Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 17889

IMPLEMLENTATION COMPLETION REPORT

REPUBLIC OF YEMEN

EASTERN REGION AGRICULTURAL DEVELOPMENT PROJECT

(CREDIT 1983-YAR)

May 21, 1998

Rural Development, Water and Environment DepartmentMiddle East DepartmentMiddle East and North Africa Region

|This document has a restricted distribution and may be used by recipients only in the|perforfnance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

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CURRENCY EQUIVALENTSCurrency Unit = Yemeni Rial (YR)

Official Rate Market RateJune 1991 US$1 - YR 12 US$1 = YR 29October 1994 US$1 = YR 50 US$1 = YR 103October 1995 US$1 =YR90 US$1 =YR 112December 1996 US$1 = YR 100 US$1 =YR 126December 1997 US$1 = YR 130.99 US$1 =YR 130.99

ABBREVIATIONS AND ACRONYMS

AREA Agricultural Research and Extension AuthorityCACB Cooperative and Agricultural Credit BankCTA Chief Technical AdviserEA Extension AgentERADA Eastern Region Agricultural Development AuthorityERADP Eastern Region Agricultural Development ProjectERR Economic Rate of RetumFAO/CP Food and Agriculture Organization/World Bank Cooperative ProgrammeGOY Government of YemenICR Implementation Completion ReportIDA Intemational Development AssociationMAI Ministry of Agriculture and IrrigationM&E Monitoring and EvaluationMOPD Ministry Of Planning and DevelopmentMRRS Marib Regional Research StationMTR Mid-Term ReviewNWRA National Water Resources AuthorityO&M Operation and MaintenanceROY Republic of YemenSAR Staff Appraisal ReportSMS Subject Matter SpecialistTA Technical AssistanceUNDP United Nations Development Programme

FISCAL YEAR OF BORROWER

January 1 - December 31

Vice President: Kemal DervisCountry Director: Inder K. SudActing Sector Director, MNSRE: Salah DarghouthTask Team Leader: Mohamed N. Ben Ali

FOR OFFICIAL USE ONLY

IMPLEMENTATION COMPLETION REPORT

REPUBLIC OF YEMENEASTERN REGION AGRICULTURAL DEVELOPMENT PROJECT

(CREDIT 1983-YAR)

Table of Contents

Page No.

PREFACE ..........................................................................................................................EVALUATION SUMMARY ................................................................... i-iv

A. Project Objectives .................. iB. Implementation Experience and Results .................................................................... iC. Summary of Findings, Future Operation and Key Lessons Learned ........... ................ iii

PART I. PROJECT IMPLEMENTATION ASSESSMENT ...................................................... IA. Statement/Evaluation of Objectives .................................................................... 1B. Achievement of Objectives ....................... ............................................. 2C. Major Factors Affecting the Project ..................................................................... 8D. Project Sustainability .................................................................... 9E. IDA Performance ................................................................... 10F. Borrower Performance ................................................................... 10G. Assessment of Outcome ................................................................... 11H. Future Operations ................................................................... 11I. Key Lessons Learned ................ 12

PART II. STATISTICAL TABLES .................................................................... 13Table 1. Summary of Assessments .13Table 2. Related Bank Loans/IDA Credits 15Table 3. Project Timetable 17Table 4. Loan/Credit Disbursements: Cumulative Estimated and Actual .18Table 5. Key Indicators for Project Implementation .............................. , ,.,. 19Table 6. Key Indicators for Project Operation .20Table 7. Studies Included in the Project .20Table 8A. Project Costs ................................................................ 21Table 8B. Project Financing ............................ 21Table 9. Economic Costs and Benefits ................................ ,,,,,,...... 22Table 10. Status of Credit Covenants .......................... 23Table 11. Compliance with Operational Manual Statements .......................................... 25Table 12. IDA Resources: Staff Inputs ........................... ,,,,.,.,,,..... 25Table 13. IDA Resources: Missions .......................... , , , . .... 26

APPENDICESA. ICR Mission's Memorandum of Understanding ................................ ...................... 27B. Project ICR from the Borrower's Perspective . 32C. Project Economic Re-evaluation .............................. ................................ 40

Map: IBRD 20585R - Project Area

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents fnay not otherwise be disclosed withoutWorld Bank authorization.

IMPLEMENTATION COMPLETION REPORT

REPUBLIC OF YEMENEAST:ERN REGION AGRICULTURAL DEVELOPMENT PROJECT

(CREDIT 1983-YAR)

Preface

This is the Implementation Completion Report (ICR) for the Eastern Region AgriculturalDevelopment Project: (ERADP), for which Credit 1983-YAR in the amount of SDR 11.0 million(US$15.0 million equivalent) was approved on January 31, 1989 and made effective on September 25,1990.

The credit was closed on December 31, 1997 or one year later than the original closing date ofDecember 31, 1996. Final disbursement took place on April 9, 1998, at which time a balance ofSDR 0.772 million (US$1.039 million equivalent) was canceled. In 1995, the amount of SDR 1.7million (US$2.5 million equivalent) was canceled from the IDA credit, following the recommendationsof the project mid-tenn review and the Country Portfolio Performance Review (CPPR) agreed upon byIDA and the Government in September 1995. Overall disbursement from the Credit amounted toUS$12.1 million or 81 percent of SAR estimate. The project had no provisions for cofinancing.However, parallel financing by the Abu Dhabi Fund for the construction of the Marib irrigation schemewas not completed as a result of political and security reasons. This has made it necessary for IDA torestructure the project; and adapt it to the new situation.

The draft ICR was prepared by an FAO/World Bank Cooperative Programme (FAO/CP)missionI (on behalf of the Rural Development, Water and Environment Sector Departnent - MNSRE ofthe Middle East and North Africa Region) and is based on the Staff Appraisal Report (SAR); theDevelopment Credit Agreement (DCA), supervision reports, information obtained from the project filesand project staff, as well as on the findings of the project completion mission which visited Yemen inJune-July 1997. After the Credit closing date of December 31, 1997, a joint IDA and FAO/CP mission2

visited Yemen and the project site to update and finalize the draft ICR. The ICR was reviewed byMNSRE and Middle East Department (MNCMS) managers. The Borrower contributed to thepreparation of the ICR by providing information and project M&E data to the ICR missions and bypreparing an ICR fromn the Borrower's perspective, which is attached as Appendix B.

The initial FAO/CP mission of June-July 1997 consisted of Messrs. F.K. Bishay (Mission Leader - SeniorEconomist), R. Suppa (Agricultural Economist) and J. C. Macartney (Agronomist - Consultant).

2 The ICR mission which visited Yemen in February, 1998 (after the December 31, 1997 closing date)consisted of Messrs. Mohamed Noureddine Ben Ali, Senior Agriculturist -Team Leader, MNSRE, Usaid El-Hanbali, Senior Irrigation Engineer, MNSRE and Rafaelle Suppa, Senior Agricultural Economist, FAO/CP.

IMPLEMENTATION COMPLETION REPORT

REPUBLIC OF YEMENEASTERN REGION AGRICULTURAL DEVELOPMENT PROJECT (ERADP)

(Credit 1983-YAR)

EVALUATION SUMMARY

A tent can be erected onlyIf there are poles to support it,

And no pole wvill standUnless the pegs are anchored.

Only if the pegs work together with the polesWill the tent serve those living in it.

Source: Al-Afwah Al-AwdiSheikh of the Madhij tribe, mid-6th Century A.D.

A. PROJECT OBJECTIVES

1. As stated in the Staff Appraisal Report (SAR), the main objectives of the Eastern RegionAgricultural Development Project (ERADP) were to:

(a) establish the institutional framework for addressing the longer-term agriculturaldevelopment needs of the region through: (i) the establishment and strengthening ofagricultural support services, including agricultural extension; and (ii) expandingagricultural research activities;

(b) provide for the early use of the production potential created by the Marib Dam and ensureits sustainability through the development of: (i) an operation and maintenance service;(ii) a tertiary distribution system for the irrigation scheme; and (iii) a pilot on-farmdevelopment; and

(c) help increase agricultural productivity and farmers' incomes by: (i) promoting the use ofimproved agricultural and irrigation practices; and (ii) upgrading the management of landand water resources.

2. Due to reasons within and beyond the Borrower's control (Gulf War, security issues, referenceSection C), the project was restructured in April 1991. While keeping to its original objectives, therestructured project reduced the scope of the components pertaining to the first and second objectives byredefining research and extension services and by reducing the area to be equipped with tertiary canalsfrom 4,250 ha to 1,750 ha (gross area). The components of the third objective were expanded to includethe construction of feeder roads and the establishment of a sand dune stabilization program. Theproject's objectives were in line with GOY national development priorities. Despite being somewhatover-ambitious, these objectives provided for a balanced approach to increase and sustain agriculturalproduction, improve farmers' income and achieve optimum use and conservation of natural resources.

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B. IMPLEMENTATION EXPERIENCE AND RESULTS

3. The ERADP was implemented in one of the most difficult regions of Yemen. The region ischaracterized by fragmented tribal populations, severe constrains in natural resources, particularly waterand an unstable security situation. Despite these issues, and notwithstanding the significant delays inproject effectiveness and implementation, the project was able to complete most of its planned activitiesand satisfactorily achieve its three objectives. The Eastern Region Agricultural Development Authority(ERADA), which was created by decree in June 1987, and the Marib Regional Research Station (MRRS)are, as called for by the first objective of the project, established, are presently serving the needs ofagricultural development in the Marib and Al Jawf regions and are sustainable. The second objective ofproviding for the early use of the production potential created by the Marib Dam and ensuring itssustainability has also been achieved through the establishment of an Operation and Maintenance (O&M)service within ERADA and the irrigation of 75 percent of the area envisaged at restructuring. Evidenceof increasing agricultural productivity, and hence farm income, has already been measured by ERADP'sMonitoring and Evaluation (M&E) and it is expected that this trend will continue and consolidate so thatfull development targets will be attained (para. 7).

4. Implementation results are briefly described for each of the project's main objectives andcomponents.

5. Objective No. I - Institutional Development. Agricultural Research: With the exception ofhousing units, of which only 18 out of 20 units were constructed due to price escalation, 100 percent ofthe physical outputs planned at restructuring for this component were achieved (paras. 6,7 and 8).Agricultural Extension: On the Credit closing date of December 31, 1997, two block centers and all 9planned extension centers had been completed. This represents an achievement of 100 percent ofexpected physical outputs for this sub-component. However, two of the extension centers and one blockcenter have not yet received their full staff complement or means of transportation (paras. 10 and 11).Women in Development: A program of activity which included home/child care, crafts and culturalpractices was fully implemented by the Women in Development (WID) team (para. 12). VeterinaryServices: Veterinary drugs, mobile veterinary units and laboratory equipment provided by ERADPenabled the vaccination of about 370,000 head of sheep and cattle and increased the productivity oflivestock in the project area (paras. 13 and 14). Training: Eighty-two ERADA and MRRS staff havebenefited from short-term training and seven candidates have completed post-graduate study courses.The courses selected were relevant to the requirements of the project. Technical Assistance: Overall,nearly 100 percent of the planned TA was implemented and its effect on project achievements and stafftraining were noticeable.

6. Objective No. 2 - Provision for Early Usage and Sustainability of Marib Dam and Scheme.Creation of an Operation and Maintenance Service: ERADA nominated and trained sufficient staff tocreate a very effective O&M unit. By establishing and equipping the O&M team early in 1994, theproject helped alleviate the potential devastation that would have been caused by the June 1996 floods(para. 20). Irrigation Scheme Development: At closing, the project was able to install secondary canalson only about 1,325 ha, i.e. the equivalent of 75 percent of the target area anticipated at restructuring(para. 21).

7. Objective No. 3 - Increasing Agricultural Productivity and Farm Income. PromotingImproved Agricultural Productivity and Irrization Practices: Two varieties of high-yielding, early-maturing wheat have been introduced by MRRS. Under farmers' conditions, these varieties haveachieved yields of 4 MT/ha. Two high-yielding groundnut cultivars, suitable for summer growing, havealso been released. Yields of 2.6 MT/ha of groundnuts have been achieved under farm conditions.(para. 23). Other activities aimed at improving productivity increases include the efforts by extension

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staff to increase the adoption by a large number of farmers of the use of chemical fertilizers, particularlyurea. The adoption of the use of urea is probably the single most important factor that contributed toincreasing crop yields in the project area (para. 24). Construction of Feeder Roads: At project closing, atotal of 50.2 km of roads (of which 4.0 km asphalted) were completed. This represents an achievementof 117 percent of restructuring targets (para. 28). Sand Dune Stabilization: 11 km of shelterbelts wereplanted. With the benefit of hindsight, the proposed 20 km of shelterbelt proved to be unrealisticallyambitious. ERADA has been able to encourage farmers to plant their own windbreaks and smallshelterbelts around their properties (para. 29).

8. Financial and Economic Objectives: Actual project cost is estimated at about US$18.4 million or66 percent of the original estimate made at appraisal (US$27.9 million, Part II, Table 8A). Overalldisbursements include IDA's US$12.1 million and GOY contribution of US$6.3 million (Part II, Table8B). With regard to the IDA credit, the final disbursement rate is estimated at 81 percent of the originalSAR commitment. As indicated in Part II, Table 9, the economic re-evaluation of the project takes intoaccount quantifiable benefits deriving from the six different farming systems (or models) for a total of11,450 ha of cultivated area. The ex-post ERR was estimated at 13 percent and is about 5 points lowerthan the ERR estimalted at appraisal. This is essentially due to the lower than expected cropping intensityof 104 percent, well below the 138 percent foreseen at appraisal. It is estimated that (Appendix c, Table5) average fann income increases range from a low of 8 percent to a high of 15 percent (para. 31).

9. Maior Factors Affecting the Project: The factors that were not subject to Government controlinclude: (i) the Gulf War (1991), which slowed down the growth of the Yemeni economy; (ii) theresettlement and absorption of the large number of Yemeni workers who had returned to Yemen fromneighboring oil-exporting countries following the Gulf War; (iii) the 1994 civil war which caused delaysin project implementation and curtailed economic growth; and (iv) the severe floods that occurred in1989 and 1996 and caused serious damage to irrigation and other rural infrastructure. Factors that wereunder GOY control include: (i) the slow administrative procedures, the shortage of trained personnel andtransport constraints which delayed project effectiveness and start up by about 20 months each; (ii) thedisparity between the, official and parallel exchange rates of the Yemeni Rial, which until 1995 increasedthe real cost of works and delayed the implementation of civil works contracts; (iii) interference andcumbersome tendering and procurement procedures imposed by MAI and MOPD until 1995, whichinfringed on ERADA's autonomy, reduced its effectiveness and delayed the pace of projectimplementation; and (iv) lack of security in the region.

10. Proiect Sustainabilitv: While the project's achievements have generally been satisfactory, its fulldevelopment and impact will only materialize in the distant future. The incremental funding for floodrepair and control works provided by the IDA-financed Emergency Flood Rehabilitation Project, thecommitment of GOY to provide timely and adequate recurrent budget and the renewed interest of theAbu Dhabi Fund in completing the Marib scheme, as well as GOY's commitment to improve security ledthe ICR mission to believe that some degree of sustainability would be achieved. However, pastexperience indicates that in view of severe budgetary constraints, such commitments and assurancescannot always be kept. Consequently, the ICR mission rates project sustainability as uncertain.

11. IDA and Borrower's Performance: IDA's performance in project identification and preparationwas satisfactory. However, its performance at appraisal was not satisfactory because it underestimatedsocial and security issues. Its performance in project supervision was highly satisfactory, particularly thequick response to rapidly changing circumstances (para. 40). The overall performance of the Borrowerand its agencies was mixed. The performance of ERADA was not consistent throughout the project as aresult of variable management quality and changes. Performance of ERADA's technical and supportstaff, as well as its technical assistants, was satisfactory as they continued to be motivated and performedadequately under extremely difficult conditions (paras. 41 and 42).

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12. Assessment of Outcome: Despite the many serious, unforeseen and mostly external unfavorablefactors that faced and delayed project implementation, the project outcome is deemed to be satisfactory.The rapid adjustments and corrective actions taken by both IDA and Government to changingcircumstances are to be highly commended (para. 44).

C. SUMMARY OF FINDINGS, FUTURE OPERATION AND KEY LESSONS LEARNED

13. Future Operation: An excellent physical infrastructure has been completed and necessaryequipment supplied. There has been considerable investment in human capital, which must now bedeployed. The continued support of ERADA and MRRS to agricultural production is paramount if theanticipated full development and impact are to be achieved. This will involve completing the staffingand operating all the research and extension facilities, as well as making the best use of the human andmaterial resources at the disposal of ERADA and MRRS. The ICR mission has received assurances thatthis is indeed the plan the GOY wants to follow (paras. 46 and 47).

14. Key Lessons Learned: The following are the main lessons learned:(i) in hardship areas, the earlyconstruction of staff housing and the provision of special allowances are necessary to motivate and attractqualified staff (Para. 7); (ii) extension Subject Matter Specialists (SMSs) should be exposed to newtechnologies early on while they are being developed or verified by researchers (Para. 8);(iii) success of the TA components can achieved when, inter alia, a favorable environment for goodperformance is created (Para. 15); (iv) early training and institutional building helps in the achievementof project objectives (Para. 20); (v) in retrospect, the Abu Dhabi fund pullout had the unintended benefitof allowing the empowerment of farmers to construct, operate and maintain with ERADA's assistancethe earthen tertiary canals, which were supposed to be constructed by the project (Para. 21); (vi) researchresults obtained from other stations can provide a quick impact when they are field tested forapplicability and relevance and promoted immediately without unnecessary duplication (Para. 24);(vi) Sector and Country Portfolio Performance Review (SPPR and CPPR) are the most appropriate forato resolve generic issues (Para. 27); (vii) sensitizing farmers and assisting them to directly takeresponsibility for implementing activities that are of interest to them would be the most efficient way ofimplementing project activities and insuring their long-termn sustainability (Para. 30); (viii) consultationand involvement of stakeholders is necessary to achieve and sustain development activities and impact(Para. 36); and (ix) unsettled security situations such as the one the Marib area can best be remedied bysustained government support to improve the quality of life in this hardship area (Para. 37).

IMPLEMENTATION COMPLETION REPORT

REPUBLIC OF YEMENEASTERN REGION AGRICULTURAL DEVELOPMENT PROJECT

(Credit No. 1983-YAR)

PART I: PROJECT IMPLEMENTATION ASSESSMENT

A. STATEMENT/EVALUATION OF OBJECTIVES

1. As stated in its Staff Appraisal Report (SAR), the main objectives of the Eastern RegionAgricultural Development Project (ERADP) were to:

(a) establish the institutional framework for addressing the longer-term agriculturaldevelopment needs of the region through: (i) the establishment and strengthening ofagricultural support services, including agricultural extension; and (ii) expandingagricultural research activities;

(b) provide for the early use of the production potential created by the Marib Dam and ensureits sustainability through the development of: (i) an operation and maintenance service; (ii)a tertiary distribution system for the irrigation scheme, and (iii) a pilot on-farmdevelopment; and

(c) help increase agricultural productivity and farmers' incomes by: (i) promoting the use ofimproved agricultural and irrigation practices; and (ii) upgrading the management of landand water resources.

2. Due to delays in completing works required by IDA to implement additional safety measures onthe Marib dam to fulfil conditions of effectiveness, the ERADP Credit did not become effective until 20months after its approval by IDA's Board. Other extemal factors beyond the control of the project (Ref.Section C), including the 1991 Gulf war and the deterioration of security in the Marib area contributed tofurther delaying the start of project implementation. Because of the above reasons and due to changes inirrigation water availability estimates and the departure of the contractor building the Marib irrigationscheme, as well as the discontinuation of funding from the Abu Dhabi for the completion of the Maribirrigation scheme, the project was restructured in April 1991.

3. While keeping to its original objectives, the restructured project reduced the scope of thecomponents pertaining to the first and second objectives by redefining research and extensionservices to more modest goals and by reducing the area to be equipped with tertiary canals from 4250 hato 1750 ha (gross area). The components of the third objective were expanded to include theconstruction of feeder roads and the establishment of a sand dune stabilisation program. During the 1995project mid-term review, the pilot on-farm development program was cancelled because potentialparticipants in the program were not, due to inter and intra-tribal conflicts, willing to manage theirproject-developed pilot farm as a demonstration to be viewed and visited by other farmers.

4. The project's objectives were in line with GOY's national development priorities. The projectdesign provided for a balanced approach to increase and sustain agricultural production, improve farmers'incomes and achieve optimum use and conservation of natural resources. Various relevant and realisticrisk elements were recognised in the SAR. The project's components and activities, however, weresomewhat ambitious and demanding on national managerial capacity. The assessment by the Abu Dhabiconsultants of water resources for irrigation and the pertaining irrigation scheme developmentcomponents needed further in-depth analyses at the design stage. The ambitious sand dune stabilisation

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program, as well as the social and security issues should also have benefited from deeper analysis at byIDA's appraisal.

B. ACHIEVEMENT OF OBJECTIVES

General

5. The ERADP was implemented in one of the most difficult regions of Yemen. The fragmentedtribal structure of the populations and the inter and intra tribal conflicts made it difficult for ERADA tobuild consensus on the global agricultural development needs of the region. Despite the fact thatERADA was quite successful in building ownership of individuals and small groups to rapidly move onthe execution of specific project activities (the planting of windbreaks, the establishment of extensiondemonstration plots and the O&M of tertiaries), the general pace of project implementation continued tosuffer from the discord and conflicts within the beneficiary population. In addition to the delicate socialconstraints, the severe limitations on natural resources, particularly water caused further conflicts anddestabilised security in the project area. However, despite the above issues, and notwithstanding thesignificant delays in project effectiveness, implementation and the somewhat ambitious project designboth at appraisal and restructuring, the project was able to complete most of its planned activities andachieve its three objectives. The Eastern Region Agricultural Development Authority (ERADA), whichwas created by decree in June 1987, and the Marib Regional Research Station (MRRS) are, as called forby the first objective of the project, established and are presently serving the needs of agriculturaldevelopment in the Marib and Al Jawf regions. The second objective of providing for the early use ofthe production potential created by the Marib Dam and ensuring its sustainability has also been achievedthrough the establishment of an Operation and Maintenance (O&M) Service within ERADA and theirrigation of 75 percent of the area envisaged at restructuring. Evidence of increasing agriculturalproductivity, and hence farm income, has already been measured by ERADP's Monitoring andEvaluation (M&E) and it is expected that this trend will continue and consolidate so that fulldevelopment targets will be attained.

Objective No. 1: Institutional Development

6. Agricultural Research. The goal of this activity is to set up an agricultural research station thatwould focus on developing technologies and resolving problems that are specific to the region. Researchin the Eastern Region was previously given little attention, apart from modest support through the Al-Jawf Project. Through ERADP, research in the region was to receive support in the form of incrementalstaff, staff training and housing units, farm and laboratory equipment and vehicles, as well as offices andlaboratories to create the Marib Regional Research Station. With the exception of housing units, ofwhich only 18 out of 20 units were constructed due to price escalation, 100 percent of the physicaloutputs planned at restructuring for this component were achieved (Ref. Table 5). Althoughconstruction of the MRRS headquarters building was completed in May 1996, research on the farm hadbeen ongoing since 1993.

7. As an institution, the creation of the MRRS is seen as a success story. It is now fully establishedand well equipped. There are six Ph.D. and M.Sc. researchers working on issues of immediate relevanceto farmers. Although the eleven researchers planned at appraisal are not all on the station, the MRRS isable to conduct on-station and on-farm research activities. Marib is considered a hardship station andcurrent security problems have reduced the incentive for staff to work there. This issue of incentives forstaff to move to Marib has been partially resolved by the construction of housing units that are nowavailable; hardship allowances may be another way of motivating qualified staff to move to Marib.AREA-headquarters has initiated a program to consolidate and improve the efficiency of agriculturalresearch in the country. This will alleviate the staff shortage in Marib and allow for increased staff

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movement between stations and reduce duplication of research. Subject matters for which no specialisedstaff exist at Marib will be treated at the Seiyun research station which focuses its activity on the sameagro-ecological area as the MRRS. The MRRS has, over the last three years, been able finance some ofits research activities with funds generated from the sale of crops grown on its farm. This practice willadd some measure of sustainability to its research activities. In 1998, the Ministry of Finance allocatedan extra YR 5 million to MRRS to implement Quick Impact Research Activities. Research managers atthe national level feel that this new support from the Ministry of Finance will continue if quick andtangible results are achieved by the MRRS.

8. As described in the SAR, the research approach to be followed by MRRS stressed that testing oftechnologies would be undertaken in farmers fields with the close involvement of ERADA's regionalextension services, This expected collaboration between research and extension did not always workwell, particularly when new technologies and/or varieties were being introduced to farmers. Oftenresearchers would set up the demonstrations with little or no participation from extension Subject MatterSpecialist (SMSs), who did not always own and understand the technology demonstrations. Theimportant lesson from this is that SMSs should be exposed to new technologies early on while thesetechnologies are being developed or verified at the research station. SMSs should participate, as equalpartners in the design and implementation of on-farm demonstrations of new technologies or varieties.The impact of research results on increasing agricultural productivity and farm income is analysed underobjective No. 3 (Para. 24, 25, 26).

9. Agricultural Support Services. The agricultural support services to be provided by thestrengthened ERADA included agricultural extension, women in development and veterinary supportservices.

10. Agriculture Extension: At project start up, the newly created ERADA was lacking in qualifiedstaffs , extension infrastructure and methodology. The ERADP focused on establishing the institutionalframework for addressing the longer-term needs for agricultural development, and hence, extensionservices became a major focus. The strengthened extension service was to consist of nine ExtensionAgents (EAs), giving an extension/farmer ratio of 1:350, supported by six SMSs. Additional field staff(i.e., five EAs) were to be recruited during project implementation. Extension centres, five within thescheme and four outside the scheme, would be constructed together with one block centre. Theestablishment of an 8-ha orchard nursery was implemented by the private sector. It was expected thateach EA would be provided with a vehicle or a motorcycle.

11. On the Credit closing date of December 31, 1997, two block centres and all 9 planned extensioncentres had been completed. This represents an achievement of 100 percent of expected physicaloutputs for this sub-component. In addition, seven out of nine extension centers and one block centerare fully staffed and operating. the remaining two extension centres and the one block centre are in theprocess of being staffed and equipped. With the delivery of the last batch of motorcycles (20 units),mobility of extension staff should no longer be constraint to the delivery of extension services.Notwithstanding the above, extension which begun to work regularly in the 1993/4 cropping season had astrong impact on agricultural production in the Marib area. The extension service reported havingcontacts with 1,900 farm families (about 64 percent of target). Fifty-three farm demonstrations werecanied out during the 1995-1997 crop seasons. The role of extension has been complementary toimproved water supply and introduced high-yielding cultivars. The full impact of extension services onagricultural productivity is discussed under objective No. 3 (Para. 24, 25, 26).

12. Women in Development. Women shoulder the burden of a number of farm operations (althoughwith some tribes of Marib women do not do any farm work), particularly harvesting (forage crops andwheat) and care of livestock. Given the conservative nature of the social system and the sensitivity of

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women's issues in the Marib area, a modest programme to support women in development was initiated.The project provided a three-month training programme for 17 women in agricultural extension. Aprogram of activity which included home/child care, crafts and cultural practices was fully implementedby the Women In Development (WID) team. Four of the WID trainees have been recruited by ERADAas extension agents to sustain the effort in WID activities. Achievement under this sub-component hasbeen satisfactory.

13. Veterinary Services. Veterinary services were basically non-existent before the advent ofERADP. Because livestock plays an important role in all farming systems practised in the Marib area,the project provided incremental veterinary staff, veterinary equipment and drugs, as well as vehicles andtraining. Five veterinary technicians have been posted at extension centres and two technicians atERADA's headquarters. Veterinary drugs and laboratory equipment procured by the project enabled thevaccination over the life of the project of about 370,000 head of sheep and cattle (mostly for sheep pox,rinderpest and endoparasites).

14. Only a few activities were undertaken to promote livestock nutrition improvement and animalhusbandry practices. Such activities have been made difficult by the constant movement of herdsmen.Settled farmers/livestock owners are the stakeholders that benefited most from the project's veterinaryservices. They have now widely adopted vaccinations and drenching, as well as extension's advice onbetter nutrition and animal husbandry practices. Anecdotal evidence suggest that mortality rates,particularly of young stock have been reduced significantly. Settled livestock owners are very likely tosustain their interest in improved animal husbandry and will continue to seek and make use of veterinaryservices and drugs, even when, as is planned, such activities will be dispensed by private entrepreneurs asa commercially priced service.

15. Technical Assistance. Traininz and Studies. At project restructuring, Technical Assistance (TA)was revised and TA estimates were set at 522 person months (p.m.) of long-term assistance, 45 p.m. forshort-term assistance and 33 p.m. for consultant studies (Table 5). Despite some delays in recruiting therequired long-term TA, the project provided 572 p.m. of actual long-term TA services to ERADA, 12p.m. of short-term services and 12 p.m. for studies. Overall, nearly 100 percent of the planned TAwas implemented under the project. Many TA positions envisaged at appraisal were not filled. Thiswas essentially due to the fact that ERADA wanted to reduce the variety of specialities and increase thelength of appointment of those specialist who had the most positive impact on ERADA's staff and workprograms. The TA component was instrumental in training key ERADA staff and had a positive impacton improving the quality of agricultural support services provided by ERADA. The success of the TAcomponent was due to the fact that ERADA was able to: (i) to chose qualified experts; (ii) create afavorable environment for them to perform well; and (iii) gave them temporary project implementationassignments until local staff became available.

16. MRRS's use of long-term TA was reduced significantly. Because of a two-year delay inconstructing the laboratories of the newly-created Marib Regional Research Station, the highly dedicateddirector of the station decided to recruit and train local staff and hire only a Chief Technical Advisor(CTA). The TA provided by the project for the MRRS was able to significantly influence the programand research methodology of the station. Since 1994, the CTA was able to bring greater focus to on-farmresearch and to the resolution of those problem that affected farners most.

17. Training. Eighty-two ERADA staff have benefited from short-term training and sevencandidates have completed post-graduate study courses. The courses selected were relevant to therequirements of the project. The Research Staff Training Program was implemented effectively with fourdegree courses and short-term overseas courses for 26 candidates. Due to the lack of language capability,all short-term training was arranged within the region and 15 months of short-term extension training was

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implemented for 14 candidates in Jordan and Egypt. Training achieved 136 percent of restructuringtargets and was generally seen as a success.

18. Studies. The proposed flood control study was combined with the feeder road design studyintroduced at restructuring. As a result of the study, the IDA mid-term review mission of May 1995included as a new component the construction of a flood protection dike (4.4 km) to protect the B-North -BN canal. The design was carried out by the consultant and the contract was awarded in March 1996.Construction started in May 1996, but works were washed away by the June 1996 floods The contractorhas demobilised and the contract has been terminated. Reconstruction of the BN canal and other worksdamaged by the June 1996 floods, as well as flood protection dikes will be financed under the on-goingIDA-supported Emergency Flood Rehabilitation Project.

19. As planned, a preliminary study was carried out on archaeological sites around Marib. Thevulnerable areas were fenced. However, fences were later looted by some tribes. It was decided not toidentify sites through fencing as this tended to attract the attention of looters. The Department ofArchaeology has decided not to delineate more sites until sufficient funds are made available to financesite development and manned protection.

Objective No. 2: Provision for Early Usage and Sustainability of Marib dam and Scheme

20. Creation of an Operation and Maintenance Service. As initially appraised, the project aimedto ensure the sustainability of the Marib dam scheme through the development of an Operation andMaintenance (O&M) service and the introduction of the tertiary distribution system and on-farmdevelopment. It had been assumed that the Abu Dhabi Fund target of equipping 4250 ha with 85 km ofsecondary irrigation canals would be achieved. However, due to the causes explained in Section C of thisreport, only 21 kmL of main canals and a few secondary canals were completed by the Abu Dhabicontractor by the time the ERADP became effective. Nonetheless, ERADA nominated and trainedearly on in the project life sufficient staff to create a very effective O&M unit. By establishing andequipping the O&M team early in 1994, the project helped alleviate the potential devastation that wouldhave been caused by the June 1996 floods. Day and night, throughout the flood period, the O&M teamgradually released water from the dam to prevent water from going over the spillway and causingtremendous damage to lives and property on its path. The O&M team has indeed contributed to thesustainability of the Marib dam and scheme.

21. Irrigation Scheme Development. At project restructuring, the availability of irrigation waterfrom the Marib dam was reassessed. The restructuring mission took the view that there was notsufficient evidence to indicate that water from the Marib dam would be able to irrigate the 4,250 haanticipated at appraisal. The mission, therefore, concluded that in view of the absence of funding fromthe Abu Dhabi Fund for the completion of the Marib irrigation scheme, it would recommend that only1,750 ha be equipped with project-financed secondary canals. At closing, the project was able to installsecondary canals on only about 1,325 ha or 75 percent of the target area anticipated at restructuring.The reason for this partial completion is due to conflicting signals received by the GOY from the AbuDhabi Fund regarding the Fund's intention to resume the construction of the Marib scheme. When theworks were finally contracted out, the contractor did not have sufficient time to complete the worksbefore December 31, 1997. Provisions have been made with the contractor to complete the work afterthe closing date under financing from the on-going Emergency Flood Rehabilitation Project. Earthentertiaries have been constmcted entirely by farmers who had sole responsibility for their O&M. The pre-project situation shows that the irrigated and cultivated area' amounted to some 9,700 ha with a croppingintensity of 97 percent. At Credit closing, the irrigated and cultivated area has increased to 12,950 ha,

I Cultivated areaf omall sources of irrigation water, i.e. surface water from the dam, well irrigation, spate, etc.

- 6 -

and the cropping intensity to 105 percent (see Table 3, Appendix C). In retrospect, the Abu Dhabi fundpullout allowed the empowerment of farmers to construct, operate and maintain with ERADA'sassistance the earthen tertiary canals.

22. On-Farm Water Management. Demonstrations were set up in two areas for Parshall flume,border strip and lined PVC methods of water delivery. However, during the 1995 project mid-termreview, the pilot on-farm development program was cancelled because potential participants in theprogram were not willing to manage their project-developed pilot farm, as a demonstration to be viewedand visited by other farmers with whom they may be in conflict.

Objective No. 3: Increasing Agricultural Productivity and Farm Income

23. Promoting Improved Agricultural Productivity and Irrigation Practices. A number ofactivities were undertaken by ERADA and MRRS staff to promote increased agricultural productivityand better use of irrigation water. Two varieties of high-yielding, early-maturing wheat have beenintroduced by MRRS. Under farmers conditions, these varieties have achieved yields of 4 MT/ha(RWYT 89/90 and ARA 32). Breeder seed of these varieties has been passed to the Seed MultiplicationCorporation and is now under multiplication. Two high-yielding groundnut cultivars, suitable forsummer growing, have also been released. Yields of 2.6 MT/ha of groundnuts have been achieved underfarm conditions. Other varietal releases include Bafateem Onion (originally introduced by the SeiyunAREA Station) which has demonstrated a high dry matter content and good storage; tomato varietiesNapoli and Roma have been released in the area and have given highly significant yield increases.

24. Other activities aimed at improving productivity increases include the efforts by extension staffto increase the adoption by a large number of farmers of the use of chemical fertilisers, particularly urea.The adoption of the use of urea is probably the single most important factor that contributed to increasingcrop yields in the project area. Sorghum which used to be broadcast with no fertilisers and very littlemanure has responded dramatically to the use of urea. Surveys conducted by the M&E team of ERADAshow that sorghum grain yields increased from 0.6 MT/ha to 1.2 MT/ha between 1990 and 1997. TheMRRS and ERADA extension staff have also developed and demonstrated technological packages forfertilisers and crop husbandry packages for wheat, groundnut and onions, optimum water requirements,irrigation dosage and frequency for wheat, potatoes and sesame, etc. Results from the Central Dhamarstation were field tested by MRRS and, where applicable, were passed for extension promotion. Thisavoided unnecessary duplication and provided for quick impact.

25. The yields achieved are very much in line with appraisal estimates and overall croppingintensity in the project area increased from 97 to 104 percent (appraisal estimate of 138%). Potato inthe rotation has been significantly reduced, due to high costs of production, virus and fungal diseases anddecreasing availability of quality seed potato. Wheat yields have almost doubled and alfalfa (which has aheavy water consumption) is gradually being replaced by sorghum. The cropping intensity in the projectarea irrigated with surface irrigation has reached 125 percent. In areas where water from wells is used,cropping intensity increased from 119 to 130 percent. This is largely due to the introduction of relaycropping with cash crops. Past severe problems with brown root rot and scale insects on citrus have beenbrought under control. The main achievements under this component are therefore satisfactory.

26. Upgrading the Management of Land and Water Resources. In 1994-95, the Marib damreservoir was infested with dense algae blooms which were carried through the irrigation water andclogged outlets and metering devices. The mid-term review mission allocated funds for consultantservices and the importation of algae-eating (Bolti) fish from Sudan. Some 3,500 Bolti fish wereimported and seeded in the dam reservoir. The effects of the Bolti fish on the algae and the growth of thefish population in the reservoir have been monitored. Second-generation fish are now surviving and

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multiplying well. Water samples are being monitored through the MRRA's laboratory in Marib.Preliminary results indicate that the algae infestation is being significantly curbed by the Bolti fish.

27. Constructiion of Feeder Roads. The feeder road component was introduced at restructuring.The target was to construct 12.5 km of new feeder roads and improve 30.5 km. of existing service roadsalong the main canals. The consultants who prepared the road designs took about 12 months longer thananticipated. Changes requested by ERADA in the design of the roads, coupled with a murky exchangerate situation in Yemen further delayed tendering and reduced the length of roads to be contracted to 4.3km of asphalt road[s. The remaining 39 km of earth and gravel roads were to be executed directly byERADA with its project-procured equipment. The construction of 4.0 km of asphalt roads wascompleted in November 1997. This was made possible by the Country Portfolio Performance Review(CPPR) which helped resolve the issue of disparity between the official and parallel exchange rates of theYemeni Rial by denominating civil works contracts in US dollars and streamlined tender reviewprocedures. These two generic issues were delaying the implementation of all IDA's projects in Yemen.ERADA had already completed the rehabilitation of about 15 km of earth roads prior to contracting forthe asphalt roads. However, ERADA's rehabilitation efforts were halted when the project's heavyequipment was requisitioned by local authorities and made available to tribal chiefs in the area to repairthe damage caused to their farm by the June 1996 floods.

28. The equipment was supposed to be retumed by the tribes within six months. Nine months laterwhen the equipment was not retumed, IDA informed the Borrower, in February 1997, of its intention tosuspend project disbursement if the equipment was not retumed by May 31, 1997. On May 25, 1997, anIDA supervision mission found that no action had been taken on this matter. The IDA mission visitedMarib and along with ERADA's management spoke to the Govemor and the local military commanderabout the return of the equipment. The mission and ERADA's management retumed to Sana'a wherethey contacted the Ministers of Agriculture, Planning and Development, Defence, the Military JointChiefs of Staff, the Director of Military Operations and people with relations at the highest level ofGovernment. The effort finally paid off when on May 30, 1997 at midnight a presidential order wasissued to the Military commander in Marib who recovered the equipment at dawn on 05/31/1997. Atproject closing, a total of 50.2 km of roads (of which 4.0 km asphalted) were completed by theproject. This represents an achievement of 117 percent of restructuring targets. Because of themany problems that this sub-component and ERADA had to overcome, the final achievement is deemedto be highly satisfactory.

29. Sand Dune Stabilisation. The area between the North and South canals of the Marib scheme isprone to sand movement. It is estimated that some 200-300 ha are lost to sand dunes every year. Toalleviate this problem, it was decided at project restructuring to plant trees on a series of bands to makeup "shelterbelts" that would arrest sand dune movement and protect agricultural land. It was proposed toplant 20 km of shelterbelts. In 1994, 31,000 trees were planted. However, due to severe drought, themortality rate was 24 percent and about 7,500 trees had to be replanted. The planting program continued,albeit at a very slow pace. At Credit closing, 11 km of shelterbelts were planted. With the benefit ofhindsight, the proposed 20 km of shelterbelt proved to be unrealistically ambitious. The major problemsfaced by this component related to theft of irrigation equipment by tribes and high tree mortality ratesdue to the hot and dry summer months.

30. Once established, the tree species that were planted proved to be adapted to the project area.Because of their adaptability to arid areas and their unpalatable nature, the trees (tamarix, sesbania,acacia, prosopis, etc.) planted in the shelterbelts are likely to sustain their growth and reduce themovement of sand. However, the trees may become subject to cutting for fuel wood and may not lastvery long without some sort of protection by the community. ERADA has so far been able to motivatemost of the commLmities to protect the trees. Moreover, ERADA has been able to encourage farmers to

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plant their own windbreaks and small shelterbelts around their properties and homes. This activity hasbecome very popular and is very likely to be very sustainable. So far, some 52 farners have establishedwindbreaks and have protected some 200 ha. of farm land from sand dune encroachment. ThisERADA/farmers joint activity is deemed to be very satisfactory and is expected to be sustainable. Thesustainability of the other shelterbelts established by ERADA is at this stage deemed to be uncertain.

Financial and Economic Objectives

31. Actual project cost is estimated at about US$18.4 million or 66 percent of the original estimatemade at appraisal (Part II, Table 8A). Final overall disbursement includes IDA's US$12.1 million andGOY contribution of US$6.3 million (Part II, Table 8B). With regard to the IDA credit, the finaldisbursement rate is estimated at 81 percent of the original SAR commitment.

32. The ERADA M&E team identified six farming systems in the project area and respectiverepresentative models are given in Appendix C. For each model/system, indications on land use,cropping intensity and crop yields are based on data derived from a complete survey for models A and Dand on random sampling for models B, C, E and F. As indicated in Part II, Table 9, the economic re-evaluation of the project takes into account quantifiable benefits deriving from the six different farmingsystems (or Models) for a total of 11,450 ha of cultivated area. In the absence of specific productionparameters, the project livestock incremental production has not been evaluated. Instead, the incrementalfodder production has been valued in line with its commercial value and taken into account as projectbenefit. The ex-post economic rate of return (ERR) has been assessed at 13 percent (Appendix C,Table 13). It is about 5 points lower than the ERR estimated at appraisal. This is essentially due tothe lower than expected cropping intensity of 104 percent, well below the 138 percent foreseen atappraisal. It is estimated that (Appendix C, table 5) average fann incomes increases ranged from a low of8 percent (for Model E, from 453,OOOYR to 490,500YR against an appraisal estimate of 28,200YR) to ahigh of 15 percent (for Model F, from 320,300YR to 369,400YR, against an appraisal estimate of64,400YR).

C. MAJOR FACTORS AFFECTING THE PROJECT

Factors Not Subject to Government Control

33. The following main extemal factors have affected the economic and social conditions in Yemenand were beyond the control of the Government. They represented substantial challenges to projectimplementation and none of these problems were foreseen at appraisal:

(a) The Gulf War (1991) which slowed down the growth of the Yemeni economy andcaused regional disniptions for several years to follow;

(b) The resettlement and absorption of the large number of Yemeni workers who had toreturn to Yemen from neighbouring oil-exporting countries following the Gulf War;

(c) The 1994 civil war also caused delays in project implementation and curtailedeconomic growth.

(d) The severe floods that occurred in 1989 and 1996 and caused serious damage toirrigation and other rural infrastructure; and

(e) The periodic social unrest in the project area, leading to a lack of security for projectofficers in the field; Both Government and IDA underestimated the sociologicalproblems of the overall effects of the unsettled security situation of the project area.

Factors Subject to Government Control

34. The following are the major factors under the government control that have adversely affectedproject implementation.

(a) Slow administrative procedures, shortage of trained personnel and transport constraintsdelayed project effectiveness and start up by about 20 months each. Both Governmentand IDA underestimated the project area's sociological problems and the cumbersomeregulations of the national tendering procedures.

(b) Diverting civil service staff including project staff from their regular activities to workon national elections (April 1993) delayed project implementation activities duringseveral months.

(c) The disparity between the official and parallel exchange rates of the Yemeni Rial up to1995 increased the real costs works and delayed the implementation of civil workscontracts. At the time, civil work contracts were denominated in Yemeni Rials with noprice escalation clause which precluded contractors from covering the cost of importedmaterials. The situation was subsequently corrected (following a CPPR in 1995) by aGovernment decision to denominate all civil works contracts financed by externalagencies in US Dollars or other hard currencies.

(d) Interference and cumbersome tendering and procurement procedures imposed by MAIand MOPD prior to 1997 infringed and regional authorities on ERADA's autonomy,reduced its effectiveness and delayed the pace of project implementation.

D. PROJECT SUSTAINABILITY

35. The first objective of the project was to establish the institutional framework for addressing thelonger-term development needs of two border Governorates - Marib and Al-Jawf, which were largelyexcluded from previous development efforts. The population of the Region consists largely of semi-nomadic tribesmen with limited experience in sedentary agriculture and in controlled surface irrigation.The population has been torn with frequent intra-tribal disputes and has always been vocal in claiming ashare of the oil revenue of the Region. As a consequence, ERADA has faced a serious challenge inmeeting the aspiration of the local populations some of whom thought of ERADA as the vehicle throughwhich government would channel subsidies and the provision of free services. It took much ofERADA's efforts to change the expectation of some of the population and make them understand that itsinstitutional mandate was to help them develop themselves and not to channel govenmuent subsidies.This is a major achievement for ERADA and one that will contribute to its sustainability as aninstitution.

36. Early in the project life, ERADA did not make sufficient efforts to sensitise farmers to thebenefits of the newly established irrigation scheme and the project. When conflicts over canalalignments, irrigation water distribution scheduling, etc. surfaced, ERADA made a major effort incultivating farmers' support for the proper use of irrigation infrastructure. At project closing,considerable progress was achieved by ERADA in creating a partnership with beneficiaries. Theownership and support of beneficiaries to the activities of ERADA and the MRRS are likely to improvethe sustainability of project activities and impact.

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37. Like in most support services projects, sustainability in the medium-term must necessarilydepend on Government's commitment to recurrent expenditures. The mission was assured byGovernment that, given the high investment already made and the level of infrastructure provided, fundshad already been committed for recurrent costs for the next two years. Past experience, however,indicates that in view of constrained budgetary resources, such assurances have not always been easy tokeep. Nonetheless, factors that may contribute to government sustained support of project activitiesinclude the fact that the project area is a border area where security is enhanced by support todevelopment. Another indication that the Government is committed to sustaining its support to the regionis its active contacts with the Abu Dhabi Fund (ADF) to resume ADF funding for the completion of theMarib irrigation scheme. The ADF has apparently agreed and has sent a number of missions and hiredconsultants to review the designs and complete the unfinished work started by Dogus contractors. Thereis currently no policy on cost recovery for irrigation. The NWRA is responsible for developing a waterresources policy and has requested IDA support in its formulation. The Government favours aParticipatory Irrigation Management (PIM) approach and will first evaluate the possibilities of the PIMwith spate irrigation schemes. The experience of the Wadi Hadramawt project will be directly relevant inproviding guidelines for the initial development of a cost recovery programme. In the project area,farmers have constructed and covered the full cost of O&M of earthen tertiaries under projectsupervision.

38. The recent decision to fund research on the basis of approved sub-projects should provide forsustainability of research services in the area. Free veterinary services are not sustainable, but as there is ademand from farmers, cost recovery should be introduced. The sand dune fixation program and thefarner-planted windbreaks are supported by farmers and their value is well recognised. The programmeis considered to be sustainable.

39. In conclusion, while the project's achievements have generally been satisfactory, its fulldevelopment and impact will only materialise in the distant future. The incremental funding for floodrepair and control works provided by the IDA-financed Emergency Flood Rehabilitation Project, Thecommitment of GOY to provide timely and adequate recurrent budget and the renewed interest of theAbu Dhabi Fund in completing the Marib irrigation scheme, as well as GOY's commitment to improvesecurity led the ICR mission to believe that some degree of sustainability would be achieved. However,past experience indicates that in view of severe budgetary constraints, such commitments and assurancescannot always be kept. In addition, control of the security situation is not always possible.Consequently, the ICR mission rates project sustainability as uncertain.

E. IDA PERFORMANCE

40. The Bank's performance in project identification and preparation was satisfactory. However, itsperformance at appraisal was not satisfactory due to the fact that both IDA and the Governmentunderestimated the social and security issues. The project, as appraised, was in line with GOY nationalobjective to assist in the promotion of balanced regional development. The initial project designincluded a well integrated set of objectives. However, many extemal factors, beyond the control of theGovemment and not foreseen at appraisal, had a dramatic effect on the implementation timetable.Considerable flexibility from both IDA and the Govemment made it possible for the project to adapt tochanging circumstances and achieve its objectives. The Bank's performance in project supervision washighly satisfactory, particularly the quick response to rapidly changing circumstances. Sixteensupervision missions were fielded and close project review continued even during unsettled times.Relative continuity was maintained in the follow-up of critical issues. The close working relationshipsbetween IDA, GOY and project management teams greatly assisted in the resolution of many problemsand bottlenecks.

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F. BORROWER PERFORMANCE

41. With due consideration to some of the serious complications that arose during projectimplementation and the fact that some of these complications were beyond the control of Govermment,the overall borrower's performance was mixed.

42. The performance of ERADA was variable throughout the project as a result of managementchanges. Performance of ERADA's technical and support staff, as well as its Technical assistants wassatisfactory as they continued to be motivated and performed adequately under extremely difficultconditions. Prior to the 1995 CPPR, standard Government procedures for procurement through MAI,MOPD and the High Tender Committee created a serious blockage in procurement, particularly withregard to small contracts. The performance of MRRS management and staff was good but was hamperedby inadequate allocations of operating budget. Therefore, the Borrower's performance regardingrecurrent budgetary allocations, particularly during the initial years of the project, was less thansatisfactory and caused some disruptions in the performance of research and extension activities. The useby MRRS management of financial resources obtained from the sale of agricultural products produced onthe research farm alleviated this budget constraint and is an indication of their commitment anddedication to the project.

43. The co-operation between the Govemment and IDA was satisfactory. It remained firnthroughout implementation period and resulted in a positive impact on project performance. TheGovemment has complied satisfactorily with the legal cove-covenants, as specified in the DevelopmentCredit Agreement (Part II, Table 10).

G. ASSESSMENT OF OUTCOME

44. Despite the many serious, unforeseen and mostly extemal unfavourable factors that faced anddelayed project implementation, the project outcome is deemed to be satisfactory. The rapid adjustmentsand corrective actions taken by both IDA and Government to changing circumstances are to be highlycommended. The performance of the construction of civil works, housing, extension centres andERADA headquarters and the MRRS can be judged as satisfactory. The impact of the project onagricultural production became noticeable in early 1995.

45. The project. has met its main objective of establishing the institutional framework fordevelopment in the area. Facilities have been constructed to a high level of quality and ERADA andMRRS should now be in a position to operate effectively, given stable security in the area. Agriculturalresearch has delivered varietal and cultural recommendations which already are showing significantimpacts at farm level. Field demonstrations have clearly had a positive impact on farmers' culturalpractices. The overall prognosis on the outcome of these activities is satisfactory.

H. FUTURE OPERATIONS

46. An excellent physical infrastructure has been completed, the necessary equipment has beensupplied and there has been considerable investment in human capital. The continued support ofERADA and MRSS to agricultural production is paramount if the anticipated full development andimpact are to be achieved. To insure adequate future operation of the project, the Borrower must:(i) complete the staiffing of the MRRS, (ii) complete the staffing and equipment of the two remainingextension centers and one block center; (iii) and sustain the provision of budgetary resources to operateand maintain ERADA and the MRRS. The ICR mission has received assurances that this is indeed theGovernment plan. As indicated above, the IDA-financed Emergency Flood Rehabilitation Project has

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committed funds to repair the flood-damaged canals and install comprehensive flood control structures.In addition, the Abu Dhabi Fund is also reviewing the design of the whole scheme and is expected tomake changes that would make the irrigation infrastructure operational and less exposed to flood damage.

47. Perhaps because the security situation continues to be of concern, the Government, through theMinistry of Agriculture and Irrigation (MAI) inforned the ICR mission that it wishes to extend the areaof ERADA to include the Govemorate of Shabwa and would like to seek IDA's assistance to undertakethis task. The MAI indicated to the mission that it would prepare and send to IDA a formal request forassistance in the financing of a follow-up project to the ERADP. The proposed project wouldcomplement the irrigation scheme rehabilitation and completion to be financed by the Abu Dhabi Fund.Furthermore, the Government has recognised that the best way to sustain the results achieved under theproject is for ERADA to continue work while cultivating the support and ownership of beneficiaries.Continued IDA involvement would keep this participatory approach on track. Through both the Ministryof Agriculture and Ministry of Planning, the Govenmment has indicated to the ICR mission that it intendsto give the enlarged Eastem Region (including Shabwa) a high priority. This priority status would resultin continued support to ERADA and other institutions in the area with adequate operating budget andwith additional investments in rural infrastructure and development.

48. Finally, through a Public Expenditure Review (PER) exercise and an Agriculture Developmentand Field Services Study (ADFSS), the Govemment and IDA are presently collaborating to make surethat operating budgets continue to be available so that the intended benefits of investment project areindeed attained. One of the main focus of the ADFSS will be to evaluate past experiences of severalprojects, including the ERADP, in the development of research and extension and make proposal forimproving their efficiency ,returns and sustainability.

I. KEY LESSONS LEARNED

49. The following are the main lessons leamed:

(a) In hardship areas, the early construction of staff housing and the provision of specialallowances are necessary to motivate and attract qualified staff (Para. 7);

(b) Extension Subject Matter Specialists (SMSs) should be exposed to new technologies earlyon while they are being developed or verified by researchers; SMSs should participate in thedesign and implementation of on-farm demonstrations of new technologies or varieties(Para. 8);

(c) Success of the TA components can achieved when: (i) qualified experts are chosen; (ii) afavorable environment for good performance is created; and (iii) temporary responsibilityfor direct project implementation is given to TAs (Para. 15);

(d) The early training and creation of the Marib dam and scheme O&M unit helped alleviate thepotential devastation that would have been caused by the June 1996 floods.(Para. 20)

(e) In retrospect, the Abu Dhabi fund pullout had the unintended benefit of allowing theempowerment of farmers to construct, operate and maintain with ERADA's assistance theearthen tertiary canals, which were supposed to be constructed by the project (Para. 21);

(f) Research results obtained from other stations can provide a quick impact when they are fieldtested for applicability and relevance and promoted immediately without unnecessaryduplication (Para. 24);

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(g) Sector and Country Portfolio Performance Review (SPPR and CPPR) are the mostappropriate fora to resolve generic issues (procurement, disbursement, exchange rate, etc.)that affect the performance of projects and sectors. CPPRs should become a systematicinstrument in the management of Bank Group portfolios (Para. 27);

(h) Sensitising farmers and assisting them to directly take responsibility for implementingactivities that are of interest to them and to the project would, if properly managed, be themost efficient way of implementing project activities and insuring their long-termsustainability (Para. 30);

(i) Consultation and involvement of stakeholders is necessary to achieve and sustaindevelopment activities and impact (Para. 36); and

(j) Unsettled security situations such as the one the Marib area can best be remedied bysustained government support to improve the quality of life in this hardship area (Para. 37).

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PART II: STATISTICAL TABLES

Table 1. Summary of Assessments

A. Achievement of obiectives Substantial Partial Negligible Not Applicable(9;0 0s) (9) (0

Macro policies El L E] I9JSector policies III [ [l [

Financial objectives EJ I- L] [H]

Institutional development El Li] FIPhysical objectives [I] F] [] Poverty reduction lE E E]Gender issues l [1 F] F]

Other social objectives ED Ei] L]Environmental objectives El [1] Fi1 E0Public sector management El [E El ElPrivate sector development El El Li] [Fi

Other (specify) El ElE El

B. Project sustainability Likely Unlikely Uncertain03) (63) 09)

HighlyC. Bank verformance satisfactorv Satisfactory Deficient

(03) 09) 09)Identification E [;i E

Preparation assistance E [i1 EAppraisal E E I

Supervision El El

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HighlyD. Borrower performance satisfactor Satisfactorv Deficient

(0) (V) W;0Preparation [ I1 rImplementation ] ] E

Covenant compliance ]E []

Operation (if applicable) aK EK]

HhHiklaE. Assessment of outcome satisfactory Satisfactory Unsatisfactory unsatisfactory

(K]) Vs) K]) (])

C:I El C E

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Table 2: Related Bank Loans/IDA Credits

Loan/Credit title Purpose Year of Statusapproval

Preceding operations

1. Wadi Hadramaut To build up infrastructure and 1976 ClosedAgricultural Development institutions, carry out pilotProject (WHADP) I developments in area of the(Cr. 615-YDR) follow-up WHADP II.

2. Tihama Agricultural To provide irrigation, village 1978 ClosedDevelopment Project II water supplies, extension, sand(Cr. 805-YAR) dune stabilisation, infrastructure

and development of State farmsfor agricultural development inWadi Rima.

3. Tihama Agricultural To increase agricultural 1979 ClosedDevelopment Project HI production in Wadi MAI by(Cr. 880-YAR) effectively using spate flows

and helping recharge theaquifer; strengtheningagricultural support services(research, extension credit),building feeder roads, andproviding potable water to ruralpoor.

4. Tihama Development Project To support the Second 1980 ClosedIV (Cr. 978-YAR) Agricultural Development in

Wadi Rima through provisionof surface irrigation in the formof permanent diversionstructures.

5. Wadi Hadramaut To increase agricultural 1983 ClosedAgricultural Development production, raise farmerProject II (Cr. 1346-YDR) incomes, correct falling water

table via use of deep-lyingaquifers, provide farmmachinery and technicalassistance.

6. Central Highlands To improve farm incomes 1984 ClosedAgricultural Development through production andProject (Cr. 1453-YAR) productivity increases, provide

potable water.

7. Agricultural Research and To strengthen agricultural 1985 ClosedExtension Project research and extension capacity(Cr. 1557-YDR) in Central Highlands, Tropical

Lowlands, Southem Uplandsregions.

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Following operations

1. Tihama V (Cr. 1667-YARP The project is a follow-up to 1986 ClosedTihama I-IV, designed to ensuresustainability by establishingregional extension, veterinaryO&M services for the TihamaRegion and supporting womenin development. The projectwould improve utilisation ofavailable land, water andhuman resources in TihamaRegion and help substitute foragricultural imports.

2. Southern Regional To increase agricultural 1987 ClosedAgricultural Development productivity and farmer incomeProject (Cr. 1772-YAR) in Southern Region through

strengthening agriculturalservices in extension, credit andinput supplies, assist O&M ofproject infrastructure and water,raise technical capability ofstaff, provide assistance towomen farmers.

3. Northern Regional To improve agricultural 1988 ClosedAgricultural Development productivity through:Project (CR. 1886-YAR) (i) improved agricultural

services, (ii) better landmanagement, (iii) improvedirrigation and agriculturalpractices and improvedhealth/nutrition, establishregional extension and O&M toensure sustainability.

4. Wadi Hadramaut To follow-up on WHADP II 1989 ClosedAgricultural Development with intention of expandigProject III (Cr. 2045,YDR) inigated area.

5. Agricultural Sector To create within MAI the 1992 On-goingManagement Support Project management basis for a modern(Cr. 2299-YEM) agricultural sector, and to

strengthen agricultural research.Also to improve generaloperations of MAI.

6. Land and Water To begin a national programme 1992 On-goingConservation Project (Cr. to reduce the erosion and gain2373-YEM) control over land and water

resources.

7. Emergency Flood To repair rural infrastructure 1997 On-goingRehabilitation Project damaged by 1996 floods

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Table 3: Project Timetable

Steps in project cycle Date planned Date actual/latest estimate

Identification a' August 1987

Preparation a/ November 1987

Appraisal June 1988 March/April 1988

Post Appraisal September 1988

Negotiations October 1988 December 7-12, 1988

Board presentation December 1, 1988 January 31, 1989

Signing May 24, 1989

Effectiveness September 25, 1989 September 25, 1990

Restructuring March 11, 1991

Midterm review May 14, 1995

Project completion December 31, 1995 December 31, 1997

Credit closing December 31, 1996 December 31, 1997

a/ Identified and prepared with assistance from the FAO/CP.

Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual(US$ million)

FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98

Appraisal estimate 1.0 2.5 5.5 8.0 10.8 13.1 14.6 15.0 15.0

Actual 0.0 0.1 1.2 1.3 3.2 5.3 7.2 10.8 12.1

Actual as % of estimate 0 4 22 16 30 40 49 72 81

Date of fnal disbursement: April 9, 1998

-19 -

Table 5: Key Indicators for Project Implementation

hmplementation Unit Planned Planned Actual CommentsIndicators in SAR (SAR) Restructuring |

1. CIVIL WORKS

ERADA ERADA also purchased

- Offices (HQ) m2 1,000 900 500 prefabricated offices fromcontractor

- Houses No. 20 22 14

- Ext.Net. Centres No. 9 9 9 Including housing facilities.

- Block Centres No. I 1 2

- Sand dune protection km 0 20 11

-Wells No. 0 5 5

- Dike (Northern Canal) No. 0 1 0 planned at mid-term review,initial work destroyed by1996 floods

- Secondary canals ha 0 1,750 ha gross 1325 ha gross 1,130 ha net completed on12/31/97.

- Feeder Roads km 0 42.8 km 50.3 km of which 4.0 km asphalted.

AREA

- Admin. building M2 450 450 450

- Houses unit 0 20 18

- Carshed 02 ° 70 70

- Feederroads km 0 0 1.8 km Completedwithprojectequipment

2. TRAINING- Short -term p.m. 72 84 154 108 beneficiaries

- Post-graduate p.m. 72 210 242 11 beneficiaries

3. TECHNICAL ASSISTANCE

- Long-term p.m. 612 522 572

- short-term p.m. 17 45 12

Consultant studies p.m. 0 33 12 At $5,000 per p.m.

4. VEHICLES

- 4-WD trucks No. 59 48 34

- Motorcycles No. 39 50 20

5. EQUIPMENT AND MACHINERY

- Tractors No. 4 2 3

- Trailers No. 3 2 2

- Thresher No. 4 2 1

- Choppers No. 4 2 4

- Motor sprayers No. 8 4 45 of which 13 at 400 1 the restat 1001I

-20 -

- Farming equipment No. 20 . 14 43 of which 15 knapsacksprayers

- Heavy equipment No. 8 10 8 (2 bulldozers, I motorgrader,I excav., I crane, 2 compac,I loader)

- Generators No. 3 3

- Workshop equipment set 3 2 5

- Pumps and generators unit -2 4 5

- Drip irrigation set4ha - 2 2

- Surveying equip. set - set set

- Groundwater M&E eqp. set set set

- Hydrology Measuring set - set set

- Soil laboratory equip. set - set set

- Plant protection equip. set set set

6. OFFICE EOUIPMENT

- Computers No. - 3 8

- Copiers No. 6 5

Table 6: Key Indicators for Project Operation

L Key operating indicators inSAR/President's Report Estimated Actual

Not identified at appraisal

Table 7: Studies Included in the Project

Purpose as definedStudy at appraisal/redefined Status Impact of study

1. Feeder roads To identify and design the Completed 52 km of roads werefeeder roads that would service constructed of which 4.3 kmthe lands under inigation with asphalt cover

2. Flood control To improve control measures Completed Construction commenced butfor existing damage to contiol with further flood damage thestructures contractor was demobilised

3. Protection of To fence + control looting It was decided not to continuearchaeological sites as fencing attracted attention to

vulnerable areas

-21 -

Table 8A: Project Costs

Appraisal estimate (US$ M) Actual/latest estimate (US$ M)

Local Foreign Total Local Foreign Totalcosts costs costs costs

Item

Support to ERADA 4.1 3.3 7.4 4.0 8.2 12.2

Supportto AREA 3.3 2.8 6.1 0.6 0.9 1.5

Technical Assistance 0.2 4.4 4.6 1.5 2.7 4.2& Training

O & M Service 1.5 2.7 4.2 n.a. n.a. ...

Tertiary Distribution 0.8 1.1 1.9 0.2 0.2 0.4System

On-farm develop. 1.5 2.2 3.7 - - -

PPF ... ... ... 0.0 0.1 0.1

TOTAL 11.4 16.5 27.9 6.3 12.1 18.4

Table 8B: Project Financing

Appraisal estimate (US$ M) Actual/latest estimate (US$ M)

Local Foreign Total Local Foreign Totalcosts costs costs costs

Source

IDA 2.5 12.5 15.0 0.0 12.1 12.1

YAR Government 7.0 1.8 8.8 6.3 0.0 6.3

Beneficiaries 1.9 2.2 4.1 - - -

TOTAL 11.4 16.5 27.9 6.3 12.1 18.4

-22 -

Table 9: Economic Costs and Benefits

Unit SAR Estimates ICR Estimates

A. Project Beneficiaries- Farmers No. 2,600 2,660

B. Area (Cultivated) ha 12,100 11,480

C. Cropping Intensity % 138 105

D. Crop Yields- Wheat tons/ha 2.7 1.2 - 2.2- Sorghum grains tons/ha 0.6 0.8 - 1.2- Vegetables tons/ha 17.0 8.0 - 15.0

E. Economic Rate of Return1' % 17.8 13

1/ The M&E team of the PMU was able to identify six farming systems in the project area and respective representativemodels are given in Appendix C. For each model/farming system, indications on land use, cropping intensity and cropyields are based on data derived from a comprehensive survey which was carried out in the new Canal Command area(1,130 ha net - Model A) and in the new upstream area (200 ha - Model D). Random sampling was carried out in theremaining areas (Models B, C, E, and F). The economic re-evaluation of the project takes into account quantifiablebenefits deriving from these six different sub project areas for a total of 11,450 ha of cultivated area of which 8,440 withinthe Marib scheme and the remainder outside the scheme but still benefiting from improved extension service as providedunder the project (Appendix 6, Table 3). Yields estimates and economic prices used in the analysis are given in AppendixC, Tables 4 and 6 respectively. In the absence of specific production parameters, the project livestock incrementalproduction has not been evaluated. However, the incremental fodder production has been valued in line with itscommercial value and taken into account as project benefit. Details on total project incremental benefits are given inTables 8 to 12. On the basis of the above, the ex-post economic rate of return (ERR) has been assessed at 13 percent, i.e.,about 5 points below the ERR estimated at appraisal (Appendix 6, Table 13). This is mainly due to the lower thanexpected cropping intensity which is presently estimated at 104 percent well below the 138 percent foreseen at appraisal.It is finally estimated that average farm income increases have ranged from 8 percent (Model E) to 15 percent (Model F)as shown in Appendix C, Table 5.

-23 -

Table 10: Status of Legal Covenants

Original RevisedCovenant Present Fulfilment fulfilment Description of

Agreement Section type status Date date covenant Comments

1. Credit Schedule 4, 09 C 06/3011992 Mid-term Review Completed in MayPara 6 Report. 1995.

2. Credit Schedule 4, 05 C Acquire right-of-way Land cleared withPara 7 of land for secondary approval of farmers.

canals prior toissuance of bids.

3. Credit Schedule 4, 10 C Acquire right-of-way Over 70% ofPara 8 for land for sand beneficiaries signed

stabilisation prior to declaration to yieldstart-up. right-of-way,

compensation isexpected by theremaining 30% priorto consent.

4. Credit Schedule 4, 10, 05 C 12/31/1992 Appoint Director of Director appointedPara 10 Finance and Internal and trained.

Auditor.

5. Credit Article Il, 05 C 12/31/1989 Establish guidelines Pesticide usePara 3.05 for handling and use governed by MAI's

of agricultural guidelines.chemicals in project.

6. Credit Article m, 02 C Cost recovery of Farmers have builtPara 3.06(a) O&M of tertiaries. tertiaries by them-& (b) selves and are

bearing the full costof their O&M ascalled for in theproject document.

7. Credit Section 4.01 01 NYD 09/30/1997 Annual Audit Report. In compliance for allprevious years, 1997audit not yet due.

8. Credit Schedule 4, 05, 09 C Establish Advisory Established in 1988.Para 1(a) Council to ERADA. Chairman & Deputy

of ERADA. Deputy,MOP; Deputy,MOA; Deputy MOF,D.G. CACB; DeputyGovernors of Mariband Al Jawf; Rep. ofthe local councilMarib and Al Jawf.

-24 -

9. Credit Schedule 4, 05 C Water user groups Farmers have builtPara 1(b)(1) established in the tertiaries themselves,

areas under Groups areirrigation. distributing surface

water and are incharge of O&M oftertiaries.

10. Credit Schedule 4, 05 CD Design of feeder Designs complete.Para 2 roads and flood Designs and location

protection study. of works had to bechanged as a result ofthe June 1996 floodswhich destroyedexisting roads andflood protectiondikes. Extensive dikeworks planned underIDA-fmancedEmergency FloodRecovery Project.

11. Credit Schedule 4, 05 C Strengthen O&M Local team has beenPara 3 service of Marib trained and is now

Dam. fully active.

12. Credit Schedule 4, 05 C 06/30/1992 Archaeological and Antiquities Dept.Para 5 historical sites study Identified sites and

and based on that mapped them;prepare plan for delineation withconservation of such fences were imple-sites. mented, however, the

fences weredestroyed byBedouins.

-25 -

Table 11: Compliance with Operational Manual Statements

Statement number and title I Describe and comment on lack of compliance[~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~No deviation from applicable operational manual statements observed.

Table 12: Bank Resources: Staff Inputs

Stage of Planned Revised Actualproject cycle

Weeks US$ Weeks US$ Weeks US$Preparation to appraisal n.a. n.a. - - 0.3 0.5

Appraisal n.a. n.a. - - 109.0 225.9

Negotiations through n.a. n.a. - - 6.5 14.3Board approval

Supervision n.a. n.a. - - 122.3 305.5

Completion n.a. n.a. - - 12.0 30.0

TOTAL 246.1 712.6 - L 250.1 576.2

-26 -

Table 13: Bank Resources: Missions

Performance rating

Stage of Number Specialised Implemen- Develop-project cycle Month/year of Days staff skills tation ment Types of

persons fienld represented b/ status objectives problems

Identification October 1987 n.a. n.a. n.a. n.a. n.a. n.a.

Preparation February 1988 n.a. n.a. n.a. n.a. n.a. n.a.

Pre-Appraisal July 1988 n.a. n.a. n.a. n.a. n.a. n.a.

Appraisal February 1989 4 n.a. AE, A, IE, E n.a. n.a. n.a.

Supervision:

I June/July 1989 2 12 AE, IE 3 2 F, TA

2 October 1989 3 20 AE, DS, IE 3 2 M, F, TA

r3 Feb./March 1990 1 15 AE 3 2 M, F, T

4 September 1990 1 15 IE 3 3 M, TA, F

5 July 1991 4 19 AE, IE, FA, SE n.a. n.a. n.a.

6 September 1991 3 5 IE, AE, A 3 3 M, F, P

Feb./March 1992 3 13 IE, SE, A 3 3 F, TA, T

8 October 1992 2 15 AE, E 3 3 F, TA

June 1993 3 8 AE, IE, A 3 3 F, P, TA

10 Nov.lDec. 1993 2 13 A, IE 3 3 F. P, T, TA

11 October 1994 1 10 A S S P, F

12 (MTR) April/May 1995 2 20 A,IE S S P, F

13 Sept./Oct. 1995 1 8 A S S P, F

14 June 1996 1 10 A U S P, F

15 December 1996 1 5 A U S M, L

16 May/June 1997 1 6 A S S M

ICR June/July 1997 3 16 AE, E, A S S n.a.

ICR Feb. 1998 3 13 A, IE, E S S n.a.

a! P: Procurement Progress; F: Financial Performance; T: Training Progress; E: Environmental Aspects; TA: TechnicalAssistance; M: Management; S: Satisfactory; U/3: Unsatisfactory; L: Legal Covenant.

bf AE: Agricultural Economist; IE: Irrigation Engineer; L: Livestock Specialist; FM: Farm Machinery Specialist;FA: Financial Specialist; A: Agronomist; AN: Anthropologist; SE: Socio-Economist; DS: Dam Specialist.

Cf Carried out by the FAO/CP.

d/ The same mission also carried out the preparation of ICR relative to the WH-III (Cr. 20450).

Cl The updating of the draft ICR prepared by FAO/CP in July 1997 was carried out by a joint IDA and FAO/CP mission inFebruary 1998.

Test

APPENDIX A

IMPLEMENTATION COMPLETION REPORT

REPUBLIC OF YEMEN

EASTERN REGION AGRICULTURAL DEVELOPMENT PROJECT

(CREDIT 1983-YEM)

ICR MISSION'S MEMORANDUM OF UNDERSTANDING

- 27 - Appendix A

Page 1 of 5

REPUBLIC OF YEMENEASTERN REGION AGRICULTURAL DEVELOPMENT PROJECT

(CR. 1983-YAR)

IMPLEMENTATION COMPLETION REPORT MISSION(February 26, 1998)

MEMORANDUM OF UNDERSTANDING

I. INTRODUCTION

1. An IDA mission' visited Republic of Yemen during the period February 18 to 27, 1998 withthe objective of reviewing and assessing the achievements of the recently completed Eastem RegionAgricultural Development Project (ERADP). To achieve its objective the mission held discussions withproject staff and gathered the information necessaty to update and complete the ImplementationCompletion Repcrt (ICR) drafted by the FAO/CP team in July 1997. The final draft of the ICR will besent to the Govemment for its review and comments prior to its submission to the Board of the WorldBank.

2. The mission visited the project site in Marib on February 23, 1998 and worked in closecollaboration with the management and staff of the Eastem Region Agricultural Development Authority(ERADA) and AREA's Regional Research Station. The mission discussed its findings andrecommendations with H.E. Mr. Ahmed Salem Al-Jabali, Minister of Agriculture and Irrigation (MAI)and H.E. Dr. Jaafar Hamed, Deputy Minister, Ministry of Planning and Development (MOPD), as well asother staff of MAI and MOPD.

3 . The recommendations and agreements of the mission, as summarized in this Memorandum ofUnderstanding (MOU), are subject to IDA's Management review and confirmation. The mission wishesto express its appreciation to H.E. Mr. Ahmed Salem Al-Jabali, Minister of Agriculture and Irrigation;H.E. Dr. Jaafar Hamed, Deputy Minister, MOPD; Df. Amin Abdo Ahmed, Chairman of ERADA andAREA's local and expatriate staff for their collaboration and assistance in the review and assessment ofthe Project.

II. MAJOR PROJECT ACHIEVEMENTS

4. The ERADP was designed to achieve two major objectives: (i) provide for the sustainabilityand early usage of the production potential created by the Marib scheme, and (ii) increase agriculturalproduction and farmers' income in the project area. To achieve the above objectives, a number ofcomponents and outputs were defined at appraisal and redefined when the ERADP was restructured in1991. Based on project monitoring and evaluation data and other information provided by ERADA, abrief assessment of the project's achievements is indicated below.

The IDA mission consisted of Messrs. Mohamed Noureddine Ben Ali, Senior Agriculturist, Task TeamLeader (February 18 to 27, 1998), Usaid El-Hanbali, Senior Irrigation Engineer (February 22-23, 1998)and Raffaele Suppa, Senior Economist, FAO/CP (February 22-25, 1998

- 28 -Appendix APage 2 of 5

(a) With regard to its first objective, the project has achieved the following activities andoutputs:(i) The project established a well-trained and well-equipped team which is presently

operating and maintaining the Marib dam and irrigation canals; the achievement ratefor this output is 100 percent of project restructuring target, and

(ii) it equipped with secondary canals a total of 1,325 ha from and an anticipated grossarea of 1,750 ha; the achievement rate for this output is 76 percent of projectrestructuring target.

(b) With regard to its second objective, the project:(i) developed agricultural research in the project area by constructing, equipping

laboratories and training the staff of the Marib Agricultural Research Station. Thestation is now operating and has produced two new varieties of wheat and twovarieties of groundnuts in addition to various improved technologies in irrigationwater regimes, fertilization, pest control and crop husbandry practices. Some staffpositions remain open and need to be filled to allow for the full utilization of theresearch potential created by the project; the achievement rate for this output is 85Rercent of project restructurinz target:

(ii) supported agricultural extension and veterinary services in the project area byconstructing, furnishing, equipping and staffing nine extension centers and two blockcenters (four of which were constructed through local financing). The newly createdextension service was able to undertake 4,980 farm visits, implement 68 on-farmdemonstrations and dispense more than 370,000 sheep and cattle vaccinations.Despite a physical implementation rate of 100 percent the overall achievement of thiscomPonent is rated 75 percent of proiect restructuring target, because some centersremain under-staffed and under-equipped;

(iii) improved ERADA's institutional capacity by financing infrastructure designs andstudies, providing technical assistance (49 p. year) and staff training (33 p. year).The project also constructed and equipped one administration building and 32housing units. Heavy equipment needed for the maintenance of the Marib dam, itsirrigation scheme and feeder roads was also procured by the project; the achievementfor these activities, vis a vis restructuring targets, was rated at 100 percent for thestudies and 76 percent for housing units. The training component was implementedat a rate of 134 percent and the TA component at 99 percent of proiect restructuringtar-aets;

(iv) upgraded rural/agricultural infrastructure by rehabilitating existing roads andconstructing new gravel and asphalt roads. Over the life of the project, the 42.5 kmrestructuring target was surpassed by 9.2 km, making for a constructed total of 52km (of which 4 km are asphalted); the achievement rate for this output is 121 percentof project restructurinz targets;

(v) constructed 11 km of shelterbelts to stabilize sand dune movement and protectagricultural areas. This was in addition to a number of small shelterbelts and windbreaks of unknown quantity established directly by farmers with seedlings providedby the project; the achievement rate for this output was estimated conservatively at55 percent of project restructuring target.

29., -A-9Appendix APage 3 of 5

III. PROJECT DI]SBURSEMENTS

5. As of February 18, 1998 total project disbursements amounted to US$11.6 million or about 74percent of the original credit amount of US$15.0 million. It is anticipated that by April 30, 1998, date atwhich payment from the credit will cease, the total disbursed amount would reach about US$12.8million. The balance of US$1.2 million would cover eligible expenses incurred before the projectclosing date of December 31, 1997.

IV. ASSESSMENT OF PROJECT IMPACT

6. Notwithstanding the significant delays in project effectiveness (20 months) and implementationcaused essentially by security concems, political ramifications of the Gulf War and the lack of trainedpersonnel in sufficient numbers, as well as strong economic distortions (disparity between the official andparallel exchange rate of the Yrial caused significant delays in the implementation of civil workscontracts), the project was able to have a number of positive impacts. These are summarized below:

(a) At the end of the Gulf War, the Abu Dhabi Fund froze its financing and did not completethe planned 6,000 ha Marib irrigation scheme. However, after restructuring, the projectwas able to equip 1,325 ha with secondary irrigation canals and partially bring the Maribscheme into early usage. This action had a very positive impact on the local populationswhich would have otherwise remained unsupportive of the proposed irrigationdevelopments.

(b) By establishing a,d equipping the O&M team early in 1994, the project helped inalleviating the potential devastation that wculd have been caused by the June 1996 floods.Throughout the crisis period the O&M team gradually released water from the dam anddid not let it go over the spillway where it would have threatened lives and damagedproperties on its path. In addition the work of the O&M team made it possible to keepgates and other specialized equipmen:t fuictioning properly.

(c) The project's institutional support to ERADA and to AREA's Marib Research Station(MRS) enabled these two institutions to provide farmers in the region with greaterresearch and extension support. This has a significant and positive impact on crop yieldswhich increased by an average of 21 percent for wheat, 66 percent for sorghum grain and28 percent for vegetables. Far.m incomes also increased by a margin of between I I to 17percent.

(d) Taking into account the benefits deriving from various farming systems in the 11,450 haserved by the project, the ex-post economic re-evaluation of the project indicates that theeconomic rate of retum is about 13 percent. This is about 5 points lower than the ERRanticipated at appraisal. The reason for this lower ERR is essentially explained by the factthat the installation, by the Abu Dhabi Fund, of irrigation canals on the planned 6,000 hadid not materialize. Nonetheless, it is estimated that more than 2,600 farm families havebenefited from the project.

- 30 -

Appendix APage 4 of 5

V. PROJECT SUSTAINABILITY

7. As in most support services projects, sustainability will be a function of the Government'scommitment to recurrent expenditures. The O&M of the Marib dam and scheme is very likely to besustainable given the Government's commitment to the development of the area and the protection of itscitizens from the risks of floods. Funding has been secured under the IDA-supported Emergency FloodRecovery Project to complete the installation of secondary canals in sectors S4 and S5 (to complete thetotal of 1,750 ha planned under the restructured ERADP) and for the rehabilitation of the flood-damagedmain canals. In addition, redesign work has been initiated under the Abu Dhabi Fund which has recentlydecided to complete the construction of the Marib irrigation scheme as originally planned. ERADA hassufficient trained staff and specialized equipment to maintain the feeder roads it has constructed.Recurrent expenditures for O&M of the Marib dam, irrigation scheme and roads network, as well as forextension services have already been incorporated in ERADA's operating budget. Provided that nodrastic budget cuts are imposed on ERADA's budget, the sustainability of these services would remainvery likely. Sand dune stabilization activities and the establishment of windbreaks to protect agriculturallands and plantations has been adopted by farmers and will be sustainable, albeit at slower pace thanunder the ERADP.

8. The sustainability of research services at the Marib station is also very likely in view of therecent decision by AREA headquarters to fund adaptive research on the basis of approved sub-projectsthat provide additional incentives and greater responsibility to researchers. The Ministry of Finance hasrecently allocated additional resources (12 million Yrials) to fund result oriented research activities andthe MRS has already benefited from these extra funds.

9. In conclusion, the feeling among ERADA, MRS management and the IDA mission is that,while the project's present outcome is generally satisfactory, its full impact will only be achieved if itsservices and suppcrt to its beneficiaries are sustained as anticipated, during the next decade. TheGovermment is aware of this challenge and has assured the IDA mission of its commitment to maintainadequate funding to cover recurrent costs and sustain support services to agricultural development alongwith improving the security situation in the project area.

VI. AGREED FUTURE ACTIONS

10. To ensure the timely completion of project disbursements, the following action plan would beadhered to and given absolute priority by the financial department of ERADA.

A. Actions to be Implemented by ERADA

Action Due DateComplete and send to IDA the remaining replenishment applications to March 30, 1998allow IDA to fully recover the initial deposit to the project's SpecialAccountRefund unutilized balance ofthe Special Accountto IDA Account ABA March 30, 19980210-8210-4, Federal Reserve Bank of New York, New York, withreference "Unutilized balance of Special Account IDA 1 9830-YEM".

- 31 -Appendix APage 5 of 5

Action Due DateSigned agreement with Kahlan Co. to cancel contract for flood March 30, 1998protection dike and recover the unutilized money that the contractorreceived as part of the advance payment. The amount to be recovered,subject to final agreement with the contractor, is estimated to be aboutUS$37,400. This amount should be retumed to IDA directly or throughthe project's Special. Account at IDA's New York Account indicatedabove.After the full recovery of the initial deposit to the Special Account, Last application in good orderERADA should send to IDA complete applications for direct payment to be sent to IDA throughby IDA for eligible expenses incurred (paid or due) before December 31, Resident Mission's office by1997. All applications should be sent to IDA through the Resident April 20, 1998.Mission office so that these arrive in Washington prior to April 30, 1998 _

B. Actions to be Implemented by IDA

Action J Due DateComplete draft Implementation Completion Report and send it to April 30, 1998Government for its comments.

Sana'a, Thursday, February 26, 1998

Mohamed Noureddine Ben Ali Dr. Amin Abdo AbmedERADP Task Team Leader, MNSRE Chairman, ERADAIDA - The World Bank Group

APPENDIX B

IMPLEMENTATION COMPLETION REPORT

REPUBLIC OF YEMEN

EASTERN REGION AGRICULTURAL DEVELOPMENT PROJECT

(CREDIT 1983-YEM)

PROJECT IMPLEMENTATION COMPLETION REVIEW

FROM THE

BORROWER'S PERSPECTIVE

- 32 -

I Project Impact

Many aspects of the project effect and project impact can not be assessedat the time but some impacts can be indicated.(A) Positive Impact1. Technological Impact:- The agricultural extension pro7pram had

promoted the use of modern inputs such as fertilizers, insecficides,pesticides improved seeds, and machinery in the project area. Farmerswere responsive to some extend to use the recommended modemtechnology.

2. Tr.e veterinary and animal extension program had a notable impact on.the level of awareness of many farmers in Marib area with respect toimproved methods of animal husbandry and various diseases. Thelivestock owner response positively to the extend that the farmercomes frequently to be helped by the depart.

.. Agro economic Impact:- Eventhough buying and seling ofagricultural lands in the project area is a rare phenomenon, yet theaverage prices of the agricultural land had increased simce 1992. Theaverage price per hectare of an average quality land under spate andwells imgation had increased from YR200,000 in 1992 to 600,000nowadays . This is partially due to optimistic outlook of investors inview of services provided by the project and partiallyto changingaltitrides of the farmer community towards agricultural activities inMarib area which become more commercial oriented and started to beperceived as a investment opportunity rather than a subsistenceactivity.

4. Environmental Impact:- The increased irriaable area (around 5000 ha),the sand dunes stabilized in the project area, the Shelter Beltestablished around farmer fields and villages, and tree seedlingsdistibuted and planted in and / or around villages and publicinstitutions in the project area had a positive impact oon climate indecreasing the temp to one two degrees during the last ten yearsMoreover the speed and magnitude of wind and storm is notablydecrease.

5. Social Impact:-The project Generate different indirect benefit:

- The Beneficiaries about 15000 (2780 family) has acquiredreasonable level of knowledce with respect to use of modernaoriculture practices which have resulted in increasing theproductivitv and consequently increasing their income leadingwith time to rural poverty alleviation.

- Forward linkage effect of the project is represented bv theadded net out put of marketing firms in MIarib or in Sana'a, the

- 33 -

easy access of farmers contacts with social services in cities (clinics, hospitals, schools, etc..) .

- Backward linkage effect can be assessed by the construction offeeder roads where new business opportunities (shops ofAgricultural inputs spare parts, general services etc...)flourished along the roadsides, creating new jobs and income.

- Multiplier effect:- The widely diffused chain of increases inincome and expenditures that is generated by the project, createfarmers writh higher earnings who buy more goods fromshopkeepers, who in turns earn and reinvest more.

(B)Negative Impact:-1- Some cases of malaria and Bilharzia have been registered in recent

years, which probably generated by the stagnant water in the lake andwells . These cases, according to the Health offEce statistics in Marib,are very few but Rapid actions had been taken by ERADA and theoffice of health at marib to overcoome this problem . The Resultobtained is encouraging.

2- An other problerm arises concerning the existence of algaes in the lakeof the darL These algaes may contaminate the aquifers and maycreate some problems in the irrigation network.

ERADA had taken remedial measures by using Bolti fish, which willfeed on Algae. These Bolti fish imported from Sudan in'Sept 96 werecompletely adapted and started to give it's second generation. The resultis not completely assessed.

II Project sustainability:-

In order to maintain the quantity and qualify of services provided byERADA, we believe that the government should adapt necessary actionand find out the solutions of financing to these following measurements.

1. Staff and Personnel.

Lately it was observed that some qualified staff of ERADA who had beentrained inside and outside the country, were thinking to leave the project.This is attributed to the following:-

- Lack of occupational motives.- The chance of training abroad has terminated by the expected

fiuture closure of the credit.- Some problems of security.- Lack of incentives.

2

-34 -

Furthe=rore, there is no difference in occupation and wages between theemployee who works in Marib, and his colleque who lives in a city andwho may find an additional income source.We believe that, it is the role of the government to allocate the necessaryfunids to distinguish the staff working in Marib and other hardship areasfrom those who work in the city.

2. Agricultural and animal extension programs:-

This vital program needs to be extended to cover the other outside Maribcommand area, specially after the approval of funds to complete theremairnin irrigation network of Canals. This important component needsbasic institutions and infstructure, moreover the operational budgetshould be allocated.3. Shelter Belt and Wind break:-

The targeted length of ShelterBelt (20km) in the restructuring was notattained (only 9.8km) up to the project closing date an other tow km wereexpected to be planted . The diffusion of seedlings for windbreak iscontinued with satisfactory rate. These indirect benefits need necessaryand additional funds to continue.

4. The services provided by Marib research station are still modest due tothe length delay in achieving the necessary procurement and civilwork. Now, AREA HQ Building had been constructed (June 96), andwell equipped, reasonable no ofstaff is available.

Efforts should continue to find out realistic-solutions to problems facingthe agriculture production ( high yielding varieties, varieties tolerant todrought, disease resistance varieties etc.) moreover the monitoring ofwater quality is necessary to be continued (since farmers-used modemtechnology). We believe also, that it will be difficult to AREA to continuewiihout the necessary funds to be allocated.

5. The other component of the project like the feeder road, themaintenance and replacement of vehicles and heavy equipment, thernaintenance and operation of Marib dam, Buildings etc.) all theseimportant component needs to be financed. ERADA, itself canparticipate to some extend in financina through the following:--.

- To adapt realistic and applicable policy throughbeneficiariescontribution in cost recovery.

- To try to invest or heir the far;n possessed by ERADA (83 ha).

3

- 35 -

- Good policy for heavy equipment rents.- To make use of Canal factory.

III Lessons to be learned :-

1 . Credit Effectiveness:- Notable delay was noticed between signingthe agreement (May 24th, 1989 ) and date of effectiveness ( Sept.30h, 1990), one year afterwards the project amended and hence the1 ' trench in 1992 - IDA should acree with the borrower on how tofind out the realistic ways and means capable to overcome pre-start-up delays encountered due to credit effectiveness delays.

2. Contracting Reaulations :- The workshop organized by IDA onJuly 1996, has a significant influence in facilitating the procedureof contraction Eventhough, notable delays encounter.ed forcontracts of small amounts ( less than US S 15000). The contractornormally is not encouraged to provide the performance bond forthis small amount bearing in mind his price quotations normallylimited to a short period of validity (not exceeding 15 days) thisperiod will never cover the time required for the long procedureundertaken fill the opening of TJC (this procedure takes normallyabout one month in analyzing the offers, obtaining ERADAapproval, MOPD approval and 3 to 4 days for the process ofopening the LIC in the Central Bank ). Tne example of this delay isthe procurement of refrigerators for the extension centers ( morethan one year ) 4 times, offers evaluated but the supplier refuse tomaintain his initial prices due to the delay of opening the L'C. IDAand the borrower should agree to overcome this problem by givingERADA management the authorization of direct purchasing in thelimnit agreed upon.

3. The borrower should undertaken rigorous measures against thosewho handicap the activities of the project and threaten the staff ofERADA. The measures of securitv control should be appliedimmediately otherwise the project sustainability will nof ensured.

4. Planing realistic implementation period: - IDA should take intoaccount important factors such as the macro economicenvironment. The absorptive capacity, prevailing rules andregulations with respects to contracting procedures, problemsrelated to security etc... to arrive at a reasonable and realisticproject implementation period.

4

- 36 -

5. Cost Recover9:- This aspect should be carefully monitored.bv IDAmission . Due to the particular character and attitude of populationin the area, a system of collecting water charge should be appliedgradually and carefully. This system beside its direct-effect of costrecovery will improve the productivity.

6. The finding of field surveys conducted by ERADA, reflect theimportance of livestock for the farmers (86 out of 89 randomsamples, possess aninmals in their farms). Therefore great artenionshould be given to this aspect.

7. Despite of the incremental production achieved in the areain therecent years, the marketing access are not parallely- improved,quality, high cost of transportation due to absence of improvedfeeder roads, handling, standardization, grading etc.

IV Borrower performance: -The implementing agency (ERADA) is a semi-autonomous

authority created by a presidential decree in 1987 and entrusted to leadthe agriculture development efforts in the Eastern Region. ERADA hadbeen confronted by several problems at the early stages of it'sestablishment, namely: -

- Bottleneck in staff due to lack of incentives.- Lack of institutional infrastructure.- Some limited problems of security.- Notable delay in recruitment of technical staff.

Three years,. onwards ERADA, has a wel-structured departments (Agric., administration, finance, Engineering, Marib dam Adni. M & Eand sand dune stabilization). With slightly clear defined functions andwith adequate and qualified staff in most project activities. TUnfortunatelythis qualified staff start to leave ERADA due to lack of incentives (seeproject sustainability).1. ERADA management and staff had actively participated in the project

preparation and appraisal and in mid-term review, makingconstructive comments on the project components - ERADAperformance during the stage of project preparation, appraisal andmid-terrn review could be evaluated as satisfactory.

2. During the stage of implementation, ERADA had succeeded in someproject components civil works, procurements but other componentshad been confronted by different problems of various nature.

Moreover, rezarding the procurement, notable delay in time schedule wasnoticed, overrun cost for certain item of procurement was registered.

5

- 37 -

Furthermore, due to causes beyond ERADA control, the local componentfor supplier was delayed - in addition significant delay was encounteredin land acquisition of some extension centers.ERADA had recruited foreign and local experts and consultants, in somedisciplines, but here also the delay was noticed.ERADA , from other point of view, fail to find out reasonable andpractical cost recovery policy which would ensure smooth andsustainable operations of the project activities all the above registereddelay are attributed to many causes outside the control of ERADAmanagement - some factors are exogenous (Gulfwar), others areindigenous (civil war in 1994 and the lack of security in the area.The effect of these extemal and internal factors are clearly.beyond thecontrol of project maniagement and thus delay in project performanceresulting from them Should not* afcribed to inadequate projectmanagement .The policy adopteclby EIRADA in selecting contractorsbelonging to the region relatively facilitated the role of ERADA.

V IDA Performance

1. The project was prepared with assistance from the FAO/CP inNovember 1987, IDA appraised the project in September 1988. TheSAR based mainly on the conistruction of Marib darn (-1987) and thenetwork of main and tertiary canals. The objective was to increase thearea. irmgated by the dam and to increase the productivity and hence toparticipate in poverty alleviation in the region.

IDA Performance durina project preparation and appraisal had beenhighly satisfactory.2. IDA had exhibited reasonable level of flexibility towards the project

in some of its component and sub-components IDA also agreed toextend the closure of the project from Dec. 96 to Dec. 97. Moreover,IDA had aoreed several times to the amendment between categories.Recently IDA agreed to finance Sector 4 & Sector 5 in order toincrease the irrigable area by 740 ha. Efforts exercisedbyIDA inreturning back the heavy equipment requisitioned by some triballeaders is envisioned. Overall -it could be genuinely argued that thelevel of flexibilitv and responsiveness exercised by IDA during theproject implementation is an instrumental element in accomplishingthe current results attained by the project.

3. IDA Supervisory missions had been very effective in monitoring allaspects of the project and in providing constrctive suggestions toovercome problems confronting project performance. Moreover, IDAmission had been quite helpful in providing guidance for futureactions and in reviewing actions taken by ERADA in response to

6

- 38 -

TaMe 5: Kay lafanrn tor7rje.ct Zziplmenma

VZ- inve*aaion F..P~d Plamaledauidc&xt ia SRA (SAl) g

t. CIs-IL WORKXS

ERAD.A ERADA shop=aodxFdai=cd

O t5 (TH) u 1000 900 500

. -vmcs '>0o. 20 22 14

- \ VgCd No. 9 9 9 g

EBacckC4cur Na. I 1 2

- dunceyac ia km 0 20 11

. vWdls No. ° 5 5

D (--xtbhan C*Aa NO. 0 1 0 piIcd at6aam °vw, h,wak &Ayodby 196 'Boo&

- S.xajdm-v cm*1s 12.750 ha ° 1325 ha gm 1,130 Ibmg glW Sd 1213LS97.

- F' Roaar km 0 42.2 km 5Isa ofwhicw 4.0km baked

ARL4

* .&.~. baidi,g m 450 450 450

0 20 1s

- C .d xn2 °0 70 70- CF r d%ed ml 1*Fcodw roa& lam.km CaIalip~x ~im

2. T-GRAr,iG-bctX 72 S4 154 10 befidarim

72 210 242 1llb dwia

3. TECEN-ICAL AM'o=A-NCZ 612 522 572

- ~at4m l17 45 12

0 33 12 Al S5,000 pwpA.

.4 VFCLES4,'D = ~~ ~ ~~ ~ ~~~~59 48 34

- 4-WD . 39 20- mauxCycim ~~No.

5. EQcSYME?4T AND -MACMDNERY

*Trzas 3 .2 2

TEsesber b;o. 4 2 1

No|x^s bb. 2 4

I%ausprzv4ws o. S 4 45 ofwh i13g4001*AetsA1001

F- ~20 14 43 ofwh(id 15 bb2u q3Zyu

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-?Iwa Pr-%Cti -* a

C. OF7I-Z EQL0NIENN.5 50 - 3 8

* C No. '6

- 39 -

To: Mr. Mohamed Noureddin Ben AliTask manager, ERADP

Fax: (202 ) 477- 1374, The World BankWashington, USA

CC: Dr. Amin A.AhmedERADA Chairmnan, Marib

Date: November 4 ,1997.

Ref. IDA Memo of Understanding (MLOU) dated SeDtember. 1997.(key action )

Dear Ben AliPlease find here under our input to the Implementation Completion

Report (ICR ) .

1- Paze 10, para 52: Sustainability.We suggest the following to be added after the first sentence " The

Government has already started implementing this decisions by allocating 5 millionY.Rs for the rapid Impact Program (RIP) - the on farm trials for the fiscal 1998 year.This is over and above the regular budgetary allocations to research for 1998.

2-page 10-11: IDA PerformanceAREA - Marib has expressed to ICR mission its views on IDA

performance which have not reflected in the report . AREA - Marib wishes to state itsappreciation to IDA for its highly positive support in all maters pertinent toimplementation of the research components.

3-pgge 13 .-para 75 sub.para 2: Kay lessons learned.AREA - Marib doesn't shar=e"the ICR missions point of view that the

separation of AREA and ERADA under two different managementrs could the majorcausefor dte lack of cooperation between Research and Extension. The underliningcauses could be crystallized inidequate support for Extension, well trained persomelparticularly at the field level ( page 6 / 7 para 31 of ICR ) and meager budgetaryallocations ( page 11, para 62 of ICR ) .Admittedly research could not provide al therequired tcchnical information since such information couldn't be generated in a shortperiod of time . Nevertheless the informadon gap has been narrowed by extrapolationof results from other Research Stations of similar environmental conditions notablySaiyun Research Station . There is a room for improvement on the present Research /Extension / Farmer Linkages developed by AREA - Marib with the generation of morerelevant technology ard as Researchers and Extension worlkers gain experience andconfidence .

With best regarSincere

Dr. oh d Al-NassiriDirector, AREA - Marib

APPENDIX C

IMPLEMENTATION COMPLETION REPORT

REPUBLIC OF YEMEN

EAST'ERN REGION AGRICULTURAL DEVELOPMENT PROJECT

(CREDIT 1983-YEM)

PROJECT ECONOMIC RE-EVALUATION

REPUBLIC OF YEMEN: Eastern Region Agricultural Development projectAppendix C: Economic Re-evaluation

Table 1. Total Project Cost in Current US$

Categories 1990 1991 1992 1993 1994 1995 1996 1997 Total

................................................................. I........ . . . . . . ... I........................ (S'0)

I (a) Civilworks (ERADA) 752 1,277 170 448 700 176 1,051 1,487 6,061

1 (b) Civil works (AREA) - - - - - 133 524 392 1,049

2 Civil works - canals - - - - - - 149 505 654

3 (a) Vehicles/equip. (ERADA) 628 49 174 962 772 740 874 1,120 5,319

3 (b) Vehicles/equip. (AREA) - - 25 10 - 239 214 243 731

4 (a) T.A. (ERADA) 476 657 399 405 694 572 462 507 4,172

4 (b) T.A. (AREA) - - 9 10 43 125 89 66 342 >

S PPF 81 - - - - - - - 81

Total: 1,937 1,983 777 1,835 2,209 1,985 3,363 4,320 18,409

Source: PMU.

Table 2. Investment Costs in Constant 1997 Prices

Total Investment Costs Total InvestmentCosts

Consumer Price Index Current Term Constant 1997 Prices Exchange Rate Constant 1997 Prices

(USA) Inflator (US$'000) | (US$'000) US$ = YR2 (YR'000)

1990 100.0 1.22 1,937 2,363 12.01 28,380

1991 104.2 1.17 1,983 2,320 12.05 27,956

1992 107.4 1.14 777 886 33.10 29,327

1993 110.6 1.10 1,835 2,019 48.62 98,164

1994 113.4 1.08 2,209 2,386 80.75 192,670

1995 116.6 1.05 1,985 2,084 121.05 252,268

1996 120.0 1.02 3,363 3,430 128.19 439,6721997 122.0 5 1.00 4,320 4,320 129.005 557,280

See Table 1.

2Central Bank of Yemen

End of 1997

Table 3. Farming Systems and Total Cultivated Project Area

Total Area Farm Nb. of Holdings Total Area at Full Development (ha) Cropping Intensity (%)

Without Size Without With Gross Net Cultivated Without WithProject (ha) (ha) Project Project Project Project

1. Inside Marib Scheme

A. Canal -newareas 4 - 280 1,325 1,130 1,410 - 125

B. Well (close to Marib Dam) 4,000 5 800 800 4,700 4,000 5,200 119 130 p

C. Well (end of scheme) 900 3 300 300 1,060 900 990 108 110D. Upstream irrigation 2.5 - 80 235 200 200 - 100E. Downstream irrigation 1,000 5 200 200 1,180 1,000 640 64 6411. Outside Marib Scheme

F. Spate/well 3,800 3.8 1,000 1,000 4,450 3,800 3,040 80 80Total: 9,700 2,300 2,660 12,950 11,030 11,480 97 104

Table 4. Comparative Yields (Mt/ha)

SAR Model A Model Js Model C Model D Model E Model F

Future Future Without With Without With Without With Without With Without With Without WithPresent Without With Project Project Project Project Project Project Project Project Project Project Project ProjectProject Project

Wheat 1.4 1.7 2.7 2.2 1.6 2.2 1.5 2.0 - - 1.2 1.4 I.0 1.3Maize - 1.8 3.0 - 2.7 - 2.8 - 2.8, - - - - - -

Sesame 0.5 0.6 0.9 - 0.8 0.7 0.8 0.6 0.7 - 0.55 0.5 0.7 0.4 0.5 USorghum (grain) 0.6 0.6 0.6 - 1.2 1.0 1.2 - 3.3 - I.0 0.8 3.0 0.9 1.0 ISorghum (stalks) - - n.a. - 2.6 2.2 2.6 - 2.4 2.0 1.8 2.2 1.8 2.2

Alfalfa 55.0 60.0 78.0 - - 60.0 70.0 50.0 58.0 - - 45.0 50.0 30.0 40.0

Vegetables 9.0 11.0 17.0 - 15.0 12.0 13.0 I0.0 11.5 - 11.0 8.0 9.5 6.0 7.0

Citrus 9.0 12.0 16.0 - - 12.0 12.5 10.0 13.0 - - 8.0 10.0 6.0 7.5Funigreek - - - - 1.3 - 1.3 - 0.8 - 0.8 - 0.8 - 0.6

Source: Data provided by M&E of PMU: For Models A and D data has been derived from complete field surveys. For the remaining Models, data is based on random samplings carriedout four times during the project period.

Table 5. Average Net Incremental Farm Incomes

Model A Model B Model C Model D Model E Model F

A. Income per ha (YR'000/ha)

(i) Without Project - 208.4 199.5 - 90.6 84.3

(ii) With Project 165.6 237.3 225.5 100.0 98.1 97.2

(iii) Incremental 165.6 28.9 26.0 100.0 7.5 12.9

B. Average Farm Size (ha) 4 5 3 2.5 5 3.8

C. Average Farm Income (YR'000)

(i) Without Project - 1,042.0 598.5 - 453.0 320.3

(ii) With Project 662.4 1,186.5 676.5 250.0 490.5 369.4

(iii) Incremental 662.4 144.5 78.0 250.0 37.5 49.1

% increase ... 14 13 ... 8 15

Table 6. Net Value of Incremental Production at Full Development-New Areas: Land Command Area (1,130 ha) and Upstream Spate Irrigation (200 ha)(in Financial Terms)

Cultivated Gross Value Production Total ProductionArea Yield Production Prices of Production Cost Costs Net Benefits(ha) (ton/h4a (tons) (YR/ton) (YR'O00) (YR/ha) (YR'000) (YR'000)

Canal Command Area (1,130 ha)- Wheat 480 2.2 1,056 38,000 40,128 34,000 16,320 23,808- Sesame 200 0.8 224 71,500 16,016 35,900 7,180 8,836- Funigreek 340 1.3 442 75,6001 33,415 45,700 15,538 17,877

- Maize 26 2.7 70 35,0001 2,450 30,300 788 1,662

- Sorghum (grqin) 84 1.2 101 30,000 3,030 19,400 1,630 1,400- Sorghum (stalks) (84) 2.6 218 4,000 872 ... ... 872

Vegetables 280 15.0 4,200 40,000 168,0Q0 126,080 35,302 132,698Total: 1,410 263,911 76,758 187,153

Upstreams (200 ba)- Sesame 40 0.55 22 71,500 1,573 23,000 920 653- Funigreek 40 0.8 32 75,6001 2,419 37,000 1,480 939

- Sorghum (grain) 70 1.0 70 30,000 2,100 19,400 1,358 742- Sorghum (stalks) (70) 2.0 140 4,000 560 ... ... 560

- Vegetables 50 11.00 550 40,000 22,000 98,000 4,900 17.100Total: 200 28,652 8,658 19,994

Source: PMU, 1997 prices.

Table 7. Economic Prices for Major Agricultural Outputs and Inputs (Import Parity Prices)

Funigreek | Sorghum Maize Soybeans (Pulses) I Wheat I Vegetablesz I Sesame I Urea TSP

........................................I.............................. ........................ ( S / o ) .. ......................................................

Price projection 2005 in constant 1990 terms3 97.3 100.3 247.0 128.7 140.0 118.3

MUV index 1.077 1.077 1.077 . 1.077 1.077 1.077Price projection 2005 in constant 1997 terms 105 108 266 139 151 127Quality adjustment factor 1.0 0.9 0.9 0.9 1 1Adjusted f.o.b value 105 97 239 125 151 127Freight and insurance 50 50 50 50 50 50C.i.f value of port ofentry 155 147 289 175 201 177

.(YR/ton).......................................................... ...................... (YR/ton) ................................ .

C.i.f value of port of entry4 19,995 18,963 37,281 22,575 25,929 22,831

Port dues, handling 6,000 6,000 6,000 6,000 6,000 6,000Transport/storage/losses5 3,000 2,800 5,600 3,400 3,900 3,400

Value ex-store/market 28,995 27,763 48,881 31,975 35,829 32,233Transport market/farm (1,000) (1,000) (1,000) (1,000) (1,000) (1,000)Fanngate price economic 50,600 27,995 26,763 47,881 30,975 40,000 48,000 34,829 31,233Farmgate price financial 75,600 30,000 35,000 71,500 38,000 40,000 71,500 40,000 35,800Conversion factors 0.67 0.93 0.77 0.67 0.82 1.00 0.67 0.87 0.87

Same conversion factor as soybeans (0.67).2 Considered as "non tradeable".3World Bank Commodity Price Projections, November 1997.4Exchange rate: I USs = 129 YR (end 1997).5 Estimated at 15% of value.

Table 8. New Areas: Canal Comniand (1,130 ha) and Upstrcams (200 ha) - Net Value of Incremental Production at Full Development(in Economic Terms)

Cultivated Gross Value Production Total ProductionArea Yield Production Prices of Production Cost Costs Net Benefits(ha) (ton/ha) (tons) (YR/ton) |(YR'000) (YR/ha) (YR'000) (YR'000)

1. Canal Command Area (1,130 ha - new areas: Model A)-Wheat 480 2.2 1,056 33,2131 35,073 32,000 15,360 19,713- Sesame 200 0.8 224 48,000 10,752 33,750 6,750 4,002- Funigreek 340 1.3 442 55,9001 24,708 42,960 14,606 10,102- Maize 26 2.7 70 28,3561 1,985 28,480 740 1,245-Sorghum (grain) 84 1.2 101 27,995 2,828 18,240 1,532 1,296- Sorghum (stalks) (84) 2.6 218 4,000 872 ... ... 872Vegetables 28 15.0 4,200 40,000 168.000 118,520 33,186 134,814

Total: 1,410 244,218 72,174 172,044Cropping intensity 125%

II. Upstreams (200 ha - new areas: Model D)-Sesame 40 0.55 22 48,000 1,056 21,620 865 191- Funigreek 40 0.80 32 55,9001 1,789 34,780 1,391 398- Sorghum (grain) 70 1.0 70 27,995 1,960 18,240 1,277 683- Sorghum (stalks) (70) 2.0 140 4,000 560 ... ... 560- Vegetables 50 11.00 550 40,000 22.000 92,120 4,606 17,394

Total: 200 27,365 8,139 19,226Cropping intensity 100%

Source: PMU, 1997 prices.

'Including value of by-products.

Table 9. Irrigation by Well (4,000 ha) - Net Value of Incremental Production at Full Development(in Economic Terms)

l l I I I Gross Value of I I Total Production lCultivated Area IYield Production Prices Production Production Cost Costs Net Bcnefits

(ha) (ton/ha) (tons) (YR/ton) (YR'000) (YR/ha) (YR'000) (YR'000)Ill. Irrigation by Wcll (4,000 ha close to Marib Dam: Model B)

(a) Without Project-Wheat 1,440 1.6 2,304 33,213- 76,523 28,500 41,040 35,483

- Sesame 720 0.7 504 48,000 24,192 30,000 21,600 2,592- Funigreek - - - - - -

- Maize - - - - - -- Sorghum (grain) 600 1.0 600 27,995 16,797 18,000 10,800 5,997- Sorghum (stalks) (600) 2.2 1,320 4,000 5,280 ... ... 5,280- Alfalfa 400 60.0 24,000 10,000 240,000 105,000 42,000 198,000-Vegetables 840 12.0 10,080 40,000 403,200 118,520 99,557 303,643- Citrus Soo 12.0 9,600 30,000 288Q000 90,000 7200 216.000

Total: 4,800 1,053,992 286,997 766,995 oDCropping intensity 120%

(b) With Project -Wheat 1,400 2.2 3,080 33,2131 102,296 33,000 46,200 56,096- Sesame 820 0.8 656 48,000 31,488 32,000 26,240 5,248- Funigreek 460 1.3 598 55,9001 33,428 42,950 19,762 13,666-Maize 240 2.8 672 28,3561 20,055 30,000 7,200 12,855- Sorghum (grain) 240 1.2 288 27,995 8,063 20,000 4,800 3,263- Sorghum (stalks) (240) 2.6 624 4,000 2,496 ... ... 2,496-Alfalfa 400 70.0 28,000 10,000 280,000 120,000 48,000 232,000- Vegetables 840 13.0 10,920 40,000 436,800 135,000 113,400 323,400-Citrus 800 12.5 10,000 30,000 300.000 95,000 76.000 224.00

Total: 5,200 1,214,626 341,602 873,024Cropping intensity 130%

Sourtc: PMU, 1997 prices.

iIncluding value of by-products.

Table 10. Irrigation by Well at End of Marib Scheme (900 ha) - Net Value of Incremental Production at Full Development(in Economic Terms)

Gross Value of Total ProductionCultivated Area Yield Production Prices Production Production Cost Costs Net Benefits

(ha) (ton/ha) (tons) (YR/ton) (YR'000) (YR/ha) (YR'000) (YR'000)IV. Irrigation by Well (900 ha end of Marib Scheme: Model C)

(a) Without Project - Wheat 290 1.5 435 33,2131 14,448 24,000 6,960 7,488

- Sesame 150 0.6 90 48,000 4,320 28,000 4,200 120- Funigreek

- Maize ,- Sorghum (grain) - - - - - -- Sorghum (stalks) - - .-- Alfalfa 160 50.0 8,000 10,000 80,000 90,000 14,400 65,600- Vegetables 210 10.0 2,100 40,000 84,000 98,000 20,580 63,420- Citrus 160 10.0 1,600 30,000 48.000 75,000 12.A00 36.000

Total: 970 230,768 58,140 172,628Cropping intensity 108%

(b) With Projectl-Wheat 250 2.0 500 33,2131 16,607 32,000 8,000 8,607- Sesame 150 0.7 105 48,000 5,040 30,000 4,500 540- Funigreek 20 0.8 16 55,9001 894 36,000 720 174- Maize 20 2.8 56 28,3561 1,588 28,480 570 1,018- Sorghum (grain) 30 1.1 33 27,995 924 18,000 540 384-Sorghum (stalks) (30) 2.4 72 4,000 288 .. ... 288- Alfalfa 150 58.0 8,700 10,000 87,000 102,000 15,300 71,700-Vegetables 210 11.5 2,415 40,000 96,600 113,000 23,730 72,870-Citrus 160 11.0 1,760 30,000 52.80 83,000 13.280 39.520

Total: 990 261,741 66,640 195,101Cropping intensity 110%

Source: PMU, 1997 prices.

Including value of by-products.

Table It. Irrigation by Well - Downstream (1,000 ha) -Net Value of Incremental Production at Full Development

(in Economic Terms)

Gross Value of Total Production

Cultivated Area Yield Production Prices Production Production Cost Costs Net Benefits

(ha) (ton/ha) (torns) (YR/ton) (YR'000) (YR/ha) (YR'000) (YR'000)

V. Irrigation by Well (1,000 ha Downstream Irrigation: Model E)

(a) Without Project - Wheat 200 1.2 240 33,213 7,971 21,000 4,200 3,771

- Sesame 70 0.5 35 48,000 1,680 19,000 1,330 350

- Funigreek - - - - -

- Maize - - - -

- Sorghum (grain) 70 0.8 56 27,995 1,568 16,000 1,120 448

- Sorghum (stalks) (70) 1.8 126 4,000 504 ... 504- Alfalfa 100 45.0 4,500 10,000 45,000 75,000 7,500 37,500

- Vegetables 150 8.0 1,200 40,000 48,000 78,500 11,775 36,225 Ii-n

-Citrus 50 8.0 400 30,000 12,.000 73,000 3,650 8.350 O

Total: 640 116,723 29,575 87,148

Cropping intensity 64%

(b) With Project - Wleat 180 1.4 252 33,2131 8,370 22,500 4,050 4,320

- Sesame 70 0.7 49 48,000 2,352 28,000 1,960 392

-Funigreek 40 0.8 32 55,9001 1,789 32,000 1,280 509

- Maize - - - - - - -

-Sorghum (grain) 70 1.0 70 27,995 1,960 16,500 1,155 805

- Sorghum (stalks) (70) 2.2 154 4,000 616 ... ... 616- Alfalfa 80 50.0 4,000 10,000 40,000 82,500 6,600 33,400

- Vegetables 150 9.5 1,425 40,000 57,000 93,000 13,950 43,050

-Citrus 0 10.0 500 30,000 15.000 75,000 3.750 011250

Total: 640 127,087 32,745 94,342

Cropping intensity 64%

Source: PMU, 1997 prices.

Including value of by-products

Table 12. Irrigation by Well - Outside Marib Scheme (3,800 ha) -Net Value of Incremental l'roduction at Full Development(in Economic Terms)

Gross Value of Total ProductionCultivated Area Yield Production Prices Production Production Cost Costs Net Benefits

(ha) (ton/ha) (tons) (YR/ton) (YR'000) (YR/hIa) (YR'000) (YR'000)VI. Irrigalion by Well (3,800 ha Outside Marib Scheme: Model F)

(a) Without Project - Wheat 950 1.0 1,045 33,213 34,708 18,000 17,100 17,608- Sesame 330 0.4 132 48,000 6,336 15,000 4,950 1,386- Funigreek - - - - - - -

Maize - - - - - - --Sorghum (grain) 330 0.9 297 27,995 8,315 15,000 4,950 3,365- Sorghum (stalks) (330) 1.8 594 4,000 2,376 ... ... 2,376- Alfalfa 480 30.0 14,400 10,000 144,000 45,000 21,600 122,400- Vegetables 700 6.0 4,200 40,000 168,000 58,000 40,600 127,400- Citrus 2 6.0 1,500 30,000 45,000 45,000 11.250 33.750

Total: 3,040 408,735 100,450 308,285Cropping intensity 80%

(b) With Project -Wheat 900 1.3 1,170 33,2131 38,859 21,000 18,900 19,959-Sesame 330 0.5 165 48,000 7,920 19,000 6,270 1,650-Funigreek ISO 0.6 90 55,9001 5,031 30,000 4,500 531* Maize - - --Sorghum (grain) 310 1.0 310 27,995 8,679 16,000 4,960 3,719- Sorghum (stalks) (310) 2.2 682 4,000 2,728 ... ... 2,728-Alfalfa 400 40.0 16,000 10,000 160,000 60,000 24,000 136,000- Vegetables 700 7.0 4,900 40,000 196,000 68,000 47,600 148,400- Citrus 250 7.5 1,875 30,000 56.250 56,000 14.000 42.250

Total: 3,040 475,467 120,230 355,237Cropping intensity 80%

Source: PMU, 1997 prices.

Including value of by-product,

Table 13. Economic Rate of Return(YR million)

Without Net Benefits 1/ Increm. Invest. Balance to beProject Model A Model D Model B Model C Model E Model F Total Benefits Costs 2/ discounted ERR

Year 0 0.0 767.0 172.6 87.1 240.6 1,267.3 0 0 0 13%Year 0 0.0 767.0 172.6 87.1 240.6 1,267.3 0.0 30.1 -30.1Year 0 0.0 767.0 172.6 87.1 240.6 1,267.3 0.0 29.6 -29.6Year 0 1.5 775.0 174.3 87.6 241.7 1,280.1 12.8 31.1 -18.3Year 10 3.0 784.0 176.0 88.2 242.8 1,304.0 36.7 104.0 -67.3Year 20 4.4 791.0 177.7 88.7 243.9 1,325.7 58.4 204.2 -145.8Year 30 5.9 799.0 179.4 89.3 245.1 1,348.7 81.4 267.4 -186.0Year 40 7.4 807.0 181.1 89.8 246.2 1,371.5 104.2 466.0 -361.8Year 60 8.9 815.0 182.8 90.4 247.3 1,404.4 137.1 590.6 -453.5Year 80 10.3 823.0 184.5 90.9 248.4 1,437.1 169.8 50.0 119.8Year 90 11.8 831.0 186.2 91.5 249.5 1,460.0 192.7 50.0 142.7Year 120 13.3 839.0 187.9 92.0 250.6 1,502.8 235.5 50.0 185.5Year 140 15.0 847.0 189.6 93.1 251.7 1,536.4 269.1 50.0 219.1Year 150 16.0 855.0 191.3 93.7 252.8 1,558.8 291.5 50.0 241.5Year 160 17.0 863.0 193.0 94.3 253.9 1,581.2 313.9 50.0 263.9Year 172 19.2 873.0 195.1 94.3 255.2 1,608.8 341.5 50.0 291.5Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5

Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5

Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5Year 172 19.2 873.0 195.1 94.3 255.2 1,068.8 341.5 50.0 291.5

1/ Details are given in Tables 8 to 12.2/ Details are given in Table 2.

%= 443'0 43000 45;3:; '0 00 4&230

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EASTERN REGIONAGRICULTURAL DEVELOPMENT PROJECT

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