Completion Report

Project Number: 35183-013 Loan Number: 2285-INO(SF) June 2015

Indonesia: Sustainable Aquaculture Development for Food Security and Poverty Reduction Project

This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011.

CURRENCY EQUIVALENTS

Currency Unit – rupiah (Rp)

At Appraisal At Project Completion (15 October 2006) (23 September 2014)

Rp1.00= $0.00011 $0.00008 $1.00= Rp9,105 Rp11,984

ABBREVIATIONS

ADB – Asian Development Bank BAPPENAS

– Badan Perencanaan Pembangunan Nasional (National Planning and Development Agency)

CEW – community-based extension worker DFS – district fisheries service DGA – Directorate General of Aquaculture EIRR – economic internal rate of return FIRR – financial internal rate of return MMAF – Ministry of Marine Affairs and Fisheries MOF – Ministry of Finance NGO – nongovernment organization NPV – net present value NSC – national steering committee OKI – Ogan Komering Ilir PCR – project completion review PIU – project implementation unit PMC – project management consultant PMO – project management office SDR – special drawing right

NOTES

(i) The fiscal year (FY) of the government and its agencies ends on 31 December. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2009 ends on 31 December 2009

(ii) In this report, "$" refers to US dollars.

Vice-President S. Groff, Operations 2 Director General J. Nugent, Southeast Asia Department (SERD) Country Director S. Tabor, Indonesia Resident Mission, SERD Team leader P. Wardani, Senior Project Officer, Indonesia Resident Mission Team members A. Fransciscus, Associate Project Analyst, Indonesia Resident Mission T. Quiko, Financial Control Analyst, Indonesia Resident Mission

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

BASIC DATA i

I. PROJECT DESCRIPTION 1

II. EVALUATION OF DESIGN AND IMPLEMENTATION 1

A. Relevance of Design and Formulation 1

B. Project Outputs 2

C. Project Costs 6

D. Disbursements 7

E. Project Schedule 7

F. Implementation Arrangements 8

G. Conditions and Covenants 8

H. Consultant Recruitment and Procurement 9

I. Performance of Consultants, Contractors, and Suppliers 9

J. Performance of the Borrower and the Executing Agency 10

K. Performance of the Asian Development Bank 10

III. EVALUATION OF PERFORMANCE 10

A. Relevance 10

B. Effectiveness in Achieving Outcome 11

C. Efficiency in Achieving Outcome and Outputs 11

D. Preliminary Assessment of Sustainability 12

E. Impact 13

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13

A. Overall Assessment 13

B. Lessons 14

C. Recommendations 14

APPENDIXES 1. Design and Monitoring Framework 16 2. Summary of Project Outputs and Accomplishments 21 3. Project Cost by Expenditure and Financier 32 4. Annual Asian Development Bank Loan Disbursements 33 5. Planed and Actual Project Implementation Schedule 34 6. Project Organizational Structure 36 7. Status of Compliance with Loan Convenants 38 8. Consultancy Services, Planned and Actual 45 9. Consumption of Fish, Vegetables, and Fruits under with and without Project Scenarios 47 10. Impact on Production and Productivity of Fish and Aquatic Products and Nominal Net Income, 2009–2012 48 11 Employment Impact 49 12. Financial and Economic Analyses 50 13. Budgetary Support for Project Sustainability 64 14. Summary of Gender Equality Results and Achievements 66

BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number

Indonesia 2285-INO(SF) Sustainable Aquaculture Development for Food Security and Poverty Reduction Republic of Indonesia Directorate General of Aquaculture of the Ministry of Marine Affairs and Fisheries SDR22,352,000 ($33,300,000) PCR: INO 1511

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years) 8. Terms of Relending (if any)

19 September 2005 7 October 2005 13 November 2006 15 November 2006 12 December 2006 15 March 2007 13 June 2007 13 July 2007 1 31 December 2013 31 December 2013 0 1.0% per annum during grace period and 1.5% per annum thereafter 32 years 8 years None

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9. Disbursements a. Dates Initial Disbursement

8 August 2008

Final Disbursement 28 November 2014

Time Interval 75.6 months

Effective Date

13 July 2007 Original Closing Date

31 December 2013 Time Interval 77.5 months

b. Amount

Amount (SDR million)

Category Original

Allocation

Last Revised

Allocation

Amount

Canceled

Net Amount

Available

Amount

Disbursed

Undisbursed

Balance 01 Civil Works 5.919 6.489 0.750 5.739 5.739 0.000 2A Equipment 1.710 2.254 0.172 2.082 2.082 0.000 2B Materials 7.817 6.837 (0.163) 7.000 7.000 0.000 03 Consulting Services 2.992 3.684 0.305 3.379 3.379 0.000 04 Training and Workshops 1.329 1.853 0.222 1.631 1.631 0.000 05 Survey, Studies, and Research

0.719 0.262 0.137 0.125 0.125 0.000

06 Interest Charge 0.782 0.782 0.281 0.501 0.501 0.000 07 Unallocated 1.084 0.191 0.191 0.000 0.000 0.000 99 Imprest Account 0.000 0.000 0.000

Total 22.352 22.352 1.895 20.457 20.457 0.000

( ) = negative. Source: Asian Development Bank Loan Financial Information System. Amount ($ million)

Category Original

Allocation

Last Revised

Allocation

Amount

Canceled

Net Amount

Available

Amount

Disbursed

Undisbursed

Balance 01 Civil Works 8.820 9.975 1.120 8.855 8.855 0.000 2A Equipment 2.550 3.449 0.235 3.214 3.214 0.000 2B Materials 11.650 10.512 (0.322) 10.834 10.834 0.000 03 Consulting Services 4.460 5.661 0.441 5.220 5.220 0.000 04 Training and Workshops 1.980 2.863 0.340 2.523 2.523 0.000 05 Survey, Studies, and Research

1.060 0.405 0.214 0.191 0.191 0.000

06 Interest Charge 1.160 1.208 0.442 0.766 0.766 0.000 07 Unallocated 1.620 0.295 0.295 0.000 0.000 0.000 99 Imprest Account 0.000

Total 33.300 34.367 2.764 31.603 31.603 0.000

( ) = negative. Source: Asian Development Bank Loan Financial Information System downloaded on 5 February 2015.

10. Local Costs (Financed) - Amount ($) 0 - Percent of Local Costs 0 - Percent of Total Cost 0

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C. Project Data

1. Project Cost ($ million)

Cost Appraisal Estimate Actual

Foreign Exchange Cost

33.30

31.60

Local Currency Cost 11.22 13.01 Total

44.52 44.61

2. Financing Plan ($ million)

Cost Appraisal Estimate Actual

Implementation Costs

ADB Financed 32.14 30.83 Government Financed Project Beneficaries’ Contributions

8.46 2.76

9.49 3.52

IDC Costs ADB Financed

1.16

0.77

Total

44.52 44.61

ADB = Asian Development Bank, IDC = interest during construction.

3. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual

A. Base Cost 1. Aquaculture Production 2. Aquaculture Support Services 3. Institutional Strengthening and Project Management Institutional Strengthening Project Management Subtotal (A) B. Contingencies 1. Physical Contingencies 2. Price Contingencies

Subtotal (B)

C. Interest Charge During Implementation Subtotal (C)

20.91 6.20

4.82 5.87 37.80

3.78 1.78 5.56

1.16 1.16

30.53 5.95

2.78 4.58 43.84

0.77 0.77

Total (A+B+C)

44.52 44.61

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4. Project Schedule

Item Appraisal Estimate Actual

Dates of Contracts with Consultants Project Management Consultant Date of Award

February 2008

April 2008

Completion of Work June 2013 December 2013 Nongovernment Organizations Date of Award May 2008 March 2009 Completion of Work December 2010 December 2012 Community-based Extension Workers Date of Award January 2009 Completion of Work December 2013 Civil Works Contracts Rehabilitation of Ponds Date of Award January 2009 June 2010 Completion of Work December 2011 December 2012 Rehabilitation of Irrigation Canals in Ponds Date of Award January 2009 June 2010 Completion of Work December 2011 December 2012 Rehabilitation of Production Road Date of Award January 2009 June 2010 Completion of Work December 2011 December 2012 Construction of Water Supply Schemes Date of Award January 2009 June 2011 Completion of Work December 2011 December 2012 Construction of Demonstration Units Date of Award January 2009 July 2009 Completion of Work December 2011 December 2012 Equipment and Supplies and Vehicles Production Input Assistance First Procurement October 2008 October 2009 Last Procurement December 2013 December 2012 Vehicles and Motorcycles for Project Management Office, Project Implementation Units, and Community-based Extension Workers

First Procurement June 2008 October 2009 Last Procurement December 2008 December 2011 Other Milestones Community Mobilization and Social Preparation Date of Award April 2008 June 2009 Completion of Work December 2010 December 2013

5. Project Performance Report Ratings

Implementation Period

Ratings Development

Objectives Implementation

Progress

From July 2008 to December 2009 From January 2009 to December 2009 From January 2010 to December 2010 From January 2011 to December 2011 From January 2012 to December 2012 From January 2013 to December 2013

Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory

Unsatisfactory Satisfactory Satisfactory

Highly Satisfactory Highly Satisfactory

Satisfactory

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D. Data on Asian Development Bank Missions

Name of Mission Date No. of

Persons No. of

Person-Days Specialization of Members

Fact-Finding

11–20 Jul 2004

3

30

a, b c

Preappraisal 27 Oct–10 Nov 2004 4 52 b, c, d, e Appraisal 3–7 Oct 2005 3 12 b, c, f Project Inception 3–10 Jul 2007 2 14 g, h Loan Review 1 28 Nov–4 Dec 2007 1 6 g Loan Review 2 18–29 Aug 2008 1 11 g Loan Review 3 11–13 Nov 2008 2 8 g, i Loan Review 4 14–24 Apr 2009 2 22 j, i Loan Review 5 5–15 Oct 2009 2 22 k, i Loan Review 6 18–27 Jul 2010 2 20 k.i Loan Review 7 27 Sep–6 Oct 2010 2 15 k,I Midterm Review 1–12 Aug 2011 3 30 k,l,m Loan Review 8 21–25 Nov 2011 1 5 k Special Loan Administration 5–9 Mar 2012 2 10 k, l Loan Review 10 26–30 Nov 2012 2 7 k, l Loan Review 11 24 May–11 Jun 2013 3 33 n, o, p Loan Review 12 20 Sep–16 Oct 2013 3 45 n, o, p Project Completion Review 23 Sep–30 Oct 2014 4 28 n, o, q

a = director, b = senior agricultural and natural resources management specialist, c = project economist, d = gender specialist, e = aquaculture environment specialist, f = counsel, g = principal project management specialist, h = associate project analyst, i = project analyst, j = environment engineer, k = water resources management specialist, l = project officer, m = economist and financial consultant, n = senior poject officer, o = project analyst, p = finance officer, q = international staff consultant.

I. PROJECT DESCRIPTION

1. The Asian Development Bank (ADB) approved a loan of SDR22,352,000 to the Government of Indonesia for the Sustainable Aquaculture Development for Food Security and Poverty Reduction Project on 12 December 2006.1 The project’s expected impact was reduced poverty and increased food security through sustainable aquaculture development. Its expected outcomes were increased production of fish and other aquatic products, and improved income, nutrition, and employment status of poor fish farmers and coastal communities. 2. To attain its outcomes, the project had three components: (i) aquaculture production enhancement, (ii) aquaculture support services, and (iii) institutional strengthening and project management. The project was implemented in five districts: Langkat, Ogan Komering Ilir (OKI), Karawang, Sumedang, and Buton. The project became effective on 13 July 2007 and closed on 31 December 2013. The Directorate General of Aquaculture (DGA) of the Ministry of Marine Affairs and Fisheries (MMAF) was the executing agency, and the district fisheries services (DFSs) served as the project implementation units (PIUs) in the five project districts.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

3. The project was highly relevant to the government’s sector policy and plan at the time of appraisal. It supported the national policy and strategy for aquaculture development and poverty reduction as stipulated in the MMAF’s Strategic Plan for 2005–2008. It was aligned with ADB’s country strategy and program for Indonesia, 2006–2009,2 which had the strategic priorities of pro-poor, sustainable economic growth, and social development. The project remained highly relevant at the time of completion. The project continued to be consistent with the government’s National Medium-Term Development Plan, 2010–2014, which still aims for poverty reduction as an important goal. The three components of the project continued to be consistent with MMAF’s Medium Term Strategic Plan for 2010–2014, which aims to expand the country’s aquaculture production from 4.78 million tons in 2009 to 16.89 million tons in 2014. The project remained consistent with ADB’s country partnership strategy, 2012–2014, 3 which included poverty reduction, support for inclusive growth in the economy, and sustainable management of natural resources as strategic thrusts. 4. Project preparatory technical assistance4 was carried out in 2003 to formulate the project design, which proved sound. The formulation process was adequate, including consultations with a wide range of stakeholders—e.g., the National Development Planning Agency (BAPPENAS), Ministry of Finance (MOF), Ministry of Home Affairs, DGA and relevant directorate generals in MMAF, and fish farmers—and desk reviews of policy and strategy documents as well as decentralize finance and statistics, which yielded a comprehensive marine and fisheries, which includes aquaculture sector assessment, economic and financial analyses, and poverty, gender, and social analyses.

1 ADB. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Loan to Indonesia

for the Sustainable Aquaculture Development for Food Security and Poverty Reduction Project. Manila. 2 ADB. 2006. Country Strategy and Program, Indonesia, 2006-2009. Manila.

3 ADB. 2012. Country Partnership Strategy, Indonesia, 2012-2014. Manila.

4 ADB. 2003. Technical Assistance to Indonesia for Sustainable Aquaculture Development for Food Security

and Poverty Reduction Project. Manila.

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5. The project adopted excellent design features of poverty targeting, community participation, capacity building for the project implementers and project beneficiaries, and microenterprise business development in aquaculture production and processing. The project was implemented in accordance with the Government Regulation No. 7 of 4 February 2008 on deconcentration and co-administration of tasks between national and regional governments which granted full project investment cost from loan proceeds as grants from the national government to district governments. The regulation was issued to replace the MOF Decree No. 35/2003 and MOF Regulation No. 129/PMK.07/2005 which granted 90% of the investment cost from loan proceeds to district governments, whose implementation guidelines were not yet available at project effectiveness in July 2007.

6. During project administration, the DGA changed the scope of project activities in Karawang District, replacing mariculture activities with freshwater aquaculture activities because of the limited potential investment in mariculture resulting from the poor quality of seawater along the district’s coastal areas. On the other hand, mariculture activities were added to the scope of project activities in Langkat District because grouper was found to have a large potential for development along the coastal areas of the district. Moreover, since some of the targets set for the outputs were unclear, and other targets were based on weak assumptions, some performance targets were revised by the project management office (PMO) to promote the setting of measurable and relevant targets. The revision in project scope and some performance targets were approved by ADB on 2 April 2012. The revised performance targets are shown in the design and monitoring framework for the project. B. Project Outputs

7. The project achieved majority of its targets. Out of the 32 performance targets in components 1, 2 and 3, 26 outputs (81%) either totally achieved or overachieved the targets. Appendix 1 shows achievements against the targets set in the design and monitoring framework. Appendix 2 summarizes the project’s output achievements.

1. Aquaculture Production Enhancement

8. This project component aimed at improving the production performance of major types of aquaculture systems in the project areas through community-based management. Market-driven, sustainable aquaculture development was made possible through (i) social preparation and community empowerment; (ii) fish production enhancement in freshwater, brackishwater, and mariculture systems; and (iii) community-based management of culture-based fisheries. 9. Social preparation and community empowerment. Nongovernment organizations (NGOs) and community-based extension workers (CEWs) were contracted by PIUs for each project district to carry out social preparation and community empowerment activities. The social preparation were undertaken to facilitate the formation of fish farmers groups and the training of their members in the establishment and management of aquaculture-based or related microenterprises. A total of 14,585 communities participated in the consultation process to assess their needs and determine potential solutions. Of these, 12,594 communities composed of 10,821 men and 1,707 women were selected (in accordance with criteria agreed upon by ADB and the government) 5 and organized to form 881 project beneficiary groups 6 for 5 The selection criteria for project beneficiaries of small-scale fish farmers to be eligible to participate in the project

included: (i) must belong to “poor income groups” as defined in the Government’s Medium-Term Development Plan and Annual Development Plan; (ii) must belong to organized fish farmer groups; (iii) must have some prior experience in fish farming; (iv) must be willing to undergo training in improved methods and practices of

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aquaculture production enhancement activities. The remaining 2,057 communities composed of 1,889 women and 168 men were selected and organized to form 139 processing or women’s groups whose primary activity was to jointly process fish or seaweed for sale in the local markets. 10. The project provided training and input assistance to production and processing groups to help them expand their aquaculture or processing enterprises. Trainings on financial and organizational management, leadership, and empowerment were provided by NGOs to fish farmers’ groups, while trainings on improved aquaculture technology and best aquaculture production practices were provided by the CEWs, the project management consultants (PMCs), and a training consultant engaged by the PIUs. With the assistance of the NGOs and the CEWs, the PIUs also formed 102 associations of project beneficiary groups, 7 from which 40 cooperatives were established by the district cooperative service. 11. Fish production enhancement. To increase the supply of fish and aquatic products, rehabilitation of ponds and their respective irrigation and drainage canals was undertaken in the project districts. Fish farmers of the project beneficiary groups were actively involved in rehabilitation works through the provision of in-kind labor. A total of 156.7 hectares of freshwater ponds were rehabilitated in Karawang and Sumedang, exceeding 348% of the target. Moreover, 7.73 kilometers of irrigation and drainage canals were also improved to support ponds’ access to water supply during planting and drain excess water during and after the harvest. For brackishwater development, 3,277 hectares of ponds were rehabilitated in Langkat, OKI, and Karawang, achieving 80% of the revised target of 4,100 hectares. In addition, 48.81 kilometers of irrigation and drainage canals were improved in Langkat, OKI, and Karawang. 12. A total of 533 mariculture cages were constructed in Langkat and Buton. To demonstrate improved technology and species for grouper in Langkat and for seaweed and grouper in Buton, 69 mariculture demonstration units were constructed in these districts. In addition, 76 demonstration ponds in freshwater aquaculture were constructed in OKI, Karawang, and Sumedang districts, while PIUs constructed 107 brackishwater demonstration units in Langkat, OKI, and Karawang districts. 13. The total number of freshwater hatcheries constructed for the production of fingerlings in Sumedang and OKI was 31. The total number of mariculture hatcheries constructed in Buton was only four. One of the hatcheries established in Buton is a district government hatchery that was turned over to beneficiary groups for their operation and maintenance. Project beneficiary groups’ fish farmers provided in-kind labor in the construction and maintenance of the hatcheries. In Buton, 582 hectares of seaweed facilities were constructed by 2,912 project beneficiaries, exceeding the target of 500 hectares. 14. To serve fish farmers who could not access clean freshwater in four project districts, 166 units of water supply facilities were constructed. These were comprised of a large water supply facility (equivalent to 130 units) in OKI District and 36 small-scale water supply units in Langkat, Karawang, and Buton districts. The project rehabilitated 38.04 kilometers of production roads in Langkat, OKI, Karawang, and Buton districts compared to the target of 60 kilometers (a 63% achievement rate). This underachievement could be attributed to two unfinished production road

aquaculture; (v) must be willing to share their new skills with other fish farmers in the community; and (vi) must be willing to be supervised and monitored by project personnel.

6 Kelompok Penerima Manfaat or Pokmaman.

7 Gabungan Pokmaman.

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rehabilitation contracts in Langkat and OKI in 2012. The production roads were intended to link project beneficiaries to markets or enable them to bring their products directly to markets. The contractors could not complete their work as they did not have financial capacity due to extremely low bidded price, good work program and schedule. The unfinished village production roads did not have a significant impact on project beneficiaries because buyers actually go to the project sites (since they have transport facilities). The PMO decided to terminate the contracts in 2013 due to insufficient time to process additional budget if the works were to be re-tendered.

2. Aquaculture Support Services

15. The main objective of this component was to upgrade the production techniques and quality of aquaculture products through strengthened extension services and improved post-harvest handling, processing, and marketing techniques in collaboration with the private sector and fish farmers’ organizations. 16. Extension services. To strengthen the districts’ fisheries extension services, which were weakened by the decentralization policy of the government,8 72 CEWs were recruited by the PIUs to (i) provide extension services and grassroots-level training for project beneficiaries on best practices in aquaculture production, and (ii) strengthen the community groups in 2013 after the NGOs’ contracts ended in December 2012. In addition, the CEWs, conducted demonstrations of improved technology, took water quality samples, and monitored and supervised the distribution of production inputs by the suppliers to beneficiary groups. From June 2009 to September 2013, the CEWs held 18,888 meetings with the beneficiary groups. The total number of community groups served by the CEWs was 1,023 groups composed of 881 project beneficiary groups, 102 associations of project beneficiary groups, and 40 cooperatives. This achievement exceeded the target of 930 groups. 17. In addition to the provision of assistance in the form of trainings and infrastructure facilities improvement, the project provided one-time production input assistance to fish farmers of the project beneficiary groups to support their aquaculture production activities. The average size of production input assistance ranged from Rp4.0 million to Rp12.5 million per person or fish farmer depending on the type of aquaculture production system, pond improvement requirements, and type of commodity. From 2009 to 2013, 12,594 fish farmers of the 881 project beneficiary groups were provided with production inputs. Apart from the fish farmers of the project beneficiary groups, the project also provided one-time processing input assistance per group to 139 women’s processing groups with processing equipment and raw materials. 18. Processing and post-harvest handling. To reduce post-harvest and economic losses, the project assisted the beneficiary groups in the procurement or installation of freezers, ice boxes, drying facilities, and storage facilities and equipment. In addition, the PIU in OKI constructed 60 small-scale fish feed mills, 58 of which are operational. The facilities were managed by fish farmers’ organizations. The project completion survey, conducted from April to June 2013, showed that the provision of processing and post-harvest equipment under the project resulted in the reduction of post-harvest and economic losses by about 55% (from an average of 11.3% to 5.0%) compared to the targeted 30%, with a potential reduction in

8 Law 32/2004 on Regional Government, which broadened the authority of regional governments, called for the

devolution of fisheries management responsibilities from the central government to the provincial and district governments. The district governments now have the main responsibility for aquaculture development and provision of extension workers. The number of districts’ extension workers was limited due to budget constraints.

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economic losses of about Rp13,000 per person. Moreover, the project resulted in an average 27% increase in the value of beneficiaries’ products compared to the without project scenario. The increase in the value of harvested products was attributed to the higher price received as a result of the use of improved species, better quality of cultured fish and other aquatic products, and lower percentage of post-harvest losses. On average, the project resulted in a 5.6% increase in the sale of harvested products (from 87.1% before the project to 92.7% with the project) compared to the target of 30.0%. This relatively small increase was attributed to the already high percentage of sales of harvested products before the project.

19. Fish marketing development. Using cell phones as a simple and effective market information network developed by the PMC, PIU staff and the CEWs were able to effectively disseminate information on real-time prices of fish and other aquatic products as well as potential market outlets offering high prices to the chairpersons of the project beneficiary groups, who relayed the market information to their members. Anticipating an increase in the supply of fish and aquatic products as a result of the provision of production input assistance, the PIUs, with the help of the PMO, undertook market promotion campaigns to promote the sale of fish and other aquatic products to prospective buyers in different markets in the project districts. 20. Environmental and fish health management. Poor water quality in the project districts was caused by aquaculture operation and by external factors such as pollution coming from outside the fish farming areas. To facilitate monitoring of water quality and fish diseases in the project districts, four laboratories were constructed (one each in OKI, Langkat, Sumedang, and Buton). The PIU in Karawang decided not to construct a water quality and fish health laboratory under the project because the existing provincial laboratory located in Karawang was sufficient to meet the project’s requirements. The PMO provided training to the technical staff in the four newly established water quality and fish health laboratories to strengthen their capabilities. Water quality in the aquaculture production areas was monitored by the CEWs using simple tools, and it was analyzed in the water quality and disease laboratories in the project districts. The PCR mission found that all the water quality and fish health laboratories in the project districts were still operating or functioning after project completion. 21. Environment screening. Owing to the successive resignations of three environment specialists in the PMC recruited for the project, the work on environmental screening of aquaculture facilities was inadequate. The PMC had difficulty in finding qualified experts due to a scarcity of environment experts in fisheries sector. Nevertheless, the third environment expert prepared an action plan to overcome the water quality problems for each of the project districts, which was approved by the PIUs. PMO and the PIU staff undertook the following actions based on the recommendations of the environment expert to minimize adverse environmental impacts resulting from more intensive aquaculture culture practices in the project districts, and to minimize pollution coming from other sources: (i) designed civil works that minimized the adverse impacts from the project as well as from the surrounding environment, (ii) provided environmental management training to PIU staff and the CEWs, (iii) established laboratory facilities for monitoring water quality and fish diseases in each project district, and (iv) encouraged farmers to adopt low-density culture and well-adapted species. A detailed assessment of the environmental impacts of project activities conducted by the PMC showed that the construction and rehabilitation works in OKI and Karawang would have a minimal negative impact on the environment because most of the civil works contracts were relatively small in size. The increased use of fish feeds in freshwater ponds in Karawang and freshwater cages in OKI was found to cause water pollution, but was found to have minimal environmental impact.

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22. Applied research. During the project implementation period, there was no applied research undertaken by the PIUs in the project areas since (i) the PIU staff did not have the necessary expertise and experience in conducting applied research, and (ii) national aquaculture development centers located in 15 strategic sites in Indonesia were already conducting applied research in freshwater culture, brackishwater culture, and mariculture. To disseminate information on the results of applied research to the CEWs, who were responsible for disseminating the information to the project beneficiaries, the PMC, as requested by the PMO, collected information on the results of applied research conducted by national aquaculture centers located in Sukabumi (for freshwater aquaculture research), Jepara (for brackishwater aquaculture research), and Lombok (for mariculture research).

3. Institutional Strengthening and Project Management

23. This component aimed to enhance the institutional capability of the DGA, the DFSs, fish farmers, and the private sector in aquaculture development. 24. Institutional strengthening. The PMO organized several training courses to improve the capacity of PMO, DGA, and PIU personnel on various subjects such as procurement of goods and services, financial management and administration, community development and gender action plans, water quality analysis, marketing, and access to various financing schemes. A total of 222 participants (comprising 55 staff members from the DGA and PMO, and 167 staff members from the five PIUs) benefited from these training courses, surpassing the target of 45 participants. A total of 72 CEWs engaged by PIUs were provided with extension equipment and portable equipment for measuring water quality, motorcycles for official use, and training in the national aquaculture development centers in Sukabumi, Jepara, and Lombok before they were assigned to work in the project villages to strengthen the districts’ fisheries extension services. The project upgraded, renovated, or established 12 aquaculture technical centers in Ujung Batee, Batam, Jambi, Lampung, Mandiangin Banjarmasin, Sukabumi, Karawang, Situbondo, Takalar, Ambon, Tetulu, and Lombok to support their carrying out functions and responsibilities to develop improved species and technology and to multiply improved species on a large scale for distribution to fish farmers. In 2010, a computer-based aquaculture management information system was installed at the DGA. As originally planned at project appraisal, the installed system should have been linked to the participating PIUs. However, this plan did not materialize because the system was linked to the DGA website, which was not able for use by the PIU staff in the collection and dissemination of project data. The PMC produced 29 high-quality reports, sets of guidelines, and presentations that were distributed to the PMO, the PIUs, the CEWs, and the NGOs. With the assistance of the PMC, the PMO and PIUs also prepared 15 quarterly project management reports and six annual reports that were submitted to ADB, the MOF, BAPPENAS, and MMAF. 25. Project management. The PMO in the DGA and the PIUs in the five project districts were established in early 2007. The PMO and the PIUs were adequately staffed and equipped to meet project requirements. Offices of the PIUs were improved, and motorcycles and vehicles were purchased for use by project staff to enable them to implement project activities effectively and efficiently. The PMC was engaged to provide international and national consultants to assist the PMO and the PIUs in project management. C. Project Costs

26. Appendix 3 and basic data C2 compare the estimated budget at project appraisal and the actual project costs. At loan closing, the actual project cost inclusive of taxes, prices and

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physical contingencies, and service charges was $44.61 million, which was close to the appraisal estimate of $44.52 million. ADB financing for the project was $31.60 million, which was lower than the appraisal estimate of $33.30 million. This can be attributed to the following reasons: (i) two road production contracts in Langkat and OKI were not completely implemented due to unperformed works, and (ii) the project completion survey was not financed by ADB because in tendering the contract, the PMO used the government’s procurement procedure instead of ADB’s quality- and cost-based selection method as agreed and stipulated in the loan agreement. ADB’s share accounted for 71.0% of the total project cost. Meanwhile, the national and the district governments’ contribution totaling $9.49 million constituted 21.3% of the total project cost and was 12.2% higher than the appraisal estimate of $8.46 million because the government shouldered the project completion survey cost and additional project management costs. The project beneficiaries’ actual contribution of $3.52 million was about 27.5% higher than the appraisal estimate of $2.76 million because the number of project beneficiaries who provided free labor and material contributions during project implementation exceeded the target of 14,000 project beneficiaries at appraisal. 27. ADB also approved the request for reallocation of loan proceeds among the project’s components and expenditure categories in March 2013. The purpose of the loan reallocation was to cover shortages in certain categories such as civil works, equipment, and consulting services, because actual costs during implementation turned out to be higher than the costs estimated at appraisal. Moreover, the project required an additional allocation to cover training or workshops for beneficiaries and community groups and a high level national workshop to discuss and agree on the executing agency’s exit strategy for achieving project sustainability. The negative balances and additional allocation for training or workshops were financed from the savings in some expenditure categories such as materials, surveys, studies and research, and the unallocated budget. The reallocation of the loan proceeds was not related to a change in scope or implementation arrangements, but was required to adjust the categories based on actual contracts awarded from 2009 to 2012.

D. Disbursements

28. Appendix 4 presents the actual annual disbursements from 2008 to 2014. The loan funds were disbursed through direct payment to the PMC and the imprest account established at Bank Indonesia. The imprest account helped expedite utilization of loan funds where payments could be made at the district level through district treasury offices. Disbursements started in 2008 and significantly increased in 2011 and 2012. The highest amount of disbursement ($11.32 million) was in 2012 when the PMO and PIUs, with the assistance of the PMC, helped accelerate project implementation activities. The total disbursement (including the interest payment and other expenditures) at close of the loan account on 15 December 2014 was SDR20.46 million ($31.60 million), or 92% of the total planned disbursement of SDR22.35 million. The unused imprest account balance of SDR1.89 million ($2.76 million) was canceled at account close. The executing agency had no difficulty in refunding the unused balance of the imprest account to ADB. E. Project Schedule

29. The project was originally scheduled to be implemented over 6.5 years, from the date of loan effectiveness on 13 July 2007 to the project completion date on 31 December 2013. The implementation of the project in the five districts began in 2009, delayed by about 2 years due to the unavailability of implementation guidelines to the MOF’s budget appropriation decree No. 35/2003 and regulation No.129/PMK.07/2005, to enable the DGA to request budget allocations

8

for project implementation for the project districts. The request for budget allocation was possible following issuance of the Government Regulation No. 7 of February 2008 (para. 5). The MOF allocated the first budgets to the DGA in mid-2008 for national-level activities and in late 2008 for district-level activities. The budgets were then distributed to the PMO for 2008 activities such as mobilization of consulting services, and to the PIUs at the beginning of 2009 for district-level activities. The PMC commenced in June 2008 and assisted the DGA in budgeting and management of the project. Despite the 2-year delay in project implementation, the PMO did not request an extension for the project since it adopted effective strategies to accelerate project implementation during 2009–2012. As a result of these strategies, the project was completed in December 2013 as originally envisaged at appraisal. Appendix 5 shows the project implementation schedule at appraisal compared with the actual implementation schedule.

F. Implementation Arrangements

30. Appendix 6 shows the actual project organizational structure compared with that envisaged at appraisal. Actual implementation arrangements were similar to those envisaged at appraisal except for some minor modifications. The DGA as the executing agency was responsible for the overall management of the project to ensure efficient and effective delivery of project inputs to the target beneficiaries and timely completion of project activities. The DGA undertook national-level activities, mainly relating to policy formulation, overall coordination of capacity-building interventions, and support of district governments in implementing local-level regulations and other technical aspects of the project, such as aquaculture development, environmental and fish health management, and culture-based fisheries management. A PMO established in the DGA was headed by a project director who was responsible for day-to-day project management and coordination. A national steering committee (NSC) was established by the MMAF to guide the overall direction of the project and ensure interagency coordination. The members of the NSC were the MMAF, BAPPENAS, the MOF, and the Ministry of Home Affairs. During project implementation, it was evident that the participation of the Ministry of Home Affairs in coordinating with district agencies was not needed since the MMAF was directly coordinating with the DFSs in the five project districts. The NSC was supported by a national technical committee headed by the NSC secretary. At the regional level, a regional advisory committee composed of representatives from the participating district government agencies was established by the head of the district to oversee project coordination among the different local agencies and liaise with the NSC. PIUs in the five project districts were established to supervise, coordinate, and manage field-level project activities in their respective districts. G. Conditions and Covenants

31. None of the major covenants were modified, suspended, or waived, as most conditions and covenants were relevant and realistic to the project’s needs. The government’s overall compliance with the loan covenants has been generally satisfactory. There were no major instances of noncompliance except for the following covenants that were partially complied with: (i) inadequate environmental screening in the construction of aquaculture facilities due to the resignation of environment specialists in the PMC because they were not qualified to take up the assignment, and (ii) unmet requirement to establish the project performance monitoring system, since the function of this system was carried out by the PMC. The executing agency took adequate care in meeting all the physical, financial, social, and environmental requirements. Audit reports on project financial statements and accounts were prepared on time by government’s auditor and were all unqualified. The status of compliance with loan covenants is shown in Appendix 7.

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H. Consultant Recruitment and Procurement

32. The project engaged 691.7 person-months of consultancy services (compared to 672.0 person-months at appraisal) comprising 60.6 person-months of international consultants (56.0 person-months at appraisal) and 631.1 person-months of national consultants (616.0 person-months at appraisal) in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time) (Appendix 8). The actual inputs exceeded those estimated at appraisal because of the need to meet actual project requirements, particularly for the positions of team leader, deputy team leader, and civil engineer/infrastructure planner. The project employed NGOs and CEWs to assist local communities in carrying out aquaculture and related activities. There was a minor change in the consultant selection method approved by ADB on 12 March 2011 to allow engagement of individual community development specialists if there were no qualified NGOs. 33. The PMO and the PIUs were responsible for the procurement of all production and processing inputs, equipment, vehicles, and services. The bulk of the materials procured under the project consisted of production and processing inputs that were provided to the project beneficiaries on a grant basis. The production and processing inputs were procured using shopping procedure since each of the supply contracts was relatively small (less than $3,000 per contract). The total value of the input assistance (which ranged from $460 to $1,440 per fish farmer for production assistance and per women’s group for processing assistance) provided to more than 14,000 project beneficiaries reached more than $10 million. Likewise, most of the equipment for the project was procured using shopping procedure. There were few pieces of large equipment for the aquaculture technical centers, which were procured using national competitive bidding procedure. The PIUs also engaged training providers to provide training courses and workshops for project beneficiaries involved in aquaculture enterprises or fish processing. The PMO also undertook three surveys: (i) the midterm survey, which was financed by the project; (ii) an outcome survey-cum-formulation of a proposed second phase project, which was financed by the project; and (iii) a project completion survey, which was financed through government funds. I. Performance of Consultants, Contractors, and Suppliers

34. The overall performance of the PMC at the central and district levels was satisfactory. The PMC provided support to the PMO in the formulation of the DGA’s policies on (i) the recruitment of CEWs by the PIUs, (ii) the provision of production input assistance to project beneficiaries, (iii) implementation of the gender action plan, (iv) environmental monitoring and evaluation, and (v) the use of beneficiary groups in the construction of simple civil works. The PMC’s assistance to the PMO and the PIUs in (i) project implementation, (ii) monitoring and evaluation, (iii) the supervision of large civil works and production input contracts, and (iv) the preparation of monitoring reports contributed to the success of the project. 35. The performance of the NGOs and CEWs was satisfactory in providing assistance to the PIUs in the selection, mobilization, and strengthening of the project beneficiaries. The performance of most of the consultants recruited under the project was satisfactory except for the detailed engineering design and supervisory consultants for civil works. The design of production roads, seaweed storage areas, rehabilitation of irrigation canals, and water quality and health laboratories should have been consulted with local public works services. The performance of all the community contractors in undertaking simple and small civil works was highly satisfactory because the project beneficiary groups were committed to completing the contracts on time and of good quality. Similarly, the performance of small civil works contractors

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was generally satisfactory in most of the project districts. Most of larger civil work contractors in the project districts showed satisfactory performance except the two contractors in Langkat and OKI, where the construction of production or access roads was not completed. The performance of the suppliers responsible for the distribution of production inputs to project beneficiaries was also satisfactory. J. Performance of the Borrower and the Executing Agency

36. The performance of the government as the borrower is rated satisfactory. The PMO and the PIUs demonstrated good performance capacity in expediting the procurement process. The heads of the DFSs in all the project districts successfully set up all the necessary local implementation arrangements and coordinated their activities with other agencies. The performance of the DGA as the executing agency is also rated satisfactory since it was able to successfully complete the project on schedule despite a 2-year start-up delay in project implementation as a result of good management and operation, and implementation efficiency and effectiveness. The DGA was able to effectively coordinate with other agencies and with the district governments. The strong support provided by the MOF and BAPPENAS to the project also contributed to its success. From February 2008 to December 2013, the government promoted the provision of an adequate and timely budget for the project. The MOF assisted the project in the approval of budget revisions proposed by the PMO and the PIUs, and in the submission of withdrawal applications to ADB. The coordination and monitoring meetings between BAPPENAS and the DGA to assess the progress of the project were valuable in formulating immediate actions or measures to address major implementation problems. Additionally, the project helped improve the institutional capacity of the DGA and PIUs.

K. Performance of the Asian Development Bank

37. ADB consistently provided timely advice and assistance, and monitored the project closely during implementation. ADB fielded a project inception mission, 12 regular project review missions (i.e., two missions per year), a midterm review mission, and a PCR mission. The review and midterm missions were useful in recommending time-bound actions to improve project implementation to the PMO, PIUs, and PMC, who then implemented these actions, which were effective in resolving implementation issues. ADB acted promptly on the government’s requests for minor changes in project scope, output targets, and loan reallocation. The assistance provided by ADB in adjusting the project scope and outputs helped the project achieve its intended outcomes. Overall, ADB’s performance is rated satisfactory.

III. EVALUATION OF PERFORMANCE A. Relevance

38. The project is rated highly relevant in expanding the country’s aquaculture production and addressing the policies and strategies of the government and ADB for poverty reduction, sustainable economic growth, and social development. The project was designed to address low production of fish and other aquatic products by poor fish farmers and coastal communities. It adopted a holistic approach of poverty targeting; community participation; capacity building for the project implementers and project beneficiaries; and microenterprise business development in aquaculture production and processing to improve income, nutrition, and employment status of project beneficiaries. Its completion has already created a demand for replication. Encouraged by the success of the project, the government has considered replicating the project in other coastal districts with a high incidence of poverty and food security problems.

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B. Effectiveness in Achieving Outcome

39. The project is rated highly effective in meeting most of its objectives and outcomes. The goals of the project as stated in the design and monitoring framework were to reduce poverty and increase food security among poor fish farmers and coastal communities. Results from the project completion survey conducted from April to June 2013 shows that the project significantly contributed to reducing poverty incidence in the five project districts from 15%–25% of the population in 2006 (prior to project approval by ADB) to 10%–16% in 2011 (Appendix 10, Table A9.1). Survey results also reveal that the nominal household income, on average, increased from Rp1.28 million in 2004 to Rp19.58 million in 2012. At the 2014 price level, real household income improved from Rp2.25 million in 2004 to Rp21.95 million in 2012. Moreover, the project directly benefited 14,585 poor fish farmer households, which was 104% of the 14,000 target. At project formulation in 2006, the target set for increased food security was a 20% increase in food and non-food expenditures and fish consumption by year 6 in 2013. All the project districts exhibited increases in food expenditure, although the percentage increase in fish consumption in Langkat and Karawang districts was less than the target of 20% since fish consumption in those districts had been high before project implementation. The overall average increase in fish consumption in the five project districts from 2006 to 2013 was 83%, thus exceeding the target of 20% (Appendix 9, Table A9.2). 40. With regard to the project’s outcome performance, results of household surveys of project beneficiaries who received production input assistance and other assistance from PIUs show that production and productivity of fish and other aquatic products increased by an average of 60% and 84%, respectively, compared to the targeted minimum increase of 20%, while the project beneficiaries’ net income without labor improved by 70% compared to the targeted minimum increase of 30% (Appendix 10). The overall increase in production and productivity of fish and other aquatic products as well as the beneficiaries’ net income can be attributed to the project’s production input assistance, training, extension services, improvement of infrastructure, and provision of other facilities. Based on interviews with some project beneficiaries, the PCR mission found that their production and net income further increased after project completion because (i) they reinvested the additional income earned as a result of the project to expand their aquaculture enterprises, and (ii) there were better weather conditions. As a result of its input assistance, the project generated 306,382 person-days of employment consisting of 296,653 person-days of employment in civil works activities for the poor fishing households and 9,729 person-days of employment in aquaculture activities (Appendix 11). C. Efficiency in Achieving Outcome and Outputs

41. The project is rated efficient in achieving outcome and outputs since it was cost-effective. The project achieved 81% of its project outputs 1 year ahead of schedule at the same cost despite start-up delays resulting from the inability of the DGA to process budgetary allocations for district-level activities in 2007. The PMO and the PIUs managing the project efficiently with the assistance of the PMC, and ADB provided efficient support, supervision, and administration. 42. Results of the financial analysis of 19 representative aquaculture enterprises indicate that investments in 18 of these enterprises are financially viable. Only the rice-fish culture was not financially viable due to the high cost of feed and wages. The financial internal rates of return of the financially viable aquaculture investments range from 53% to more than 100%, which are above the prevailing financial cost of capital of 10%. Using 2014 constant prices, the reevaluated base case economic internal rate of return (EIRR) of 40.75% for the project as a whole indicates that the project is still economically viable. The resulting positive net present

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value for the 20-year period at a social discount rate of 12% indicates that the project is expected to generate approximately Rp412.88 billion for the Indonesian economy. The estimated switching values show that even with large changes in costs (65.6%) and benefits (191.0%), the project will be able to maintain an EIRR equal to 12%, or the social opportunity cost of capital. Details of the financial and economic analyses, including assumptions and sensitivity analyses, are shown in Appendix 12. D. Preliminary Assessment of Sustainability

43. To support the continuation of project activities after project completion and promote sustainability of project outcomes and achievement of project impact, a high-level exit strategy meeting was held in December 2013. One of the sustainable measures agreed upon during the meeting was the budgetary commitment of the district governments to enable the DFS to provide continued capacity building activities to further strengthen project beneficiary groups and extend technical support and production input assistance to these groups. The budgetary support was also intended to cover the salaries of the contractual CEWs and the operating costs of the DFSs for project monitoring activities. The PCR mission noted that after project completion, the DFSs in all the project areas have mainstreamed and continued supporting the project beneficiaries using their own limited resources and/or budgets from the district governments and the MMAF. In 2014, the five DFSs and MMAF committed a total of $1.04 million to support the project’s operation and maintenance (O&M) and other costs (Appendix 13). Among the five project districts, only Karawang has been able to continue hiring the CEWs at a salary rate higher (Rp1,700,000 per month) than that fixed by the government (Rp600,000 per month). The other four districts either rehired the CEWs at the government salary rate only for a few months or did not extend their contracts after project completion. In Langkat District, voluntary CEWs from the local community were recruited by the district’s extension agency. 44. The PCR mission founds that most of the beneficiary groups organized under the project are still functioning and active. The PCR mission’s interactions with various beneficiary groups (e.g., project beneficiary groups, associations of project beneficiary groups, women’s processing groups, and cooperatives) also revealed that the groups interviewed have become successful in their aquaculture-based enterprises and have shown self-reliance in their business operations. These groups have expanded their aquaculture businesses (e.g., by increasing the number of cages, ponds, and rafts for seaweed culture) using their own savings obtained from the increase in their incomes resulting from the production assistance and training provided by the project. While cooperatives in particular have shown self-reliance, project beneficiary groups, association of project beneficiary groups, and women’s groups need further extension, credit, and marketing support from the DFS in their aquaculture and processing enterprises to support their long-term sustainability. Some of these groups need further assistance in terms of product development, access to credit, marketing of their products, and organizational strengthening to transform them into cooperatives. The DFSs in the project districts need to cooperate with other agencies (e.g., district cooperative service) and the private sector to provide these services. 45. Officers and selected members of cooperatives interviewed by the PCR mission reported that they have been providing services to their members, such as bulk purchase of production inputs that they sell to their members at cheaper prices, microlending, savings mobilization, and group marketing. The PCR mission also observed that because the project fostered mutual help and cooperation among the project beneficiaries, a sense of volunteerism has been instilled among them, as evident from their willingness to continue operating and maintaining the aquaculture infrastructure facilities renovated and constructed under the project. Based on the strong commitment from the MMAF and district governments to provide

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continuous financial support, the expected growth of cooperatives in the project districts, and indications that investments made under the project are relevant to the communities, the project’s sustainability is rated most likely. E. Impact

46. In general, the project brought about positive economic, social, institutional, and environmental impacts. The economic impacts include (i) increased incomes from aquaculture enterprises; (ii) increased employment opportunities, (iii) increased opportunities for women to increase their incomes from fish processing and aquaculture production activities, and (iv) increased savings of the household beneficiaries, which were re-invested in their existing enterprises. The project significantly contributed to reducing poverty incidence in the five project districts from 15%–25% of the population in 2006 to 10%–16% in 2011, and increasing household income, on average, from Rp1.28 million in 2004 to Rp19.58 million in 2012. 47. The project’s social impacts include (i) improved food security and nutrition of poor fishing households, (ii) increased fish consumption, and (iii) improved health and hygiene through the provision of water supply facilities, The most significant social impact was the empowerment of fish farmers and women. In addition to the income opportunities that they enjoyed as a result of the project, women have substantially benefitted in terms of empowerment. Women made up 25% of the total project beneficiaries. Women membership accounted for 14% of the total project beneficiary groups, 92% of the total processing groups, and 23% of the total cooperatives. Women participation in training on aquaculture production and processing has significantly improved their opportunities to engage in livelihood enterprises to earn and increase their family income. Women beneficiaries in all project districts reported that the project addressed their immediate economic needs, enhanced their status in the community, increased their self-confidence, and empowered them to express their views on how to operate or manage their aquaculture production or processing enterprises. Appendix 14 presents a summary of gender equality results and achievements. 48. The project’s institutional impact is significant in terms of strengthened institutions. The project developed strong institutional capacity and good coordination and teamwork among national and district governments, with the assistance of NGOs and CEWs, and supported by active participation of project beneficiaries. 49. The project’s environmental impact is positive arising from improved aquaculture resource management at farm and district levels. As a result of training and extensions, fish farmers learned and adopted the recommended fingerling or seed stocking rate and the appropriate feeding and fertilizer rates to ovoid or minimize water pollution in their ponds or cages. The overall project’s impact is significant.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

50. The overall performance of the project is rated highly successful because it (i) is highly relevant to the government’s and ADB’s policies of reducing poverty and promoting sustainable aquaculture development, (ii) is highly effective in meeting most of the indicators set in the design and monitoring framework, (iii) is efficient in cost, (iv) is most likely sustainable after project completion, and (v) has a significant impact. The reevaluated EIRR of 40.75% indicates that the project is economically feasible. Despite initial implementation problems, the project met

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most of the intended outputs and outcomes in most project sites as well as the impact targets (Appendix 1). The major factors that contributed to the success of the project were (i) the strong institutional capacity of the DGA as the executing agency, (ii) the good facilitation and leadership skills of the PMO and the PIUs, (iii) close coordination and teamwork among the national agencies (BAPPENAS, MOF, MMAF) and district governments, (iv) the dedication of the NGOs and CEWs in organizing and strengthening community groups, and (v) the active participation of project beneficiaries in the implementation of project activities. B. Lessons

51. The following lessons are drawn from the project: (i) The delay in project start-up could have been avoided if the government had issued

Government Regulation No. 7 of 4 February 2008 immediately after project effectiveness. (ii) The project adopted excellent design features of poverty targeting, community

participation, capacity building for both the project implementers and the project beneficiaries, and microenterprise business development in aquaculture production and processing.

(iii) The project developed strong institutional capacity and good coordination and teamwork among national and district agencies, encouraged dedication among the NGOs and CEWs, and supported the active participation of project beneficiary groups.

(iv) Gender mainstreaming through group formation and capacity building training programs in aquaculture production and food processing is an effective strategy in empowering women.

(v) Forming and strengthening cooperatives is a good strategy in sustaining project benefits after project completion.

(vi) Use of voluntary extension workers recruited from local communities by district agencies will help ensure continuity of extension services to local project beneficiaries.

(vii) A functional management information system should have been developed in DGA. C. Recommendations

1. Project Related

52. Future monitoring. The DFSs in the five project districts should continue their monitoring activities after project completion. They need to regularly monitor (i) the organizational performance and activities of the various beneficiary groups under the project (project beneficiary groups, associations of project beneficiary groups, women’s groups, and cooperatives); (ii) the problems encountered in these groups’ aquaculture or processing enterprises, including the financial performance of these enterprises; and (iii) the status of various infrastructure facilities constructed or provided by the project. This monitoring will help support the viability and sustainability of the post-project impact. The project beneficiary groups should conduct participatory monitoring and evaluation. 53. Handover of project assets. To help monitor and assess the needs of the different community groups formed under the project in the project districts, the DGA should fast-track the formal handing over of the project's physical assets (e.g., motorcycles and other vehicles) to the DFSs to enable them to request budgetary support from the district governments for the operation and maintenance of these assets. National physical assets such the fish health and quality laboratories should be operated and maintained continuously.

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54. Budgetary support. Full commitment of the district and national governments should be encouraged to provide budgetary support for (i) monitoring and evaluation activities of the DFSs in the five project districts, and (ii) the provision of input and technical assistance to the project beneficiary groups after project completion. Adequate budget should also be allocated to rehire additional extension workers since the DFSs in the project districts, especially in OKI and Buton, have a limited number of extension personnel.

55. Capacity building of community organizations and groups. Further training on cooperative organization and management should be conducted for the fish farmer groups, including women’s groups, since some of the associations would like to be transformed into cooperatives to (i) improve their access to financing institutions, and (ii) enable them to provide more economic services to their members. This would necessitate closer collaboration and linkages between the DFS and the district cooperative service in each project district. 56. Market assistance. Market assistance should be continuously provided by DFSs, especially for the fish farmer groups that are now producing large volumes of fish and aquatic products, by establishing market linkages or facilitating market arrangements with potential buyers. 57. Further action or follow-up. The DGA and the DFSs, especially those in Karawang, OKI, and Buton, should seek the support of the Ministry of Environment and Forestry and district heads in resolving the worsening water quality problems in the project districts caused by the dumping of industrial waste in rivers, mining, and other agricultural activities. The DGA, the Ministry of Environment and Forestry, and the district heads should hold multisectoral meetings with representatives from the industrial and mining companies as well as from selected project beneficiary groups to address the water quality problems that have adversely affected the aquaculture subsector in the project districts. Moreover, the DFSs in Karawang, OKI, and Buton should urgently implement the action plans recommended by the PMC to improve local water quality.

2. General 58. Replication of the project. The government has considered replicating the project in other coastal districts with a high incidence of poverty and food security problems. The government could therefore start planning the design of the new project by considering the excellent design features of the project (para 5.), the factors that contributed to its success, and replicable lessons from the project. 59. Formulating measurable output indicators. In designing the proposed future project, the output indicators should be quantitatively and qualitatively measurable to avoid potential refinements during implementation.

16 Appendix 1

DESIGN AND MONITORING FRAMEWORK Design

Summary Performance

Targets/Indicators Achievements At Project Completion Review

Impact Reduced poverty and increased food security in five rural districts

• Food and non-food expenditures and fish consumption (about Rp155,000 in 2004) up 20% by year 6

• Incomes of 14,000 poor households increased to above the poverty line by year 6

• Results from the project completion survey conducted from April to June 2013 shows that fish consumption in the project districts, on average, increased by 83% from 2006 to 2013, exceeding the target of 20%.

• Based on the results of the project completion survey, the project significantly contributed to reducing poverty incidence in the five project districts from 15%–25% of the population in 2006 to 10%–16% in 2011. Survey results also revealed that the total household income, on average, increased from Rp1.28 million in 2004 to Rp19.58 million in 2012. Moreover, the project directly benefited 14,585 poor fish farmer households, which exceeded the target of 14,000 households.

Outcome Increased fish production through sustainable aquaculture development

• Production, productivity, and

range of products for all types of aquaculture operations increased from 2006 levels by at least 30% by year 6

• Income (about Rp320,000 in

2004) of fish farmer households and communities up 20% by year 6

• About 18,000 jobs created by

the project by year 6

• Results of the household surveys conducted by

the PMO and the CEWs from 2009 to 2012 show that production and productivity of fish increased by an average of 60% and other aquatic products increased by an average of 84%, which exceeded the target minimum increase of 30%.

• The household surveys also showed that the

project beneficiaries’ net income improved by 70%, which surpassed the target of at least a 20% increase.

• The project generated 306,382 person-days of

employment consisting of 296,653 person-days of employment in civil works activities for the poor fishing households and 9,729 person-days of employment in aquaculture activities. Achievement of the employment target could not be quantified because it is not clear whether this indicator refers to 18,000 person-days of jobs.

Outputs Component 1: Aquaculture Production Enhancement Communities organized and empowered; social infrastructure and facilities improved; fish production in freshwater, brackishwater, and mariculture enhanced

• About 14,000 poor households organized and participate in community managed aquaculture enterprises

• Brackishwater aquaculture and

mariculture: - 5,700 hectares of fish ponds rehabilitated and managed;

• 14,585 beneficiaries (compared to the targeted

14,000) were organized and participated in community-managed aquaculture enterprises.

• 3,277 hectares of ponds were rehabilitated in Langkat, OKI, and Karawang, achieving only 80% of the revised target of 4,100

hectares.

Appendix 1 17

Design Summary

Performance Targets/Indicators

Achievements At Project Completion Review

through rehabilitation and establishment of community-based aquaculture systems

this target was revised to 4,100 hectares of fish ponds due to much smaller potential area for brackishwater development in OKI

- 300 units mariculture cages established and

managed - 150 brackishwater and

mariculture demonstration units established; this target was revised by disaggregating to 100 brackishwater demonstration units and 50 mariculture demonstration units

- 500 hectares of seaweed

culture facilities developed • Freshwater aquaculture: - 45 hectares of fish ponds

rehabilitated or established - 100 units demonstration facilities established (including for rice fish culture) • Hatcheries: - 27 freshwater hatcheries

established; this target was revised as follows: 20 freshwater hatcheries and 7 mariculture hatcheries established to cover both types of aquaculture

- 10 nurseries established, but

expanded to include seaweed nurseries or seaweed gardens in mariculture areas

• Other infrastructure: - 150 units of water supply facilities provided - 60 kilometers of access roads

and pathways rehabilitated

• 533 mariculture cages established primarily to grow grouper were constructed in

Langkat and Buton, exceeding the target by 78%.

• 107 brackishwater demonstration units were

established, exceeding the revised target by 7%; 69 mariculture demonstration units were established, exceeding the revised target by 38%.

• The project constructed 582 hectares of

seaweed culture facilities, exceeding the target by 16%.

• 156.7 hectares of freshwater ponds were

rehabilitated in Karawang and Sumedang, exceed the target by 248%.

• 76 total demonstration ponds were established

in freshwater aquaculture in OKI, Karawang, and Sumedang, meeting only 76% of the target.

• 31 total freshwater hatcheries were constructed

for the production of fingerlings in Sumedang and OKI, exceeding the target by 55%. The total number of mariculture hatcheries constructed was short of the target, since only four were established.

• The project fully met the target of establishing 10 nurseries, including seaweed

gardens in mariculture areas.

• The project exceeded the target and constructed 166 units of water supply facilities comprised of a large water supply facility equivalent to 130 units in OKI and 36 small-scale water supply units in Langkat, Karawang, and Buton.

• The project rehabilitated 38.04 kilometers in

Langkat, OKI, Karawang, and Buton. There were two unfinished production road rehabilitation contracts in Langkat and OKI in 2012.

18 Appendix 1

Design Summary

Performance Targets/Indicators

Achievements At Project Completion Review

Component 2: Aquaculture Support Services Production techniques and quality of aquaculture products improved through strengthened extension services and improved post-harvest handling, processing and marketing

• Some 3,500 community groups served by extension workers; this target was reduced to 930 target groups since the actual number of project beneficiaries in each group actually ranged from 10–20 members instead of 4

• About 1,250 of women’sgroups served by extension workers; this target was reduced to 200 groups since the number of members per group was larger than estimated at appraisal but the number of women participation in the project activities should still meet the 30% target

• At least 300 fisheries extension activities conducted in all project sites by year 6

• At least 50% of project beneficiaries assisted in gaining access to various financing schemes

• Fish post-harvest and

economic losses reduced by 30%

• Value of cultured fish and

other aquatic products increased by 20%

• Sales of cultured fish

increased by about 30% by year 6

• The CEWs served 1,023 community groups, indicating an achievement rate of 110% compared to the revised target.

• The total number of women’s groups served by CEWs was 139. In addition to this, CEWs served women members (13%) of the total project beneficiary groups.

• The CEWs held a total of 18,888 meetings with the beneficiary groups in all the project districts.

• Provision of financial assistance to project beneficiaries was not included in the project design. Nevertheless, the project assisted some associations of project beneficiary groups to form 40 cooperatives to have better access to credit from financial institutions.

• Results of the project completion survey conducted from April to June 2013 showed that the provision of processing and post-harvest equipment under the project resulted in a 55% reduction of post-harvest and economic losses (from an average of 11.3% before the project to 5.0% with the project) compared to the targeted 30% reduction.

• Based on the results of the project completion

survey, the project beneficiaries, on average, obtained a 27% increase in the value of their products with the project compared to the without project scenario. The increase in the value of harvested products was attributed to the higher price received as a result of the use of improved species, better quality of cultured fish and other aquatic products, and lower percentage of post-harvest losses.

• Results of the project completion survey revealed that, on average, there was an increase of about 5.6% in the sale of harvested products with the project (from 87.1% before the

Appendix 1 19

Design Summary

Performance Targets/Indicators

Achievements At Project Completion Review

• Market information,

including price information, for fish and other cultured commodities effectively disseminated to target beneficiaries

• Water quality in aquaculture

production areas improved in all project districts

• Water quality and fish

disease laboratories established and functional at project sites

• Applied aquaculture research

(e.g., broodstock development, seed production, and feed development), ecological assessment studies, and other special studies conducted by suitable research and academic institutions

project to 92.7% with the project) compared to the target of 30.0%. The small increase in the sale of harvested products was attributed to the already high percentage of sales of harvested products before the project.

• Using cell phones as a simple and effective market information network, the PIU staff and the CEWs were able to easily and effectively disseminate information on real-time prices of fish and other aquatic products as well as potential market outlets to the chairpersons of the project beneficiary groups, who relayed the market information to their members.

• Water quality in aquaculture production areas improved in only Langkat and Sumedang but deteriorated in Karawang, OKI, and Buton.

• Four water quality and fish disease laboratories were established (one each in OKI, Langkat, Sumedang, and Buton). The PIU in Karawang decided not to construct a new laboratory and instead relied on the services provided by the provincial water quality and fish health laboratory in the area since the district did not have trained technicians to operate a laboratory.

• There was no applied research undertaken by

the PIUs in the project areas since (i) the PIU staff did not have the expertise and experience in conducting applied research; and (ii) the national aquaculture development centers located in 15 strategic sites in Indonesia were already conducting applied research in freshwater culture, brackishwater culture, and mariculture.

Component 3: Institutional Strengthening and Project Management Capacity of national- and district-level institutions, including private sector institutions, in aquaculture development and management strengthened; and establishment and operation of project management office and units supported

• 45 fisheries personnel of the DGA and participating district fisheries services trained in aquaculture, environment, and related fields

• 70 extension officers

(community-based and district fisheries service staff) provided with training and transport equipment

• During 2009–2012, 222 staff (55 staff from DGA and PMO and 167 staff from the five PIUs) received training.

• 72 CEWs engaged by PIUs were given (i) adequate training in the national aquaculture development centers in Sukabumi, Jepara, and Lombok, and (ii) transport equipment before they were assigned to work in the project villages to strengthen the districts’ fisheries extension service.

20 Appendix 1

Design Summary

Performance Targets/Indicators

Achievements At Project Completion Review

• Five aquaculture technical centers upgraded, renovated, or newly established

• Computer-based aquaculture

information system developed and installed at DGA and linked to the participating districts and to offices concerned

• Aquaculture-related information materials produced and distributed

• Up-to-date and consistent

information presented in published materials

• PMO and PIUs established in

DGA and five project districts • PMO and PIUs adequately

staffed and equipped with necessary facilities

• Annual project implementation achievements consistent with predetermined or planned implementation targets for each year

• Funds budgeted for project disbursed and utilized in a timely manner

• The project upgraded, renovated, or newly

established 12 aquaculture technical centers in Ujung Batee, Batam, Jambi, Lampung, Mandiangin, Sukabumi, Karawang, Situbondo, Takalar, Ambon, Tatelu, and Lombok to help them carry out their functions and responsibilities to develop improved species and technology, and to multiply improved species on a large scale for distribution to fish farmers.

• The computer-based aquaculture management information system was installed at the DGA in 2010, but it was not linked to the participating districts and offices because the system that was linked to the DGA website was not compatible for use by the PIU staff in the collection and dissemination of project data.

• The PMC produced 29 high-quality reports, guidelines, and presentations that were distributed to the PMO, the PIUs, the CEWs, and the nongovernment organizations.

• The PMO and the PIUs prepared 15 quarterly project management reports and six annual reports, which were submitted to ADB, the Ministry of Finance, the National Development Planning Agency, and the Ministry of Marine Aquaculture and Fisheries.

• The PMO in the DGA and the PIUs in the five project districts were established in July 2007.

• The PMO and the PIUs were adequately staffed and equipped to meet project requirements.

• Except during 2007–2008 as a result of the 2-year project delay when the ADB loan was not yet available, annual project implementation achievements were consistent with predetermined or planned implementation targets for each year.

• Disbursements started in 2008 and significantly increased in 2011 and 2012. The highest amount of disbursement ($11.32 million) was in 2012 when the PMO and PIUs, with the assistance of the PMC, helped accelerate project implementation activities.

Note: Revised performance targets became effective on 2 April 2012 after the midterm review.

ADB = Asian Development Bank, CEW = community-based extension worker, DGA = Directorate General of Aquaculture, OKI = Ogan Komering Ilir, PIU = project implementing unit; PMO = project management office. Sources: ADB. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Loan for Sustainable Aquaculture Development for Food Security and Poverty Reduction Project. Manila; Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 2 21

SUMMARY OF PROJECT OUTPUTS AND ACCOMPLISHMENTS Table A2.1: Achievements in Project Outputs, 2009–2013

No. Output Target Achievement Target

(%)

Component 1: Aquaculture Production Enhancement

1 Number of households organized and who participated in community-managed aquaculture enterprises

14,000 14,585 104

2 Total area of rehabilitated and managed brackishwater ponds (hectares)

4,100 3,277 80

3 Number of established and managed mariculture cages

300 533 178

4 Number of brackishwater demonstration units established

100 107 107

5 Number of mariculture demonstration units established

50 69 138

6 Number of mariculture hatcheries established

7 4 57

7 Total area of seaweed culture facilities developed (hectares)

500 582 116

8 Total area of freshwater ponds rehabilitated (hectares)

45 233 518

9 Number of freshwater demonstration units established

100 76 76

10 Number of freshwater hatcheries established

20 31 155

11 Number of water supply facilities provided 150 166 111

12 Length of production or access roads rehabilitated (kilometers)

60 38 63

Component 2: Aquaculture Support Services

13 Number of community groups served by extension workers

930 1,024 110

14 Number of women’s groups served by extension workers

200 139 70

15 Number of extension activities conducted in all project sites

300 18,888 6,296

16 Number of project beneficiaries receiving production input assistance

14,000 14,585 104

17 Fish post-harvest and economic losses (%)

Reduced by 30%

Reduced by 55%

183

18 Value of cultured fish and other aquatic products (%)

Increased by 20%

Increased by 27%

135

19 Sales of cultured fish (%) Increased by 30.0%

Increased by 5.6%

19

20 Market information, including price information for fish and other cultured commodities, effectively disseminated to target beneficiaries

Market information

network established in five districts

Network established

starting 2011

100

21 Water quality in aquaculture production areas improved in all project districts

Water quality improved in

Langkat, OKI,

Water quality improved in Langkat and

40

22 Appendix 2

No. Output Target Achievement Target

(%) Karawang, Sumedang, and Buton

Sumedang, but deteriorated in

Karawang, OKI, and Buton

22 Number of water quality and fish diseases laboratories established and operational

5 4 80

23 Applied aquaculture research conducted by suitable research and academic institutions

Research carried out by

suitable research and

academic institutions

Research carried out by

national aquaculture development

centers

100

Component 3: Institutional Strengthening and Project Management

24 Number of personnel of DGA and participating district fisheries services trained in aquaculture environment and related fields

45 222 493

25 Number of community-based extension workers provided with training and transport equipment

70 72 103

26 Five aquaculture technical centers upgraded, renovated, or newly established

5 12 240

27 Computer-based aquaculture information system developed and installed at DGA and linked to the participating districts and relevant offices

1 Developed and installed in DGA but not in PIUs

100

28 Aquaculture-related information materials produced and distributed

Implemented 29 sets of guidelines

prepared by the PMCs

distributed to PMO and PIUs

100

29 Up-to-date and consistent information presented in published materials

Published quarterly and

annually

15 project management reports and 6 annual reports published by PMO during 2008–2013

100

30 PMO and PIUs established in DGA and five project districts

PMO and five PIUs

Established in 2007

100

31 PMO and PIUs adequately staffed and equipped with necessary facilities

Adequately staffed and equipped

Completed in 2008 and 2009

100

32 Funds budgeted for project disbursed and utilized in a timely manner

Achieved starting 2009.

100

DGA = Directorate General of Aquaculture, OKI = Ogan Komering Ilir, PIU = project implementation unit, PMC = project management consultant, PMO = project management office. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 2 23

Table A2.2: Fish Ponds and Irrigation Canals Rehabilitated and Improved in Freshwater Areas, 2009–2012

District 2009 2010 2011 2012 Total

Total Area of Fish Ponds Rehabilitated and Improved (hectares)

OKI 0.0 0.0 0.0 0.0 0.0

Karawang 0.0 50.0 76.0 9.0 135.0

Sumedang 8.3 12.0 1.4 0.0 21.7

Total 8.3 62.0 77.4 9.0 156.7

Total Length of Irrigation Canals Rehabilitated and Improved (kilometers)

OKI 0.00 0.00 0.00 0.00 0.00

Karawang 0.00 2.91 0.82 0.00 3.73

Sumedang 0.00 4.00 0.00 0.00 4.00

Total 0.00 6.91 0.82 0.00 7.73

OKI = Ogan Komering Ilir. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.3: Fish Ponds and Length of Canals Renovated, 2009–2012

District 2009 2010 2011 2012 Total

Total Area of Fish Ponds Rehabilitated and Improved in Brackishwater Area

(hectares)

Langkat 0 0 121 279 400

OKI 0 500 510 0 1,010

Karawang 0 600 1,042 225 1,867

Total 0 1,100 1,673 504 3,277

Length of Irrigation/Drainage Canals Improved in Brackishwater Area

(kilometers)

Langkat 0.00 0.00 5.50 6.00 11.50

OKI 0.00 6.70 8.80 0.00 15.50

Karawang 0.00 9.24 10.56 2.00 21.81

Total 0.00 15.94 24.86 8.00 48.81

OKI = Ogan Komering Ilir. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.4: Mariculture Cages Established and Managed, 2009–2012 (units)

District 2009 2010 2011 2012 Total

Langkat 174 80 190 80 524

Buton 0 0 9 0 9

Total 174 80 199 80 533

Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

24 Appendix 2

Table A2.5: Demonstration Ponds Constructed, 2009–2012 (units)

District Freshwater

Ponds Brackishwater

Ponds Mariculture Total

Langkat 0 86 20 106

OKI 18 9 0 27

Karawang 30 12 0 42

Sumedang 28 0 0 28

Buton 0 0 49 49

Total 76 107 69 252

OKI = Ogan Komering Ilir. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.6: Freshwater and Mariculture Hatcheries Constructed, 2009–2012

(units) District 2009 2010 2011 2012 Total

Langkat 0 0 0 0 0

OKI 0 0 1 0 1

Karawang 0 0 0 0 0

Sumedang 0 10 20 0 30

Buton 0 3 0 1 4

Total 0 13 21 1 35

OKI = Ogan Komering Ilir. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.7: Seaweed Culture Facilities Developed in Buton, 2009–2012

2009 2010 2011 2012 Total

Total number of beneficiaries receiving production input assistance

0 815 1,157 940 2,912

Total area of seaweed culture facilities established (hectares)

0 163 231 188 582

Note: Each beneficiary was given assistance to grow an average of 0.2 hectares of seaweed. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.8: Water Supply Units Constructed or Improved, 2009–2012

(units) District 2009 2010 2011 2012 Total

Langkat 0 0 3 6 9

OKI 0 0 130 0 130

Karawang 0 5 15 0 20

Sumedang 0 0 0 0 0

Buton 0 0 7 0 7

Total 0 5 155 6 166 OKI = Ogan Komering Ilir. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 2 25

Table A2.9: Production Roads Constructed or Improved, 2009–2012 (kilometers)

District 2009 2010 2011 2012 Total

Langkat 0.00 0.00 1.20 0.00 1.20

OKI 0.00 5.03 6.50 0.00 11.53

Karawang 0.00 2.80 6.25 4.55 13.60

Sumedang 0.00 0.00 0.00 0.00 0.00

Buton 0.00 0.00 0.00 11.71 9.71

Total 0.00 7.83 13.95 16.26 38.04 OKI = Ogan Komering Ilir. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.10: Meetings Held by Community Extension Workers with Project Beneficiary

Groups, 2009–2013

District

Number of CEWs Engaged by PIUs

Number of Meetings Held by CEWs with Project Beneficiary Groups

2009 2010 2011 2012 2013 Total

Average Number of Meetings Per CEWS Per Month

Langkat 12 240 798 1,405 1,658 843 4,944 6.74 OKI 15 116 564 1,186 944 66 2,876 3.36 Karawang 10 40 614 654 640 397 2,345 4.11 Sumedang 20 144 541 1,309 1,136 717 3,847 3.37 Buton 14 603 1,202 1,527 1,019 525 4,876 6.11 Total 71 1,143 3,719 6,081 5,397 2,548 18,888 4.66

CEW = community-based extension worker; OKI = Ogan Komering Ilir; PIU = project implementation unit. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.11: Project Beneficiaries Receiving Production Input Assistance, 2009–2012

District Aquaculture

System Commodity 2009 2010 2011 2012 Total

Langkat Brackishwater Shrimp 86 200 319 242 847

Soft-shell crab 0 120 270 200 590

Subtotal 86 320 589 442 1.437

Mariculture Grouper 174 80 190 80 524

Subtotal 174 80 190 80 524

Total 260 400 779 522 1,961

Ogan Komering Ilir

Freshwater Catfish 0 0 330 0 330

Asian catfish 0 525 720 260 1,445

Polyculture of carp and tilapia

291 0 0 0 291

Hatchery (carp, tilapia, catfish, and gurami)

14 0 0 0 14

Rice-fish culture 133 0 0 0 133

Ornamental fish 3 0 0 0 3

Subtotal 441 525 1,050 260 2,276

26 Appendix 2

District Aquaculture

System Commodity 2009 2010 2011 2012 Total

Brackishwater Polyculture of shrimp and milkfish

0 80 255 750 1,085

Subtotal 0 80 255 750 1,085

Total 441 605 1,305 1,010 3,361

Karawang Freshwater Carp 0 0 196 76 272

Tilapia 0 0 74 0 74

Catfish 0 0 20 15 35

Asian catfish 0 0 0 9 9

Polyculture of carp and tilapia

0 100 0 0 100

Rice-fish culture 0 0 200 0 200

Ornamental fish 0 0 0 60 60

Subtotal 0 100 490 160 750

Brackishwater Milkfish 0 244 270 64 578

Polyculture of shrimp and milkfish

0 156 174 106 436

Polyculture of shrimp, milkfish, and seaweed

0 0 0 25 25

Tilapia 0 0 14 30 44

Subtotal 0 400 458 225 1,083

Total 0 500 948 385 1,833

Sumedang Freshwater Carp 24 150 113 7 294

Tilapia 2 180 783 58 1,023

Catfish 19 78 110 19 226

Gurami 0 30 0 0 30

Hatchery: Carp Tilapia Catfish Gurami

7 10 39 0

12 32 3 5

18 114 10 0

3 12 2 0

40 168 54 5

Rice-fish culture 40 54 277 250 621

Total 141 544 1,425 351 2,461

Buton Mariculture Seaweed 0 815 1,157 940 2,912

Total 0 815 1,157 940 2,912

All Districts

All Systems Total 842 2,864 5,614 3,208 12,528

Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 2 27

Table A2.12: Directorate General of Aquaculture and Project Implementation Unit Staff Trained, 2009–2012

(number) PMO or PIU 2009 2010 2011 2012 Total

PMO 15 15 15 10 55

PIU Langkat 15 15 18 6 54

PIU OKI 12 2 21 11 46

PIU Karawang 7 7 4 4 22

PIU Sumedang 6 4 5 2 17

PIU Buton 12 6 2 8 28

Total 67 49 65 41 222 DGA = Directorate General of Aquaculture, OKI = Ogan Komering Ilir, PIU = project implementation unit, PMO = project management office. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.13: Training Provided to Community-Based Extension Workers

District Training Type Training Location

Date No. of CEWs

Langkat CEWs

Extension techniques Stabat Jun 2009 10

Mariculture techniques Lampung 22 Jul–4 Aug 2010 5

Brackishwater techniques Situbondo 22 Jul–4 Aug 2010 5

Gender mainstreaming and community mobilization

Sumedang 12–15 Sep 2011 10

Access to aquaculture credit Bogor 6–9 Dec 2011 10

Strengthening of CEWs Bogor 22–24 Jun 2011 10

Fishery extension service Lampung 9–12 May 2012 10

Ogan Komering Ilir CEWs

Training on extension and technology

Kayuagung Jul 2009 9

Training on brackishwater aquaculture techniques

Jepara 12–24 Jul 2010 6

Training on hatchery of catfish Bogor 23–30 Oct 2011 10

Gender mainstreaming and community mobilization

Sumedang 12–5 Sep 2011 5

Training on hatchery in Jambi Jambi 23–30 Oct 2011 7

Access to aquaculture credit Bogor 6–9 Dec 2011 15

Strengthening of CEWs Bogor 22–24 Jun 2011 5

Fishery extension service Lampung 9–12 May 2012 5

Training on operation and maintenance of infrastructure facilities

Kayuagung 22–23 Oct 2012 15

Karawang CEWs

Brackishwater aquaculture techniques

Karawang 2–15 Sep 2009 8

Community development Karawang 29 Sep–12 Oct 2009 10

Freshwater aquaculture techniques

Sukabumi 6–19 Oct 2009 2

Gender mainstreaming and community mobilization

Sumedang 12–15 Sep 2011 6

Access to aquaculture credit Bogor 6–9 Dec 2011 6

Strengthening of CEWs Bogor 22–24 Jun 2011 6

Fishery extension service Lampung 9–12 May 2012 4

28 Appendix 2

District Training Type Training Location

Date No. of CEWs

Operation and maintenance of infrastructure facilities

Karawang 25–27 Sep 2012 6

Sumedang CEWs

Improved technology of freshwater aquaculture

Sukabumi 5 Oct–1 Nov 2009 20

Gender mainstreaming and community mobilization

Sumedang 12–15 Sep 2011 10

Access to aquaculture credit Bogor 6–9 Dec 2011 10

Strengthening of CEWs Bogor 22–24 Jun 2011 10

Fishery extension service Lampung 9–12 May 2012 4

Environmental protection and management

Bogor May 2012 3

Buton CEWs

Improved technology on grouper and seaweed culture

Lampung 9–12 May 2009 4

Improved extension service and technology on seaweed

Lombok May 2009 10

Gender mainstreaming and community mobilization

Sumedang 12–15 Sep 2011 5

Access to aquaculture credit Bogor 6–9 Dec 2011 5

Strengthening of CEWs Bogor 22–24 Jun 2011 10

Fishery extension service Lampung 9–12 May 2012 10

Production input assistance Bogor 8–11 Aug 2012 14

Capacity building in extension Bau Bau 17–21 Nov 2012 25 CEW = community-based extension worker. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.14: Equipment and Motorcycles Provided by Project Implementation Units to

Community-Based Extension Workers

District Number of

CEWs

Number of Vehicles (units)

Number of Extension Equipment

(sets)

Number of Water Quality

Equipment (sets)

Langkat 12 12 motorcycles 12 12

Ogan Komering Ilir 15 7 motorcycles

and 5 boats

15 15

Karawang 10 10 motorcycles 10 10

Sumedang 20 20 motorcycles 20 20

Buton 15 15 motorcycles 15 15

Total 72 64 motorcycles and 5 boats

72 72

CEW = community-based extension worker, PIU = project implementation unit. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 2 29

Table A2.15: List of Aquaculture Technical Centers Upgraded, 2009–2011 No. Name of Technical Centers Location Specialization

1 Technical Center for Mariculture, Ujung Batee Branch Office

Aceh, Sumatra Mariculture

2 Technical Center for Mariculture, Batam Branch Office

Batam, Sumatra Mariculture

3 Technical Center for Freshwater Aquaculture, Jambi Branch Office

Jambi, Sumatra Freshwater aquaculture

4 National Center for Mariculture, Lampung

Lampung, Sumatra Brackishwater and mariculture

5 National Center for Freshwater Aquaculture, Sukabumi

Sukabumi, West Java Freshwater aquaculture

6 National Center for Fisheries Production Service, Karawang

Karawang, West Java Freshwater and brackishwater aquaculture

7 Technical Center for Mariculture, Situbundo Branch Office

Situbundo, East Java Mariculture

8 Technical Center for Brackishwater Aquaculture, Mandiangin Branch Office

Mandiangin, Kalimantan Brackishwater aquaculture

9 Technical Center for Brackishwater Aquaculture, Takalar Branch Office

Takalar, Sulawesi Brackishwater aquaculture

10 Technical Center for Freshwater Aquaculture, Tatelu Branch Office

Tatelu, Sulawesi Freshwater aquaculture

11 Technical Center for Mariculture, Lombok Branch Office

Lombok, West Nusa Tenggara

Mariculture

12 Technical Center for Mariculture, Ambon Branch Office

Ambon, Maluku Mariculture

Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.16: List of Technical and Management Reports Prepared by Project Management Consultants

No. Name of Report Author

1. Project Management Manual Dimyati Nangju

2. Project Technical Implementation Manual Dimyati Nangu

3. Project Procurement Manual Dimyati Nangju

4. Project Work Plans and Budgets, 2009–2013 Dimyati Nangju

Guidelines on Budget Monitoring System Darra Irawati

6. Project Performance Monitoring System Muhammad Ilyas

7. Design of Aquaculture Management Information System Muhammad Ilyas

8. Model Agreements Between Project Implementation Units and Project Beneficiary Groups

Bambang Sumartono

9. Master Plan for Upgrading the Directorate General of Aquaculture’s Capacity in Fish Diseases Diagnosis, Prevention and Control

Sri Lestari Angka

10. Training Module for Fish Health Management Sri Lestari Angka

11. Terms of Reference for Local Information Technology Company Muhammad Ilyas

12. Guidelines for Freshwater Aquaculture Development Ateng Kurnia Jagatraya

13. Guidelines for Brackishwater Aquaculture Development Bambang Sumartono

14. Guidelines for Mariculture Development Hartoyo

15. Terms of Reference and Implementation Guidelines for Nongovernment Organization Selection

Dimyati Nangju

16. Guidelines on Development of Microenterprises Ali Wigono Wiroto

30 Appendix 2

No. Name of Report Author

17. Manual on Preparation of Proposals and Analysis of Microenterprises

Ali Wigono Wiroto

18. Successful Livelihood Models for Fish Farmers Bambang Sumartono

19. Training Needs Assessment Soedijanto

20. Training and Extension Plan Soedijanto

21. Master Plan for Aquaculture Research and Development Fuad Chalik

22. Terms of Reference and Procedural Guidelines for Selection of Research and Academic Institutions

Fuad Chalik

23. Guidelines on the Project’s Processing and Quality Improvement Interventions

Josephine Wiryanti

24. Guidelines on Fish Marketing Interventions Lasma Tambunan

25. Environmental Management and Monitoring Plan Supriadi Tumpatih

26. Initial Environmental Examination Supriadi Tumapatih and Detailed Engineering Design Consultants

27. Engineering Plan for the Proposed Civil Works Edy Sulistyono

28. Standard Tender Documents for the Design and Construction of Civil Works

Edy Sulistyono

29. Guidelines on Community Mobilization and Social Preparation Agustinah Soewito Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A2.17: List of Project Management Reports and Annual Reports Submitted to ADB and the Government, 2008–2013

Name of Report Period of Coverage Date of

Submission to ADB

Project Management Report No. 1 1 Jul 2007–30 Sep 2008 15 Oct 2008

Annual Report for 2008 1 Oct–31 Dec 2008 1 Jan–31 Dec 2008

31 Jan 2009

Project Management Report No. 2 1 Jan–31 Mar 2009 30 Apr 2009

Project Management Report No. 3 1 Apr–30 Jun 2009 31 Jul 2009

Project Management Report No. 4 1 Jul–30 Sep 2009 30 Oct 2009

Annual Report for 2009 1 Oct–31 Dec 2009 1 Jan–31 Dec 2009

31 Jan 2010

Project Management Report No. 5 1 Jan–31 Mar 2010 30 Apr 2010

Project Management Report No. 6 1 Apr–30 Jun 2010 31 Jul 2010

Project Management Report No. 7 1 Jul–30 Sep 2010 30 Oct 2010

Annual Report for 2010 1 Oct–31 Dec 2010 1 Jan–31 Dec 2010

31 Jan 2011

Project Management Report No. 8 1 Jan–31 Mar 2011 29 Apr 2011

Project Management Report No. 9 1 Apr–30 Jun 2011 30 Jul 2011

Midterm Report 1 Jan 2009–30 Jun 2011 5 Jul 2011

Project Management Report No. 10 1 Jul–30 Sep 2011 28 Oct 2011

Annual Report for 2011 1 Oct–31 Dec 2011 1 Jan–31 Dec 2011

7 Feb 2012

Project Management Report No. 11 1 Jan–31 Mar 2012 27 Apr 2012

Project Management Report No. 12 1 Apr–30 Jun 2012 31 Jul 2012

Project Management Report No. 13 1 Jul–30 Sep 2012 31 Oct 2012

Appendix 2 31

Name of Report Period of Coverage Date of

Submission to ADB

Annual Report for 2012 1 Oct–31 Dec 2012 1 Jan–31 Dec 2012

31 Jan 2013

Project Management Report No. 14 1 Jan–31 Mar 2013 30 Apr 2013

Project Management Report No. 15 1 Apr–30 Jun 2013 31 Jul 2013

Project Management Report No. 16 1 Jul–30 Sep 2013 30 Oct 2013

Project Completion Report 13 Jul 2007–31 Dec 2013 30 Oct 2013 ADB = Asian Development Bank. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

32 Appendix 3

PROJECT COST BY EXPENDITURE AND FINANCIER Table A3.1: Project Cost by Expenditure and Financier at Appraisal

($ million)

Category ADB Government Beneficiaries Total

Works 8.82 2.79 1.50 13.11

Equipment and vehicles 2.55 0.28 0.00 2.83

Materials 11.65 1.29 0.00 12.94

Studies, surveys, and research 1.06 0.12 0.00 1.18

Consulting and NGO services 4.46 0.34 0.00 4.80

Training 1.98 0.22 0.00 2.20

Interest/Service charge 1.16 0.00 0.00 1.16

Unallocated (price contingencies) 1.62 0.18 0.00 1.80

Vehicles (project management) 0.00 0.20 0.00 0.20

Training for DGA staff 0.00 0.35 0.00 0.35

Project management 0.00 1.92 0.00 1.92

Operation and maintenance 0.00 0.77 1.26 2.03

Total 33.30 8.46 2.76 44.52

ADB = Asian Development Bank, DGA = Directorate General of Aquaculture, NGO = nongovernment organization. Source: ADB. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Loan to Indonesia for the Sustainable Aquaculture Development for Food Security and Poverty Reduction Project. Manila.

Table A3.2: Project Cost by Expenditure and Financier, Actual

($ million) Category ADB Government Beneficiaries Total

Works 8.86 2.69 1.99 13.54

Equipment and vehicles 3.21 0.34 0.00 3.55

Materials 10.83 1.08 1.53 13.44

Studies, surveys, and research 0.19 0.02 0.00 0.21

Survey for project completion report 0.00 0.14 0.00 0.14

Consulting and NGO Services 5.22 0.52 0.00 5.74

Training 2.52 0.25 0.00 2.77

Interest/Service Charge 0.77 0.00 0.00 0.77

Unallocated 0.00 0.00 0.00 0.00

Project management:

Administration by central government 0.00 2.12 0.00 2.12

Administration by district governments 0.00 0.56 0.00 0.56

Monitoring and evaluation 0.00 0.49 0.00 0.49

Operation and maintenance 0.00 1.28 0.00 1.28

Total 31.60 9.49 3.52 44.61 ADB = Asian Development Bank, NGO = nongovernment organization. Sources: Indonesia Resident Mission’s record (30 September 2014); Directorate General of Aquaculture, Ministry of Marine Affairs and Fisheries.

Appendix 4 33

ANNUAL ASIAN DEVELOPMENT BANK LOAN DISBURSEMENTS Table A4: Actual Disbursements by Year, 2008–2014

($)

Year Annual

Disbursement

Actual Cumulative Disbursement

Percentage of Actual

Cumulative Disbursement

(%)

2008 702,356 702,356 2.22

2009 3,455,232 4,157,588 10.93

2010 5,832,547 9,990,135 18.46

2011 6,930,851 16,920,986 21.93

2012 11,323,809 28,244,795 35.83

2013 2,934,491 31,179,286 9.29

2014 423,265 31,602,551 1.34

Total 31,602,551 31,602,551 100.00 Source: Asian Development Bank Loan Financial Information System.

34 Appendix 5

PLANNED AND ACTUAL PROJECT IMPLEMENTATION SCHEDULE

Appendix 5 35

Planned Actual Planned (Intermittent Activity) Actual (Intermittent Activity) CEW = community-based extension worker, DFS = district fisheries service, DGA = Directorate General of Aquaculture, NGO = nongovernment organization, PIU = project implementation unit, PMO =project management office. Sources: Asian Development Bank. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Loan to Indonesia for the Sustainable Aquaculture Development for Food Security and Poverty Reduction Project. Manila; Project Administration Memorandum; Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

36 Appendix 6

PROJECT ORGANIZATIONAL STRUCTURE Figure A6.1: Project Organizational Chart at Appraisal

BAPPENAS = Badan Perencanaan Pembangunan Nasional (National Planning and Development Agency), CEW = community-based extension worker, DFS = district fisheries service, MMAF = Ministry of Marine Affairs and Fisheries, MOF = Ministry of Finance, MOHA = Ministry of Home Affairs, NGO = nongovernment organization. Source: Asian Development Bank. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Loan to Indonesia for the Sustainable Aquaculture Development for Food Security and Poverty Reduction Project. Manila.

Appendix 6 37

Figure A6.2: Project Organizational Chart, Actual

BAPPENAS = Badan Perencanaan Pembangunan Nasional (National Planning and Development Agency), CEW = community-based extension worker, DFS = district fisheries service, MMAF = Ministry of Marine Affairs and Fisheries, MOF = Ministry of Finance, NGO = nongovernment organization. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

38 Appendix 7

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Nature of Covenant Reference in Loan

Agreement

Status of Compliance

1. In the carrying out the Project and the operation of Project facilities, the Borrower shall perform, or cause to be performed, all obligations set forth in Schedule 5 to this Loan Agreement.

LA, Art IV, Section 4.01

Complied with. Staffing and equipping the PMO and the PIUs was carried out in 2008 and 2009. The PMO and PIUs were adequately staffed and equipped with necessary facilities.

2. The Borrower shall (i) maintain, or cause to be maintained, separate accounts for the Project; (ii) have such accounts and related financial statements audited annually; (iii) furnish to the Asian Development Bank (ADB), as soon as available but in any event not later than six (6) months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request.

The Borrower shall enable ADB, upon ADB's request, to discuss the Borrower's financial statements for the Project and its financial affairs related to the Project from time to time with the auditors appointed by the Borrower pursuant to Section 4.02(a) hereabove, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Borrower unless the Borrower shall otherwise agree. The Borrower shall enable ADB's representatives to inspect the Project, the Goods and Works financed out of the proceeds of the Loan, and any relevant records and documents.

LA, Art IV, Section 4.02 (a) LA, Art IV, Section 4.02 (b) LA, Art IV, Section 4.03

Complied with. Financial statements and accounts were audited. and financial reports were prepared on time by an independent auditor for 2008, 2009, 2010, 2011, 2012, and 2013. All audited financial statements of the project were submitted in June of the following year (i.e., in June 2009 for the 2008 financial statements, in June 2010 for 2009, in June 2011 for 2010, in June 2012 for 2013, and in June 2014 for 2013). Complied with. ADB provided comments on the annual audited financial report and followed up with the executing agency on remedial actions to be taken with regard to the audit findings. Complied with. ADB inspected project sites and goods and vehicles purchased under the project during loan review missions.

3. National Steering Committee (NSC) Establishment of NSC prior to the Effective Date to provide guidance on the overall direction of the Project and ensure inter-agency coordination between the Project’s activities and the Borrower’s policy on aquaculture development; to be chaired by the Director General of the Directorate General of Aquaculture (DGA) and

LA Sch 5, para 3

Complied with. The NSC was established to provide guidance on the overall direction of the project and interagency coordination. It was chaired by the DGA and was comprised of senior officials (at the first echelon level) of BAPPENAS and the MOF. The NSC was assisted by a NTC comprising technical staff of BAPPENAS, the MOF, and the MMAF. The NSC secretary was the head of the NTC. The Ministry of Home Affairs was not invited by the MMAF to be an

Appendix 7 39

Nature of Covenant Reference in Loan

Agreement

Status of Compliance

shall comprise a secretary and senior officials from BAPPENAS (National Planning and Development Agency),

Ministry of Finance (MOF), and local government officials from the Project Provinces. Project District governments shall be invited to attend NSC meetings on issues that require their participation. NSC shall be assisted by a national technical committee (NTC), which shall comprise of technical staff of NSC member agencies and the Ministry of Home Affairs, and headed by the NSC Secretary.

active member of the NTC because the PMO was already coordinating closely with the PIUs at the district level.

4 Project Management Office (PMO) Establishment of the PMO within DGA, to oversee the day-to-day implementation of the Project, including (i) Project coordination and implementation, (ii) preparation and submission of all necessary reports to NSC and ADB, (iii) close monitoring of Project implementation, (iv) conduct procurement at the central level for specific goods and services, (v) select and engage consultants, and (vi) design and undertake a baseline survey, midterm and Project completion survey; to be headed by a dedicated Project Director and supported by a dedicated Project Manager, with experience and expertise acceptable to ADB, and an adequate number of the required technical, administrative and financial staff.

LA Sch 5, para 4

Complied with. The DGA established the PMO in early 2007 at the central level after the project was approved by ADB in December 2006 but before the loan became effective in July 2007. The PMO was headed by a project director and assisted by a project manager and two assistant project managers for administration and finance. It was supported by an adequate number of the required technical, administrative, and financial staff.

5. Regional Advisory Committee (RAC) Prior to the Effective Date an RAC shall have been established in each of the Project Districts to oversee Project coordination between the various agencies at the local level and liaise with the NSC as required. The RACs shall consist of representatives of the Project District government, other agencies and institution concerned.

LA Sch 5, para 5. Amended on 12 July 2007

Complied with. The RACs were established in each project district and met twice a year in 2011, 2012, and 2013. Each RAC was chaired by the district secretary and was composed of representatives of the participating district government agencies and heads of subdistricts. The RACs were responsible for overseeing project coordination between the various agencies at the district level and for liaising with the NSC as required.

6. Project Implementation Unit (PIU) The PIUs, established in each Project District, shall be responsible for implementing the Project activities at the district level, (ii) carrying out procurement at district level for certain goods and services and civil works, (iii) coordinating with other relevant

LA Sch 5, para 6

Complied with. The PIUs were mobilized in 2007. Each PIU was headed by the fead of the district fisheries service and assisted by a number of technical, administrative, and financial staff in charge of the implementation of the three components of the project.

40 Appendix 7

Nature of Covenant Reference in Loan

Agreement

Status of Compliance

government agencies at the district level, and (iv) prepare and submit all necessary reports for submission to the PMO and RAC. Each PIU shall be headed by a dedicated PIU Head, with experience and expertise acceptable to ADB, and an adequate number of the required technical, administrative and financial staff.

7. District Governments

District governments shall be responsible for cross-sector coordination and implementation of the Project’s activities, including provision of support to the (i) development and rehabilitation of sustainable aquaculture farming systems and post-harvest facilities; (ii) development and implementation of programs in hatchery production, culture-based fisheries, and lake and river management; (iii) aquaculture technology demonstration and extension; and (iv) small-scale infrastructure development in support of local aquaculture.

LA Sch 5, para 7

Complied with.

8. Counterpart Funds Without prejudice to the provisions of Section 6.06 of the Loan Regulations, the Borrower shall ensure, and shall cause each of the Project Districts to ensure, that (i) counterpart funds for the Project implementation are provided on time; and (ii) annual budgetary appropriation request is submitted in a timely manner and appropriated funds are promptly disbursed during each year of Project implementation.

LA Sch 5, para 8

Complied with. The MOF allocated the first budgets to the project through the DGA, MMAF, approved in mid-2008 for central-level activities and late 2008 for district-level activities in accordance with Government Regulation No. 7 of 4 February 2008. In addition, the district governments also allocated small local budgets to PIUs to meet a portion of local expenditures that could not be met by the central budget.

9. Selection Criteria Within one year of the Effective Date, the Borrower shall develop detailed criteria for selection of the Project beneficiaries in accordance with the general criteria listed below. To be eligible Project beneficiaries, the small-scale fish farmers: (i) must belong to the poor income

groups as defined in the Borrower’s Medium Term Development Plan and Annual Development Plan;

(ii) must belong to organized fish farmer groups;

(iii) must have some prior experience

LA Sch 5, para 9

Complied with. The project beneficiaries were selected by NGOs in accordance with the agreed beneficiary selection criteria.

Appendix 7 41

Nature of Covenant Reference in Loan

Agreement

Status of Compliance

in fish farming; (iv) must be willing to undergo training

in improved methods and practices of aquaculture;

(v) must demonstrate willingness to share their new skills with other fish farmers in the community;

(vi) must be willing to be supervised and monitored by the Project Personnel.

10. The general criteria for the subprojects are as follows: (i) selection criteria for culture species:

(a) the species must have been previously cultured in the territory of the Borrower and must not be harmful to indigenous species in the Project Provinces;

(b) its rate of growth must be sufficiently high;

(c) it must be able to reproduce successfully under culture conditions;

(d) it must accept and thrive on abundant and cheap artificial

feeds; (e) it must be acceptable to the

target consumers; (f) it should be able to support a

high population density in ponds or cages; (g) it must have high resistance to

disease; and (h) seeds must be available and

easy to obtain. (ii) selection criteria for technology to

be adopted: (a) the technology must be simple,

low-cost, and low-level to facilitate transfer to, and adoption by, fish farmers and have greater chances of success; and

(b) more complex technologies which require higher capital and other inputs are better suited to medium- and large-scale private entrepreneurs with the capability to engage the services of technical specialists in running their operations.

(iii) criteria for the siting of brackishwater aquaculture and mariculture subprojects: (a) the subproject must not be

located in environmentally critical areas, such as protected

LA Sch 5, para 10

Complied with.

42 Appendix 7

Nature of Covenant Reference in Loan

Agreement

Status of Compliance

forests, marine sanctuaries, or nature reserves;

(b) the subproject must not involve the conversion of mangrove forests into fishponds;

(c) the subproject must not involve the destruction of coastal habitats such as coral reefs, seagrass beds and associated flora and fauna;

(d) ample attention must have been paid to site selection, culture installation design, and the management of culture operations to preserve the integrity of the environment;

(e) integrated aquaculture, such as maintaining mangroves along fishpond dikes and in nearby areas, should be encouraged for environmental conservation; and

(f) will involve minimal land acquisition and resettlement.

11. Involuntary Resettlement The Borrower shall ensure and shall cause each of the Project Districts to ensure that prior to the award of civil works contracts, it shall screen for involuntary resettlement effects, to ensure that there are no losses of land, income, housing, community facilities and resources that would require compensation to be paid in accordance with ADB’s Policy on Involuntary Resettlement (1995). In the event land acquisition and resettlement is required for any activities funded under the Project, such land acquisition and resettlement shall be carried out in accordance with the agreed Compensation Policy Framework and Procedural Guidelines prepared for the Project and as endorsed by the Borrower by letter dated October 31, 2005.

LA Sch 5, para 11

Not relevant. The project was not likely to involve involuntary resettlement.

12. Gender The Borrower shall ensure, and shall cause each of the Project Districts to ensure, that the agreed Gender Action Plan is complied with, in order to ensure (a) equal opportunities for men and women in all Project activities, including aquaculture development, processing, marketing, resource management and livelihood

LA Sch 5, para 12

Complied with.

Appendix 7 43

Nature of Covenant Reference in Loan

Agreement

Status of Compliance

programs; (b) equal opportunity for women to access financial assistance; and (c) inclusion of an adequate portion of women in the Project’s training programs.

13. The Borrower shall further ensure that one PMO staff member is designated as the gender focal point, with responsibility for organizing gender training, coordinating gender-related activities, advising on how gender concerns can be incorporated in Project activities, and monitoring the extent to which this is done.

LA Sch 5, para 13

Complied with. One PMO staff member was designated as the gender focal point.

14. Environment The Borrower shall ensure that the site selection, design, construction and operation of the aquaculture facilities and social infrastructure are implemented in accordance with the relevant regulations and standards of the Borrower as well as the ADB’s Environment Policy (2002). Further, all aquaculture facilities, social infrastructure, and microenterprise activities shall be subject to an environmental screening and procedural requirements in accordance with the environmental monitoring plan prepared for the Project prior to their establishment.

LA Sch 5, para 14

Partially complied with. Environmental screening of aquaculture facilities was inadequate due to the resignations of three environment specialists in the PMC, owing to their lack of qualifications to undertake the assignment. The first environment specialist recruited under the project resigned in November 2009 before completing his assignment. The second environment specialist was recruited in February 2011 but resigned at the end of May 2011 for personal reasons. The third environment specialist began work in September 2011 but resigned in January 2012. The PMC had difficulty in finding qualified experts due to a scarcity of environment experts. Nevertheless, the third environment expert prepared an action plan to overcome the water quality problems for each of the project districts, and the PIUs approved this plan.

15. Indigenous People The Borrower shall ensure that all necessary measures are taken under the Project with regard to indigenous peoples in accordance with the Indigenous Peoples’ Development Framework dated October 31, 2005 prepared for this project and ADB’s Policy on Indigenous People (2003).

LA Sch 5, para 15

Not relevant. There were no indigenous people in the project districts.

16. Anticorruption Policy ADB shall have the right to investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive or coercive practice relating to the Project. Relevant provisions of ADB’s anticorruption policy shall be included in the bidding documents for the Project and all contracts financed by

LA Sch 5, para 16

Complied with.

44 Appendix 7

Nature of Covenant Reference in Loan

Agreement

Status of Compliance

ADB in connection with the Project shall include provisions specifying the right of ADB to audit Project-related records and accounts of DGA and all contractors, suppliers, consultants, and other service providers working under the Project.

17. Project Performance Monitoring System

Within one year of the Effective Date, MMAF shall establish a project performance monitoring system, which shall encompass (a) monitoring of physical and financial progress as well as economy and efficiency of key activities such as recruitment of consultants, procurement of equipment and materials, training arrangements, conduct of surveys and special studies, policy development, drafting of implementation guidelines, and the like; (b) monitoring of the level and adequacy of participation of various stakeholders, including local communities, in Project activities; (c) monitoring of the Project’s social, environmental, and economic impacts, including the establishment of benchmark information and data; and (d) setting a mechanism for making necessary adjustments in the project design and implementation arrangements and incorporating lessons learned from similar projects in project planning.

LA Sch 5, para 17

Partially complied with. The requirement to establish a project performance monitoring system was not met since the project performance monitoring function was carried out by the PMC. The PMC regularly coordinated with, discussed with, and reported to the PMO on the project’s physical, financial, social, and environmental progress and issues, and stakeholders’ participation in the project. This impacted the good performance of the project.

18. Monitoring and Evaluation The Borrower shall introduce participatory monitoring and evaluation, at the community level, as part of the Project’s comprehensive participatory development approach. The monitoring and evaluation shall be prepared in the form and substance agreed between the Borrower and ADB and shall be submitted to ADB on a quarterly basis together with the Project progress report.

LA Sch 5, para 18

Complied with. Beneficiary groups assisted the PIUs in the collection of socioeconomic data at the community group level. The collected data were analyzed by the community-based extension workers and the NGOs. The PMO and the PIUs submitted quarterly progress reports in the form of project management reports and also annual reports to ADB.

ADB = Asian Development Bank, BAPPENAS = Badan Perencanaan Pembangunan Nasional (National Development Planning Agency), DGA = Directorate General of Aquaculture, MMAF = Ministry of Marine Affairs and Fisheries, MOF = Ministry of Finance, NGO = nongovernment organization, NSC = national steering committee, NTC = national technical committee, PIU = project implementation unit; PMO = project management office, RAC = regional advisory committee. Sources: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 8 45

CONSULTANCY SERVICES, PLANNED AND ACTUAL

Appraisal–Actual

Positions No. Contracted Person-Months

At Appraisal Actual At Appraisal Actual

A. International Positions

1. Team Leader/Project Management Specialist

1 1 48.00 51.98

2. Fish Health Management Specialist

1 1 4.00 3.64

3. Fish Information System Specialist

1 1 4.00 4.00

4. Project Economist Specialist

0 1 0.00 1.00

Subtotal A 3 4 56.00 60.62

B. Domestic Positions

1. Site Adviser – Langkat, North Sumatra

1 2 60.00 59.14

2. Site Adviser – Ogan Komering Ilir, South Sumatra

1 2 60.00 57.36

3. Site Adviser – Karawang, West Java

1 1 60.00 60.19

4. Site Adviser – Sumedang, West Java

1 1 60.00 64.55

5. Site Adviser – Buton, Southeast Sulawesi

1 1 60.00 57.18

6. Brackishwater Specialist 1 1 32.00 53.29

7. Freshwater Specialist 1 1 32.00 31.00

8. Mariculture Specialist-1 1 1 24.00 23.91

9. Community Development & Gender Specialist

1 1 48.00 44.38

10. Microenterprise Specialist-1 1 1 30.00 0.45

11. Microenterprise Specialist-2 1 1 30.00 4.55

12. Institutional Development Specialist

1 1 9.00 9.00

13. Training and Extension Specialist

1 1 24.00 24.00

14. Research & Development Specialist

1 1

12.00 11.09

15. Fish Processing & Quality Specialist

1 1 12.00 12.00

16. Fish Marketing Specialist 1 1 9.00 8.82

17. Civil Engineer/Infrastructure Planner

1 1 18.00 41.77

18. Environment Specialist 1 3 12.00 8.73

19. Project Management & Policy Advisor

0 1 00.00 10.50

20. Procurement & Contracting 0 2 00.00 19.27

46 Appendix 8

Appraisal–Actual

Positions No. Contracted Person-Months

At Appraisal Actual At Appraisal Actual

Specialist

21. Financial Management Specialist

0 1 00.00

29.91

22. Unallocated 0 1 24.00

Subtotal B 19 26 616.00 631.09

Total (A+B) 22 30 672.00 691.71 Sources: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 9 47

CONSUMPTION OF FISH, VEGETABLES, AND FRUITS UNDER WITH AND WITHOUT PROJECT SCENARIOS

Table A9.1: Poverty Incidence in Project Districts during 2006 - 2011

District 2006 2007 2008 2009 2010 2011

Langkat 20.57 18.23 14.81 12.75 10.84 10.31

Ogan Komering Ilir 25.93 22.50 17.67 16.17 15.98 15.06

Karawang 16.51 14.83 14.00 12.90 12.21 11.80

Sumedang 15.12 15.63 15.18 13.69 12.94 12.48

Buton 25.20 22.94 22.93 20.16 17.95 16.64

Indonesia 17.75 16.58 15.42 14.15 13.33 12.36 Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A9.2: Consumption of Fish, Vegetables, and Fruits under With and Without Project Scenarios, 2009 - 2013

District Consumption (grams/capita/day)

Fish Vegetables Fruits

Langkat Before input assistance 23.3 100.6 22.0

After input assistance 25.8 101.3 36.0

% increase 11.0 10.0 64.0

Ogan Komering Ilir Before input assistance 23.0 77.4 23.0 After input assistance 61.0 111.6 47.9

% increase 165.0 44.0 108.0

Karawang Before input assistance 38.6 114.0 52.0 After input assistance 39.6 127.0 56.0

% increase 3.0 11.0 8.0

Sumedang Before input assistance 21.3 118.0 67.8 After input assistance 59.1 206.0 97.7

% increase 177.0 75.0 44.0

Buton Before input assistance 57.4 120.0 50.8 After input assistance 90.4 193.5 85.9

% increase 57.0 61.0 67.0

Average increase (%) 83.0 40.0 58.0

Target (%) 20.0 - - Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

.

48 Appendix 10

IMPACT ON PRODUCTION AND PRODUCTIVITY OF FISH AND AQUATIC PRODUCTS and NOMINAL NET INCOME, 2009–2012

(%)

District Average

Production Increase

Average Productivity

Increase

Average Net Income Increase

Average Success

Rate

Average Failure Rate

Langkat 63 68 32 61 39

Ogan Komering Ilir 44 55 102 84 16

Karawang 104 168 77 82 18

Sumedang 110 129 163 94 6

Buton 16 (23) 36 30 70

Overall Average 63 93 68 70 30

Target 30 30 20 - - ( ) = negative. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 11 49

EMPLOYMENT IMPACT

Table A11.1: Employment Generated from Project Beneficiaries’ Participation in Civil Works, 2009–2012

Year Total Labor Expenditure in Civil

Works (Rp‘000)

Estimated Number of Employment Opportunities

Created

(person-days)

2009 1,047,250 20,945

2010 3,528,650 70,573

2011 8,220,109 164,402

2012 2,036,665 40,733

Total 14,832,674 296,653 Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Table A11.2: Impact of Production Input Assistance on Employment

Generation in Project Districts, 2009–2012

District

Increased Labor Requirement of Sample Beneficiaries

Increased Total Employment Generated for All Project

Beneficiaries of Production Input Assistance

No. of Sample

Beneficiaries

Employment Generated

(Person-Days)

Total No. of Beneficiaries

Who Received Production

Input Assistance

Employment Generated

(Person-Days)

Langkat 132 103 1,961 1,530

Ogan Komering Ilir

136 21 3,301 519

Karawang 176 264 1,833 2,750

Sumedang 175 62 2,461 872

Buton 282 393 2,912 4,058

Total 901 843 12,528a

9,729 a

This figure does not include 1,826 beneficiaries in Karawang who received production input assistance for the second time in the mid quarter of July 2013 since their aquaculture farms were damaged by floods in January 2013. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

50 Appendix 12

FINANCIAL AND ECONOMIC ANALYSES

I. INTRODUCTION

1. Financial and economic analyses of 19 representative aquaculture enterprises were conducted to examine the financial and economic viability of the aquaculture production enterprises supported by the project. Economic analysis of the project as a whole was also carried out to determine its economic viability. No financial analysis of the project as a whole was carried out as no such analysis was specified in the report and recommendation of the President.

II. FINANCIAL AND ECONOMIC ANALYSES OF AQUACULTURE ENTERPRISES

A. Assumptions and Methodology 2. The financial and economic analyses used (i) data on the itemized fixed investment cost, (ii) production levels of fish and aquatic products, (iii) input use levels collected by the project site advisors from sample project beneficiaries whom they monitored in the five project districts during project implementation, and (iv) prevailing output prices of fish and other aquatic products as well as the prices of production inputs in the project districts in 2014 that were collected by the staff of the district fisheries services. Investment cost items were adjusted to the 2014 price level using the consumer price index deflator. 3. Financial analysis of each enterprise covered a period of 7 years. It was assumed that input subsidy for one cropping was provided during the first year of operation. The average size of production input assistance or subsidy ranged from Rp4.0 million ($460) to Rp12.5 million ($1,440) per person or fish farmer depending on the type of aquaculture production system, pond improvement requirements, and type of commodity. The input subsidy was considered as an income or benefit in financial analysis. The cost items considered in the financial analysis included investment costs and annual operating expenses that were shouldered by the fish farmer-beneficiary. The fixed investment cost consisted of tools, equipment, boat, and other fixed assets needed in aquaculture production. The operating costs included expenditures on material inputs (feeds, fertilizers, fingerlings/seeds, vitamins, antibiotics), labor, fuel or oil, and other variable expenses. Annual gross revenue of each aquaculture enterprise was computed by multiplying the production volume for each year by the price of the output (i.e., ex-farm price). For the first year of operation, the amount of subsidy was added to the annual gross revenue to derive the total income. Annual gross revenues and costs were estimated based on constant 2014 prices. The annual net income of each aquaculture enterprise was calculated by subtracting total cost (i.e., investment cost plus total variable or operating cost) in each year from the corresponding annual income. The financial opportunity cost of capital used in the analysis is 10%, the prevailing lending rate for small enterprises in Indonesia. It was assumed that the fish farmer-beneficiaries borrowed capital and did not use equity capital.

B. Results of the Financial and Economic Analyses of Aquaculture Enterprises 4. A summary of the financial results on the 19 aquaculture enterprises that were provided with input assistance by the project is shown in Table A12.1. Except for the rice-fish culture, which is not financially viable because of high costs of feeds and labor, the other 18 aquaculture enterprises are highly financially viable, with financial internal rates of return (FIRRs) ranging from 53% to more than 100%—well above the financial cost of capital of 10% and net present

Appendix 12 51

values (NPVs) that are positive. Using NPV as a measure of financial viability, the top five financially profitable aquaculture enterprises are soft-shell crab culture in cages (Langkat), tiger shrimp culture in pond (Karawang), milkfish and seaweed polyculture (Karawang), milkfish culture in pond (Karawang), and tiger shrimp-milkfish polyculture in pond (Karawang and Ogan Komering Ilir [OKI]). The least financially viable enterprises are Asian catfish culture in cages (OKI), Asian catfish in pond (OKI), common carp in pond (Karawang), grouper cage culture (Langkat), and long line seaweed culture (Buton).

Table A12.1: Summary of the Results of the Financial Analysis of 19 Aquaculture Enterprises at Project Completion: Base Case

Type of Aquaculture Enterprise District FIRR (%)

NPV (Rp'000)

Brackishwater

1. Tiger shrimp culture in pond, 3,500 square meters Langkat >100 27,921

2. Vanamei shrimp culture in pond, 3,500 square meters

Langkat >100 89,465

3. Soft-shell crab in cages, 0.4 hectares Langkat >100 885,490

4. Tiger shrimp-milkfish polyculture in pond, 2 hectares OKI >100 115,197

5. Tiger shrimp-milkfish polyculture in pond, 1 hectare Karawang >100 119,178

6. Tiger shrimp culture in pond (plain system), 1 hectare

Karawang >100 213,543

7. Milkfish culture in pond (plain system), 1.5 hectares Karawang >100 121,706

Mariculture

1. Grouper cage culture, 3 meters x 4 meters Langkat >100 14,078

2. Seaweed culture (long line), 2,000 square meters Buton 99 29,176

3. Seaweed culture (line), 2,000 square meters Buton >100 32,077

Freshwater

1. Asian catfish culture in pond, 100 square meters OKI 56 9,095

3. Common carp culture in pond, 200 square meters Karawang 53 15,584

4. Common carp culture in swift water pond, 60 square meters

Sumedang >100 45,528

5. Tilapia culture in stagnant water pond, 1,500 square meters

Sumedang 56 37,721

6. Catfish culture in stagnant water pond, 100 square meters

Sumedang >100 86,874

7. Rice-fish culture, 1,000 square meters Sumedang (1,672)

8. Carp and tilapia polyculture, 5,000 square meters Karawang >100 48,868

9. Milkfish and seaweed polyculture, 10,000 square meters

Karawang >100 144,833

FIRR = financial internal rate of return, NPV = net present value, OKI = Ogan Komering Ilir. ( ) = negative. Source: Asian Development Bank project completion review mission.

5. This section also compared the results of the financial viability analysis of representative aquaculture projects at appraisal, midterm review, and at project completion. Financial analysis in the midterm review and project completion review covers 19 representative aquaculture enterprises, while only five aquaculture enterprises were assessed at project appraisal: grouper cage culture (Buton), mudcrab fattening (Langkat), carp pond culture (Sumedang), shrimp culture (Karawang), and seaweed culture (Buton). Moreover, both the midterm review and project completion review utilized the same set of input use and production data in conducting

52 Appendix 12

financial analysis. Financial benefits and costs during the midterm review, however, were estimated in constant 2011 prices, while they were computed in constant 2014 prices in the project completion review. 6. At project appraisal, all the representative aquaculture activities were also found to be financially viable: their FIRRs ranged from 39% to 66%, significantly exceeding the prevailing cost of capital of 22% during the appraisal year (Table A12.2). Mudcrab fattening, which was proposed at project appraisal instead of soft-shell crab, exhibited the highest FIRR, followed by shrimp culture. Carp pond culture and seaweed culture were the least financially viable among the five aquaculture enterprises evaluated at project appraisal. This is consistent with the findings of the midterm review and project completion review that showed that carp pond culture and seaweed culture were among the least profitable aquaculture enterprises, and that tiger shrimp culture was among the most financially viable aquaculture enterprises.

Table A12.2: Estimated Financial Returns on Aquaculture Enterprises at Project Appraisal

Item

FIRR (%)

Base Case

Switching Values (%)

Increase in Variable Costs

Decrease in Total Revenue

Grouper cage culture (Buton) 47.0 13.5 10.6

Mudcrab fattening (Langkat) 66.0 41.2 25.4

Carp pond culture (Sumedang) 39.0 80.9 23.3

Shrimp culture (Karawang) 50.0 74.9 29.3

Seaweed culture (Buton) 44.0 13.3 10.3 FIRR = financial internal rate of return. Source: Asian Development Bank.

7. The same findings at project appraisal, midterm review, and project completion indicate that the project’s provision of input assistance or subsidies to the project beneficiaries has helped improve the financial viability of most of their aquaculture enterprises. 8. Using the switching value technique, sensitivity analysis was conducted to ascertain the effects of potential changes in benefits and cost fluctuations on the financial viability of the 18 aquaculture schemes that were found to be financially viable. Two scenarios were evaluated: (i) an increase in variable costs; and (ii) a decrease in gross revenue or income resulting from a decline in farm–gate output prices and/or production shortfalls due to the occurrence of diseases, high seed/fingerling mortality caused by water pollution, delayed production input delivery, and poor quality seeds or fingerlings. 9. Results of the sensitivity analysis show that the FIRRs of 11 of the 18 financially viable aquaculture systems are more sensitive to increases in operating costs than to decreases in gross revenue (Table A12.3). Vanamei shrimp culture in pond, tiger shrimp-milkfish polyculture, tiger shrimp culture in pond, tiger shrimp culture in pond (plain system), seaweed culture (line method), Asian catfish in pond, Asian catfish in cages, common carp culture in pond, common carp culture in swift water pond, tilapia culture in pond, and catfish culture in pond have lower switching values for increases in operating costs compared to their switching values for decreases in gross revenue. Increases in operating costs are thus the most important factor affecting the financial viability of most of the 18 aquaculture schemes evaluated at project completion. A similar finding was also reported at project appraisal. The FIRRs of the five

Appendix 12 53

aquaculture projects evaluated at project appraisal were also found to be more sensitive to increases in operating costs as compared with decreases in total revenue (Table A12.2). 10. To minimize the risk of high operating costs, it is recommended that the production groups or project beneficiary groups purchase production inputs (particularly feeds) in bulk. To date, 40 cooperatives have been formed in the project districts. It is recommended that more production groups be strengthened and assisted to transform them into cooperatives, which would enable them to engage in input procurement and trading as well as product marketing, in addition to providing microcredit services to their members. 11. High switching values for both increases in operating costs and decreases in total revenue were calculated for vanamei shrimp culture, soft-shell crab in cages, tiger shrimp-milkfish polyculture, tiger shrimp in pond (plain system), milkfish culture in pond, carp and tilapia polyculture, and milkfish, and seaweed polyculture. It would therefore take major adverse impacts for the FIRR of these aquaculture enterprises to decline to the financial cost of capital. Among the 19 aquaculture enterprises, grouper cage is the most sensitive to both increases in operating costs and decreases in gross revenue, exhibiting the lowest switching values for both risk factors.

Table A12.3: Results of Sensitivity Analysis of the 18 Financially Viable Aquaculture Enterprises: Switching Values at Project Completion

(%)

Type of Aquaculture Enterprise Switching Values

Increase in Operating Cost

Decrease in Income

Brackishwater

1. Tiger shrimp culture In pond, 3,500 square meters 10.4 16.3

2. Vanamei shrimp culture in pond, 3,500 square meters 35.4 41.8

3. Soft-shell crab in cages, 0.4 hectares 126.5 72.4

4. Tiger shrimp-milkfish polyculture in pond, 2 hectares 28.4 35.7

5. Tiger shrimp-milkfish polyculture in pond, 1 hectare 50.0 48.7

6. Tiger shrimp culture in pond (plain system), 1 hectare 48.6 49.9

7. Milkfish culture in pond (plain system), 1.5 hectares 92.6 71.7

Mariculture

1. Grouper cage culture, 4 meters x 4 meters x 6 meters 5.4 4.6

2. Seaweed culture (long line), 2,000 square meters 14.4 8.1

3. Seaweed culture (line), 2,000 square meters 9.1 12.4

Freshwater

1. Asian catfish culture in pond, 100 square meters 6.5 13.2

2. Asian catfish in cage, 4 meters x 2 meters x 2 meters 6.9 12.2

3. Common carp culture in pond, 200 square meters 8.2 13.4

4. Common carp culture in swift water pond, 60 square meters 10.4 17.4

5. Tilapia culture in stagnant water pond, 1,500 square meters 6.3 10.2

6. Catfish culture in stagnant water pond, 100 square meters 18.0 27.1

7. Carp and tilapia polyculture, 5,000 square meters 143.6 74.8

8. Milkfish and seaweed polyculture, 10,000 square meters 104.1 68.4 Source: Asian Development Bank project completion review mission.

54 Appendix 12

12. Economic analysis of the 19 representative aquaculture enterprises was likewise conducted using the world price numeraire, which was also the methodology used at project appraisal and during the midterm review. The prices of the non-tradable goods were adjusted to the world price level by the standard conversion factor, which is 0.9 in Indonesia. Taxes, subsidy, and interest payments were omitted in the analysis. Input and output prices were adjusted to constant 2014 base prices using the consumer price index deflator in Indonesia. Prevailing wages in 2014 were multiplied by the shadow wage rate factor of 0.65.

13. Results of the economic analysis likewise showed that 18 aquaculture enterprises are economically viable (Table A12.4). The most economically viable aquaculture enterprises are soft-shell crab culture in cages (Langkat), milkfish and seaweed polyculture (Karawang), milkfish culture in pond (Karawang), tiger shrimp-milkfish polyculture in pond (Karawang and OKI), and vanamei shrimp culture in pond. The least economically viable aquaculture enterprises are Asian catfish culture in cages (OKI), Asian catfish in pond (OKI), common carp culture in pond (Karawang), and seaweed culture (line method) (Buton). Only the rice-fish culture is not economically viable (para. 4).

Table A12.4: Summary of the Results of the Economic Analysis of the 19 Aquaculture Production Enterprises at Project Completion: Base Case

Type of Aquaculture Enterprise District EIRR (%)

NPV (Rp'000)

Brackishwater

1. Tiger shrimp culture in pond, 3,500 square meters Langkat >100 14,408

2. Vanamei shrimp culture in pond, 3,500 square meters

Langkat >100 95,614

3. Soft-shell crab in cages, 0.4 hectares Langkat >100 836,131

4. Tiger shrimp-milkfish polyculture in pond, 2 hectares OKI >100 98,504

5. Tiger shrimp-milkfish polyculture in pond, 1 hectare Karawang >100 52,816

6. Tiger shrimp culture in pond (plain system), 1 hectare

Karawang >100 75,570

7. Milkfish culture in pond (plain system), 1.5 hectares Karawang >100 102,889

Mariculture

1. Grouper cage culture, 3 meters x 4 meters Langkat >100 18,639

2. Seaweed culture (long line), 2,000 square meters Buton >100 24,861

3. Seaweed culture (line), 2,000 square meters Buton 48 18,911

Freshwater

1. Asian catfish culture in pond, 100 square meters OKI 65 9,141

3. Common carp culture in pond, 200 square meters Karawang 67 17,466

4. Common carp culture in swift water pond, 60 square meters

Sumedang >100 41,565

5. Tilapia culture in stagnant water pond, 1,500 square meters

Sumedang 56 48,273

6. Catfish culture in stagnant water pond, 100 square meters

Sumedang >100 77,880

7. Rice-fish culture, 1,000 square meters Sumedang -901

8. Carp and tilapia polyculture, 5,000 square meters Karawang >100 40,350

9. Milkfish and seaweed polyculture, 10,000 square meters

Karawang >100 123,776

EIRR = economic internal rate of return, NPV = net present value, OKI = Ogan Komering Ilir. Source: Asian Development Bank project completion review mission.

Appendix 12 55

III. Economic Analysis of the Project as a Whole A. Major Assumptions and Methodology

14. Economic analysis of the project was conducted covering a period of 20 years (from 2008 to 2027) to measure the project’s economic impact on the national economy using EIRR and NPV as measures of project worth. Economic analysis was conducted in 2014 constant prices and in the local currency, rupiah. The economic analysis is based on the world price numeraire, following ADB’s Guidelines for the Economic Analysis of Projects.9 In using the world price numeraire approach, the financial price of each non-traded output was converted to its economic value by multiplying the financial price by 0.90, the standard conversion factor in Indonesia. To derive economic prices, financial prices were adjusted by removing taxes and duties.

1. Project Costs

15. All project cost items by financier (i.e., ADB and national and district governments) were disaggregated into their foreign and local currency components. The dollar cost stream was adjusted to constant 2014 base prices using the dollar deflator (manufactures unit value index obtained from World Bank), and the local cost stream was adjusted using a domestic deflator (consumer price index in Indonesia). Using the world price numeraire approach, the adjusted foreign exchange cost components were expressed in economic terms in local currency using the prevailing official exchange rate in each year during the project implementation period. Taxes and interest payments considered as transfer payments were excluded in the economic analysis. To convert all local currency costs in constant 2014 prices to economic values, these were multiplied by the standard conversion factor of 0.9. Projected dollar and local cost streams from 2008 to 2027 were expressed in constant 2014 prices. The summary of annual economic costs by source of financing is presented in Table A12.5.

Table A12.5: Economic Project Costs in Constant 2014 Prices By Financier and by Year

(Rp'000) Economic Project Cost

Year Asian Development

Bank

Regional Government's Revenue and Expenditure

Central Government's Revenue and Expenditure Total

2008 6,079,338 1,562,904 1,573,071 9,215,313 2009 31,885,658 6,448,079 1,497,151 39,830,888 2010 55,838,298 14,653,906 969,895 71,462,098 2011 56,340,088 22,701,403 325,328 105,643,843 2012 88,622,609 15,953,425 1,067,809 34,565,198 2013 27,630,555 6,761,453 173,189 4,473,514 2014 4,473,514 Source: Asian Development Bank project completion review mission’s economic estimates using actual project expenditure data from the Asian Development Bank and the project management office.

9 ADB. 1997. Guidelines for the Economic Analysis of Projects. Manila.

56 Appendix 12

2. Project Benefits

16. The quantifiable benefits used in estimating the economic benefits attributable to the project were grouped into the following categories: (i) net income/benefits from brackishwater aquaculture enterprises, (ii) net income/benefits from mariculture enterprises, (iii) net income/benefits from freshwater aquaculture enterprises, (iv) benefits from mangrove development, and (v) income generated from employment in civil works. 17. Economic benefits from aquaculture enterprises. The project provided input assistance to 12,528 project beneficiaries for one cropping season only from 2009 to 2012. However, the economic analysis at project completion did not include 63 ornamental fish growers (60 in Karawang and 3 in OKI) and 17 hatchery operators in OKI because the project completion survey, which was conducted from April to June 2013, did not include them as sample respondents. The economic analysis therefore covered 12,391 project beneficiaries. The list of aquaculture systems with the corresponding number of project beneficiaries included in the economic analysis is shown in Table A12.6.

Table A12.6: Aquaculture Enterprises Covered in the Economic Analysis at Project Completion, 2009–2012

District Aquaculture

System Commodity 2009 2010 2011 2012 Total

Langkat Brackishwater Tiger and vanamei shrimp

86 200 319 242 847

Soft-shell crab 120 270 200 590 Subtotal 86 320 589 442 1,437 Mariculture Grouper cage culture 174 80 190 80 524 Subtotal 174 80 190 80 524 Total 260 400 779 522 1,961

Ogan Komering Ilir

Freshwater Catfish pond culture 330

Asian catfish cage 525 660 260 1,445 Tilapia and common

carp polyculture 291 291

Rice-fish culture 133 133 Subtotal 424 525 990 260 2,199 Brackishwater Tiger shrimp-milkfish

polyculture 80 255 750 1,085

Subtotal 80 255 750 1,085 Total 424 605 1,245 1,010 3,284

Karawang Freshwater Common carp pond culture

196 76 272

Tilapia in stagnant water pond culture

74 74

Catfish pond culture 20 15 35 Asian catfish in

ponds 9 9

Tilapia and common carp polyculture

100 100

Rice-fish culture 200 200 Total 100 490 100 690 Brackishwater Milkfish 244 270 64 578 Shrimp-milkfish 156 174 106 436

Appendix 12 57

District Aquaculture

System Commodity 2009 2010 2011 2012 Total

polyculture Shrimp, milkfish, and

seaweed polyculture 25 25

Tilapia 30 44 Subtotal 400 458 225 1,083 Total 500 948 325 1,773

Sumedang Freshwater Common carp pond 24 150 113 7 294 Tilapia 2 180 783 58 1,023 Catfish pond culture 19 78 110 19 226 Gurame 30 30 Hatchery:

Common carp 7 12 18 3 40 Tilapia 10 32 114 12 168 Catfish 39 3 10 2 54 Gurame 5 5

Rice-fish culture 40 54 277 250 621 Total 141 544 1,425 351 2,461

Buton Mariculture Seaweed 815 1,157 940 2,912 Total 815 1,157 940 2,912

Five Districts

All Systems Grand Total 825 2,864 5,494 3,208 12,391

Source: Project Management Office.

18. Compared to the economic analysis done at project appraisal, which only estimated the EIRRs of five representative aquaculture enterprises as an indication of the project’s economic viability, the economic analysis conducted at project completion covered the project as a whole using actual income and cost data from 2009 to 2012 for various freshwater, marine, and brackishwater aquaculture enterprises that were gathered in the five project districts during the project completion survey. The average income and cost figures by type of aquaculture system and by year when the input assistance was provided covered both the sample project beneficiaries who were successful and those who failed in terms of production, productivity, and income. Using estimates of the rates of success and failure that were estimated from the farm samples during the conduct of the project completion survey, these rates were extrapolated to determine the number of project beneficiaries who succeeded or failed in their aquaculture enterprises categorized by type of aquaculture system (Table A12.7). All financial costs and benefits were estimated in constant 2014 prices using the consumer price index deflator before their economic values were determined. The same methodology (i.e., world price numeraire) was adopted during the midterm review in 2011, but the data used were only based on income and cost data collected from the 19 representative aquaculture systems in the same year. In the midterm review, the total number of project beneficiaries by type of aquaculture system for 2012 was projected. 19. The annual economic net income of each aquaculture enterprise was calculated by subtracting total economic cost (material input cost plus total variable or operating cost in economic values) in each year from the corresponding annual economic gross revenue/income. Annual gross revenue of each aquaculture enterprise was computed by multiplying the production volume for each year by the economic price of the output (i.e., ex-farm price). In using the world price numeraire approach, the financial price of each non-traded output was converted to its economic value by multiplying the financial price by 0.90, the standard conversion factor, which is the reciprocal of the shadow exchange rate factor in Indonesia of

58 Appendix 12

1.11. The standard conversion factor was not applied to grouper, soft-shell crab, and vannamei shrimp since they are traded or exported commodities. From the prices of inputs and outputs, a 10% tax was also deducted since sales or value added taxes are considered as transfer payments. Interest payments for borrowed capital are also excluded in the economic analysis. To estimate the economic labor cost, the shadow wage rate factor of 0.65 was used to adjust the farm wage(s).

Table A12.7: Success and Failure Rates of Project Beneficiaries, 2009–2012

District and Aquaculture System

Commodity Year Number of

Beneficiaries

Success Rate Failure Rate

Number % Number %

Langkat

Brackishwater

Tiger and vanamei shrimp

2009 86 40 46 46 54

2010 200 118 59 82 41 2011 319 134 42 185 58

2012 242 201 83 41 17 Total 847 492 58 355 42

Soft-shell crab

2010 120 73 61 47 39

2011 270 208 77 62 23 2012 200 196 98 4 2 Total 590 477 81 113 19

Mariculture Grouper cage culture

2009 174 54 31 120 69

2010 80 50 62 30 38

2011 190 106 56 84 44 2012 80 56 70 24 30

Total 524 266 51 258 49

Ogan Komering Ilir

Freshwater

Catfish pond culture

2011 330 287 87 43 13 Total 330 287 87 43 13

Asian catfish in cage

2009 100 68 68 32 32 2010 425 302 71 123 29

2011 660 614 93 46 7

2012 260 244 94 16 6 Total 1,445 1,228 85 217 15

Tilapia and common carp polyculture

2009 441 441 100

Total 441 441 100

Brackishwater Tiger shrimp-milkfish polyculture

2010 80 80 100 2011 255 212 83 43 17

2012 750 540 72 210 28 Total 1,085 832 77 253 23

Karawang

Freshwater

Tilapia in stagnant water pond culture

2011 74 74 100 2012 60 60 100

Total 134 134 100

Catfish pond culture

2011 20 20 100 2012 15 15 100 Total 35 35 100

Tilapia and common carp polyculture

2010 100 100 100 2011 200 118 59 82 41 2012 150 96 64 54 36 Total 450 314 70 136 30

Rice Field Fish Culture Rice-fish (Carp)

2011 200 200 100 Total 200 200 100

Brackishwater Milkfish 2010 244 244 100

2011 270 170 63 100 37

Appendix 12 59

District and Aquaculture System

Commodity Year Number of

Beneficiaries

Success Rate Failure Rate

Number % Number %

2012 64 45 71 19 29 Total 578 460 80 118 20

Shrimp-milkfish polyculture

2010 156 147 94 9 6

2011 174 108 62 66 38

2012 106 80 75 27 25 Total 436 334 77 102 23

Tilapia monoculture

2011 14 100

2012 30 100 Total 44 100

Sumedang Hatchery Operation: Common

carp 2009 7 7 100

2010 12 11 89 1 11 2011 18 16 91 2 9 2012 3 3 100 Total 40 37 93 3 7

Tilapia 2009 10 10 100 2010 32 30 93 2 7 2011 114 107 94 7 6 2012 12 8 70 4 30 Total 168 155 92 13 8

Freshwater

Catfish

2009 39 34 88 5 12

2010 3 3 100 2011 10 10 100

2012 2 2 100 Total 54 49 91 5 8

Gurame 2010 5 4 80 1 20

Grow-Out Operation:

Common carp

2009 24 23 100

2010 150 140 93 10 7

2011 113 111 98 2 2

2012 7 100 7 100

Total 294 274 93 12 7

Tilapia 2009 2 2 100

2010 180 167 93 13 7

2011 783 760 97 23 3

2012 58 58 100

Total 1,023 987 96 36 4

Catfish

2009 19 17 91 2 9

2010 78 69 88 9 12 2011 110 110 100

2012 19 19 100 Total 226 215 95 11 5

Gurame in pond

2010 30

30 100

Rice-fish Culture

2009 40 40 100

2010 54 51 94 3 6 2011 277 247 89 30 11

2012 250 250 100 Total 621 587 95 34 5

60 Appendix 12

District and Aquaculture System

Commodity Year Number of

Beneficiaries

Success Rate Failure Rate

Number % Number %

Buton

Mariculture Seaweed 2010 815 220 27 595 73 2011 1,157 451 39 706 61 2012 940 301 32 639 68 Total 2,912 972 33 1,940 67

Sources: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta; Asian Development Bank project completion review mission.

20. In the economic analysis, the total cost of the material inputs provided to the fish farmers as a grant or subsidy is not treated as a private cost on their part since it is considered to be a transfer payment. During the cropping season with production input assistance, net income per crop (with assistance) was computed by subtracting labor cost from gross income. After the input assistance, net income (without assistance) was calculated by subtracting total variable cost (material input cost plus labor cost) from gross income. The annual net income derived by the project beneficiaries would vary depending on the number of crops per year for their respective enterprise. For example, the number of crops per year for soft-shell crabs is 10. When a project beneficiary received production input assistance for growing soft-shell crab, their annual income would include net income from one crop with input assistance plus net income from nine crops without assistance. For subsequent years without project assistance, annual net income would include 10 crops without assistance. In projecting gross income, actual farmgate prices for fish and aquatic products were used based on the price data monitored by the project site advisers and the community extension workers since the start of the project until 2013. For 2014, data on actual farmgate prices for fish and other aquatic products, the prices of material inputs, and wages were obtained from the staff of the district fisheries services in the five project districts. After 2014, annual net income figures in constant 2014 prices were used in the analysis. In the economic analysis, constant prices are used because it is difficult to predict inflation rates in the future. 21. For hatchery operation, the replacement of spawn and other equipment (e.g., basins, scooping net) provided by the project was assumed to occur every 3 years for common carp and gurame. Spawn replacement for tilapia and catfish for hatchery operation was assumed to occur every 2 years. Feeds and oxygen have to be subsequently purchased by the fish farmers every month after the production input assistance. 22. Economic benefits from employment in civil works. The poor fish farmers also earned additional income from their employment in civil works. To derive the economic benefits from this employment, the annual financial benefits were converted to the 2014 price level using the consumer price index deflator (with 2014 as the base year) and then adjusted by using the shadow wage rate factor. As shown in Table A12.8, the total economic benefits from wage employment in civil works amounted to approximately Rp11.44 billion. As mentioned earlier in the main report, the total amount of employment created for the poor fishing households in civil works activities from 2009 to 2012 was about 296,653 person-days.

Appendix 12 61

Table A12.8: Economic Benefits Generated from Employment in Civil Works 2009–2012

Total Income Received from

Employment in Civil Works (Rp'000)

Year

Amount of Employment Generated

Actual Financial Values

Economic Values in 2014 Prices

(Person-days)

2009 1,047,250 881,638 20,945 2010 3,528,650 2,825,354 70,573 2011 8,220,109 6,247,014 164,402 2012 2,036,665 1,484,283 40,733 Total 14,832,674 11,438,289 296,653

Sources: Project Management Report No. 14, January–March 2013; Asian Development Bank project completion review mission.

23. Economic benefits from mangrove development. In 2011, the project developed 55.8 hectares of mangrove areas in Karawang. As of 31 December 2012, only 34.4 hectares (61.6%) of the seedlings had survived, due to droughts during the dry season and flooding in the rainy season (Table A12.9).

Table A12.9: Status of Mangrove Seedlings Planted in Karawang in 2011 as of 31 December 2012

Total Number of Beneficiary

Groups

Total Number of Beneficiaries

Total Number of Seedlings

Planted in 2011

Total Number of Seedlings that Survived

2012

Survival

Rate (%)

53 869 139,500 86,000 61.6

Source: Directorate General of Aquaculture. 2013. Project Annual Report for 2012. Jakarta

24. Benefit transfer method was employed to estimate the economic benefits from mangrove development under the project. The valuation of the economic benefits from mangroves in the project areas was based on the economic benefit estimates from a recent study in South Sulawesi Province in Indonesia. In this study, the total economic benefits that could be derived from direct use of mangrove (i.e., captured fishery and wood resource uses) in South Sulawesi in 2012 was estimated at Rp58,467,828 per hectare per year. The study, however, did not quantify the indirect economic benefits from mangrove development, or the benefits that could be derived from its ecological functions, such as prevention of flooding and coastal erosion. Using the consumer price index deflator, the 2012 economic benefits figure obtained from the study was then expressed in 2014 value, which amounted to Rp65,554,242 per hectare per year. It was assumed that economic benefits that would be derived from mangrove development in the project areas would start in 2016, or 5 years after planting of the mangrove seedlings. The expected economic benefits to be realized 5 years after planting (starting from 2016 onwards) from 34.4 hectares of mangroves with seedlings that survived would be Rp2,255 million per year. Multiplying this figure by the standard conversion factor of 0.9, the economic benefits from mangrove establishment in the project site would be Rp2,030 million per year from 2016 to 2027 in constant 2014 prices.

62 Appendix 12

B. Results of the Economic Analysis, Including Sensitivity Analysis of the Project 25. Base case. As shown in Table A12.10, the project is economically viable since the recalculated EIRR at project completion is 40.75%, which is higher than the social opportunity cost of capital in Indonesia of 12.00%. At a social discount rate of 12%, the estimated NPV implies that the project will generate approximately Rp412.88 billion for the Indonesian economy.

Table A12.10: Economic Analysis of the Project in Constant 2014 Prices: Base Case

Year

Project Cost (Rp

million)

Project Benefits (Rp million) Total Benefits

(Rp million)

Net Benefits

(Rp million)

Brackishwater Aquaculture Enterprises

Mariculture Enterprises

Freshwater Aquaculture Enterprises

Mangrove Establish-

ment

Income from Civil Works

Employment 2008 9,215 0 0 0 0 0 0 (9,215) 2009 39,831 824 520 7,663 0 882 9,889 (29,942) 2010 71,462 6,209 1,049 13,371 0 2,925 23,554 (47,005) 2011 79,367 16,755 2,240 28,304 0 6,247 53,546 (22,715) 2012 105,644 37,627 6,926 17,936 0 1,484 63,973 (38,262) 2013 34,565 53,582 3,844 21,349 0 0 78,775 44,480 2014 4,474 105,038 2,959 38,491 0 0 146,488 142,014 2015 0 105,038 2,959 36,644 0 0 144,641 144,641 2016 0 105,038 2,959 38,491 2,030 0 146,968 148,518 2017 0 105,038 2,959 36,644 2,030 0 145,121 146,671 2018 0 105,038 2,959 38,491 2,030 0 146,968 148,518 2019 0 105,038 2,959 36,644 2,030 0 145,121 146,671 2020 0 105,038 2,959 38,491 2,030 0 146,968 148,518 2021 0 105,038 2,959 36,644 2,030 0 145,121 146,671 2022 0 105,038 2,959 38,491 2,030 0 146,968 148,518 2023 0 105,038 2,959 36,644 2,030 0 145,121 146,671 2024 0 105,038 2,959 38,491 2,030 0 146,968 148,518 2025 0 105,038 2,959 36,644 2,030 0 145,121 146,671 2026 0 105,038 2,959 38,491 2,030 0 146,968 148,518 2027 0 105,038 2,959 36,644 2,030 0 145,121 146,671 EIRR (%) 40.75 NPV (@ 12%) Rp 412,875.05 million EIRR = economic internal rate of return, NPV = net present value. Source: Asian Development Bank project completion review mission.

26. Results obtained from conducting economic analysis of the project as a whole in this project completion report are not comparable with those derived at project appraisal since economic analysis done at project appraisal only estimated the EIRRs of five representative aquaculture enterprises as an indication of the project’s overall economic viability. Although the world price numeraire approach was also adopted in the analysis wherein the prices of non-tradable goods were adjusted to the world price level by the SCF, project costs, excluding the price contingencies and interest during construction, were apportioned to individual aquaculture schemes. At project appraisal, the EIRR values for individual schemes ranged from 15% to 21%, which were reported to provide an indicative range for the project’s overall EIRR (Table A12.11).

Appendix 12 63

Table A12.11. Anticipated Aquaculture Scheme Level of Economic Worth at Project Appraisal

Aquaculture Scheme EIRR (%)

Grouper cage culture (Buton) 16

Mudcrab fattening (Langkat) 21

Carp pond culture (Sumedang) 15

Shrimp culture (Karawang) 19

Seaweed culture (Buton) 20

EIRR = economic internal rate of return. Source: Asian Development Bank.

27. The recalculated EIRR at project completion of 40.75% is higher than the EIRR of 39.00% estimated during the midterm review (Table A12.12). This could be mainly attributed to the fact that the projected total number of project beneficiaries (categorized by type of aquaculture system), in conducting economic analysis at midterm, was than the actual number of project beneficiaries (also classified by type of aquaculture system) in this project completion report.

Table A12.12: Economic Internal Rate of Return and Net Present Value Estimates at Midterm and at Project Completion

EIRR (%)

NPV (Rp billion)

Item (Base Case)

Midterm review (with budget reallocation) 39.00 301.00 Project completion review 40.75 412.88

EIRR = economic internal rate of return; NPV = net present value. Source: Asian Development Bank project completion review mission.

28. Sensitivity analysis. The switching values technique was used in conducting sensitivity analysis. The switching value estimates indicate that if project benefits decrease by 65.6% or if the project costs increase by 191.0%, the project will still be able to maintain an EIRR equal to 12% or the social opportunity cost of capital (Table A12.13). These figures imply that if the percentage decrease in project benefits is more than the switching value (65.6%), or if the percentage increase in project costs exceeds the switching value (191.0%), the project will no longer be economically viable.

Table A12.13: Results of Sensitivity Analysis of the Project At Completion

Switching Value (%)

Decrease in Project Benefits Increase in Project Costs

65.6 191.0

Source: Asian Development Bank project completion review mission.

64 Appendix 13

BUDGETARY SUPPORT FOR PROJECT SUSTAINABILITY

District

Amount of Budget Commitment During

High-Level Exit Strategy Meeting

(Rp)

Amount of Budgetary Contribution from Regional Government’s Budget Revenue

and Expenditure

Actual Budgetary Contribution from Central Government’s Budget Revenue and

Expenditure Amount

(Rp) Purpose

Amount (Rp)

Purpose

Langkat 500,000,000 30,000,000 Monitoring and empowerment of fish

farmers

Subtotal 30,000,000

Ogan Komering

Ilir

3,500,000,000 80,000,000 Operation of water quality laboratory

2,477,182,000 Access road construction (1 kilometer)

75,000,000 Project monitoring

525,000,000 Production input assistance

Subtotal 680,000,000

Karawang 5,100,000,000 188,568,000 Mangrove plantation

206,950,000 Sand pump

199,580,000 Development of rice-fish culture facilities

2,794,294,450 Replication of the project to 14 subdistricts (production input

assistance, construction of water supply facilities and production road, laboratory

supplies)

45,760,000 Packaging materials for processed fish

69,657,400 Transport vehicle for fresh fish marketing/distribution

Subtotal 3,504,809,850

Appendix 13 65

District

Amount of Budget Commitment During

High-Level Exit Strategy Meeting

(Rp)

Amount of Budgetary Contribution from Regional Government’s Budget Revenue

and Expenditure

Actual Budgetary Contribution from Central Government’s Budget Revenue and

Expenditure Amount

(Rp) Purpose

Amount (Rp)

Purpose

Sumedang 1,275,000,000 300,000,000 Empowerment of the project beneficiaries

3,944,743,000 Rehabilitation of fish hatchery (pond

construction, water and electricity installation, fish

broodstock, feeds, equipment for hatchery, fish

processing building)

200,000,000 Development of high-quality fish seeds

200,000,000 Study on Aquaculture Development Zonation of

the Jatigede Dam

200,000,000 Study on the Master Plan of the Minapolitan Area

200,000,000 Development of tilapia hatchery facilities

175,000,000 Development of multi-species hatchery facilities

Subtotal 1,275,000,000

Buton 901,000,000 300,000,000 Production input assistance for seaweed

culture

200,000,000 Grouper cage

Subtotal 500,000,000

Total 5,989,809,850 6,421,925,000

Grand Total 12,411,734,850 equivalent to $1.036 million Note: Buton also committed Rp600 million worth of production input assistance in 2015 (Rp600 million to 6 groups of seaweed growers and Rp200

million for one group of grouper farmers. Sources: District fisheries services in Karawang, Sumedang, Ogan Komering Ilir, Langkat, and Buton districts.

66 Appendix 14

SUMMARY OF GENDER EQUALITY RESULTS AND ACHIEVEMENTS I. PROJECT DESCRIPTION

1. The Sustainable Aquaculture Development for Food Security and Poverty Reduction Project was approved on 12 December 2006 and became effective on 13 July 2007. The project was completed on 31 December 2013 as originally envisaged at appraisal. The project's expected impact was reduced poverty and increased food security through sustainable aquaculture development in five districts in Indonesia: Langkat, Ogan Komering Ilir (OKI), Karawang, Sumedang, and Buton. The expected outcomes were increased production of fish and other aquatic products, and improved income, nutrition, and employment status of poor fish farmers and coastal communities. To attain its outcomes, the project had three components: (i) aquaculture production enhancement, (ii) aquaculture support services, and (iii) institutional strengthening and project management. At appraisal, gender mainstreaming was specified as part of the project activities. A gender plan was included in the summary poverty and reduction and social strategy attached to the report and recommendation of the President for the project, which identified various activities and targets to enhance women’s participation in project activities and their access to project benefits.

II. GENDER ANALYSIS AND PROJECT DESIGN FEATURES

A. Gender Issues and Gender Action Plan Features

2. Results of the poverty analysis conducted at appraisal revealed that more than 50% of women in the five project districts primarily worked at unpaid jobs, demonstrating a lack of income-generating opportunities in these communities. In response to this concern, several gender-responsive activities dealing with women’s reproductive, productive, and community management roles were incorporated in the project design. The project scope aimed to meet women’s needs and improve their socioeconomic status by getting them involved in aquaculture, culture-based fisheries, and related activities, including fish processing, trading, and community-based monitoring. Moreover, the project aimed to support women in gaining access to resources, technical assistance, and capacity building efforts for poverty reduction and food security. As part of a strategy to maximize impacts on women, they were included in all project activities, including production input assistance, and training programs. Likewise, women were encouraged to participate in setting up, operating, and managing small-scale, aquaculture-based enterprises. The strengthening of women’s groups ensured equitable opportunities for women to be represented and assume leadership positions in decision-making bodies, especially at the local level. To assure that gender concerns were addressed by the project and in the areas of education, nutrition, and child care, gender specialists were hired to conduct gender training to sensitize local government officials and extension personnel of the district fisheries services to women’s needs and sociocultural issues. 3. During project implementation, women’s participation was promoted by gender focal persons, one in the project management office (PMO) and one in each project implementation unit (PIU) in the five project districts (para. 1). In the first quarter of 2010, the community development and gender specialist from the project management consultant completed the gender action plan, which was used by the PIUs in the five project districts as a guideline on how to promote the participation of women in project activities during 2010–2013. The community development and gender specialist worked under the supervision of the team leader of the PMO. The gender specialists at the PMO and the PIUs were responsible for the implementation, monitoring, and reporting of the gender action plan.

Appendix 14 67

Table A14.1: Comparison of the Women’s Participation Targets Set at Project Appraisal and in the 2010 Gender Action Plan

Gender Participation Targets Set At Appraisal Gender Participation Revised Targets Specified in the Gender Action Plan in 2010

Components/Activities Components/Activities Social Preparation and Community Empowerment

• At least 30% of the participants in the consultation process for needs assessment and social preparation will be women

• At least 30% of the members in the community-based organizations will be women

Social Preparation and Community Empowerment

• At least 30% of participants in the consultation process for community needs assessment and social preparation will be women

• At least 30% of the members in community-based organizations will be women

• 300 women’s processing groups formed

• At least 20% of the officers of project beneficiary groups will be women

Aquaculture Production Enhancement

• At least 25% of the trainees in fish production and culture-based fisheries will be women

Aquaculture Production Enhancement

• At least 25% of the trainees in fish production and culture-based fisheries will be women

Livelihood Opportunities

• At least 33% of trainees in microenterprise activities will be women

• At least 25% of microenterprises supported by the project will be women

Livelihood Opportunities

• At least 33% of trainees in microenterprise activities will be women

• At least 25% of microenterprises supported by the project will be women

Fish Marketing Development

• Marketing campaigns will include modules especially tailored to women’s roles in aquaculture production and processing

Fish Marketing Development

• Marketing campaigns will include modules especially tailored to women’s roles in aquaculture production and processing

Increased Staffing

• At least 33% of new staff recruited under the project will be women

Increased Staffing

• At least 30% of new staff recruited under the project will be women

Sources: Asian Development Bank. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Loan to Indonesia for the Sustainable Aquaculture Development for Food Security and Poverty Reduction Project. Manila; Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

4. Sex disaggregated data were included in the database of the project performance management system and aquaculture management information system. Gender indicators were included in the project monitoring system and became an important element in the evaluation system in the PMO and the PIUs. Specific targets for women’s participation in project activities, which were set at project appraisal and revised in the gender action plan prepared in 2010, are shown in Table A14.1. In the gender action plan, two additional targets were included: at least 20% of the officers of the project beneficiary groups should be women, and the 300 groups of processors formed should have female members. The gender action plan also lowered the targeted percentage of women recruited under the project from 33% at project appraisal to 30%. 5. In April 2012, the PMO reduced the target for the number of women processing groups to be formed from 300 in the gender action plan to 200 because the actual number of women members per group was more than that estimated when the gender action plan was prepared.

68 Appendix 14

However, the targeted women’s participation rate in community groups (i.e., project beneficiary groups and women’s processing groups) of at least 30% was retained. The women’s participation targets shown in Table A14.10 were then used in assessing the gender-related results and achievements of the project.

B. Overall Assessment of Gender-Related Results and Achievements 6. In line with the gender action plan, the project beneficiaries were classified into male and female beneficiaries. At the start of project implementation, consultations with project beneficiaries were undertaken to assess their needs. About 3,596 (25%) of the 14,585 participants in the consultation process for needs assessment and social preparation were women, close to the revised target of 30%. The reasons for lower participation could be attributed to (i) schedule conflicts between the consultation meetings and women’s household chores, and (ii) limited engagement of the gender focal persons at the PIUs, since they were employed on a part-time basis. The consultations were undertaken to develop community groups for aquaculture development activities and processing activities.

Table A14.2: Distribution of Project Beneficiary Groups and Women’s Processing Groups

by Gender and by Project District, 2009–2012

District Number of Beneficiary

Groups

Male Members Female Members Total

Members

Number % Number %

Langkat 187 1,791 69 790 31 2,581

Ogan Komering Ilir

260 2,755 74 970 26 3,725

Karawang 156 1,874 78 529 22 2,403

Sumedang 189 2,271 78 659 22 2,930

Buton 228 2,298 78 648 22 2,946

Total 1,020 10,989 75 3,596 25 14,585

Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion

Report. Jakarta.

7. The participation of women in project activities was promoted by encouraging women to join project beneficiary groups in aquaculture development activities (freshwater aquaculture, brackishwater aquaculture, and mariculture), and by forming fish processing groups to enable women to undertake fish processing activities, which complemented the aquaculture production activities in the project area.

8. Women in community groups for aquaculture development activities. From 2009 to 2012, 881 project beneficiary groups were formed by nongovernment organizations (NGOs) and community-based extension workers (CEWs) in the project districts with a total of 12,528 members (Table A14.3). Of the total participants, 1,707 (14%) were women. The reasons for low participation could be attributed to conflicting schedule of aquatic farming activities with women chores. 9. Through close guidance of the PIU gender focal persons, the NGOs, and the CEWs, some women beneficiaries developed leadership and financial management skills. For example, they were provided training on bookkeeping and financial analysis, enabling them to hold

Appendix 14 69

positions such as secretary or treasurer in associations of project beneficiary groups or cooperatives. The project management consultant reported that 21% of the officers in the 881 project beneficiary groups were women, compared to the target of 20%.

Table A14.3: Distribution of Project Beneficiary Groups by Gender, 2009–2012

District

Number of Project

Beneficiary Groups

Male Members Female Members Total

Members

Number % Number %

Langkat 156 1,788 91 173 9 1,961

Ogan Komering Ilir

219 2,748 83 547 17 3,295

Karawang 123 1,744 92 153 8 1,897

Sumedang 157 2,243 91 218 9 2,461

Buton 226 2,298 79 616 21 2,914

Total 881 10,821 86 1,707 14 12,528

Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta. 10. Women were also members of the associations of project beneficiary groups, accounting for 23% of these groups’ members in the five project districts (Table A14.4). There were approximately nine project beneficiary groups per association of project beneficiary groups. Moreover, approximately 23% of the members of cooperatives in the project districts were also women (Table A14.5). Women benefited from being members of cooperatives in terms of being able to access microcredit assistance and market their products as a group, taking advantage of higher price bargaining power and reduced marketing costs.

Table A14.4: Distribution of Members in Associations of Project Beneficiary Groups

2009–2012

District

Number of Association Groups of

Fish Farmers

Male Members Female Members

Total Members

No. % No. %

Langkat 13 607 72 235 28 842

Ogan Komering Ilir 11 2,835 75 956 25 3,791

Karawang 12 1,204 83 247 17 1,451

Sumedang 35 3,230 80 810 20 4,040

Buton 31 2,219 74 783 26 3,002

Total 102 10,095 77 3,031 23 13,126

Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

70 Appendix 14

Table A14.5: Distribution of Members in Cooperatives, 2009–2012

District Number of

Cooperatives

Male Members Female Members Total Members

No. % No. %

Langkat 12 474 72 185 28 659

Ogan Komering Ilir 10 240 69 109 31 349

Karawang 4 115 77 35 23 150

Sumedang 2 3,259 80 810 20 4,069

Buton 12 297 65 162 35 459

Total 40 4,385 77 1,302 23 5,687

Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

11. Women in processing groups. During 2009–2012, 2,057 project beneficiaries were selected and organized to receive processing input assistance and training on fish and seaweed processing. Women comprised 92% of the total number of members of processing groups (compared to the targeted 30%), and they were organized into 139 women’s processing groups (compared to the targeted 200) (Table A14.6). There were women’s processing groups composed of both men and women. OKI had the highest number of women’s groups (41), followed by Karawang (33), Sumedang (32), Langkat (31), and Buton (2). In terms of the total number of women members, Langkat had the highest, followed by Karawang, Sumedang, OKI, and Buton. Each group consisted of 10 to 20 members, with an average of 15 members. The main activity of the groups was to process fish or seaweed for sale in the local markets or cooperatives. 12. The project assisted the women groups with the provision of processing equipment such as cooking utensils, a fish refrigerator, and raw materials. Various fish processing products such as steamed fish in banana leaves, shredded fish, smoked fish, boneless fish or fish presto, fermented small shrimps, fish and shrimp crackers, and salted fish were sold by women members to enable them to earn extra income from their activities. In Sumedang, the PCR mission observed that profits were distributed to group members once a week. A member typically received an additional income of Rp50,000 per day or Rp250,000 per week. In Buton, women benefited from cleaning, selecting, and drying quality seaweeds for family seaweed planting and enterprise. Where there was demand from neighboring groups, women earned an additional Rp10,000 per kilogram for cleaning, selecting, and drying seaweeds.

Table A14.6: Distribution of Members in Women’s Processing Groups by Gender and Project District, 2009–2012

District Number of Women Groups

Male Female Total

No. % No. %

Langkat 31 3 1 617 99 620

Ogan Komering Ilir

41 7 2 423 98 430

Karawang 33 130 26 376 75 506

Sumedang 32 28 6 441 94 469

Buton 2 0 0 32 100 32

Total 139 168 8 1,889 92 2,057

Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

Appendix 14 71

13. Women were also recruited to assist in the implementation of various project activities such as the selection of project beneficiaries, mobilization of community groups (project beneficiary groups, women’s groups, associations of project beneficiary groups, and cooperatives), and capacity building of the project beneficiaries. About 30% of the total number of staff at the PMO and the PIUs (i.e., district fisheries services) involved in the implementation of project activities were women, indicating achievement of the minimum target of 30% set at appraisal and in the gender action plan (Table A14.7). Meanwhile, the proportion of women CEWs recruited under the project (29%) was close to the target of 30%. Most of the positions held by women recruited under the project were technical in nature (e.g., aquaculturists, water quality personnel in laboratories, extension workers), while some held administrative positions.

Table A14.7: Distribution of Staff Recruited at the Project Management Office and the

Project Implementation Units

Project Staff Community Extension Workers

District Male Female

Total Male Female

Total No. % No. % No. % No. %

Langkat 7 78 2 22 9 10 83 2 17 12

Ogan Komering Ilir

13 65 7 35 20 10 67 5 33 15

Karawang 8 80 2 20 10 7 70 3 30 10

Sumedang 11 65 6 35 17 12 60 8 40 20

Buton 8 62 5 38 13 12 80 3 20 15

Project Management Office

23 74 8 36 31

0 0 0 0 0

Total 70 70 30 70 100 51 70 21 70 72

Sources: Project Management Office; District fisheries services in Karawang, Langkat, Sumedang, Ogan Komering Ilir, and Buton.

C. Gender Equality Results

1. Participation, Access to Project Resources, and Practical Benefits

14. Gender mainstreaming activities enabled women to have access to project resources such as processing equipment and raw materials for processing, and the activities provided women with access to training programs on improved aquaculture techniques and practices and fish processing. The purpose of giving women equal access to project resources and trainings was to provide them with the benefits of equal and fair development. 15. Prior to the distribution of production inputs to project beneficiaries, they had to be trained on improved aquaculture techniques and practices to enable them to achieve higher productivity and production. During 2009–2012, 10,764 project beneficiaries were trained by the PIUs (Table A14.8), but only 1,347 of the trainees were women. Although women were included as participants in trainings on aquaculture production, they were not beneficiaries of production input assistance because their husbands already received production input assistance. Aquaculture production activities were mainly undertaken by men, while lighter tasks were delegated to women.

72 Appendix 14

16. Women benefited from the project by learning technical knowledge on improved aquaculture techniques and practices from the trainings on aquaculture production that they attended. They applied these new techniques when they assisted their husbands in performing farm operations in their aquaculture enterprises or when they worked as paid farm workers in some fish farming operations. Women’s participation in aquaculture activities varies by type of aquaculture commodity and by project district. In Langkat, women assist the men in the preparation of feed fish or trash fish in tiger shrimp culture. In soft-shell crab culture in cages, women cut the crab legs, place crabs in the cage or basket, prepare feeds, feed, and remove the meat from the claws of the crab for sale in the market. Women employed to remove meat from the claws of the crab in Langkat are currently paid Rp10,000 per kilogram of crab meat. Women participate in grouper cage culture for long periods of time since they take charge of cage maintenance and feeding activities for 6 months per cropping cycle while their husbands go sea fishing.

Table A14.8: Project Beneficiaries Trained in Aquaculture Techniques, 2009–2012

Male Female Total

District Number % Number %

Langkat 1,750 92 163 8 1,913 Ogan Komering Ilir 1,340 87 205 13 1,545

Karawang 1,657 93 124 7 1,781

Sumedang 2,243 91 218 9 2,461

Buton 2,427 79 637 21 3,064

Total 9,417 87 1,347 13 10,764 Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

17. In tiger shrimp-milkfish polyculture in brackishwater, women in OKI are also involved in feeding fish and shrimps because their husbands are busy with other fishing activities. In Asian catfish culture in ponds, the wives manage the pond operation because most of the freshwater fish farmers are also engaged in rice farming or are employed in rubber or palm oil plantations. 18. Women in Karawang participate in most aquaculture activities, including pond preparation, preparation and counting of fish seed, fish feed preparation, cultivation, fertilization, harvesting, and post-harvest operations. In Sumedang, most of the aquaculture activities are undertaken by men, but women are occasionally involved in fish seed selection for catfish breeding. In Buton, women comprise 20% of the farmers involved in seaweed cultivation, and women participate in seed selection and binding of seaweed seedlings. Some groups of women even plant seedlings themselves in the sea because their husbands are busy in open fishing activities. 19. During 2009–2012, the PIUs trained 1,081 women processors in Langkat, OKI, Karawang, Sumedang, and Buton (Table A14.9). Women comprised 92% of the 1,963 project beneficiaries who underwent training in fish processing techniques and who were provided with processing equipment. The training was designed to train women on improved techniques to produce high-quality processed fish that could be sold in nearby markets at reasonable prices. After the training, the PIUs provided processing equipment and fish as raw materials to women trainees to enable them to earn extra income from processing activities. Various processing products in the form of fish and shrimp crackers, steamed fish in banana leaves, fermented

Appendix 14 73

small shrimps, shredded fish, smoked fish, boneless fish or fish presto, and salted fish were sold by women members to enable them to earn extra income from their food processing activities. Market information was not provided during the training, but the PIUs assisted women in promoting and marketing their processed fish and seaweed products to prospective buyers. The PIUs scheduled meetings between the women beneficiaries and prospective buyers in the PIU offices to enable the women beneficiaries to showcase and sell their processed food products. In the gender action plan and at project appraisal, one of the indicators of women’s project participation was the proportion (i.e., 25%) of the total number of microenterprises supported by the project that were operated or managed by women. It was impossible, however, to quantify this target because aquaculture enterprises were usually a family business involving both men and women. Moreover, there were women’s processing groups composed of both men and women. The operation and management of these processing enterprises was therefore the joint responsibility of the men and women members. Table A14.9: Project Beneficiaries Trained in Fish Processing Techniques and Provided

with Processing Equipment Assistance, 2009–2012

Male Female Total

District Number % Number %

Langkat 3 8 617 92 620 Ogan Komering Ilir 9 1 351 99 360

Karawang 122 3 360 97 482

Sumedang 28 25 441 75 469

Buton 6 32 94 32

Total 162 8 1,801 92 1,963 Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.

2. Strategic Changes in Gender Relations 20. Women beneficiaries’ participation in trainings on aquaculture production and processing has significantly improved their opportunities to engage in livelihood enterprises to earn and augment their family income. Before the implementation of the project, women participated less in the operation and management of aquaculture livelihood enterprises. From the technical knowledge on improved aquaculture production technologies and processing methods gained from attending the project’s training programs, women’s participation in fish farming activities has been enhanced starting from production, post-harvest, and aquatic products. 21. The project involved women as members and/or officers of community groups, particularly women’s groups and cooperatives formed under the project. Some women acted as treasurers of the community groups, giving them an active and important role in the financial management of these organizations. 22. The project therefore facilitated the economic and social empowerment of poor women beneficiaries through group formation and capacity building on livelihood development. Women beneficiaries in all project districts reported that the project addressed their immediate economic needs, enhanced their status in the community, and increased their self-confidence. The increase in their income and socialization, and their participation in training programs on aquaculture production and food processing, empowered women in the project districts to express their views on how to operate or manage their aquaculture production and processing

74 Appendix 14

enterprises. Many of them were successful in managing their processing enterprises and in taking organizational leadership roles in implementing project activities. 23. The project also provided gender equality and opportunities for women to participate in the implementation of aquaculture-related and community development activities. The women CEWs and the project staff at the PIUs and PMO were instrumental in providing assistance in the distribution of processing inputs, extending technical guidance or extension support services in the project beneficiaries’ aquaculture production and/or processing activities, and in organizing and strengthening project beneficiary groups.

3. Contribution of Gender Equality Results to Overall Loan Outcomes and Effectiveness

24. The gender action plan was integral in meeting the project’s overall outcomes of poverty alleviation and food security through sustainable aquaculture development. The gender action plan’s refinement of activities, implementation, and monitoring contributed to the project’s gender results. The gender action plan was a major component in beneficiary selection, project trainings, organizational formation, and strengthening of beneficiary groups, and in the provision of processing input assistance.

III. LESSONS LEARNED AND RECOMMENDATIONS

25. The following are lessons learned and recommendations:

(i) The PMO, PIUs, national gender consultant at the PMO, gender focal persons assigned

in the five project districts, NGOs, CEWs, and the resident mission’s gender specialist worked closely to ensure that the gender action plan was implemented and monitored.

(ii) Women were invited to attend aquaculture training programs, but they were not provided

with production input assistance under the project. Future projects should consider including women who are heads of households (i.e., widows and single mothers) and who are interested in venturing into aquaculture business enterprises as beneficiaries of production input assistance.

(iii) Underachievement of some women’s participation targets are partly because the gender

focal persons at the PIUs were only engaged on a part-time basis since they had to attend to their other responsibilities and tasks as regular staff members of the PIUs.

(iv) The Ministry of Marine Affairs and Fisheries and the PIUs should continue gender mainstreaming activities not only in the project sites, but also in other districts not covered by the project. Considering that they already have adequate experience in implementing gender mainstreaming activities, the gender focal persons in the PIUs should be assigned to continue with their gender-related tasks, but the PIUs should give them incentives for their extra work.

(v) Another reason for underachievement of some women’s participation targets was because project activities conflicted with women’s chores. It is recommended that future projects set flexible meeting and training schedules that do not conflict with women chores.

Appendix 14 75

(vi) Women’s groups organized under the project were composed of both men and women. To increase women’s participation in future projects, women only groups should be formed.

Table A14.10: Comparison between Achievements and Results and the Revised Women’s

Participation Targets

Gender Action Plan (Activities, Indicators and Targets, Time Frame, and

Responsibility)

Progress to Date Issues and Challenges

Components/Activities Social Preparation and Community Empowerment • At least 30% of the

participants in the consultation process for needs assessment and social preparation are women

• At least 30% of the members

in community groups are women

• 25% or 3,596 of the 14,585

participants in the consultation process for needs assessment and social preparation were women.

• Women participated in all four

community groups developed by the project: (i) project beneficiary groups, (ii) processing groups, (iii) associations of project beneficiary groups, and (iv) cooperatives.

• Achievements: (i) 14% or

1,707 members of the 12,528 project beneficiary groups members were women (ii) 92% or 1,889 of the 2,057 members of women’s processing groups were women, (iii) 23% or 3,031 women were among the associations of project beneficiary groups’ 13,126 members in the five project

• Lower women’s participation was due to (i) conflicts in the schedule of consultation meetings and women’s household chores, and (ii) the part-time employment status of the gender focal persons at the PIUs, who had to attend to their other responsibilities and tasks as regular staff members of the PIUs. Although the gender specialist at the project management consultant provided support to the gender focal persons at the PIUs, she could not stay in one district for a long period of time because she had to cover all five project districts.

• Low participation among

women in project beneficiary groups was partly because the main activity of these groups was to produce fish and other aquatic products. Women’s participation in fish farming activities was minimal compared to male beneficiaries.

76 Appendix 14

Gender Action Plan (Activities, Indicators and Targets, Time Frame, and

Responsibility)

Progress to Date Issues and Challenges

• 200 women’s processing groups formed

• At least 20% of the officers in project beneficiary groups are women

Responsibility: Nongovernment organizations, community-based extension workers, and gender focal persons at the PMO and in the five project districts Time Frame: 2009–2012

districts, and (iv) 23% or 1,302 members of the 5,687 members of cooperatives were women.

• 139 (70%) of the targeted 200

women’s processing groups formed.

• 21% or 185 officers in 881

project beneficiary groups were women, which surpassed the minimum target; most women held positions as secretary or treasurer.

Aquaculture Production Enhancement

• At least 25% of the trainees in fish production and culture-based fisheries are women

Responsibility: PIUs in the five project districts and gender focal persons at the PMO and in the five project districts Time Frame: 2009–2012

• 13% or 1,347 of the 10,764

trainees in fish production and culture-based fisheries were women.

• Most of the trainees were the fish farmers because they were more involved in fish farming operations. Women had to do household chores, take care of their children, and assist in fish farming operations (e.g., feeding fish or crabs or shrimps) while their husbands were attending the training program on aquaculture production.

Livelihood Opportunities

• At least 33% of the trainees in microenterprise activities are women

• At least 25% of microenterprises supported by the project are operated and/or managed by women

Responsibility: PIUs in the five project districts and gender focal persons at the PMO and in the five project districts

• 93% of the trainees in

microenterprise (processing) activities were women.

• It was impossible to quantify

this target because aquaculture enterprises were usually a family business involving both men and women. Moreover, there were women’s processing groups composed of both men and women. The operation and management of these processing enterprises were therefore jointly the

Appendix 14 77

Gender Action Plan (Activities, Indicators and Targets, Time Frame, and

Responsibility)

Progress to Date Issues and Challenges

Time Frame: 2009–2012 responsibility of the men and women members.

Fish Marketing Development

• Marketing campaigns will include modules especially tailored for women’s roles in aquaculture production and processing

Responsibility: PIUs in the 5 project districts and gender focal persons at the PMO and in the five project districts Time Frame: 2009–2012

• Market campaigns either

through business meetings at the offices of the district fisheries services where buyers/traders and representatives of women’s groups could promote their products, or through participation in local trade exhibits or trade fairs. (i) Langkat: Fish and shrimp

cracker (ii) Ogan Komering Ilir:

Smoked fish

(iii) Karawang: shredded milkfish, milkfish boneless, anchovies, fermented small shrimps, boiled milkfish.

(iv) Sumedang: Boiled, shredded catfish, shredded Asian catfish, dried spiced tilapia

Increased Staffing At least 30% of new staff recruited under the project will be women

• 30 out of 100 (30%) of the

total number of staff at the PMO and the PIUs (i.e., district fisheries services) involved in the implementation of project activities were women. The women personnel hired under the project were mostly technical staff (e.g., extension workers, laboratory personnel in the water quality and fish health laboratories), while others were administrative staff.

PIU = project implementation unit, PMO = project management office. Source: Ministry of Marine Affairs and Fisheries, Directorate General of Aquaculture. 2013. Project Completion Report. Jakarta.