Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No.2049-PH

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PHILIPPINES

NATIONAL EXTENSION PROJECT

STAFF APPRAISAL REPORT

October 24, 1978

Projects DepartmentEast Asia and Pacific Regional Office

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

US $1.00 = Pesos (P) 7.4P 1.00 = US$0.135

WEIGHTS AND MEASURES = METRIC SYSTEM

1 hectare (ha) = 2.47 acres1 kilometer (km - 0.62 miles1 square kilometer (sq km) = 0.3881 square miles1 meter (m) = 39.37 inches1 cubic meter (cu m) = 35.31 cubic feet1 millimeter (mm) = 0.039 inches1 kilogram (kg) = 2.2 pounds

ABBREVIATIONS

BAECON - Bureau of Agricultural EconomicsBAI - Bureau of Animal IndustryBAEx - Bureau of Agricultural ExtensionBPI - Bureau of Plant IndustryBS - Bureau of SoilsFMT - Farm Management TechnicianHMT - Home Management TechnicianMOA - Ministry of AgricultureNFAC - National Food and Agriculture CouncilNCP - Nutrition Center of the PhilippinesNNC - National Nutrition CouncilNTC-RD - National Training Centers for Rural

DevelopmentPTC-RD - Philippine Training Centers for Rural

DevelopmentRYDO - Rural Youth Development Officer

GOVERNMENT OF THE PHILIPPINESFISCAL YEAR

January 1 - December 31

FOR OFFICIAL USE ONLYPHILIPPINES: NATIONAL EXTENSION PROJECT

STAFF APPRAISAL REPORT

TABLE OF CONTENTS

Page No.

1. BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . 1

The Rural and Agricultural Sector . . . . . . . . . . . . 1Agrarian Reform . . . . . . . . . . . . . . . . . . . . . 2Food Production Programs. 2Nutrition Programs. 3Experience with Past Lending . . . . . . . . . . . . . . 4

2. THE PRESENT EXTENSION SYSTEM . . . . . . . . . . . . . . . 6

Ministries and Agencies Providing Extension . . . . . . . 6Extension Services of the Ministry of Agriculture . . . . 8

Status . . . . . . . . . . . . . . . . . . . . . . . . 8Problems .9

Activities. 9(a) Farm Management Technicians . . . . . . . . . . . 10

(b) Home Management Technicians . . . . . . . . . . . 10(c) Rural Youth Development Officers . . . . . . . . 11(d) Livestock Officers . . . . . . . . . . . . . . . 11

Coordination of Extension with Local Programs 12

3. THE PROJECT.123. TEPOET . . . . . . . . . . . . . . . . . . . . . . . . 1

Objectives .. 12Project Identification/Preparation . . . . .12Project Components . . . . . . . . . . . . . . . . . . . 13

(a) Organizational Program . . . . . . . . . . . . . . 13(b) Vehicles, Equipment and Buildings . . . . . . . . . 13

(c) Extension Methodology . . . . . . . . . . . . . . . 13(d) Staffing Program and Training . . . . . . . . . . . 13(e) Studies/Consultant Services . . . . . . . . . . . 14

Detailed Features .. 14

Vehicles and Communications . . . . . . . . . . . . . . . 14Audio-Visual Training and Demonstration Aids . . . . . . 16Office, Printing and Reproduction Equipment . . . . . . . 17Civil Works . . . . . . . . . . . . . . . . . . . . . . 18Staffing and Training . . . . . . . . . . . . . . . . . 19

4. PROJECT COST AND FINANCING ... . . . . . . . . . . . . . 21

Cost Estimate .... . . . . . . . . . . . . . . . . . . 21Financing . . . . . . . . . . . . . . . . . . . . . . . 22

Procurement .23

This report is based on the findings of a mission composed of Messrs. Fornoand Luhman and Ms. Sjamsu (Bank) and Messrs. Rohde and Jessup (consultants)who visited the Philippines from February 20 to March 10, 1978

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Page No.

Disbursements . . . . . . . . . . . . . . . . . . rAccounts and Audit . 24Environmental Effects . . . . . . . . . . . . . . . . . . WtRole of Women .. . . ............ . ..... 24

5. PROJECT IMPLEMENTATION . . . . . . . . . . . . . . . . . . 25

Ministry Reorganization . . . . . . . . . . . . . . . . .Organization of the Extension Service . . . . . . . . . . 27Operations of the Extension Service . . . . . . . . . . . 27Responsibilities . . . . . . . . . . . . . . . . . . . . 27Extension Methodology . . . . . . . . . . . . . . . 28Preparation of Demonstration Materials . . . . . . . . . 29Links with Research . . . . . . . . . . . . . . . . . . 29Salaries and Allowances ... . . . . . . . . . . . . . . 30Vehicle Plan .... . . . . . . . . . . . . . . . . . . 31Monitoring and Evaluation . . . . . . . . . . . . . . . . 31

6. BENEFITS, JUSTIFICATION AND RISKS . . . . . . . . . . . . 32

Benefits . . . . . . . . . . . . . . . . . . . . . . . 32Justification . . . . . . . . . . . . . . . . . . . . . 33Risks .. . 34

7. AGREEM1ENTS REACHED AT NEGOTIATIONS .. 34

LIST OF TABLES IN THE MAIN TEXT

Table No.

2.1 Main Agencies Providing Agricultural andNutritional Supporting Services . . . . . . . . . . . . . 5

3.1 Vehicles and Communication Equipment . . . . . . . . . . . . 153.2 Audio-Visual Equipment . . . . . . . . . . . . . . . . . . . 173.3 Office and Printing Equipment . . . . . . . . . . . . . . . 183.4 Technical Staff Build-up . . . . . . . . . . . . . . . . . . 203.5 Main Training Program . . . . . . . . . . . . . . . . . . . 214.1 Project Cost . . . . . . . . . . . . . . . . . . . . . . . . 224.2 Financing . . . . . . . . . . . . . . . . . . . . . . . . 23

LIST OF FIGURES

Figure 2.1 Existing Organization of the Ministry of Agriculture 7Figure 5.1 New Organization of the Ministry of Agriculture 26

ANNEXES

1. Project Cost Phasing 362. Training Needs and Costs 39

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Page No.

ANNEXES (continued)

3. Estimated Schedule of Disbursements 40

4. Economic Analysis 41

5. Documents in Project File 42

LIST OF M4APS

IBRD - 13155R The Philippines

PHILIPPINES

NATIONAL EXTENSION PROJECT

I. BACKGROUND

1.01 The project is designed to accelerate and sustain technology trans-fer (a) to promote further production increases in the main food crops andexpand livestock production; (b) to improve the quality of rural life throughhigher incomes, better nutrition and improved home management; and (c) toreduce rural unemployment by assisting out-of-school youth establish backyardlivestock enterprises. Together these activities are directed towards increasingfarm income, improving rural family life and reducing rural unemployment. TheMinistry of Agriculture (MOA),I1 would be the key executing agency.

The Rural and Agricultural Sector

1.02 Some 31 million people or 70% of the Philippine population livein rural areas where social services are poor, economic activities limited,agricultural productivity often low and underemployment high. The ruralpopulation is growing at 2.7% per year, reflecting a natural increase ofabout 3.2% and an annual rate of migration to the cities of 0.5%. By 1985,rural-urban migration is expected to reach 1.1% per year, placing considerablestrain on urban infrastructure and services.

1.03 Agriculture is the predominant sector in the Philippine economy,accounting for about 30% of gross domestic product and over one-half oftotal employment. Small farms provide the main income for 65% of the ruralpopulation. Other sources of income include forestry, fishing, mining,small-scale manufacturing and service industries. Farming is chieflyoriented towards food grain production (60% rice and 40% corn) for domesticconsumption, while coconuts and sugar are the main export crops. Althoughagriculture is still by far the largest export sector, the contribution ofagriculture (including forestry) to export earnings has fallen from more than70% in the early 1970s to less than 60% in 1977, largely due to the rapidgrowth of nontraditional manufactured exports.

1.04 Agriculture's performance was exceptionally strong in 1976, when pro-duction increased by 7%, compared with the trend growth rate of 4.5%. Riceand corn production were both at record levels. The agricultural terms oftrade improved by 18% during the period 1970-74, declined slightly in 1975 andrecovered to the 1974 level in 1976. Domestic rice, corn and sugar pricesare largely administered, while coconut prices tend to fluctuate with theworld market. Government price intervention for rice was able to cushionthe impact on consumers of the 1972-73 crop damage and the peak world prices

/1 Prior to the shift in Government to a Parliamentary System in June 1978,government agencies were organized into departments with the senior staffposition being that of Department Secretary.

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of 1973-74, while at the same time allowing the farm-gate price for paddy torise with the trend in international prices. As a result of price adjustmentsmade in the last two years, domestic prices for major crops are in line with

world prices.

1.05 Because of these favorable developments in production and prices,the growth of rural family incomes has exceeded that of urban incomes in thelast four years. The ratio of the average rural income to the average urbanincome rose from 0.48 in 1971 to 0.57 in 1975, and the share of family incomesreceived by the poorest 40% of families increased from 12% to 15% during thesame period. However, about 40% of all rural families earn incomes below thelevel required to ensure adequate nutrition and provide essentials foraccepted minimum standards of living.

1.06 Government efforts to assist the rural poor have largely concen--trated on the agricultural sector, and have been directed at achievingAgrarian Reform and rice and corn production increases. Recently, however,there has been strong Government support for nutrition programs, with therealization that widespread malnutrition exists among children in the country,despite the apparent successes in the food production programs. The achieve-ments of the main government programs in the rural areas, together with theoutlook for the future are summarized below (paras. 1.07 to 1.11).

1.07 Agrarian Reform. For historical reasons, land ownership in thePhilippines is inequitably distributed. The land transfer program, which hasbeen in operation for five years and covers rice and corn growing areas, pro-ceeded quite rapidly when larger landholdings were the focus of concentration,but progress has been slower recently as the focus has been on a larger numberof medium-sized holdings, which often belong to middle-class landowners. Asof June 1977, an estimated 120,000 tenants, or 30% of the total tenants underthe program, had recived Certificates of Land Transfer which established theirclaim to the land. Despite the difficulties in the process of implementation,the transfer program remains an important part of the Government's ruraldevelopment strategy, and is the responsibility of a separate ministry, theMinistry of Agrarian Reform (MAR).

1.08 Food Production Programs. Shortly after the declaration of MartialLaw in October 1972, three intensive food production programs were launchedby the then Department of Agriculture. These were (a) the Masagana 99Program (signifying a target rice yield of 99 cavans or 4.4 ton/ha), (b) theMasagana Maisan Program, (or "bountiful harvest" corn production program) and(c) the Gulayan Sa Kalusugan Program (vegetables for better health). Theeffectiveness of the Masagana programs has recently been reviewed by theBank (Report Nos. 2177-PH and 2192-PH). For rice there have been signifi-cant production improvements. Since 1973, when the Philippines had a net ricedeficit of around 600,000 tons, production has increased to a point where thecountry was approximately self-sufficient in the crop year 1976/77, and hada marketable surplus in excess of 100,000 tons in 1977/78. Although much of

the production increase in the past four years has resulted from favorableweather, the Masagana 99 Program has certainly had a significant impact onfarmer adoption of improved rice varieties and cropping practices. It islikely that for the next four to five years the country will be marginallyself-sufficient (with perhaps small surpluses for export) in good crop years,and will be in a deficit position following years of bad weather. However,beginning in the mid-1980s, the Philippines appears likely to move to apersistent surplus position in rice. This will largely result from thesubstantial increases in irrigated area which are now under development, andfrom Government efforts to improve the quality and coverage of its extensionservice and other supporting services to farmers.

1.09 Production of corn in the Philippines still falls far short of demand.Although the country is self sufficient in white corn for human consumption,its imports of yellow corn are usually around 160,000 tons annually. Theseimports represent about 80% of the corn used by commercial feed millers.Between 1961-77, corn production grew at an average annual rate of 5.7% ofwhich 3.3% was due to an area increase and 2.4% due to yield increases.In the last five years, however, production increases have been due mainly toincreases in cropped area. This contrasts with the recent production increasesfor rice which have resulted largely from higher yields. Despite governmentefforts to promote feed grain production through its Masagana Maisan programs,yields of yellow corn, which account for 8-9% of total production, havedeclined on average by 6.5% per year. Much of the decline has been due to adowny mildew disease which is now being intensively studied by plant breedersand other researchers in the country. However, even with the existing cornvarieties in the Philippines, much could be done to boost yields throughbetter farming practices. Traditionally corn is grown by poorer farmerswith less arable farms. A well oriented extension force could have asignificant impact on corn yields through imparting improved, but simplecultivation practices.

1.10 Nutrition Programs. Since the establishment of the NationalNutrition Council (NNC) in 1974, together with its secretariat, the NutritionCenter of the Philippines (NCP), well formulated programs of nutritionmonitoring, preventive and remedial activities have been devised. Theinvolvement of several government agencies and various private concernsin the implementation of NCP programs, however, makes coordination difficult.The Ministry of Agriculture is the main agency responsible for promotingthe preventive and technical aspects of the NCP program, while the Ministriesof Health (DOH) and Social Services (DSSD) are primarily concerned withmonitoring and remedial activities. The programs of the NCP have drawnwidespread attention to the nutritional problems existing in the Philippines,particularly in infants among the poor and in the rural areas. This hasbecome very evident as a result of a nationwide, multiagency effort coordina-ted by the NCP, wherein every preschool child is regularly weighed as ameasure of the overall effectiveness of nutrition programs, and as a meansof identifying localities with below average levels of nutrition. Initialdata collected on about a third of the country's pre-school children suggest60% suffer from varying levels of protein-calorie malnutrition.

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1.11 The nutrition programs make extensive use of public media, rangingfrom radio and television to sophisticated advertising techniques, comic booksand simple posters. A remedial program of the NCP, which relies heavily onpromotion by extension workers, involves the sale at very low cost (P 0.5each) of nutritious, locally prepared weaning foods, popularized under thename of Nutripak. Some 90 packaging plants now operate and sell more than14,000 Nutripaks a week. While this is not meant to be a solution tothe problem on a widescale basis, it does focus attention of parents on theneed for nutrition rehabilitation of children in their own homes. Anotherimportant program has been the organization of interdisciplinary nutritioncommittees at the regional, provincial, municipal and village (barangay)levels, to stimulate local interest and to enable the national programs to betailored to local needs. In conjunction with these committees, a Barangay(village) Nutrition Scholar's program is in effect to train volunteers tocarry out simple, nutritional surveillance of children. The network ofnutrition committees form the focal point for the dissemination of informa-tion and back-up support by the Ministry of Agriculture's nutrition extensionforce.

Experience with Past Lending

1.12 The proposed project would be the first Bank project directlyassisting the Ministry of Agriculture (MOA), apart from US$0.8 million pro-vided under the Fourth Education Loan (1374-PH) for mobile audio-visualequipment. A number of previous Bank loans for agriculture and ruraldevelopment in the Philippines have relied on support from the Ministry ofAgriculture, particularly the extension services. To the extent thatstaff, facilities and equipment were available, the support from the MOA hasbeen satisfactory. However, during implementation of the past severalirrigation loans, it has become evident that improvements in agriculturalextension services would further enchance the benefits expected from theseprojects.

1.13 The proposed project would rely heavily on the National and RuralTraining centers (NTC-RD and PTC-RD) provided under the Fourth EducationProject (1374-PH). Much of the in-service and pre-service training ofextension staff would be done there since progress in establishing thetraining centers and in drawing up curricula has been satisfactory. Animportant contributing factor to the generally high level of agriculturalexpertise in the Philippines has been the first and second education projects(Loan 393-PH and Credit 349-PH), which financed training and development atthe University of Los Banos (UPLB) Agricultural College, and two regionalagricultural colleges, as well as equipment for 13 agricultural high schools.

1.14 The nutrition aspect of the proposed project also ties in withthe first Bank-assisted population project (Loan 1035-PH) under which some200 rural health units have been constructed and a large number of midwivestrained for rural areas. There are now some 1,500 rural health units in thecountry as well as a growing number of locally operated nutrition centers.The extension service to be supported under the proposed project wouldprovide the technical back-up support for those rural centers and providethe link between day-to-day operations and the programs and technologydeveloped by the Nutrition Council of the Philippines (NCP).

Table 2.1: MAIN AGENCIES PROVIDING AGRICULTURAL AND NUTRITIONAL SUPPORTING SERVICES

Approx. no.

Department/ of field

agency staff /a Main function of field staff

Ministry of Agriculture (MOA)

Bureau of Agricultural Extension for farm improvement,

Extension (BAE) 8,600 home management and youth development.

Bureau of Plant Industry (BPI) 2,700 Research and regulatory work on pestsand diseases.

Bureau of Animal Industry (BAI) 1,700 Extension on animal health andhusbandry to commercial scale livestock

enterprises.

Bureau of Soils (BS) 550 Research on soil and fertilizer require-ments.

Ministry of Agriculture: AttachedAgenciesPhilippines Coconut Authority (PCA) 220 Extension on coconut and intercrops.Philippines Tobacco Authority (PTA & PVTA) 200 Extension on tobacco production.

Philippines Cotton Growers Assn.(Philcotton) 170 Extension on cotton production.

Philippines Sugar Ind. Authority(Philsucom) 15 Extension on sugar cane production.

National Grains Authority 460 Assist in marketing of food and feedgrains.

Ministry of Agrarian Reform (MAR) 3,140 Assist land reform beneficiaries(withdrawing from agricultural exten-sion work under PD 980.)

Ministry of Local Government and

Community Development (MLGCD) 2,670 Provide a very limited amount of agricultural

and nutrition services. Also locally coordinate

services of other agencies.Ministry of Natural Resources (MNR)

Bureau of Forest Development (BFD) 1,780 Forest regulatory, research and extension

work.Bureau of Fisheries and AquaticResources (BFAR) 560 Extension on fish production and handling.

Ministry of Education and Culture(MEC) 6,520 Mainly school and community education.

Ministry of Health (MH) 13,300 Rural health, medical, dental,and nutrition services.

Ministry of Social Services (MSSD) 2,100 Social welfare including nutrition services.

National Irrigation Authority (NIA) 5,740 Regulate and maintain irrigation water supply and

provide a water advisory service in irrigated areas.

Farm Systems Dev. Corp. (FSDC) 460 Provide agricultural extension as part of

cooperative development.

National Banking Agencies and Rural 830+ Provide agricultural extension as part of

Banks credit services.

/a Includes field supervisory staff.

2. THE PRESENT EXTENSION SYSTEM

Ministries and Agencies Providing Extension

2.01- At present, about 15 government ministries and agencies and some50,000 government staff provide varying forms of rural extension (see Table2.1), although the borderline between truly agricultural extension and moregeneral rural community development and service is difficult to define. Inpractice, however, the Ministry of Agriculture with a field staff of about10,000 is responsible for the dissemination of technical information in thefields of crop and livestock production, home management, nutrition andrural youth development. Where staff of other agencies are involved insimilar activities, a certain amount of overlap does occur. In most cases,however, informal agreements exist between staff of the different agenciesas to their respective roles, although such roles may vary between agenciesfrom region to region. With regard to nutrition, however, where the largestnumber of agencies are involved, the Ministry of Agriculture staff generallyprovide more of a technical support and education role. The actual implemen-tation of programs, such as the weighing and feeding of children is conductedby rural health workers from other government agencies or from the municipali-ties/ villages. Similarly, the distinction between the roles of field staffof the Ministry of Agriculture (MIOA) and of the National Irrigation Authority(NIA) is that the latter advise mainly on the efficient use of irrigationwater and are responsible for ensuring the timely delivery of water. Thefact that more efficient use is made of manpower and resources than thelarge number of involved agencies tends to suggest, is due to the relativelyclose coordination between staff at the field level on the various localAction Committees (see para. 2.09).

2.02 Agricultural extension per se has developed quite strongly alongcommodity lines. Coconuts are handled by the Philippine Coconut Authority(PCA), sugar by the Philippine Sugar Commission (Philsucom), cotton byPhilcotton, and tobacco by the Philippine Tobacco (and Virginia Tobacco)Administration (PTA and PTVA). All are either attached agencies or underthe administrative supervision of the Ministry of Agriculture (see Figure 2.1).Extension services for other crops, mainly cereals (rice and corn), fruit andvegetables are handled by the Bureau of Agricultural Extension (BAEx).Animal production is serviced by the Bureau of Animal Industry (BAI). BothBAEx and BAI are line agencies of the Ministry of Agriculture (seeFigure 2.1).

2.03 With so many agencies presently involved in extension and such awide range of functions (see Table 2.1), it is inevitable that some rivalriesand confusion do exist among staff of various agencies, as to where theirresponsibilities end and those of others begin. Discrepancies betweensalaries and/or allowances paid to staff of different agencies, and evenwithin the same agency, for doing essentially the same job add to theproblem. In part this situation has inadvertently arisen as a side effectof the quite successful intensive food production programs of Government,which have been coordinated by NFAC - the National Food and AgriculturalCouncil. Although essentially a policy-making body comprised of representa-tives from all ministries and agencies dealing with the rural sector, NFAC

PHILIPPINESNATIONAL EXTENSION PROJECT

Figure 2.1 Existing Organization of the Ministry of Agriculture

Office of theMinister

MAIN ATTACHED AGENCIES & AGENCIES UNDER ADMINISTRATIVE SUPERVISION .

National Grain' Philippine* Cocount| Phil/Virginia' Philippine* PalaYan NGAuthority Coconut Investment Tobacco Admin. Cotton Bayan Nati.

(NGA) Authority (PCA) Company (PTA) & (PVTA) CorprOTiON) Advisory Committee(PH ILCOTTON)

Philippi ne- Philippine'. National- Presidential*National Food- Sugar Agricultural M eat Committee onand Agricultural Commission Training Inspection Agricultural

Counc'i (PHILSUCOM) Council Commission Credit

STAFF UNITS

Computer ~~~~~~~~~~~~~~~~~~~~~~~~~~FinancialAgrarian Reform Compuier Administrative Planning and

U nit CetrService Service ManagementServi ce

LINE BUREAUS

Bureau of Bureau of Bureau of Bureau of BureauAgricultural Agricultural Animal Plant ofEconomics Extension Industry Industry Seeds(BAECON) (BAE) (BAI) (BPI) (BS)

Field Staff Field Offices Field Offices Field offices Field Offices

World Bank -19233

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has become increasingly involved in implementation of the food programs,largely because the extension agencies had insufficient resources to implementthe programs themselves. Consequently NFAC has (i) borrowed staff, mainlyfrom BAEx and BPI (i.e. Bureaus of Extension and Plant Industry); (ii) giventhem more liberal living and travel allowances; (iii) provided them withextension guidelines and technological back-up support and (iv) concentratedthem on the priority food production program areas. While undoubtedly thishas contributed, in the short run, to above average production increases inparts of the country, it has tended to erode the responsibilities and capa-bilities of BAEx.

2.04 Mindful of the proliferation of extension services and the discrep-ancies in compensation, Government has recently initiated a number of actionsto help remedy the situation. For example, agricultural extension servicesprovided by the Ministry of Agrarian Reform (DAR) are being phased out underPresidential Decree 980. Likewise, the Presidential Letter of Instruction(LOI) No. 599 recognizes the importance of the extension worker in assistingthe rural population, and calls for a revision of salary scales. Also underLOI 599 a Steering Committee has been formed to draw up plans on how Govern-ment might achieve its long-term objective of having at least one extensionworker in every barangay (village). Government's request for Bank assistancein strengthening the extension services of the Ministry of Agriculture, thelead agency responsible for extension, forms a major part of Government'sstrategy to streamline its extension services in rural areas.

Extension Services of the Ministry of Agriculture

2.05 Status. The status of the extension service in the Philipines isquite unlike that of other countries where the Bank has assisted extension.The most notable features are the size of the extension force and theacademic qualifications of personnel. Within the Ministry of Agriculturethere are about 8,600 extension staff, of whom more than 90% have tertiarylevel degrees, mainly Bachelor of Science in Agriculture. If those performingagriculture extension are related to the number of rice and corn farmers inthe Philippines, there is a ratio of one extension worker to 270 farmers.This should be a near optimum ratio and certainly is far superior to that incountries such as Indonesia, Thailand and India where ratios are of the orderof 1:1,000 to 1:6,000.

2.06 Another notable feature is the relatively high standard of agri-cultural research in the Philippines, and the availability of generally wellformulated packages of technology, particularly for rice, and to a lesserextent for corn. For the past 40 years, the University in Los Banos (UPLB)has been internationally recognized as a center for tropical agriculturetraining and research. It has been strengthened through three Bank educationloans (see para. 1.13) as well as various other sources of aid. Its capacityhas been further strengthened by the establishment of the International RiceResearch Institute (IRRI), adjacent to the university complex. Furthermore,the agricultural research done at UPLB, IRRI and the various Ministry ofAgriculture and private research stations are coordinated and evaluated bythe Philippine Council for Agricultural Resources and Research (PCARR).Major functions of PCARR are the formulation of research programs and thepackaging of technology for promotion by the extension service. Likewise as

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discussed in para. .010, the Nutrition Council of the Philippines, togetherwith such groups as the Food and Nutrition Research Institute (FNRI) areparticularly competent in drawing up programs and technology packagessuitable for National programs.

2.07 Problems. Despite the apparently favorable number of extensionstaff and the level and type of technology available, average rice and cornyields in the Philippines are low and serious nutritional problems exist.A number of institutional problems are recognized by Government as affectingtheir extension effort; viz:

(a) field staff lack practical training and knowledge of extensionmethodology;

(b) there is a serious shortage of equipment and facilities for fieldlevel training of staff and for demonstrating improved technologypractices. This is compounded by very inadequate budgetary allowancesfor the printing or reproduction of leaflets, demonstration slides,cassettes, etc. which are generally of high quality and availablefrom various sources;

(c) the majority of extension workers have to rely on public transportfor mobility, which together with the unnecessarily large amount ofreport writing requirements, results in technicians spending only30 to 50% of their time with clientele;

(d) the links between research and extension are poorly developed duelargely to the absence of sufficient subject matter specialist(SMS) positions in the extension service;

(e) the emphasis of extension workers on those farmers participating inthe Masagana, rice and corn production programs has concentratedthe service on a very small proportion of farmers. As the numberof farmers participating in the Masagana programs has declinedover the past 4 years, the coverage of the agricultural extensionservice has also decreased; and

(f) the present organization of the Ministry of Agriculture does notpermit clear lines of command from the National level down to thefield. While the Bureaus of Agricultural Extension (BAEx)and Animal Industry (BAI) are mainly responsible for extension, themore research and regulatory oriented Bureaus of Plant Industry(BPI) and Soils (BS) also do some extension work. Coordinationbetween Bureaus is poor since even in the country's 12 regions and73 provinces, the staff of each Bureau report to different Directors/supervisors. Consequently under the present organization, theextension force of the Ministry of Agriculture is fragmented andits limited resources inefficiently used.

2.08 Activities. The extension staff of the Ministry of Agriculture aredivided into four main groups, each with quite separate activities, i.e.(a) farm management; (b) home management; (c) rural youth development; and (d)livestock development. The main activities of technicians in each of thesegroups are discussed below.

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(a) Farm Management Technicians (FMTs). These comprise the majority ofthe extension force and number about 5,300. While primarily theyare responsible for promoting food crop production throughout thecountry, their activities in recent years have been focused largelyon the governments main food production programs, i.e. Masagana 99for rice, and Masaganang Maisan for corn. To a large extenttherefore, the activities of a great number of the FMT's have beenunder the direction of the National Food and Agriculture Council(NFAC), rather than under the Bureau of Agriculture Extension(BAEx) (see para. 2.03). Under the program of NFAC, FMT's areresponsible for assisting farmers to (i) prepare farm budgets andloan applications; (ii) ensure the timely availability of inputsupplies; and (iii) provide suitable technology packages andsupervise their adoption. The FMT is also responsible forinforming the bank concerned of the time and estimated amount ofgrain harvested, and for periodically reminding the farmer of hisrepayment obligations. The latter function is encouraged by therural banks who are authorized by NFAC to pay extension workers asmall amount for every production loan taken out. Also, thefinancing institution has the authority to use extension workersin the collection of loans from farmers. This activity would bephased out under the project since the emphasis on debt collectionconflicts with the role of the extension worker as a "friend" ofthe farmer who is able to advise him on how to improve his production.

As the number of farmers in arrears has grown under the Masaganaprogram, the coverage of the FMT's has shrunk. Once in arrears,a farmer cannot obtain another bank loan. Concomitantly, heusually no longer is visited by the extension worker. The problemof poor mobility is particularly accute among the FMTs. Alsothere is a need for a major revision in the mode of operation ofFM4Ts. Apart from a need for greater supervision and more regularand practically oriented training, greater use needs to be made ofcontact farmers, rather than the present system of individualcontact with those farmers still actively participating in theMasagana programs. There have, however, been pilot schemes to tryout the more regular training and visit (T&V) system which usescontact farmers and which has been used quite successfully inother Bank projects (see Bank Publication on the T&V system of May1977). A slight modification of this sytem would be adopted underthe proposed project.

(b) Home Management Technicians (HMTs). The majority of these arewomen, and number about 1,200 in total. Whereas the role of theHMTs was previously oriented around teaching food preparation,sewing and home budgeting, their activities are becoming moredirected to the implementation of nutrition programs. With theinception of the Malnutrition Prevention Project (MPP) in 1976,jointly developed by the extension service (BAEx) and the NutritionCenter of the Philippines, increasing numbers of HMTs are beinggiven well-defined work programs and highly specific objectives in

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the field of nutrition, home garden food production, familyplanning and child development. The main objective of these HMTsinvolved in the nutrition program is the early prevention of mal-nutrition through close interaction with mothers during pregnancyand in the first year of child life. The early results of theprogram are already very good (see Annex 6). However, coverage isstill very limited. Each HMT serves roughly one municipality(c. 30,000 people), which may comprise up to 30 barangays (villages).Usually the HMTs are able to concentrate on only 3 to 5 villagesin their area due to time constraints. Their coverage could begreatly enhanced through better mobility, much less emphasis onreport writing and through the availability of teaching/extensionequipment and materials (leaflets, etc.). This would allow moregroup contact and reduce the need for individual contact. Anincrease in EMT numbers is also needed.

(c) Rural Youth Development Officers (RYDOs). These extension agentsnumber about 500 and have as their primary job, the organizationof youth into 4-H youth clubs. Food production and nutrition trainingactivities are the focal point of 4-H club activities. There areabout 5,000 4-H clubs in the Philippines with a membership of about150,000. Recently the focus of the youth clubs has been on out ofschool youth who number about 7.6 million in the 10 to 24 age group.Of the 6 million out of school youth in rural areas, about 51% areidle, 41% are engaged in housekeeping and about 8% are temporarilyunemployed. Plans are now underway to modify the 4-H club activitiesthrough the formation of new groups to be called "Anak Bukid"(young farmers), through which technical and financial assistancewill be given for individual youths to set up and operate livestockunits along sound commercial lines. A major attempt is beingplanned to combat rising rural unemployment through the "Anak Bukid"program. The general problems of the extension service alsoconfront the RYDOs, i.e. inadequate mobility and lack of demonstra-tion equipment. There is also a need for the number of RYDOs to beroughly doubled.

(d) Livestock Officers. Under the present extension system in thePhilippines, there is no formal livestock extension service. TheBureau of Animal Industry (BAI) which is responsible for thelivestock subsector, is mainly involved with research, quarantineimmunization and other regulatory type functions. In the perfor-mance of these duties, however, BAI's field staff of about 1,700(of which 250 are veterinarians) do perform some extensiontype work. However, generally only the medium-scale livestockproducers are frequently contacted by BAI. Therefore, techniciansspend relatively little time with the small backyard producers whohave a few chickens or pigs, and who are estimated to comprise 80%of the farmers in the country with livestock, and who supply anestimated 60% of total consumption. Under the project, therefore,there would be two important changes regarding livestock extension.Firstly, FMTs would receive basic livestock training to enable them

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to advise farmers on simple livestock husbandry and health matters.Secondly, a livestock extension force comprising initially about500 technicians would be established to provide a regular extensionservice to the small to medium scale commercial Livestockenterprises.

2.09 Coordination of Extension with Local Programs. The Philippinesis divided into 73 provinces, roughly 1,500 municipalities and about35,000 barangays (villages). There is also a plan to divide t-he countryinto 13 regional planning bodies. At each of the existing levels, there is awell coordinated Action Committee with representatives from aill governmentagencies and the private sector. At the provincial level, the governorchairs the committees, while at the municipal and barangay (village) level,the committees are chaired by the mayor and barangay captain respectively.The action committees coordinate all government and private programs in theirarea, and where necessary, subcommittees are formed to specifically tailornational programs to local needs.

2.10 With regard to both agriculture and nutrition, there is particularlyclose coordination, and it is largely due to the effectiveness of theseaction committees that the problems of overlapping functions aetween govern-ment agencies are not as great as the number of agencies involved would seemto indicate. Clearly there are differences in the degree of coordinationbetween provinces, municipalities and barangays, but the system generallyworks well. Some provinces, however, have recruited their o9Tnv small staffof agriculturists to complement the nationally paid extension staff. Whilegenerally this does not conflict with the national extension efffort, themuch higher level of salary paid to provincial agriculturalists does causesome bad feeling. Under the project steps are taken to resolve this andother staff compensation problems.

3. THE PROJECT

Objectives

3.01 The Government of the Philipires has requested Banl'K assistance inIits renewed efforts: (a) to promote further production increases in themain food crops and expand livestock production; (b) to imp--cve the qualityof rural life through higher incomes, better nutrition and general homemanagement; and (c) to reduce rural unemployment by assisting out-of-schoolyouth establish backyard livestock enterprises. The project N;.-ould beimplemented over four years by the Ministry of Agriculture. It wouldlargely involve the strengthening of the extension service -t:--ough theprovision of facilities, equipment, technical staff increases and training.It would also involve changes in the organization of the Ministry of Agricul-ture and in the levels of compensation paid to field staff.

Project Identification/Preparation

3.02 At the request of government, a Bank mission reviewed the extension

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services in the Philippines In February/March 1977, immediately following aBank-organized, international workshop on the training and visit system ofagricultural extension, which has proven particularly successful in India.The workshop WaS held in the Philippines at the International Rice ResearchInstitute (IRRI). After subsequent discussions between government and theBank, the Ministry of Agriculture took over preparation of the project withthe help of consultants from the University of Los Banos (UPLB), and thePhilippine Training Center for Rural Development (PTC-RD). The latter wasestablished and funded under the Bank's Fourth Education Loan (1374-PH).

3.03 The project was appraised in February/March 1978. At the sametime, Bank missions reviewed with government the overall rice and feedgrainsituation, as well as the status of agricultural supporting services. Theoutcome of these studies and ongoing discussions with government shouldprovide a sound base on which to build an extension service geared toassisting the rural poor and expanding food and feedgrain production.

Project Components

3.04 Components of the proposed project are as follows:

(a) Organizational Program. Implementation of an improved organiz-ational structure for the Ministry of Agriculture which includesthe establishment of a more unified extension service and closecoordination between research and extension (see paras. 5.01 to5.05).

(b) Vehicles, Equipment and Buildings

(i) Provision of equipment and materials for extension servicesincluding:

(a) vehicles for transporting staff and materials(paras. 3.05-3.08);

(b) communications equipment (para. 3.09);

(c) audio-visual aids and other demonstration and trainingequipment and materials (para. 3.10 to 3.12) and

(d) office, printing and photographic equipment and supplies(para. 3.13).

(ii) Construction of about 500 rural extension centers and renovationof existing facilities for extension services (para. 3.14);

(c) Extension Methodology. Introduction and implementation of soundextension methodology, with particular emphasis on close supervision,regular training of extension workers and regular visits (see para.5.08-5.10).

(d) Staffing Program and Training. Implementation of a staffing andtraining program to increase the number of trained extension staff,

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including the provision for additional subject matter specialistpositions and for a staff of livestock extension technicians(para. 3.15 to 3.18).

(e) Studies/Consultant Services.

(i) 36 man-months of consultant services to conduct a reviewof rural technicians and extension workers salaries andincentives, for the Ministry of the Budget, ,wLih a view tomore equitably compensating such staff and --- identifyingoverlapping extension services provided by different agencies(para. 5.16);

(ii) 24 man-months of consultant services to deve'lo more effec-.ivemonitoring and evaluation procedures to evaluate (a) individualperformance of extension wokers and (b) effectiveness ofextension services provided (para. 5.20); a--,

(iii) 6 man-months of consultant services to assist the Ministryof Agriculture in upgrading the capabilities -if their Drocure-ment division and to advise on the suitabili-- of varioustypes of equipment to be procured under the :--oect (para. 5.0G5

Detailed Features

3.05 Vehicles and Communications. One of the most serious constraintsfacing the Ministry of Agriculture's extension technicians. is theirlack of mobility and infrequent contact or communication wit' supervisorsand back-up support staff. Instructions or information from the National orRegional offices frequently take a week or more to reach technicians. Itmay then be a week or more before technicians can act on the advice received,due largely to their dependence on public transport. BAEx presently hasonly 52 vehicles in running condition for the entire Bureau, and there areno vehicles less than 10 years old. Likewise only about 23000 extensiontechnicians have motorcycles. Even these, however, are not fully utilizedbecause of inadequate travel allowances (see para. 5.14).

3.06 The project, therefore, would concentrate heavily c- improving themobility of staff and on improving means of communication. Items to beprovided are listed in Table 3.1 and cost estimates are gi-Ver. in Annex 1.Regional offices in particular would be supported by the provison of jeeps(4-wheel and 2-wheel drive) pick-ups and vans to enable subject matterspecialists to get into the field for training and supervisory purposes, andto facilitate the supply of demonstration material (seed or fertilizer kits,leaflets, etc.) to technicians. Cars would be provided fc- -le RegionalDirectors and their two assistants who would be required to -ravel betweenthe main provincial centers in their region, as well as between the variousregions or national offices. In line with the reorganizatio- of the MOAalong Regional lines (see para. 5.01), the National offices of BAEx and BAIwould be provided with less vehicles than the Regional Off±ces.

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Table 3.1: VEHICLES AND COMMUNICATION EQUIPMENT(units)

T O T A LItem Year: 1 2 3 4 Total

VehiclesJeep (4 & 2-wheel drive) 426 342 100 100 968Pickup 58 55 - - 113Combi/van 22 6 - - 28Car 40 - - - 40Motorcycles 862 900 1650 3000 6412Sidecars 1000 550 275 275 2100Boats & trailers 9 - - - 9Minibus 50 26 - - 76

CommunicationsTransmitter (SSB) & aerials 59 16 10 5 90Transmitter (VHF) & aerials 206 166 110 105 587

3.07 For the Provincial, and Municipal/Barangay extension staff, atotal of 6,000 motorcycles and 2,000 side cars would be provided. Thiswould raise the number of extension technicians with motorcycles from about20 to 80%. The motorcycles would be purchased by the technicians themselvesthrough salary deductions (see para. 5.18), and the MOA would give techni-cians a mileage allowance commensurate with their job function (see para. 5.17).Detachable side cars would be provided by the MOA to those technicians whoseparticular job calls for the movement of equipment and supplies (knapsacks,sprayers, chemicals, fertilizers, pamphlets, etc.).

3.08 Incremental operating and maintenance costs are included in theproject (see Table 4.1). Most of the vehicle maintenance work would becontracted out to local repair shops which are abundant and widely distributedthroughout the Philippines. Spare part dealerships are also widely distri-buted. The National and Regional offices of the Ministry of Agriculturealso have small teams of mechanics for minor repair work. Some $25,000 worthof miscellaneous tools and equipment would be provided under the project for140A workshops servicing project vehicles and equipment.

3.09 Communication equipment to be provided would be the high frequencytransmitter/receiver (SSB) needed for distant communications between thenational and regional offices, since the telephone network in the Philippinesis still poorly developed. Very high frequency equipment (VHF) would beprovided for the shorter distance communications between the regional,provincial and municipal offices. The equipment would be used for all MOAactivities and would greatly expand the present radio communication networkwhich generally does not reach beyond the provincial level. Much of thepresent equipment is very old and is frequently out of order. Generators

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would be provided to enable communications and other equipment to continueoperation during power blackouts. The latter occur frequently during thetyphoon season - often when communication needs of the Ministry of Agricultureare more urgent.

3.10 Audio-Visual Training and Demonstration Aides. Apart from themobility and communcation constraints facing technicians, there is an almosttotal lack of even simple teaching aides, either for inservice training oftechnicians or for conducting field demonstrations. Compounding this problemis the inexperience of most of the technicians with extension practices.Although more than 90% of technicians are agricultural graduates, they lacktraining in extension methodology. They also particularly lack practicalexperience. Training therefore would be an important component of theproject, for which substantial amounts of audio and visual equipment andmaterials would be needed (see Table 3.2).

3.11 Since much of the training would be done in the field throughregular contact with subject matter specialists and small, short-durationgatherings of extension workers, equipment such as overhead projectors, taperecorders and other audio and visual aid materials would be provided atprovincial and municipal centers. On average one in every third municipality(i.e. approximately 500) would have training/meeting facilities (seepara. 3.14) and simple audio-visual training equipment. M4uch of thisequipment would also be used by technicians for demonstrations, e.g. tofarmer groups, 4-H clubs or Barangay womens groups. The project also hasbeen particularly designed to facilitate the production or purchase ofsuitable audio visual materials, e.g. slides, cassette tape programs,nutrition charts etc. Equally important is the provision under the projectfor coordination with agencies producing audio and visual aid materials(e.g. IRRI and NNC)I1 and for sufficient quantities of audio visual materialsto be produced and distributed (see para. 3.13).

/1 IRRI: International Rice Research InstituteNNC: National Nutrition Council

Table 3.2: AUDIO-VISUAL EQUIPMENT(units)

T O T A LItem Year 1 2 3 4 Total

Slide projector/screen 149 20 20 10 199Overhead and opaque projectors 177 220 120 111 628Slide viewer 217 200 100 100 617Studio recorder 20 6 1 - 27Tape recorder (cassette) 215 179 119 114 627Megaphone 284 200 100 100 684Visual maker 2 - - - 2

Camera (still) 26 - - - 26Movie projector 8 6 1 - 15Photo lab/kits developing 1 - - - 1Photo enlarger 1 - - - 1Microphone 148 20 16 15 199Mixer amplifier 63 20 16 15 114Speakers 296 40 32 30 398Generator 206 166 110 105 587Cassettes 500 1000 1500 1000 4000Print dryer 1 - - - 1Photo timer 1 - - - 1Tape duplicator 1 - - - 1

3.12 In addition to the above, each technician would be provided withhis/her individual kit of simple extension tools and materials. Kits wouldbe prepared according to job function. A Farm Management Technician forexample, could be provided with a measuring tape, budding knife, syringe andneedle set and a variety of audio-visual cassettes or slides appropriate tohis clientele. Home Management Technicians on the other hand could beprovided with grinders, vegetable garden seed and fertilizer kits, etc.Complementing the audio and visual-aid materials to be provided to technicianswould be the 42 mobile audio-visual units provided for under the FourthEducation Project (Loan 1374-PH). Orders for these units have been placedand delivery is due by early 1979. The project also provides for some35,000 simple weighing scales to be distributed throughout the country tobarangays (villages), in support of the activities of those HMTs who arefocused on the education of rural women in the self-care and monitoring oftheir children's early development.

3.13 Office, Printing and Reproduction Equipment. Just as the contactof technicians with farmers is reduced to less than 50% by lack of mobilityand equipment, a similarly low efficiency situation exists for office staff.Few typewriters, calculators and general office equipment exist, and mostequipment is very old. Likewise printing and reproduction equipment is veryold and inadequate to meet the needs of the present day service. In view ofthe importance of printed leaflets etc. to the extension service, theproject would provide for printing presses and other reproduction equipment

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at the national office. Equipment for black and white photo processingwould also be provided. Color work would be contracted out. Mimeo machines;electric at the national and manual at the provincial levels, would beprovided for simple reproduction purposes. Table 3.3 lists approximateamounts of office printing and reproduction equipment to be provided.

Table 3.3: OFFICE AND PRINTING EQUIPMENT(units)

T O T A LItem Year 1 2 3 4 Total

PrintingOffset press 18" x 25-1/2" 1 - - - 1Offset press 36" x 39" 1 - - 1Plate maker 1 - - - 1Paper cutter 1 - - - 1Stitching machine 1 - - - 1Collator 1 - - - 1Temperature control sink 1 - - - 1Type setting equipment 2 - - - 2Process camera (20" x 24") 1 - - - 1

Office EquipmentCopier 15 - 3 - 18Mimeographing machines:(i) electric 27 - - - 27

(ii) manual 50 25 15 10 100Table calculator 92 65 52 52 261Pocket calculator 500 500 500 500 2,000Electric

typewriter electric 28 3 8 1 40Manual typewriter 187 136 186 200 709Filing cabinet 4 drawers 207 162 172 212 753Safe 63 50 - - 113Index card cabinet 14 - - - 14

Air conditioner 16 15 14 13 58Refrigerator 66 30 31 - 127Furniture - - - - 1Electric fan 247 162 180 220 809Checkwriter 13 - - - 13

Addressograph 1 - - - 1

3.14 Civil Works. The civil works provided for under the projectlargely center on the construction of about 500 rural extension centers. Onaverage there would be one center to every three municipalities, the cost ofeach center being about US$8,000. The land on which these centers would bebuilt would either be donated by the municipality as done for the few pilotcenters in operation, purchased outright, or obtained on long-term lease. An

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assurance was obtained at negotiations that MOA would secure all land neededfor construction of the pilot centers. The centers would be constructedeither through contract work or by force account. The facilities would serveas storage centers for equipment and materials as well as training/meetingcenters for technicians, nutrition scholars, women's groups, etc. Eachcenter would be equipped with a simple kitchen. Suitable designs for theconstruction of these units have already been prepared but these may be modifiedas the project progress. Likewise, choice of location for the extension centerswould remain flexible to enable the Ministry of Agriculture to make best use ofthe facilities in accordance with changing situations which inevitably ariseduring project implementation. Some US$200,000 would be provided under theproject for renovations to existing offices, many of which are in need ofrepair or alterations.

Staffing and Training

3.15 Although the extension force of the Ministry of Agriculture isnumerically quite strong at present, the expanded coverage to be achievedunder the project would require moderate staff increases. In particular,there would be a need to greatly enlarge the size of the subject matterspecialist (SMS) staff and to use such staff more effectively. Under theproject the 120 specialists now backstopping the extension service would beincreased by 280 to about 400. Most of the SMS positions would be filled fromwithin the existing ranks of BAEx where enough staff with the basic qualifi-cations exist. Further training of such staff would be included under theproject.

3.16 With the establishment of about 400 SMS positions, additionalfield level staff would need to be recruited to compensate for staff promo-tions to SMS positions, and to carry out the expanded programs of theextension service under the project. Extension staff increases of about 35%(3,000) over the life of the project would be needed, and would include about500 rural youth development officers (RYDOs), 500 livestock extension officers,1,000 home management techncians (HMTs) and about 1,000 farm managementtechnicians (FMTs). An assurance on the incremental staffing requirementsof the project was obtained at negotiations (para. 7.01 (a)). The proposedfield staff build up is shown in Table 3.4. Almost all new extension staffrecruited would have BS degrees in Agriculture or animal science, inaccordance with civil service regulations. Each year, Philippine agriculturalcolleges graduate some 3,000 students and therefore there would be nodifficulty recruiting the additional staff under the project. It is alsoexpected that a number of the incremental extension staff will come fromwithin the Ministry of Agriculture itself, particularly as the Bureau ofPlant Industry (BPI) is phased out of extension activities.

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Table 3.4: TECHNICAL STAFF BUILD-UP

Existing /a Yearly incrementStaff classification No. 1 2 3 4 Total

Subject matter specialist (SMS) 120 50 50 80 100 400Rural youth development

officer (RYDO) 500 50 100 150 200 1,000Livestock extension officer (LO) 0 50 100 150 200 500Home management technician (HMT) 1,200 100 200 300 400 2,200Farm management technician (FMT) 5,300 100 200 300 400 6,300

Total 7,120 350 650 980 1,300 1O,400

/a Excludes supervisory staff and technical support staff who bring totalexisting technical staff complement to 8,600.

3.17 Although more than 90% of the extension staff of BAEx are agricul-tural graduates, they have very little training in extension methodology.Furthermore, since the numbers of extension staff have approximately doubledover the past 4 years, the general level of experience among staff is verylow. Under the project, therefore, training requirements range from on-the-job, practical training, to short duration courses on extension methodologyand specific topics such as nutrition and various aspects of crop and live-stock production and marketing. For the subject matter specialists and othersupervisory staff, more advanced training would be provided, including alimited number of master degree courses (35) and short-duration study tours todeveloping countries with ongoing extension programs (approximately 500 man-weeks). Management training for supervisory staff would be given emphasis,since the lack of adequate supervision of staff particularly at the fieldlevel is a major weakness of the present service. At the regional andnational level, staff would be specifically assigned to develop the in-servicetraining capabilities of the extension services, as well as to determinetraining needs and to resolve logistical training problems. Details oftraining to be provided under the project are given in Table 3.5 (see alsoAnnex 2).

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Table 3.5: MAIN TRAINING PROGRAM

StaffType of training Duration numbers

Fellowships for masters degree 2 years 35Overseas and in-country study tours 4-6 weeks 100

pre-service orientationCourse (new staff) 2 weeks 3,400In-service course for field

technicians 2 weeks 9,000Bi-monthly meetings

for field technicians 1 day each 9,000

3.18 Most of the on-the-job training would be done at the various pro-vincial, municipal and rural extension centers, such as those described inpara. 3.13, where technicians would gather bi-weekly to meet with theirsupervisors and Subject Matter Specialist. Initially this type of trainingwould be given the greatest emphasis, as the most cost-effective way ofrapidly raising the competance of field staff. The more in-depth trainingwould be conducted in 2-week courses at Provincial and Regional offices aswell as at the Philippine Training Centers for Rural Development (PTC-RD;see Report No. 1207c-PH). Training Specialists at national, regional andprovincial offices would be responsible for determining training needs andfor coordinating with agencies arranging training, such as the PTC-RD andthe Nutrition Council of the Philippines.

4. PROJECT COST AND FINANCING

Cost Estimate

4.01 Total project costs are estimated at US$70.1 million of whichUS$26.0 million or 37% is foreign exchange. Prices and salaries are expressedat current levels. Physical contingencies of 15% for vehicles, equipment,and civil works are included and amount to 6% of project cost.

4.02 . The contingency due to expected price increases over the implemen-tation pe'riod amounts to about 15% of total project cost, assuming thefollowing annual inflation rates:

Annual inflation rate (%)Item 1979 1980-82

Civil works 7.5 7.0Equipment & services 6.5 6.0Salaries 10.0 10.0

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4.03 Project cost details are presented in Annexes 1 and 2 and aresummarized below:

Table 4.1: PROJECT COST

ForeignLocal Foreign Total Local Foreign Total exchange

Component -------- P -------- ---- US $ million --- (%)

Vehicles 53.8 53.8 107.6 7.27 7.27 14.54 50Equipment 25.8 31.4 57.20 3.48 4.25 7.73 55Civil works 20.2 10.9 31.1 2.73 1.47 4.20 35Training andconsultants 8.0 15.5 23.5 1.08 2.09 3.17 66

Incrementaloperating cost 151.0 43.8 194.8 20.41 5.91 26.32 22

Total BaseCost 258.8 155.4 414.2 34.97 20.99 55.96 38

ContingenciesPhysical 14.13 15.24 29.57 1.91 2.06 3.97 52Price 53.5 21.83 75.33 7.23 2.95 10.18 29

Subtotal 67.63 37.07 104.7 9.14 5.01 14.15 35

Total ProjectCost 326.4 192.5 518.9 44.1 26.0 70.1 37

Financing

4.04 The proposed Bank loan of US$35 million would cover the foreignexchange costs of US$26 million and US$9 million equivalent of local costs.Government would finance the remaining 50% of project costs, equivalent toUS$35.1 million (P 260 million). Overall, the project would increase theGovernment's budget appropriations for extension by about 70%. The proposedBank loan would be for 20 years including a 5-year grace period. Implementationof the project would take place over 4 years.

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Table 4.2: FINANCING(amounts in US$ million)

Government IBRD TotalComponent Amount % Amount %

Vehicles 1.45 10 13.09 90 14.54Equipment 0.77 10 6.96 90 7.73Civil works 0.84 20 3.36 80 4.20Training and consultants 0.79 25 2.38 75 3.17Incremental operating cost 26.32 - - - 26.32Contingencies 4.95 35 9.20 65 14.15

Total 35.10 50 35.00 50 70.10

Procurement

4.05 Civil works would consist primarily of small extension centerscosting about US$8,000 each, spread over a wide geographical area and phasedover the entire implementation period of the project. They would not besuitable for international competitive bidding procedures. Therefore civilworks contracts would either be done by force account or be awarded on thebasis of competitive bidding advertised locally in accordance with governmentprocedures satisfactory to the Bank. In general, vehicles and equipmentwould be procured through international competitive bidding in accordancewith Bank guidelines. A preference margin of 15% of the c.i.f. price ofimported goods or the prevailing customs duty, whichever is lower, would beextended to local manufacturers in the evaluation of bids. However, topermit flexibility in the procurement of specialized items and items purchasedin small quantities, such items costing not more than US$50,000 but notexceeding US$2.0 million in total would be procured on the basis of competi-tive bidding advertised locally in accordance with government proceduressatisfactory to the Bank. In addition, with the exception of vehiclespurchased under the Vehicle Plan (para. 5.18), off-the shelf items costingnot more than US$10,000 each but not exceeding US$500,000 in total, wouldbe purchased on the basis of prudent shopping, involving at least threequotations. For the approximately 6,000 motorcycles (less than 1% of totalmotorcycles in the country) which are to be purchased over a four-yearperiod by individual technicians under loans secured by an MOA special timedeposit (para. 5.18), purchases would be limited to motorcycles of maximum200 cc engines but would include all brands for which there are dealers inthe Philippines with reputable service and maintenance facilities. Using aprocurement procedure acceptable to the Bank which combines local competitivebidding procedures with consumer preference, MOA would obtain quotes fromall qualified dealers and make lists of such discount prices available totechnicians. Foreign suppliers of a wide range of goods are well representedin the Philippines. Where contracts are estimated to cost more thanUS$100,000 the Bank's prior approval would be required before invitations tobid are issued and contracts are awarded for civil works, vehicles, andequipment.

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Disbursements

4.06 Disbursements would be made at the rate of 100%,of ,hee foreignexchange cost of directly imported equipment, 100% of the ex-factory priceof locally manufactured equipment and 65% of expenditure for importedequipment procured locally. For consulting services, traini.g and for studytours, disbursements would be 100% of total cost. Disbursements for civilworks would be 50% of expenditures. All disbursements would be made on thebasis of normal documentation, except for force account work for extensioncenters and for motorcycles (see para. 5.18), for which disbursements wouldbe made against statements of expendLitures with supporting documentationretained by the borrower and held available for inspection by the Bank duringthe course of supervision missions. It is expected that disbursements wouldbe completed by June 30, 1983. An estimated schedule of disbursements isgiven in Annex 3.

Accounts and Audit

4.07 MOA would maintain a separate project account coveririg all projectexpenditures and this account would be audited annually by the Government'sCommission on Audit (COA). An assurance was obtained at negotiations thatthe audited accounts, together with COA's report, would be sent to the Bankno later than 6 months after the end of each fiscal year (Janucry 1 toDecember 31).

Environmental Effects

4.08 The project would have no direct effect on the enrvronment, but tothe extent that improved farming practices require soil conservation,fetility level maintenance, rat control and minimum chemical pest controluse, it is expected that the project would promote considerable and lastingimprovements on the environment.

Role of Women

4.09 The project would have a very large impact on women in the ruralcommunities served by the extension service. Out of the total fieldextension staff of about 8,600 approximately 50% are women. The extensionservice focuses heavily on the farmers' wives and other housewives in therural community, most of whom are actively involved in farmingo Women formthe greater proportion of the labor force during transplanting and harvesting.They also play a large part in the management of home finances and indecisions on purchases of equipment, fertilizers etc. Women also aregenerally responsible for the marketing of farm produce and the actualpurchasing of farm inputs. They are therefore a major target group of theproposed project.

4.10 In addition, the project would promote the contact of technicianswith rural women during pregnancy and in the first year of t-heir child'slife. The Malnutrution Prevention Program to be promoted under the projectaims to educate women in the prevention of manutrition of the-ir childrenthrough breast feeding, and subsequent preparation in their owen homes ofnutritious, locally available foods. Rural women would also be educatedto monitor the early growth of their children through regular weighing onscales to be provided in the villages by the project.

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5. PROJECT IM4PLEMENTATION

Ministry Reorganization

5.01 Of foremost importance in achieving efficient implementation ofthe project would be the streamlining of the Ministry of Agriculture such

that a single line of command would exist from the Ministry, through the

Regional Directors, Provincial Officers and Municipal Officers, to the field

level extension worker. The organizational changes to be implemented under

the project have been authorized by Presidential Decree No. 1579,

and culminate from discussions between the Bank and Government, andfrom studies within the Ministry of Agriculture itself, on ways of improving

the present organization. Support for the reorganization has been obtained

from the Government Commission on Reorganization, and from all the Bureau

Directors within the Ministry of Agriculture.

5.02 The prinicipal changes to be implemented would be the appointment

of a new Regional Director for each of the country's 12 Regions (Fig. 5.1).

Directors would have full control and responsibility for Agriculture Ministry

staff and their activities in their respective regions. Regional Directors

would report directly to the Minister of Agriculture, through his Deputy

Ministers or Assistant Secretaries./l Under the reorganization, the existing

bureaux of Plant Industry (BPI), Extension (BAEx), Animal Industry (BAI),

Soils (BS), and Agricultural Economics (BAECON), would no longer function as

line agencies with control over field level staff. They would act instead as

staff bureaux, or divisions of the Ministry at the national level. As such,

the responsibilities of national bureau staff would be to service the regional

staff by preparing guidelines for national programs and assisting in the

procurement and supply of equipment, materials, technology packages, etc. The

national bureaux would also be responsible for coordinating the Ministry of

Agriculture's activities with other government agencies, such as the National

Nutrition Council (NNC) and the Philippine Council for Agricultural Resources

Research (PCARR).

5.03 In the early stages of the Ministries' reorganization there would

not be any physical relocation of staff, and very little relocation is expected

overall. However, there would be stronger enforcement of an existing minister-

ial order that extension staff should live in the village (barangay) around

which they work. At the national level, staff would continue to function much

the same as before. However, with the field supervisory function formally

/1 The new interim Parliament is currently discussing guidelines for appoint-ment of deputy ministers vs. the Assistant Secretary positions which

existed under the previous government departmental organization.

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PHI LIPPINESNATIONAL EXTENSION PROJECT

Figure 5.1 Proposed Organization of Ministry of Agriculture

| Minister of

Agriculture

Deputy Ministers

Administrative Technical StaffService Units Bureaus

a) Agrarian Reform a) Animal Industryb) Computer bb Extensionc) Administrative c) Agr. Economicsd) Planning .d) Plant IndustrY

e) Financial & Mgmt. e) Soils

Municipal Officer ~ ~ ~ ~ ~ AdinstatveStf

forV Crp

|Asst. Regional Diretor Asst. Regional l

for Crops & Extension DirEctor for Animals

l + 1 | Ani~~~~~~~~~~~~~~~~~~mal lTechians eciasts ialists

|Provincia Officer || Provincial Officer|

for Crops for Animals |

|Municipa Officer|

| for Crops l

X ~~~~~~~~~~~~~Livestock Technicians9 ~~~~~~~~~~~~~~~and

Extension Officers

FMT's, HMT's, R YDOO's

World Bank-19232

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transferred to the Regional Directors, national bureau staff would have moretime to formulate and evaluate programs, coordinate with research agencies,arrange for procurement and supply of equipment and materials, etc. At theregional level, likewise, staff would continue to function as under theformer organization, the main change being in their lines of supervision.The new Regional Directors would be promoted two salary grades above theformer salary levels of bureau Regional Directors. Similarly, two AssistantRegional Directors would be appointed for each region, at one salary levelabove the former Regional Director level. In most cases senior regionalstaff would be appointed from among the four bureau directors in each regionunder the previous organization. Three out of the four, therefore, would bepromoted, while the other would lose his title, but his salary scale wouldbe unaltered. At negotiations an assurance was obtained that by January 31,1980 each of the 12 Regional Directors and at least two Assistant RegionalDirectors for each region would have been appointed (see para. 7.01 (b)).

Organization of the Extension Service

5.04 With implementation of the regional reorganization, all crop exten-sion, research, quarantine and other regulatory work would fall under theresponsibility of one Assistant Director, while the other Assistant RegionalDirector would supervise similar activities with regard to livestock production.Extension services covering small scale backyard livestock production would,however, be the function of general extension staff who would be supervisedby the Assistant Regional Director for Crops and Extension. The AssistantDirector for Livestock would be responsible for the extension, research andregulatory services needed for the quite sophisticated level of commerciallivestock production in the Philippines.

5.05 Below the Assistant Regional Director level, staff would be super-vised by officers responsible for crops and extension or for livestock atthe Provincial and Municipal levels. Terms of reference for staff at alllevels have been drawn up to assist in the initial implementation of theproject (ref. Annex 5), although some modification is likely as the projectprogresses. Overall responsibility for implementation of the project wouldbe with the National Bureau of Extension (BAEx) Director, who would reportto the Minister through his deputies on the progess of the project. In viewof the fact that this would be the first Bank project directly assisting theMinistry of Agriculture, and since the MOA has little experience in theprocurement of large amounts of equipment, six man-months (US$4,000/man-monthinclusive of all costs) of consultant services are funded under the project toprovide assistance when needed in procurement documentation and in determiningthe type of equipment best suited to the Ministry's needs.

Operations of the Extension Service

5.06 Responsibilities. The existing division of responsibilities betweenFarm Management Technicians (FMTs), Home Management Technicians (HMTs), andRural Youth Development Officers (RYDOs) would be continued under the project(ref. para. 2.08). Two important changes in the scope of the extension servicewould, however, be made. For the first time, extension services would be initiatedwhich would extensively cover backyard livestock production, as well as provide

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more regular extension services to commercial livestock producers. For thesmall scale, backyard livestock producers, the Farm Management Technician(FMT) would, through an in-service training program, be trained to advise onsimple livestock production and health aspects.

5.07 The second change in the coverage of the extension service would beto revise the deployment of Farm Management Technicians (FMTs) such that theywould cover all farming areas where food crops are grown. Under the Masaganaprograms, FMTs were concentrated on priority production areas and in recenttimes their coverage has been reduced even further in order to concentrateon the small proportion of rice and corn farmers still actively partici-pating in the programs. An important objective of the regular in-servicetraining to be conducted under the project would be to train FMTs in theproduction of a number of crops, in order to develop a force of generalagricultural extension advisors. A large part of the extension effort,however, would still be concentrated on rice production, since rice is themajor staple. The technology package for rice is also better developed thanfor most other crops.

5.08 Extension Methodology. The operational changes to be implementedunder the project would require mainly (a) closer supervision of fieldstaff; (b) more emphasis on the use of contact farmers, women's groups,etc.; (c) much less report writing by technicians; and (d) greater emphasison simple, practical in-the-field training of technicians. The latter (d)is accepted by the Ministry of Agriculture as the most effective way torapidly increase the overall capabilities of the extension force. Withregard to the use of contact farmers, the present tendency of FMTs to meetindividually with farmers participating in the Masagana programs would bephased out. Instead FMT would work through contact farmers who would needto be selected on the basis of their good relationship with neighboringfarmers, whether or not such contact farmers actively participate in thespecial food production programs of Government. The effectiveness of groupcontact under the project, and therefore wider extension coverage, would begreatly enhanced through the project's provision for demonstration materialsand equipment, as well as adequate quantities of well prepared leaflets, etc.

5.09 In view of the wide range of activities of the extension service,e.g. crop and livestock production, child nutrition, the extension methodologyto be used would differ for the FMT, HM4T, RYDO and commercial scale livestockextension staff. Several important similarities would exist, however. Allextension staff would have a schedule of activities which would includeregular meetings with his/her supervisor and with subject matter specialist.Such meetings would occur at least once each month, at which time the tech-nician would receive simple, practical in-service training, and attend toadministrative matters with his/her supervisor. Technicians would developdefinite schedules of visits with contact farmers or other such groupsand be periodically supervised on the job by the supervisor.

5.10 The methodology described above of regular training and regularlyscheduled meetings with farmers, etc., does not differ greatly from presentoperational procedures of the extension service. Supervision has, however,been negligible in the past. There should be few difficulties involved inimplementing the proposed changes. Also, the extension methodology to beimplemented is similar to the Training and Visit System adopted in otherBank projects. However, an important consideration in the Philippine

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situation is the fact that more than 90% of the extension staff have collegedegrees. They therefore possess a greater capacity to absorb technicalinformation and likewise can be given greater responsibility in organizingtheir own work program- and in adapting technology packages to the particularcircumstances in their areas.

5.11 Preparation of Demonstration Materials. Fortunately, in thePhilippines, there are a number of organizations interested in the dissemina-tion of technology, and with trained staff capable of producing suitablematerials. High quality "demonstration aides" are available from agenciessuch as the International Rice Research Institute (IRRI), the PhilippineCouncil for Agricultural Resources and Research (PCARR), the Food andNutrition Research Institute (FNRI), the Nutrition Center of the Philippines(NCP) and the National Training Center for Rural Development (NTC-RD). TheMinistry of Agriculture itself also has trained staff capable of puttingtogether technology packages, demonstration kits and handouts. The problemhas always been the inability to reproduce the demonstration materials insufficient quantities to enable them to have a significant impact. Underthe project, equipment and materials as well as incremental operating expenseswould be provided to overcome these reproduction constraints. Field staffwould also be provided with suitable means for fully utilizing the variousforms of demonstration materials, e.g. leaflets, photos, slides, and tapecassettes. The close coordination between the extension service and actioncommittees at the provincial, municipal and barangay (village) level wouldbe continued under the project, as a means of tailoring nationally preparedtechnology packages to the needs and programs of the individual localities(see para. 2.09).

5.12 Links with Research. It is expected that the weak links nowexisting between agricultural research and extension organizations withinthe Ministry of Agriculture, would be greatly strengthened as a result ofthe reorganization. Both extension and research activities and their budgetwould be under the supervision of each Regional Director. Staff in theregion would no longer see themselves as belonging to separate research(BPI) or extension (BAEx) agencies. Extension subject matter specialistswould in many instances have their offices at research stations, therebyenabling them to maintain close contact with researchers. The 44 demonstra-tion farms presently owned by BAEx would simply become part of each region'stotal complement of stations for the production of foundation seed or forbasic and applied research.

5.13 Closer links between MOA extension staff and the PhilippineNutrition Program would be formed by assigning a staff member of the Ministryof Agriculture to coordinate with the National Nutrition Center (NNC) inaccordance with an existing Memorandum of Agreement (ref. Annex 5). Thiswould facilitate closer coordination of the NNC programs with activities ofthe extension service. Ministry of Agriculture publications would provideup-to-date information on all nutrition activities in the Philippine NutritionProgram and clearly delineate Ministry of Agriculture field personnelresponsibilities.

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5.14 Salaries and Allowances. At present, BAEx salaries are inadequateto offer sufficient career opportunities to retain better staff. They arealso out of line with salaries paid by other Government agencies. Furthermore,the travel allowance which BAEx provides to field staff is insufficient tocover the travel cost of technicians with average workloads. The result isthat technicians sometimes sacrifice part of their salaries to cover travelcost and often undertake less travel than is necessary to provide effectiveextension. Also, the compensation structure gives no inducement to techni-cians to serve in isolated areas of the country where extension services areoften most needed.

5.15 The low salaries and allowances, together with the implementation ofspecial production programs (para. 1.08), have led to the development of afragmented system of payments and lines of authority to BAEx technicians. Thishas greatly reduced the capability of the agency to provide technical assist-ance to farmers. Some of the extension staff are paid by the provinces, somereceive incentive allowances from NFAC (para. 2.03), and some receive bonusesfrom the rural banks for their participation in credit operations. Eachagency which provides some form of payment to technicians expects them to beresponsive to its requirements and orientation.

5.16 In accordance with a Presidential Instruction LOI 599, the Ministryof the Budget has agreed to undertake a study of the compensation system forextension staff in all Government agencies. Some 36 man-months (US$6,000/man-month inclusive of all costs)-of consultants services would be required. Thestudy would involve a comparison of the compensation of extension staff amongthe agencies, on the basis of job functions and would compare compensation ofextension staff in the public sector with that of technicians performingsimilar or comparable work in the private sector. The study would aim todetermine competitive salary levels for extension staff and offer recommenda-tions on how these levels might be reached over time. It would also establishstandard job descriptions for extension technicians and estimate the locationallowance necessary to induce competent technicians to work in remote areas.The study would also help government focus on the number of agencies now doingvarious forms of extension, with a view to rationalizing their extensionresponsibilities. Assurances were obtained at negotiations that consulantswould be hired by December 31, 1979 in order for the Ministry of the Budgetto evaluate the study in consultatior with the Bank by March 31, 1981,/1 andbegin implementing a more equitable system of staff compensation by January31, 1982. Terms of reference for the consultant study would be prepared byJuly 31, 1979, in consultation with the Bank (para. 7.01 (c)).

5.17 With regard to travel allowances, the Ministry of Agriculturewould undertake a survey of the transportation cost now incurred by itstechnicians, and of the cost which would be incurred to achieve full effec-tiveness on the job. The intent would be to ensure that technicians receivetravel allowances adequate to meet their average transportation requirements

/1 Because the fiscal year in the Philippines corresponds with the calendaryear, it would not be possible to implement the February 1981 results ofthe study before January 1982. Discussion between the Bank an theGovernment on the results of the study would take place in early 1981.

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for effectiveness. An assurance was obtained at negotiations that MOAwould establish adequate transportation allowances for extension staff byJanuary 31, 1980 (para. 7.01(d)).

5.18 Vehicle Plan. At present, NFAC operates a scheme which enablesfield technicians to purchase motorcycles with loans provided through thePhilippine National Bank (PNB), and financed from a special time depositmade by NFAC. By providing low interest loans (6% vs 14% normal rate),technicians are encouraged to purchase motorcycles and thereby reduce theoverheads of the extension services in maintaining a large fleet of vehicles.Inflation rates in the Philippines have been around 8% annually over the past3 years and are expected to remain at that level for the duration of theproject. At appraisal some 6,500 field technicians, mostly from the Ministryof Agriculture, had obtained motorcycles through this program from accrediteddealers. To be accredited, dealers must provide a reputable service andspare parts. They must also be able to arrange delivery and servicing in thefield. Technicians are free to choose the type of motorcycles they want, upto a 200 cc limit, and are provided with a list of special discounts providedby dealers accredited under the program. Loans are for P 5,000 (US$675), andthe technician is responsible for the balance, plus insurance and registrationcost, as the down payment. Since the program has worked well in the past, itis proposed that a similar program be adopted under the project and be operatedby the Ministry of Agriculture. An assurance was otained at negotiationsthat the Ministry of Agriculture would by July 31, 1979, make arrangementssatisfactory to the Bank for providing motorcycles to field level technicians,field staff supervisors and subject matter specialists.

5.19 Monitoring and Evaluation. An important aspect of the projectwould be the development of an effective monitoring and evaluation systemwith the following features: (a) minimum report writing by field level tech-nicians; (b) better use of all data collected; (c) more objective assessmentof the effectiveness of extension; and (d) more object