AFRICAN DEVELOPMENT FUND
Language : English
Original : English
REPUBLIC OF MALAWI
SMALLHOLDER CROP PRODUCTION AND MARKETING PROJECT
APPRAISAL REPORT
AGRICULTURE AND RURAL DEVELOPMENT DEPARTMENT
NORTH, EAST AND SOUTH
May 2006
TABLE OF CONTENTS
Page
PROJECT INFORMATION SHEET, CURRENCY AND MEASURES,
LIST OF ABBREVIATIONS AND ACRONYMS,
EXECUTIVE SUMMARY, LOGICAL FRAMEWORK MATRIX
i-xi
1.
ORIGIN AND HISTORY OF THE PROJECT
1
2.
THE AGRICULTURE SECTOR
2.1
Overview of the Sector
2.2
Land Use and Land Tenure
2.3
Poverty, Health and Gender Aspects
2.4
Sector Development Constraints
2.5
Sector Development Policy and Strategy
1
1
4
5
6
6
3.
IRRIGATION SUB-SECTOR
3.1
Overview
3.2
Irrigation Development Constraints, Policies and Strategies
3.3
Institutional Framework
3.4
Donor Interventions
3.5
Lessons Learnt from Past Interventions in Malawi
9
9
12
14
16
16
4.
THE PROJECT
4.1
Concept and Rationale
4.2
Project Area and Project Beneficiaries
4.3
Strategic Context
4.4
Project Objective
4.5
Project Description
4.6
Production, Market and Prices
4.7
Environmental and Social Impacts
4.8
Project Costs
4.9
Sources of Financing
17
17
19
20
20
21
27
29
32
33
5.
PROJECT IMPLEMENTATION
5.1
Executing Agency
5.2
Institutional Arrangements
5.3
Supervision, Implementation and Expenditure Schedule
5.4
Procurement Arrangements
5.5
Disbursement Arrangements
5.6
Monitoring and Evaluation
5.7
Financial Reporting and Auditing
5.8
Aid Coordination
34
34
34
35
36
38
39
39
39
6.
PROJECT SUSTAINIBILITY AND RISKS
6.1
Recurrent Costs
6.2
Project Sustainability
6.3
Critical Risks and Mitigating Measures
40
40
40
41
7.
PROJECT BENEFITS
7.1
Financial Analysis
7.2
Economic Analysis
7.3
Social Impact Analysis
7.4
Sensitivity Analysis
42
42
42
43
43
8.
CONCLUSIONS AND RECOMMENDATIONS
8.1
Conclusions
8.2
Recommendations and Conditions for Grant Approval
44
44
44
LIST OF TABLES
Page
No.
4.1
4.2
4.3
5.1
5.2
5.3
6.1
Summary of Cost Estimates by Component
Summary of Cost Estimate by Category of Expenditure
Sources of Finance
Expenditure Schedule by Component
Expenditure Schedule by Source of Finance
Summary of Procurement Arrangements
ADF/GOM Financing of Recurrent Costs (UA)
32
33
33
36
36
37
40
LIST OF ANNEXES
No.
1.
2
3
4.
5.
6.
7.
8.
9.
10.
No. of Pages
Map of Malawi showing the Project Area
Project Organisation and Management
Provisional List of Goods and Services – Categories of Expenditure
Summary of Economic Analysis
Malawi: Summary of Bank Group Operations
Project Implementation Schedule (January 2007 – December, 2012)
Environmental and Social Management Plan Summary
Supervision Schedule during Implementation
Highlights on the Project Preparation and Review Process
Malawi: Status of Audit Reports and Project Completion Reports
Project Information Documents (PIDs)
1.
2.
3.
4.
Project Detailed Cost Tables
Study Report - Designs, Tender Documents
Study Report - TA terms of Reference
Study Report – Feasibility Study
1
2
1
3
4
1
4
1
1
1
CURRENCY EQUIVALENTS
(February 2006)
1 UA
1 UA
1 USD
= 176.281 MWK
= 1.4450 USD
= 130 MWK
GOVERNMENT FISCAL YEAR
July 1 – June 30
This Appraisal Report was prepared by a team comprising Messrs. Ibrahim Amadou (Senior Agricultural
Economist and Mission Leader), Alex Mend (Principal Agronomist), Louis-Philippe Mousseau (Senior
Environmentalist), Hesham Kandil (Senior Irrigation Engineer), Ms Aude Apetey (Financial Analyst), a
Consultant Civil Engineer, and a Consultant Marketing Specialist, following their mission to Malawi in
February 2006. The report was peer reviewed by Mr. Walter Odhiambo (Senior Agricultural
Economist). Enquiries should be addressed to Mr. A. Beileh, Manager, ONAR.1 (Ext. 2139) and the
authors.
i
AFRICAN DEVELOPMENT FUND
Temporary Relocation Agency
B.P. 323, 1002 Tunis Belvedere, Tunis, TUNISIA
Tel: (216 71) 333 511
Fax: (216 71) 351 933
Website: www.afdb.org
PROJECT INFORMATION
Date: May 2006
The information provided hereunder is intended to provide some guidance to prospective suppliers,
contractors, consultants and all persons interested in the procurement of goods and works for
projects approved by the Boards of Directors of the Bank Group. More detailed information and
guidance should be obtained from the Executing Agency of the Borrower.
1.
COUNTRY
:
Malawi
2.
PROJECT TITLE
:
Smallholder Crop Production and Marketing
Project (SCPMP)
3.
LOCATION
:
The project is located in 19 districts of Malawi.
4.
THE BORROWER
:
Government of the Republic of Malawi.
5.
EXECUTING AGENCY
:
Ministry of Irrigation and Water Development,
P.O. Box 30797,
Lilongwe 3, Malawi;
Tel: 265- 1 – 759730/752122
Fax: 265- 1 – 751459
6.
DESCRIPTION
: The project comprises three components: i) Irrigation
Development, with two sub-components (development of irrigation schemes and
environmental mitigation); ii) Farmer Support, with three sub-components (scheme
management, agriculture production and marketing); and iii) Project Coordination and
Management.
7.
TOTAL COST
:
UA 16.82 million
Foreign Cost
Local Cost
:
:
UA 9.63 million
UA 7.19 million
8.
9.
BANK GROUP LOAN/GRANT
ADF Grant
:
UA 15.00 million
OTHER SOURCES
Government of Malawi
Beneficiaries
:
:
UA 1.77 million
UA 0.05 million
ii
PROJECT INFORMATION (Cont’d)
10.
ESTIMATED STARTING DATE AND DURATION: January 2007 for 6 years.
11.
PROCUREMENT OF GOODS AND WORKS: Procurement of Goods and Works
will be in accordance with Bank’s Rules of Procedures. National Competitive Bidding
(NCB) shall be adopted for procurement of (i) civil works (ii) field trucks and
vehicles (iii) equipment and materials. Procurement of miscellaneous goods such as
bicycles shall be through the National shopping procedures.
12.
CONSULTANCY SERVICES REQUIRED AND STAGE OF SELECTION: Selection
of Consultants/Technical Assistance will be through shortlist. International TA:
Irrigation Engineer (139 person-month), Environmentalist (9 person-month), Water
Users Association Expert (16 person-month), Marketing Specialist (124 person-month).
National TA: Project Coordinator (72 person-month), Project Accountant (72 personmonth), Monitoring and Evaluation Specialist (124 person-month), Procurement Officer
(72 person-month), 10 District Project Officers (720 person-month), Project Audit (18
person-month) and Training Specialists (200 person-month).
13.
Environmental Categorisation: The project is classified as Category II
iii
ABBREVIATIONS AND ACRONYMS
ADD
ADF
ADMARC
AEDC
AWP/B
CAADP
CDC
CSF
CSP
CV
DA
DAEC
DAMT
DC
DCAFS
DDANR
DEC
DDMT
DoI
DPO
EAD
EIA
EIRR
EISA
EMA
ESA
ESMP
EPA
EU
GDP
GoM/GOM
IA
IFAD
INTOSAI
JICA
MC
MDGs
M&E
MFI
MGDS
MWK
MoAFS
MoNR
MoMNRE
MoIWD
MPRS
MRFC
NASFAM
Agricultural Development Division
African Development Fund
Agricultural Development & Marketing Corporation
Agricultural Extension Development Coordinator
Annual Work Plan/Budget
Comprehensive Africa Agriculture Development Programme
Community Development Committees
Communal Storage Facilities
Country Strategy Paper
Curriculum Vitae
District Assembly
Department of Agricultural Extension Coordinator
Directorate of Agriculture Management Team
District Commissioner
Donor Committee on Agriculture and Food Security
District Directorate of Agriculture and Natural Resources
District Executive Committee
District Management Team
Department of Irrigation
District Project Officer
Environmental Affairs Department
Environmental Impact Assessment
Economic Internal Rate of Return
Environmental and Social Impact Assessment
Environmental Management Act
Environmentally Sensitive Areas
Environmental and Social Management Plan
Extension Planning Area
European Union
Gross Domestic Product
Government of Malawi
Implementation Agreement
International Fund for Agricultural Development
International Organisation of Supreme Audit Institution
Japan International Cooperation Agency
Market Centers
Millennium Development Goals
Monitoring and Evaluation
Micro-finance Institution
Malawi Growth and Development Strategy
Malawi Kwacha
Ministry of Agriculture and Food Security
Ministry of Natural Resources
Ministry of Mines, Natural Resources and Environment
Ministry of Irrigation and Water Development
Malawi Poverty Reduction Strategy
Malawi Rural Finance Company
National Smallholder Farmers Association of Malawi
iv
NCB
NDP
NEP
NEPAD
NGO
NIPDS
NPV
O&M
OPEV
PC
PCR
PCU
PIU
PRA
PSC
PY
RBCSP
RDP
SA
SACCO
SCPMP
SFPDP
SMS
SSIDS
TA
TCE
UA
USAID
USD
WRA
WRB
WUA
WUG
National Competitive Bidding
National Decentralisation Policy
National Environmental Policy
New Partnership for African Development
Non Governmental Organisation
National Irrigation Policy and Development Strategy
Net Present Value
Operation and Maintenance
Operations Evaluation Department
Project Coordinator
Project Completion Report
Project Coordination Unit
Project Implementation Unit
Participatory Rural Appraisal
Project Steering Committee
Project Year
Results Based Country Strategy Paper
Rural Development Project
Special Account
Savings and Credit Co-operative
Smallholder Crop Production and Marketing Project
Smallholder Flood Plain Development Programme
Subject Matter Specialist
Small Scale Irrigation Development Study
Traditional Authorities
Technical Committee on Environment
Unit of Account
United States Agency for International Development
United States Dollars
Water Resources Act
Water Resources Board
Water Users Association
Water User Group
v
EXECUTIVE SUMMARY
1.
PROJECT BACKGROUND
1.1
The small-holder agricultural sub-sector which accounts for the bulk of food
production in Malawi is characterised by subsistence, low productivity and vulnerability to
natural vagaries such as droughts and floods. The Government of Malawi (GOM)
recognising the important role that irrigation plays in the improvement of productivity of
smallholder farmers, requested the Bank to finance the Small Scale Irrigation Development
Study (SSIDS). The Bank financed the SSIDS through a grant of UA1.12 million which was
completed in 2004. The SSIDS came up with a feasibility report for the present Smallholder
Crop Production and Marketing Project (SCPMP). Following a formal request from the
Government in November 2004, a Bank project formulation mission visited Malawi in
October 2005 and identified information gaps, developed a framework for the project, revised
the project scope, and agreed on a tentative list of project sites. This was followed by a Bank
appraisal mission in February 2006.
1.2
The project addresses one of the core challenges identified by the GOM’s draft
Malawi Growth and Development Strategy (MGDS) 2006–2011, which is the successor of
the Malawi Poverty Reduction Strategy Paper (MPRSP). The MGDS is aimed at achieving
and sustaining the Millennium Development Goals (MDGs) and making Malawi a hunger
free nation through fostering sustainable economic growth and the creation of wealth with
fair and equitable distribution. The MGDS recognizes that agricultural development will
drive medium term growth by expanding and diversifying production. The agriculture sector
is expected to contribute to sustainable economic growth which is considered central to
Malawi’s ability to reduce poverty, achieve the MDGs and gain self sufficiency. It is
recognized that, without achieving this growth, it will be impossible to deliver on the
Government’s vision of creating wealth and employment for all the people of Malawi.
Government efforts under the strategy are therefore expected to contribute to increased onand-off farm incomes and employment opportunities, leading to poverty reduction;
realization of Malawi as a hunger free nation; improved small holder profitability; and
protection of natural resources and the environment for sustainable growth. The proposed
project activities are also well anchored in the Government’s New Agriculture Policy,
National Irrigation Development Policy and the Decentralisation Policy. Thus the project will
contribute to the achievement of the goals of the MGDS and the Agricultural Sector Strategy.
1.3
The proposed project is anchored on Pillar I of the Bank Group’s Country Strategy
Paper (2005-2009) which seeks to help increase the level of irrigation infrastructure and
support agricultural/rural development. The CSP interventions are directly linked to the
strategic priorities of the MGDS and aligned with Vision 2020 and the MDGs. The Project
will also contribute to the achievement of core Comprehensive Africa Agriculture
Development Programme (CAADP) objectives of poverty alleviation and sustainable
development and the comprehensive agriculture mandate of the NEPAD initiative. The
project builds on the experiences gained from the various Bank financed projects in Malawi.
The choice of this smallholder irrigation intervention is in line with the ADF X strategy on
selectivity to boost production and productivity, food security and poverty reduction in
RMCs.
vi
2.
PURPOSE OF THE GRANT
The ADF grant of UA 15.00 million will be used to finance part of the investment and
recurrent costs of the project.
3.
SECTOR GOAL AND PROJECT OBJECTIVE
The overall sector goal of the project is to contribute to poverty reduction and food security in
rural Malawi. The specific objective of the project is to increase productivity and income of
rural households in the project area. This will be achieved through the promotion of
intensification and diversification of the existing cropping system and improvement to the
marketing system which will significantly increase production, productivity and incomes of
the small farmer whilst improving household nutrition and environmental management of
natural resources at the same time.
4.
DESCRIPTION OF PROJECT OUTPUTS
In order to achieve the stated objective, the project will focus on:
(A) Irrigation Development Component: including development of 39 small-scale irrigation
schemes; 1,140 treadle pumps provided to smallholder farmers; 3,055 ha developed for crop
production, cropping intensity increased from 1 to 2.5 times, crop productivity increases by
20%.
(B) Farmer Support Programme: including support for establishment of 39 Water Users
Associations; 600 smallholder farmers (300 women) trained in water management; 350
smallholder farmers (175 women) trained in crop production and pest control technologies;
76 extension officers receive training for trainers; 76 study tours involving 3,000 farmers and
extension staff undertaken; 8,750 persons trained on environmental mitigation measures and
health aspects related to irrigation; 3,450 persons (1,380 women) trained on techniques of
financial management and business planning, aspects of post harvest handling and in simple
market research concepts; construction of 26 community storage facilities and 14 market
centres.
(C) Project Coordination and Management: The project will provide resources for management
and coordination of the project including key project staff, equipment for project and district
coordination, monitoring and evaluation, supervision, preparation of audit and progress reports
and studies.
5.
PROJECT COSTS
The total cost of the project, including contingencies, is estimated at UA 16.82 million of
which UA 9.63 million (57.0%) will be foreign exchange, and UA 7.19 million (43.0%) will
be in local costs.
6.
SOURCES OF FINANCE
The project will be financed by the ADF and the Government of Malawi, including
contributions from the Beneficiaries. An ADF Grant amounting to UA 15.00 million or 89.1%
of total costs will be used to finance 98.2% of the investment costs, as well as 48.8% of recurrent
vii
costs (parts of all categories excluding salaries). The GOM contributions amounting to UA 1.77
million, or 10.6% of total costs, will finance salaries of national staff, the cost of 1,140 treadle
pumps (already purchased) and part of the operating costs. The beneficiaries will contribute UA
0.05 million or 0.3% of the total costs towards their share of infrastructure maintenance of
irrigation schemes and market infrastructure.
7.
PROJECT IMPLEMENTATION
The project will be implemented over a period of 6 years. The Executing Agency of the
project will be the Ministry of Irrigation and Water Development (MoIWD). The project will
be implemented within the established structures in the Ministry through the Department of
Irrigation (DoI) which will oversee project implementation, monitor project progress, and
coordinate and account for the utilisation of project funds. The DoI will be strengthened by
the recruitment of a technical staff comprising a Project Coordinator, Project Accountant,
Monitoring and Evaluation Officer, Irrigation Engineer Procurement Officer, Administrative
Officer and support staff. Since the main focus of project activities will be at the district level,
the project coordination process adopted is in line with the established decentralisation
process. In view of the insufficient capacity at the district level, 10 District Project Officers
(DPO) will be recruited to assist in the day to day implementation of project activities in the
districts that have many scheme sites.
8.
CONCLUSIONS AND RECOMMENDATIONS
8.1
Conclusions
The project is technically feasible, economically viable, environmentally sound, and socially
desirable. The project is participatory in its design and decentralised in its implementation
with a significant beneficiary input intended to ensure sustainability. The project is demanddriven as there was considerable participation of stakeholders in the preparation process. This
should bring about a high degree of ownership of facilities developed through the project and
provide some guarantee of sustainability. Further guarantees are provided by the technically
unsophisticated nature of many of the interventions and their simple maintenance
requirements and by the use of existing government structures for project implementation.
The project meets the government objective of improving the productivity of smallholder
agriculture. The project will also contribute significantly to achieving the MDGs of halving
the proportion of people living in extreme poverty by 2015, and promoting gender equality
and empowerment of women through their involvement in project activities.
8.2
Recommendation
It is recommended that a grant of UA 15.00 million be granted to the Government of Malawi
for the purpose of implementing the project as described in the report and subject to the
conditions specified in the protocol of agreement.
viii
Malawi
Smallholder Crop Production and Marketing Project
Result-Based Logical Framework
Hierarchy of Objectives
EXPECTED RESULTS
by sector and theme
REACH
Sector Goal/Theme
Sector/Theme
Long term Outcome
1. Increased smallholder farm
and rural incomes
Beneficiaries
1. Smallholder
farmers
2. New job opportunities
2. Rural population
Contribute to poverty reduction and food
security in Malawi.
Project Objective
Improve productivity and incomes
through:
1. Promotion of the intensification and
diversification of the existing cropping
systems.
2. Improvement to the agricultural
marketing system
Activities/Inputs
1. Irrigation Infrastructure
Development
1. First phase of Irrigation infrastructure
development in 28 sites in 17 districts
2. Second phase irrigation infrastructure
design and implementation of 11 sites
in 5 districts.
3. Supervise construction works
3. Increased product quality
leading to better prices of farm
produce.
3. Consumers in
Malawi
Sector/Theme:
Medium Term Outcome
Beneficiaries
1. Increased incomes for
smallholder farmers
2. Improved household nutrition
and environmental management
of natural resources
3. Better organised market
Sector/Themes
Short-Terms OUTPUTS
Irrigation Infrastructure
Development and Mgt
1. Increased irrigated land by
3,055 hectares through
development of new irrigation
schemes
2. improved farming performance
and efficiency
1. About 8,756
Smallholder household
farmers in project area,
4,000 of whom will be
female headed
households
2. About76% of
Malawi rural
population will benefit
(directly or indirectly)
from the market
improvement activities
Beneficiaries
Farmers
WUA
Smallholder farmers at
39 sites in 19 districts
PERFORMANCE
INDICATORS
SOURCE & METHOD
Verifiable Indicators
Long Term outcome
1. Value of sales by smallholder
farmer groups
2. Average income within the
participating smallholder farmer
groups
Source: Commodities
Competitiveness and M&E reports
and MGDS reports.
Indicators
Medium Term Outcome
1.Iincrease in yield obtained by
farmers from irrigation
2. Smallholder farmers sales from
agriculture products increased
INDICATIVE TARGETS TIMEFRAME
Target Indicators and Timeframe
1. Smallholder sub-sector contribution to
agricultural GDP increases from 80% in PY1 to 90%
per annum in PY6
2.
Area developed in irrigation
(ha)
WUAs
3.
Cropping pattern and yield in
project area
Assumption Continuity in GoM
reform policy
2. Smallholder contribution to rural employment
increases from 80% In PY1 to 83% in PY6
Risk mitigation: Government
Policy decision already taken to
encourage investment and
economic growth
Target Indicators and Timeframe
Assumptions/ Risks
1. Yield increased from 1.13t/ha to 1.18t/ha (maize);
16.67t/ha to 19.93t/ha (cabbages); 0.29t/ha to
0.33t/ha (paprika); 0.45t/ha to 0.49t/ha (chillies);
20t/ha to 22.23t/ha (onions); 1.17t/ha to 1.26t/ha
(rice); from PY1 to PY6
Assumption
2. Smallholders’ farm sales increased from 1 % in
PY1 to 10% per annum by PY6
- No major drought occurs
- No conflict among beneficiaries
Risk Mitigation
-water reservoirs/small dams
constructed, appropriate training of
farmers
- effective communication &
sensitisation of farmers
Source: Market competitiveness
analyses and M&E reports
INDICATORS
Short-Terms outputs
Irrigation infrastructure developed
and efficiently managed
1.
Number of irrigation schemes
in place and operational
Main Assumptions/Risks
TARGET INDICATORS
TIMEFRAME
Area provide by irrigation infrastructure
Assumption/statement and Risk
Mitigation
1.
First phase development of 1550 ha in 28
irrigation schemes in 17 districts operational
by PY3
2.
Second phase development of 1505 ha in 11
irrigation schemes in 5 districts operational by
PY4
Assumptions
1. Favourable weather conditions
prevail.
2. Project Beneficiaries follow
through with their stated interest
Risks Mitigations
1. sensitisation of farmers
2. project designed to reach the
ix
Hierarchy of Objectives
4. Environmental mitigation measures
4.1a Preparation of comprehensive site
specific ESMP for the 28 identified
irrigation schemes
EXPECTED RESULTS
by sector and theme
3. ESMP and ESIA for all the 39
schemes prepared
4.1b Preparation of an ESIA study an
related site specific ESMP for the 11
irrigation schemes to be developed in phase
II
3.1 Environmental Management
Certificates and related terms &
conditions
4.2a Institutional strengthening of DOI,
Department of Agriculture, Land resource
and Conservation Department in
Environment Management & Monitoring
3.2 EIA certificate & related
env. Management certificate
4.2b Institutional strengthening of District
Environmental units in the targeted project
districts
3.3 Compliance with EIA/Env.
Mgt certificate for the project
PERFORMANCE
INDICATORS
SOURCE & METHOD
4.
Person month provided for
works supervision
5.
Number of ESMP and ESIAs
completed
6.
Payment of EIA processing
fees, implementation of
mitigation measures
1. 28 irrigation
schemes
2. 11 irrigation
schemes
INDICATIVE TARGETS TIMEFRAME
Main Assumptions/Risks
3.
Cropping intensity increased from 1 in PY1 to
2.5 times by PY 5
4.
Crop productivity (rice, maize and vegetables)
increased from 1% in PY1 to 8% by PY 6
poorer segment of society
3. Farmers' Support component
addresses the issue of farmers
participation and capacity
building include WUA
formation.
5.
Environmental Mitigation measures before,
throughout and after project implementation
3. Line ministries
4.3 Undertake end of project Environmental 3.4 Review compliance with
EIA and Env. Mgt certificate
Audit
terms & conditions
4.4 Social: Prevention of HIV/AIDS,
3.5 Health consultant & district
prevention of waterborne diseases,
health officer recruited
awareness campaigns etc.
Component Cost: (UA 9.05 million)
REACH
4. 19 Districts
5. 39 irrigation
schemes
Source: M&E and supervision
Reports, Semestrial/annual auditing
of ESMP by the Env. Affairs Dept.
(EIA Unit)
Source: M&E and supervision Reports,
Semestrial/annual auditing of ESMP by the Env.
Affairs Dept. (EIA Unit)
x
Hierarchy of Objectives
2. Farmers Support Component
2.1 Scheme Management
2.2 Agricultural Production
1.
2.
3.
4.
5.
Training in Irrigation and Crop
Production Techniques
Support to Farmers’ Organizations
Support to Extension Service
Community Development Activities
Formation of Savings and Credit
Groups
2.3 Marketing
1. Marketing Capacity Building and
Competitiveness
2. Marketing Infrastructure
EXPECTED RESULTS
by sector and theme
REACH
PERFORMANCE
INDICATORS
SOURCE & METHOD
INDICATIVE TARGETS TIMEFRAME
Main Assumptions/Risks
Smallholder farmers
Quality of maintenance by users
28 WUA established by PY3 and another 11 by PY4.
Assumptions:
1. Farmers will be responsive and
actively participate in WUA
Risks and Mitigations:
Risks:
-The farmers will not be able to
operate and maintain the irrigation
schemes efficiently
Mitigations:
-Extensive training support will be
undertaken during the project.
1. Improved irrigation, crop
husbandry and Integrated Pest
Management techniques
2. Farmers organizations operate
as legal entities through
appropriate participatory
methodologies
3. Improved capacity for district
staff and extension services.
1. Small holder
farmers
1. No. Extension staff & farmers
trained
1. Training of 600 farmers (300 of which would be
women) yearly from PY1 to PY6
2. WUAs
2. No. Savings & Credit groups
established
2. Training of 76 Field Agents, at least 25 of which
will be women, from PY1 to PY6
1. Training conducted and
competitiveness analysis
conducted
2. Communal Storage Facilities
(CSF) and market Centre (MC)
constructed
Farmers/ Buyers
Water Management, Crop
Production, Marketing, and
Extension
39 WUAs formed and operating
3. Beneficiary families
3. Training of 122 district engineers/extension staff,
at least 50 of which will be women, from PY1 to
PY6
1. Number of person trained
2. Number of studies conducted
3. Number of CSF and MC
constructed
4. % reduction in post harvest
losses
5. Negotiation ability of farmers or
their organisation
Source: M&E and Supervision
Reports
Component Cost UA 6.55 million
1. 86 farmer groups (each group comprising 40
farmers) of which 40% (or 16 group members) are
women, trained by end of project (PY6)
2. Three commodity competitiveness studies
conducted during project implementation (1 in PY1,
1 in PY4, and 1 in PY6)
3. Total of 26 CSF constructed in 26 schemes (6 in
PY2, 6 in PY3, 6 in PY4 and 8 in PY5) and Total of
14 MC constructed in 14 Districts (3 in PY2, 3 in
PY3, 3 in PY4 and 5 in PY5)
Assumption/statement
- WUAs structure and operational
procedures are coherent with
irrigation policy.
- Appropriate audit structures are
functioning.
Risk mitigations
1. Continuous sensitization of
farmers on importance of group
formation & training
Assumption
Demand for vegetables &
horticultural crops will increase at
least proportionately to demographic
growth,
Risk Mitigation :
Promote diversification to
compensate for temporary price
fluctuations in particular crop i.e.
improve crop-mix
xi
Hierarchy of Objectives
EXPECTED RESULTS
by sector and theme
a.
Project Coordination
•
•
•
•
•
•
•
•
Project Coordination
Recruitment of Technical Team
Bidding and shopping documents
prepared and competition launched;
Contracts for training staff signed and
implemented;
Contracts for designs and works
inspection and supervision signed;
Midterm review, final evaluation and
audit of accounts conducted regularly
and without delay
Component cost: (UA 1.22 million)
Project Total (UA 16,82 million)
- Project Management
established and staff recruited
- Timely and efficient project
implementation
REACH
Project
Project staff
PERFORMANCE
INDICATORS
SOURCE & METHOD
•
Progress and supervision
reports,
•
Bidding Documents, contracts
and progress and supervision
reports;
•
Monitoring-evaluation reports
•
Midterm review and final
evaluation, as well as annual
project account audit report
INDICATIVE TARGETS TIMEFRAME
Main Assumptions/Risks
Assumption
1 PC, 1 accountant, 1 M&E, 1 Procurement
Specialist and staff provided by Gvt are in place by
second quarter PY1.
No delays in project activities
Risk mitigation
Qualified staff will be recruited
1
1.
ORIGIN AND HISTORY OF THE PROJECT
1.1
The Republic of Malawi is a landlocked country bordered by Mozambique, Zambia
and Tanzania (Annex 1). It has a total area of 11.8 million ha of which one-fifth is taken up
by water, principally Lake Malawi. In 2004, the population of Malawi was estimated at 12.5
million, growing at 2% per year (over 7% in urban areas). Population density is high (and
rising), as is the dependency ratio of 0.906 (every 10 working persons are supporting over 9
dependents). Poverty is widespread, and Malawi’s social indicators are among the lowest in
the world. According to poverty analysis undertaken in 2000, based on 1997/98 Integrated
Household Survey (IHS) data, around 64% of Malawians live below the poverty line. Around
66% of the rural population live below the poverty line, compared to around 55% in urban
areas.
1.2
The main development issues facing Malawi’s agriculture are the low productivity
and profitability of smallholder agriculture, which have been characterized by low and
stagnant yields, particularly in maize production systems. Consequently, the majority of
Malawians face severe food insecurity for larger parts of the year and poverty in general.
Malawi has over the last decade generally run food deficits, relying on food imports and food
aid, with an estimated 40% of the country’s population unable to satisfy its caloric needs of
2,200 kilocalories per day and 55% of rural population suffering from chronic food
insecurity. It is estimated that over 50% of rural households run out of food between 4 and 6
months after harvest and have to seek opportunities of earning supplementary income to
purchase food on the market.
1.3
The small-holder agricultural sub-sector which accounts for the bulk of food
production in Malawi is characterised by subsistence, low productivity and vulnerability to
natural vagaries such as droughts and floods. The Government of Malawi (GoM) recognising
the important role that irrigation plays in the improvement of productivity of smallholder
farmers, requested the Bank to finance the Small Scale Irrigation Development Study
(SSIDS). The Bank financed the SSIDS through a grant of UA1.12 million which was
completed in 2004. The SSIDS came up with a feasibility report for the present Smallholder
Crop Production and Marketing Project (SCPMP).
1.4
Following a formal request from the Government in November 2004, an ADB project
formulation mission visited Malawi in October 2005 and developed a framework for the
project, revised the project scope, agreed on a tentative list of project sites and identified
information gaps. This was followed by a Bank appraisal mission in February 2006. The
proposed project is anchored on Pillar I of the Bank Group’s 2005-2009 Country Strategy
Paper (CSP) which seeks to increase the level of irrigation infrastructure and support
agricultural/rural development.
The CSP interventions are directly linked to the
Government’s Malawi Poverty Reduction Strategy (MPRS), Malawi Growth and
Development Strategy (MGDS), Vision 2020 and the MDGs.
2.
THE AGRICULTURE SECTOR
2.1
Overview of the Sector
2.1.1 Agriculture is the most important sector of the Malawian economy. Depending on
climatic conditions, the sector accounts for about 40% of the Gross Domestic Product (GDP),
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contributes about 75% of the country’s export earnings and generates income for around 84%
of the population. It provides raw materials for about two-thirds of the manufacturing sector,
and dominates the commercial and distribution sectors. Tobacco, tea and sugar which are the
three main agricultural export products, make a contribution of about 80% to Malawi’s
annual export earnings. Maize and tobacco are grown throughout the country, whereas sugar
and tea are produced mostly in the South. Maize is the major staple food crop with 60% of
the total cropped land devoted to its production. Livestock contributes about 7% to GDP. The
livestock enterprise is largely constituted by ruminants such as cattle, goats and sheep and
monogastrics such as pigs and chickens. The livestock enterprise provides for both
subsistence and commercial requirements.
2.1.2 The agricultural sector is characterised by a dualistic structure, with one sub-sector
consisting of low input/low productivity smallholder farms and the other comprises relatively
large scale, modern estates. It is estimated that of the 5.3 million hectares (56% of total land
area of Malawi) that are considered arable, smallholder farmers cultivate 2.7 million hectares
(51% of total arable land), and 0.9 million hectares belong to the estate sector. Furthermore,
wetlands, which are normally not classified as arable, constitute about 0.3 million ha. Many
of these wetlands commonly known as dambos or dimbas, are actually cultivated and are an
important source of food. Their importance as cultivated areas increased during and after the
1992 drought but there is a limited amount of information on their use for agriculture.
2.1.3 The smallholder sub-sector provides employment for about 80% of the rural
workforce and contributes around 80% of agricultural GDP (commercial farmers produce the
rest). Smallholder farmers operate on customary land or small scale leasehold estates. Most
are engaged primarily in subsistence, rain-fed farming with little or no surplus due to small
farm size, low productivity, limited productive assets, vulnerability to drought and crop
diseases. However, the national food supply is heavily dependent on smallholder agriculture.
Smallholder farmers cultivate a variety of crops, including maize, sorghum, millet, sweet
potatoes, cassava, groundnuts, cowpeas, soybeans, pigeon peas and vegetables. They also
grow cash crops such as tobacco, paprika and cotton.
2.1.4 About 55% of smallholders have farm sizes below 1.0 ha and another 25% have an
average size of only 0.25 ha to satisfy their basic food requirements. The food supply
produced on such small plots is enough for only six months of the year. During the rest of the
year smallholder farmers have to depend on off-farm activities to raise the necessary cash for
their food supply. Crop yields have not improved much in the last decade (1988/89 to
1999/00) and the mean yields are far below the potential for Malawi. Average maize yields
have remained below 1.0 metric ton/ha for the past decade. Large scale commercial estates
located in the high potential areas are engaged, primarily, in the production of export crops
such as tobacco, coffee, tea and sugarcane.
2.1.5 Performance: From 1992 to 1994 the agricultural sector experienced a negative rate,
mainly due to two major droughts in 1991 and 1993. Following reasonable rains and
subsidised distribution of seed and fertiliser to smallholder farmers in 1994, the country
enjoyed a relatively good harvest in 1994/95 and 1995/96 seasons. It is estimated that in the
1994/95 season, agricultural production grew by a robust 29.7% and in 1995/96 the sector
registered 38% growth over the previous year. This continuous growth was mainly due to
expansion of smallholder production that resulted in a 35% increase in maize production in
1995/96 compared to 1994/95. However, due to erratic rains, compounded by socioeconomic factors such as failure of the majority of smallholder farmers to access improved
3
technologies such as inorganic fertilisers and improved maize seed, the country failed to
maintain the production of maize surpluses, hence the government was forced to import
maize to meet domestic demand. Throughout the remainder of the decade, agricultural sector
growth was characterised by volatile changes due to drought, resulting in a sharp fall in
agricultural output. The country has since the mid-1990s persistently registered deficits on
maize production which have been supplemented by imports or food aid.
2.1.6 In the past, the large scale estate sub-sector has grown faster than the smallholder subsector. Between 1980 and 1994, estates grew at an annual average rate of 5.05% while the
smallholder sub-sector grew at only 0.36%. Much of this growth can be attributed to an
expansion of the area under burley tobacco, which at that time could not be grown by farmers
on customary land. The increase in production of cash crops has resulted in reduction of
arable land for the cultivation of food crops. Due to the pressure on arable land, smallholder
farmers have been forced to cultivate marginally productive land, consequently reducing crop
yields.
2.1.7 Marketing: The Agricultural Development and Marketing Corporation (ADMARC)
was, up until 1987, the sole buyer of smallholder produce with depots nation-wide. This
monopoly has been removed by the structural adjustment reforms of the 1980s and
ADMARC is now one of the many traders, but still remains a buyer of last resort. In the
agricultural sector the reforms involved the following measures: liberalisation of smallholder
agricultural produce marketing coupled with the removal of subsidies on producer and
consumer prices, especially of maize and fertilisers; deregulation of producer and consumer
prices with the exception of maize where prices are supposed to swing within the
government’s maize price band; liberalisation of fertiliser marketing, seed production and
marketing and tobacco production and marketing. The aim of the reform has been to remove
barriers and the restriction in the production and marketing of agricultural commodities and
to encourage private sector participation in the agricultural trade. ADMARC purchases
currently account for about 1% of smallholder production.
2.1.8 The market liberalisation has encouraged a number of other organizations such as the
National Smallholder Farmers Association of Malawi (NASFAM) and Horticulture
Development Organisation of Malawi (HODOM), to enter into agricultural produce
marketing. However, these organisations are not involved in the marketing of perishable
produce such as vegetables. For example, NASFAM, which has centres located in thirteen
districts, encourages smallholder farmers to form cohesive village-based clubs and
associations in order to grow and market high value cash crops including chillies, cotton,
groundnuts, rice, paprika and soya. Its next strategic plan will also focus on horticulture
crops. Currently, NASFAM has a membership of over 100,000 smallholder farmers in 32
Associations. NASFAM also operates input supply centres and also links its associations to
credit institutions like the Malawi Rural Finance Corporation (MRFC), National Bank of
Malawi and New Building Society.
2.1.9 In general, perishable horticultural crops are mainly bought by vendors and
intermediaries from the nearby trading centres and towns. These handle small quantities of
produce at a time that are quickly transported to the markets and do not need storage facilities
within the rural areas. Farmers also take their produce to periodic markets in the nearby
trading centres and to markets in the large urban centres, such as Lilongwe and Blantyre.
Facilities to store perishable produce after harvest are not available in the rural areas except
4
for Irish potatoes and sweet potatoes that can be preserved in specially built ventilated sheds
for 2 to 3 months.
2.1.10 Malawi is a net importer of most cereals and horticulture crops. Any increase in
production of these crops will reduce its imports. The imports of rice and maize have been
fluctuating in the last 5 years; it was 2,252 tons of rice and 9,326 tons of maize in 2001. In
2002, there was a shortage in the production of rice and maize which resulted in the
importation of 348,365 tons and 11,278 tons of maize and rice respectively. While in 2003,
the imports of rice and maize were 5,456 tons and 61,836 tons respectively; and imports of
263 tons and 6,865 tons of rice and maize respectively was reported in 2004. The project is
expected to increase annual production of maize and rice by 13,296 tons and 1,813 tons
respectively, in addition to the increased production of other vegetable (high cash crops).
2.2
Land Use and Land Tenure
2.2.1 The Land Act of 1965 created three regimes of tenure, which are customary, freehold
and leasehold tenure. There are three categories of land, namely, customary (87%), public
(11%) and private land (2%). Customary land, which accounts for land ownership in the
project area, is that held and used in accordance with customary law. The Act declares the
land the lawful property of the people of Malawi and administered by the President on behalf
of the people. Through the Minister, the state has ultimate powers of administration and
control over customary land. The village chief or other traditional authority is authorised to
allocate land that is not occupied and, once allocated, the land is handed down within families
through the generations along the male or female line, depending on the family system
(matrilineal or patrilineal system of inheritance and succession) that dictates the inheritance
rights (land use, property rights and ownership). Under a patrilineal system, the land-use
rights will pass from father to son, while in a matrilineal system they pass from mother to
daughter. However, the “owner/user” of the land has no legal right to it and the village
headman may reallocate unused part of the plots to other residents of the village or
newcomers. Although the traditional authority still has power over land, which may have
been cultivated for generations by families, this power is rarely exercised. This situation does
not encourage investment on the land as the owner/user will consider this to be too risky. In
addition, the cultural practice that the living partner of a marriage does not inherit the land he
or she has cultivated adds further risk and discourage investment on the land. The traditional
authority has the responsibility for ensuring that all the land issues are handled in an
acceptable manner and conflicts are avoided.
2.2.2 In order to encourage farmers at the project sites to invest in irrigation infrastructure
and develop their own plots, a signed agreement was obtained from each village headman by
the SSIDS team, stating that land use rights for those presently cultivating in the scheme sites
would not be altered. In addition, the ownership of the land would be transferred to a Water
Users’ Association to be formed at each site. The land ownership would be legalised as a
long term leasehold to the WUA. This requires the WUA to be registered as a legal entity and
within its constitution the old land use rights would be adopted.
2.2.3 Private land is defined as that which is held or occupied under freehold title, leasehold
title, a Certificate of claim, or which is registered as private land under the Registered Land
Act of 1967. This definition is based on the tenurial arrangements under which the land is
held. Public land refers to land occupied, used, or acquired by the Government or any other
land which is neither customary nor private.
5
2.2.4
The National Land Policy, 2002: The National Land Policy was adopted in 2002
and focuses on land as a basic resource to all people of Malawi. The new policy provides
opportunities for the people of Malawi to embark on a path of socially and environmentally
sustainable development. In addition, the policy highlights a number of approaches for
addressing problems facing the land resource sector.
2.3
Poverty, Health and Gender Aspects
2.3.1 Poverty in Malawi is wide spread, and is more severe in rural areas where about 85%
of the country's population resides. Recent Government estimates indicate that about 64% of
Malawians live below the poverty line. Around 66% of the rural population lives in poverty
as compared to 55% in urban areas. Nationally, women earn less than men per annum, make
up 67% of the population below the poverty line, and constitute almost 92% of the population
with no formal literacy skills. Gender-based variations in the incidence of poverty do not
appear to be significant: the incidence of poverty among female headed households is 29%
while it is 26% amongst male-headed households. But female household heads are
disproportionately poor; 64% of rural female-headed households and two-thirds of
individuals in rural female-headed households are poor. Poverty is deeper and more severe in
female-headed households, suggesting that the ultra poor are more likely to be living in
female-headed households.
2.3.2 The pervasiveness of poverty in Malawi is reflected by the poor socio-economic
indicators. For example, life expectancy in Malawi dropped from 43 years at birth in 1996 to
about 38 years at birth in 2004. In 2001, 49% of children under 5 years of age were found to
have stunted growth, up from 30% in 1995, being a direct consequence of malnutrition. In
addition, it was found that poor households consume only 66% of the recommended daily
calorie requirement - highlighting high levels of food insecurity. The HIV/AIDS epidemic in
Malawi is one of the most severe in Africa. It is estimated that 15% of adults aged 15-49 are
infected, and that this infection is concentrated in the younger half (ages 15 to 24),
particularly women. The urban infection rate in adults is estimated to average 23%, compared
to 12.4% in rural areas. However, there is evidence indicating that HIV prevalence has
stabilized over recent years at around 15%. The fact that HIV/AIDs is the leading cause of
death in the most productive age group (20-49 years) points to its potential adverse effects on
rural labor and rural labor productivity. Farmers, especially women farmers, spend more of
their time caring for the sick, thus spending less time tending to their agricultural enterprises.
2.3.3 Women are reported to comprise about 60% of smallholder farmers. They spend as
much time on farm work as they do on domestic activities – and they work as much as men
on the farm. Women contribute labour to both cash and food crops and there is no
differentiation between men and women’s operations. They sow, weed, apply fertiliser and
pesticides, harvest, and process the crops. Women’s contribution to nutrition and a balanced
diet is considerable. They are the major growers of legumes and vegetables for home
consumption. Women care for the all-important small livestock - poultry, goats, pigs, and
rabbits. These are often the only animals owned by poor families. Although most households
are still headed by a man, 26% of rural households are headed by women. Female household
heads make almost all decisions in their households, while women in male-headed
households may make decisions on their own or in consultation with the husband. On
average, the decision to grow most crops is taken by both husband and wife. However, females
tend to make more decisions on food crops such as maize, rice, sweet potatoes, beans, cassava,
6
pumpkin and groundnuts, while men predominate in decision making on cash crops such as
soybean, sunflower, exotic vegetables, tobacco, wheat, cotton and coffee.
2.4
Sector Development Constraints
The agricultural sector is operating in an environment that is full of challenges which
contribute to low productivity and profitability. These challenges include:
i) Poor access to agricultural inputs by the majority of smallholder farmers due to high
costs of inputs, low access to credit, unavailability of the inputs, and a heavy reliance
by farmers on local seed particularly maize (75%);
ii) Poor infrastructure to support initiatives for improved productivity. These include
lack of adequate and competitive markets for products, transport and other
communication facilities;
iii) Low adoption of improved technologies such as irrigation techniques, agro-processing
facilities due to inaccessibility and unaffordability of those technologies for most
farmers;
iv) Unfavourable weather conditions characterized by inadequate or excess rains in some
seasons, dry spells, droughts and washaways;
v) HIV/AIDS impact on the productive age group;
vi) Gender imbalance characterized by marginalization of vulnerable groups like women,
children, orphans, old and the poor in the formulation, implementation and sharing of
benefits from agriculture programmes; and,
vii) Heavy reliance on rainfed agriculture.
2.5
Sector Development Policy and Strategy
2.5.1 New Agricultural Policy: The Ministry of Agriculture and Food Security has
developed a New Agricultural Policy (2005) in order to outline the actions to be implemented
by the institution and other stakeholders in the agriculture sector in an effort to create ‘a
nation with sustainable food security and increased agro-based incomes’. While the
national goal is to create wealth through poverty reduction, this policy specifically seeks to
fulfill the mandate of the Ministry of Agriculture which is, ‘to promote and facilitate
agricultural productivity so as to ensure food security, increased incomes and creation of
employment opportunities through the sustainable management and utilization of natural
resources, adaptive research and effective extension delivery system, promotion of valueaddition and agribusiness and irrigation development’.
2.5.2 Some of the objectives to be achieved through the implementation of the policy include:
(i)
Revitalization and development of marketing infrastructure in Malawi to
induce production through: the rehabilitation and commissioning of ADMARC
markets throughout the country with priority on maize purchases, organization and
strengthening of farmer cooperatives, provision of timely market information (prior to
planting), up-scaling of existing market information systems; establishment of Malawi
commodity exchange market; promotion of maize contract farming to service
strategic grain reserves and promotion of agribusiness training and practices.
(ii)
Increasing and stabilizing agricultural production through: rehabilitation of
existing irrigation facilities; development of new large scale irrigation schemes;
7
development of water resources for irrigation through construction of dams, drilling
of boreholes and canalization; enhanced technical capacity in irrigated agriculture
through support to training institutions, staff and farmer training.
(iii)
Enhance uptake of improved technologies for increased agricultural
production through: development of appropriate technologies such as high yielding,
drought tolerant and disease tolerant crop varieties and livestock breeds; provision of
pluralistic extension services through improved extension methodologies; promotion
of Agriculture Extension Services through the District Agriculture Services System;
and conduct of intensive farmer training programmes.
(iv)
Promote commercialization of farming in the smallholder agriculture sector
through: initiation of smallholder farmer managed agriculture credit system; enhanced
linkage between farmer organizations and microfinance and marketing institutions;
facilitation of formation and management of agricultural cooperatives in ADMARC
markets; facilitation of formation and management of sustainable farmer based
organizations.
(v)
Reduce HIV/AIDS impact and gender disparities in the agricultural sector
through: mainstreaming of gender and HIV/Aids at work place and farming
communities; promotion of agro-based income generating projects for vulnerable
groups; generation of technologies that are friendly to HIV/Aids affected persons and
promotion of dietary diversification.
(vi)
Promote access to agricultural inputs through introduction of targeted subsidy
for fertilizers, seeds and livestock inputs. Prioritization of provision of inputs for
maize production to enhance food security; establishment of a land bank for the
agricultural sector with concessional rates; promotion of use of hybrid and open
pollinated varieties (OPV) maize seeds and fertilizers; promotion of food-for- work
programmes targeted for agricultural production, such as distribution of inputs and
construction of agricultural infrastructure; promotion of organic manure production
and agroforestry technologies; and promotion of seed production of all crops
2.5.3 The National Decentralisation Policy: The National Decentralisation Policy (NDP)
approved in 1998 provides the main framework for implementation of decentralisation in the
country. The Local Governments Act (1998) provides the institutional details of the local
government structure, including key structures, procedures (including elections),
accountabilities and remedies. The National Decentralisation Policy (NDP) backed by the
Local Governments Act (1998) devolves political and administrative powers and
responsibilities to Assemblies. One key aspect of the Decentralisation Policy is that it
removes implementation functions from central government and transfers them to the District
Assemblies. The NDP seeks to achieve a number of objectives, namely, (i) to create a
democratic environment and institutions in Malawi for governance and development, at the
local level which will facilitate the participation of the grassroots in decision making; (ii) to
eliminate dual administrations (field administrations and local government) through the
integration of governmental agencies at the district level into one administrative unit with the
aim of making public service more efficient, more economical and cost effective; (iii) to
promote accountability and good governance at the local level in order to help government
reduce poverty; and (iv) to mobilise the masses for socio-economic development at the local
level.
8
2.5.4 At the district level, the local government system is made up of District Assemblies
(DA) whose functions include making policy decisions on local governance and development
in the district, promotion of infrastructural and economic development through district
development plans, and consolidation and promotion of local democratic institutions and
democratic participation. The DA has elected Ward Assembly members called Councillors
from each ward of the Assembly. There are also additional appointed Assembly members
representing interest groups. These are ex-officio with no voting powers. Other non voting
members are Traditional Authorities (TA) and Members of Parliament within the jurisdiction
of the Assembly. The DA has been given the mandate to employ its own staff.
2.5.5 The Assembly Secretariat headed by a District Commissioner (DC) is the main organ
for implementing policies at Assembly level under which all sectoral policies and functions
are executed. There is an administrative structure comprising of the District Executive
Committee (DEC) chaired by the DC which plays an advisory role to the Assemblies. It
comprises heads of various governmental departments, officials from parastatals and
representatives of Non Governmental Organisations (NGOs). Linked to the Assembly on the
policy implementation are the Community Development Committees (CDCs). The CDCs are
charged with the mobilization of community resources and the determination of development
interventions in their areas. They are responsible for identifying needs and facilitating
planning and development in local communities.
2.5.6 The functions and services of the line ministries at the district level have been
assigned to the DA. The line ministries are responsible for sectoral policies, standards and
general oversight over Assemblies. They provide technical guidance, monitor and mentor
local governments in their respective sectoral policies and strategies. Ministries and
departments involved in devolution are required to prepare sector devolution plans and have
these approved by the Cabinet Committee on Decentralization. At the Assembly level, the
line ministries are represented by the Technical Departments in the DEC, who implement
sector activities.
2.5.7 The major problems with regard to capacity at the local government level are: (i) lack
of adequately qualified staff in key positions particularly at middle management level; (ii)
insufficient equipment; (iii) inadequate financial resources; and (iv) shortcomings in
organisational and human resource management. The recruitment process of staff in local
governments is often long and unpredictable. Moreover, the incentives for well qualified
personnel to work in the districts are low. In general, staff are not adequately trained and
prepared for their tasks especially when new policies and public financial management tools
are introduced. Existing staff is required to assume additional responsibilities and extra
workload thereby affecting their performance. As a result, many central government
institutions are reluctant to devolve functions to local government levels because they have
concerns regarding the capacity of staff in local governments.
2.5.8 The National Decentralisation Policy was designed to be implemented in phases
focusing on transfer of functions of five key sectors (Education, Water, Housing, Agriculture,
Commerce and Industry, Gender) in the first phase while building the institutional capacity at
the centre and the local government for effective management of the process and without
disrupting delivery of services at the local level. Other key activities included support to
ministries to prepare sector devolution plans and transfer of functions to assemblies,
9
recruitment and training of staff and systems development in areas of development planning,
fiscal devolution, financial management and accounting and human resource management.
2.5.9 The National Decentralisation Programme (NDP) has been developed as a strategic
coordination framework for effective implementation of the National Decentralization Policy
and Local Government Act over a period of ten years, from 2000 - 2010. The NDP will also
serve as a tool for mobilizing resources from stakeholders and development partners wishing
to support the implementation of the decentralization process in Malawi. The first National
Decentralization Programme (NDP I) was developed and implemented from 2001 – 2004 and
covered legal reforms, institutional development and capacity building, fiscal
decentralisation, accounting and financial management, sector devolution and local
development planning. The main donors financing the programme were UNDP, NORAD, the
Bank and GTZ.
2.5.10 From the review of the achievements of NDP I undertaken in 2004, it was noted that
10 Sectors (Education, Health, Agriculture, Natural Resources and Environmental Affairs,
Water, Gender and Community Services, Lands and Physical Plans, Transport and Public
Works, Commerce, Housing) prepared their Devolution Plans. Seven sectors (Health,
Agriculture, Water, Gender and Community Services, Transport and Public Works,
Commerce, Housing) prepared their Sector Devolution Guidelines to guide the absorption
and implementation of devolved functions. Some sectors (Agriculture, Gender, Commerce,
Water, Housing, and Education) commenced transferring some functions to the assemblies.
Guidelines for managing devolved activities had been prepared by 7 line ministries and
District Assemblies had started managing some of the devolved functions.
2.5.11 The transfer of defined functions and resources to local assemblies by key sectoral
ministries has been slow. This slow pace has been attributed to: (1) limited appreciation of
the benefits of devolutionary decentralisation; (2) absence of a clear political and institutional
driver for the devolution process and (3) fear among politicians and government officials of
losing control over resources. The review programme has resulted in the preparation of the
second phase of the programme for the 2005-2009 period – National Decentralization
Programme II. Accelerating the transfer process will be the centrepiece of NDP II.
3.
IRRIGATION SUB-SECTOR
3.1
Overview
3.1.1 Malawi’s agriculture is mainly rain-fed. There are two distinct seasons, the rainy
summer season and the dry winter season. In the former, crops are mainly rainfed with some
occasional supplementary irrigation, while in the latter crops are fully irrigated or use residual
moisture plus supplementary irrigation. The summer crops are grown mainly on the uplands,
and are normally planted at the start of the rains from late October to early December. All the
major cash crops are grown under this system, including maize, cassava, sweet potatoes,
groundnuts and tobacco. The dry season irrigated crops are planted at the end of the rainy
season from March to September. They are grown mainly under dambo (wetland) system in the
lowlands. In this system crops use residual moisture plus some supplementary irrigation to
ensure adequate water supply. They are also grown under flood, and at times overhead
irrigation using gravity or motorised pumps to deliver the water. The irrigated crops include
maize, rice, sweet potatoes, irish potatoes, beans, leafy vegetables, tomatoes and onions.
Farmers use improved crop varieties, but in most areas, they are recycled and used over and
10
over again. Many reported using fertilisers on their crops, but application is limited to the main
food and cash crops such as maize, potatoes and tobacco and the dimba/irrigated crops. Few
farmers use chemicals for pest and disease control and these are generally limited to cash crops
such as cotton and tobacco and food crops such as maize and beans.
3.1.2 According to the Department of Irrigation, the estimated irrigation potential area is
450,000, which represents 16.7% of the arable cultivable area of 2.7 million ha. However,
only 63,000 ha has been fully developed consisting of 48,135 ha (77%) under estates whilst
about 14,697 ha (23%) is under smallholder, which produces mainly cereals (mostly rice and
maize) and horticultural crops with 11,497 ha under farmer-run self-help irrigation schemes
and 3,200 ha under Government-run irrigation schemes. Apart from this, traditional wetland
(dambo) cultivation using residue moisture covers about 62,000 ha mainly during the dry
seasons since such areas are waterlogged and inaccessible during the rainy season. There is
thus great potential for irrigation development.
3.1.3 Private Estates: Most of the land developed for irrigation has been developed by the
private sector, through establishment of private estates. The irrigated area under estates
covers export or high value crops like sugarcane (45%), tea (43.75) and coffee (11.3%). The
estate irrigation systems normally utilise surface water resources and use surface irrigation
methods like flooding and furrow, and also overhead irrigation methods like sprinkler
systems/centre pivot, and to a lesser extent micro-irrigation system (drip) in coffee plots.
3.1.4 Smallholder Irrigation Schemes: There is no formal classification of smallholder
irrigation schemes but they are normally grouped as farmer-run self-help irrigation schemes
or Government-run irrigation schemes. The latter schemes are in the process of being
rehabilitated by the Government mainly through donor funding and handed over to
smallholder farmer groups. Most of the smallholder-irrigation schemes produce mostly rice,
maize and horticultural crops but have problems due to poor scheme infrastructure,
inadequate irrigation water supply, and inefficient use of available water.
3.1.5 Government-run irrigation schemes: Between late 1960s and mid 1980s, GoM
constructed, operated and maintained 16 smallholder river diversion gravity-fed irrigation
schemes on public land, with a total irrigable area of 3,200 ha, which were mainly occupied
by settlers and smallholder farmers from surrounding areas with a plot-holding size of
between 0.1 to 0.3 ha. The schemes were constructed without full involvement of the farmers.
Consequently the latter’s participation was limited and their involvement was restricted to
crop production and paid maintenance work. Most schemes had a full fledged Government
management unit headed by a scheme manager with frontline staff under the agronomy and
engineering sections who were responsible for daily scheme management including water
allocation.
3.1.6 GoM has not managed to adequately operate and maintain the 16 schemes which
resulted in poor performance due to poor farmer organisations and a dependency attitude of
farmers on government assistance, even for activities within their control. GoM gradually
reduced its financial contribution and involvement in scheme management so as to empower
farmers to manage the scheme-related activities. However, GoM could not hand over the
schemes to the farmers in their dilapidated state. Owing to this, it ventured into the process of
rehabilitating the schemes with the aim of handing them over to smallholder farmer
organisations. The four schemes, Hara, Wovwe, Lufira and Domasi, have had full
rehabilitation intervention through the IFAD funded Smallholder Floodplains Development
11
Project and farmer organisations, like Water User Associations, are already in place. Another
scheme, Kasinthula, which used to grow mainly rice and green maize, was also rehabilitated
and turned into an outgrower sugarcane scheme for Illovo (Nchalo) Sugar Estate and is under
the management of Kasinthula Cane Growers Limited. In such schemes, the GoM staff are
withdrawn and deployed to other stations.
3.1.7 Self help irrigation schemes: Unlike Government schemes, self-help schemes are
developed by either the farmers through their own initiative or with support from the
Government, including scheme improvement where farmers are also required to provide free
labour, and locally available construction materials like sand, lump stones and bricks. The
Government would in such cases provide other more expensive materials like cement and
quarry stones. In the case of new schemes, farmers fully participate in each stage of scheme
development, from site identification, design and construction with full support from the
Government. After construction, farmers operate and maintain the schemes with minimum
Government support. The result has been that scheme performance has improved because of
the instilled sense of ownership. The Government only assist when major catastrophe like
flash floods occurs.
3.1.8 Self-help irrigation schemes vary in sizes with respect to technologies used. Most of
them have a gross area of less than 100 ha, with the smallest being 0.3 ha (treadle pumpbased). Successful ones are river diversion gravity-fed schemes, followed by manual pump
based schemes and motorised-pump based schemes. The river diversion schemes are
common and cover a total area of 6,595 ha which uses either basin, furrow or flood irrigation.
Depending on the scheme size, the plotholding size ranges from 0.1 to 0.5 ha per farmer.
Most of the canals in schemes (<1ha) are normally not lined whilst other schemes (>3ha) will
have lined primary (main) and secondary (branch) canals. Though the scheme
implementation time is longer, the system is best suited for most farmers since the
operational costs have proved to be affordable. However, these are associated with some
problems including poor irrigation water management leading to low irrigation efficiencies.
3.1.9 Manual pump based schemes mainly depend on the treadle pumps which were
introduced in 1997 and have become very popular amongst smallholder farmers. Approtec
(Kickstart) money maker manual pump was introduced in 1999 but was not fully adopted due
to high cost, though it is greatly used in East Africa. Approximately, 4,199 ha are under
treadle-pump technology excluding the total area of schemes which are developed by NGOs
whose records are not relayed to DoI. Plot-holding sizes vary depending on farmer’s wetland
size since the technology is mainly used on individual basis in the existing customary land
which does not require farm-plot redemarcation. In some cases, a group of farmers can share
one treadle pump and cultivate on a communal farm. An evaluation on the uptake and use of
the treadle pumps by smallholder farmers indicated that it has been widely adopted by
smallholder farmers and that it is easy to operate and maintain, and can be individually
owned. However, the pump can only easily extract water from a suction lift (depth) of not
more than 4 meters which requires wetlands with shallow water table. For farmers with larger
areas, several shallow open wells are often dug in order to alternate during irrigation.
3.1.10 Motorized pump-based irrigation schemes involve pumping water from surface or
groundwater resource and let it flow either by gravity to the field or conveyed through
pressurised system (sprinkler or drip). Apart from unavailability of spare parts, farmers
complain that pump operation and maintenance costs are also high. Where farmers are using
submersible pumps to abstract ground water, apart from high investment costs, the electricity
12
cost is high. In general, most of the existing irrigation schemes which are poorly managed or
no longer fully operational are based on motorised pumps. Farmer groups are cohesive only
during the first few cropping seasons and then the membership starts to dwindle when the
pump starts developing problems.
3.2
Irrigation Development Constraints, Policies and Strategies
3.2.1 Constraints: Irrigation development is faced with constraints including: (i) inadequate
funding for irrigation development; (ii) inadequate number of qualified and skilled Irrigation
Officers; (iii) poor communication between different operational levels; (iv) high farmer
illiteracy and poverty levels; (v) low extension staff/farmer ratio; (vi) lack of reliable
transport for frontline staff; (vii) inadequate construction equipment and machinery; (viii)
poor monitoring and evaluation of irrigation schemes; and (ix) poor irrigation water
management.
3.2.2 Policies and Strategies: According to MoAFS, the vision of the agriculture sector is
to achieve sustained food security and increased agro-based incomes with a mission to
promote and facilitate agricultural productivity and sustainable management and utilisation of
natural resources. To achieve these ideals, the MoAFS adopted the pluralistic approach to the
extension service where several players such as public/government, civil/NGOs and private
extension companies play their part in the country’s extension endeavours. The extension
strategies and approaches include commodity advisory services, one village one product,
farmer field schools, participatory extension, and farmer organisation.
3.2.3 The GoM adopted a National Irrigation Policy and Development Strategy (NIPDS) in
June 2000 to “provide a clear statement of the Government’s aspirations for the irrigation
sector and to highlight the strategy for attaining irrigation development objectives.” NIPDS,
supported by an Irrigation Act passed in 2001, states that GoM will assume the role of
facilitator in sustainable irrigation development using a participatory approach. GoM will
embark on such activities based on requests from smallholder farmers that meet the criteria
for sustainable development. The policy objectives are to: (i) contribute to poverty alleviation
by targeting resource poor smallholder farmers for irrigation development; (ii) increase
agriculture production and enhance food security through efficient irrigation; (iii) extend
cropping opportunities, intensify cropping intensity and provide high yielding variety of
crops; (iv) create and enable suitable conditions for irrigated agriculture, by facilitating and
encouraging the private sector to invest in irrigation development, and encourage rural
communities and WUAs to manage and operate irrigation projects; (v) optimise government
investment in irrigation development by applying principles of cost sharing and cost
recovery; (vi) enhance human capacity for irrigated agriculture in the public, parastatal and
private sector in order to facilitate effective applied research in irrigation technology and
marketing of irrigated produce; and (vii) create the spirit of business culture in the small scale
irrigated agriculture sector, to promote and provide competitive financing of irrigation
projects.
3.2.4 NIPDS development strategies aim to: (i) identify areas with irrigation potential; (ii)
update of available information concerning economics of water use to assist in rational and
efficient irrigation d development; (iii) assist small holder farmers, to develop and manage
new and existing irrigation schemes through establishment of local farmer organisations; (iv)
conduct applied research in irrigation technology; (v) transfer ownership of existing
government schemes to the beneficiaries, through participatory methods that will enhance
13
farmers’ responsibility and obligations towards the management of the schemes; (vi)
facilitate the establishment of a well co-ordinated marketing system with considerable local
processing and better storage /transportation of farm produce; and (vii) address specific
problems that women face in irrigated agriculture. The proposed project will address many of
these elements of the NIPDS. Following this policy, an Irrigation Act was passed by
Parliament in November 2001 which makes provision for the sustainable development and
management of irrigation, protection of the environment from irrigation related degradations,
establishment of a National Irrigation Board and for matters connected therewith or incidental
thereto.
3.2.5 The Water Resources Act (WRA) was passed by the Government in 1969 for
purposes of proper water resources management and provides for the control, conservation,
apportionment and proper use of the resources. In terms of water abstraction, the WRA is
enforced by the Water Resources Board (WRB) which is a body within the MoIWD. Under
the WRA, except for riparian use or general domestic purpose, all water abstractions and
industrial effluent discharges into public water bodies, including human sewage must be
licensed and a renewable water abstraction right (permit) issued accordingly. The water
abstraction fees are charged based on the water source and type of usage. However, the
defaulters cannot be properly policed since the WRB is grossly understaffed. Plans are
underway to strengthen the capacity of WRB. The National Water Policy (January 2004)
incorporates the vision of the water sector as “water and sanitation for all, always” which is
based on the country’s central policy of poverty reduction, and it endeavours that every
Malawian has equitable access to water and sanitation services for sustainable socio
economic development of the country. The overall national policy goal is sustainable
management and utilization of water resources, in order to provide water of acceptable
quality in sufficient quantities, and ensure availability of efficient and effective water and
sanitation services that satisfy the basic requirements of every Malawian.
3.2.6 The Environmental Management Act (EMA), adopted in 1996, provides the basic
legal and administrative framework for environmental planning and management, including
the requirement for Environmental Impact Assessment (EIA) studies for prescribed projects.
The Act is the legal operational translation of the National Environmental Policy (NEP) of
Malawi (1996) and the National Environmental Action Plan (1994). It gives strength to the
principles outlined in the NEP, to the extent that wherever sector legislation conflicts with the
EMA, the latter shall take precedence. Section 9 of EMA sets out the power, functions and
duties of the Environmental Affairs Department and those of the Director of Environmental
Affairs. Section 16 provides provisions for the establishment and the powers and duties of an
Inter-Agency Technical Committee on Environment (TCE), while Section 24 specifies the
steps to be followed in the preparation of a project’s EIA Study. The Government of
Malawi’s Guidelines for EIA, adopted in December 1997, specifies a list of prescribed
projects where an EIA is mandatory (List A) and a list of projects where an EIA may be
required (List B). List A, Item A1.2, identified irrigation projects designed to serve more than
10 ha. While List B, Item B2.1 identified large-scale irrigation or drainage schemes. It is
believed that the irrigation schemes (all under 250 ha) should fall under List B (as well as in
accordance with ADB’s ESAP), and consequently required an ESMP for each irrigation
schemes. However, in order to avoid any delay in project implementation, the EIA Study and
related site-specific ESMP attached to the Feasibility Study have been prepared in order to
fulfill with List A’s EIA requirements. EIA’s sector guidelines, including for irrigation and
drainage, have been adopted in 2002. Finally, Section 27 of the EMA specifies that any
project subjected to an EIA cannot be approved nor be implemented, until the project’s EIA
14
Study is judged satisfactory and that an EIA Certificate of Environmental Compliance, with
its Terms and Conditions be issued by the Director of Environmental Affairs. Government
Notice N.10 of August 2004, entitled the Environmental Management Regulations, described
the EIA processing fees which include the technical review by the EAD/EIA Unit and the
TCE and the undertaking of semestrial/annual monitoring/auditing of the implementation of
the ESMP. Implementation of the ESMP is under the legal and operational responsibility of
sector ministries or departments and EMA provides for penalties for non-compliance. The
District Environmental Officer is mandated to report on the level of implementation of the
site-specific ESMP at the District level and to provide technical advice and/or any corrective
actions required to the District’s Director of Agriculture and Natural Resources.
3.3
Institutional Framework
3.3.1 Ministry of Agriculture and Food Security (MoAFS): MoAFS has been restructured
from the previous Ministry of Agriculture, Irrigation and Food Security (MoAIFS) which
used to have the Department of Irrigation, as one of the departments. The overall purpose of
the Ministry of Agriculture and Food Security is to promote and accelerate broad-based,
sustainable agricultural and irrigation development policies so as to promote economic
growth and contribute to poverty reduction. The MoAFS comprises one administration and
five technical departments which report directly to the Secretary for Agriculture. The
technical departments include: Agricultural Research Services; Animal Health and Industry;
Crop Production; Agricultural Extension Services; and Land Resources Conservation. The
Ministry is further divided both administratively and technically into 8 Agricultural
Development Divisions (ADDs) which are headed by Programme Managers.
3.3.2 In each ADD, there are Subject Matter Specialists (SMS) representing Crop
Production, Animal Health and Veterinary Services, Agriculture Extension Support Services,
Research and Technical Services, Land Resources Conservation and Irrigation Departments.
Below the ADDs, there are Rural Development Projects (RDPs) at the district level with the
same structure as the ADDs and these are further divided into Extension Planning Areas
(EPAs) which are further divided into sections.
3.3.3 With regard to functionality, the Ministry of Agriculture Headquarters through its
departments mainly concentrates on policy formulation and regulation, coordination of both
local and offshore training and collaboration with other stakeholders in the sector. At ADD
level, there is interpretation of policies from the MoAFS Headquarters, coordination of
subject matter specialists, supervision of programmes, development of technical messages
and training of all subject matter specialists. With respect to RDPs, the functions include
dissemination of messages, training of EPA staff and farmers, providing technical advice and
supervision of EPA staff. At EPA level, activities involve imparting technical messages to
farmers, formation of farmer groups, conducting farmer demonstrations and linking farmers
to credit institutions. The Ministry is in the process of devolving its agricultural programmes
to District Assemblies in line with the decentralisation process. Consequently, the functions
of the RDPs and the EPAs will be the responsibility of the Directorate of Agriculture and
Natural Resources.
3.3.4 Ministry of Irrigation and Water Development (MoIWD): MoIWD has the overall
control of surface and groundwater resources in terms of water resource planning and
development; maintenance of water resource data bases; review of applications for water
rights; monitoring of water abstractions; water quality management; protection of water
15
resources and catchments management, and also irrigation development. The Department of
Irrigation, which until recently was part of the Ministry of Agriculture and Food Security, is
responsible for irrigation development in Malawi and is a key institution for irrigation
scheme planning, designing, construction, and also rehabilitation of remaining Governmentrun irrigation schemes. The technical divisions of the DoI include: Planning, Designing and
Operations, Training and Advisory, Irrigation, Research and Development which are
supported by a Drawing Office, workshop, Human Resources Management and Accounts.
3.3.5 Ministry of Mines, Natural Resources and Environment (MoMNREA). The
Environmental Affairs Department (EAD) is responsible for the administration,
implementation and monitoring of the Environmental Impact Assessment (EIA) Studies.
However, the actual implementation of the site-specific Environmental Management Plans
for the 39 proposed Irrigation schemes identified within the scope of the SCPMP will remain
the responsibility of the DoI. Throughout the EIA process, the EAD is guided by the
Technical Committee on the Environment (TCE). The existing institutional, technical
(monitoring equipment) and financial capacities of EAD are rather limited and the
decentralization of the EIA administration process to the District level still remains in its
infancy. It is hoped that, with a stronger decentralization process, the EIA process will
become more effective and efficient, that the EIA monitoring will improve, provided that the
districts are adequately staffed and resourced. In view of the existing limited capacities at the
District level, the ESMP outlined in Annex 7, has included the financial provisions for the
institutional strengthening of the District Environmental Units for ensuring continuous
monitoring of the implementation of the mitigation measures at each irrigation scheme.
Semestrial and annual monitoring/auditing of the implementation of the site-specific ESMP
will also be undertaken by EAD, in accordance with the Environmental Management Act
(1997) and the project’s EIA Certificate and its Terms and Conditions.
3.3.6 District Directorate of Agriculture and Natural Resources (DDANR). The DDANR
which is headed by a Director regroups a number of services which were previously under
line ministries. These services include extension, irrigation, forestry, livestock, fisheries,
environment and energy, each one headed by a Head of Division. Coordination of the
activities of the DDANR is done through the District Directorate of Agriculture Management
Team which is made up of the District Director and the Heads of Divisions. Most of the
activities of the DDANR are carried out at the Extension Planning Area (EPA) level which is
headed by the Agricultural Extension Development Coordinator (AEDC) and Section level
where field assistants are located. However, there is no extension officer specialized in
irrigation who can routinely be in contact with the farmers. Hence, the need for training of
extension officers in irrigation practices. The division in charge of irrigation development
has, in most cases, one irrigation officer and an assistant irrigation officer to oversee
irrigation activities within their jurisdiction.
3.3.7 Non-Governmental Organizations (NGOs): NGOs are coordinated by the Council for
Non-Governmental Organisations of Malawi (CONGOMA), but individual NGOs, like
ActionAid (Malawi), CARE International, PLAN International, Evangelical Lutheran
Development Programme (ELDP), World Vision International, Save the Children Federation,
AFRICARE, Concern Universal, Churches Action in Relief and Development (CARD), and
EU Public Works Programme are involved in funding and implementation of a number of
irrigation-related activities mainly through food security programmes.
16
3.3.8
Private Sector: Due to overstretching of DoI staff and the complexity of activities,
DoI engaged the private sector, mainly local consultants and contractors, to speed up the
scheme development activities, although their performances have been mixed. The DOI’s
lack of experienced staff has also led to the poor supervision quality and poor contract
management. Construction contracts which were supervised by independent consultants tend
to perform better. In general, the local private sector engineering capacity for irrigation
development, is extremely limited and relies mainly on a number of experienced individuals
who used to work in the civil service.
3.4
Donor Interventions
The current donor funded smallholder irrigation-related projects and programmes
most relevant to the proposed project, in terms of complementarities and/or activeness in the
project area, include: (i) IFAD - Smallholder Flood Plains Development Programme (SFPDP)
(ii) JICA - Construction and Rehabilitation of Bwanje Valley Irrigation Project, and Capacity
building and development for Smallholder Irrigation Schemes; (iii) BADEA - Small Farms
Irrigation Development Project; (iv) USAID - Support to NASFAM, Support for
Agriculturally-Linked Enterprises, Cassava Industry Promotion Project (SARRNET),
Deepening the Micro-finance Sector, Commercial Microfinance for Malawi Under-deserved
Poor (Opportunity International); (v) World Bank/IFAD - Irrigation, Rural Livelihoods and
Agriculture Development Project; (vi) EU Public Works Programme; and (vii) African
Development Bank - Smallholder Irrigation Project (ShIP), Horticulture and Food Crops
Development Project (HFCDP), Rural Income Enhancement Project (RIEP), Macadamia
Project, Smallholder Outgrower Sugar Production Project, and Lake Malawi Fisheries
Development Project. In general, these interventions seek to address issues related to food
security and poverty reduction through empowerment of rural communities, community
involvement in irrigation development, natural resources management, diversification of
income sources, improved access to domestic water supply, rural infrastructure livestock
production, and improved crop husbandry practices. The proposed project will have a wider
coverage than the ongoing projects and will also concentrate on establishment of irrigation
schemes on customary land as opposed to rehabilitation of government schemes.
3.5
Lessons Learnt from Past Interventions in Malawi
3.5.1 Weak Project Design: According to the recent Project Completion Reports (PCRs),
OPEV reports and the draft 2005 Country Portfolio Review Report for Malawi, poor quality
at entry was one of the most important contributing factors to the low implementation rate of
projects. Poor project design as a result of unsatisfactory formulation and weak articulation of
projects is mainly attributed to poor identification of the real problems and the resultant
unrealistic intervention strategies. There have been instances of inadequate or lack of
feasibility and design studies to confirm the viability of all or the critical components of the
projects, as was the case with Smallholder Irrigation Project. Complex projects and related
conditions precedent to entry into force should be avoided—the Government’s
implementation capacity is low and efforts should be made to design projects and
components taking into account this low level of capacity. For example, in the late 1990s a
generation of Bank-funded projects had micro-finance as one of the components, which has
proved difficult to implement because the design did not include proper study of the capacity
of the local Micro-finance Institutions (MFI) to deliver. It is imperative therefore that future
project designs should take into account the problems that have been encountered with microfinance and either not include a micro-finance component or make only limited use of micro-
17
finance until there is clear evidence that MFIs have become developed enough and the legal
and regulatory environment is strong enough to support such institutions and intended
beneficiaries.
3.5.2 Inadequate Implementation Management Capacity: In the past, GoM used to second
staff to serve in projects, but as the positions of the seconded staff remain vacant in the civil
service during the period that the staff member is on secondment, this created significant
capacity gaps in the civil service. In order to address this issue, the GoM decided that the
projects should be implemented and managed through the existing ministerial structures.
However, this new arrangement created some significant challenges and has not been
successful. One of these challenges was the fact that the staff in the existing structures in
Ministries have a myriad of other routine responsibilities in their respective departments. As a
result, it became too demanding on such staff to efficiently handle those routine
responsibilities and also ensure the effective implementation of the projects. Moreover, staff
members who take on project responsibilities shoulder more responsibilities due to the
difference between the operations of a project and the workings of the mainstream
government civil service. This became a source of de-motivation for staff who are not used to
going beyond the normal call of duty. As a result, many ongoing Bank and IFAD funded
projects have reverted to PIUs. Even the recently approved World Bank/IFAD Irrigation,
Rural Livelihoods and Agriculture Development Project has provision for a fully fledged
PCU staffed by recruited personnel.
3.5.3 Inadequate staffing of PIUs: Some of the PIU members do not have any significant
training or experience on project implementation management, thereby limiting their
capabilities to steer projects as required. With no procurement officers of their own, the
projects experienced serious difficulties in procuring the goods and services that they
required. Large-scale international procurement, especially given the complexities of
international competitive bidding and the management of such processes, remains a complex
challenge in the ministries in charge of projects in agriculture. The PIU staff also do not have
experience in conducting M&E and therefore rely on the overstretched staff in the M&E Unit
in the ministries which also lack adequate resources like office equipment and computers for
data processing.
3.5.4 Streamline Loan Conditions: Delays in the fulfillment of loan conditions has been a
factor in project implementation delays, which have negatively affected the performance of
projects. The total average delay from loan approval by the Boards of Directors to entry into
force for all on-going projects is 0.8 years. Quality at entry should consider rationalising the
conditions for entry into force as well as for disbursement effectiveness, so as to reduce the
possibilities for project start-up delays. The design of loan conditions should increasingly
take into account Government’s capacity to implement them in a timely fashion.
4.
THE PROJECT
4.1
Concept and Rationale
4.1.1 In Malawi, unreliable rainfall combined with extended periods of dry spells which
adversely affect the crop productivity calls for full and supplementary irrigation. Investment
in harvesting and management of water during period of plenty, and for irrigation use during
period of scarcity, is critical to meeting the food and fiber requirements for a growing
population. Agricultural intensification through irrigation has the potential to double yields
18
and provide two harvests per hectare to the small farmer in a given year. It has been noted
that farmers who are using irrigation schemes are more food self-sufficient and economically
better off than those totally dependent on rain fed farming. Analysis of small irrigation
schemes in several African countries (Kenya and Zimbabwe), where average size holdings
ranged between 0.5 ha to 1.0 ha, revealed that irrigation generally contributed 25-80% of
total household income, thereby contributing substantially to poverty reduction. The present
project is therefore a national priority for Malawi as it will provide the needed resources for
the development of small scale irrigation for smallholder farmers.
4.1.2 Investments in increasing productivity are unlikely to yield enhanced farmer incomes
unless market development issues are simultaneously addressed. Low profitability of
smallholder agriculture has also been influenced by weak links to markets. Smallholder
farmers face critical information and infrastructure constraints which result in high input
costs and low output prices. Isolation of their produce from profitable markets also locks
them into cropping patterns of non-diversified production. This project is intended to address
marketing constraints faced by smallholder farmers in the project area and also address
problems of produce marketing faced by resourceful poor farmers and hence enhance
profitability for farmers. Through capacity building and competitiveness activities, the project
will prepare the small farmer groups to be more business oriented in managing their farms
and post harvest and marketing facilities.
4.1.3 The proposed project will target smallholder food producers with the aim of
improving food security and reducing poverty for the participating households, as well as for
the communities residing adjacent to the schemes. The development of irrigation
infrastructure will also contribute towards a reduction in the dependence on food imports
which has been a drain on foreign currency reserves, posing a significant threat to the ongoing economic reform program of the GoM. Reliable irrigation water supply will also
enable the poorer farmers to cultivate high value crops.
4.1.4 The project activities have been formulated following an interactive and participatory
approach involving farmers and other stakeholders. The choice of irrigation technologies for
the schemes was made in full consultation with farmers in the project areas. The proposed
design has looked at a number of irrigation technologies, namely those based on pumping,
both motorised and treadle pump and those using gravity. The motorised pump option was
rejected and the treadle pump and gravity options were retained. This is because experience
has shown that the high operation and maintenance costs and technical requirements of such
systems usually exceed smallholder farmer resources, thereby impeding sustainability of
these types of irrigation schemes. Gravity and treadle pump are considered to be appropriate,
and conform to the existing situation and the engineering constraints in terms of water
availability, topography, and geotechnical conditions. Additionally as farmers are familiar
with these technologies, the developed irrigation schemes are likely to be sustained in the
long term.
4.1.5 The proposed design has taken these into consideration and is supporting gravity and
treadle pump schemes. The proposed design also looked at the top-down managed
government sponsored approaches compared to bottom-up approaches, involving Water
Users Association (WUA) and opted for the latter, which would involve beneficiary and
private sector involvement in scheme design and operation and maintenance and government
performing the role of development facilitator.
19
4.1.6 The project design has also benefited from lessons learnt from implementation of Bankfunded projects, as well as experiences gained from those funded by other donors. For
successful implementation, projects must be based on viable feasibility and design studies
and beneficiaries must be involved in the conceptualisation and design of the project. The
proposed project has been prepared during the course of a Bank-funded study which involved
extensive consultations with the smallholder farmers, government ministries, district
authorities, traditional authorities, non-governmental organizations to build understanding
and ownership for the present project. Scheme farmers were fully involved in the design of
the irrigation schemes during the study and will continue to do so for the new schemes during
the course of implementation. They will also be fully responsible for the operation and
maintenance of the irrigation schemes. Moreover, the project design has also been fully
informed by the experience garnered from the ongoing and past Bank portfolio in the country.
4.1.7 Lessons learnt from IFAD and Bank-funded projects have shown that reliance on line
ministries in project coordination and management has led to failure due to serious staff
shortage. Hence the need for recruiting a technical team to strengthen the Department of
Irrigation to oversee project implementation, monitor project progress, and coordinate and
account for the utilization of project funds. The technical team would include a project
coordinator and other key competent and experienced professionals.
4.2
Project Area and Project Beneficiaries
4.2.1 Project Area: The project area will cover 19 of Malawi’s 28 districts, namely, Balaka,
Chikwawa, Chitipa, Dedza, Dowa, Karonga, Kasungu, Lilongwe, Machinga, Mangochi,
Mchinji, Mzimba, Nkhatabay, Nkhotakota, Nsanje, Ntcheu, Ntchisi, Rumphi and Zomba. The
19 project districts were selected because they have the most suitable agro-ecological
conditions for gravity and treadle pump irrigation development. Thirty nine irrigation sites,
covering about 3,055 hectares have been identified for development. Rainfall is unimodal and
occurs from November to May which varies from less than 600 mm in lower shire and rift
valley areas to over 1,800 mm in highlands. Recently, the rainfall has been erratic and
unevenly distributed. The mean annual temperature ranges from 8°C in the highlands to over
32°C in the lower shire valley. The project area is topographically suitable for surface
irrigation, the slope is gentle less than 5% and the plots are mostly flat, requiring little
levelling. The soils are mostly medium to heavy textured soils of the clay plains, and highly
fertile recent floodplain soils. They are suitable for rain fed grown or and surface irrigation,
subject to topographic limitations. In most of the proposed scheme sites, the land is already
allocated and cultivated. Over the years, land holding have reduced in size as they have been
split into portions as inheritance. Moreover, a farmer often owns two or more separate areas
of land spread over the valley, dambo or upland areas. Consequently, a high percentage
(75%) of villagers cultivate plots in most of the proposed scheme areas and land holdings are
small, ranging from 0.1-0.2 ha in low lying dimba areas up to 1.0 ha in upland areas. The
major crops grown under rainfed conditions include maize, cassava, sweet potatoes,
groundnuts and tobacco. The irrigated crops include maize, rice, sweet potatoes, potatoes,
beans, leafy vegetables, tomatoes and onions. The main village-based organizations found in
the project sites include committees responsible for borehole (water point committee), health,
education (school), village development, funeral and irrigation (if there is an existing
scheme).
4.2.2 Beneficiaries: The estimated total number of beneficiary households is 8756, or a total
of 45,531 people. The project beneficiaries are all the farmers owning plots in the vicinity of
20
the 39 proposed irrigation schemes who had expressed their interest to fully participate in the
project. The average family size is between 4.3-5.0 persons. The majority of the beneficiaries
comprise of households that are food secure for between 2-5 months and 5-8 months (48%
and 40% respectively).Women are estimated to comprise about 60% of the beneficiaries.
4.3
Strategic Context
4.3.1 The project addresses one of the core challenges identified by the GOM’s draft
Malawi Growth and Development Strategy (MGDS) 2006–2011, which is the successor of
the Malawi Poverty Reduction Strategy Paper (MPRSP). The MGDS is aimed at achieving
and sustaining the Millennium Development Goals (MDGs), and making Malawi a hunger
free nation through fostering sustainable economic growth and the creation of wealth with
fair and equitable distribution. The MGDS recognizes that agricultural development will
drive medium term growth by expanding and diversifying production. The agriculture sector
is expected to contribute to sustainable economic growth which is considered central to
Malawi’s ability to reduce poverty, achieve the MDGs and gain self sufficiency. It is
recognized that, without achieving this growth, it will be impossible to deliver on the
Government’s vision of creating wealth and employment for all the people of Malawi.
Government efforts under the strategy are therefore expected to contribute to increased on
and off farm incomes and employment opportunities, leading to poverty reduction; realization
of Malawi as a hunger free nation; improved small holder profitability; and protection of
natural resources and the environment for sustainable growth. The proposed project activities
are also well anchored in the Government’s New Agriculture Policy, National Irrigation
Development Policy and the Decentralisation Policy. Thus the project will contribute to the
achievement of the goals of the MGDS and the Agricultural Sector Strategy.
4.3.2 The proposed project is anchored on Pillar I of the Bank Group’s Country Strategy
Paper (2005-2009) which seeks to help increase the level of irrigation infrastructure and
support agricultural/rural development. The CSP interventions are directly linked to the
strategic priorities of the MGDS and aligned with Vision 2020 and the MDGs. The Project
will also contribute to the achievement of core Comprehensive Africa Agriculture
Development Programme (CAADP) objectives of poverty alleviation and sustainable
development and the comprehensive agriculture mandate of the NEPAD initiative. The
project builds on the experiences gained from the various Bank financed projects in Malawi.
The choice of this smallholder irrigation intervention is in line with the ADF X strategy on
selectivity to boost production and productivity, food security and poverty reduction in
RMCs.
4.4
Project Objective
The overall sector goal of the project is to contribute to poverty reduction and food
security in rural Malawi. The specific objective of the project is to increase productivity and
income of rural households in the project area. This will be achieved through the promotion
of intensification and diversification of the existing cropping system and improvement of the
marketing system which will significantly increase production, productivity and incomes of
the small farmer whilst improving household nutrition and environmental management of
natural resources at the same time.
21
4.5
4.5.1
Project Description
The project comprises three components:
(A) Irrigation Development Component: including development of 39 small-scale irrigation
schemes; 1,140 treadle pumps provided to smallholder farmers, 3,055 ha developed for crop
production, cropping intensity increased from 1 to 2.5 times, crop productivity increases by
20%.
(B) Farmer Support Programme: including support for establishment of 39 Water Users
Associations, 600 smallholder farmers (300 women) trained in water management; 350
smallholder farmers (175 women) trained in crop production and pest control technologies;
76 extension officers receive training for trainers; 76 study tours involving 3,000 farmers and
extension staff undertaken; 8,750 persons trained on environmental mitigation measures and
health aspects related to irrigation; 3,450 persons (1,380 women) trained on techniques of
financial management and business planning, aspects of post harvest handling and in simple
market research concepts; construction of 26 community storage facilities and 14 market
centres.
(C) Project Coordination and Management Component: including strengthening of the
Department of Irrigation (DoI) through the recruitment of a technical staff comprising a
Project Coordinator, Project Accountant, Monitoring and Evaluation Officer, Irrigation
Engineer, Procurement Officer, Administrative Officer and support staff; recruitment of 10
District Project Officers (DPOs) to support the district structures; purchase of 4 utility
vehicles and office equipment and furniture.
A.
Irrigation Development Component
A.1
Development of Irrigation Schemes
4.5.2 Under this component, the project will support the development of 39 small scale
irrigation schemes, in two phases, with a total area of 3,055 ha. Phase I will comprise
development of 28 irrigation schemes covering a total area of 1,550 ha. The engineering
designs as well as the bidding documents, of the irrigation schemes to be developed during
Phase I have already been prepared during the SSID study. The field investigations and
design of the 11 irrigation schemes to be developed during Phase II will be undertaken during
the course of project implementation. The proposed Phase 2 sites will cover a total irrigable
area of 1,505 ha.
4.5.3 For Phase I sites, two types of irrigation system will be established: gravity-fed
surface irrigation and treadle pump irrigation system. The former type will require all or
some of the following elements of design: headworks (intake) structures for diversion of the
water from the river or stream; conveyance and distribution canal layout; drainage system;
hydraulic structures; river training and flood protection works; and scheme access road
improvement works. For treadle pump-based schemes, water will be pumped direct from the
rivers or from shallow open wells and conveyed to the scheme plots through field channels or
reinforced polythene pipes. Alternatively, where technically and financially feasible,
canalisation activities will be carried out to harness water resources for irrigation in order to
effectively serve other farmers who have irrigable land away from natural water bodies. Such
farmers will be provided with 1,140 treadle pumps, by the project, for ease of water delivery
22
to their plots. In both types of schemes, apart from treadle pumps which will be abstracting
groundwater, according to the Water Act, farmers will be required to apply for a water
abstraction right (permit), which is a licence granted to abstract public water. The farmers
would only apply as a legal entity in the form of WUAs, and in its absence, such application
will be made by the interim main scheme committee. To avoid delays in project
implementation, the project will support each scheme committee, through payment of the
application fees, in order to acquire the water abstraction right (permit).
4.5.4 A consultant will be recruited over the first three years of the project to undertake the
verification of the designs of the Phase I schemes, tendering, evaluation of tenders and
supervision of works. The same consultant will prepare designs, undertake tendering and
supervision of the works for the Phase II schemes.
A.2
Environmental Mitigation
4.5.5 In order to address any likely negative environmental impacts that may arise from the
construction and operation of the irrigation schemes, environmental mitigation related
activities would also be carried out under this component. The activities under this subcomponent will include: (i) the recruitment of an Environmental Consultant to finalise the
comprehensive ESMP for the Phase I irrigation schemes and prepare the Environmental and
Social Impact Assessment (ESIA) and related site-specific Environment and Social
Management Plan (ESMP) for the Phase II schemes. The Consultant will, in coordination
with the Environmental Affairs Department, also provide on-going training to DoI and
District staff on ESIA and Environmental Audits, as well as providing technical support to
the Monitoring and Evaluation Officer in the preparation of the site-specific ESMP’s Annual
Work Plan and Progress Report; (ii) support to District Environmental Officers to ensure
continuous monitoring of the implementation of the mitigation/enhancement measures at
each irrigation scheme, in accordance with the ESMP and their AWP and to stimulate intersectoral coordination with District’s health, agriculture, irrigation and forestry Officers on
site project monitoring; and (iii) support for the implementation of mitigation measures, as
identified in each site-specific ESMP, during the operational phase. These measures range
from prevention of soil erosion, eutrophication and invasive weeds, promotion of agroforestry and protection of upper catchments, promotion of aquaculture, prevention of waterborne diseases and HIV-AIDS, etc. The project will facilitate the undertaking of an End-ofProject Environmental Audit.
B.
Farmers’ Support Component
4.5.6 The Farmers' Support component is designed to enhance the sustainability of the
project and its constituent schemes by creating sufficient momentum and capacity among
individual farmers, farmers’ groups and Water Users’ Associations to carry on with the
activities beyond the end of the project implementation. This component will ensure that
farmers obtain maximum benefits from the investments in terms of increased food security
and increased household income. It will also support farmers to maintain the equipment and
infrastructure to enhance the sustainability of the improved irrigation schemes and practices.
B.1
Scheme Management
4.5.7 Under the current irrigation development policy, irrigation schemes are supposed to
be owned and managed by cohesive smallholder farmer organisations, such as, Water Users’
23
Associations (WUAs) or Cooperatives. The project will assist the scheme farmers in the
formation of 39 WUAs which will be expected to (i) operate and maintain the irrigation and
drainage systems; (ii) collect water charges; (iii) resolve conflicts among its members, arising
from the use of water, (iv) improve the management performance and sustainability of
irrigation schemes; (v) contribute to the regulation of water use along river basins and
addressing environmental and health concerns; (vii) improve crop production and hence the
household food security. This requires detailed preparation and familiarisation with new
tasks, functions and responsibilities by all parties, water users and representatives of
Governmental bodies, in order to gain a new understanding about the division of functions.
4.5.8 The formation of the WUAs will be done in two stages. During the preliminary stage,
much of the attention will be focused on fulfillment of requirements for WUA formation and
physical implementation of scheme activities. In this case, an interim committee will be
required to meet the scheme development requirements. During the final stage, the focus will
shift to formalising WUAs, through extensive training of the members, in order to give them
powers and capacity to operate and maintain the schemes efficiently and effectively.
4.5.9 The first activity will be to identify and establish a list of the future users of the
Scheme and the plot size or allocation of plots. Only the future users will participate in the
discussions and they will have to contribute according to the benefits they can expect from
the scheme. Right from the beginning of any discussions, it will be emphasised that
involvement in the Scheme is a commercial enterprise aimed at making profits, and that the
farmers will be entirely responsible for paying for irrigation services. It will also be
emphasised that both men and women should be able to become members of the WUA,
irrespective of whether the allocation of land is to the household, to the man or to the woman.
All scheme farmers will be required to be members not only of the Water User Group
(WUG), which will be formed at block level, but also of the WUA. Whilst membership in
WUG will be informal, the membership in WUA will be formal since the latter will be a legal
entity. Each WUG will manage a scheme area of between 20 to 25 ha. The list of members of
the scheme will be entitled to select an Interim Committee, which will serve for the period of
implementation. Each WUG will hold elections and send their elected representatives, with
an equal number of men and women, to form the Interim Committee.
4.5.10 The scheme farmers will be given the opportunity to discuss the detailed designs and
the requirements for operation and maintenance, in terms of labour and/or cash during the
verification stage of the designs of the Phase I schemes. The designs of the Phase II schemes
will be discussed at the preparation stage. Where appropriate and practical, the scheme
farmers’ suggestions will be taken into consideration in any alterations to be made to the
designs. At each scheme site the farmers will sign an Implementation Agreement (IA) with
the project as a prelude to the start of works. The IA will specify the tasks, contributions,
roles and responsibilities of the farmers and the project. The farmers will own the scheme and
will be responsible for operation and maintenance without any financial assistance from the
Project or Government. Each WUG will also appoint one person to be responsible for
allocation of irrigation water to other fellow farmers in accordance with the irrigation
schedule.
4.5.11 The services of a consultant, for 16 person-months in two separate inputs/assignments,
will be procured to assist in establishment of WUG and WUA, development of project specific
WUA formation guidelines and implementation methodology including formulation and
implementation of training programmes for district extension staff and WUAs operation and
24
maintenance of irrigation infrastructure. The training will also include understanding of the
WUA’s role and responsibilities under the NIDPS, Water Resources Act and any other related
policy and legislation, associated scheme development consequences especially on downstream
water users in order to be in line with the integrated water resources management, conflict
resolution, group dynamics and community based monitoring and evaluation. The consultant
will also assist the WUA in the preparation of its rules and regulations, bylaws and constitution.
The WUGs will nominate trainees for water management training, generally one man and one
woman. These nominees must agree in advance and sign a declaration that they will train the
other group members after the training sessions and for a period of at least two seasons. Only if
they adhere to this agreement will additional training related to that component continue to be
provided. The Interim Committee members will also receive training in the general tasks and
responsibilities of office bearers and specific tasks of the chairperson, treasurer and secretary.
B.2
Agricultural Production
4.5.12 Training in Irrigation and Crop Production Techniques: Through the Project’s
facilitation, farmers will be encouraged to make choices on the crops and varieties for production
based on the following commercial indicators and variables: gross margin analysis; risks
involved in production; marketing prospects; and the need for cash and/or credit for input supply
and transport. Although the final choice will be entirely free for the farmer to decide, it should be
emphasised that for market oriented commercial farming, the crops grown must make maximum
profits in order to finance the Scheme operation and maintenance and ensure sustainability in the
long term.
4.5.13 The project will provide support to farmers to improve irrigation, crop husbandry and
Integrated Pest Management techniques with regard to the selected crops through training and
propagation of better technology. The training will be based on the lead (contact) farmer concept.
Extension staff will initially be trained on the concept and they will in their turn train the contact
farmers. The training will be open to interested groups with an average of 25 farmers per group
within the schemes. The training will initially start with the training of two extension officers
responsible for the proposed scheme, one at the Section and the other at the EPA level. They will
follow a two-week practical training of trainers course, in groups of 15, and at the end of their
training will act as trainers for the contact farmers.
4.5.14 The training of farmer groups will be done towards the end of the civil works. Each
group will select a maximum of four contact farmers (preferably 2 males and 2 females) to serve
as a contact point for delivery of the component support and services. The contact farmers would
be trained by the trainers in communication skills, farmer training skills, irrigation water
management techniques. The contact farmers will in their turn undertake the training of fellow
farmers. The contact farmer will also be responsible for allocation of irrigation water to other
fellow farmers in accordance with the irrigation schedule.
4.5.15 With the limited duration of training given, the contact farmers cannot be expected to be
specialists at the beginning of the first season. However, they would be required to share the
technical knowledge they have acquired and stimulate discussion among their group members. A
single exchange visit will be arranged, for each group of contact farmers and other WUA
committee members, to another functional scheme within or outside the project areas, in order to
share technical ideas, experiences and exchange good and bad lessons learnt with the host
farmers. The visiting farmers will be hosted for a maximum of one week. The project budget has
made provision for 15 smallholder farmers and one extension expert (facilitator) to travel and
25
stay at another scheme. Two tours, comprising 20 scheme farmers per tour, will be conducted for
each scheme to other operational schemes within and outside the project areas. The first tour will
be conducted during the scheme construction and the second one during scheme operation.
4.5.16 Support to Farmers’ Organizations: The scaling up of production levels by smallholder
farmers is a major objective of the Government of Malawi. The proposed strategy is to support
farmer organizations to operate as legal entities through appropriate participatory methodologies.
Farmer clubs will be the lowest level of organization for the farmers targeted under this project.
The clubs will act as the smallest business unit in the sites from which pre-cooperatives will
hatch from based on capacity. As much as possible, and based on demand and workability,
multipurpose cooperative will be promoted to answer the needs of the clubs holistically rather
than to have farmers get affiliated to multiple institutions in order to solve their common
problem. Farmers will be sensitized on formation and management of farmer clubs and
eventually cooperatives.
4.5.17 Support to Extension Service: Appropriate staff training will initially start with two
extension officers per scheme, one at the Section and the other at the EPA level. They will follow
a two-week training of trainers course, in groups of 15, and at the end of their training will act as
trainers for the contact farmers. Tours, for field project frontline-staff, will also be supported for
functional schemes. Funds will be provided for curriculum development, strategy workshop, and
staff training. Supervision, by the district staff will be carried out on monthly basis whilst
department and ministry level staff will supervise the project on quarterly basis. In view of the
large number of project sites spread nationally (39 sites in 19 districts), the project will provide 7
seed-nursery field trucks and 51 motorcycles, for transportation of training and field
demonstration materials and to facilitate field extension visits. Office equipment will also be
provided to field staff to facilitate the project activities.
4..5.18 Community Development Activities: The activities under this sub-component will
mainly involve training on environmental mitigation measures and health aspects related to
irrigation. The activities will start after the first or second cropping season, when the community
has some experience of irrigation. Although the Water Users’ Association will be involved, the
village health committee, which already exists in most villages, has been selected as the best
entry point to give these subjects the attention they deserve and to enhance sustainability.
4.5.19 Training will be provided in: (i) protection of water sources and intake structures; (ii)
maintaining access to water for livestock; (iii) the effects of chemical fertiliser and pesticides on
the quality of drinking water; (iv) specific issues, as indicated in the Environmental Impact
Assessment; (v) the relationship between intensification of production, labour requirements and
the availability of healthy family labour, specifically for the treadle pump; (vi) the prevention of
HIV/AIDS, care and support and mainstreaming in accordance with national policies; (vii)
gender issues and gender mainstreaming at both district and community levels in order to
improve on their knowledge, attitudes and skills (viii) bilharzia (Schistosomiasis) and malaria
and their relation to stagnant water; (ix) the symptoms associated with various waterborne
diseases; (x) the dangers of untreated drinking water and the alternative treatment methods; (xi)
general sanitation.
4.5.20 The village health committee will be invited to nominate trainees and to sign an
agreement committing themselves, the nominees and the implementing agent to the training and
transfer of knowledge throughout the village. The nominated members can either be members of
the existing health committee or will be incorporated in the health committee after their training.
26
Apart from technical aspects, the trainees will be coached in methods of transferring their
knowledge at the end of each training component. After the training, the trained nominees are
expected to train the village health committee, the WUA committee and hold awareness meetings
in each section of the village. Two follow-up visits should be conducted to evaluate the impact of
the training. An NGO will be recruited to undertake the training.
4.5.21 Support to Savings and Credit Groups: Whilst the project is not providing funds for
micro-credit, it will support the formation of credit and savings groups in order to prepare
them to be able to access credit provided by other Bank-financed projects that have credit
components, and from the NASFAM credit-facilitation system. This sub-component is
necessary given that within the project area, farmers are mainly short of cash at the beginning
of each cropping season, when they require money to purchase seeds and other agricultural
inputs. Their strategies for coping with this cash demand include selling of surplus crops or
livestock, or using off-farm income. Credit is available either informally or formally. For
example, farmers are able to obtain loans from the internal savings of informal savings and
credit groups. The project would provide support on demand from the communities. Sitespecific awareness meetings will sensitise farmers about the support available to savings and
credit groups. Groups of between 7 and 25 persons who are interested to form a savings group
can approach the project for support. Both members of the proposed irrigation schemes and
other community members within the target village(s) will be able to form savings groups,
either as separate categories or mixed. The group will receive training on how to organise
themselves, to distribute roles and undertake tasks. The group members will meet at regular
weekly intervals at agreed dates and times. It is expected that members will save continuously
at these meetings with a fixed amount, although they can decide the level of savings they can
afford. At each meeting the amounts saved, totals per person and per group should be read
aloud in order not to alienate the illiterate members. At least 60% of the members should be
present for each meeting to form a quorum. The saved funds should be loaned out to those
members who can show proof of being able to invest the money and get quick returns. The
funds should be paid back to the group with interest (to be decided by the group) in four equal
parts (capital plus interest) over the period to be decided by the group members. A specialised
NGO/MFI will be recruited to do the different training, facilitation and monitoring under this
sub-component.
B.3
Marketing
4.5.22 This sub-component will support the smallholder farmers and communities around the
irrigation schemes in the marketing of produce including post-harvest handling. This support will
be through: (i) Capacity Building and Competitiveness and (ii) Marketing Infrastructure
Development. Marketing Capacity Building and Competitiveness will promote the concept of
running an irrigation scheme as a business through three sub-activities, namely, capacity
building, marketing information and competitiveness analysis. Capacity building will be carried
out through training programmes to improve the financial, management, and business planning
skills of the farmers. Farmer training will include issues of agricultural linkages, enterprise
development and market information. The project will train 86 groups (each group comprises 40
trainees) on the techniques of financial, management, and business planning. The training will
also include aspects of post harvest handling to improve produce quality. Under marketing
information, farmers will be trained on simple market research concepts to assist them in
identification of new markets and possible expansion of existing markets. The project will
arrange for visits to potential customers for the farmer groups, (such as schools, hospitals,
colleges, hotels, etc,) to estimate their future food consumption (demand). This kind of market
27
research training will change the mentality of farmers to be more business oriented which will
improve their performance and efficiency. Short term consultants will be recruited to analyse the
competitiveness of commodities produced within the different geographic areas of the project.
The analysis will be conducted at least three times during the life of the project. The first
analysis will be undertaken at the beginning of the project as a baseline study. The second one
will be undertaken after construction of at least 50% of the irrigation schemes and the
establishment of few marketing infrastructure to monitor the performance of the project as a
whole, and the third analysis will be carried out during the final year of the project which will
provide a good source of information for project performance.
4.5.23 Marketing Infrastructure Development: The project will establish two kinds of
infrastructure, namely: (i) Communal Storage Facilities (CSF) and (ii) Market Centres. The
project will construct 26 CSF close to the project sites in 15 of the 19 project districts. The CSFs
will be used for storage of agricultural produce, both durable and perishable. The operations and
maintenance of the CSF will be done by the farmers’ organisation whose funds will be sourced
from cost recovery measures (user fees and rent). One market centre will be constructed in 14 of
the 19 project districts and will be used either as wholesale and retail markets. The market fees
will be used to fund the operating costs of the MC to ensure its sustainability.
C.
Project Coordination and Management Component
4.5.24 The project will be implemented within the established structures in the Ministry
through the DoI which will oversee project implementation, monitor project progress, and
coordinate and account for the utilisation of project funds. The DoI will be strengthened by
the recruitment of a technical staff comprising a Project Coordinator, Project Accountant,
Monitoring and Evaluation Officer, Irrigation Engineer, Procurement Officer, Administrative
Officer and support staff. The technical team, including the Project Coordinator, will comprise
experienced professionals competitively recruited from the open market and acceptable to the
Bank and their remuneration paid under the grant resources. The technical team will ensure
that project activities are initiated and are adequately budgeted for, beneficiaries are properly
sensitised about the project, consolidate project records, monitoring and evaluation and
supervision of activities are undertaken, submit all procurement documents to the Bank for
review and approval, compile and submit all disbursement applications and quarterly
progress reports, and undertake annual audits of all project accounts and submit the audit
reports to the Bank. The districts have only been recently established and recruitment of
personnel is ongoing, therefore in order to facilitate coordination of implementation of
project activities, the project will recruit 10 District Project Officers (DPOs) to support the
district structures. In view of the fact that the number of sites vary between the districts, some
grouping of districts would be necessary hence the need for only 10 DPOs. Given the large
size of the project area and the need to closely monitor project implementation in all the 19
districts involved in the project, the DoI will be equipped with four vehicles. It will also be
provided with computers and other office equipment, and furniture.
4.6
Production, Market and Prices
4.6.1 The project will lead to increased productivity as a result of intensification of
agricultural production due to irrigation development. In addition, improvement to post
harvest handling facilities due to establishment of the CSFs and marketing services as a result
of the market centers will improve quality and reduce losses. The current level of losses is
between 30-60% for horticulture crops depending on the perishability of the crop, with
28
tomato having highest level of losses. In the case of field crops such as maize and rice, the
losses are between 15-20%. The project will reduce these losses by 50%, which will increase
supply while simultaneously improving the quality of the produce. In the case of horticulture
crops, increased production will not depress prices because of the expected concomitant
increase in quality. For rice and maize, the price will not be affected because of the
continuous shortages Malawi is experiencing in the supply of rice and maize. The increased
production as a result of the project will not be sufficient to significantly affect prices. The
projected production comes from the additional 3,055 hectares by the project plus 14% of the
national level production as a result of the post harvest facilities and market enters.
4.6.2 Prices will be affected positively by the expected improvement in the quality of the
commodities produced under the project. The table below describes the expected benefits of
the project.
Crop
Maize (grains)
Maize (cobs)*
Beans
Irish Potatoes
Sweet Potatoes
Cabbages
Paprika
Chilies
Onions
Tomatoes
Rice
Approximate
current
production at
national level
(ton/year)
1,733,125
80,000
420,590
1,784,749
50,000
870
1,678
50,000
35,000
49,722
Projected
project related
production
increase
(ton/year)
Farm gate
price
(MWK/ton)
Additional
production value
(000'MWK/year)
13,296
48,880,000
1,073
4,409
18,000
5
45,000
8,000
239,330
244,400
48,292
35,270
15,092
7,750
69
88
3,429
7,000
10,000
80,000
95,000
20,000
105,646
77,497
5,557
8,358
68,578
2,536
1,813
20,000
22,000
50,725
39,881
Total
923,536
* Production is per cob and price is MWK/cob
4.6.3 The crops proposed include: maize, beans, Irish potatoes, sweet potatoes, cabbages,
paprika, chilies, onions, tomatoes, and rice. Production will start as from the second and third
year of project implementation. The project will improve the production and marketing
processes in cereals and vegetables through the various interventions under Component B.
This will have an import substitution effect in rice and maize; and export promotion effect in
vegetable/horticultural commodities. The project will generate annual increases in the
production of rice by 1,813 tons and maize by 13,296 tons (import substitution effect). On
the other hand, the project will generate annual increases in the production of beans by 1,073
tons; Irish potato by 4,409 tons; sweet potato by 15,092 tons; cabbages by 7,750 tons; onions
by 3,429 tons; tomato by 2,536 tons; and 157 tons of paprika and chilies. The project benefit
at full development will be about MWK 0.9 billion ($7.1 million) annually. Product prices
would not be negatively affected as all the additional production generated by the project will
be absorbed in the market due to the chronic food shortages over the recent times in Malawi.
29
4.7
Environmental and Social Impacts
4.7.1 In accordance with the Bank Group’s Environmental and Social Assessment
Procedures (ESAP), small-scale irrigation project, of less than 2,000 ha and not situated in or
near Environmentally Sensitive Areas (ESAs), falls into Category 2. Thus, it requires an
Environmental and Social Management Plan (ESMP). This categorization was validated by
PSDU on January 20, 2006. The environmental and social impacts of each of the proposed 39
irrigation schemes scattered in 19 districts in Malawi are expected to be minimal, site specific
and manageable, on the condition that appropriate mitigation measures are implemented
during the construction and operation phases. The footprint of the physical works are limited
and the selected technology is “environmentally-friendly” (e.g. gravity system and treadle
pumps). The Executive Summary of the ESMP is found in Annex 7.
4.7.2 Pursuant to Malawi’s Environmental Management Act (1996) and its EIA Guidelines
(1997), the proposed SCPMP falls under the prescribed lists of projects for which an EIA
Study is required. Using the EIA Guidelines for Irrigation and Drainage Projects (2002), an
EIA Study and related site-specific ESMP for the 28 already identified irrigation schemes
was prepared within the scope of the Feasibility Study (2001-2003) and finalized in March
2004. After an initial examination by the Environmental Affairs Department (EAD), this
Department indicated, in a letter on February 14th, 2006 that it had No Objection for the
proposed irrigation activities since the EIA Report and site-specific ESMP have addressed all
generic environmental and social issues outlined in the EIA Checklist for Small-Scale
Irrigation. Official issuance of the EIA Certificate with specific Terms and Conditions is
expected by May 2006 from EAD. In accordance with Malawi’s legal obligations, it is
understood that an EIA study and site-specific ESMP will be prepared for the 11 newly
identified schemes during their feasibility study and technical design at project inception.
Review and approval by EAD and ADB will be conditional prior to the start of physical
works.
4.7.3 Positive social and environmental impacts have been carefully considered throughout
project’s identification, feasibility and design stages of the ESIA Study and the development
of site-specific ESMP for each of the irrigation schemes. Environmental and social impacts
can occur at the construction and operational phases of the Project. In terms of positive
impacts resulting from project activities, the following ones are considered of significant
importance: (i) improvement of the overall food security and livelihoods of the farmers and
the people living near the irrigation schemes. This will result in the overall improvement of
the health and social well-being of the farmer’s communities, reduce their vulnerability to
drought and contribute to poverty reduction through increased agricultural productivity and
farm income; (ii) creation of employment for the people surrounding the irrigation schemes
and catalysis of income generating activities, including trade in agricultural inputs and
produce and boosting small and medium size enterprise sector; (iii) farmers and surrounding
communities will have the opportunity, through the Farmer Support Program, to learn and
practice improved agricultural methods and efficient utilization of farm inputs and natural
resources, such as sound soil and water’s management; (iv) the technical and managerial
assistance provided to the Department of Irrigation and District’s Directorate of Agriculture
and Natural Resources will strengthen their institutional capacities and optimize their
operational performance; (v) women, in particular, will have the opportunity to participate in
farm-related income generating activities and contribute meaningfully to the socio-economic
development of their communities.
30
4.7.4 The construction and/or rehabilitation of 39 small-scale irrigation schemes, identified
under component A of the Project, will, nevertheless, generate a number of negative social
and environmental impacts within the recipient farmer communities and ecosystems.
Specifically, during construction phase, negative impacts will emanate from the erection of
new facilities for each irrigation scheme (construction/rehabilitation of earth dams,
construction of weirs, side intake and associated canals and drains, construction of bridges
and culverts, spot improvement of access roads, etc.), generating land clearing (including
depletion of valuable indigenous trees and loss of greenery beauty of the site), disturbance to
the wildlife due to noise and removal of vegetation, increased soil erosion from the site due to
extensive land clearance and rubble disposal, increased suspended matter and sediment in
water streams due to soil erosion, change in water flow impacting downstream aquatic life,
water and soil pollution from construction campsites and construction machinery. During the
operational phase of the irrigation scheme, negative impacts include irrigation-induced
erosion, permanent change in hydrology for downstream ecosystems, flooding, loss of water
through earth feeder canals, surface and groundwater contamination from use of fertilizers
and pesticides, presence of invasive weeds and crop diseases, increased incidence of waterborne and water related diseases (e.g. malaria, bilharzias), human and wildlife conflict, and
potential conflict over water and land rights.
4.7.5 Enhancement and mitigation measures for the identified negative environmental
impacts outlined above have been considered during the Feasibility Study. Since most of the
negative impacts are anticipated during the construction phase and result directly from
methods and practices adopted by construction contractors, Code of Good Practices for
Construction have been included in the Work Contract to prevent, to the extent possible,
negative environmental impacts. In addition, the following recommendations have been
suggested: a) construction activities should take place during the dry season, b) selective
clearance of trees on project site by cutting only those trees in the right-of-way of the
irrigation schemes, c) effective spray of water to loose soils to suppress dust and minimize
soil erosion. During the operational phase, an extensive Farmer Support Program will be
implemented to ensure the promotion of environmentally-sound agricultural practices by the
individual farmers, farmer’s groups and the Water User Associations. In particular, regular
and tailor-made training courses will be provided on water management, soil fertility
program, environmental management (protection of upstream catchments and maintenance of
environmental water flow), promotion of Integrated Pest Management (IPM) and handling of
pesticides, hygiene and sanitation and maintenance of the irrigation infrastructures.
4.7.6 Additional institutional, financial and operational enhancement measures have been
recommended considering the limited capacities (and inadequately staffed) in environmental
management of the institutions responsible for ESMP’s implementation and the specificity of
each receiving ecosystem for the irrigation schemes. These measures are: a) an Internationalrecruited Environmental Consultant will finalize the comprehensive ESMP for the 28 already
identified irrigation schemes and will prepare the EIA Study and related site-specific ESMP
for the 11 newly identified irrigation schemes. His/her ToRs will also address the social
issues related to irrigation development. This Consultant will also provide on-going training
to DoI and District Authorities on EIA and Environmental Audits as well as providing
technical support to the DoI’s Monitoring and Evaluation Officer in the preparation of the
site-specific ESMP’s Annual Work Plan and Progress Report; b) under the umbrella of the
District’s Directorate of Agriculture and Natural Resources, institutional and financial
support will be provided to the District’s Environmental Officer in order to ensure continuous
monitoring of the implementation of the mitigation/enhancement measures at each irrigation
31
scheme, in accordance with the ESMP and their AWP and to stimulate inter-sectoral
coordination with District’s health, agriculture, irrigation and forestry Officers on site project
monitoring; c) as identified in each site-specific ESMP, financial assistance will be provided
for the implementation of mitigation measures during the operational phase. These measures
range from prevention of soil erosion, eutrophication and invasive weeds, promotion of agroforestry and protection of upper catchments, promotion of pisciculture, prevention of waterborne diseases and HIV-AIDS, etc.
4.7.7 In terms of environmental monitoring, a generic monitoring framework has already
been prepared for the 39 irrigation schemes included within the scope of this project. This
framework will be tailor-made for each of the irrigation scheme by the Internationallyrecruited Consultant, including the selection of a set of environmental and social indicators to
monitor the effectiveness of the mitigation measures at construction and operation phases. In
terms of surveillance, Contractors, as per their Work Contracts, and Supervising Engineer
will be the responsible entities. For the project’s environmental planning and monitoring
responsibilities, they will be shared as such: the DoI, as the official executing agency for the
project, and more specifically, the M & E Officer will be accountable for the preparation of
an AWP and for the implementation of the Environmental Management and Monitoring
Plans, will consolidate all the monitoring reports from site-specific ESMP and present a
specific summary section into the Bank’s semestrial report. Technical assistance from the
Internationally-recruited Consultant will be provided during the first four years of the project
for this task. Throughout this process, the M & E Officer will also be able to rely on the
following institutional set-up to fulfill his/her responsibilities: 1) the District’s Environmental
Officer will monitor, on a continuous basis, the implementation of the mitigation measures as
outlined in the comprehensive site-specific ESMP and related AWP during the operational
phase; he/she will report on a semestrial basis to the District’s Director of Agriculture and
Natural Resources; 2) the District’s Director will review the state of implementation of the
ESMP, take any corrective actions and consolidate the monitoring report of all sites for
transmission to the M&E Officer. In addition, in compliance with Malawi’s legal framework,
DEA will carry out, in coordination with resource-persons from Ministries of Irrigation and
Water Development, Agriculture, Health, Land Resources and Conservation Department,
annual auditing (and field visit) on the project’s compliance with the EIA Certificate and its
Terms and Conditions. Considering the limited institutional capacities at the sector and
District level, DEA will also undertake an additional oversight monitoring supervision on the
implementation of site-specific ESMP every six-month during construction and operational
phases.
4.7.8 The costs for the mitigation measures during construction phase of the irrigation
schemes as well as for the Farmer Support Program have been already costed and
mainstreamed into project design and budget. An additional amount of U.S. $545,610 over
the six-year project duration have also be budgeted for the following issues: (i) costs of the
EIA processing fees estimated at U.S.$20,000 for the 39 small-scale irrigation schemes (this
amount will then be used to cover the environmental monitoring/auditing costs and
allowances of the EAD and related ministries throughout project implementation); (ii) U.S.
$90,000 for the recruitment of an Internationally-recruited consultant for the finalization of
the 28 comprehensive site-specific ESMPs and the preparation of the EIA Study and related
11 site-specific ESMPs, technical assistance to the M&E Officer on ESMP’s planning and
reporting process, and on-going training of DoI and District authorities on EIA and
Environmental audits; (iii) an average lump sum amount of U.S.$10,000 per irrigation
scheme (total of U.S.$390,000) for the implementation of enhancement and/or mitigation
32
measures during the operational phase, (iv) an amount of U.S.$45,600 for the institutional
strengthening of the District Environmental Units for ensuring continuous monitoring and
technical assistance to the farmer, farmer organizations and Water User Associations, and,
finally U.S.$10,000 for the undertaking of an End-of-Project Environmental Audit. The inkind contribution from the District authorities for the services of District Environmental
Officer is estimated at US $ 22,800 for the six-year project’s duration.
4.8
Project Costs
The total project cost is estimated at UA 16.82 million, including contingencies. The
foreign exchange component would amount to UA 9.63 million, representing 57% of the total
cost, while local cost would be UA 7.19 million, or 43.0% of total cost. Summaries of cost
estimates by components and by category of expenditure are in Tables 4.1 and 4.2
respectively.
Table 4.1
Summary of Cost Estimates by Component
(MWK '000)
Local Foreign Total
Local
(UA)
Foreign
Total
%
Foreign
Exchange
A. Irrigation Infrastructure Development
1. Irrigation and Drainage Schemes
2. Environmental Mitigation
444,222
35,651
822,723 1,266,945 2,519,965
43,649
79,300
202,241
4,667,108
247,609
7,187,073
449,850
65
55
Subtotal
479,873
866,372 1,346,245 2,722,206
4,914,717
7,636,923
64
150,494
294,059
51
B. Farmers’ Support Component
1. Water Management
25,308
26,529
51,837
143,565
2.1 Training in Crop Husbandry
89,768
15,120
104,888
509,232
85,772
595,005
14
2.2 Support to Farmers’ Organisations
32,886
14,094
46,980
186,554
79,952
266,506
30
147,337
79,601
226,938
835,809
451,557
1,287,366
35
10,422
3,956
14,377
59,119
22,439
81,557
28
17
2. Agricultural Production
2.3 Support to Extension Service
2.4 Community Development Activities
2.5 Formation of Savings and Credit Groups
60,742
12,528
73,270
344,575
71,068
415,643
3. Support to Marketing
150,100
308,260
458,360
851,481
1,748,685
2,600,167
67
Subtotal
516,562
460,088
976,650 2,930,335
2,609,968
5,540,303
47
2,276
41,284
43,560
12,911
234,192
247,103
95
2. Personnel
49,213
122,851
172,064
279,173
696,906
976,078
71
Subtotal
51,489
164,135
215,624
292,084
931,098
1,223,181
76
1,047,924 1,490,594 2,538,518 5,944,624
59
C. Project Coordination
1. Office Equipment
Total BASELINE COSTS
Physical Contingencies
Price Contingencies
Total PROJECT COSTS
8,455,784
14,400,408
394,586
650,397
1,044,983
62
149,309
93,340
242,649
846,994
1,266,791 1,698,587 2,965,378 7,186,203
529,496
9,635,677
1,376,490
16,821,880
38
57
69,558
114,653
184,211
33
Table 4.2
Summary of Cost Estimates by Category of Expenditure
(MWK '000)
Local
I. Investment Costs
A. CIVIL WORKS
1. Irrigation Schemes (Treadle Pump)
2. Irrigation Schemes (Gravity)
3. Market Storage Facilities
4. Market Centers
Subtotal CIVIL WORKS
Foreign
(UA)
Total
Local
4,824 11,256 16,080
237,974 555,273 793,247
62,400 145,600 208,000
37,800 88,200 126,000
342,998 800,329 1,143,327
Foreign
Total
% Foreign
Exchange
27,365
1,349,970
353,980
214,430
1,945,746
63,853
3,149,931
825,954
500,338
4,540,075
91,218
4,499,901
1,179,934
714,768
6,485,821
70
70
70
70
70
B. GOODS
1. EQUIPMENT & MATERIALS
2. VEHICLES
FIELD TRUCKS
MOTORCYCLES
Bicycles
Subtotal VEHICLES
3,912
35,208
39,120
22,192
199,727
221,918
90
237
237
50,830
22,389
2,129
75,348
50,830
22,389
2,366
75,585
1,342
1,342
288,346
127,007
12,080
427,433
288,346
127,007
13,422
428,776
100
100
90
100
Subtotal GOODS
4,149 110,556 114,705
23,534
627,160
650,694
96
297,097
990,322
30
1,944,446 3,240,743
269,733
449,555
2,511,276 4,680,621
7,678,510 11,817,136
60
60
54
65
C. SERVICES
1. TRAINING
122,203
2. TECHNICAL ASSISTANCE
3. STUDIES & SURVEYS
Subtotal SERVICES
Total Investment Costs
II. Recurrent Costs
A. Salaries & Allowances
B. OPERATIONS & MAINTENANCE
INFRASTRUCTURE MAINTENANCE
C. GENERAL OPERATING CHARGES
1. OFFICE OPERATING CHARGES
2. OTHER OPERATING COSTS
Subtotal GENERAL OPERATING CHARGES
Total Recurrent Costs
Total Base Cost
Physical Contingencies
Price Contingencies
Total Project Cost
4.9
52,373 174,575
693,226
228,513 342,769 571,282
31,699 47,549 79,248
382,414 442,690 825,105
729,561 1,353,576 2,083,137
1,296,297
179,822
2,169,345
4,138,625
117,805 109,404 227,209
668,281
620,623
1,288,904
48
6,950
39,426
-
39,426
-
846
7,615
8,461
192,762 20,000 212,762
193,608 27,615 221,223
318,363 137,019 455,382
1,047,924 1,490,594 2,538,518
69,558 114,653 184,211
149,309 93,340 242,649
1,266,791 1,698,587 2,965,378
4,799
1,093,493
1,098,292
1,805,999
5,944,624
394,586
846,994
7,186,203
43,195
47,995
113,455 1,206,948
156,651 1,254,943
777,273 2,583,272
8,455,784 14,400,408
650,397 1,044,983
529,496 1,376,490
9,635,677 16,821,880
90
9
12
30
59
62
38
57
6,950
-
Sources of Financing
As shown in Table 4.3, the project will be financed by the ADF and the Government of
Malawi (GoM), including contributions from the beneficiaries. Annex 3 gives the sources of
finance by categories of expenditure (list of goods and services). An ADF Grant amounting to
UA 15.00 million or 89.1% of total costs will be used to finance 98.2% of the investment costs,
as well as 48.8% of recurrent costs (parts of all categories excluding salaries). The GoM
contributions amounting to UA 1.77 million, or 10.6% of total costs, will finance salaries of
national staff, the cost of 1140 treadle pump (already purchased by the GoM) and part of the
operating costs. The beneficiaries will contribute UA 0.05 million or 0.3% of the total costs
towards their share of infrastructure maintenance of irrigation schemes and market infrastructure
Table 4.3: Sources of Finance
MWK '000
Foreign
Local
ADF Grant
GOM
Beneficiaries
Total
Total
Foreign
UA
Local
Total
Percent
1,551,331 1,092,884
147,255
165,598
8,310
2,644,215 8,800,333
312,853
835,344
8,310
-
6,199,668
939,397
47,139
15,000,000
1,774,741
47,139
89.1
10.6
0.3
1,698,587 1,266,791
2,965,378 9,635,677
7,186,203
16,821,880
100.0
34
5.
PROJECT IMPLEMENTATION
5.1
Executing Agency
The Executing Agency of the project will be the Ministry of Irrigation and Water
Development (MoIWD) through the Department of Irrigation (DoI). However, in view of its
limited capacity to implement projects, the Department of Irrigation will be strengthened for
effective project implementation. Accordingly, DoI will recruit a technical team, led by a
Project Coordinator, to oversee the day-to-day coordination and management of project
activities under the overall guidance of the Director of the Department. At the field level, the
project will also be implemented using the existing structures at the districts in line with the
requirements of the established decentralisation process.
5.2
Institutional Arrangements
5.2.1 The project organisation and management is presented in Annex 2. The project will be
implemented within the established structures in the Ministry through the DoI which will
oversee project implementation, monitor project progress, and coordinate and account for the
utilisation of project funds. The DoI will be strengthened by the recruitment of a technical
staff comprising a Project Coordinator, Project Accountant, Monitoring and Evaluation
Officer, Irrigation Engineer Procurement Officer, Administrative Officer and support staff. The
technical team, including the Project Coordinator, will comprise experienced professionals
competitively recruited from the open market and acceptable to the Bank and their
remuneration paid under the grant resources. Since the recruitment of the technical team may
take some time, and in order to avoid delays in the disbursement of the grant and start up of
project activities, GoM will designate an Interim Project Coordinator to work on the initial
project start up activities, notably, the recruitment of the staff (using GoM salary scale). The
appointment of the Interim Project Coordinator will be condition to first disbursement of the
grant.
5.2.2 The main focus of project activities will be at the district level and their
implementation would be carried out through the existing district structures in line with the
established decentralisation process. The District Management Team (DMT), headed by the
District Commissioner, in each of the 19 targeted districts will be responsible for the overall
coordination of project activities and the monitoring of the implementation of project
activities. The Directorate of Agriculture Management Team (DAMT), headed by the District
Director of Agriculture, will act as a technical facilitation team for project activities.
Membership of the DAMT will include the different District Heads of Section. In view of
insufficient capacity, the day to day implementation of project activities will be entrusted to a
District Project Officer (DPO) under the guidance of the District Director of Agriculture and
Natural Resources. Since the number of irrigation schemes vary between the districts, some
grouping of districts would be necessary, therefore 10 DPOs will be recruited.
5.2.3 At the national level, a Project Steering Committee (PSC) would be established to
oversee project implementation. The PSC would be chaired by the Principal Secretary of
MoIWD, or his/her representative. Members will comprise the Secretary to the Treasury,
Ministry of Finance, or his/her representative, the Principal Secretary, or his/her
representative, Ministry of Economic Planning and Development, Ministry of Agriculture
and Food Security, Ministry of Mining, Natural Resources and Environmental Affairs,
35
Ministry of Local Government and Rural Development the Ministry of Health and
beneficiary representatives. The Director of Irrigation Services will be designated ex-officio
member and the Project Coordinator shall be the Secretary. The Committee will meet twice a
year and its mandate will include approval of the Project’s Annual Work Plan (AWP) and
Budget (AWPB) before submitting these to the Bank for review. The PSC will also monitor
performance of the project and provide advice on policy issues.
5.3
Supervision, Implementation and Expenditure Schedule
5.3.1 In view of the fact that the project area is very large, the Bank will closely supervise
the project twice a year. When the Bank’s Malawi Country Office will be opened, it will also
contribute actively to the overall supervision of the project. The District Project Officers will
assemble quarterly reports from technical information on a quarterly basis. This information
will be submitted to the Project Coordinator who will be responsible for reporting to the
Project Steering Committee (PSC). Through the project’s monitoring system, project
management will monitor progress of all three components. A Mid-Term Review (MTR) will
be undertaken by end of PY3 and a Project Completion Report (PCR) will be prepared by
both the Borrower and the Bank by PY6. The project implementation schedule is given in
Annex 6.
5.3.2 Given the nature of the activities and the dispersal of the project sites, the project has
been designed to be implemented over a period of six years as indicated in Annex 6. This
time period will also provide sufficient time for the capacity building to take effect and for
water users associations and communities to assume responsibility for the operation of the
activities. It is planned that the first year of project implementation will be focussed mainly
on organizational aspects and training in participatory approaches. It will also focus on the
recruitment of the consultant who will verify the designs of the first group of schemes, tender
them out and supervise the construction works. The bulk of project activities will take place
in PY 2 to 5 in order to ensure that identified activities can be implemented before project
closure.
5.3.3 The expenditure schedule by component and by category of expenditure over the
project period is projected to be as shown in Tables 5.1 and 5.2 below.
36
Table 5.1 Expenditure Schedule by Component (UA)
Totals Including Contingencies
2007
2008
2009
2010
2011
2012
Total
A. Irrigation Infrastructure Development
1. Irrigation and Drainage Schemes
624,106
2,894,458
2,864,081
268,143
268,143
268,143
84,808
84,808
70,059
70,059
70,059
70,059
449,850
708,914
2,979,266
2,934,140
338,202
338,202
338,202
7,636,923
116,519
136,538
12,094
12,094
12,094
4,720
294,059
40,265
145,495
216,972
111,742
40,265
40,265
595,005
2. Environmental Mitigation
Subtotal
7,187,073
B. Farmers’ Support Component
1. Water Management
2. Agricultural Production
2.1 Training in Crop Husbandry
2.2 Support to Farmers’ Organisations
-
133,253
133,253
-
-
-
266,506
124,932
510,674
208,889
147,623
147,623
147,623
1,287,366
-
79,079
619
619
619
619
81,557
2.5 Formation of Savings and Credit Groups
15,487
171,714
181,982
15,487
15,487
15,487
415,643
3. Support to Marketing
15,316
595,640
595,935
595,935
788,956
8,384
2,600,167
312,519
1,772,394
1,349,745
883,501
1,005,045
217,099
5,540,303
1. Office Equipment
156,586
58,521
7,999
7,999
7,999
7,999
247,103
2. Personnel
156,534
163,909
163,909
163,909
163,909
163,909
976,078
Subtotal
313,120
222,430
171,908
171,908
171,908
171,908
1,223,181
1,334,553
4,974,090
4,455,792
1,393,610
1,515,155
727,208
14,400,408
Physical Contingencies
68,736
370,207
371,787
91,042
106,763
36,449
1,044,983
Price Contingencies
24,695
273,976
427,869
197,222
275,739
176,989
1,376,490
1,427,984
5,618,272
5,255,448
1,681,874
1,897,656
940,646
16,821,880
2.3 Support to Extension Service
2.4 Community Development Activities
Subtotal
C. Project Coordination
Total BASELINE COSTS
Total PROJECT COSTS
Table 5.2
2007
ADF Grant
GOM
Beneficiaries
Total
5.4
Expenditure Schedule by Source of Finance (UA)
2008
2009
2010
2011
2012
Total
1,112,769
5,236,221
4,969,849
1,409,547
1,614,695
656,919
15,000,000
307,278
373,717
276,178
262,436
272,382
282,749
1,774,741
7,937
8,334
9,420
9,891
10,579
978
47,139
1,427,984
5,618,272
5,255,448
1,681,874
1,897,656
940,646
16,821,880
Procurement Arrangements
5.4.1 Procurement arrangements are summarized in Table 5.3 below. All procurement of
goods, works and acquisition of consulting services financed by the Bank will be in accordance
with the Bank's Rules of Procedure for Procurement of Goods and Works or, as appropriate,
Rules of Procedure for the Use of Consultants, using the relevant Bank Standard Bidding
Documents.
37
Table 5.3 Summary of Procurement Arrangements (UA ‘000)
Project Categories
A. CIVIL WORKS
B. GOODS
Equipment & Materials
Field Trucks & Vehicles
Motorcycles
Bicycles
C. SERVICES
Training
Technical Assistance
Studies & Survey
E. OPERATING COST
Infrastructure O & M
Salaries
General Operating Charges
Miscellaneous
Total
*
_
+
National
Competitive
Bidding
Shortlist*
Other
Non
Bank
Funded
7,690
-
-
-
7,690
(7,690)
-
-
-
(7,690)
Total
-
-
-
-
-
104
-
-
140
244
(104)
-
-
-
(104)
311
-
-
-
311
(311)
-
-
-
(311)
138
-
-
-
138
(138)
-
-
-
(138)
16
-
-
-
16
(16)
-
-
-
(16)
-
-
-
-
-
-
757
374
-
1,131
-
(757)
(332)
-
(1,089)
-
3,326
-
-
3,326
-
(3,279)
-
-
(3,279)
-
502
21
-
523
-
(483)
(21)
-
(504)
-
-
-
-
-
-
-
-
-
-
-
-
-
47
47
-
-
-
-
-
-
-
-
1,515
1,515
-
-
-
-
-
-
-
369
-
369
-
-
(357)
-
(357)
-
-
1,512
-
1,512
(1,512)
-
-
(1,512)
-
8,259
4,585
2,276
1,702
16,822
(8,259)
(4,519)
(2,222)
-
(15,000)
Short List applies to the use of consulting services only
Other may be LIC, International or National Shopping, Direct Purchase or Force Account.
Figures in brackets are amounts financed by the Fund.
5.4.2 Civil Works: Procurement of civil works contracts totaling UA 7.690 million in
aggregate, will be carried out under National Competitive Bidding (NCB) procedures. The
NCB procedures have been selected because the works are individually small and scattered in
different locations and are unlikely to attract bids from outside Malawi. Moreover, the amount,
scope and nature of the works involved is within the capacity of local contractors. The works
involve the construction of 39 irrigation schemes in 19 districts (UA 5.795 million),
construction of 26 communal storage facilities in 15 districts (UA 1.180 million); and
construction of 14 rural market centres in 14 districts (UA 0.715). These works will be
implemented through several small contracts because of their location and time spread, with
each contract not exceeding UA 500,000.
5.4.3 Goods: Contracts for goods will be procured and awarded under NCB procedures
because of the existence in the local market of a sufficient number of qualified potential
38
suppliers to ensure competition. Three such contracts will be awarded, viz. 7 seed nursery
field trucks and 4 utility vehicles (UA 311,000), motor cycles (UA 138,000), equipment and
materials (UA 104,000) and valued in total UA 553,000. Other miscellaneous goods such as
bicycles (16,000), where the amounts are small and estimated to cost less than UA 50,000
will be procured using National shopping procedures.
5.4.4 Consulting Services: Procurement of consulting services valued in total at UA
504,000, and technical assistance valued in total at UA 3.279 million, will be on the basis of
short list, in accordance with the “Bank’s Rules of Procedure for the Use of Consultants”.
The selection procedure will be based on technical quality with price consideration.
Consulting services and technical assistance will include verification and preparation of
standard designs, preparation of tender documents as well as supervision of civil works for
irrigation schemes and marketing infrastructure and environmental impact assessments,
project management, accounting, and project monitoring and evaluation. For services costing
less than UA 100,000, for individuals and UA 350,000, for consulting firms, the Borrower
may limit the publication of the advertisement to national/regional newspapers. However, any
eligible consultant, being regional or not, may express his desire to be short-listed.
5.4.5 Training: Training of various categories of staff and farmers under the farmers’ support
component valued at UA 1.131 million will be contracted to appropriate institutions, trainers or
NGOs, acceptable to the Bank. The training would be carried out through a programme
prepared by the project and submitted to the Bank for approval indicating the type of training,
the persons to be trained, and CVs where applicable, institution, estimated costs and
disbursement procedures.
5.4.6 Miscellaneous items, including personnel costs, operation and maintenance of
equipment, and other administrative costs, will be procured through existing GoM procedures
which are acceptable to the Bank.
5.4.7 National Procedures and Regulations: Malawi’s national procurement laws have been
reviewed and determined acceptable.
5.4.8
General Procurement Notice: The text of a General Procurement Notice (GPN) will be
discussed and agreed with the Borrower and this will be issued for publication in the UN
Development Business, upon approval by the Board of Directors of the grant proposal.
5.5
Disbursement Arrangements
5.5.1 The direct payment method and the special account method will be used. The project
will open a special account in a bank acceptable to the Fund into which advances for
implementation of activities qualifying for special account will be deposited. The ADF will
replenish the SA after the Executing Agency has provided valid justifications for the use of at
least 50% of the previous deposits. GoM will be required to open an account in which its
contribution to the project will be deposited. This account will be audited together with the
project accounts.
5.5.2 In each of the 19 districts, an account will also be opened in a commercial bank
acceptable to the ADF. The account will be managed by the District‘s Director of Finance.
Thereafter funds will be withdrawn from the project’s Special Account to be deposited in the
district account to finance eligible expenses.
39
5.6
Monitoring and Evaluation
5.6.1 Monitoring would be an integral part of project management activities. A team of
consultants will carry out a mid-term review in the third year of project implementation. A
consultant would be recruited for three months in the first year of the project to assist with the
establishment of a comprehensive monitoring and evaluation system. The consultant would
come back every year starting from the end of the second year for the same period to assist
with the analysis of the data collected. The monitoring and evaluation system would include,
at the community level, a system of Participatory Monitoring and Evaluation. The M&E
Specialist will undertake a baseline study in PY1 and follow it up with annual surveys to
assess performance and impact of project activities. It will be responsible for compiling the
quarterly and annual progress reports. The project M&E process will be anchored within the
existing system of the MoIWD developed by the Government.
5.6.2 The Bank will conduct regular follow-ups, review and supervision missions to closely
monitor the implementation of the project. The latter would be undertaken twice a year given
the national coverage of the project. With the planned opening of the Malawi Country Office,
there will be very close monitoring of the project.
5.7
Financial Reporting and Auditing
5.7.1 An experienced Project Accountant will be responsible for financial management and
reporting procedures for the project. The accountant will ensure that proper accounting
procedures are implemented and maintain an automated accounting system for the project in
order to facilitate verification of expenditures by component/category and source of finance.
The District Director of Finance who is responsible for the District Project Accounts, will
submit monthly returns of expenditure to the DoI and Project Coordinator to enable it closely
monitor and consolidate the expenditures for the timely submission of request for
replenishment of the Special Account. The Project accountant will undertake periodic checks
on the District accounts.
5.7.2 Audit of Public Enterprises which include government ministries, programs and
projects is the responsibility of the National Audit Office in Malawi as articulated in the
Constitution of the republic and the Public Finance Management Act. The National audit
office uses International Organization of Supreme Audit Institutions (INTOSAI) standards
when carrying out its audits. The annual financial statements produced by the project will be
audited by the Auditor General of Malawi. Provisions have also been made for the
recruitment by the Auditor General of reputable professional auditors mutually acceptable to
GOM and the Bank should the need arise. The certified audit report shall be submitted to the
Bank not later than six months after the financial year.
5.8
Aid Coordination
There exists a donor agriculture coordination group, the Donor Committee on
Agriculture and Food Security (DCAFS) composed of the different donors present in Malawi
which are involved in the agriculture and rural development sector. The EU is the current
chair of the committee which meets once a month, usually on the first Thursday. DCAFS
provides a forum for donors to coordinate their activities in the agriculture and rural
40
development sector to ensure programme synergy and compliance with Government of
Malawi policies. The donor group is about to engage to support the government to develop
sector wide approaches to rural development. In the process of formulating the project, the
various missions interacted with the donor community to inform them about the project and
to benefit from their own experiences. These exchanges will continue during the
implementation of the project with the various Bank missions that will visit Malawi.
6.
PROJECT SUSTAINIBILITY AND RISKS
6.1
Recurrent Costs
6.1.1 The total recurrent cost under the project are estimated at UA 3.07 million
(approximately 18% of total project costs) consisting of field allowances for the project staff,
salaries for government extension staff and operating expenses, including operations and
maintenance of infrastructures, vehicles and motorcycles. The recurrent cost will be financed
by the ADF grant (48.8%), the Government of Malawi (49.7%) and Beneficiaries (1.5%) as
indicated in Table 6.1 below.
Table 6.1
ADF/GOM Financing of Recurrent Costs (UA)
2007
2008
2009
2010
2011
2012
Total
%
ADF
172,988
260,320
349,418
227,884
238,425
249,472
1,498,507
48.8%
Government
230,080
240,638
249,689
259,121
268,951
279,198
1,527,677
49.7%
Beneficiaries
7,937
8,334
9,420
9,891
10,579
978
47,139
1.5%
411,004
509,292
608,528
496,896
517,955
529,648
3,073,322
100%
Total Recurrent Costs
6.1.2 The GoM contributions to the recurrent costs mainly relates to salaries for existing
staff (UA 1.5 million) and part of the operations and maintenance (UA 0.27 million, which
includes beneficiary participation in infrastructure maintenance amounting to UA 0.047
million). The Government’s budgetary allocations for the staff (considered under this
project), are already in place through the annual budgets allocated to the Ministries of
Irrigation and Water Development and Agriculture and Food Security. About 85% of
Government contribution is already included in the Government budget, and given the
government’s commitment to this important food security project, it should not have any
difficulty in meeting its share of the recurrent costs. The project will not need Government
contributions at the end of the implementation period since the project is designed in such a
way that it will be self-sustaining in the long run, as the beneficiaries would be trained to be
fully responsible for schemes operation and management.
6.2
Project Sustainability
6.2.1 A participatory approach and extensive consultation which was done during project
identification, preparation and design has cultivated sense of ownership among the
smallholder farmers whose commitment was endorsed in the initial participatory agreement
form. The high degree of farmer participation in all scheme development stages will ensure
technical sustainability. The decentralised nature of implementation and the in-kind
contribution of farmers during project implementation will bring about full ownership of
facilities, developed by the project, and this will further enhance sustainability. The project
41
design deliberately opted for river diversion gravity-fed schemes and treadle pump based
irrigation schemes due to their low operation and maintenance costs which are a small
fraction of the expected incremental income at farm level. The proposed irrigation
technologies are simple and have already been implemented in several existing smallholder
irrigation schemes and private estates, in Malawi, and have been proven to be suitable. In
addition, during the SSID study, irrigation water inlets in the proposed sites were selected, in
participatory manner, with technical evidence of irrigation water availability even during the
driest months. Land tenure security issues were extensively discussed with the beneficiaries
during the study period which is an important aspect for scheme sustainability.
Environmental mitigation measures have been incorporated into the project design whose
implementation will minimise negative environmental impacts expected to result directly
from civil works and irrigation activities.
6.2.2 The proposed extensive training, including study tours and exchange visits, for
farmers at the grassroots level in both irrigation practices and marketing will ensure full
responsibility of scheme management leading to self-management and thus long-term scheme
sustainability. The proposed training will assist in strengthening farmers’ bargaining power to
gain better terms and access to required resources. WUA formation, from the onset of the
project, has deliberately been included in the project design so that farmers will be able, in
future, to autonomously operate the scheme on commercial basis thus generating more
financial resources for scheme operation and maintenance. WUA management will be
responsible for ensuring that all farmers owning plots, within a block, are fully utilising them
for irrigated agricultural production. The orientation towards traditional crops, currently
grown in the area for domestic consumption and income generation, will assist the farmers to
technically and financially establish themselves whilst allowing for a gradual shift of the
farming systems towards higher value cash crops. The marketing subcomponent will assist
farmers in establishing proper marketing links thereby having a ready market for their
produce.
6.3
Critical Risks and Mitigating Measures
6.3.1 The occurrence of severe droughts in successive years during project implementation
could result in farmers not making meaningful returns on adopted improved crop varieties.
This will be mitigated to some extent by the provision of dam storage with the irrigation
facilities under the project. Additionally, some districts may lack capacity to plan and manage
the implementation of project activities. This will be mitigated by the training which will be
provided to the key implementing bodies. Furthermore, the Bank will ensure that the project
is supervised at least two times a year.
6.3.2 The interest and practical participation by the farmers in the implementation of the
Scheme is of paramount importance, as it will greatly determine the impact of the project and
its sustainability. The risk of inadequate participation of farmers in construction, in particular
their willingness and ability to provide labour before and during construction will be
mitigated by extensive training support in group dynamics so that they can plan and organise
themselves for the implementation, operation and maintenance of the schemes.
42
7.
PROJECT BENEFITS
7.1
Financial Analysis
7.1.1 Project financial analysis was carried out based on representative crop and farm
budgets for the various farming systems of the project sites, using the prevailing cropping
pattern and looking at incremental costs and benefits due to the project interventions. Most
of the data used for the analysis was derived from a study on Economic Budgets and Parity
Prices for Different Crop Enterprises conducted by the Ministry of Agriculture and Food
Security in February 2005.
7.1.2 The crop models and budgets have been developed for all project farming areas. They
were then assembled into two models related to the irrigation technology that would be
implemented. The developed model focused on appraising ten crops, maize (grains and cobs),
beans, Irish potatoes, sweet potatoes, cabbages, paprika, chilies, onions, tomatoes, and rice,
as well as post harvest, marketing, and irrigation infrastructure. The project was appraised
with the objective of determining how irrigation, post harvest, and market facilities as well as
capacity building would impact the farming and marketing activities of smallholder farmers
who engage in producing the ten crops in the project sites and engage in marketing these ten
crops in the project area.
7.1.3 Model A represents farms located in areas where a gravity scheme will be
implemented. This technology will be implemented on a total area of 2,653 ha which hosts
7,286 households. Total production in this area would rise from 80,277,897 MWK in the
‘without’ project situation to 596,156,476 MWK in the ‘with’ programme situation. As a
result, the net incremental return per household would reach 56,106 MWK (USD 432).
Similarly model B represents farms in sites where a treadle pump scheme will be
implemented. It covers a total area of 402 ha which hosts 1,470 households. Total production
in this area would rise from 2,626,897 MWK in the ‘without’ project situation to 49,261,806
MWK in the ‘with’ project situation. Consequently the incremental return per household
would reach 31,724 MWK (USD 244).
7.1.4 The net present value (NPV) decision criteria rather than the internal rate of return
(IRR) has been used in assessing the project. At 22% real required rate of return, the base
case financial results indicate that the project is attractive to smallholder as the NPV of the
real net cash-flows is positive, amounting to a value of MK 905 million for the entire project
area.
7.2
Economic Analysis
The economic analysis assesses how the project is viable to the entire society. It is
derived from the financial analysis by adjusting the financial prices for any market distortion
that drives a wedge between the economic value and the financial values of the items. The
financial value does not reflect the true economic value of a resource employed, thus the need
to adjust it for distortions using conversion factors. Particularly, the economic value of the
exported crops includes the foreign exchange premium associated with the distortions in the
market for traded goods. An economic analysis was carried out over a 20-year period. The
results of the analysis show that the project would be economically rewarding, with an
economic internal rate of return (EIRR) of 25.1%. The Net Present Value at 12 % discount
43
rate is MWK 1.66 billion (UA 8.7 million). The summary of the economic analysis is
presented in Annex 4.
7.3
Social Impact Analysis
7.3.1 The proposed project is expected to yield considerable benefits to participating
farmers and to the whole economy. The project will have positive impact on the economy by
assisting to build and retain capacity for 8,756 households (45,531 farmers) within the project
sites. The marketing component of the project will serve about 14% of the project districts,
i.e. more than one million people in the project districts. The project would contribute to
creating a cadre of well-trained smallholder farmers and promote business development and
the emergence of rural entrepreneurs with the objective of creating a critical mass of selfconfident and business oriented farmers who will be able to identify, develop and exploit
economic opportunities related to agricultural production and marketing on a sustainable
basis. It will lead to strengthened farmers’ organizations that would perform basic market
researches in order to sign contracts with potential customers.
7.3.2 The crop specific training will result in significant gains in productivity and
production by improving irrigation and crop practices among smallholder farmers resulting in
increased food security. This will contribute to poverty reduction.
7.3.3 The construction of community storage facilities and market centers and marketing
specific training will result in significant reduction in crop losses and improvement of crop
standard and specifications. This will increase the marketable cash crops which will lead to
improved quality and standard of living of the targeted population. For example, a
preliminary value chain analysis for tomato in the Mzuzu area shows that farmers receive
about 18% of market margins while in the Lilongwe area it is about 7%; with about 60%
losses in both areas. The marketing component of the project will improve the quality of
produce to meet the requirements of the modern markets (supermarkets and tourism
facilities). This will be due to the storage facilities at project sites and market centers at
project districts. The price of the new high value products will be increased due to the
improved quality and the targeting of different consumption markets.
7.3.4 Enhancement of Women Participation: The project will promote gender
mainstreaming and will specifically target female-headed households to improve their
livelihoods through membership of Farmers’ Organizations. Women will be involved in the
participatory irrigation scheme management as members of WUAs and will constitute half
the elected representatives of WUGs as well as half of the contact farmers trained by the
project. Women’s access to project benefits will be increased through training, especially in
the area of water management techniques, farming skills, business skills and community
development activities. The Monitoring and Evaluation Officer will facilitate collection of
gender disaggregated data and the project coordinator will ensure active involvement of
women in the project.
44
7.4
Sensitivity Analysis
A sensitivity analysis has been carried out to assess the impact on estimated project
returns arising from changes in base case assumptions as presented below. The sensitivity
analysis shows that:
(i)
(ii)
(iii)
A decrease of benefits by ten percent will reduce the EIRR to 21.3 percent and the
NPV (at real interest rate of 12%) to MWK 1.14 billion (UA 6.02 million); and 20
percent decrease in benefits will reduce the EIRR to 17.3 percent and the NPV to
MWK 0.62 billion (UA 3.2 million).
An increase of cost by ten percent will reduce the EIRR to 21.7 percent and the NPV
to MWK 1.31 billion (UA 6.9 million); and an increase of cost of 20 percent will
reduce the EIRR to 18.7 percent and NPV to MWK 0.95 billion (UA 5.01).
Delaying project benefits by one year will reduce the EIRR to 18.7 percent and the
NPV to MWK 1.0 billion (UA 5.3 million); delaying benefits by two years will
reduce the EIRR to 14.5 percent and the NPV to MWK 0.42 billion (UA 2.2 million).
These analyses show that the project is robust and can withstand a series of adverse effects by
maintaining its EIRR above the assumed opportunity cost of capital of 12%.
8.
CONCLUSIONS AND RECOMMENDATIONS
8.1
Conclusions
The project is technically feasible, economically viable, environmentally sound, and
socially desirable. The project is participatory in its design and decentralised in its
implementation with a significant beneficiary input intended to ensure sustainability. The
project is demand-driven as there was considerable participation of stakeholders in the
preparation process. This should bring about a high degree of ownership of facilities
developed through the project and provide some guarantee of sustainability. Further
guarantees are provided by the technically unsophisticated nature of many of the
interventions and their simple maintenance requirements and by the use of existing
government structures for project implementation. The project meets the government
objective of improving the productivity of smallholder agriculture. The project will also
contribute significantly to achieving the Millennium Development Goals of (i) halving the
proportion of people living in extreme poverty by 2015, and (ii) promoting gender equality
and empowerment of women through their involvement in project activities.
8.2
Recommendations and Conditions for Grant Approval
It is recommended that an ADF grant not exceeding UA 15.0 million be granted to the
Republic of Malawi for the purpose of implementing the project as described in this report,
subject to the following specific conditions:
45
A.
Conditions Precedent to Entry into Force of the Grant Protocol of Agreement
The Grant shall enter into force upon its signature.
B.
Conditions Precedent to First Disbursement of the Grant
The first disbursement shall be conditional upon the fulfilment of the following conditions:
(i)
opened a special project accounts in a bank acceptable to the Fund, and on terms and
conditions also acceptable to the Fund, into which the grant resources proceeds shall
be deposited on the request of the executing agency (para. 5.5.1);
(ii)
provided evidence of the designation of an Interim Project Coordinator to work on the
initial project start up activities (para. 5.2.1);
Other Conditions: The Borrower shall have:
(i)
recruited the Project Coordinator, Project Accountant, Monitoring and Evaluation
Officer, Irrigation Engineer, Procurement Officer within six (6) months of first
disbursement (para. 5.2.1);
(ii)
opened within six months of entry into force of the grant, 19 District Project Accounts
in banks acceptable to the Fund, and on terms and conditions also acceptable to the
Fund into which part of the ADF grant resources shall be deposited prior to the
commencement of any project sponsored activities in the districts, (para. 5.5.2).
Annex 1
Page 1 of 1
Smallholder Crop Production and Marketing Project
Map of Malawi showing Project Area
This map has been drawn by the African Development Bank Group exclusively for the use of the readers of the SCPMP Appraisal Report to which it is attached. The
names used and the borders shown do not imply on the part of the Bank and its members any judgment concerning the legal status of a territory nor any approval or
acceptable of these borders
Annex 2
Page 1 of 2
Malawi: Smallholder Crop Production and Marketing Project
Project Organisation and Management
ADF
Principal Secretary
Project Steering Committee (PSC)
PS MoIWD (chair), Rep. Finance, etc Other
Stakeholders to be Co-opted as Necessary
DEPARTMENT OF IRRIGATION
Technical Team
District Directorate of Agriculture and
Natural Resources
Agriculture Directorate Management Team
Extension Planning Areas
Front Line Extension Workers
Community Project Committees
Annex 2
Page 2 of 2
PROFILE OF INTERIM PROJECT COORDINATOR
1.
The Interim Project Coordinator will, for a period of six months, oversee the initial
project start up activities, notably, the recruitment of the Technical Team. Within the initial six
months period, he or she will be the key link between the project and the Fund and will therefore
perform the following major specific duties:
•
•
•
•
•
2.
Co-ordinate all project start-up activities and ensure that they are executed according to
schedule.
Supervise and monitor the preparation of advertisement for recruitment of the project
technical team, tender documents, including the analysis of tenders.
Supervise and ensure timely development of the initial Annual Work Programs and
Budget and submit them to the Fund for review.
Compile Project Quarterly Reports.
Serve as Secretary to the Project Steering Committee and supervise and ensure execution
of any decisions approved by the Committee.
Qualifications and Experience. The candidate for the position should:
•
•
•
Possess a post graduate degree in Agricultural Economics or Irrigation/Civil Engineering
with economics background.
Have at least 10 years experience as Project Manager or Team Leader of experts with
various professional backgrounds.
Have a track record on establishing and managing monitoring and evaluation units.
Annex 3
Page 1 of 1
Malawi: Smallholder Crop Production and Marketing Project
Provisional List of Goods and Services – Categories of Expenditure
(UA)
ADF GRANT
Amount
A. CIVIL WORKS
GOM
%
7,690,297
Amount
BENEFICIARIES
%
Amount
100
0
0
%
TOTAL
Amount
%
0
0
7,690,297
46
B. GOODS
Equipment & Materials
104,378
43
139,669
57.2
0
0
244,047
1.5
Field Trucks & Vehicles
310,741
100
-
0
0
0
310,741
2
Motorcycles
138,197
100
-
0
0
0
138,197
1
15,915
100
0
0
0
0
15,915
0.1
569,232
80
139,669
19.7
0
0
708,901
4
Bicycles
Subtotal GOODS
C. SERVICES
Training
1,088,910
96
40,784
3.6
0
0
1,129,694
7
Technical Assistance
3,279,294
99
47,021
1.4
0
0
3,326,316
20
502,582
96
19,590
3.8
0
0
522,172
3
4,870,786
98
107,395
2.2
0
0
4,978,181
30
-
0
-
0
47,139
100
47,139
0.3
Studies & Surveys
Subtotal SERVICES
D. OPERATIONS &
MAINTENANCE
Infrastructure Maintenance
Salaries
General Operating Charges
Other Operating Charges
Subtotal OPERATIONS &
MAINTENANCE
Total Project Cost
-
0
1,515,785
100
-
0
1,515,785
9
357,377
97
11,892
3.2
-
0
369,269
2
1,512,309
100
0
0
-
0
1,512,309
9
1,869,686
54
1,527,677
44.4
47,139
1.4
3,444,502
21
15,000,000
89.1
1,774,741
10.6
47,139
0.3
16,821,880
100
Annex 4
Page 1 of 3
Smallholder Crop Production and Marketing Project
Summary of Economic Analysis
1. Introduction
The Small-Scale Irrigation Development Project is a project that links the marketing of agricultural
commodities with irrigation technologies to improve food security through promoting the intensification
and diversification of the existing cropping system and changing the behavior of farmers to be more
business oriented.
2.
Economic Analysis
a.
Methodology and Assumptions:
The judgement of the Project’s economic viability is based on an assessment of its tangible benefits,
measurable in monetary terms. This approach is premised on the basic objective of ensuring that the
funds provided for the construction of the Project, its operation and maintenance, as well as for the
necessary replacement costs, shall result in an overall improvement of the economic welfare of greater
value than the total cost incurred. Apart from the measurable benefits, other intangible socio-economic
and technical benefits justify the establishment of the Project.
Conversion factors are used to convert financial values to economic values by making adjustments in
order to account for the influence of market imperfections. Although substantial liberalisation has taken
place in Malawi in recent years, following the implementation of IMF sponsored programmes, these
adjustments still have to be made to take into account imperfections on the labour market and to correct
taxes, duties and subsidies. The Standard Conversion Factor (SCF) has been determined to convert the
financial values of all items not internationally traded as well as the values of all activities directly related
to the implementation of the Project and its operation which incur costs in local currency. A SCF of 0.97
has been determined for this evaluation, as shown in Table 1.
Table 1
Calculation of the Standard Conversion Factor (SCF), MWK billion
Item description
1999
2000
1. Total imports consumer good CIF
32.25
39.48
2. Total exports consumer goods FOB
23.63
31.82
3. Total customs duties/imports taxes
2.28
2.38
4. Export subsidies
0
0
5. 1+2
55.38
71.30
6. (1+2+3) – 4
58.16
73.68
Standard Conversion Factor (SCF) 5/6
0.96
0.97
0.97
Average 2000-2002
Source: Small-Scale Irrigation Development Study (SSIDS), Malawi, 2004
2001
53.66
31.42
2.67
0
85.08
87.75
0.97
The Shadow Wage Rate (SWR) for skilled as well as unskilled labour depends on the development of the
labour market in the local economy. The share of unskilled labour as a proportion of total construction
activities is generally very low (in the range of 2-4 %, depending on the nature of the work) and therefore
has not been considered. The SCF has been applied for construction activities. For agricultural activities a
factor of 0.94 has been applied for skilled labour and a factor of 0.4 for unskilled labour.
For agricultural cost components such as fertiliser, chemicals and seeds, specific conversion factors have
been determined to take into account the foreign exchange content of the products, the use of skilled and
unskilled labour as well as the impact of transfer payments in the form of subsidies and taxes. A 5 %
adjustment has been effected to allow for the discounts that will be realised by the farmers through
organised group purchasing of the various inputs that can be procured in large quantities at a time. These
calculations give conversion factors of 0.88 for fertiliser, 0.95 for chemicals and 0.81 for seeds (see Table
2 for the calculations).
Annex 4
Page 2 of 3
Table 2 Calculation of Conversion Factors for Fertilisers, Chemicals and Seeds
Description
Fertilisers
%
Financial costing:
Materials
(local)
2
(imported)
82
Labour
16
Taxes and surcharges
0
Total
100
Economic costing:
Materials
(local)
2
(imported)
82
Labour
9
Taxes and surcharges
0
Total
93
Conversion Factor
0.93
5% adjustment
0.88
Source: Small-Scale Irrigation Development Study (SSIDS), Malawi, 2004
Commodity
Chemicals
%
Seeds
%
1
98
1
0
100
15
55
30
0
100
1
98
1
0
99
0.99
0.95
14
55
17
0
86
0.86
0.81
Crop produce values for the “With Project” situation have been derived from the proposed cropping
programme, projected yield levels under irrigation and economic prices based on the border price
estimates and/or derived from the financial local market prices by using the estimated conversion factors.
Farm gate prices have been calculated by taking into account all costs for internal handling as well as
transport. These adjustments have been made using the official exchange rate, based on import price
estimate, Free on Board (FOB), Nacala or Cost Insurance Freight (CIF) Europe. The calculation of
economic values for internationally traded commodities takes into consideration the cost of external
railage, handling and insurance. For commodities that are not traded on the international markets and
therefore meant for consumption within Malawi, the SCF has been used to determine the approximate
economic value. Economic project development costs have been calculated by applying the SCF and
SER to the financial values.
b.
Economic Analysis Results
The results of the analysis show that irrigation development, crop production, and marketing activities
would be economically rewarding, with an economic internal rate of return (EIRR) of 25.1%.
Annex 4
Page 3 of 3
Table 3: Economic Internal Rate of Returns (EIRR)
#
YEAR
Investment cost.
Operations &
Replacement
costs
Total
Costs.
Total
Revenue
Net Benefits
1
2007
179
41
220
0
-220
2
2008
901
57
958
0
-958
3
2009
819
134
953
318
-636
4
2010
209
174
383
636
253
5
2011
243
237
481
954
473
6
2012
72
363
435
1 060
625
7
2013
363
362
1 060
697
8
2014
363
362
1 060
697
9
2015
363
362
1 060
697
10
2016
386
385
1 060
674
11
2017
363
362
1 060
697
12
2018
363
362
1 060
697
13
2019
363
362
1 060
697
14
2020
363
362
1 060
697
15
2021
363
362
1 060
697
16
2022
363
362
1 060
697
17
2023
363
362
1 060
697
18
2024
386
385
1 060
674
19
2025
363
362
1 060
697
20
2026
363
362
1 060
697
2 424
EIRR
25.1%
ENPV
1 663
1 174
Note: Treadle-pumps are replaced in year 10 and year 18 resulting in an increase in operating costs.
c.
Economic Sensitivity Analysis
The above result has been tested for sensitivity due to shifts in cost and benefits as well as to
implementation lags. The results are summarized below.
Sensitivity analysis
EIRR
Costs up by 10%
21.7%
Costs up by 20%
18.7%
Benefits Down by 10%
21.3%
Benefits Down by 20%
17.3%
Costs up by 20% and Benefits Down by 20%
11.3%
Benefits lagged by 1 year
18.7%
Benefits lagged by 2 year
14.5%
The results show that the analyzed project activities would be more sensitive to shifts in benefits
more than costs. However, a combination of increases in costs and a reduction in benefits would
make the project economically marginal, reducing the EIRR to 11.3% and a delay in project
benefits by two years would also have a significant impact, reducing the EIRR to 14.5%.
Annex 5
Page 1 of 4
Sector
Company
Loan number
Project title
Approval
date
Signature
date
10-Dec-97
27-May-98
Agriculture
ADF
2100150000688
RURAL INCOME ENHANCEMENT PROJECT
Agriculture
ADF
2100150000673
MACADAMIA SMALLHOLDER DEVELOPMENT
PROJECT
15-Jul-98
Agriculture
ADF
2100150000690
SMALLHOLDER IRRIGATION PROJECT
26-Nov-98
Agriculture
ADF
2100155000221
SMALL SCALE IRRIGATION STUDY
26-Nov-98
Agriculture
ADF
2100150000679
HORTICULTURE & FOOD CROPS DEV PROJECT
2100155000229
HORTICULTURE & FOOD CROPS DEV PRO
STUDY
2100150006702
SMALLHOLDER OUTGROWER SUGAR-CANE
PRODN.
2100150007035
LAKE MALAWI ARTISANAL FISHERIES DEV
PRO
2100155001894
LAKE MALAWI ARTISANAL FISHERIES DEV
PRO STUDY
2100150007223
CUSTOM. LAND REFORM & SUSTAIN.
LIVELIHOOD STUDY
Agriculture
Agriculture
Agriculture
Agriculture
Agriculture
ADF
ADF
ADF
ADF
ADF
Entry into
force
2100150008895
SUPPORT FOR GOOD GOVERNANCE
Social
ADF
2100150000682
Disbursement
rate
7,060,000.00
4,682,348.30
2,377,651.70
13-Jan-99
7-Nov-00
6,850,000.00
1,969,073.00
24-May-99
13-Apr-00
5,020,000.00
704,918.25
13-Jan-99
19-Nov-99
1,119,234.00
15-Dec-98
24-May-99
1-Feb-00
15-Dec-98
24-May-99
15-Dec-99
Status
66.30%
Ongoing
4,880,927.00
28.70%
Ongoing
4,315,081.75
14.00%
Ongoing
563,202.62
556,031.38
50.30%
Ongoing
6,650,000.00
2,008,045.00
4,641,955.00
30.20%
Ongoing
1-Feb-00
840,000.00
419,615.00
420,385.00
50.00%
Ongoing
10-Feb-00
8-Nov-00
8,930,000.00
1,845,216.00
7,084,784.00
20.70%
Ongoing
29-Jan-03
5-May-03
8-Sep-03
6,930,000.00
1,127,153.00
5,802,847.00
16.30%
Ongoing
29-Jan-03
5-May-03
8-Sep-03
840,000.00
251,766.00
588,234.00
30.00%
Ongoing
16-Sep-03
13-May-04
13-May-04
Ongoing
Agriculture Total
ADF
Undisbursed
Balance
Disbursements
1-Feb-00
Total ADF
Multi-Sector
Net Signed
Loans
394,640.00
184,247.06
210,392.94
46.70%
44,633,874
13,755,584
30,878,290
35.32%
44,633,874
13,755,584
30,878,290
35.32%
8-Dec-04
4-Mar-05
6-May-05
12,000,000.00
12,000,000.00
-
100.00%
Ongoing
POVERTY REDUCTION AND INSTITUTIONAL
SUPPORT
10-Dec-98
24-May-99
12-May-00
7,000,000.00
4,292,659.00
2,707,341.00
61.30%
Ongoing
Ongoing
Social
ADF
2100155000228
POVERTY REDUCTION AND INSTITUTIONAL
SUPPORT
10-Dec-98
24-May-99
12-May-00
2,000,000.00
1,833,373.00
166,627.00
91.70%
Social
ADF
2100150000696
RURAL HEALTH CARE PROJECT III
8-Nov-00
26-Mar-01
2-Oct-01
10,000,000.00
4,972,985.00
5,027,015.00
49.70%
Ongoing
Social
ADF
2100150006687
SUPPORT TO CDSS (EDUCATION IV)
21-Nov-01
5-Aug-02
26-Nov-02
15,000,000.00
1,579,096.00
13,420,904.00
10.50%
Ongoing
Social
ADF
2100150006792
SKILLS DEVPT & INCOME GENERATION
PROJECT
16-Jan-02
5-Aug-02
5-Mar-03
9,590,000.00
2,282,470.00
7,307,530.00
23.80%
Ongoing
ADF
2100155005966
SUPPORT TO HEALTH SECTOR PROGRAMME
43,590,000.00
14,960,583.00
28,629,417.00
47.40%
43,590,000.00
14,960,583.00
28,629,417.00
47.40%
13,540,000.00
198,338.34
13,341,661.66
1.50%
Ongoing
Ongoing
Social
24-Nov-05
Ongoing
Total ADF
Social Total
Transport
Transport
ADF
ADF
2100150000683
KARONGA-CHITIPA ROAD (LIFILYA TO
CHITIPA SECTION)
15-Dec-99
10-Feb-00
16-Nov-00
2100150007157
ROADS REHAB/UPGRADING IN
KARONGA/CHITIPA
29-Oct-03
23-Jan-04
5-May-04
Total ADF
Transport Total
13,670,000.00
-
13,670,000.00
0.00%
27,210,000.00
198,338.34
27,011,661.66
0.75%
0.75%
27,210,000.00
198,338.34
27,011,661.66
Water/Sanit
ADF
2100150006726
INTEGRATED WS & SAN. FOR CRWB & NRWB
5-Dec-01
5-Aug-02
15-Oct-02
8,490,000.00
708,452.00
7,781,548.00
8.30%
Ongoing
Water/Sanit
ADF
2100155001729
INTEGRATED WS & SAN. FOR CRWB & NRWB
5-Dec-01
5-Aug-02
15-Oct-02
1,100,000.00
542,240.00
557,760.00
49.30%
Ongoing
9,590,000.00
1,250,692.00
8,339,308.00
28.80%
9,590,000.00
1,250,692.00
8,339,308.00
28.80%
Total ADF
Water/Sanit Total
Annex 5
Page 2 of 4
Sector
Approval
date
Signature
date
Entry into
force
Net Signed Loans
Disbursements
Undisbursed
Balance
Disbursement
rate
Company
Loan number
Project title
Status
Agriculture
ADF
2100150000657
NAMWERA RURAL DEVELOPMENT
26-Oct-76
10-Dec-76
10-Oct-77
4,600,642.19
4,600,642.19
-
100.00%
Completed
Agriculture
ADF
2100150000658
BLANTYRE-SHIRE HIGHLAND
RURAL DEVELOPMENT
16-Dec-83
9-May-84
23-Mar-85
9,616,837.12
9,616,837.12
-
100.00%
Completed
Agriculture
ADF
2100150000671
ZOMBA RURAL DEVELOPMENT
25-Nov-87
22-Feb-88
25-Sep-89
5,697,206.36
5,697,206.36
-
100.00%
Completed
Agriculture
ADF
2100150000670
NATIONAL LIVESTOCK
DEVELOPMENT
18-Jan-88
22-Feb-88
10-May-90
6,709,743.46
6,709,743.46
-
100.00%
Completed
Agriculture
ADF
2100155000213
INSTITUTIONAL SUPPORT TO SDA
28-Aug-90
31-Jan-91
10-Feb-93
538,567.08
538,567.08
-
100.00%
Completed
Agriculture
ADF
2100155000215
MACADAMIA NUTS STUDY
18-Dec-90
31-Jan-91
18-Jun-91
458,006.81
458,006.81
-
100.00%
Completed
Agriculture
ADF
2100155000216
SMALLHOLDER SUGAR CANE
STUDY
18-Dec-90
31-Jan-91
18-Jun-91
200,943.76
200,943.76
-
100.00%
Completed
Agriculture
ADF
2100155000217
AGRICULTURAL SECTOR STUDY
18-Mar-91
31-Jan-92
1-Nov-92
1,410,468.59
1,410,468.59
-
100.00%
Completed
2100150000687
MWANZA RURAL DEVELOPMENT
PROGRAMME
27-Aug-91
13-May-92
11-Mar-93
8,013,152.00
5,447,804.00
2,565,348.00
68.00%
Completed
29-Oct-92
5-Mar-93
24-Feb-95
3,868,418.00
3,644,131.25
224,286.75
94.20%
Completed
Agriculture
ADF
Agriculture
ADF
2100150000678
LILONGWE RURAL FORESTRY
PROJECT
Agriculture
ADF
2100155000222
LOWER SHIRE IRRIGATION STUDY
12-Dec-92
15-Jan-93
10-Mar-93
675,214.99
675,214.99
-
100.00%
Completed
2100150000672
AGRICULTURAL SERVICES
PROJECT
3-Sep-93
1-Oct-93
5-Oct-94
9,210,520.00
8,179,753.47
1,030,766.53
88.80%
Completed
2100150000674
AGRICULTURAL SECTOR
ADJUSTMENT PROGRAMME
3-Sep-93
1-Oct-93
19-May-94
15,290,643.50
15,290,643.50
-
100.00%
Completed
2100155000226
SPECIAL PROG FOR FOOD
SECURITY - PHASE 1
19-Jun-00
21-Dec-00
8-Mar-01
Completed
Agriculture
Agriculture
Agriculture
ADF
ADF
ADF
Total ADF
Agriculture
Total
Comms
Comms
ADB
ADB
2000192000341
TELECOMMUNICATIONS
2000191000034
TELECOMMUNICATIONS PROJECT
II
ADF
2100150000692
TELECOMMUNICATIONS PROJECT
II
730,000.00
-
100.00%
63,199,962.58
3,820,401.28
96.50%
67,020,363.86
63,199,962.58
3820401.28
96.50%
-
100.00%
Completed
Completed
8-Nov-83
9-May-84
8-Nov-84
7,933,197.81
7,933,197.81
21-May-91
2-Aug-91
10-Feb-94
14,999,922.91
14,999,922.91
-
100.00%
22,933,120.72
22,933,120.72
0.00
100.00%
11,052,954.82
11,052,954.82
-
100.00%
33,986,075.54
33,986,075.54
Total ADB
Comms
730,000.00
67,020,363.86
21-May-91
13-May-92
10-Feb-94
Comms Total
Completed
100.00%
Finance
ADB
2000192000337
LINE OF CREDIT TO MALAWI DEV
CORP
22-Nov-72
11-Dec-72
6-Apr-73
1,485,997.20
1,485,997.20
-
100.00%
Completed
Finance
ADF
2100150000680
LINE OF CREDIT TO INDEBANK
12-Dec-96
8-Jan-98
31-Mar-99
1,346,291.02
1,346,291.02
-
100.00%
Completed
2,832,288.22
2,832,288.22
Finance Total
100.00%
Annex 5
Page 3 of 4
Ind/Min
Ind/Min
Ind/Min
ADF
ADF
ADF
2100150000689
INDUSTRY - TRADE POLICY
ADJUSTMENT
23-Feb-89
22-Sep-89
16-Nov-89
13,854,303.38
13,854,303.38
-
100.00%
Completed
2100155000219
INDUSTRIAL SECTOR
OPPORTUNITIES
19-Nov-90
31-Jan-91
4-Jul-91
690,789.00
525,861.17
164,927.83
76.10%
Completed
2100155000220
ETUDE PRODUCTION DE BAUXITE
A MULANJE
25-Nov-92
15-Jan-93
21-Oct-93
Completed
Total ADF
Ind/Min Total
636,929.14
636,929.14
-
100.00%
15,182,021.52
15,017,093.69
164,927.83
92.03%
15,182,021.52
15,017,093.69
164927.83
92.03%
Multi-Sector
ADF
2100150000676
ENTREPRENEURSHIP - CAPITAL
MARKET ADJUST
30-Oct-91
31-Jan-92
29-Dec-92
9,210,520.00
9,210,520.00
-
100.00%
Completed
Multi-Sector
ADF
2100150000681
STRUCTURAL ADJUSTMENT LOAN
15-Dec-98
13-Jan-99
16-Feb-99
10,000,000.00
10,000,000.00
-
100.00%
Completed
2100155000230
ISP: AID-DEBT MANAGEMENT &
GOVERNANCE
18-Oct-00
26-Mar-01
18-May-01
1,000,000.00
547,751.71
452,248.29
54.80%
Completed
20,210,520.00
19,758,271.71
452,248.29
84.93%
20,210,520.00
19,758,271.71
452,248.29
84.93%
Multi-Sector
ADF
Total ADF
Multi-Sector
Total
Power
ADB
2000192000338
Power
ADB
2000192000339
TEDZANE FALL HYDRO-ELECTRIC
NKULA-LILONGWE ELECTRIC
LINES
2000192000340
NKULA FALLS "B" HYDRO ELEC
POWER
Power
ADB
15-Dec-69
9-Mar-70
20-Apr-70
3,113,141.41
3,113,141.41
-
100.00%
Completed
24-Jun-75
8-Aug-75
30-Jul-76
5,000,000.00
5,000,000.00
-
100.00%
Completed
7-Jun-77
16-Jul-77
2-Aug-77
4,229,137.41
4,229,137.41
-
100.00%
Completed
12,342,278.82
12,342,278.82
Total ADB
Power
ADF
2100150000666
RURAL ELECTRIFICATION
17-Jun-80
24-Jun-80
17-Feb-81
Power Total
Social
ADF
2100150000659
PRIMARY - TERTIARYEDUCATION
PROJECT
Social
ADF
2100150000661
RURAL HEALTH
Social
ADF
2100150000662
Social
ADF
5,485,817.15
5,485,817.15
17,828,095.97
17,828,095.97
100.00%
-
100.00%
Completed
100.00%
24-Apr-80
24-Jun-80
16-Jan-81
7,315,309.21
7,315,309.21
-
100.00%
Completed
4-Dec-81
12-Feb-82
24-Sep-82
7,350,124.54
7,350,124.54
-
100.00%
Completed
SECOND RURAL HEALTH PROJECT
17-Dec-84
1-Jul-85
24-Apr-86
7,997,105.43
7,997,105.43
-
100.00%
Completed
2100150000660
PRIMARY AND SECONDARY
EDUCATION PROJECT
23-Sep-86
17-Mar-87
10-Aug-87
15,588,056.49
15,588,056.49
-
100.00%
Completed
Social
ADF
2100150000695
WOWEN IN DEVELOPMENT
PROJECT
29-Oct-92
5-Mar-93
8-Jul-94
4,996,859.38
4,996,859.38
-
100.00%
Completed
Social
ADF
2100150000677
EDUCATION III
6-May-97
29-May-97
5-Aug-98
12,000,000.00
11,709,916.00
290,084.00
97.60%
Completed
Social
ADF
2100155000225
HEALTH STUDY
20-Nov-97
27-May-98
13-Nov-98
727,323.70
727,323.70
-
100.00%
Completed
2100155000227
SUPPORT TO NATIONAL AIDS
CONTROL PROGRAMME
15-Dec-99
10-Feb-00
20-Dec-00
Completed
Social
ADF
Total ADF
Social Total
Transport
ADB
2000192000342
ENGINEERING SERVICES
LILONGWE AIRPORT
8-May-74
1-Jul-74
2-Jan-75
1,000,000.00
859,498.35
140,501.65
85.90%
56,974,778.75
56,544,193.10
430,585.65
97.94%
56,974,778.75
56,544,193.10
430,585.65
97.94%
500,000.00
500,000.00
-
100.00%
Completed
Annex 5
Page 4 of 4
Transport
ADB
2000192000343
LILONGWE INT. AIRPORT PHASE I
23-Feb-77
22-Mar-77
23-Nov-77
4,982,802.15
4,982,802.15
-
100.00%
Completed
Transport
ADB
2000192000344
LILONGWE INT. AIRPORT PHASE II
28-Dec-77
25-Jan-78
30-Jun-78
4,956,286.93
4,956,286.93
-
100.00%
Completed
2000192000345
KAMUZU INTERNATIONAL
AIRPORT PHASE III
9-Nov-82
31-Jan-83
2-Aug-83
14,783,392.80
14,783,392.80
-
100.00%
Completed
2000192000346
ROAD CONSTRUCTION MAINTENANCE
25-Jan-84
9-May-84
14-Aug-84
11,238,755.61
11,238,755.61
-
100.00%
Completed
36,461,237.49
36,461,237.49
Transport
Transport
ADB
ADB
Total ADB
Transport
Transport
Transport
Transport
Transport
Transport
Transport
Transport
Transport
ADF
ADF
ADF
ADF
ADF
ADF
ADF
ADF
ADF
100.00%
2100150000667
MUZUZU-MUHUJU ROAD STUDIES
30-Apr-75
19-Aug-75
5-Jul-76
275,998.12
275,998.12
-
100.00%
Completed
2100150000668
JOHN-MZUMARA-EKWENDENI
ROAD CONSTRUCTION
28-Feb-79
17-May-79
22-Aug-79
7,368,415.95
7,368,415.95
-
100.00%
Completed
2100150000669
CHAMPHOYO-MBOWE ROAD - THE
MZIMBA SPUR
24-Oct-85
24-Mar-86
12-Jul-86
11,793,131.37
11,793,131.37
-
100.00%
Completed
2100150000698
MCHINJI KASUNGU NKHOTAKOTA
ROAD STUDIES
23-Sep-86
17-Mar-87
10-Jan-88
1,311,338.76
1,311,338.76
-
100.00%
Completed
2100150000684
ROAD MAIN AND CONST II
PROJECT (ADF/TAF)
15-Feb-90
30-Nov-90
1-Dec-90
11,997,546.11
11,997,546.11
-
100.00%
Completed
2100155000214
ROMAC II: INSTITUTIONAL
STRENGTHENING
15-Feb-90
29-May-90
23-May-91
1,966,998.06
1,966,998.06
-
100.00%
Completed
2100150000685
MCHINJI-MSULIRA-NKHOTAKOTA
ROAD
18-Dec-90
31-Jan-91
28-Feb-91
14,751,376.32
14,751,376.32
-
100.00%
Completed
2100150000686
MCHINJI-MSULIRA-NKHOTAKOTA
ROAD
25-Nov-91
13-May-92
22-Sep-93
12,058,498.24
12,058,498.24
-
100.00%
Completed
2100150000691
MCHINJI-KASUNGU-MSULIRA
ROAD PRJCT (SUP LOAN)
2-Oct-97
25-Mar-98
5-May-98
-
100.00%
Completed
Total ADF
Transport
Total
4,657,919.74
4,657,919.74
66,181,222.67
66,181,222.67
100.00%
102,642,460.16
102,642,460.16
100.00%
Water/Sanit
ADF
2100150000664
WATER SUPPLY SYSTEM IN
MALAWI DISTRICT
14-Dec-76
7-Feb-77
7-Jul-77
4,605,259.75
4,605,259.75
-
100.00%
Completed
Water/Sanit
ADF
2100150000665
BLANTYRE WATER SUPPLY
19-Sep-77
7-Oct-77
2-Feb-78
4,602,004.72
4,602,004.72
-
100.00%
Completed
25-Aug-83
9-May-84
8-Nov-84
477,332.08
477,332.08
-
100.00%
Completed
19-Nov-84
1-Jul-85
10-Sep-86
11,587,112.87
11,587,112.87
-
100.00%
Completed
Water/Sanit
ADF
2100150000697
STUDY OF DISTRICT WATER
SUPPLY(PHASE II)
Water/Sanit
ADF
2100150000663
MAIRA BALAKA WATER SUPPLY
Water/Sanit
ADF
2100150000693
DISTRICT WATER SUPPLY
12-Jun-90
31-Jan-91
26-May-92
13,307,038.63
13,307,038.63
-
100.00%
Completed
Water/Sanit
ADF
2100155000224
DISTRICT WATER SUPPLY
12-Jun-90
31-Jan-91
26-May-92
842,520.25
842,520.25
-
100.00%
Completed
2100150000694
BLANTYRE WATER SUPPLY
PROJECT PHASE VII
21-Apr-92
5-Mar-93
30-Dec-93
7,199,677.21
7,199,677.21
-
100.00%
Completed
2100155000218
BLANTYRE SANITATION MASTER
PLAN
21-Apr-92
5-Mar-93
13-Feb-95
677,453.69
677,453.69
-
100.00%
Completed
ADF
2100150000675
DISTRICT WATER SUPPLY III
PROJECT
3-Dec-97
27-May-98
23-Dec-99
12,420,000.00
11,216,353.55
0
100.00%
Completed
ADF
2100155000223
DISTRICT CENTRES SANITATION
18-Nov-98
13-Jan-99
1-Aug-00
-
100.00%
Completed
Water/Sanit
Water/Sanit
Water/Sanit
Water/Sanit
ADF
ADF
Total ADF
Water/Sanit
Total
944,242.81
944,242.81
56,662,642.01
55,458,995.56
100.00%
56,662,642.01
55,458,995.56
100.00%
Annex 6
Page 1 of 1
Malawi: Smallholder Crop Production and Marketing Project
Implementation Schedule (January 2007 – December 2012)
Activity
Period
Responsibility
1
Grant Approval
June, 2006
ADF Board
2
Grant Signature
July/August 2006
ADF/GoM
3
Prepare GPN for publication
July 2006
EA/ADF
4
Nominate Interim Project Manager
July 2006
EA
5
August/September 2006
GoM
6
Set Up Project Steering Committee and hold
1st Meeting
Open Special Accounts – Foreign and Local
August/September 2006
EA
7
Grant Disbursement Effectiveness
September 2006
ADF
8
Recruit project technical staff
August/October 2006
EA/ADF
9
Project Launching
November, 2006 - January, 2007
ADF/GoM
November 2006 – January, 2007
EA
11
Develop and Finalise Procurement Plan and
Documents
Recruit TAs
November – January, 2007
EA
12
Develop Reporting, M&E Arrangements
November 2006 - December, 2006
DoI/M&E Specialist
12
Undertake Baseline Study
December 2006/January , 2007
DoI / M&E Specialist
10
14
Conduct Training
April, 2007/Continous
DoI/Consultants
12
Recruit contractors
April 2007
DoI
19
Scheme construction
July 2007/Continuous
EA
20
Procure Equipment and Other Goods
November 2007
EA
22
23
Monitoring and Reporting/Quarterly Reports
Audit Report
15 Days After end of Each Quarter
6 Months end of Each Fin. Year
EA
EA
24
Mid Term Review
January 2010
EA and ADF
25
Project Completion Report
April 2013
EA and ADF
Annex 7
Page 1 of 4
Malawi: Smallholder Crop Production and Marketing Project
Environmental and Social Management Plan Summary
Project Title:
Country:
Department
Smallholder Crop Production and Marketing
Project (SCPMP)
Malawi
ONAR
Project Number: P-MW-AAC-001
Environmental Category: 2
Division: ONAR.1
a) Brief description of the project and key environmental and social components
The project’s sector goal is to contribute to poverty reduction through addressing food insecurity in Malawi. The
specific objective of the project is to increase agricultural productivity and income revenues of smallholders’ farmers in
the targeted 19 districts of Malawi. The expected project results are: 1) to increase the agricultural production and
productivity of the smallholders food producers through irrigation development, thereby reducing the effects of climatic
variation; 2) to increase the domestic supply of staple crops (especially maize, the main food staple food crop for most of
the country’s population) which will improve long-term food security and household nutrition; 3) to increase product
quality leading to better prices of farm produces. Induced impact results would be an increase in producers’ incomes,
employment’s opportunities, and contribution to the Government’s overall poverty reduction efforts. As well, best
practices in relation to agricultural production and environmental/natural resources management will be promoted
through the project as well as the institutional strengthening of the key stakeholders in the irrigation sector (Department
of Irrigation, District’s Directorate of Agriculture and Natural Resources).
The project will comprise three (3) main components and related sub-components and activities. These are:
A. Irrigation Development Component, with 2 sub-components: 1) Development of 39 small-scale irrigation schemes
in two phases, with a total area of 3,055 ha. Phase I include the development of 28 identified irrigation and drainage
schemes (1,550 ha) in 17 districts. Phase II include the technical design and implementation of 11 additional irrigation
schemes (1,505) in 5 districts; 2) Implementation of environmental mitigation measures;
B. Farmers’ Support Component, with 3 sub-components: 1) Establishment of Scheme Management Units, managed
by smallholder farmers organisations, such as Water Users’ Association (WUAs) or Cooperatives, for the sustainable
operation and maintenance of irrigation schemes; 2) Agricultural Production, including training in irrigation practices and
crop production techniques, technical support to Farmers’ Organizations, support to Extension Services, community
development activities, establishment of Savings and Credit Schemes; and 3) Marketing, through capacity building and
competitiveness and marketing infrastructure development;
C. Project Coordination and Management Component: the Executing Agency for this Project will be the Ministry of
Irrigation and Water Development (MoIWD), through the Department of Irrigation (DoI). A technical team will assist
the DoI in the day-to-day coordination and monitoring of implementation of the project activities. However, since the
main focus of the project activities will be at the District level and that their implementation will be carried out through
the existing structure at the District level, a project coordination mechanism at the District level will be established.
Specifically, in accordance with the Government’s decentralization policy, a District Management Team (DMT), headed
by the District Commissioner, in each of the 19 targeted districts will be responsible for the overall coordination of
project activities and the monitoring of the implementation of project activities. In view of insufficient capacity, the dayto-day implementation of project activities will be entrusted to a District Project Officer (DPO) under the guidance of the
District Director of Agriculture and Natural Resources. The Directorate of Agriculture Management Team (DAMT),
headed by the District Director of Agriculture and Natural Resources, will act as a technical facilitation team for project
activities. Membership of the DAMT will include the different Heads of Section, including the District’s Agriculture and
Food Security, Irrigation, Forestry, Fishery, Livestock and Environment Officers. Environmental mitigation related
activities will also be carried out under this Component.
The project will be undertaken in 19 of the 28 Districts of Malawi, namely, Balaka, Chikwawa, Chitipa, Dedza, Dowa,
Karonga, Kasungu, Lilongwe, Machinga, Mangochi, Mchinji, Mzimba, Nkhatabay, Nkhotakota, Nsanje, Ntcheu, Ntchisi,
Rumphi, Zomba.
The main direct beneficiaries of the project will include the smallholder’s farmers, the farmers groups, the Water User
Associations and Cooperatives. The indirect beneficiaries will include the MoIWD, the Districts authorities and the
sector-ministries involved in irrigation development. In particular, the Ministry of Mines, Natural Resources and
Environmental Affairs, through the Environmental Affairs Department (EAD), will play in active role in the review and
Annex 7
Page 2 of 4
approval of the comprehensive ESMP for each of the 28 irrigations schemes as well as for the review and approval of the
EIA Study and related site-specific ESMP for the 11 additional irrigation schemes identified during the appraisal mission.
b) Major environmental and social impacts
Numerous positive social and environmental impacts have been identified within the scope of this project during the
preparation of the EIA Study. From a social perspective, the provision of improved and/or reliable irrigation
infrastructures will enable farmers to increase agricultural productivity through extended cropping opportunities, to
enhance employment creation and related income, to improve food security and rural livelihoods and to reduce
vulnerability to droughts. This will impact directly on poverty reduction level in the targeted rural areas and accelerate
transition to sustainable agriculture and a dynamic rural economy. The provision of farmers training will induce
improved agricultural practices, management and use of natural resources (particularly land and water) as well as
reducing long-term conversion of wilderness to cultivated lands, efficient use of agricultural inputs and improved crop
diversification. It will also boost trade in agricultural inputs and produce, thereby boosting the agricultural small scale
industry. It is worth underlying that the irrigation schemes will open-up opportunities for the participation of women in
economic activities, leading to the economic empowerment of the rural communities as a whole. Finally, an improved
social cohesion will emerge with the creation of new farmers group and organizations (WUAs and Cooperatives) within
the irrigation schemes and related agro-processing facilities. It is worth indicating that there is no displacement and/or
resettlement envisioned within the implementation of the project activities.
From an environmental perspective, the overall environmental impacts of the SIDP have positive and negative impacts.
At first, it is critical to underline that all irrigation fields will be established on existing agricultural fields which have
been under rain-fed irrigation. The positive impacts will mainly benefit the human environment and mostly during the
operation phase (see above). Most of the negative impacts are anticipated during the construction phase. However, with
appropriate mitigation measures, the potential negative impacts can be reduced. Specifically, positive impacts during the
construction phase will include the creation of employment for construction workers. Potential negative impacts from
construction activities will include excavation and movement of soil, land clearing and removal of trees, potential
siltation of water courses, hydrology and water flow changes in river systems, water and soil pollution from construction
campsites and construction machinery, impact on natural resources (deforestation). During the operation phase, potential
negative impacts include irrigation-induced erosion, permanent change in hydrology and water resources for downstream
ecosystems, flooding, loss of water through earth feeder canals, surface and groundwater contamination y fertilizers and
pesticides, human and wildlife conflict, invasive weeds and crop diseases, increase incidence of water-borne and related
water related diseases (e.g. malaria, bilharzias) and riparian water and land conflicts.
c) Enhancement and mitigation program
Taking into account the overall positive contribution of the project’s activities towards the promotion of environmentally
sound agriculture development, especially as it relates to irrigation development, a number of specific enhancement and
mitigation measures at the institutional and operational levels have been proposed in order to optimize the overall
environmental performance of the project.
1) Site-specific Environmental and Social Management and Monitoring Plans have been prepared for each of the
identified 28 irrigation schemes during the technical design. Preliminary mitigation measures, identification of the
role and responsibilities of institutions at national and district levels and, finally, financial resources have been
provided to ensure full compliance with these Plans. For the 11 additional irrigation schemes identified by the GoM
during the appraisal mission, in accordance with Malawi’s Environmental Management Act (1996) and its
Guidelines for EIA (1997), an EIA Study and related site-specific ESMP will be prepared during their technical
design; since most of the negative environmental impacts are anticipated during the construction phase and result
directly from methods and practices adopted by construction contractors, Code of Good Practices for Construction
have been included in the Work Contract. During the operational phase, a lump sum has been provided for each
irrigation scheme for the implementation of environmental/natural resources measures (from prevention of soil
erosion, eutrophication and invasive weeds, promotion of agro-forestry and protection of catchments areas,
promotion of aquaculture, prevention of water-borne diseases and HIV/AIDS). EIA Studies and ESMP will be in
compliance with the Malawi’s Environmental Management Act (1996) and related Guidelines for EIA (1997) and
Bank’s Environmental and Social Assessment Procedures. No physical works will start prior to official issuance of
the EIA and Environmental Management Certificate by Malawi’s EAD;
Annex 7
Page 3 of 4
2) An internationally-recruited Environmental Consultant will finalize the comprehensive ESMP for the 28 already
identified irrigation schemes, will prepare the EIA Study and related site-specific ESMP for the additional 11
irrigation schemes. His/her ToRs will also address social issues. Considering the limited institutional capacity of the
EAD and the District’s Environmental Officer, he/she will provide independent monitoring/review/audit of the
implementation of the site-specific ESMP during the first four years of the project operation as well as providing ongoing training on Environmental Management and Monitoring Plans at the national and district level. He/she will
closely work with the Monitoring and Evaluation Officer for the preparation of the Annual Environmental Work
Plan and its semestrial implementation progress report;
3) The Farmer Support Program, 2nd Component of this project, is specifically designed to enhance the sustainability of
the project by creating sufficient momentum and capacity among individuals’ farmers, farmers’ groups and Water
Users’ Association to carry on with their activities beyond project duration. Specifically, regular and tailor made
training courses will be provided at all the irrigation schemes. These courses will address sustainable water
management, environmental management (water catchments protection, agro-forestry, soil conservation), crop
management and related Integrated Pest Management (IPM), hygiene and sanitation (including water borne
diseases), waste management, etc. ; and, finally,
4) In view of the limited institutional capacity at the District level in relation to environmental management, provision
of technical (through the above mentioned environmental consultant and active involvement of EAD in project
implementation) and financial assistance will be provided to the District Environmental Unit to ensure on-going
environmental monitoring of the implementation of the ESMP and mitigation measures at site level as well as to
ensure functional and effective coordination with the District’s health, agriculture, forestry and irrigation officers.
d) Monitoring program and complementary initiatives
Environmental monitoring is a requirement of irrigation development projects in order to check that planned mitigation
measures have been implemented, to measure their level of effectiveness and to provide early warning of environmental
change. Monitoring activities for this project are being proposed at different levels:
1) In accordance with the Environmental Management Act (EMA) and related Government Notice No.10 of August
2004, the MoIWD is required to pay EIA processing fees to the Environmental Affairs Department for undertaking
the technical review of the EIA Studies and related site-specific ESMP, with the technical assistance of the Technical
Committee on Environment and, most importantly to undertake semestrial/annual monitoring/auditing of the
implementation of site-specific ESMP during project duration. This monitoring will allow to validate the conformity
of the project with the EIA Certificate and the site specific Environmental Management Certificate and any specific
Terms and Conditions. This monitoring team will be composed of EAD and sector-ministries, such as Ministry of
Health, Agriculture, Water Resources Board, Land Resources and Conservation Department, etc..The EAD will also
play in active role in the mainstreaming of environmental considerations through its involvement in the review of
ESMP’s Annual Work Plan and their review and approval by the Project Steering Committee (PSC);
2) At the District level, as mentioned above, under the supervision of the Director of Agriculture and Natural
Resources, the District’s Environmental Officer will be responsible for the on-going monitoring of the
implementation of mitigation measures as outlined in the comprehensive site-specific ESMP and related Annual
Work Plan during the operational phase and the coordination with District’s sector specialists. Site-specific ESMP
will include a baseline study of the biophysical and social environment and environmental and social performance
indicators. Any corrective recommendations/actions will be provided to the District’s Director of Agriculture for
further discussion with the District’s Project Officer and the DoI’s Project Coordinator;
3) At scheme level, considering the diversity of the ecosystems within which each of the 39 irrigation schemes are
proposed, specific environmental monitoring indicators will be suggested in each site-specific ESMP in accordance
with the biophysical and social specificity of each site. Indicators that may be used for monitoring purposes include,
among others, the following parameters: general conditions of the infrastructure, general condition around the
infrastructure, soil erosion and gulleying, organic, chemical and bacteriological pollution, ponding and floral/fauna
composition, incidence of water-borne diseases, use of chemical fertilizers and pesticides, water quality, ecological
effects of pesticide use, human and animal safety, etc.. Through the Farmer Support Program, training will be also
provided to the Water User Association and Cooperative to undertake environmental monitoring.
e) Institutional arrangements and capacity building requirements
The Ministry of Irrigation and Water Development (MIWD) will be the official executing agency of the project, through
the Department of Irrigation (DoI). Considering the modest internal institutional capacities of the DoI, the Project will be
implemented with the assistance of a technical team in the day-to-day coordination and monitoring of
Annex 7
Page 4 of 4
the project activities. Specifically, the Monitoring and Evaluation officer will have the overall responsibilities to ensure
that site-specific ESMP are implemented. He/she, with the technical support of the EAD, the District’s Environmental
Officer and the internationally-recruited environmental consultant, will ensure that the project and site-specific Annual
Work Plan and Progress Report fully mainstreamed the environmental considerations during project’s construction and
operation phases.
In accordance with Malawi’s Environmental Management Act and the EIA’s Guidelines, the Environmental Affairs
Department (EAD) will be responsible for approving EIA study and site-specific ESMP, to deliver EIA and the
Environmental Management Certificate and, finally, to monitor and audit the implementation of the ESMP. EAD,
through the participation of the representatives from the Technical Committee on the Environment will ensure that all
social and environmental impacts from irrigation activities (soil, water quality, health, agriculture) will be dealt by sector
ministries and District’s technical specialists.
It is worth mentioning that the project will strengthen the institutional capacities of the targeted smallholders’ farmers,
MoIWD and its Department of Irrigation, the District’s Directorate of Agriculture and Natural Resources, and the private
agriculture sector services providers in promoting environmentally-sound smallholder agricultural development. The
EAD (EIA Unit) and the Technical Committee on Environment (TCE) will also be strengthened in the promotion of
sound agricultural development through their active involvement in the review and approval of the EIA and related sitespecific ESMP and their active involvement in the semestrial monitoring/auditing of the implementation of the ESMP.
f) Public consultation and disclosure requirements
During the preparation of the feasibility studies for the 28 identified irrigation schemes, field work in Phase I and II have
promoted the use of Participatory Rural Appraisal (PRA) in order to identify and assess critical environmental and social
issues with the farmers (e.g. land tenure, water sources, areas of bush/forest, cropped and grazing land). During Phase III
of the Study which included the preparation of the EIA Study, further consultations were held to identify potential
environmental and social impacts of the proposed engineering interventions and design mitigation measures. Their views
have been incorporated in the irrigation scheme design, including in the design of the ESMP. As the final design of the
28 identified irrigation schemes will be updated/finalized at project inception, while the design of the 11 new irrigation
schemes will be initiated in the early project stages, the consultation process with the beneficiaries will be re-initiated in
order to update the mitigation measures and to ensure their mainstreaming into the final technical design.
g) Estimated cost
The costs for mainstreaming environmental and social mitigation and monitoring measures are estimated at U.S.
$545,610 over the six-year project implementation period. Specifically, the costs of the EIA processing fees (and related
monitoring/auditing by EAD) is estimated at $20,000 for the 39 irrigation schemes, the recruitment of the International
consultant for 9 months spread over a period of 5 years is estimated at $90,000, the implementation of specific mitigation
measures for all the irrigation schemes is estimated at $390,000, the institutional strengthening of the District
Environmental Unit for ensuring on-going monitoring of site-specific ESMP at $45,600 and finally, the undertaking of a
end-of-project Environmental Audit at $10,000. In-kind contribution from the District Authorities for the professional
services of the District’s Environmental Officer is estimated at $22,800 for the project’s duration
It is worth indicating that the environmental impacts during the construction phases have already been mainstreamed
in the project design and the Tender documents for the contractor. As well, significant environmental enhancement
measures have been mainstreamed into the Farmers Support Program (promotion of environmentally-sound agricultural
production, namely the handling of pesticides, application of IPM, soil fertility maintenance plan, maintenance of
environmental flows for downstream ecosystems, etc.).
h) Implementation schedule and reporting
The measures outlined in the ESMP will be implemented following the same project schedule as all activities were
mainstreamed into the project design and implementation. Achievements or problems will be reported in the project
quarterly/annual progress reports and should be timely addressed by the project management and the Bank.
Annex 8
Page 1 of 1
Malawi: Smallholder Crop Production and Marketing Project
Supervision Schedule during Implementation
Launching of the project
:
January 2007
Supervision
:
June 2007
Supervision
:
December 2007
Supervision
:
June 2008
Supervision
:
December 2008
Supervision
:
June 2009
Mid-Term Review
:
December 2009
Supervision
:
June 2010
Supervision
:
December 2010
Supervision
:
June 2011
Supervision
:
December 2011
Supervision
:
June 2012
Supervision
:
December 2012
Project Completion Report
:
April 2013
Annex 9
Page 1 of 1
Malawi: Smallholder Crop Production and Marketing Project
Highlights on the Project Preparation and Review Process
1.
Project Identification and Preparation: The Project was identified during the course of the
Bank-financed Small-scale Irrigation Development Study (SSIDS).
The project preparation study was carried out at national level by a consulting company and was
undertaken in three phases, as follows:
•
Phase I, the planning phase, resulted in a report, submitted in December 2001, which
identified five Projects, consisting of 39 irrigation Schemes, for further evaluation.
•
Phase II, the Feasibility Study, involved fieldwork between August and November 2002
with a report submitted in April 2003. The findings of the Phase II Feasibility Study
were presented and discussed at a National workshop held in July 2003.
•
Phase III involved the detailed engineering designs and bidding documents of the Projects.
The report was completed in March 2004.
•
The overall project framework was further discussed and agreed with the Government of
Malawi during a Bank mission that visited Malawi in October 2005.
2.
Project Appraisal: The project was appraised in February 2006 by a team comprising of an
Agronomist, an Agricultural Economist, an Irrigation Engineer, an Environmental Specialist, a
Financial Analyst, a Consultant Marketing Specialist and a Consultant Civil Engineer. The mission
visited a number of irrigation scheme sites and held detailed discussions with district officials,
farmers, traders and the local communities. The mission also met other donors involved in irrigation
development in Malawi. A systematic review and verification of all aspects of the project was
conducted by the mission.
3.
Internal Working Group: The internal review meeting that considered the project appraisal
report was held on 27 March 2006. The report was carefully revised based on all comments received,
and processed further in accordance with the requirements of the Bank Group’s Operations Manual.
4.
Inter-Departmental Working Group: The inter-departmental working group meeting that
considered the project appraisal report was held on 20 April 2006. The report was revised based on all
comments received, and processed further in accordance with the requirements of the Bank Group’s
Operations Manual.
5.
Review by POPR: The report was submitted to POPR on 27 April, 2006 for review.
POPR reviewed and cleared the report for submission to the SMC on 4 May 2006.
6.
Senior Management Committee: The SMC was held on 11 May, 2006. Comments
received were duly incorporated in the report, and on advice of the SMC, the report has been
submitted to SEGL for translation and distribution to the Board.
Annex 10
Page 1 of 1
Malawi: Status of Audit Reports and Project Completion Reports
There are two Audit Reports currently under preparation in the agricultural sector:
− Horticulture and Food Crops Development Project
− Macadamia Smallholder Development Project
There is one Project Completion Report outstanding for in the agricultural sector:
− Mwanza Rural Development Project