participatory small-scale irrigation development programme

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Programme Management Department

Federal Democratic Republic of Ethiopia

Participatory Small-scale Irrigation Development

Programme Phase II (PASIDP II)

Final programme design report

Main report and appendices


Participatory Small-scale Irrigation Development Programme Phase II (PASIDP II)


i

Contents

Currency equivalents iii

Weights and measures iii

Abbreviations and acronyms iv

Map of the programme area vi

Executive Summary vii

Logical Framework x

I. Strategic context and rationale 1

Country and rural development context 1

Rationale 2

II. Programme Description 5

Programme Area and Target Group 5

Development Objective and Impact Indicators 7

Outcomes/Components 8

Lessons learned and adherence to IFAD policies 14

III. Programme Implementation 15

Approach 15

Organizational Framework 17

Planning, M&E, learning and knowledge management 18

Financial management, procurement and governance 20

Supervision 22

Risk and Constraints Identification and Mitigation 22

IV. Programme Costs, Financing, Benefits and Sustainability 24

Programme Costs 24

Programme Financing 24

Summary benefits and economic analysis 25

Sustainability 27

List of Figures

[click here and insert List of Figures]

List of Tables

[click here and insert List of Tables]




ii

Appendices

Appendix 1: Country and Rural Context Background 30

Appendix 2: Poverty, Targeting and Gender 34

Appendix 3: Country performance and lessons learned 44

Appendix 4: Detailed Programme Description 48

Appendix 5: Institutional Aspects and Implementation Arrangements 66

Appendix 6: Planning, M&E and Learning and Knowledge Management 78

Appendix 7: Financial management and disbursement arrangements 88

Appendix 8: Procurement 96

Appendix 9: Programme cost and financing 102

Appendix 10: Economic and Financial Analysis 106

Appendix 11: Draft programme implementation manual 114

Appendix 12: Compliance with IFAD policies 118

Appendix 13: Contents of the Project Life File 124

Appendix 14: Risk Management 125

Appendix 15: Questions on scaling up to be considered at design stage 129




iii

Currency equivalents

Currency Unit = Ethiopian Birr (ETB)

US$1.0 = ETB 21.3

Weights and measures

1 kilogram = 1000 g

1 000 kg = 2.204 lb.

1 kilometre (km) = 0.62 mile

1 metre = 1.09 yards

1 square metre = 10.76 square feet

1 acre = 0.405 hectare

1 hectare = 2.47 acres




iv

Abbreviations and acronyms

ACC Agricultural Commercialization Clusters ADB African Development Bank ADLI Agricultural Development-Led Industrialisation ADP Agricultural Development Plan AEZ Agro-Ecological Zone AGP Agriculture Growth Programme ASAP Adaptation for Smallholder Agriculture Programme ATA Agricultural Transformation Agency AWPB Annual Work Plan and Budget BIA Beneficiary Impact Assessment BOA Bureau of Agriculture BOARD Bureau of Agriculture and Rural Development BOQ Bill of Quantity CA Conservation Agriculture CAPI Computer Assisted Personal Interview CBINReMP Community-Based Integrated Natural Resources Management Project CC Climate Change COSOP Country Strategic Opportunities Programme CPE Country Programme Evaluation CRGE Climate Resilient Green Economy CSA Central Statistics Agency CSA Climate Smart Agriculture DA Development Agent DBE Development Bank of Ethiopia DP Development Partner EARI Ethiopian Agricultural Research Institute EBCR Economic Benefit Cost Ratio EFA Economic and Financial Analysis ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plans ETB Ethiopian Birr FAO Food and Agriculture Organisation FC Farmers’ Cooperative FCA Federal Cooperative Agency FPCMU Federal Programme Coordination and Management Unit FPIC Free prior and informed consent FRG Farmers’ Research Group GAPs Good Agricultural Practices GDP Gross Domestic Product GOE Government of Ethiopia GTP Growth and Transformation Plan Ha Hectares HDI Human Development Index ICB International Competitive Bidding IFAD International Fund for Agriculture Development ICO IFAD Country Office ICRAF World Agroforestry Centre ICRISAT International Crop Research Institute for the Semi-Arid Tropics IGIP Integrated Agro Industrial Parks IOE Independent Office of Evaluation IPM Integrated Pest Management IWMI International Water Management Institute IWUA Irrigation Water Users Association




v

KAP Knowledge, attitude and practise LDSF Land Degradation Surveillance Framework MAA Market Access Alliance MDGs Millennium Development Goals MFIs Micro-Finance Institutions MIS Management Information System MPAT Multidimensional Poverty Assessment Tool MoANR Ministry of Agriculture and Natural Resources MoFEC Ministry of Finance and Economic Cooperation MT Metric ton MTR Mid-Term Review NCB National Competitive Bidding NGO Non-Government Organisation NLF National Learning Forum NPSC National Programme Steering Committee ORDA Organization for Rehabilitation and Development of Amhara PASIDP Participatory Small-Scale Irrigation Development Programme PASDEP Plan for Accelerated and Sustained Development to End Poverty PCR Programme Completion Report PDO Programme Development Objective PDR Programme Design Report PFI Participating Financial institution PIM Project Implementation Manual PME Planning, Monitoring and Evaluation RAF Resettlement Action Framework RAP Resettlement Action Plan RIMS Results and Impact Management System RPCMU Regional Programme Coordination and Management Unit RUFIP Rural Financial Intermediation Programme RUSACCOS Rural Savings and Credit Cooperative SACCOS Savings and Credit Cooperatives SECAP Social, Environmental and Climate Assessment Procedures SDGs Sustainable Development Goals SKD Strategy and Knowledge Department SLMP Sustainable Land Management Project SNNPR Southern Nations, Nationalities and Peoples Region SO Specific Objective SOE Statement of Expenditure UN United Nations UNDP United Nations Development Programme UNIDO United Nations Industrial Development Organisation US$ United States Dollar WA Withdrawal Application WB World Bank WFP World Food Programme WMT Watershed Management Team WHH Women-Headed Household




vi

Map of the programme area




vii

Executive Summary

A. Rationale

i. The Government of Ethiopia (GOE) and IFAD are moving to a programmatic approach with a

longer-term vision for lending in the Ethiopian small-scale irrigation subsector. The first phase of the

Participatory Small-scale Irrigation Development Programme (PASIDP), which was implemented

during the period 2008-2015, has contributed to reduce the country’s vulnerability to adverse climate

risks and drought, and to reduce rural poverty and food insecurity. The Country Programme

Evaluation (CPE) of the IFAD Independent Office of Evaluation (IOE) recommended to finance a

second phase of the PASIDP, as small-scale irrigation offers great potential for reducing the impact of

climate change, and enhancing economic growth and poverty reduction aspirations of the GOE. In

addition, the subsector is a key area of both the Growth and Transformation Plan (GTP II) and the

Climate Resilient Green Economy (CRGE) strategy. Therefore the GOE and IFAD have agreed to

finance PASIDP II, the second of three consecutive interventions to support small-scale irrigation

development. This second phase will complete and fine-tune the intervention model that was

developed under the first phase and pilot the geographical expansion that would mainly be

undertaken under the third phase, the final vision being to scale up the Programme nationwide.

ii. PASIDP II is based on the assumption that poor farmers who are provided with access to a

secure irrigation production base as well as access to markets and services, will be able to produce

and market greater volumes of produce in a profitable scenario. The watersheds contiguous with the

irrigation schemes, which exhibit varying levels of degradation, will also receive investment to stabilise

and improve their productive capacity and enhance resilience of systems. This will improve the

prosperity, food security and nutrition of farmers, thereby improving their resilience against external

shocks, including those induced by adverse weather and climate change. In order to achieve these

goals, the interventions should enable increased profitable production and productivity of the targeted

farmers in food insecure Woredas.

iii. The main innovations in the design of PASIDP II in order to complete the small-scale irrigation

model are: (i) mainstreaming of participatory planning and selection of schemes in order to ensure

sustainability; (ii) developing agri-business linkages and market access in order to mitigate marketing

risks, in particular for perishable high-value crops; (iii) integration of climate change adaptation

strategies, including adjacent watershed improvement and management, building on the successful

experiences with the Community Based Integrated Natural Resource Management Project

(CBINReMP); (iv) promotion of improved crop husbandry and access to inputs as well as improved

access to financial services, so as to achieve the targeted yields and to improve water productivity of

farms and schemes; (v) an enhanced focus on gender and youth as priority target group; (vi)

mainstreaming nutrition-sensitive agriculture; and (vii) aligning to IFAD’s new Social, Environmental

and Climate Change Assessment Procedures (SECAP) and its international engagements with

respect to climate change resilience.

B. Intervention Area, Target Group and Targeting Strategy

iv. The Programme area of PASIDP II will cover four regions of Ethiopia, namely: (i) Amhara, (ii)

Oromia, (iii) Southern Nations, Nationalities and Peoples Region (SNNPR), and (iv) Tigray. By mid-

term review, the opportunity to expand the interventions of PASIDP II on a pilot basis to other regions

is envisaged.

v. The beneficiaries of PASIDP II will essentially be 108,750 beneficiary households, of which (i)

46,250 households in small-scale irrigation schemes and some fields in the adjacent watersheds; (ii)

37,500 households in the adjacent watersheds; (iii) 15,000 employment opportunities created due to

the growing labour need requirements on farms and in the marketing chains; (iv) 10,000 households

that benefitted from irrigation support under PASIDP I and that will benefit from the agronomic support

and market linkages support under PASIDP II. Within the selected irrigation schemes and adjacent




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watersheds, PASIDP II will be using a self-targeting approach together with mechanisms to promote

inclusion of women, youth and vulnerable groups.

C. Programme Development Objective, Outcomes and Components

vi. The Programme Development Objective (PDO) is to provide “improved income and food

security for rural households on a sustainable basis”.

Component A: Investment in Small-scale Irrigation Infrastructure

vii. The expected outcome of Component A is “farmers have access to sustainable irrigation

schemes“. The proposed Programme aims to develop 18,400 ha of small-scale irrigation schemes.

Subcomponent A.1 will support (a) the identification and selection of 22,000 ha of schemes, (b) the

feasibility studies and detailed designs following improved quality guidelines, (c) the establishment

and strengthening of Irrigation Water Users Associations, (d) the required environmental and social

impact studies and environmental and social management plans. Subcomponent A.2 will support the

development of the selected irrigation schemes, including multiple user systems alongside irrigation.

Component B: Investment in Capacity for Sustainable Agriculture

viii. The expected outcome of Component B would be “farmers have increased marked-oriented

skills and capacity for sustainable agriculture”. Component B will support a range of activities

designed to ensure that the beneficiaries operate in an environment that is more conducive to rural

commercial development. Subcomponent B.1 will finance the strengthening of farmers’ cooperatives,

the development of agribusiness linkages and access to financial services. Subcomponent B.2 will

support the improvement of crop husbandry practices mainly through farmers’ research groups,

extension support and the availability of improved seed. The Subcomponent will also make provision

for gender-activities and promotion of nutrition-sensitive agriculture. Subcomponent B.3 will support

improved watershed management on 60,000 ha of adjacent watersheds and promotion of

conservation farming.

Component C: Programme Management, M&E, and Knowledge Management

ix. Component C will focus on (a) Learning and Knowledge Management, (b) Programme

Management, Monitoring and Evaluation.

D. Implementation Arrangements

x. The Ministry of Agriculture and Natural Resources (MoANR) will be the lead executing agency.

The Minister of State for Natural Resources will be responsible for coordinating implementation with

support from the Directorate of Small Scale Irrigation, which will ensure adequate engineering skills in

support of the Irrigation Water User Associations. The Federal and Regional Programme Coordination

Management Units established during the first phase of the Programme will continue to provide day to

day management of PASIDP II. Specialized services providers would be competitively procured to

build capacity in innovative areas, including the setting-up of market access alliances, the

mainstreaming of climate-change innovations and conservation farming, and access to rural finance.

E. Cost and Financing

xi. The total Programme cost would be US$145.3 million. An allocation of about US$ 103.5 million

is available to the Federal Democratic Republic of Ethiopia from the PBAS cycle of 2016/2018, which

will constitute IFAD loan of US$ 102 million on highly concessionary terms, as well as an IFAD grant

of US$ 1.5 million. An additional grant of USD 11 million (7.6% of total programme cost) is being

considered under ASAP to mainstream climate resilient interventions within the IFAD co-financed

programme in Ethiopia. GOE will provide equivalents of US$ 18.7 million representing 12.9% of total

Programme costs. GOE will cover all duties and taxes. The public services at national, regional and

Woreda levels will play a key role in Programme implementation. The beneficiary contribution would

be US$12.1 million. They would provide a 10% contribution in the construction works of the irrigation

schemes, to be provided in labour and materials. They would also provide labour for the watershed

improvements.




ix

F. Benefits and Impact

xii. PASIDP II will have 108,750 beneficiary households1, of which 46,250 households in irrigation

schemes with fields in adjacent watershed. Small-scale irrigation allows households to evolve from

one rain-fed crop per annum to one or two irrigated crop cycles in addition to one rain-fed crop cycle,

which enhances their food security and allows them doubling their incomes from agriculture. In

addition, 37,500 households in adjacent watershed will be trained in watershed management and

conservation farming; 10,000 households that benefited from PASIDP I irrigation schemes will be

linked up to markets and receive agronomic support; about 15,000 additional jobs will be created, of

which 5,000 on the farms. The ERR of 28.8% over 20 years is profitable from an economic stand

point with a Net Present Value of US$ 165 million.

G. Sustainability

xiii. The Programme has been confirmed as Environmental and Social Category A, since a number

of irrigation schemes under the Programme may result in loss of environmental services provided by a

natural ecosystem, or may have significant implications that affect a broader area and are not readily

remedied. An Environmental and Social Management Framework (ESMF) and Free Prior and

Informed Consent (FPIC) Implementation Plan have been developed to guide the Programme during

implementation, and ESIAs/ESMPs will be conducted for those schemes classified as Category A,

while ESMPs will be prepared for Category B projects. The project will endeavor to avoid schemes

that may result in high probability of physical and economic resettlement. If any scheme is selected

that will trigger such physical and economic resettlement, a Resettlement Action Plan (RAP) shall be

prepared and disclosed as a precondition to finance the scheme. The RAP process should entail

meaningful consultation and negotiation with potentially affected people, in accordance with the FPIC

Implementation Plan. In terms of climate risk, PASIDP II classification is ‘medium’. The climate risks

will be mitigated by increasing the ability of the affected communities to adapt to environmental and

economic variability, demographic shifts shocks and long term changes.

1 Corresponding to a total of 652,500 beneficiaries.




x

Logical Framework2

Results Hierarchy

Performance Indicators Means of Verification Risks Assumptions Indicators3 Baseline End Target4 Source Frequency

Responsibility

Goal: Increased prosperity and improved resilience to shocks in food insecure areas of Ethiopia

1. # of HH participating in

the Programme graduated

above the poverty line 3/4

years after schemes are

operational

TBD5 TBD Reference surveys

PY1, PY7 FPCMU, consulting firm

2. % increase in value of

assets of participating

households

TBD TBD Reference

surveys PY1, PY7

FPCMU,

consulting firm

3. % reduction in

prevalence of child

malnutrition TBD TBD

Reference

surveys PY1, PY7

FPCMU,

consulting firm

4. Number of smallholder

household members

supported in coping with the

effects of climate change

(ASAP indicator) 6

0 480,000 Reference

surveys

PY1, PY3,

PY7

FPCMU,

consulting firm

Development Objective: Improved income and food security for rural households on a sustainable basis

5. # of direct beneficiary

households 0 108,750

Progress reports

Annual FPCMU,

consulting firm Effective

agribusiness

linkages

Efficient start-

up

6. Increase in household

income from project support

Reference

surveys PY1, PY3, PY7

FPCMU,

consulting firm

Farm model A – 1 ha (ETB) 5,210 18,772 Farm model B – 1 ha (ETB) 7,833 29,072 Farm model C – 1 ha (ETB) 5,499 19,583 Farm model D – 1 ha (ETB) 6,298 29,84 Farm model E – 1 ha (ETB) 5,295 9,665

Farm model F – 1 ha (ETB) 9,108 15,073

2 20 Key performance indicators, including 5 ASAP Indicators 3 If possible, indicators are disaggregated by gender of household head, gender and age. 4 The impact survey of PASIDP (IFAD, 2016) was used to determine the end targets. 5 TBD= To Be Determined after baseline survey 6 Measured by household resilience index To be determined at the beginning of the programme with the technical assistance of IFAD-ECD team




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Component 1: Investments in Small-Scale Irrigation

Outcome 1: Farmers have sustainable access to irrigation schemes

7. # of farmers that have

access to irrigation schemes 0 46,250

Surveys and specialized studies

PY1, PY3, PY7

RPCMU, implementers

Ownership of

beneficiaries

in irrigation

schemes (A)

No elite

capture (R)

Output 1.1. Selection of

irrigation schemes for investment

8. # of feasibility studies

approved 0 18,400 ha

Progress

report Quarterly

RPCMU,

implementers

9. 100% of IWUAs operate

sustainably TBD 150 IWUAs

Progress

report Quarterly

RPCMU,

implementers

Output 1.2 Irrigation

schemes developed or upgraded on 15,000 ha

10. # of ha farmland under

operational irrigation TBD 18,400 ha Survey

PY1, PY3,

PY7

RPCMU,

implementers

11. Value of Infrastructure

[USD] protected from extreme

weather events (ASAP

Indicator)

0 80 Million Progress

Report Annual FPCMU

Component B: Investment in capacity for sustainable agriculture

Outcome 2: Farmers have increased market-oriented skills and capacity for sustainable agriculture.

12. 70,000 households

achieve at least 50% increase

in farm income

Maize: 1.5MT/ha

Wheat: 1.5 MT/ha

Onion: 4 MT/ha

Chickpea:0.7MT/ha

Maize: 3.0 MT/ha

Wheat: 2.7 MT/ha

Onion: 10 MT/ha

Chickpea: 1.8 MT/ha

Surveys

and

specialized

studies

PY1, PY3,

PY7 FPCMU and

consulting firm

Access to

financial

services (A)

Sufficient

capacity of

public

services (A)

Climate

change

measures

adopted (A)

Output 2.1 Improved

access to appropriate inputs, access to agricultural and financial services for smallholder producers

13. # of functional

cooperatives that provide at

least 3 services to clients

TBD 100 Progress report

Quarterly RPCMU,

implementers

14. # of households with

strengthened financial literacy TBD 50,000

Progress report

Quarterly RPCMU,

implementers

15. In and off farm

employment creation TBD 15,000

Progress report

Quarterly RPCMU, implementers

Output 2.2 Improved

productivity in intervention areas

16. # of people trained in

sustainable production

practices and technologies,

including NRM (ASAP

Indicator)

TBD 15,000 Progress report





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17. Households in

vulnerable areas with

increased water availability for

agricultural production (ASAP

Indicator)

0 80,000 households Survey PY1, PY3, PY7

RPCMU, implementers

Output 2.3 Improved and

sustainable watershed management

18. # of ha under improved

watershed management

(ASAP indicator)

0 ha 60,000 ha Progress report


19. Extent of land with

rehabilitated or restored

ecosystem services (ASAP

Indicator)

0 40% LDSF7 PY1, PY3, PY7

RPCMU, implementers

20. Crop yield stability over

seasons8 TBD 70%

Progress report

PY1, PY3, PY7

RPCMU, implementers

7 Land Degradation Surveillance Framework (LDSF) for monitoring land and environmental health surveillance, 8 Would be used in areas where yield and rainfall data is regularly recorded




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1

I. Strategic context and rationale

Country and rural development context

During the last decade, the Government of Ethiopia (GOE) has achieved impressive results in

the field of economic growth and poverty reduction. The broad-based Gross Domestic Product (GDP)

growth averaged 10.8% per annum over the period 2003/04 - 2013/14, compared to an annual

population growth of about 3%. This strong economic growth was driven by significant levels of public

investment and growth in services and agriculture. The GOE committed more than 60% of its total

expenditures to poverty-oriented sectors – such as agriculture, education, health, water and road

construction. The GDP growth has translated into a reduction of poverty. Ethiopia's most recent

poverty analysis report9 indicates that the national incidence of poverty declined markedly from 45.5%

in 1995/96, to 38.7% in 2004/05, and to 29.6% in 2010/11. Despite this progress, enormous

challenges remain. Indeed, Ethiopia’s Human Development Index (HDI) for 2014 is 0.44, positioning

the country at 174 out of 187 countries, and categorising it as 'low human development'. Ending

extreme poverty in Ethiopia requires sustaining current efforts and ensuring that economic growth is

inclusive, notably in the rural areas. Many non-poor households in Ethiopia today are just above the

poverty line and vulnerable to falling into poverty in case of a significant shock.

To sustain the strong economic growth, enhancing the productivity of agriculture and,

particularly of farming systems with high potential for productivity increases such as small-scale

irrigation, remains critical. The GOE continues to put considerable emphasis on the development of

agriculture as a driver of economic growth. This is confirmed by the country’s second Growth and

Transformation Plan (GTP II) the agriculture and natural resources pillar of which has four Strategic

Objectives (SO), namely: (i) SO1: increasing crop production and productivity; (ii) SO3: enhance

livestock production and productivity; (iii) SO3: reduce natural resource degradation and improve its

productivity; and (iv) SO4: ensure food security, disaster risk reduction and enhance preparedness

capacity.

Ethiopia’s ecological system is very fragile and vulnerable to climate change, in part due to

stress on natural resources. The key challenges include soil degradation, deforestation and loss of

biodiversity, besides weak environmental management and enforcement capacity. Climate change

projections for Ethiopia indicate a significant increase in temperature and a likely increase in drought

occurrences, heavy rains and floods, particularly in the lowlands10. Spatial patterns and temperature

and rainfall amounts are projected to change through 2010–2039, and to result in more extreme

events11 . Future projections show that the mean annual temperature will increase in the range of 0.9

to 1.1ºC by 2030, in the range of 1.7 to 2.1ºC by 2050, and in the range of 2.7 to 3.4ºC by 2080

compared to the 1961 to 1990 normal9, posing a sustained threat to agriculture and the economy.

However, the biggest climate change impact is associated with limited water availability12. Although

there is no significant change in annual rainfall amounts during last 30 years, increasing intra-

seasonal variability caused significant damages in communities livelihoods, including in the year

2015/16. Drought in Ethiopia will continue to be regional in nature and commonly cover large areas

and extend for long periods of time. In the last five years, about 80% of the farmers in the lowlands

and 22% in the highlands had at least one crop failure13. During the time of high crop failure, farmers

tend not to farm the next crop season, due to high uncertainty on the rainfall and high price of

improved seeds. Crop failure causes some of these households not to meet their food needs and rely

partly on food assistance. Increasing temperature is expected to increase irrigation water demands,

both in the drylands where irrigation is currently required but also in areas where the system is

9 Ministry of Finance and Economic Cooperation (MoFEC), GTP Annual Report 2014 10 Gummadi, S. et al, 2015. The changing climates of Ethiopia and its implication on agricultural systems. ICRISAT

Research Paper. Addis Ababa, Ethiopia 11 USAID and USGS, 2012. A climate trend analysis of Ethiopia 12 You and Ringler (2010) IFPRI. 13 START, 2013.




2

currently dependent on rain-fed agriculture. This scenario will exacerbate poverty, particularly in the

vulnerable, drought-prone regions.

Since 2011, the Ministry of Environment and Forestry’s efforts have been focused on

implementing the Climate-Resilient Green Economy (CRGE) strategy that sets the target for the

Ethiopia to become a middle-income carbon-neutral country by 2025. To this end, in April 2014, a

project aimed at supporting the Reducing Carbon Emissions from Degradation and Deforestation

(REDD) mechanism was launched. This will help Ethiopia access the carbon trade whereby

developed countries offset their emissions by investing in emission-reduction projects in developing

countries. Concerted effort has been geared towards rolling out and operationalizing the CRGE. In

addition to preparing manuals and introducing monitoring and evaluation systems, these include the

Sectoral Reduction Mechanism (SRM), which sets comprehensive actionable plans for the CRGE’s

goals of reducing vulnerability and emissions.

Rationale

The Government of Ethiopia (GOE) and IFAD are moving to a programmatic approach with a

longer-term vision for lending in the Ethiopian small-scale irrigation subsector. The first phase of the

Participatory Small-scale Irrigation Development Programme (PASIDP), which was implemented

during 2008-2015, has contributed to reduce the country’s vulnerability to adverse weather conditions

and drought, and to the reduction of rural poverty and food insecurity. In addition, IFAD also co-

financed in the past the Special Country Programmes I and II that invested in small-scale irrigation.

The Country Programme Evaluation (CPE) of the IFAD Independent Office of Evaluation (IOE)

recommended to finance a second phase of PASIDP, as small-scale irrigation offers a great potential

for the economic development and poverty reduction aspirations of the GOE, and to achieve the

Sustainable Development Goals (SDG). Irrigation is a key area of the second Growth and

Transformation Plan (GTP II). Therefore the GOE and IFAD have agreed to finance PASIDP II, the

second of three consecutive interventions to support small-scale irrigation development in Ethiopia.

This second phase will further fine-tune the intervention model that was developed under the first

phase and pilot further geographical expansion that would mainly be undertaken under the third

phase, the final vision being to scale up the Programme nationwide. The Programme will also explore

synergies and complementarities with ongoing initiatives, in particular the Agriculture Growth

Programme II (AGP II) and the Sustainable Land Management Project II (SLMP-2), which are both

involved in small-scale irrigation and sustainable watershed management. PASIDP II will enhance the

CRGE’s goals in reducing climate vulnerability through improved water productivity of schemes and

sustainable management of watersheds.

The design of PASIDP II is based on lessons generated by PASIDP

The key achievements of the first phase of PASIDP include: a) the development of 116

smallholder irrigation schemes, covering 14,680 ha and benefiting 36,100 households; b) the

development and strengthening of 214 Irrigation Water Users Associations (IWUAs); c) the support to

various commodity groups that served as vehicles for service delivery to the target communities; d)

the preparation of 205 Agricultural Development Plans; e) the establishment and support to 230

Farmer Research Groups (FRGs) as learning and knowledge sharing platforms; f) the establishment

of 130 community nurseries and 539 home gardens. In addition, a specialised project implementation

capacity was developed at federal, regional and local levels. A final impact assessment14 concluded

that PASIDP had positively affected the livelihoods of beneficiary households and had good local spill

over effects. In addition, small-scale irrigation allows households to evolve from one rain-fed crop per

annum to one or two irrigated crop cycles in addition to one rain-fed crop cycle. The positive impacts

inter alia on livelihoods include: (i) crop yields tripled compared to rain-fed yields; (ii) crop income of

PASIDP households was 3.5 times higher than that of rain-fed dependent households; (iii) improved

households asset ownership, food security levels and improved women empowerment. However,

14 Conducted by IFAD's Strategy and Knowledge Department (SKD). January 2016




3

marketing problems have mainly been perceived for perishable crops either by flooding local markets

with additional production or experiencing high post-harvest losses due to weak market linkages.

Theory of Change of PASIDP II

Most farmers in Ethiopia are still primarily dependent on rain-fed agriculture. The current

practices in rain-fed agriculture contribute to major landscape degradation, and are themselves barely

viable, producing only sufficient basic food for households in good seasons and deficits in poor years.

There is little or no rural employment generated beyond that provided by farming households. PASIDP

II is based on the assumption that poor farmers, who are provided with access to a secure irrigation

production base as well as access to markets and services, will be able to produce and market

greater volumes of produce in a profitable scenario. The watersheds contiguous with the irrigation

schemes, which exhibit varying levels of degradation, will also receive investment to stabilise and

improve their productive capacity. This will improve the prosperity, food security and nutrition of

farmers, thereby improving their resilience against external shocks, including those induced by

adverse weather and climate change. In order to achieve these goals, the interventions should enable

increased profitable production and productivity of the targeted farmers in food insecure Woredas.

Support would be needed to ensure proper linkages to markets and value addition opportunities for

surplus produce. This will enable the Programme investments to generate increased revenues for the

target group emanating from integrated prioritized market linkages, development of irrigation

infrastructure, climate resilience crop agronomy and institutional development. There will also be

substantial incremental employment derived from the additional labour and services inputs required

for successful irrigated agriculture.

Small-scale irrigation development is an important pathway not only for improving food security

and income of drought prone communities, but also for protecting upstream forests and bio-reserves.

Unless farmers are supported to produce enough food and income from their current small

landholdings, they will keep encroaching the surrounding forests, wetlands and bio-spheres, which

are commonly water towers for the wider region, as it is the case in Bale bio-reserves.

Innovations in the Design of PASIDP II

The main innovations in the design of PASIDP II in order to complete the small-scale irrigation

model that was developed by previous IFAD interventions, are: (i) mainstreaming of participatory

planning and selection of irrigation schemes in order to enhance long-term sustainability; (ii)

developing agri-business linkages and market access in order to mitigate marketing risks, in particular

for perishable high-value crops; (iii) integration of climate change adaptation strategies, including

adjacent watershed management; (iv) increased focus on improved crop husbandry and access to

inputs and financial services, so as to achieve the targeted yields and to improve water productivity;

(v) an enhanced focus on gender and youth as priority target groups; (vi) mainstreaming nutrition-

sensitive agriculture; and (vii) aligning to IFAD’s new Social, Environmental and Climate Assessment

Procedures (SECAP) and its international engagements with respect to climate change resilience.

The transition by smallholders from subsistence-oriented rainfed crop production to competent

owners and operators of irrigation schemes requires a substantial investment in improving their

organizational knowledge and skills. Similarly, smallholders who not gain access to irrigation

schemes, but are farming in the adjacent watersheds for the schemes, will also require substantial

improvements in their capacity to manage the natural resources in an environmentally sustainable

manner, while at the same time improving their productivity and incomes. While PASIDP I was

successful in infrastructure development and creation of Irrigation Water Users’ Associations (IWUAs),

farmers were not always able to market their additional production, leaving the potential for increased

incomes untapped, while others managed to connect with dealers and markets resulting in better

outcomes and prosperity. In response to this challenge observed in the first phase, the second phase

aims investing in agribusiness linkages and market access.




4

Irrigation investments will be complemented by investments in the micro-watersheds, building

on the successful experiences with the Community Based Integrated Natural Resource Management

Project (CBINReMP). Appropriate forms of watershed management and rehabilitation are essential to

protect catchments for dams and streams. This can greatly reduce soil erosion and landscape

degradation, while at the same time, providing for enhanced production and income-generating

opportunities in the watersheds. Empirical evidence suggests that community-based integrated

watershed management, widely practiced in Ethiopia, is effective in reversing land degradation and

restoring healthy and productive landscapes. Communities participating in IFAD’s CBINReMP jointly

prepare plans to restore their communal grazing and cropland, and the re-greening impacts are well

visible after only a few years. The ecosystem services provided by these restored landscapes, such

as increased water availability, reduced sediment loads and increase soil cover, are essential to the

success of any productivity-related investments such as those of PASIDP II.

Climate Change Adaptation measures15 are integrated into the Programme activities to address

the inherent risks resulting from a changing climate and the potential multiplication of effects, such as

damage to landscapes and infrastructure and recurrent droughts. PASIDP II will focus on six key

issues related to climate resilience: (i) the conduct of scheme-relevant climate analyses, helping

communities to understand climate change scenarios and to develop adaptation strategies; (ii) the

promotion of longer-term adaptive agronomic practices, mainly supporting sustainable watershed

management activities, organizing and facilitating farmers research groups (FRG) to experiment and

innovate on various climate smart and profitable options on behalf of the wider community, including

more efficient and equitable use of irrigation water; (iii) integrating and promoting various alternative

water sources, particularly water harvesting, (iv) establishing water monitoring instrumentation to

provide improved information flow between upstream and downstream farmers and Woreda

administrations; (v) enhancing national institutional capacity in climate change mainstreaming; and,

(vi) learning and knowledge management in the field of profitable water-saving strategies and climate-

smart agriculture, and facilitate knowledge exchanges between farmers and supporting institutions to

scale-up adoption of these practices.

Enhanced Social, Environmental and Climate Assessment Standards. While the majority

of Programme interventions are expected to have only limited and site-specific environmental and

social risks, a number of proposed irrigation schemes, particularly irrigation schemes where dams

may be constructed, may result in more serious environmental and social impacts such as physical

resettlement and/or economic displacement, and loss of environmental services provided by a natural

ecosystem. PASIDP II has therefore been classified as ‘Category A’. At this stage the exact sites and

types of interventions and persons to be affected are not known, and therefore an Environmental and

Social Management Framework (ESMF) and a Free Prior and Informed Consent (FPIC)

implementation plan have been developed for the Programme in order to guide the preparation of

Environmental and Social Impact Assessments (ESIAs) and Environmental and Social Management

Plans (ESMPs) that will be required for individual schemes of respectively Categories A and B. The

FPIC implementation plan describes the participatory and consultation process for seeking the

consent of communities’ whose land use and access rights will be affected.

The Programme will endeavour to avoid schemes that have high probability of physical

resettlement and economic displacement of communities. A resettlement Action Framework is not

required at this design stage. However, if any scheme is selected that will trigger physical and

economic resettlement, a Resettlement Action Plan shall be prepared and disclosed as a precondition

to finance the scheme. The process should entail meaningful consultation and negotiation with

potentially affected people, according to the FPIC Implementation Plan. In case, no agreement is

reached, the project implementers will modify the specific interventions associated with affected

people or halt them if changes are not possible. The RAP is finalised as a supplement document to

the Environmental and Social Impact Assessment report. Local grievance redress mechanisms will be

established to receive and facilitate the resolution of affected persons’ concerns and grievances about

15 These activities will be financed through the Adaptation for Smallholder Agriculture Programme (ASAP) grant.




5

physical and economic displacement and other PASIDP impacts, giving emphasis to the impacts on

vulnerable groups.

IFAD has developed a Complaints Procedure for “Alleged Non-Compliance with its Social and

Environmental Policies and Mandatory Aspects of Its Social Environmental and Climate Assessment

Procedures”. Parties adversely or potentially adversely affected by IFAD-funded projects and

programmes may bring issues to the Fund’s attention using [email protected]. The IFAD

website provides a clear summary of the steps involved and guidance on how to report issues.

II. Programme Description

Programme Area and Target Group

Programme Area

The intervention area of PASIDP II covers initially four regions, namely: (i) Amhara, (ii) Oromia,

(iii) Southern Nations, Nationalities and Peoples Region (SNNPR), and (iv) Tigray. These regions

were also covered under the phase I of PASIDP. The choice of the area was premised on the

Government’s desire to build on the delivery capacity developed by PASIDP I, to respond to the high

demand for additional investments in small-scale irrigation in these regions, and to deepen and

broaden the impact of the interventions. By the mid-term review (MTR) of PASIDP II, the opportunity

to expand the interventions on a pilot basis to other regions is envisaged, in preparation of a third

phase of PASIDP.

The farming systems in the 4 targeted regions are quite diverse. However, almost all farming is

based on low-input/low-output forms of rain-fed agriculture. The main features of these farming

systems are: (a) use of animal drawn traditional chisel ploughs for primary land preparation; (b) very

limited or no use of purchased inputs of fertiliser, herbicide or pesticide; (c) little or no use of improved

seed; (d) family labour used for almost all operations; and (e) limited access to irrigation schemes.

The effect of this technical approach to agriculture is that yields are low in years of good rainfall, and

there are widespread crop failures in years when rainfall is below average or poorly distributed. The

land preparation techniques and the practise of harvesting most crop residues leave the soil exposed

and highly vulnerable to soil erosion. Large proportions of arable lands have been severely degraded,

reducing their productive capacity to very low levels. In the higher altitude areas, the main crops

grown are maize, wheat, teff and chickpea. In lower areas, crops are maize, sorghum and common

beans. There are also other crops grown in small quantities. The crop mix represents farmers’ coping

and survival strategy rather than an assessment of relative levels of profitability. Farmers usually only

market a small proportion of their produce after their household needs are met. Barter within a

community, for other types of produce, livestock, or in exchange for labour, is a common means of

disposal of small surpluses when they occur. Most farmers also own small numbers of chickens and

small ruminants. Many also own draught animals, and a few have small herds of cattle. All livestock is

grazed on communal grazing land, as well as on harvested crop residues. Livestock is owned rather

than produced for the market, and animals are only sold to meet emergency cash needs. With this

combination of low input technology, reliance on erratic rainfall amounts and distribution, and a

declining soil resource base due to degradation and lack of nutrient replacement, farmers are most

vulnerable to adverse conditions, including climate change. There are frequent occurrences of poor

nutrition and personal deprivation, and instances where farmers need to dispose of assets to ensure

their survival are common.

Target Groups

The core target group of PASIDP II will be farmers who operate on land holdings of less than

0.5 ha in lowlands with potential for irrigation and about 1 ha in the adjacent watersheds. They are

mainly poor and food insecure rural households, involved in rain-fed agriculture or traditional irrigation

schemes and commonly vulnerable to shocks and climate change. They rely predominantly on mixed

crop-livestock farming system, living on a per capita income of less than US$0.3 per day.

mailto:[email protected]




6

PASIDP II aims to develop 18,400 ha of small-scale irrigation schemes and an estimated

60,000 ha of adjacent watersheds that will be developed using a micro-watershed approach. The

beneficiaries of PASIDP II will essentially be 108,750 households, of which (i) 46,250 households in

small-scale irrigation schemes with fields in the adjacent watersheds; (ii) 37,500 households in the

adjacent watersheds, without land in the irrigation schemes; (iii) 15,000 youth and landless people

who benefit from rural employment creation due to the growing labour need requirements in irrigation

and related downstream and upstream agribusiness development; (iv) 10,000 households that

benefitted from irrigation support under PASIDP I and that will benefit from the agronomic support and

agribusiness linkages and market access support under PASIDP II.

Within the core target group, women and Women-headed households (WHHs) represent a

very vulnerable group because of deeply embedded socio-cultural attitudes and practices that keep

them disproportionally engaged in basic productive and reproductive activities limiting their social and

economic empowerment. Female farmers and WHHs who face following main constraints: lack of

access to farmland, shortage of farm labour or not having draft animals, lack of access to inputs.

These problems reduce their sources of household income, resulting in impoverishment. Given their

vulnerability, the programme will include WHHs as a priority target group to benefit from the

intervention.

Youth refers to those who are between 18 and 35 years of age. Youth, largely unemployed,

underemployed, and underpaid, rank among the working poor. Youths rarely own productive assets

that would enable them to become self-employed. In agriculture, access to land is the prime barrier;

most of the young population is also landless. Compounded by lack of access to credit and

motivational factors, young women are the most vulnerable and hard-to-reach young people in

particularly in rural settings. The inequality, caused by both cultural and economic factors, is deep and

the improvements in young women’ literacy rates are occurring very slowly. It is expected that 20% of

the total beneficiaries will be youth (of which 50% young men and 50% young women) corresponding

to about 20,000 beneficiaries.

Targeting Strategy

PASIDP II will adopt (i) geographic targeting of Woredas and irrigation schemes; (ii) self-

targeting; and (iii) direct targeting mechanisms. Geographic targeting: Within the intervention

regions, the Programme will select Woredas using the following criteria: (i) a high level of poverty and

food insecurity; (ii) potential for small-scale irrigation; and (iii) not covered by the Agriculture Growth

Programme, phase 2 (AGP 2); and (iv) rural Woredas. The Programme foresees at least three types

of irrigation schemes: (a) schemes are already under PASIDP I, construction is completed but the

agricultural and agribusiness activities are about to pick-up; (b) schemes, where traditional irrigation

has been practiced; and (c) new schemes where there is limited experience in irrigation agriculture.

The selection criteria of irrigation schemes at the identification stage will be: (i) potential to

produce profitable crops with sufficient availability of water and irrigable soils; (ii) absence of social

conflicts with regard to access to land and water; and (iii) access to markets. If confirmed, a full

feasibility study will be developed following PASIDP II quality standards. At this stage, a longer list of

selection and prioritization criteria will be applied, including: (a) compliance with the ESIA/ESMP/RAP

attaining SECAP standards; (b) avoid schemes with high probability to have physical resettlement or

economic displacement; (c) an acceptable estimated unit cost of development – priority will be given

with schemes that have the lowest costs; (d) estimated cost of water/ha for the targeted crop, (e)

estimated production cost to revenue ratio; (e) an acceptable plot size to reach out to sufficient

smallholders (preferably on average less than 0.5 ha/household); (f) willingness of the land owners in

the targeted schemes to include vulnerable groups in the schemes. PASIDP II could also finance

small-scale irrigation schemes that are linked to micro watersheds developed with SLMP II support.

During the implementation of PASIDP I, feasibility studies were undertaken on 8,300 ha of

schemes that have not yet been constructed. These schemes would be the initial candidates for

construction under PASIDP II, but their feasibility studies will be subjected to a full review of




7

compliance with new ESMF quality standards, and subsequently if needed updated. Additional

schemes will be identified and studied during PASIDP II implementation in order to reach a total of

18,400 hectares. In addition, a pipeline of 2,500 ha of feasibility studies for the third phase would be

prepared.

Targeting Tools to Ensure Inclusiveness

In the selected irrigation schemes and watersheds, a self-targeting approach and participatory

planning of the investments with the farmers will ensure that the interventions respond to their

priorities, management and labour capacity. In addition, PASIDP II will adopt direct targeting tools

including FPIC to reach out to vulnerable groups, under or unemployed youth and women. The

efficiency of reaching out to these groups who traditionally have less voice and power in the rural

society will be integrated in the participatory planning processes. Additional empowerment and

capacity-building measures will include: (i) information and mobilisation campaigns, using local

information meetings and media; (ii) prioritisation of schemes with small plot sizes (less than 0.5 ha

per household) and high percentage of vulnerable people involved; (iii) agribusiness linkages and

input supply through cooperatives, also for the vulnerable groups; (iv) inclusive farmers’ research

groups (FRGs) and extension approaches; and (v) a broad range of skills training activities; (vi)

monitoring of inclusiveness.

Gender approaches. Gender will be mainstreamed in implementation with a focus on

supporting women to overcome constraints including access to assets, training and inputs. PASIDP II

will help women to: (i) access irrigation schemes; (ii) enhance their skills in irrigated farming, with

particular reference to production of high value crops; (iii) enhance women’s representation on

IWUAs, FRGs and cooperatives, and strengthening of their leadership capacity; (iv) access financial

support through MFIs and RuSACCOs; (v) FRGs and extension groups for women; (vi) access

labour-saving technologies, (vii) nutrition-sensitive agriculture and home gardens for women. In

addition, the gender approach will be based on: (a) quotas if required, at least 40 % of women among

beneficiaries of the various activities; (b) household methodologies to ensure women participation and

to enhance gender equality; (c) monitoring of women participation in activities; (d) gender training for

programme implementers.

The interventions will create rural labour opportunities, in particular for rural youth, in irrigation

schemes and upstream/downstream agribusiness development opportunities. The Programme will: (i)

prioritise young people for training related to the development of skills and capacities in post-harvest

handling and marketing; (ii) support the creation of youth led enterprises. Equality between young

men and young women will be respected in their selection and participation and implementers will be

trained in specific approaching for reaching out and involving youth, especially young women who

may face additional constrains compared to their young male counterparts16.

Development Objective and Impact Indicators

The Programme’s goal is to ‘contribute to “Increased prosperity and improved resilience to

shocks in food insecure areas of Ethiopia”. The Programme Development Objective (PDO) is “to

provide improved income and food security for rural households on a sustainable basis”.

The core indicators of the Programme are presented in the logical framework. The key impact

and outcome indicators and targets will be: (i) 108,750 beneficiary households, representing 652,500

household members; (ii) increases in household income from agriculture of at least 200%17 in irrigated

schemes, compared to rain-fed farming systems;(iii) 80% of targeted population with increased

climate resilience (ASAP).

16 Anna Robinson-Pant: Learning knowledge and skills for agriculture to improve rural livelihoods. UNESCO (2016): 17 Based on the Impact Evaluation of PASIDP I (2016).




8

Outcomes/Components

Component A: Investment in Small-scale Irrigation Infrastructure

The expected outcome of Component A is “farmers have sustainable access to irrigation

schemes“.

Subcomponent A.1: Irrigation Scheme Participatory Planning and Preparation

The expected output of Subcomponent A.1 is “selection of 22,000 ha of irrigation schemes for

investment”. PASIDP II will build a pipeline of irrigation schemes to be implemented during its lifetime

(18,750 ha) and the first years of the third phase (7,000 ha). In order to enhance ownership and

sustainability, the Programme will adopt a fully participatory process for the identification, feasibility

study, detailed design and construction or upgrading of irrigation schemes.

Identification of schemes and feasibility studies. The participatory process of scheme

identification will originate from the potential beneficiaries. Once a scheme is identified and confirmed

as a potential candidate for a full feasibility study, an Irrigation Water User Association (IWUA) will be

formed, where it does not exist to act as the representative of the farmers. All schemes to be

developed will be screened using a list of criteria set up to ensure all investments will be viable,

sustainable and contribute to the achievement of the PDO. These criteria will be based on those used

under PASIDP; however, PASIDP II will introduce improved quality standards for scheme feasibility

studies, paying more attention to market aspects, financial viability, environmental and social

sustainability and climate resilience. Based on these criteria, the respective Bureaus of Agriculture

and Rural Development (BoARD) in each participating region will provide the Programme with a

prioritized list of potential schemes. The FPCMU will subsequently review the quality of the feasibility

studies and eligibility, send back for revisions where required, and make the decision to continue with

detailed design when the studies show that investment is feasible. Depending on their safeguards

categorisation, Environmental and Social Impact Assessments (ESIAs) or Environmental and Social

Management Plans (ESMPs), and Resettlement Action Plans (RAPs) if necessary, will be prepared -

and FRIC and RAPs implemented - for each scheme. The limited likelihood for resettlement will be a

key selection criterion for the schemes, in view that that resettlement will be avoided to the extent

possible.

Another key improvement under PASIDP II will be a mandatory discussion of the feasibility

study with the intended beneficiaries through their IWUA, who will need to give their written approval

to contribute to the rehabilitation and to ensure scheme maintenance before the detailed design of

works is undertaken. Elements that need to be discussed and agreed upon include: (a) the proposed

scheme layout, (b) the cost of the scheme management and the resulting water charges, (c) the

environmental and social impacts and mitigation measures; (d) models of the cropping and financial

operation of the scheme, including an analysis of the technical and financial risks for the participants;

(e) potential upstream-downstream agribusiness linkages and how it will affect the management of the

respective schemes; (f) expected benefits accruing to each household from the scheme. A key

requirement for participation will be the confirmed willingness of the benefiting farmers to significantly

contribute to the investment cost of the scheme of at least 10%, in kind provided as labour and

materials, establishment and functionality of the IWUA and establishment of a savings account to

provide for the initial contributions towards operational and maintenance costs of the scheme.

Formation, strengthening and engagement of Irrigation Water Users Associations18.

Once a scheme is confirmed as a potential candidate for a full feasibility study, an IWUA will be

formed or strengthened in cases where they have already been formed, to act as the representative of

the potential irrigation farmers. This would be a pre-requisite to enable continuation of the process.

18 The IWUAs are mandated by a new Federal IWUA proclamation, recognizing the association as a legal entity for operation

and management of irrigation systems. There is still need for regional proclamations on IWUAs that will mandate the targeted schemes. Hence the Programme will facilitate the development of these regional proclamations.




9

The Programme will provide training and initial support and mentoring for IWUAs. This support will be

delivered through an experienced service provider with the support of Woreda public officials.

Increased technology options and improved decision-making. PASIDP II will promote

innovative technologies, including solar-powered irrigation systems, improved distribution systems

such as drip irrigation, and water storage and harvesting. A service provider will be engaged to

develop a decision-making methodology. This methodology will allow the design consultants to make

a better analysis of the context of each scheme in the initial identification phase, and to shortlist the

technology options with their advantages and disadvantages. These results will subsequently be used

to agree with the IWUAs on the selection of technology for the feasibility study. The decision-making

methodology will initially focus on water-scarce areas vulnerable to climate change, by systematically

mapping target areas using GIS and remote sensing tools, which will be targets for promoting

technologies that increase both water use efficiency and commercial viability.

Detailed engineering design of schemes. Based on recommendations of feasibility studies,

all identified measures related to water management will be subjected to in-depth designs. The

envisaged design will not only target irrigation structure but will also focus on essential service

facilities such as access/roads and market sheds. The irrigation infrastructure design will seek to find

the optimum balance between upfront investment cost, robustness to the impacts of climate change

and extreme events, operational costs, water use efficiency at command and field level, minimized

negative social and environmental impacts, and simplicity of use and maintenance. The Programme

will support the regional engineers to carry out detailed geological investigations and site verifications

for all detailed designs, to reduce the risk of occurrence of unexpected events during construction.

Technical support from the Directorate of Small Scale Irrigation (SSI) will be provided to ensure that

the designs and works meet the established quality standards. The designs will be shared with the

IWUAs and community leaders and Kebele authorities to solicit their comments and recommendations

and ensure local acceptance.

Climate change mainstreaming. Reliability of water sources and increasing competition for

water are key concerns for PASIDP II. Hydrological data is absent in many cases, resulting in frequent

overestimation of available water resources and increasing water conflicts. PASIDP II will support the

collection of hydrological data for specific sites identified for potential future investment. For river

systems with one or more larger schemes planned, the Programme will support modelling of climate

change impact on river baseflow and flood events to inform the design of the schemes. Furthermore,

the Programme will promote farm level adaptive water demand management by IWUAs through

training and farmer-to-farmer knowledge exchanges on water saving strategies.

Subcomponent A.2: Small-scale Irrigation Infrastructure Development

The expected output of Subcomponent A.2 is “irrigation schemes developed on 15,000 ha”.

Procurement and cost control. PASIDP II will procure works for the construction of selected

schemes and the associated infrastructure from qualified bidders. Tender documents will include

construction works for irrigation and road infrastructure as a package. It has been established that

construction companies (public, private or NGOs) with capacity to ably undertake the required

construction works exist in the target areas. Priority will be given to those companies which

demonstrated good performance with the first phase of PASIDP. The BoWR will have an important

role to play in controlling the costs of infrastructure, avoiding underbidding and subsequent excessive

cost variations, as frequently occurred in PASIDP. While PASIDP II will use a unit cost ceiling as done

in PASIDP, increased attention will be paid to the design review process. Detailed engineering

designs as prepared by the design consultant will be reviewed by the FPCMU, paying specific

attention to the adequacy of the design and completeness of the Bill of Quantities (BOQ).

Construction works and contract management. All selected schemes will be constructed

following technical specifications provided by designs, including the measures for mitigation of

environmental, social and climate risks contained in the ESIAs and ESMPs. The construction process

will adjust and align with any unforeseen situation, after discussion with the design engineers and




10

IWUA. Contracts will be supervised by the design engineer, in close collaboration with Programme

staff. Following specific training to do so, IWUAs will also monitor implementation progress during

construction and report their concerns with the supervising engineer.

The Programme, through ASAP, will develop guidelines on resilient construction standards and

when necessary development of additional alternative water sources (water harvesting, etc..).

Irrigation management transfer. After construction and expiration of the defect liability period

of the contractor, each scheme will be handed over to the respective IWUA. This will mean a transfer

of all responsibilities for the sustainable management of the scheme. A scheme handover certificate

will be signed between regional authorities and the IWUA, and witnessed by the Kebele authorities.


The expected outcome of Component B is “farmers have market-oriented skills and capacity for

sustainable agriculture”.

Subcomponent B.1: Agribusiness Linkages and Market Access

The expected output of Subcomponent B.1 is “improved access to appropriate inputs,

agricultural and financial services for smallholders”. This will be achieved through (a) mobilizing,

organizing and strengthening of farmers’ cooperatives; (b) supporting the emergence of agribusiness

linkages between these organized farmers and other marketing chain stakeholders and service

providers; and (c) developing linkages with financial service providers.

Strengthening of Farmers’ Cooperatives19. Farmers’ cooperatives (FCs) will be the main

vehicle for application of the principles and practices of irrigation farming as a business. The

Programme will mainly work with the multi-purpose cooperatives. These will largely perform as the

‘commercial arms’ of the smallholder farmers with responsibility of availing inputs to the farmers and

helping farmers to market their surplus produce in a more organised manner. The Programme will

provide sustained support for the development of the FCs as cohesive business entities. This support

for two years will include (i) training in record keeping, book keeping and financial management

techniques such as scheme profit and loss calculations; (ii) development of leadership skills,

cooperative governance, and communication; (iii) facilitation support to enable them to provide inputs,

access to finance and agribusiness links to produce markets. A capacity building needs assessment

will be undertaken to design specific interventions.

Market Access Alliances (MAA). The Programme will facilitate the establishment of

agribusiness linkages between different farmers’ cooperatives with the relevant private and public

stakeholders, through20 MAAs which would be voluntary platforms, comprising membership of

farmers’ cooperatives, service providers (transporters, specialist inputs providers, mechanised service

providers, primary processors and aggregators), financing institutions, as well as relevant Woreda-

level public institutions. It is assumed that at scheme level, the same lead farmers would be

represented in the IWUA, the FCs, the FRGs and MAAs. The agribusiness linkages could take

different forms, including out-grower schemes or provision of inputs, whereby FCs will not replace

traders and larger private sector entities, but rather organize the farmers to engage in effective, viable

and mutually beneficial business relationships, by aggregating demand for inputs and services as well

as agricultural products for efficient marketing. The development of MAAs will require coordinated

effort throughout the life of the programme. To provide this support, Market Facilitation Teams,

supported by highly qualified consultants with practical experience in agribusiness will be constituted

within the PCMU at Federal and Regional levels (see: Chapter III. Implementation arrangements).

19 Farmers Cooperatives (FCs) exercise their authority from Cooperatives Societies Proclamation No. 147/1998.

Cooperative membership is on a voluntary basis. Responsibilities for Cooperatives include supplying inputs, marketing

farm produce and extending lines of credit to members. 20 Linkages and synergies will be sought with the Agro-Industrial Parks intended to be established by the Ministry of

Industry, in collaboration with UNIDO and other Development Partners, as well as with the “Purchase from Africa for

Africans” (PAA) initiative led by WFP and FAO with support from the Brazilian government and DFID.




11

Access to financial services is a key factor to enable productivity improvements through the

timely acquisition of inputs and small to medium-scale capital assets, such as processing equipment,

agricultural machinery, animals for land works and transportation. Saving products are also critical for

farmers to mitigate the risk of natural disasters typically associated with agriculture. Cooperatives,

traders and agro-processors also need financing to aggregate farmers’ marketable surplus. In order to

bridge the supply-deficit gap, the Programme will assist irrigation smallholder farmers and other actors

in the marketing chain to access financial services through linkages with Micro-finance Institutions

(MFIs) and RuSACCOs.21 The Programme will also support the utilization of existing Warehouse

Receipt Systems (WRS). Warehouse receipt systems enable smallholder farmers to access credit by

using their output as collateral. The support will consist of technical support to strengthen the WRS.

Identification of opportunities for young entrepreneurs. In addition to strengthening FCs,

PASIDP II will support the identification of potential post-harvest and market related

activities/enterprises benefiting youth and provide skills training.

Subcomponent B.2: Capacity Building and Empowerment of Smallholder Farmers

The expected output of Subcomponent B.2 is “improved agricultural productivity in intervention

areas”.

Agricultural Development Plans (ADP). Comprehensive ADPs will be mandatory for

investment in any scheme and watershed. They will be prepared for all irrigation schemes and

adjacent watersheds with the full participation of the IWUAs, WMTs, cooperatives and other relevant

members of the Market Access Alliances. The ADP will define the interventions for agricultural

development that will be provided under Subcomponents 2.2 and 2.3, including FRGs,

demonstrations, agronomic extension support, seed multiplication, nurseries, gender and nutrition-

sensitive activities, etc.. The ADPs will include scheme-level climate-risk impact analyses along with

potential remedies for the identified risks.

Farmer Research Groups (FRGs). PASIDP II will use Farmers research groups (FRG) as key

vehicles to assess the viability of the current and potential commodities for non-irrigated and irrigation

agriculture, enhance farmer experimentation and promote innovation on climate smart options.

Support will be provided for national agricultural research institutions and the Woreda specialists in

establishing and facilitating FRGs for promoting experimentation and innovation, both within irrigation

schemes and adjacent watersheds. Some key innovations to be evaluated by FRGs are: (i) water

saving agronomic practises; (ii) soil fertility management; (iii) integrated pest management (IPM); (iv)

labour-saving technologies; and (v) improved seed availability. PASIDP II would institutionalize the

FRG approach by generating evidence, distil success factors and by promoting it to sister

programmes (e.g. AGP) and upcoming projects.

Agronomic support. The Programme will start by inventorying and then promoting climate

smart and best agronomic practices from PASIDP I and other initiatives. The programme will create

local capacity in irrigation agronomy, particularly in choosing and adopting appropriate crop varieties,

adopting integrated soil fertility management options, pest and disease management and improved

water and nutrient use of crops through managing weeds, successive planting time and intercropping

and relay cropping systems. Various training events will be organised for women farmers,

communities, development agents and Woreda experts to integrate climate smart interventions into

their day to day farming practices.

21 It is anticipated that many RFIs will benefit from incremental liquidity through the Ministry of Industry’s Small and

Medium Enterprise Finance Project, cofinanced by the World Bank and the European Investment Bank. The SME

Finance Project will have four components: (i) Component 1: Financial services to SMEs; (ii) Component 2: Enabling

environment for SME Finance; (iii) Component 2: Business Development Services to SMEs; (iv) Component 4: Project

management, communication and impact evaluation. The project will inject liquidity into MFIs through the Development

of Ethiopia (DBE) through two main windows, including (i) Lease finance to SMEs and (ii) SME lending. Furthermore, it

is envisaged that IFAD finances a complementary project to support agricultural finance under the 2019-2021 PBAS

cycle to respond to the expected increasing demand of financial services from smallholders and other agribusinesses.




12

Improved seed availability. The Woreda experts and development agents will support the

farmers’ communities adopting three channels of seed systems, namely: (i) supporting groups of

farmers to produce and market quality seeds of crops that are of interest in the respective schemes;

(ii)) strengthening BoA nurseries and establishing communal nurseries in the command area of the

new schemes for own use and selling to other sister schemes; and (iii) establishing alternative seed

sources including through traders. The Programme will facilitate access to start-up seeds and inputs

through linkage with private sector providers, as well as targeted on-the-job training for development

agents. A supply source of more climate resilient planting materials will be identified and facilitated.

Promotion of Nutrition-Sensitive Agriculture. PASIDP II will promote nutrition-sensitive

agriculture, which will involve strategies to improve the nutritional quality, safety and adequate

consumption of food through the following activities:

a. Water points for household consumption as additional benefits as part of the labour saving

technologies reducing women’s time burden for fetching water will be promoted, as well as

simple ferro-concrete tanks at homestead level;

b. Own-consumption pathway for nutrition. This intervention will focus on farmers as producers

and consumers. It will promote home gardens as a means to access nutritionally sound

produce for own consumption, as well as nutrition education and sensitization for women,

including for pregnant women young mothers

c. Market pathway for nutrition. This approach will focus on influencing the food environment,

resulting in an improved access to and awareness of nutritious and diverse foods in the market,

increased market availability and demand. It will include interventions, such as value added

product development and awareness of nutrient-dense varieties of legumes that are rich in

micronutrients. Farmers will be linked with local private business enterprises that are committed

to nutrition enhancement under the platform of the Scaling-Up Nutrition Business Network;

d. A community-based nutrition monitoring system will be established as part of the research

tools. The system will measure changes in food practices, food group consumption and local

perceptions on food production, processing, storage, marketing, preparation and consumption.

Programme implementers will track progress on nutritional outcomes related to dietary

diversification, food and nutrition knowledge, attitudes and practice (KAP) through the food KAP

survey.

Subcomponent B.3: Watershed Management

The expected output of Subcomponent B.3 is “improved and sustainable watershed

management”.

Micro Watershed Management Plan. The target is to improve management of 60,000 ha22 in

rain-fed areas adjacent to the irrigation schemes. The Programme will provide a range of training and

support activities in the watersheds. The interventions would include specific assistance through

FRGs, extension support and seed supply for demonstration and adaptive trials interventions to

promote improved watershed management and conservation agriculture (CA).

To tackle the socio-economic root causes of land degradation, investments in the adjacent

watersheds will be guided by a landscape approach, integrating socio-economic benefits from land

and environmental sustainability in a wider geographic zone. PASIDP II’s specific approaches to be

employed will depend on the agro-ecological zone and the existing efforts in terms of landscape

approach in that particular area, including area closures, which will be mapped using GIS and Remote

sensing tools. In areas where community-based watershed management interventions have already

been introduced, PASIDP II investments will aim at supporting and enhancing that process. In such

cases, the Programme will pay specific attention to: a) integration of multiple-benefit interventions; b)

improved climate-informed planning, through mapping and capacity building; c) introducing alternative

22 For each ha of irrigation scheme, approximately 4 ha of adjacent watersheds will be treated.




13

water sources, including water harvesting; d) specific soil and water conservation measures directly

protecting the irrigation schemes and e) considering trade-offs in choosing commodities to be

integrated into the watershed; for instance farmers prefer to grow eucalyptus as a fast growing cash

crop but is also a water demanding tree often causing water depletion, particularly if planted around

head of springs. In areas where no landscape approach has been adopted yet, the Programme will

support the full process from the initial stages. PASIDP II will support a range of the most successful

multi-benefit interventions specific to the local context such as: a) grazing land management through

‘social fencing’; b) planting of fruit trees; c) participatory forest management; and d) introduction of

energy-saving technologies. e) supplementary irrigation from alternative water sources would allow

rainfed farmers to introduce more productive crop types and varieties in to their system;

Rain-fed crop land suffers from high levels of water run-off, soil erosion and reducing soil

fertility. This affects catchment productivity, causes downstream damage and reduces land

productivity. PASIDP II will conduct an assessment of good agricultural practices in the different agro-

ecological zones for rain-fed and irrigated areas to identify how to introduce changes in land and crop

management practices to build agricultural productivity and resilience of the farming systems. These

incremental investments will be based on reducing labour for land preparation, improved timeliness of

planting and weeding and improved post-harvest management. FRGs and field days will be used to

refine and evaluate these approaches.

To link to on-going activities in Ethiopia working on GIS and Earth Observation approaches to

targeting, monitoring and planning of watershed use, PASIDP II will work with the Ethiopian Soil

Information System23. This will complement the planned activities on LDSF and provide PASIDP II

with improved recommendations on, for example, crop and variety choose based on predicted

climate, fertiliser recommendations and investment in degradation hot-spot areas.

Watershed Management Teams (WMTs) will be formed under Water sector policy and

strategy and the Community Based Participation and Development Guidelines. They will be mandated

to rehabilitate degraded watersheds, conserve water and soil and mitigate climate change. The

Programme would provide the necessary training and mentoring for the establishment and initial

operation of the WMTs, with training to be provided by a competent service provider with support from

public officials and institutions. This training would include techniques of micro-water shed

management, construction and maintenance of anti-erosion and anti-degradation structures,

biological techniques for erosion and degradation management and restoration of degraded areas

and enhanced rainfed agriculture and livestock management systems compatible with sustainable

catchment management.

Component C: Programme Management, Monitoring and Evaluation, and

Knowledge Management

Subcomponent C.1: Learning and Knowledge Management

PASIDP II will provide space for capturing, documenting and disseminating of Programmes’

lessons and innovations using different technologies. It will involve both internal and external

communication. The KM function will closely work with the M&E system to support the capturing,

documenting and sharing of information and lessons. The Programme will support the regional and

federal PCMUs by embedding climate change adaptation specialists into their teams, who among

other things would facilitate, document and distribute proceedings of the internal learning events.

Given differences in experience and agroecology, the Programme will strongly facilitate peer-to-peer

learning. Specific attention will be given to collecting information for knowledge products to build the

evidence-base on best performing schemes, resettlement activities, environmental management,

climate change adaptation, mitigation and gender and youth empowerment.

23 (see https://wle.cgiar.org/content/ethiopia-establishes-soil-information-service-based-cgiar-developed-methods)

https://wle.cgiar.org/content/ethiopia-establishes-soil-information-service-based-cgiar-developed-methods




14

Subcomponent C.2: Programme Management, Monitoring & Evaluation

The objective of Subcomponent C.2 is to ensure an effective operational planning,

implementation, monitoring and evaluation of PASIDP II. Details are presented in Chapter IV and

Appendices 5 and 6.

Lessons learned and adherence to IFAD policies

Lessons Learned24

From IFAD’s country portfolio of completed and ongoing interventions, many lessons learned of

relevance to PASIDP II were integrated in the design, in particular from the first phase of PASIDP. A

summary of such lessons and their design implications are provided hereunder:

Adequate beneficiary participation and community ownership, including adequate engagement

in both process and product, greatly enhances the long-term sustainability of development initiatives.

Subcomponent A.1 of PASIDP II, which is the entry point, will promote a community-based and

participatory approach in programming and implementation, strengthening and establishing

grassroots institutions. This will simultaneously contribute to minimize potential conflicts during the

course of implementation;

A return on investment is only possible if the irrigated command areas are used for the

production of crops with a viable market. Development of an effective irrigation scheme is a costly

endeavour. Productivity enhancement by itself does not necessarily increase farmers’ incomes

without proper linkages to markets and/or value addition opportunities. In order for irrigation schemes

to be viable and sustainable, they need to be wholly operated and maintained by the IWUA with no

government support. This also necessarily requires linkages to output markets so that farmers can

sell surplus produce and earn enough income to pay adequate fees for effective operation and

maintenance. Subcomponent B.1 of PASIDP II is being developed on the premise that markets will

influence cropping decisions at the scheme level.

The pathway to greater resilience of small farm enterprises goes through enhanced productivity

which in turn requires investment in improved technology. The latter requires access to finance and

markets. While access to irrigation and other sources of water is crucial, such investments must be

backed by complementary investments to ensure efficiency and high productivity of the natural

resources, including water. Subcomponents B2 and B3 focus on ensuring that appropriate natural

resource management and agronomic practices and technologies are adopted in view of maximizing

farm productivity and incomes of the target groups.

Schemes should be designed and constructed in response to demands of the beneficiaries and

bearing in mind a realistic beneficiary contribution in both cash and kind, during construction and for

operation and maintenance. PASIDP II will ensure that IWUAs are fully involved in planning, design

and construction of schemes, and that there is a realistic contribution from the beneficiaries toward

the capital cost. In addition, the Programme has planned specific capacity building activities for

IWUAs with regard to different aspects, including development of ADPs.

Water available at the end of the dry season tends not to be enough for the whole command

area; this could, potentially, be a source of conflict if not handled well. Accordingly, IWUAs will be

helped to obtain data on dry season river flows and ensure that they adopt internal rules to give

equitable access to land and water resources in the dry season. Major trade-offs are also forecasted

between upstream and downstream users and between agriculture and ecosystem services. In the

regions, where water resources are limited and climate variability is well recognized, a watershed

scale water budgeting and well thought irrigation management is required to minimize competition

between upstream and downstream users and to improve scheme performance. Targeted

24 A more comprehensive list is provided in Appendix 3.




15

interventions including night storage, introducing less water demanding perennial crops, and

integrating alternative water sources (eg. water harvesting) should be part of scheme design.

There tends to be a mistiming between the construction of irrigation facilities and the timely

provision of agricultural support services. As a result, the target farmers end up taking a considerable

amount of time before they can effectively make good use of the irrigation facilities. Under PASIDP II,

ADPs will be prepared concurrently with the planning and development of the schemes and the

Programme would ensure that the required extension services are availed to guide their effective

implementation. In addition, access to financial services was integrated.

Rehabilitation of watershed and catchment areas is essential for the sustainability of irrigation

schemes. Accordingly, PASIDP II has allocated an entire Subcomponent and a specific budget for

watershed management.

The first phase of PASIDP had a slow start, which the PCR attributed to delays in bidding

processes, selection and contract management and weak performance of the private sector, mainly

contractors and consultants. PASIDP II will use these lessons and (i) start from a pipeline of existing

studies and maintain such pipeline, (ii) build on effective procurement modalities of PASIDP I, and (iii)

closely monitor progress and manage in an adaptive way.

Adherence to IFAD policies

The design of the PASIDP II is aligned to the Strategic Framework 2016-25, the Targeting

Policy – Reaching the Poor (2010), and the Gender Equality and Women’s Empowerment (2012). The

Programme will ensure that women and youth equally benefit from programme interventions. PASIDP

II will be implemented in compliance with IFAD’s Policy on Improving Access to Land and Tenure

Security, the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and

Forests and the Framework and Guidelines for Land Policy in Africa. As such, before supporting any

development intervention that might affect the land access and use rights of communities, it will

ensure that their free, prior and informed consent (FPIC) has been solicited through inclusive

consultations based on full disclosure of the intent and scope of the activities planned and their

implications. The Programme is aligned to IFAD’s Natural Resources Management Policy and Climate

Change Strategy.

III. Programme Implementation

Approach

Programme governance. PASIDP II’s success will depend on strong collaboration between

government institutions, private sector players and farmers. Joint planning, implementation and

monitoring of activities are essential features of the programme. To succeed in developing financially

viable irrigation schemes and to promote farming as a business, the role of market-oriented

stakeholders in irrigation development needs to be much stronger than before. To ensure that

investments are climate resilient, partners with actionable knowledge on the impacts of climate

change will need to be engaged at crucial moments. Bringing all these stakeholders together and

working efficiently will require a high level of planning from the Programme management.

The Programme will be governed by four main principles: a) alignment with GOE systems and

procedures, especially those governing public expenditure management and procurement, and

integration of Programme implementation into relevant institutions in decentralized government

structure; b) greater empowerment of beneficiaries to take lead role through their grassroots

institutions in Programme implementation; c) cooperation with private agricultural service providers

and various players in priority commodity chains; and d) stronger partnerships and harmonization with

other development partners and other stakeholders in the sector. The Programme coordination,

management and implementation arrangements are well integrated into the decentralized regional




16

administration at the outset. Harmonization and alignment of these arrangements with national

policies, procedures and institutional framework augurs well for sustainability.

Planning and phasing of scheme development. Adequate and realistic planning of scheme

development, which incorporates possible impacts of environmental and social considerations and

climate change, is crucial to the success of the overall investment as well as achieving acceptable

implementation progress. At the start of the Programme, the FPCMU will develop a flowchart with key

milestones and deliverables, which will be used throughout the lifetime of the Programme to monitor

progress and identify bottlenecks. The start of the procurement and construction process will be timed

with capacity building initiatives, and sufficient time needs to be reserved following construction to

allow for continued support by the Programme. Planning of scheme development will furthermore

need to be adequately spread to use the capacity of Programme and government staff most

efficiently.

Table 2: Phasing of irrigation scheme and watershed development by Programme year (PY)25

Partnerships with other initiatives. The Programme will develop partnerships with other

partners and on-going initiatives and build on their knowhow:

i. the Second Phase of the Agriculture Growth Programme (AGP II) will be a partner, in

particular with respect to knowledge management, institutional capacity building and policy

dialogue. Regarding the selection of Woredas, AGP II and PASIDP II will be complementary

interventions;

ii. the Sustainable Land Management Project (SLMP-2) will be a privileged partner; SLMP is

already active in some watersheds adjacent to irrigation schemes proposed for PASIDP

investment. The PASIDP support will complement activities being already undertaken by the

SLMP, but will not duplicate such interventions;

iii. the Ministry of Industry’s Small and Medium Enterprise Finance Project will inject capacity

and incremental liquidity into MFIs through the Development Bank of Ethiopia (DBE), through

two main windows, including (i) Lease finance to SMEs and (ii) SME lending for working

capital;

iv. the CGIAR centres and in particular the International Crop Research Institute for the Semi-

Arid Tropics (ICRISAT), the International Water Management Institute (IWMI) and World

Agroforestry Centre (ICRAF), which have a strong presence in Ethiopia and have been

closely working with the national system on multiple agricultural and environmental issues

that are relevant to PASIDPII, including water productivity , watershed management, and

modelling local-level climate change scenarios;

v. FAO (a) in partnership with ICCO Terrafina Microfinance (ITM), would contribute by enabling

access to financial services for farmers’ organizations, including multipurpose cooperatives;

(b) could provide training of trainers centred on marketing, farm business management,

cooperative management, record keeping and input distribution. Trainers would be experts

from woreda‘s Agriculture Development Offices (ADOs) and Cooperatives Promotion Offices

(CPOs);

25 The phasing presented in the table is indicative and efforts will be made to accelerate implementation readiness to

allow scheme construction to start already in PY1, particularly with the completion of 11 uncompleted schemes from

PASIDP.

PY 1 PY 2 PY 3 PY 4 PY 5 PY 6 PY 7 Total

# feasibility studies approved 0 65 45 40 0 0 0 150

# schemes construction started 0 20 45 45 40 0 0 150

# IWUAs formed 0 20 45 45 40 0 0 150

Ha of operational irrigation area 0 0 3000 5300 5300 4800 0 18,400

Ha of watershed development started 8,000 18,000 18,000 16,000 0 0 60,000




17

vi. the Agriculture Transformation Agenda (ATA) team would be involved in the implementation of

the IFAD grant;

vii. the Ministry of Industry’s Agricultural Commercialization Cluster Initiative, as the planned

investment in value addition can become a powerful driver for market access and income

generation, along the targeted value chains; as well as the “Purchase from Africa for Africans”

(PAA) initiative led by WFP and FAO with support from the Brazilian government and DFID.

Organizational Framework

PASIDP has successfully developed effective implementation arrangements, from federal level

down to Kebele level, and created a mode of operation that has streamlined planning, financial

management, procurement, monitoring and reporting systems that can effectively support PASIDP II

implementation. The institutional arrangement for oversight, management and coordination of PASIP

II implementation will be built on the existing arrangement established under the PASIDP, with some

adjustments to reflect new dimensions and scope of the new phase, strengthen the capacity of

Programme Implementing Agencies and build vertical and horizontal institutional linkages. The

Programme institutional arrangement for coordination will be undertaken in four levels, in accordance

with the Government's decentralized structure − Federal, Regional, l offices and Woreda.

The Ministry of Agriculture and Natural Resources (MoANR) will be the lead executing agency.

The Minister of State for Natural Resources will be responsible for coordinating implementation with

support from the Directorate of Small Scale Irrigation.

At the Federal level, the National Project Steering Committee (NPSC) established during

PASIDP will continue to provide oversight with regard to policy and strategic guidance on Programme

focus, priority setting and institutional strengthening to ensure that PASIDP II achieves its objective

and contributes to the higher level sector policy and strategic goals under GTP.

The Federal Programme Coordination and Management Unit (FPCMU) established during the

first phase of the Programme will continue to provide day to day management of PASIDP II. The

FPCMU will be under the leadership of a National Programme Coordinator who will report to the

Minister of State for Natural Resources. The FPCMU will play a key role in (i) planning, monitoring

and evaluation, (ii) coordinating stakeholders at federal level and (iii) leading the quality control of

investments, including ensuring cost-efficiency.

The FPCMU will be championing the enhanced Participatory Planning and Preparation process

as introduced by the Programme. It will continue to play its role in reviewing and approving feasibility

studies and detailed designs, and will make sure they meet the improved quality standards, which will

be defined in the PIM and the ESMF. The FPCMU capacity will be strengthened on issues related to

marketing, safeguards and climate change adaptation. A Programme Market Facilitation Team

(PMFT) will be established to devise the strategy and time-table for support at the national and

provincial level, provide a link to policy makers and high-level market entities, and provide direct

technical support at Regional levels. Environmental and Social Safeguards Specialists will ensure

proper application of the ESMF. A Climate Change Adaptation specialist will provide leadership on

issues related to climate change adaptation mainstreaming supported by a regional

adaptation/watershed specialist in each region (see ToR).

Technical support by the Ethiopian Agriculture Transformation Agency (ATA). ATA, upon

request of MoANR will provide technical and analytical support to operationalize PASIDP II

interventions, and coordinate multiple stakeholders as necessary. ATA will also bring on board and

oversee specialized services providers and develop/roll out an action plan for south-south cooperation

to build capacity in innovative areas, including the setting-up of market access alliances, the

mainstreaming of climate-change innovations, and access to rural finance.

At the Regional level, the Programme will be managed by the respective Regional

governments with the Heads of the Bureaux of Agriculture and Natural Resources providing overall




18

leadership. The existing Regional Project Steering Committees (RPSCs), chaired by the respective

Heads of Bureaux of Agriculture and Natural Resources, will be expanded to include Heads of the

relevant Bureaux and other representatives from market and trade, cooperative agency,

environmental protection, land use management, Agricultural Research Institutes, etc. The Regional

Project Coordination and Management Units (RPCMUs) will be responsible for the day to day

management of the Programme. RPCMUs will be playing a leading role in planning investments and

the procurement and coordination of design consultants, works contractors and capacity building

service providers.

A Market Development Facilitation Team (MDFT) will provide direct training and mentoring for

all cooperatives engaged at each irrigation scheme, and would initially convene and subsequently

provide training and mentoring to MAAs involving all relevant commercial entities. Regional

Environmental and Social Officers will conduct environmental and social monitoring on a day to day

basis, ensure implementation of mitigation measures as identified in the scheme ESMPs and provide

technical support to the implementation of climate change adaptation measures.

At the Woreda and Programme site level, a Woreda Coordinator will work with a team of

three Development Agents to oversee activity implementation. The skill mix of the Development

Agents will depend on priority interventions in a given Woreda. The Woreda coordinator, having close

linkages on the ground, will be handling day-to-day issues in programme implementation in close

collaboration with the regional RPCMU. The Woreda Coordinator is a new role compared to the first

phase of PASIDP, and is expected to significantly speed up programme implementation and ensure

quality of investments due to the greater proximity.

Farmer-based organisations will be implementing essential elements of PASIDP II. IWUAs will

be trained to develop and implement a business plan that will include collection of fees from members

that would be used for routine operation and maintenance (O&M) and longer-term investments to

keep the irrigation schemes operating efficiently. They will actively participate in the entire process of

scheme development from identification to the final scheme hand-over. Multi-purpose cooperatives

will largely perform as the ‘commercial arms’ of the smallholder farmers with responsibility of availing

inputs to the farmers and helping farmers to market their surplus produce in a more organised

manner. The last of such organisations are the watershed management teams; these will play a

pivotal role in improving land and water management through watershed/catchment rehabilitation and

management activities.

A partnership with ATA will be developed for the mobilization of technical assistance with regard

to key innovative aspects of the programme. With funding from the IFAD grant, ATA would be

responsible to mobilize internationally competitive national and international expertise26 to provide

analytical and technical support to the FPCMU in (i) verifying the quality and assumptions in market

and feasibility studies; (ii) coaching of facilitators, in particular for the Agribusiness Linkages and

Market Access Subcomponent 2.1; (iii) addressing specific recommendations that may arise from

implementation support missions; and (iv) learning and knowledge management.

Planning, M&E, learning and knowledge management

Planning

The FPCMU will compile the annual work planning and budgeting (AWPB) involving each level

of Programme participants, starting with the primary stakeholders at the scheme and micro-watershed

26 The IFAD grant has been mobilized in the context of a commitment to support South-South Triangular cooperation.

for an effective transfer of knowledge and good practices in the context of making investments in irrigation infrastructure

and sustainable land management more viable in terms of enhancing productivity, resilience and commercial viability,

including incentives and benefits for IFAD’s target group. IFAD will closely supervise and support this initiative to

ensure an effective transfer of knowledge between Ethiopia and other countries in the region and beyond. A key

criterion for the selection of consultants will be their prior exposure to other countries with similar challenges and

potential to benefit from adaptation of successful practice to the local context. This will be complemented by exchange

visits. internationally competitive (including national)




19

level. The Woreda, in collaboration with the Zonal office, will prepare AWPBs which will be submitted

to the respective Regions and consolidated by RPMUs to produce Regional AWPBs. The Regional

AWPBs will be reviewed and approved by the respective RPSCs before being submitted to the

FPCMU. The FPCMU will review and consolidate the Regional AWPBs based on the Programme’s

overall operational and financial targets in particular will define programme activities and outputs;

review and adjust approaches based on implementation experience; and set realistic targets each

year. The FPCMU will then produce to the Programme-wide AWPB for a given year which would be

submitted to the National Project Steering Committee (NPSC) for approval. Finally, the AWPB would

be submitted to IFAD, at least 60 days before the commencement of the proceeding programme year,

for its review and expression of ‘No Objection’. The annual planning and implementation cycle will be

aligned with GOE’s planning cycle. The fiscal year goes from July to June while budget preparation

extends from January to May. The AWPB will document lessons of experience from past

implementation and how such lessons have been used to benefit the proposed plan. It will also

include a plan for staff capacity development and training, whenever warranted.

Monitoring and Evaluation

PASIDP II’s M&E system will be guided by Logical Framework. In line with the overall

programme result based management approach, the system will collect appropriate and timely

information to track programme progress towards outputs, outcomes, impact and sustainability.

The system will generate, aggregate and systematically record formal data, both qualitative and

quantitative, from Regional, Woredas, Kebeles and schemes and micro-watershed levels. Through

the analysis and communication of this information, managers of each Component will be able to

evaluate/assess outcomes achievement, track progress, identify implementation bottlenecks, make

informed decisions and take timely corrective action when needed. These will be at the basis of

progress reports and will enable Programme management at all levels, local communities and other

stakeholders to keep track of interventions progress against the AWBP and determine if: (i) the

Programme is on-track, on-time and on-target; (ii) funds are used as intended; (iii) the Programme is

implemented as planned.

Baseline surveys, with sex and age disaggregated data, will include a household survey to

assess socio-economic level of beneficiaries and a gender analysis and will be conducted during year

1, and used to accurately inform the result based logical framework baseline and target values. In

addition each scheme feasibility study will provide baseline data to assess individual schemes

performance and results. The MTR review will evaluate whether the Programme is on course to

achieve the Programme objectives and will assess targeting performance using participatory M&E.

Any prevailing constraints will be identified and recommend such re-orientation as may be required to

address such constraints and help get the Programme back on course to achieve the set targets. The

recommendations will take into consideration the likelihood of achieving the objectives during the

remaining time period. At completion, a Beneficiary Impact Assessment (BIA) will be undertaken and

this will used to prepare a Programme Completion Report (PCR) that will provide an overview of the

accomplishments of PASIDP II. The impact survey will be conducted at the end of the programme to

strengthen the assessment of effectiveness and impact. Specialised studies to evaluate the extent to

which the Programme is making progress towards the achievement of set targets will be contracted

out.

The regular monitoring and reporting on inputs and outputs against AWBP will be the

responsibilities of the Programme staff at Woreda, Region and Federal levels. At the Kebele level, the

agricultural development agents will be responsible for collection and reporting of the data in their

respective sectors, as well as facilitate the M&E activities at community level. Programme managers

of each component will be responsible to analyse and evaluate/assess outcomes achievement, track

progress, identify implementation bottlenecks, make informed decisions and take timely corrective

action when needed. The issues will be discussed it during the regional biannual review workshop

and/or federal annual review workshop. The overall responsibility for the Programme’s M&E system

will rest with the M&E Specialist of the FPCMU, who will be supported by the RPCMU M&E




20

Specialists. The M&E Specialist and the MIS/GIS specialist of the FPCMU, in consultation with the

RPCMU M&E and MIS/GIS specialist, will establish a web-based management information system

(MIS), using dedicated software to collect data from various levels with the TA of an international MIS

consultant. To ensure an effective flow of information, the Specialist will develop simple and user-

friendly tools for data collection, data entry, data processing and analysis. Standard forms and formats

will be developed and made available to ensure consistency in the way data is recorded across all

Programme areas.

PASIDP II will provide robust capacity building activities to M&E Officers, FPCMU staff,

Regional M&E staff, Woreda staff and IWUAs. The purpose of the training will be to provide skills in

planning, monitoring of activities, data analysis, audit of data, gender in M&E, RIMS, and other

specific technical skills and M&E tools to support the implementation of the Programme’s M&E

activities.

Strengthening of capacity for M&E at the national and regional level. This initiative will be led by

ATA and implemented with grant resources, focusing on (i) the operationalization of key outcome

indicators to be mainstreamed in similar investments to drive learning and good practice in agricultural

investment; (ii) developing guidelines for increased accountability and smooth execution of M&E

functions across different levels of government and across institutions, including data collection,

reporting and verification arrangements; alignment of plans and M&E approaches, to enhance

learning and sharing.

Learning and Knowledge Management

Learning and Knowledge Management (L&KM) will play an important role in the Programme’s

planning, supervision, monitoring and evaluation system, helping to inform activities, replication and

scaling up. It will serve as a foundation for replication of successes, provide the analytical basis to

resolve challenges, and help to adapt activities to changing social and economic circumstances in the

target schemes. A learning and knowledge management strategy will be developed during the first

year of PASIDP II by the FCPMU M&E officer, KM officer in consultation with Regions, Woredas and

Kebeles with the TA of an international KM consultant. The IFAD KM strategy27 will be the reference

document. The strategy will outline systems, processes and responsibilities to ensure that the project

will generate, capture, document, package, use and disseminate knowledge and lessons learnt

throughout the programme as well as externally. The system will include the five aspects of integrated

L&KM as developed by IFAD-Africa: information management, M&E, innovation and experimentation,

internal and external communication and learning and adaptation.

Financial management, procurement and governance

Financial Management

The financial management assessment undertaken at design revealed that GOE systems are

adequate for financial management needs of PASIDP II. To complement the government systems, the

Programme finance team will comprise of a Finance Manager competitively recruited and employed

on a performance based contract. The Finance Manager will be assisted by an Accountant at FPCMU

and Regional Programme Accountants at the respective Regional Bureaus and Woreda Accountants

in the Programme Woredas. Existing accountants will be assessed for suitability and the remaining

vacant positions will be filled through competitive recruitment;

Funds Flow and Disbursement Arrangements. Under PASIDP II, there will be external

funding from IFAD and ASAP. MoANR will open a separate designated account at the National Bank

of Ethiopia solely to receive Programme funds from IFAD (IFAD loan and ASAP grant) and a

programme operating account held in a commercial bank acceptable to IFAD. Both bank accounts will

be operated by the Federal Programme Coordination and Management Unit (FPCMU) in accordance

27 IFAD. 2007. Knowledge Strategy 2007-2010




21

with GOE regulations. The respective programme Regional Bureaus and implementing partners will

also open programme bank accounts in commercial banks. Disbursements would be done under the

SMART statement of expenditure (SOE) procedures and the ASAP co-financing managed on a

parallel basis with IFAD funding for the investment in knowledge management, pro-poor agricultural

value chain development and agricultural productivity and resilience categories. Release of funds to

Regions and implementing partners shall be on the basis of activity budgets for the initial Programme

implementation stage and, subsequently, on the basis of justifications rather than general advances.

The RPCMUs and implementing partners shall be required to open and operate separate bank

accounts for the loan to facilitate traceability of funds.

The Programme will be implemented on the basis of approved Annual Work Plans and Budgets

(AWPBs). The budgeting process will be done jointly between FPCMU, RPCMUs, Woredas and

implementing partners. FPCMU will consolidate the budget, present it for approval by the Programme

Steering Committee (PSC) and submit the estimates to MoFEC for inclusion in the National estimates.

A No Objection from IFAD will be required for each AWPB during the implementation. Budget

submission to IFAD will be by 30 April for each budget year as required by the IFAD general

conditions;

The Programme will move to the government Integrated Budget and Expenditure (IBEX)

accounting system for its accounting needs. The IBEX team at MoFEC will facilitate the design of the

chart of accounts for PASIDP II reflecting the funding sources, programme components, programme

Subcomponents, expenditure categories and activities in both US$ and ETB;

Programme audits: The Internal Audit department of MoANR will include PASIDP II in its

internal audit plans and undertake an audit with six monthly internal audit reports submitted to the

PSC. IFAD will require submission of management action plans and progress of implementation of

recommendations as part of the mandatory annual report. During implementation of PASIDP, statutory

audit services were provided by the Audit Services Corporation (ASC); the same arrangement will

continue under PASIDP II. However, MoANR will have to address delays and the quality of audits that

characterised PASIDP implementation. Audit of PASIDP II will be conducted under specific Terms of

Reference that will be generated in line with the IFAD audit guidelines.

Start up and retroactive financing: To facilitate early start-up of the Programme, it is

proposed that GOE will pre-finance some activities whose costs will be reimbursed by IFAD upon

effectiveness of the programme. This will cover agreed eligible costs during the preparatory period

from 1 July, 2016 to 31 December 2016 covering items of eligible expenditure equivalents of US$

1,994,000. These will include baseline survey, studies and selection of appropriate scheme sites,

training needs assessment, workshops, completion of on-going schemes that are within PASIDP II

Woredas, salaries and allowances and operating costs.

The FPCMU will update and implement the financial management section of the Programme

Implementation manual (PIM). The financial management arrangements including, staffing, budgeting,

accounting, funds flow, disbursements, financial reporting, internal controls and auditing shall be

detailed at Appendix 7.

Procurement

IFAD’s General Conditions place emphasis on using the Borrower/Recipient’s procurement

regulations, provided they are deemed to be consistent with IFAD’s guidelines. This is in line with the

various commitments of the international donor community to work towards increasing the use of

national systems where they can be shown to be compatible with the requirement of donors. The

IFAD procurement guidelines and handbook require an assessment of national procurement systems

as part of programme design. The assessment was done in two stages: a) overarching country

assessment; and b) programme specific assessment.

The findings suggest that the country’s legislative and regulatory framework is adequate to

address the relevant procurement issues that will arise under PASIDP II. The applicable law and




22

regulations are contained in: a) Federal Democratic Republic of Ethiopia Procurement and Property

number 649/2009; b) the Public Procurement Directive of June 2010; and c) Public Procurement

Manual. All these provide an adequate operational environment for procurement, including

procurement for works. However, the Programme specific assessment, based on PASIDP operations,

indicates a need for improvement in the following areas: a) recruit a Programme-specific Procurement

Officer; b) management of records of procurement processes; c) contract Management; d) integrate

procurement in the budget formulation process; and e) reporting. Overall, the process is rated as

‘medium’ risk.

Under PASIDP II, and given the medium risk ranking of the GOE procurement systems, the

IFAD prior review thresholds would be US$ 100,000 for goods, services and for works. Mitigation

measures for civil works, including those for irrigation infrastructure, would be included in the

respective construction contracts. PASIDP II will not set up a specific procurement unit as GOE’s

requirement is that Procurement staff in Ministries is managed as a pool. However, to enhance

implementation efficiency, PASIDP II will recruit a Procurement Officer and an Assistant Procurement

Officer to be contributed to the Pool. These will handle the Programme’s procurement needs on a

priority basis and will provide support to the participating Regions in handling procurements for the

Programme. PASIDP II international and local technical assistance will be made by direct contracting

of recognised institutions, while all other PASIDP II International Competitive Bidding (ICB)

procurements will be carried-out and managed centrally at the FPCMU/MoANR. National Competitive

Bidding (NCB) and Local Shopping may be carried-out at the Regional levels in case bulking

opportunities may not be feasible at the FPCMU. Regions will, therefore have to submit their

procurement plans for inclusion in the consolidated PASIDP II procurement plan. Efforts will be made

by the PASIDP II Procurement Officer to ensure that the best contract packaging possible, including

consideration of what lots can be put together in a package for which it is possible to find a supplier or

bulking opportunities.

Supervision

IFAD and MoANR will jointly undertake six-monthly supervision missions. The Country Director

of IFAD will have oversight of the supervision process with the assistance of specialist consultants.

The most important skills and experiences that will be required in the supervision missions include: a)

Irrigation Engineer; b) Financial Management and Procurement Specialist; c) Monitoring and

Evaluation Specialist; d) Rural Finance Specialist; e) Marketing and Agribusiness Specialist; f)

Agronomist and g) environmental specialist. Key features likely to require attention by the missions

will include: (i) the quality of preparatory planning and studies of schemes, including the early

establishment of IWUAs and their active participation; (ii) setting up of a functional M&E system; (iii)

procedures and systems causing implementation and reporting delays; (iv) the procurement function;

(v) access to finance and inputs.

Risk and Constraints Identification and Mitigation

Major risks in Ethiopia’s agriculture sector

The design of PASIDP II has benefited from a Risk Assessment Study recently undertaken by

the Platform for Agricultural Risk Management (PARM). An analysis of the risks most relevant to

PASIDP II has been included in Appendix 14. Extreme risks, with a low or moderate frequency but

high severity (such as extreme droughts or market outbreaks), require the involvement of macro level

players to pool or transfer these risks. In other cases, farmers have the responsibility to manage the

most frequent but with moderate/low severity risks such as small price variations. The Risk

Assessment Study identified and prioritized the following major risks: (1) droughts, (2) livestock

diseases and (3) crop pest-diseases and price variations.

Table 3: Risks in Ethiopia’s agriculture sector, in PASIDP II regions

Risk Category Risk High risk Moderate/low risk




23

Weather Risks Drought Amhara, Oromia, SNNP and Tigray

Flood Amhara, SNNP, and Tigray

Delayed/late rains Amhara, Tigray and SNNP

Biological and

environmental risks

Plant pests and diseases All regions

Livestock diseases All regions

Inputs and price risk

Rising prices All regions

Quality variability All regions

Food crops All regions

PASIDP II is expected to mainly improve farmers’ management of moderate and low risks (ex.

dryness) while for extreme risks (extreme droughts) interventions of macro level actors will remain

required. Classifying risks and assigning responsibilities during Programme implementation will help

improve overall agricultural risk management. As part of the design and planning of irrigation and

watershed investments, an analysis is made of the frequency of risks occurring that exceed farmers’

capacity to manage (e.g. for irrigation schemes, water supply may be insufficient every 2 out of 10

years). Partnerships with macro level players leading emergency and social protection programs (eg.

Productive Safety Net Program – PSNP and DRMFSS/EWRD) will ensure the timely assistance of

Programme beneficiaries if such extreme events occur.

Regular and timely access to information is a key pillar of agriculture risk management. In

Ethiopia thematic information is available at national level28`* and efforts should be made to ensure

their dissemination at regional, zonal and community level. PASIDP II will explore ways to facilitate the

collection, analysis and distribution of the key information such weather forecasting, commodity price

variations, pest and diseases control systems.

Price variations are recognized by farmers as a major risk, often due to their limited access to

different markets and the tendency to produce the same commodities during the year. The increased

productivity in the irrigations schemes supported by PASIDP II may actually amplify these risks, if no

viable market is available. PASIDP II will therefore provide strong support on agribusiness linkages

and marketing, ensuring that increase productivity effectively increases income and prosperity.

Major constraints to the implementation of PASIDP II

In addition to the risks likely constraints affecting the successful implementation of PASIDP II,

have been identified and mitigation measures, proposed within the Programme design. Some

measures to manage these limitations are proposed in the Table below.

Table 4 Constraints affecting successful implementation of PASIDP II

Constraint Implications Management measures

Very slow start-ups A higher overhead cost and lower economic return

Performance evaluating and retaining the experienced PASIDP staff

Limited participation of beneficiaries in preparation of studies of schemes

Low ownership and sustainability of schemes

The early establishment and strengthening of IWUAs

Attention to ensuring active participation of the target beneficiaries in all stages of irrigation scheme development

Linking SHF to market and suppliers

Weak agribusiness linkages

Low return on investment as farmers shift predominantly to cereal production

Implication of cooperatives;

Diversification of productions and marketable commodity selection

Limited access to finance Farmers don’t invest to optimise benefits from irrigation.

Marketable commodity selection

Training to SHF on seasonal planning

28 Available information systems in Ethiopia for weather, pest and diseases and prices: early warning system (FEWSNET) -

Early Warning Response Dir. (EWRD) - National Meteorology Agency - Livestock Information Network Knowledge System -

EthioSIS – Ethiopian Commodity Exchange (ECX).




24

(commodity selection, contracting farming…)

Limited capacity of public extension system

Farmers would not get the support they need to optimise their potential income from irrigated agriculture.

Allocation of funds to address the identified capacity limitations.

Development of market linkages and involvement of farmers’ organizations.

Land tenure and certification

Some of the irrigation land could be underutilized Work with the local administration authorities

Soil fertility Crop intensification might lead to lower soil fertility

Training on soil fertility management (rotations, commodity selections, inputs…)

IV. Programme Costs, Financing, Benefits and Sustainability

Programme Costs

Total Programme costs over 7 years, including contingencies29, taxes and duties, are estimated

at US$ 145.3 million (ETB 3,844 million), as presented in the table below. Component A represents

71.9% of the costs, Component B 20.5% and Component C 7.6%.

Programme Financing

PASIDP II will be financed by Government, IFAD, ASAP and the beneficiaries. The cost of

components by financier is presented in the table below. An allocation of US$ 103.5 million is

available to the Federal Democratic Republic of Ethiopia (GOE) from the PBAS cycle 2016/2018,

which will constitute an IFAD loan of US$ 102 million on highly concessionary terms, as well as an

IFAD grant of US$ 1.5 million. An additional grant of US$ 11 million will be allocated under ASAP to

mainstream climate resilient interventions within PASIDP II.

The IFAD loan proceeds, representing 70.2% of total Programme costs, will be allocated to: (i)

the investments in small-scale irrigation; (ii) the development of agribusiness linkages and support to

agriculture; (iii) programme management, monitoring and evaluation; (iv) learning and knowledge

management. The IFAD grant will mainly be allocated to the mobilization of internationally competitive

(including national) technical assistance (US$ 1 million) to (i) verify the quality of feasibility studies, (ii)

provide leadership and coaching of facilitators, in particular for the Agribusiness Linkages and Market

Access Subcomponent B.1; (iii) to address specific recommendations that may arise from

implementation support missions; and (iv) facilitate innovation, learning and knowledge management.

An amount of approximately US$ 500,000 will be allocated to the strengthening of M&E capacity,

which is envisaged to be implemented in partnership with the Agricultural Transformation Agency

(ATA). All contracts under the grant would be subject to IFAD prior review.

The ASAP grant, representing 7.6% of Programme costs, will be used to finance: (i) capacity

development in climate-smart irrigation scheme development, (ii) the development of alternative water

sources, (iii) mainstreaming of climate-smart tools in research and extension approaches; (iv)

watershed management; (v) climate-change related knowledge management.

GOE will provide equivalents of US$18.7 million representing 12.9% of total Programme costs.

GOE will cover all duties and taxes. The public services at national, regional and Woreda levels will

play a key role in Programme implementation.

The beneficiary contribution would be US$12.1 million. They would provide a 5% contribution in

the construction works of the irrigation schemes, to be provided in labour and materials. They would

also provide community labour for the watershed improvements.

29 Physical contingencies have been estimated at 2% based on the experience from PASIDP I. In the case of cost

overruns, fewer schemes will be constructed.




25

Table 5: Programme costs by component

Table 6: Cost of components by financier

Summary benefits and economic analysis

Component A and B is expected to lead to (i) strong increase in crop production and marketing

in 18,400 ha irrigation schemes, from 1 rainfed cropping season to 1 or 2 irrigated and 1 rainfed

season, leading to an increase in cropping intensity of approximately 0.9 to 1.4; this would lead to

strong increases in farm income for 46,250 farm households as well as farm labour requirements;

(ii) higher yields in 60,000 ha of adjacent watersheds; (iii) additional job creation for 15,000 young

and landless people, who are not member of the households that own irrigation schemes or

watersheds; (iv) improved market access and higher yields for 10,000 farmers’ households that

received investment support under PASIDP I.

Financial analysis

The detailed financial analysis is presented in Appendix 10. Six farm models with a without and

with programme situation, of which 4 for farmers with land in irrigation schemes and watersheds, and

2 for farms with only land in watersheds. In the without project situation, farmers (models A, B, C and

D) cultivate only 1 ha of rain-fed crops. In the with programme situation, they cultivate 0.6 ha of rain-

fed crops and 0.4 ha of irrigated crops during the dry season. Models E and F simulate farmers that

have only 1 ha in the adjacent watersheds in the rainy season. It is assumed that yields in the

watershed models are only 85% of those in irrigated agriculture. These models capture the multitude


Participatory Smallholder Irrigation Development Programme II (PASIDP II) % % Total

Components Project Cost Summary (ETB '000) (US$ '000) Foreign Base

Local Foreign Total Local Foreign Total Exchange Costs

A. Investment in Small-scale Irrigation Infrastructure

1. Irrigation Scheme Participatory Planning and Preparation 87 292 52 010 139 302 4 098 2 442 6 540 37 5

2. Small-scale Irrigation Infrastructure Development 1 535 193 381 083 1 916 276 72 075 17 891 89 966 20 67

Subtotal 1 622 485 433 093 2 055 578 76 173 20 333 96 506 21 72

B. Investment in Capacity for Sustainable Agriculture

1. Agribusiness Linkages and Market Access 40 387 15 966 56 353 1 896 750 2 646 28 2

2. Capacity Building and Empow erment of Smallholder Farmers 138 487 21 540 160 027 6 502 1 011 7 513 13 6

3. Watershed Management 213 748 156 515 370 262 10 035 7 348 17 383 42 13

Subtotal 392 622 194 021 586 642 18 433 9 109 27 542 33 20

C. Programme Management, M&E, Knowledge Management

1. Learning and Know ledge Management 29 411 9 159 38 570 1 381 430 1 811 24 1

2. Program Management, Monitoring and Evaluation 158 311 22 759 181 070 7 432 1 069 8 501 13 6

Subtotal 187 722 31 918 219 640 8 813 1 499 10 312 15 8

Total BASELINE COSTS 2 202 829 659 032 2 861 861 103 419 30 940 134 360 23 100

Physical Contingencies 40 350 12 419 52 769 1 894 583 2 477 24 2

Price Contingencies 721 998 207 742 929 739 6 563 1 894 8 457 22 6

Total PROJECT COSTS 2 965 176 879 192 3 844 369 111 876 33 418 145 294 23 108


Participatory Smallholder Irrigation Development Programme II (PASIDP II)

Components by Financiers Local

(US$ '000) IFAD loan IFAD grant ASAP Beneficiaries GoE Total For. (Excl. Duties &

Amount % Amount % Amount % Amount % Amount % Amount % Exch. Taxes) Taxes


1. Irrigation Scheme Participatory Planning and Preparation 4 771 68.6 1 000 14.4 288 4.1 - - 893 12.8 6 952 4.8 2 569 3 490 893

2. Small-scale Irrigation Infrastructure Development 77 455 79.4 - - 1 000 1.0 4 452 4.6 14 631 15.0 97 537 67.1 19 397 63 509 14 631

Subtotal 82 226 78.7 1 000 1.0 1 287 1.2 4 452 4.3 15 523 14.9 104 489 71.9 21 966 66 999 15 523


1. Agribusiness Linkages and Market Access 2 445 86.5 - - - - - - 383 13.5 2 828 1.9 796 1 649 383

2. Capacity Building and Empow erment of Smallholder Farmers 1 260 15.6 - - 5 625 69.4 - - 1 215 15.0 8 100 5.6 1 089 5 796 1 215

3. Watershed Management 7 866 41.6 - - 2 891 15.3 7 621 40.3 510 2.7 18 887 13.0 7 978 10 399 510

Subtotal 11 571 38.8 - - 8 516 28.6 7 621 25.6 2 108 7.1 29 815 20.5 9 863 17 844 2 108


1. Learning and Know ledge Management 996 50.8 - - 672 34.2 - - 294 15.0 1 963 1.4 467 1 201 294

2. Program Management, Monitoring and Evaluation 7 206 79.8 500 5.5 524 5.8 - - 797 8.8 9 028 6.2 1 122 7 352 554

Subtotal 8 203 74.6 500 4.5 1 196 10.9 - - 1 091 9.9 10 990 7.6 1 589 8 553 848

Total PROJECT COSTS 102 000 70.2 1 500 1.0 11 000 7.6 12 072 8.3 18 722 12.9 145 294 100.0 33 418 93 397 18 479




26

of coping strategies developed by farming households in the Programme area. An analysis of the

incremental net benefit flow of the 6 farm models over a period of 10 years, as well as key financial

performance indicators (IRR, return to family labour, NPV and B/C ratio) shows that the approach of

the Programme is financially sound. The key financial results are summarised in the table below.

Models A, B, C and D have NPV’s between 17,558 ETB and 65,841 ETB. The watershed farm

models have NPV’s between 5,174 ETB and 6,905 ETB. The analysis of annual cash-flow of the

models (presented in Appendix 10) shows that subsidizing the initial investments is required because

of the negative cash-flow in year one. For farmers in the watershed, it is necessary in order to

convince them to participate in the programme activities, as they don’t benefit from irrigation support.

Access to markets is the most sensitive factor, mainly because it has an impact on the cropping

pattern (vegetables can only be produced in areas with good market access).

Table 7: Summary of financial models

Economic analysis

A cost-benefit analysis was carried out to assess the economic viability of the proposed

Programme. The analysis was conducted over a 20-year period and in constant 2016 prices.

Economic benefits considered in the analysis are: (i) the incremental net economic benefits from crop

production in the irrigation schemes (models A, B, C, D); (ii) the incremental net economic benefits

from crop production in the rain-fed watersheds (models E, F); (iii) the net benefits of PASIDP I

farmers who receive agronomic support and market access support (conservatively estimated at 10%

of net benefits received by PASIDP II farmers); (iv) revenues of jobs created along the value chain

(estimated at ETB 36/day); (vi) benefits from the agribusiness linkages, market access and agronomic

support for PASIDP II farmers have not been integrated as they overlap with those from the crop

models; (vii) the economic cost of the Programme has been calculated using COSTAB; corrections

have been made in order to avoid double counting (mainly the investments in irrigation schemes and

watersheds). The adoption rate of technologies is 75%. Financial prices and costs and benefit

streams derived from the financial crop models have been transformed into economic values. All the

investment, replacement and recurrent costs related to the activity and crop models are already taken

into account in the calculation of the models’ profit margins for each crop.

The ERR of 28.8% over 20 years is profitable from an economic standpoint, with a net present

value of US$ 165 million per annum. The sensitivity analysis assessed the effect of the main risks for

the Programme and the adverse situations that would arise and have a negative impact on the

Programme in terms of benefits and costs and various lags in time. The sensitivity analysis indicates a

solid resilience to increases in programme costs and reduction in output prices. The adoption rate and

time lags of benefits are the most sensitive factors.

Table 8: Summary of economic analysis and sensitivity analysis

Link with the risk matrix IRR (%) NPV (US$)

Base case 28.8% 165 227.74

Combination of risks affecting output prices, yields 27.6% 143 948.96

Model A: Highland

area with limlited

acces to the market

Model B: Highland

area with acces to

the market

Model C: Middle lands

area with limlited acces to

the market

Model D: humid

area with acces to

the market

Model E: Watershet

area with limlited acces

to the market

Model F: Watershet

area with acces to the

market

1,38 1,70 1,40 1,73 1,42 1,79

21 607 54 070 17 558 67 841 5 174 6 905

22% 38% 19% 45% 18% 18%

245 373 259 376 185 294

B/C

NPV (ETB) @ 10%

IRR

Return to family labour




27

and adoption rates 26.3% 122 670.18

Increase of input prices or construction material 27.8% 227 333.89

26.7% 221 512.77

Risks affecting adoption rates and low implementation capacity

25.9% 141 185.24

23.2% 118 610.12

Sustainability

Exit Strategy

The potential for sustainability of outcomes and outputs of the Programme beyond the

implementation period is high.

Institutional Sustainability – The participatory process of scheme establishment, embracing

the key stakeholders, ensures that the Programme responds to the target communities’ concerns,

agricultural sector priorities, national development policies and strategies, and institutional framework.

The approach creates ownership and the necessary foundations and commitments for sustainability

post Programme. PASIDP II implementation will be fully embedded within the Government’s

institutional framework at all levels which will continue to exist after Programme implementation. The

institutional building capacity approach encompassing government institutions at different levels and

the rural producer institutions will ensure that skills exist to continue supporting Programme-initiated

activities after completion.

Financial and Commercial Sustainability. The market-led approach to guide investments is

meant to foster the culture of entrepreneurship among smallholder farmers. Linkages to markets will

ensure that farmers have an avenue through which to dispose of their surplus production. As long as

the established linkages prove to be mutually beneficial, the long-run outcome would be sustainability

of incomes for the parties involved. The financial analysis of the Programme indicates that producers

will substantially improve their income and earn good returns on their investments. These financial

benefits on investments in the sector, couple with the improved access to finance, will not only

promote sustainability but will also enhance replicability and options for scaling-up.

Environmental, Social and Climatic Sustainability

The Programme has been confirmed as Environmental and Social Category A, since a number

of irrigation schemes under the Programme may result in loss of environmental services provided by a

natural ecosystem, or may have significant implications that affect a broader area and are not readily

remedied. Thus, ESIAs/ESMPs will be developed and the documents disclosed at regional, woreda

and kebele levels – during programme implementation only for those schemes classified as Category

A, while ESMPs will be prepared for Category B projects. The project will endeavor to avoid schemes

that may result in high probability of physical and economic resettlement. If any scheme is selected

that will trigger such physical and economic resettlement, a Resettlement Action Plan (RAP) shall be

prepared and disclosed as a precondition to finance the scheme. The RAP process should entail

meaningful consultation and negotiation with potentially affected people, in accordance with the FPIC

Implementation Plan. This is in line with Ethiopian Environmental Assessment Procedures.

Environmental and socio-economic baselines were prepared as part of the design documents

for the schemes to be considered under PASIDP II. In addition, environmental and social impact

assessments were conducted for these schemes. A gap analysis has been conducted on the ESIAs

for these schemes. The gap analysis notes key issues that need to be addressed in order for the

ESIAs to be updated prior to start of project activities so that they conform to IFAD’s SECAP

safeguard requirements as well as MEFCC/EPA guidelines. ESIAs will be reviewed and given




28

clearance by the regional Bureaus of Environmental Protection, Land Administration and Use

(BOEPLAU) or the equivalent Bureau dealing with environmental protection. The RAPs will be

submitted for approval to the BOEPLAU at regional level.

In terms of climate risk, PASIDP II classification is ‘medium’. Climate change is negatively

impacting the environment, access and availability of water resources as well as livelihoods. While the

impact of climate change on the target population is high, PASIDP II is designed to mitigate the risks

by increasing the ability of the affected communities to adapt to environmental and economic

variability, demographic shifts shocks and long term changes. The risk of climate change negatively

impacting the intended outcome of the Programme, and thereby its classification, is thus medium.

IFAD’s Complaints Procedure provides a means for persons.




30

Appendix 1: Country and Rural Context Background

A. Economic Context

1. Since 2004, Ethiopia has experienced high and consistent economic growth driven largely by

growth in services and agriculture. With growth rates between 8% and 14% GDP has outpaced

population growth which has averaged about 3% during the 2004-2014 period, and Ethiopia recorded

annual per capita growth rates of 8.3% over the last decade (World Bank 2013). This has translated in

a successful reduction of poverty during this period. This high and consistent economic growth has

been driven by high levels of public investment and growth in services and agriculture. Since the early

1990s, Ethiopia has pursued a “developmental state” model with the objective of reducing poverty.

The approach has employed a strong role for the Government of Ethiopia in many aspects of the

economy and high levels of public investment to encourage growth and improve access to basic

services. To sustain the rapid economic growth, enhancing the productivity of agriculture and,

particularly of crop production, remains critical in the agenda of the growth and transformation

programme (MoFEC, GTP Annual Report 2013). Recent joint efforts by the Government of Ethiopia

and donors in water management schemes have strengthened Ethiopia's agricultural resilience,

contributing to GDP (PPP) rise from US$420 in 1990 to US$968 in 2009 and US$1,311 in 2013.

B. Government policies

2. The Government of Ethiopia is currently implementing its ambitious second generation of the

Growth and Transformation Plan (GTP II), which sets a long-term goal of becoming a middle-income

country by 2025. The Government continues to put considerable emphasis to the development of the

agricultural sector due to the significant role it plays in the national economic growth and in the lives of

the Ethiopians in general and those in rural areas in particular. It is looked at as being essential in

ensuring the country’s overall food security, provision of adequate product supply to the industry,

contribution to the reduction of inflation and increasing foreign currency reserves. Accordingly, GTP II

has defined four strategic objectives that include: a) Strategic Objective 1: Increasing crop production

and productivity; b) Strategic Objective 2: Enhance Livestock Production and Productivity; c) Strategic

Objective 3: Reduce Natural Resource Degradation and Improve its Productivity; and d) Strategic

Objective 4: Ensure Food Security, Disaster Risk Reduction and Enhance Preparedness Capacity. All

of these strategic objectives are consistent with the overall goal and objective of PASIDP II.

C. National Food Security

3. Ethiopia imports a significant amount of grains to withstand food security challenges. During the

period from 2010/11 to 2014/15, annually, on average, the country has imported 938.4 thousands

metric tons of grain. Subsequently, during the same period the country has paid average annual fee of

US$332.8 million to import the grains, which was about 11.4% of the value of total exports that the

country has made during the same period. This is a concern for a country that already hold a high

trade balance deficit, which was about US$8.7 billion annual average during the same period30.

PASIDP II is being designed to happen in a holistic approach, which inter alia, include: environmental

rehabilitation and watershed managements, increase productivity in agriculture with intensive use of

irrigation agriculture and use of appropriate farm inputs, would be expected to increase overall grain

production and contribute to national grain availability.

D. Irrigated Agriculture

4. The contribution of agriculture to value added has been high throughout this period. However,

over time, the importance of agriculture has fallen and the importance of the service sector has

increased. The contribution of agriculture to value added fell from 52% in 2004 to 40% in 2014 while

the contribution of the services sector increased from 37 to 46% during this time. In Ethiopia, rain-fed

30 Grain imports and trade balances are calculated based on data obtained from National Bank of Ethiopia, available at:

www.nbe.gov.et. Average exchange rate of 1USD =19ETB has been applied.

http://www.nbe.gov.et/




31

agriculture covers more than 93% of the land area but continues to be affected by recurrent droughts,

including 2015. This is attributed to spatial and temporal variations in rainfall, poor water management

strategies and low water storage capacity. Hence, irrigation provides an opportunity for farmers to

increase their productivity and incomes, satisfy the growing food and feed needs of an increasing

population, reduce malnutrition and minimize the impacts of climate change on agriculture and

livelihoods.

E. Access to Financial Services

5. The agriculture sector plays a central role in the life and livelihood of most Ethiopians, where

about 12 million smallholder farming households account for an estimated 95% of agricultural

production and 85% of all employment. Despite its importance, the rural smallholder agricultural

sector is one of the most financially excluded sectors of the economy. In overall terms, Ethiopia has a

very low rural banking density and consequently one of the lowest financial inclusion ratios of Sub-

Saharan Africa, with only 14 % of adults having access to credit. Most branches and Microfinance

institutions are concentrated in urban areas, leaving the rural areas underserved with a ratio of

1:125,158 people to a commercial bank or MFI branch. In the FY 2014/2015, commercial Banks and

the Development Bank disbursed ETB 75.5 billion in new loans to various economic sectors.

However, the agriculture sector received only 17.3% of all credit and most of the credit went to the

large commercial agriculture sub-sector (especially the export oriented subsectors). According to the

World Bank agribusiness indicators, only 1% of rural households have received credit for agricultural

activities. Even when financial services are available in rural areas, whether from traders and

agricultural processors offering input credit, they tend to be relatively costly and with rigid terms.

Therefore, Institutions lending to the agricultural rural sector in Ethiopia have not developed prudent

risk management systems as well as innovative products and lending methodologies for the sector.

6. MFIs and rural financial cooperatives have tried to bridge this supply deficit gap. However, their

efforts to increase outreach are constrained by low levels of liquidity, inappropriate products and

lending methodologies and low risk appetite for smallholder lending. Access to financial services to

small holder is also constrained by demand side factors such as lack of commercial orientation by

most farmers, poor financial literacy, production of low value crops, high post-harvest losses. The

dispersed production, low population density and less developed infrastructure in the rural areas leads

to higher transaction costs which discourages financial service providers. Irrigation smallholder

farmers are particularly disadvantaged due to their dispersed locations, poor infrastructure, small

production units and poor access to markets. Securing capital to purchase inputs like seeds and

fertilizer, invest in machinery, and pay for transport to sell outputs is therefore a challenge that

smallholder farmers face every harvest season.

7. The GOE has been consistently committed to the development of the rural financial sector and

has taken a number of policy and legislative measures for furtherance of rural financial sector. On the

policy front the Agricultural Growth Program-Agribusiness and Market Development (AGP-AMDe)

program in Ethiopia uses a value chain approach to strengthen the agriculture sector, enhance

access to finance, and stimulate innovation and private sector investment. The recent legislations to

enhance provision of financial services to the rural and agricultural sector include proclamation to

provide for a warehouse receipts system issued in 2003, proclamation on Insurance Business issued

in 2012, regulations for mobile banking and agent banking issued in 2012, proclamation on capital

goods leasing business issued in 2013.

8. It is anticipated that many RFIs will further benefit from incremental liquidity through the Ministry

of Industry’s Small and Medium Enterprise Finance Project, cofinanced by the World Bank and the

European Investment Bank. The SME Finance Project will have four components: (i) Component 1:

Financial services to SMEs; (ii) Component 2: Enabling environment for SME Finance; (iii)

Component 2: Business Development Services to SMEs; (iv) Component 4: Project management,

communication and impact evaluation. The project will inject liquidity into MFIs through the

Development of Ethiopia (DBE) through two main windows, including (i) Lease finance to SMEs and

(ii) SME lending.




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F. Vulnerability to Climate Change

9. Ethiopia’s ecological system is very fragile and vulnerable to climate change, in part due to

stress on natural resources. The key challenges include soil degradation, deforestation and loss of

biodiversity, besides weak environmental management and enforcement capacity.

10. Climate change projections for Ethiopia indicate a significant increase in temperature and a

likely increase in drought occurrences, heavy rains and floods, particularly in the lowlands31. Spatial

patterns and temperature and rainfall amounts are projected to change through 2010–2039, and to

result in more extreme events32 . For the past four decades, the average annual temperature in

Ethiopia has been increasing by 0.37ºC every ten years, with the majority of the temperature rise

observed during the second half of the 1990s33. Future projections show that the mean annual

temperature will increase in the range of 0.9 to 1.1ºC by 2030, in the range of 1.7 to 2.1ºC by 2050,

and in the range of 2.7 to 3.4ºC by 2080 compared to the 1961 to 1990 normal9, posing a sustained

threat to agriculture and the economy. However, the biggest climate change impact is associated with

limited water availability34. Although there is no significant change in annual rainfall amounts during

last 30 years, increasing intra-seasonal variability caused significant damages in communities

livelihoods, including in the year 2015/16. Drought in Ethiopia will continue to be regional in nature

and commonly cover large areas and extend for long periods of time. In the last five years, about

80% of the farmers in the lowlands and 22% in the highlands had at least one crop failure35. During

the time of high crop failure, farmers tend not to farm the next crop season, due to high uncertainty on

the rainfall and high price of improved seeds. Crop failure causes some of these households not to

meet their food needs and rely partly on food assistance.

11. For the Belg rains36, rainfall declines are projected across the south-central and eastern parts of

the country, and will negatively impact Belg harvests as well as pastoral rangelands during the

summer and early fall. This may be particularly disruptive for drought-prone communities in southern

Oromia and The Great Rift Valley, which have been relying upon meager Belg rains for their

livelihoods. As for the Kiremt rains37, rainfall declines are projected to range across the western and

southern parts of Ethiopia. Increasing temperature is expected to increase irrigation water demands,

both in the drylands where irrigation is currently required but also in areas where the system is

currently dependent on rain-fed agriculture. This scenario will exacerbate poverty, particularly in the

vulnerable, drought-prone regions, with the very poorest facing the increasing impacts of a changing

climate.

12. Since 2011, the Ministry of Environment and Forestry’s efforts have been focused on

implementing the Climate-Resilient Green Economy (CRGE) strategy that sets the target for the

Ethiopia to become a middle-income carbon-neutral country by 2025. To this end, in April 2014, a

project aimed at supporting the Reducing Carbon Emissions from Degradation and Deforestation

(REDD) mechanism was launched. This will help Ethiopia access the carbon trade whereby

developed countries offset their emissions by investing in emission-reduction projects in developing

countries. Concerted effort has been geared towards rolling out and operationalizing the CRGE. In

addition to preparing manuals and introducing monitoring and evaluation systems, these include the

Sectoral Reduction Mechanism (SRM), which sets comprehensive actionable plans for the CRGE’s

31 Gummadi, S. etal, 2015. The changing climates of Ethiopia and its implication on agricultural systems. ICRISAT

Research Paper, under review. Addis Ababa, Ethiopia 32 USAID and USGS, 2012. A climate trend analysis of Ethiopia 33 EEA, 2008. 34 You and Ringler (2010) IFPRI. 35 START, 2013. 36 Belg rains are the short rains occurring between February, March and May and provide water to Ethiopia’s southern,

north-eastern, eastern and north-central parts. These rains are essential for long-cycle crops such as sorghum and

maize, harvested in the meher season, i.e. from June to October. The Belg season is producing about 30% of the food

and feed in the Ethiopian highlands. 37 Kiremt rains are the long rains occurring between June and October across most of the country, apart from the

southeastern parts. These rains lead to meher season and provide around 50-80% of annual rainfall totals.




33

goals of reducing vulnerability and emissions. In 2014, CRGE projects in agriculture, water, irrigation

and energy, forestry, transport, industry and urban development were being implemented.




34

Appendix 2: Poverty, Targeting and Gender

A. Rural Poverty Context of Ethiopia

1. Ethiopia is a country of many nations, nationalities and peoples, with an estimated total

population of 96.5 million (2014). About 17% of the population live in urban centres, the great majority

of them in Addis Ababa. At a current annual growth rate of over 3%, Ethiopia’s population is estimated

to reach more than 130 million by 2025, and is projected by the UN to be among the world’s ten

largest countries by 2050. As structural food-deficit country, Ethiopia is very vulnerable to trade

shocks from international food and fuel prices, and to weather-related shocks. It continues to be

affected by recurrent droughts, as demonstrated in 2011/12 and 2015.

2. Ethiopia has achieved high economic growth since 2000 and achieved a GDP per capita of

US$ 1,218 in 2014. The country has one of the fastest growth rates of the Human Development Index

(HDI), from 0.284 in 2000 to 0.435 in 201438. The HDI for 2014 puts Ethiopia at the rank of 173 out of

187 countries. Life expectancy at birth has improved from 52 years in 2000 to 63.6 years in 2014. The

headcount poverty rate fell from 45.5% in 1995/96, to 38.7% in 2004/05, and to 29.6% in 2010/11.

Inclusive agricultural growth was the major driver of poverty reduction, bolstered by pro-poor spending

on basic services and rural safety nets. For every 1% of growth in agricultural output, poverty was

reduced by 0.9%. The average household in Ethiopia also has better health, education and living

standards today than in 2000. However, there is a higher poverty headcount index for the rural areas

(30.4%) than the urban areas (25.7%). Between 2005 and 2011, poverty depth reduced slower in rural

than in the urban areas while poverty severity increased faster in the rural than in the urban areas. On

the average, there are more vulnerable households in rural areas.

B. Characteristics of the Ethiopian Smallholder Farmers

3. About 12.7 million Ethiopian smallholders produce 95% of agricultural GDP. Approximately

85% of the country’s population resides in rural areas and predominantly relies on rain-fed agriculture

and livestock for employment and income generation. The types of rural livelihoods traditionally

practised include: (i) crop-based farming system; (ii) traditional rain fed cereal cultivation; (iii) mixed

agriculture combining crops and livestock; and (iv) traditional irrigated and diversified crop production.

The major farming system in PASIDP II regions is mixed agriculture combining crops and livestock.

Most rural households have small land holdings of less than one hectare on average. Agriculture is

dominated by a low input, low output rain fed farming system, which increases the vulnerability of rural

households to the vagaries of nature. Livestock serves as a source of manure and fuel, and as a

saving to buffer bleak seasons of food and seed shortage. When there are marketable surpluses,

smallholder farmers are often constrained by lack of access to profitable markets.

4. The smallholder farmers are extremely vulnerable to external shocks such as volatile global

markets, drought and other natural disasters. Most rural poor households have a limited asset base,

and lack access to basic health, education and potable water facilities. Drought is a major factor in

rural poverty. It has become more frequent and severe throughout the country over the past decade,

and the trend shows signs of worsening. Frequent droughts and crop failures easily result in wide

speared food shortages, household food insecurity and famine. The impact of drought is most severe

for vulnerable households living in the pastoral areas of lowlands and the high-density parts of

highlands. In addition to their vulnerability to climatic conditions, poor rural people lack basic social

and economic infrastructure such as health and education facilities, veterinary services and access to

safe drinking water.

5. A large number of poor households face a prolonged hunger season during the pre-harvest

period. Herders, like farmers, are vulnerable to increasingly frequent drought, which can wipe out their

livestock and assets and bring on severe poverty.

38 UNDP (2015). 2014 Human Development Report.




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C. Gender Analysis

6. Overview. The Global Gender Gap Index ranked Ethiopia 118th out of 135 countries in 201239.

The 2011 Gender and Development Index (GDI) placed Ethiopia in the 174th position out of 187

countries. Those rankings and analyses expose prevailing social attitudes that favour men/boys over

women/girls with regards to food, assets, health care and education while leaving women/girls with

limited opportunities for participation in formal sector employment40. The Ethiopia Demographic and

Health Survey 2011 indicates that only 38% of Ethiopian women are literate, compared to 56.3%

literacy among men. The literacy among women also varies greatly by age, increasing sharply from

13% among women age 45-49 to 64% among women age 15-1941. About 69% of urban women are

literate compared to 29% of rural women. Ethiopia’s relatively low ranking in Global Gender Gap

Index is primarily due to its last position on the literacy rate indicator.

7. The maternal mortality ratio in Ethiopia is 676 for every 100,000 births. Millennium

Development Goal 5, calls for the improvement of maternal health, with a target of reducing the

maternal mortality ratio (MMR) by three-quarters over the period 1990-2015 and achievement of

universal access to reproductive health by 2015. The Federal Ministry of Health (FMOH) has applied

a multi-pronged approach to reduce maternal and newborn morbidity and mortality by improving

access to and strengthening facility-based maternal and newborn services. Between 2000 and 2011,

national data show that maternal mortality declined in Ethiopia by 22% from 871 to 676 per 100,000

live births. For the period 1990 to 2013, global data show maternal mortality declined by 70%, from

1400 to 420 per 100,000 live births.

8. Although the level of women’s representation in the federal parliament is low, significant

improvements were observed when compared with the previous two elections (1995 and 2000). In the

first parliament (1995 election), 13 women (2.74%) were represented out of 547 seats while in the

second parliament (2000 election) around 42 (7.7%) of the elected MPs were women. In the third

parliament (2005-2010), the number of women holding seats rose to 117 (22%). Further progress has

been achieved during the 2010 election where women hold 27% of the seats in the house of people’s

representatives. During the third election, the government had strived to increase the number of

women legislators to 30-50% of the house, through different measures. The number of seats held by

women in the House of Federation has now reached 21 (18.75%). Apart from the political

empowerment of women, training women on leadership is the major mechanism undertaken to

strengthen women’s capacity in decision-making. It is believed that women’s education and economic

empowerment play a vital role in empowering and enhancing the decision-making capacity of

women.42

9. Efforts are on-going to foster female leadership in the civil service. In 2010, women’s

representation reached 13% at Ministerial level (3 women, 20 men), 8.3% among State Ministers (4

women for 44 men), 25% of Commissioners (1 women for 4 men) and 12.7% of Ambassadors.

Federal and Regional Courts Judges included 16.0% of women (56 women; 203 men). Affirmative

action is encouraged to bring more women in public offices. Government and non-government

organization provides scholarships to upgrade the educational level of women in the civil service. The

GTP aims to bring to 30%, the number of women in higher decision-making level and 50% of women

in the middle level through intensive training of successors. In addition, MoWCYA is attempting to fill

the gap through support to decision-makers and short-term leadership trainings for women leaders

and senior female professionals.43

10. Women in rural areas. Households headed by women are particularly vulnerable. Women are

much less likely than men to receive an education or health benefits, or to have a voice in decisions

39 Gender Gap Report 2011, http://www.weforum.org/issues/global-gender-gap. 40 UNDAF Ethiopia. 41 Ethiopia Demographic and Health Survey 2011, CSA, March 2012. 42 2010 MDGs progress report , http://www.et.undp.org/index.php?option=com_mdg&Itemid=152, p.20 43 Government’s contribution to the sixth and seventh periodic reports of Ethiopia on CEDAW, 2010.




36

affecting their lives. For women, poverty means undernourished families, lack of education for children

and other deprivations. In areas where farming is the mainstay men and women work in the fields and

share agricultural work. Women are also involved in back-yard gardening, poultry and beekeeping.

Both men and women work in the fields, however, ploughing remains a male preserve, while hoeing

and weeding is shared by both men and women. The gender division of labour in this particular

context has implication for women head of household as ploughing of land is not only labour-

intensive, it is also very heavy work requiring men’s physical strength. Prevalence of socio-cultural

norms discourages women from undertaking these activities. As ploughing is a male prerogative,

women head of household depend more on sharecropping agreements with male counterparts,

support from family members or hiring male labourers. Women own only 19 % of the land (CSA,

2007/2008).

11. Although Ethiopian laws give equal property rights to women, tradition and women’s low social

and economic status limits their ownership of assets. Ownership and decision making remains in the

control of men, implying that economic and social (e.g. divorce) shocks may have a greater impact on

women. Mandatory joint land titling in Ethiopia has proved to be effective to secure married women’s

land rights, especially in the case of divorce or death of a spouse, and improved women’s access to

productive resources. In the two regions where land certification involved the issuance of joint titles to

both spouses (Amhara and Oromia), women’s names appeared on more than 80% of all titles, 4 times

the 20% rate recorded in the region where the certificate was issued only in the name of the

household head.

12. Women are usually responsible for planting, weeding, harvesting, transport and storage of food

crops; and attending of small livestock. In some instances women are also responsible for

transporting and selling surplus, and animals in markets although the decision on the use of the

income generated is generally assumed by men. Men and women are responsible for the production

of different crops or livestock. In some areas, men and women produce the same crops, in the same

field or in a separate field (land is register in both names and women head of household also own

land certificate in their name) either for subsistence or for the market. Separate tasks may also be

assigned within the cropping cycle (or in livestock production) by gender. While men have traditionally

assumed responsibility over cash crops and large livestock, when they migrate in search of labour

opportunities, women also assume responsibility over these farming activities, increasing their

workload. In general terms, Ethiopian women work longer hours than men. In some rural areas, water

collection consumes up to 40% of a woman’s day, averaging between 3 to 5.25 hours. 80% of rural

Ethiopian women spend between 1-5 hours per household per day searching for fuel wood.

D. Youth

13. Youth in Ethiopia refers to those who are between 18 and 35 years of age. Youth are largely

unemployed, underemployed, and underpaid, and they often rank among the working poor, in

particular in rural areas. Due to high levels of unemployment, most of them have not been absorbed in

the job market. Young women in the very poor rural areas are, in many instances, subjected to early

marriages and unwanted pregnancies. Youths rarely own any productive assets that would enable

them to become self-employed. In agriculture, access to land is the prime barrier (most of the young

population is also landless people) compounded by lack of access to credit and motivational factors

associated to the fact that, in general, youth are less interested in engaging in this type of work if it is

limited to subsistence agriculture.

14. Rural youth can only access the land through heritance from parents and/or through allocation

from land administrators. The young women unlikely inherit the land since they marry and move to

husband’s village (Bezu and Holden, 2013). However, recent empirical study indicates that since the

land is becoming scarce, most rural youths are not accessing sufficient land farms either from parents

or respective land authorities (Bezu and Holden, 2013).Young women continue to face multiple and

interlocking forms of discrimination, leaving them often among the most vulnerable and hard-to-reach

young people in particularly in rural settings. The inequality, caused by both cultural and economic

factors, is deep, and the improvements in young women’ literacy rates are occurring very slowly.




37

15. Modernization has somehow reduced some gender inequalities. However, the situation of

young women in the family, educational and occupational spheres varies. For example, a married

female farmer of 24 years old with two children and an educated young man of 19 years old are likely

to have different aspirations requiring different interventions (Bennell, 2010). Age and gender are key

social factors defining a young person’s life opportunities. While young people tend to have limited

economic independence, this is more acute for young women and girls. Young men can grow out of

this dependency through education, economic opportunities and inheritance of land, however, women

are often more constrained by social norms and gender relations (Bennell, 2007; 2010). For example,

early marriage and pregnancies affect women and girls’ mobility and ability to defy established norms

and gain access to knowledge, training or engage in commercial activities. Rates of early marriage

are high but have fallen recently. However, the 2011 Demographic and Health Survey (DHS) reports

that 63% of women in Ethiopia are married by age 18, compared to 14% of men. The government has

taken further steps to reduce child marriage through its 2011 Growth and Transformation Plan, which

sets five-year targets to reduce early marriage by more than half – from 21.4% in 2010/2011 to 10.4%

in 2014/2015.

E. Core Target Group of PASIDP II

16. The primary target group of the Programme consists of smallholder farmers. The main

subcategories are the following:

a) Subsistence farmers cultivate a limited area of land that is less than 0.5 ha, who use different

soil fertility improvement measures but cannot afford to purchase a complete package of

agricultural inputs. They are often subsistence farming households performing mixed crop-

livestock farming, the majority of which are classified as food deficit and are net buyers of

food, not producing sufficient to feed their families for the entire year, even in normal years.

They have important post-harvest losses. Weak bargaining power and poor market linkages

reduce the income derived from the sale of limited surpluses. They do not have access to

financial services from formal institutions;

b) Women and Female headed households are a highly vulnerable group because of deeply

embedded socio-cultural attitudes and practices; they are a particularly vulnerable social

group because of one or more of the following factors: lack of access to farmland, shortage of

farm labour or no draft animals. These factors result in their impoverishment;

c) Small farmers producing a surplus for marketing. These farmers actively engage in agriculture

at a larger scale than their subsistence counterparts. They use more adequate agronomic

practices but with limited effectiveness in the face of climate change; they face important

post-harvest losses and have limited bargaining power in the market. These households are

generally more food secure. Formal financial institutions offer limited financial products to this

group, which limits their ability to expand their production and productivity levels.

F. Targeting Tools

17. The targeting mechanism will seek to ensure equitable participation in and benefits from

Programme activities. Below is presented (a) a detailed description of the selection process of

irrigation schemes; (b) identification of the target group, including the most vulnerable; (c) gender

considerations.

Selection of irrigation schemes

18. See: Appendix 4

Identification of the target groups

19. The Programme will work with the farmers who are working on the targeted sites for the

irrigation schemes and the adjacent watersheds. In addition, efforts will be undertaken to ensure an

equitable participation in the Programme activities.




38

20. Poor and food insecure farmers will be identified through transparent participatory process with

the communities. The selection parameters may include: a) having unmet food gaps during the year

or using harmful copping mechanism to fill the unmet food gaps; b) have less than 1 ha of rain-fed

land (for farming communities). Detailed criteria will be specified in the Programme Implementation

Manual (PIM) and will also follow poverty criteria set at regional level by implementing partners, as the

livelihood differences among the groups will require specific socio-economic analysis. After identifying

communities and applied proper consultation mechanisms, including receiving agreement from all

communities involved (this includes upstream/downstream consultation), the Woreda and Kebele

administrations will, jointly with the communities, determine the type of small-scale irrigation scheme

most appropriate for the area. In approving schemes for construction, the RPCMU will take into

consideration the number of female-headed households to benefit and the likely impact on more,

vulnerable, food insecure households.

Gender Mainstreaming in Programme Implementation

21. Women will be one of the priority targets as the Programme will offer women empowerment

opportunities by: a) increasing their opportunities for participation in decision making in IWUAs, FRGs,

extension groups, WMTs, MAAs; b) enhancing their skills in irrigated farming, with particular reference

to production of high value crops; c) targeting additional activities for women (e.g. nutrition related

training, home gardens, …); and d) facilitating access to financial services.

22. At least 40% of beneficiaries will be women or Women-headed household; 40% will be

unemployed youth (between 18 and 35 years old). Whereas cultural and social constraints may limit

women’s participation, the Programme will put in place separate consultation modality for mobilization

and creation of women’s groups and leadership. For example, mobilization of women, identification of

women leaders and a system in place to allow women to alternate their representatives in case of lack

of time/additional workload to attend meetings will be considered and put in place. Where necessary,

the ability to engage with more women will be strengthened by receiving guidance and support from

the Bureaux of Women Affairs at the Regional levels.

23. Special training programmes and activities will be organized to target women. These would

be conducted by the Gender expert/Gender Focal person from the Woreda level, and DAs would also

participate. This training would cover both agricultural aspects and issues relating to health, nutrition

and family welfare. The trainings will also be designed to change attitudes, improve skills and

positively influence the role of women in agricultural production, processing and marketing, household

savings and credit use, as well as improve nutrition and family welfare. The Programme will also

provide training in leadership skills, putting particular emphasis supporting women to be to play a

greater part in decision-making.

24. Women will be organized in groups and they will have access to irrigation. Specific activities

that will benefit women will include: a) promotion of seed production systems, particularly by

encouraging women-managed community nurseries; and b) promotion of home gardens for women

as a strategy to address food and nutrition security and providing cash access to women.

25. Basic training in irrigated agriculture, use of drip irrigation for vegetable cultivation, new

technology, use of labour saving tools and farm implements and fuel-saving cooking stoves, etc. will

be provided. This will involve sensitisation and skill transfer in agricultural technology. Subject to the

baseline surveys and training needs assessment, the training will include: a) management and

organization of group dynamics; b) collective marketing and contractual arrangements; c) market

information system; d) postharvest handling; e) quality control; etc.

26. PASIDP II will provide the space for mainstreaming nutrition in order to accelerate and

harness the achievement on agricultural productivity and income to increase impact on nutrition

outcomes. The relation between nutrition in gender and climate smart initiatives will be explored in

nutrition-sensitive interventions. Other linkages will include adoption of household methodology

tools with a nutrition lens to accelerate the impact of the interventions at the household level. Nutrition

education for women will be promoted through the different farmers’ organisations. Special attention




39

will be given to pregnant women and young mothers. The training will include: a) diversification of

food production and consumption; b) specific training activities and behaviour change communication;

and c) attention to the nutrient value of crop varieties (primarily in terms of micronutrient profiles)

promoted in the Programme area. To ensure that the benefits of improved nutrition are well

understood and socialised to the target families, the training programme provided to village

Development Agents will include a module on nutrition and its links to improved welfare.

27. Monitoring and Evaluation. Monitoring of component implementation, especially with respect

to adoption rates, outputs and outcomes will be disaggregated by gender. Where relevant,

Programme management will be encouraged to respond positively to any clear learning opportunities

or any issues that need to be addressed.

28. Capacity building and household methodology – Capacity building activities will also

consider inclusion of the household methodology, where possible, which will include gender

sensitization through selected tools for enhanced gender responsiveness. Household methodologies

will be used in capacity building activities related to nutrition as well as production outcomes.

Inequalities in gender relations at the household level have a direct impact upon agricultural

production and productivity, and on other desirable development outcomes, such as education, food

security and nutrition. Household methodologies involve working with all household members towards

achieving a common household vision. Household methodologies have been successfully used in

IFAD supported projects in Uganda, Malawi, and Zambia and are appropriate for livelihoods

approaches as well as value chain development. In PASIDP II, the methodology will be implemented

at the group level. In farmer empowerment, the methodologies will be used to ensure that

organizational goals are inclusive, address issues of power and gender, and strengthen mechanisms

for dialogue.

29. Initial skills development at the group level on household methodologies will be replicated at the

household level supported by peer group members and trained facilitators. This will ensure that the

empowerment achieved by individual group members is translated at the household level. Several

tools from the gender action learning system (part of the household approaches) will be used for

gender sensitization, awareness creation and for improved gender equity in agricultural production

and marketing. The visioning tool, for example, will be used initially with the group as part of the

participatory planning process. Once group members have mastered the methodology, they will be

encouraged to replicate the visioning exercise at the household level. Group and community

facilitators will provide peer support to individual members to address challenges raised at the

household level. Other tools will be used to address various gender and socio-economic issues. Such

tools will include (but not limited to) the gender balance tree, challenge action tree, livelihood road

journey, income and expenditure tree, and will be used flexibly according to the context.

IFAD’s KEY FEATURES OF GENDER-SENSITIVE DESIGN AND IMPLEMENTATION

Design 1. The programme design report (PDR)

contains – and implementation is based on - gender-disaggregated poverty data and an analysis of gender differences in the activities or sectors concerned, as well as an analysis of each programme activity from the gender perspective to address any unintentional barriers to women’s participation.

Women will be one of the priority targets as the programme will offer these women empowerment opportunities by: (i) increasing their opportunities for participation in decision making in IWUAs and also the various farmers’ groups; (ii) enhancing their skills in irrigated farming; (iii) targeting additional activities for women e.g. nutrition related training and awareness raising; and (iv) facilitating access to financial services for productive agriculture and market related activities.

2. The PDR articulates – or the programme

implements – actions with aim to expand women’s economic empowerment through access to and control over productive and household assets;

Barriers for women’s participation and benefitting from the programme will be identified during the socio cultural analyses and issues will be addressed through application of the household methodologies and tools.




40

Strengthen women’s decision-making role in the household and community, and their representation in membership and leadership of local institutions;

Women will also be at least 30% in IWUAs and selected women trained to take leadership positions. Leadership training will be provided to this end.

Achieve a reduced workload and an equitable workload balance between women and men.

The programme will promote technologies with a particular emphasis on affordable, gender sensitive time and labour saving technologies that reduce drudgery for women and girls especially and weeding labour. Multiple user systems will be introduced alongside irrigation. The programme will also consider use of labour saving tools and fuel-saving cooking stoves etc.

3. The PDR includes one paragraph in the

targeting section that explains what the programme will deliver from a gender perspective.

The programme will target equallt men and women and will have specific inclusion for women head of households. Equal outreach of men and women will also be ensured by promoting extension service /development agents being male and female. Specific activities that will benefit women are: a) nutrition training, B) promote seed production systems, particularly by encouraging women-managed community nurseries; c) promote home gardens for women as a strategy to address food and nutrition security and providing cash access to women. Basic training on irrigated agriculture, new technology, use of labour saving tools and farm implements and fuel-saving cooking stoves etc.

4. The PDR describes the key elements for

operationalizing the gender strategy, with respect to the relevant programme components.

A socio cultural study will be carried out at start up to further (i) identify the distinctive characteristics of target groups; the male and female producers of different poverty levels; (ii) identify opportunities and measures required to promote their inclusion in the schemes and the use of household methodologies; and (iii) mainstream on this basis gender and inclusion issues into programme implementation. Findings from the analyses will inform an implementation action plan which will include actions to improve production and develop market linkages, as well as activities designed to expand women’s and poorer households’ access to and control over capital, land, knowledge and support services.

5. The PDR describes - and the

programme implements - operational measures to ensure gender- equitable participation in, and benefit from, programme activities. These will generally include:

5.1 Allocating adequate human and financial resources to implement the gender strategy

A Gender expert will be recruited as part of the NPCU to ensure that women and youth are participating in the programme activities as equal partners, and that issues specifically related to women and youth are being adequately addressed. The programme will support training of staff and partners on gender and social inclusion.

5.2 Ensuring and supporting women’s active participation in programme-related activities, decision-making bodies and committees, including setting specific targets for participation

This will be achieved through the use of quotas, at least 30% women representation (members). Mechanism for alternate women leaders will also be considered.

5.3 Ensuring that programme management arrangements (composition of the programme management unit, programme terms of reference for staff and implementing partners, etc.) reflect attention to gender equality and women’s empowerment concerns

The terms of reference for the programme coordinate will reflect responsibility for gender focus and social inclusion. Capacity of the PASIDP II implementers (and partners) on GEWE will be strengthened through trainings and implementation support.

5.4 Identifying opportunities to support strategic partnerships with government and others development organizations for networking and policy dialogue

PASIDP II is built on a strong partnership with the GOE and Regional Governments, and collaboration with the other Rome-Based-Agencies, FAO and WFP, will be explored. For what concern land related issues, collaboration will be explored with activities undertaken as part of LAND programme (USAID and GOE).

6. The logical framework, M&E, MIS and The baseline survey will include a gender analysis. This will




41

learning systems specify in design – and M&E unit collects, analyses and interprets sex- and age-disaggregated performance and impact data, including specific indicators on gender equality and women’s empowerment.

provide a basis to track women’s empowerment through programme support.

IFAD’S TARGETING CHECKLIST FOR DESIGN Design

1. Does the main target group - those expected to benefit most- correspond to IFAD’s target group as defined by the Targeting Policy (poorer households and food insecure)?

The target group consists of poor and food insecure rural households (men and women smallholder farmers, women headed households, unemployed youth) operating on small land holdings less than one hectare on average and are dependent on subsistence rain fed farming and seasonal employment as casual labour; small farmers producing surplus for market.

2. Have target sub-groups been identified and described according to their different socio-economic characteristics, assets and livelihoods - with attention to gender and youth differences?

Target subgroups have been described based on different socio economic opportunities, livelihood strategy and gender roles within the household. They are classified as: subsistence farming; small farmers producing a surplus for the market; women, women head of household and youth.

3. Is evidence provided of interest in and likely uptake of the proposed activities by the identified target sub-groups? What is the evidence? (matrix on analysis of programme components and activities by principal beneficiary groups completed?)

The marketing chains supported by PASIDP II reflect crops that are already traditionally grown in the regions.

4. Does the design document describe a feasible and operational targeting strategy in line with the Targeting Policy, involving some or all of the following measures and methods:

4.1 Geographic targeting – based on poverty data or proxy indicators to identify, for area-based programmes or programmes, geographic areas (and within these, communities) with high concentrations of poor people

Initially 4 regions: Amhara, Oromia, Southern Nations, Nationalities and Peoples Region (SNNPR) and Tigray. Selection of Woredas according to the following criteria: (i) level of poverty and food insecurity areas; (ii) potential for irrigation; (iii) potential for agribusiness linkages and market access; (iv) rural Woredas.

4.2 Direct targeting - when services or resources are to be channelled to specific individuals or households

At least 20% of the target group will be unemployed youth.

4.3 Self targeting – when goods and services respond to the priority needs, resource endowments and livelihood strategies of target groups

Irrigation benefits, access to market, financial services and rangeland rehabilitation will obviously be enjoyed by all beneficiaries in the programme command areas.

4.4 Empowering measures - including information and communication, focused capacity- and confidence-building measures, organisational support, in order to empower and encourage the more active participation and inclusion in planning and decision making of people who traditionally have less voice and power

Consultation and awareness creation with communities to ascertain their willingness to participate in the Programme will be undertaken. Inclusive and consultative processes that ensure that communities are properly consulted, understand the costs, benefits and risks and agree to the establishment of a scheme will be put in place. Groups’ formation and consultation will consider socio cultural characteristics and measures will be taken to overcome cultural barriers where present. This will be specifically done for ensuring women participation.

4.5 Enabling measures –to strengthen stakeholders’ and partners’ attitude and commitment to poverty targeting, gender equality and women’s empowerment, including policy dialogue, awareness-raising and capacity-building

Results from the socio cultural analysis will not only inform the social inclusion in the implementation of PASIDP II but will also inform policy dialogue at county and national levels. It is particularly important to get empirical appreciation of the livelihood issues in the arid and semi-arid areas.

4.6 Attention to procedural measures - that could militate against participation by the intended target groups

Women, women head of household and youth specific groups will be supported through mentoring, coaching in order to build confidence and negotiation skills. Training programmes will include sessions on leadership for women in IWUAs. Participatory methodologies will be applied throughout the all process.




42

4.7 Operational measures - appropriate project/programme management arrangements, staffing, selection of implementation partners and service providers

While the ultimate responsibility for poverty targeting, gender & youth focus lies with the programme coordinator, a Gender expert will be recruited as part of the NPCU team to be responsible for these issues during implementation. Gender focal points will then be appointed at regional level in the RPCU to follow up on all gender related and also social issues. Where capacity is lacking, training and capacity building as well as technical support will be provided.

5. Monitoring targeting performance.

Does the design document specify that targeting performance will be monitored using participatory M&E, and also be assessed at mid-term review? Does the M&E framework allow for sex-disaggregated data and are there gender-sensitive indicators against which to monitor outputs, outcomes and impacts?

Monitoring and evaluation of poverty targeting, gender and youth focus will be part of the programmes’ supervision schedule. This will include; One supervision mission and one follow-up mission annually; and a Mid-term review. Progress on these issues will be reported in the programme’s by-annual progress reports. All people-centred indicators will be disaggregated by gender and age, and enriched by qualitative information and analysis. Reporting on poverty targeting, gender and youth focus will be part of the reporting requirements.




44

Appendix 3: Country performance and lessons learned

A. Country Performance

1. Overall, the performance of the country programme was assessed by the Country Programme

Evaluation (CPE) in 2015 as being satisfactory. Implementation of the programme was consistent with

the COSOP objectives, with appropriate selection of interventions. All but one intervention (Agriculture

Marketing Improvement Programme) were conceived and designed appropriately and have been

largely successful. The programme has been strongly poverty-focused and fully aligned with the

priorities and strategies of the country. The geographical focus of a large part of the programme on

low rainfall areas is consistent with the rural poverty thrust of IFAD. While the rural finance component

of the programme is national in scope, the small size of loans (for microfinance) and the design of

rural finance based on rural community groups, makes the programme self-targeting on the poor.

Despite the overall positive assessment, the CPE also identified several weaknesses at the

programme and individual project levels that need attention. One of such areas relates to Monitoring

and Evaluation (M&E). M&E continued to be a weak part of IFAD’s programme. With the exception of

Pastoral Community Development Project (PCDP), none of the other projects have succeeded in

putting in place monitoring and evaluation mechanisms that allow a periodic assessment of project

impacts.

B. Lessons Learned

2. A number of lessons have been learned from experience of implementing IFAD and other

partners-supported programmes and projects in Ethiopia. Some of such lessons are summarised

below.

Phasing and planning

3. The first phase of PASIDP had a slow start, which the PCR attributed to “delay in biding

processes, selection and contract management and weak performance of the private sector, mainly

contractors and consultants”. PASIDP II will use these lessons and (i) start from a pipeline of existing

studies and maintain such pipeline, (ii) build on effective procurement modalities of PASIDP I, and (iii)

closely monitor progress and manage in an adaptive way. The PIM will show how the bottle necks will

be resolved

Figure 1 PASIDP I Implementation progress: plan (dashed line) vs actual.




45

Market linkages

4. Development of an effective irrigation scheme is a costly endeavour. A return on investment is

only possible if the irrigated command areas are used for the production of crops with a viable market.

In that regard, PASIDP II has made market linkages a big determining factor for scheme

establishment. Productivity enhancement by itself does not necessarily increase farmers’ incomes

without proper linkages to markets and/or value addition opportunities. The Programme is

incorporating specific interventions aimed at linking farmers to markets.

5. Based on PASIDP experience, a lack of institutional support to link farmers to markets to sell

surplus produce at the cooperative level has tended to lead to high postharvest losses and reduction

in potential household incomes. There have not been effective linkages between the cooperatives and

other essential elements in the value chains for the commodities produced. The Famers

Cooperatives (FCs) have done little in facilitating farmers to develop farming as a business by linking

them to the appropriate avenues for accessing inputs, loan facilities and marketing of produce.

Beneficiary participation and ownership

6. Inadequate beneficiary participation and community ownership, including inadequate

engagement in both process and product, greatly diminishes the long-term sustainability of

development initiatives. PASIDP II will promote a community-based and participatory approach in

programming and implementation, strengthening and establishing grassroots institutions. This will

redress this weakness and simultaneously contribute to minimize potential conflicts during the course

of implementation.

Provision of agricultural support services

7. There tends to be a mistiming between the construction of irrigation facilities and the timely

provision of agricultural support services. As a result, the target farmers end up taking a considerable

amount of time before they can effectively make good use of the irrigation facilities. ADPs will be

prepared concurrently with the planning and development of the schemes and the Programme would

ensure that the required extension services are availed to guide their effective implementation.

Efficiency of start-up activities

8. New Programmes and Projects tend to take a long time to effectively take off. This is

attributable to a number of factors. The most commonly cited factor relates to the protracted process

of recruiting the staff. In addition, when the staff is on board, there is a need for the newly recruited

staff to get acquainted to the IFAD processes and procedures. It is, therefore, recommended that,

efforts be made, whenever possible, to retain the good performing staff from the preceding

Programme/Project to help provide a good start for the new Programme/Project

9. Experience has shown that Programmes/Projects tend to encounter difficulties in undertaking

baseline surveys/studies in a timely fashion. In many cases, such surveys/studies get undertaken

years after Programme/Project activities have already been initiated and, as a result, get a distorted

situation of pre-existing conditions. To that effect, it is a good practice to undertake baseline

studies/surveys as part of Programme design.

Viability and sustainability of irrigation schemes

10. In order for irrigation schemes to be viable and sustainable, they need to be wholly operated

and maintained by the IWUA with no government support. This necessarily requires linkages to output

markets so that farmers can sell surplus produce and earn enough income to pay adequate fees for

effective operation and maintenance. PASIDP II is being developed on the premise that markets will

influence cropping decisions at the scheme level;

11. Water available at the end of the dry season tends not to be enough for the whole command

area; this could, potentially, be a source of conflict if not handled well. Accordingly, IWUAs will be

helped to obtain data on dry season river flows and ensure that they adopt internal rules to give

equitable access to land and water resources in the dry season;




46

12. Generally female farmers respond better to initiatives than their male counterparts. Greater

female participation in development can accelerate poverty reduction. PASIDP II will use strategies

such as quotas and the household methodologies to ensure women and youth participation to

enhance gender equality;

13. Schemes should be designed and constructed in response to demand of the beneficiaries and

bearing in mind a realistic beneficiary contribution in both cash and kind, during construction and for

operation and maintenance. PASIDP II will ensure that IWUAs are fully involved in planning, design

and construction of schemes. The Programme has planned specific capacity building activities for

IWUAs with regard to different aspects, including development of ADPs and/or business plans.

14. Rehabilitation of watershed/catchment areas is essential for the sustainability of irrigation

schemes. Accordingly, PASIDP II has allocated an entire Subcomponent and a specific budget for

watershed management.

Programme coordination and management

15. It is important to ensure that Programme coordination, management and implementation

arrangements are well integrated into the decentralized regional administration at the outset.

Harmonization and alignment of these arrangements with national policies, procedures and

institutional framework augurs well for sustainability.




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Appendix 4: Detailed Programme Description

Component A: Investment in Small-scale Irrigation Schemes

1. The expected outcome of Component A is “farmers have access to sustainable irrigation

schemes“. Component A aims at developing or upgrading 15,000 ha of small-scale irrigation and

preparing 7,400 ha of feasibility studies as part of a programme pipeline..

Subcomponent A.1. Irrigation Scheme Participatory Planning, Design and Preparation

2. The expected output of Subcomponent A.1 is “selection of 22,000 ha of irrigation schemes for

investment”. PASIDP II will build a pipeline of irrigation schemes to be implemented during its lifetime

(15,000 ha) and the first years of the third phase (7,000 ha). In order to enhance ownership,

sustainability and market-oriented management, PASIDP II will adopt a fully participatory process for

identification, feasibility, detailed design and construction of new irrigation schemes.

3. Selection of schemes. The selection of irrigation schemes will be done in three steps:

4. The participatory process of scheme identification will originate from the Kebeles, as

representatives of potential beneficiaries. The identification of schemes will be initiated by the farmers,

organised into groups of 5 or more members, who request for assistance to start irrigated farming or

to improve a traditional scheme. The farmers will submit a request to the Development Agent (DA)

and Kebele authorities. The Kebele and Woreda authorities will check that the group meets the

minimum standards to proceed with a prefeasibility assessment:

i. scheme is from a drought prone and food insecure Kebele from the programme regions

of Amhara, Oromia, SNNPR and Tigray;

ii. the group has more than five members that include preferably women, youth and female

headed households;

iii. all members of the group have appended a signature to the request, affirming that they

are members by free choice.

30. The Woreda BoARD will ensure that all DAs in eligible Kebeles are aware of PASIDP II

eligibility criteria and scheme selection criteria. Information pamphlets, in local language, will be

prepared to ensure a common understanding. The DAs will inform farmers in eligible Kebeles of

PASIDP II eligibility criteria and the way the farmers can request for assistance.

31. Prefeasibility assessment. The assessments will be undertaken by multi-disciplinary teams

comprising, among others, of an irrigation engineer, irrigation agronomist, sociologist,

environmentalist, hydrologist. The assessment will determine the proposed scheme’s potential to

meet the following criteria:

i. availability of adequate and good quality soil and water for the intended area to be irrigated;

ii. absence of any social conflicts with regard to access to land and water;

iii. access to markets, either by being nearby a settlement/urban area or an all-weather road

leading to high population areas; 44 and

iv. potential to produce high value crops with market demand.

32. The selection process is designed in a way to ensure that communities are properly

consulted, understand the costs, benefits and risks and agree to the establishment of a scheme will

be put in place. In selecting participating Woredas, consideration to the willingness of rural

communities to participate in Programme activities will be key as it would entail

44 This criterion is meant to ascertain that transportation requirements in terms of logistics and costs can be met within

an overall viable operation.




49

redistribution/allocation of land in the irrigable area in order to allow equitable access to irrigated land

by more vulnerable groups (women, landless, unemployed youth). However, such land allocation will

be carried out with the full consent of the communities. This will be ensured during the process of

community consultation, sensitisation and awareness creation. Traditional land tenure systems (i.e.

communal land rights) and local practices for land use will also be analysed and considered to make

sure that proper land allocation (and subsequent certification) is undertaken according to the local

specificities and through agreements (formal/informal) that are accepted by communities involved.

Table 1 PASIDP II Scheme selection and prioritization matrix

Criterion Pass when Priority for

Water, land resources and engineering

Water availability Proof of water available n/a

Technical feasibility Feasibility study approved n/a

Average plot size < 1 ha / household < 0.5 ha / household

Economic and financial

Unit cost before design review < 5.500 USD/ha Lower unit cost

Commercial viability IRR>10% and NPV>0 Higher IRR and NPV

Cost of water/ha/crop tbd Lower cost

Cost of sales / revenue tbd Lower ratio

Social and environmental

Conflicts Free of water / land conflicts n/a

Environmental impact ESIA certificate obtained Lower environmental impact

Community contribution > 10 % of total investment n/a

Community endorsement Signed approval by IWUA n/a

5. Increased technology options and improved decision-making. Whereas PASIDP focused

on a limited number of technologies, PASIDP II will increase the available options to better match the

wide diversity of biophysical and socioeconomic contexts in which will operate. Additional

technologies that will be introduced or scaled-up under PASIDP II include solar-powered irrigation

systems, shallow and deep groundwater pumps, improved distribution systems such as drip irrigation,

and water storage. A service provider will be engaged to, jointly with the Federal and Regional PMU,

develop a decision-making methodology. This methodology will assist the PMU and design

consultants to make a better analysis of the context of each scheme in the initial identification phase,

based on the information available in the (pre-)feasibility studies. The methodology will provide clear

guidance on how to translate the information available in a (pre-)feasibility study into a “decision

matrix”, shortlisting a few technology options and their advantages and disadvantages for the specific

case . These results will subsequently be used to discuss and agree with the intended beneficiaries

on the selection of technology for the feasibility study. The decision-making methodology will initially

focus on water-scarce areas vulnerable to the impacts of climate change, to identify technologies that

increase both water use efficiency and commercial viability.

Figure 1 Irrigation technologies supported under the first phase of PASIDP (% of schemes)




50

6. Feasibility studies of irrigation schemes. Schemes that pass the prefeasibility criteria will be

submitted to the Regional BoARD for a full feasibility study. Prior to this, an IWUA will be established

and basic training provided to participate in the feasibility study. The Regional BoARD will recruit

private or state enterprises to carry out the full feasibility studies. For schemes less than 50 ha, the

Woreda officials will prepare the feasibility studies. The key results of the feasibility study will be

discussed and agreed upon with the IWUA. Final selection and prioritization of schemes will be done

by BoARD based on the following matrix, adjusted to local conditions. Some criteria are pass/fail only;

others allow prioritization of schemes when selecting from a batch of studies. For the latter, regions

will use a standardized scoring method but assign their own weights.

7. The feasibility studies will involve technical and administrative (government representatives,

traditional, etc.) authorities of different levels, as well as full participation by the IWUAs. This will follow

existing consultative mechanisms of each region as per the Programme implementation

arrangements. At the end of the process, the respective BoARD for each region will provide the

Programme with the list of potential schemes, including the basis for their selection. The FPCMU will

subsequently review the quality of the feasibility studies and eligibility, send back for revisions where

required, and make the decision to continue with detailed design when the studies show that

investment is feasible.

8. PASIDP II will introduce improved quality standards for scheme feasibility studies, paying more

attention to market aspects, financial viability, environmental sustainability and climate resilience.

More specifically, the quality improvements are related to (i) Environmental and Social Impact

Assessments (ESIAs), (ii) more realistic Agricultural Development Plans (ADP) informed by market

studies, (iii) better coherence between surveys and engineering designs, (iv) discussion of

alternatives (technology choices, scheme layout), (v) analysis of various water uses (agriculture,

household, livestock) and provisions to continue supporting those; and (vi) mandatory second field

visit / “ground-truthing” of engineering designs. Depending on their safeguards categorisation,

Environmental and Social Impact Assessments (ESIAs) or Environmental and Social Management

Plans (ESMPs), and Resettlement action plans (RAPs) if necessary, will be prepared - and RAPs

implemented - for each scheme.

9. Two different scenarios will be followed: (i) for the new/un-studied schemes, feasibility studies

will be carried out following the guidelines stated above; (ii) for schemes with feasibility studies

already undertaken, all existing documents will be reviewed and subjected to PASIDP II

requirements/conditions starting with priority schemes listed in the table below. Under PASIDP I,

feasibility studies were undertaken on 8,300 ha45 that have not yet been constructed. These will be

the initial candidates for construction under PASIDP II, after a review and update of the feasibility

studies. In situations where the documents will be found lacking, the necessary steps will be

undertaken to ensure that informed recommendations/decisions are made. Only schemes meeting the

set minimum requirements will be eligible and considered for selection.

10. Multidisciplinary feasibility studies will be undertaken bringing together various experts on:

a. agricultural commodity markets (establish availability and accessibility of a market to absorb

a sizable portion of the expected production of the targeted commodities);

b. agribusiness (to establish the degree of financial viability and risk of the proposed schemes);

c. hydrology (availability of sufficient and good quality water, taking into account projected

climate change impact);

d. agronomy (potential for the application of Good Agricultural Practices (GAPs), etc.);

e. topography (use of irrigation by gravity, potential area covered due to optimum alignment of

canals, use of cost effective and efficient technology, etc.);

f. land tenure system (verifiable absence of land ownership disputes);

45 8,300 ha accepted on a total of 9,100 ha, after a first screening.




51

g. socio-cultural environment (potential/willingness for farmers’ mobilisation, etc.);

h. geology (soil structure and quality);

i. watershed management (identify required interventions to prevent catchment area

degradation);

j. environmental issues (examination of potential environmental damage and proposed

changes in the design/alternatives if the impacts are reversible/irreversible).

Table 1 Priority list of schemes with existing studies

Scheme Name Region Woreda Ha House-

holds Cost (US$) Cost per ha

(US$/ha) Irrigation technology

Masta SNNPR Deremalo 200 400 $ 675,000 $ 3,375 Diversion

Senbta SNNPR Kachabira 40 130 $ 120,920 $ 3,556 Diversion

Menisa SNNPR Offa 160 320 $ 379,540 $ 2,791 Diversion

Gondoro SNNPR Adiyo 100 200 $ 309,877 $ 3,646 Diversion

Welmel Tika Oromia H/bulluk 250 500 $ 1,227,362 $ 5,776 Diversion

Bereda Lencha Oromia Gola Oda 300 800 $ 526,268 $ 2,064 Diversion

Hargetti Tirtiro Oromia Gola Oda 250 750 $ 759,159 $ 3,573 Diversion

Karra Horda Oromia Gurawa 200 600 $ 637,448 $ 3,750 Diversion

Welmel Oromia D/Mena 280 500 $ 334,972 $ 1,407 Diversion

Kercha Dewa Oromia Qoricha 283 1,132 $ 559,299 $ 2,325 Piped

Korobo Oromia Bule Hora 103 60 $ 131,181 $ 1,498 Diversion

Gobu-3 Spate Amhara Kobo 250 271 $ 498,733 $ 2,347 Spate

Gobu-4 Spate Amhara Kobo 400 533 $ 1,189,768 $ 3,499 Spate

Gosh Weha Amhara Habru 75 180 $ 382,055 $ 5,993 Diversion

Amid Intake Amhara Raya kobo 68 143 $ 384,989 $ 6,661 Diversion

Golina Intake Amhara Raya kobo 170 200 $ 271,743 $ 1,881 Diversion

Atakar Tigray Mereb-Leke 25 100 $ 177,579 $ 8,357 Diversion

Gereb Kuhatat Tigray Ofla 20 80 $ 158,714 $ 9,336 Diversion

Adi-Asmeana Tigray Ofla 28 112 $ 108,152 $ 4,544 Diversion

Gereb-Higoza Tigray Endamokeni 30 120 $ 108,216 $ 4,244 Diversion

Adikerakiro Tigray Emba-Alaje 26 104 $ 167,473 $ 7,578 Diversion

Total

3258 7235 $ 9,108,447

11. Detailed engineering designs of schemes. Based on recommendations of feasibility studies,

all identified measures related to water management will be subjected to in-depth designs at scheme

level. The envisaged design will not only target irrigation structure (head-water intake, irrigation and

drainage network, tail-water ditch, collectors, etc.) but will also focus on service facilities (access

roads and market sheds). The design layout will seek to allow: (i) efficient source of water (gravity as

opposed to lifting); (ii) efficient use of water (use of lined canals and best option for canal alignment to

allow maximisation of the command area); (iii) least possible investment cost; d) simple and easy to

use and maintain irrigation system; etc. The detailed design will also provide all possible technical and

technological options and will give advice for the selection of the best (good distribution of good

quality water) and optimum (investment cost) option for implementation, while providing rationale for

the recommendation made. Dimensioning (head-water intake, canals, etc.) and characterisation will

also be part of the design exercise, including all related drawings of the system to be adopted.




52

12. Where necessary, the road infrastructure for improved access to schemes will be part of the

overall design of the scheme. The provision of perennial access would aim at meeting the

requirements for year-round farming system of developed schemes. The requirements for market

infrastructure will be assessed on a scheme by scheme basis and will be linked to the requirements of

the commodities to be grown. Issues to be considered, as pre requisite, before constructing these

service facilities include: organisation of beneficiaries around the management of the assets, provision

of sufficient and well secured land for construction, maintenance of the facility, etc.

13. Formation, strengthening and engagement of Irrigation Water-Users Associations

(IWUA). The IWUAs are mandated by a new Federal IWUA proclamation number 841/2014

recognizing the association as a legal entity for operation and management of irrigation systems.

Accordingly, the proclamation does not permit them to undertake activities related to procurement of

agricultural inputs or marketing of produce within the irrigation system. Their functions are to manage

and regulate water flows to irrigators, to maintain water delivery systems and to provide for their

sustainable maintenance and upkeep. Irrigation scheme operation and maintenance needs to be of a

high standard in order to allow for an optimal exploitation of the irrigation facilities.

14. Once a scheme is confirmed as a potential candidate for a full feasibility study, an IWUA will be

formed, or strengthened in cases where they have already been formed, to act as the representative

of the potential irrigation farmers. This would be a pre-requisite for a scheme to be supported to

develop a feasibility study. Accordingly, the Programme will provide training and initial operational

support and mentoring for IWUAs. This support, delivered through an experienced service provider

with the support of Woreda public officials, will consist of:

a. developing clear roles and responsibilities for the Woreda officials and the IWUA and its

committees;

b. formulation, adoption of bylaws and registration of the IWUA. Formal registration will not be

a pre-requisite for eligibility;

c. election of office bearers, taking into account gender considerations;

d. training of office bearers in leadership, scheme management and calculation of water

charges;

e. development of appropriate water charging mechanisms that ensure the water charges

meet the full cost for O&M; the mechanism will ensure that collection and utilisation of water

charges will be efficient and transparent;

f. training in water allocation and discipline techniques for water users;

g. training in scheme operation and maintenance;

h. training in record keeping.

15. A key requirement for participation will be the confirmed willingness of the benefiting farmers to

significantly contribute to the investment cost and future operation of the scheme. The criteria to be

used to assess this would be, at the minimum, the following:

a. contribution to the investment cost of the scheme of at least 10%, provided as labour and

materials or/and as cash;

b. establishment and functionality of the IWUA, with trained office bearers and appropriate

consultative and administrative procedures; and,

c. establishment of a savings account to provide for the costs of operation of the scheme.

16. The IWUA will confirm understanding of the expected commitments by each member, prior to

approval of the feasibility study. After the preparation of the feasibility study, the IWUA will sign a

record of consultation to confirm understanding of the results of the study. The formal acceptance of




53

this information by the IWUA, and its commitment to sustainable operation of the scheme, would be

required before construction would be able to commence.

17. Improved local knowledge in Climate Change (ASAP financing). The Programme will

conduct scheme-based climate analysis, helping communities to understand climate change

scenarios and develop option-by-context adaptation strategies. PASIDP-II will conduct scheme-level

climate analysis and develop climate trends using downscaling global models to scheme level.

PASIDP-II will conduct training scheme-level events to help communities streamline climate change

adaptation strategies into their day to day farm activities. The Programme will develop local level

Climate maps and scheme level posters to create adaptive capacity of the local communities and

extension services. The scenario analysis is going to be complemented by plans with different

strategies by context for niche specific climate smart adaptation and institutional interventions.

18. Environmental and Social Impact Assessments. Under SECAP, the Programme has been

classified as ‘Category A’. At this stage the exact sites and types of interventions are not known, and

therefore an Environmental and Social Management Framework (ESFM) is being developed in order

to guide the preparation of Environmental and Social Impact Assessments (ESIAs) and Environmental

and Social Management Plans (ESMPs) that will be required for individual schemes. The ESMF will

propose a new environmental and social screening methodology that complements the screening

process adopted by AGP and SLMP, in order to have consistency in ESMF environmental and social

screening processes and assessment procedures prepared by the MOANR. The ESMF will facilitate

the application of SECAP requirements to PASIDP II interventions in order to address the social,

environmental and climate impacts associated with PASIDP II design and implementation. In the

event that physical and/or economic displacement will be triggered, a Resettlement Action Plan (RAP)

will be prepared as part of the ESIA process for the scheme.

19. As part of the start-up activities for PASIDP II, the ESIAs and ESMPs will need to be updated to

satisfy SECAP requirements. The updating of these documents will begin with those schemes that are

selected for immediate implementation - that is schemes prioritized on the basis of factors such as

cost per hectare, market access, readiness for implementation in terms of feasibility studies and

design as well as safeguards eligibility and screening criteria. During the updating exercise, scheme

designs will be presented and explained to the communities, Kebeles and Woredas for comment and

further input if necessary, in order to fulfil SECAP consultation and FPIC requirements.

20. In addition there will be a need for capacity building in topics such as environmental, social and

climate risk screening; environmental and social best practices (including proper application of

chemical inputs, water saving agronomic practices, soil fertility management, preparation of IPMP,

and labour saving techniques) to improve scheme sustainability; environmental and social monitoring

during both construction and operation of the schemes; watershed management (which will

incorporate participatory mapping of watersheds) and conservation agriculture techniques. Some of

these topics are captured under PASIDP II. The training will be targeted Farmers Cooperatives,

Irrigation Water Users Associations (IWUAs) at the scheme level, Watershed Management Teams at

the Woreda, Kebele and Community levels, as well as Regional, Zonal, Woreda and Kebele staff.

Subcomponent A.2: Participatory Irrigation Infrastructure Development

21. The expected output of Subcomponent A.2 is “irrigation schemes developed and upgraded on

about 15,000 ha (corresponding to about 150 schemes, assuming an average of 100 ha per scheme).

22. Planning and phasing of scheme development. Adequate and realistic planning of scheme

development is crucial to achieving acceptable implementation progress. Adaptive management will

be crucial to achieve effective implementation. At the start of the Programme, the PMU will develop a

flowchart with key milestones and deliverables, which will be used throughout the lifetime of the

Programme to monitor progress and identify bottlenecks. The start of construction related activities

will need to be timed with capacity building initiatives, and sufficient time needs to be reserved

following construction to allow for continued support by the Programme.




54

Figure 2 Indicative timeline and milestones for scheme development; starting from identification

23. Figure 2 provides an overview of the estimated timeline of scheme development, with an

estimated 1.5 years required between scheme selection (start of tender process) and finalization of

construction works (irrigation area operational). Keeping this timeline in mind, and the time required to

provide adequate support to IWUAs following hand-over, the estimated planning (phasing) of scheme

development is given in the table below.

Table 2: Phasing of irrigation scheme and watershed development by Programme year (PY)

24. Procurement. This process will procure services for the construction of selected schemes and

the associated infrastructure from qualified bidders. Tender documents will include construction works

for irrigation and road infrastructure and market facilities as a package. It has been established that

construction companies (public, private or NGOs) with capacity to ably undertake the required

construction works exist in the Programme target areas. Experience with PASIDP will be used during

the selection process; priority will be given to those companies with demonstrated good performance.

Invitation to tender will be advertised by regional authorities, in accordance with the procurement

procedures, with the packages arranged to take advantage of scale for construction. The Programme

will encourage regional authorities to attract bidders from outside the regions as much as possible to

improve competition.

25. Unit Costs of Schemes. The BoRW and RPMU will have an important role to play in

controlling the costs of infrastructure, avoiding underbidding and subsequent excessive cost

variations, as frequently occurred in PASIDP. It is essential that the BoRW only allows for investments

in schemes that are financially viable and thus do not put an unrealistic burden on IWUAs and their

member farmers in terms of costs of maintenance and operation. Scheme selection should be

accompanied by a robust design review process and feasibility assessment. Schemes should then be

prioritised taking into account unit cost of development and unit costs per beneficiary and returns to

the investment, environmental considerations. For any scheme feasibility study submitted exceeding

that cost ceiling, the regional authorities will need to provide a justification comprising of (i) detailed

proof of financial feasibility and (ii) reasons for choosing this scheme over others (reasons could

include social impact, alignment with other initiatives, etc.). Increased attention will be paid to the

design review process. Tender documents as prepared by the design consultant will be reviewed by

the PMU, paying specific attention to the adequacy of and realistic price-setting (rates) in the Bill of

Quantities.

Activity Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q2 Q3 Q4 Q3 Q2 Q3 Q4

Identification

Survey and design

Approval and Selection

IWUA formation and strengthening

Tendering

Construction Works

Supervision of works and follow-up

Defect liability

Commissioning and hand-over

Operation and Maintenance

Year 1 Year 2 Year 3 Year 4 Year 5

PY 1 PY 2 PY 3 PY 4 PY 5 PY 6 PY 7 Total

# feasibility studies approved 0 65 45 40 0 0 0 150

# schemes construction started 0 20 45 45 40 0 0 150

# IWUAs formed 0 20 45 45 40 0 0 150

Ha of operational irrigation area 0 0 2000 4500 4500 4000 0 15,000

Ha of watershed development started 8,000 18,000 18,000 16,000 0 0 60,000




55

26. A summary of the determination of PASIDP II unit costs is given in Figure 2. An analysis of unit

costs under Special Country Programme II (SCP II) and PASIDP I (figure 4 section a) evidences a

gradual increase of costs, which can be mainly attributed to inflation and increasing price of materials.

PASIDP I included rehabilitation of schemes at relatively lower unit costs, which is not foreseen under

PASIDP II. Yet, under PASIDP II a higher percentage of lower-cost technologies is expected (section

b) which will offset this difference. The final average unit cost is budgeted at US$ 4700/ha, including

10% community contribution and 15% taxes. These unit costs are in line with what a study46 found to

be average unit costs for successful schemes in sub-Saharan Africa of 4,708 US$ /ha (in 2016 US$

value).

Figure 2 Determination of PASIDP II unit costs. US$ values given in section (a) are historic US$ values

not corrected for inflation, and are based on evaluation reports.

27. Construction works and contract management. All selected schemes will be constructed

following technical specifications and guidelines provided by designs, including the measures for

mitigation and management of environmental, social and climate risks contained in the ESMPs.

Contracts will be supervised by a designated engineer, in close collaboration with Programme staff.

Following specific training to do so, IWUAs will also monitor implementation progress during

construction and report any concerns with the supervising engineer.

28. Scheme handover. After construction and expiration of the defect liability period of the

contractor, each scheme will be handed over to the respective community’s IWUA. This would mean a

transfer of all responsibilities for the sustainable operation and maintenance of the scheme, including

monitoring of environmental and social impacts and mitigation. Prior to handover, IWUAs will be

trained on specific issues related to the functioning of their scheme (water use and distribution, fees

collection, conflict resolution, etc.). Maintenance works include both routine and periodic ones.

Routine maintenance, carried out each season, need to be done to allow good water distribution

(quality and quantity) over the command area. This will include: desilting, herbs removal, fixing cracks,

etc. on the canals. According to the approach adopted by each IWUA, this will be done either by the

members or by outsourcing to someone else paid through water fees. Periodic maintenance works,

which include heavier works, will need to be carried out every 3 to 5 years and require the IWUA to

mobilize support of local contractors.

29. Developing alternative water sources (ASAP financing). Given the increasing need for

irrigation water under ever changing climates, PASIDP II invests in the selected schemes on at least

15 alternative water sources, in addition to surface water irrigation. Runoff harvesting would be done

from open surfaces and paths, and roads, and storage will be done in structures such as pond or

underground tanks. Pans and ponds will be particularly promoted, as they can be made cost effective

using local materials and community labour. The dry lowlands of Ethiopia are commonly subject to

occasional but intense flooding during the peak rainy season, providing an opportunity for rainwater

46 Inocencio et al (2007) Cost and performance of Irrigation Projects: A Comparison of Sub-Saharan Africa and Other

Developing Regions. IWMI Research Report 109




56

harvesting. Where seasonal rivers carry a lot of sand, the sand formation can be used to store water

for use during the dry season. Because the water is stored under the sand, it is protected from

significant evaporation losses and is also less liable to contamination. Where other conventional

irrigation methods may not be feasible, spate irrigation would be an option. In terms of climate change

adaptation, spate irrigation holds promise considering that rainfall events are expected to get

evermore erratic with flush floods, which can be harnessed and used. Various types of drip irrigation

systems will be tested, ranging from 10-liter bucket kits to 200-liter drums or mini-tank systems and

operate at 1.0m water head. Drip irrigation and other new technologies should firstly target

commercial vegetable production. ’Partnerships will be considered with former IFAD grantees with

expertise in this area and in the country, such as Meta RAIN Foundation and the Floodwater Irrigation

Network.

30. On-the-job training for young professionals. Ethiopia’s universities and vocational schools

are training high number of professionals to work in rural development, and specifically irrigation

development. However, it is widely acknowledged that education has been too theoretical the past.

Various initiatives are currently underway to transform university curricula, through the University

Water Sector Partnership47, and to provide training for current staff through the Micro and Small

Irrigation Support Project48. PASIDP II will complement these initiatives by offering on-the-job training

to university students and young professionals, providing them a chance to work with senior

professionals.


31. The expected outcome of Component B would be “farmers have increased marked-oriented

skills and capacity for sustainable agriculture”.

32. Component B will target (i) 37,500 farmers in the irrigation schemes and watersheds, (ii) the

37,500 additional farmers in adjacent watersheds, and (iii) 15,000 PASIDP I farmers in 30 schemes

who did not benefit from market and agronomic support. The investment in irrigation facilities alone

will not ensure sustainable improvements in incomes and food security for the target groups. The

farming operations need to be both highly productive and profitable at the household and scheme

levels. Without this, there will not be sufficient revenue to pay for the operation, maintenance and

eventual replacement of the capital investment in irrigation. In addition, the transition for smallholder

farmers from subsistence-oriented rainfed crop production and agro-pastoralism to competent and

profitable owners and operators of irrigation schemes requires a substantial investment in improving

their organizational knowledge and skills. Similarly, smallholders who do not gain access to irrigation

schemes, but are farming in the adjacent watersheds for the schemes, will also require substantial

improvements in their capacity to manage the natural resources in a sustainable manner, while at the

same time improving their productivity and incomes.

Subcomponent B.1: Agribusiness Linkages and Market Access

33. The expected output of Subcomponent B.1 is “an improved access to appropriate inputs,

agricultural and financial services for smallholders”.

34. Strengthening of Farmers’ Cooperatives and associations49. Responsibilities for Farmers

Cooperatives include supplying inputs, marketing farm produce and extending lines of credit to

members. Based on their legal responsibilities, Farmers Cooperatives (FCs) will be the main vehicle

for application of the principles and practices of irrigation farming as a business for the PASIDP II.

35. The Programme will provide them sustained support for two years from the inception of the

investment at each scheme through an experienced service provider with skills in training and

mentoring for rural commercial enterprise development. This will include (i) training in record keeping

47 See http://www.universitywatersectorpartnership.org/ 48 See http://smis-ethiopia.org/ 49 Farmers Cooperatives exercise their authority from Cooperatives Societies Proclamation No. 147/1998.

http://www.universitywatersectorpartnership.org/

http://smis-ethiopia.org/




57

and in financial management techniques such as gross margin and scheme profit and loss

calculations; (ii) development of leadership skills, good governance, access to financial services, and

communication; (iii) training on the role of cooperatives as cohesive business entities. Support will

also be provided: (a) for the strengthening of linkages with various knowledge institutions, such as

Regional Agricultural Research institutions; (b) to enable them to adequately serve their members

with regard to provision of inputs, access to finance and linking farmers to produce markets. A

capacity building needs assessment will be undertaken and the findings used to design specific

interventions that will address the identified needs.

36. Market Access Alliances (MAA). These would be voluntary organisations, comprising

membership of farmers’ organisations and cooperatives, service providers (transporters, specialist

inputs providers, mechanised service providers, primary processors and aggregators), financing

institutions and produce buyers/off-takers, as well as relevant Woreda level public institutions. The

MAAs will seek to enable engagement between all relevant entities in a marketing chain, from farmers

to initial markets. They would initially be based geographically on a Woreda, but could be further

developed at Kebele level if there is sufficient demand, especially in cases where there are several

irrigation schemes within a Kebele. The MAAs would help develop transparent and trusted

communication and commercial relationships between the different actors, with the motivation that

improved relationships would lead to improved revenues and profits for all commercial members due

to their shared interests. This is an approach to determining priority needs for investment, developing

trusted agribusiness linkages and transparency in pricing and marketing, ensuring efficiency in the

transactions. Direct market linkages, if appropriately structured and respected by all parties, are a

constructive way of ensuring a consistent supply of good quality raw material to a given company; it

also implies a trusted way of ensuring a market for farmers’ produce. There are several examples of

direct market linkages already implemented in Ethiopia (such as growing Malt Barley for beer

companies), though very few are related to irrigable commodities.

37. Identification of commodities for irrigated production will be a major role of Cooperatives, in

close consultation with other MAA members. An initial analysis of possible agricultural commodity

value chains will indicate whether any and, if so, which agricultural commodity value chains are

commercially viable and can form an entry point for farmers into the market. When selecting suitable

agricultural commodities for a specific area or scheme, consideration will be given to the following

actors: (a) size and structure of the market, identification of key players in each value chain,

assessment of profit margins and financing/investment opportunities; (b) financial analysis for

smallholders based on realistic crop models and risk analysis; (c) potential to link smallholders into

commercial value chains; (d) potential for achieving a balance between market-oriented production

and risk management strategies (e.g. household nutrition and consumption, storage possibilities,

fodder); and e) degree of climate resilience in terms of vulnerability to droughts and increasing

temperatures, as well as water use efficiency. When selecting agricultural commodities, efforts will be

made, where relevant, to link into and complement efforts made to identify primary and secondary

commodities under the Agricultural Commercialization Clusters (ACC) initiative by the Agricultural

Transformation Agency (ATA). ATA has developed an Excel-based “High Value Crop Assessment”

tool that is being used at Woreda level to assess the promising commodities for value chain

development. Thus, feasibility studies will seek to make use of this tool whenever available and to the

extent that it is compatible with the other criteria.

38. Agribusiness and Market Facilitation Support. The development of commercially viable

irrigation schemes will require coordinated effort throughout the life of the programme. The task will be

to coordinate all of the proposed activities within a synchronised framework to enable all potential

marketing chain actors to work together for mutual benefit. As there is little or no previous history of

such an arrangement in the intervention area, it may require concentrated and prolonged technical

support to be achieved. At the Federal Level, a Programme Market Facilitation Team (PMFT) will be

constituted within the FPCMU including an agronomist and a Markets, Finance and Cooperatives

Specialist. They will be supported by a highly qualified international or national consultant. This team




58

would devise the strategy and time-table for support at the national level, provide a link to policy

makers and high-level market entities, and provide direct technical support at Regional levels.

39. At the Regional Levels, a Market Development Facilitation Team (MDFT) would be constituted

with responsibility for direct support within the region. Each MDFT would provide direct training and

mentoring for all cooperatives engaged at each irrigation scheme, and would initially convene and

subsequently provide training and mentoring to MAAs involving all relevant commercial entities. The

MDFT would also comprise the equivalent expertise as the Federal MDTF, and be supported through

a competent consultant with experience in agribusiness/finance. They would report to the PMFT, and

receive technical support and back-stopping. In undertaking their work, the MDFTs would take care to

enable the members of the MAAs to make decisions and agreements, and not to do this on their

behalf.

40. Woreda staff will be facilitated to support MAA development in collaboration with the

Cooperative Agency. The staff will need to receive specific business and value chain training, such as

value chain concepts and promotion.

41. Access to financial services. Access to credit in the rural smallholder agricultural sector faces

significant supply-side and demand side constraints. On the supply side, most lending institutions are

unwilling to lend to the agricultural sector due to the perception that the agriculture sector is a high-

risk investment with high default rates. As a result, they impose collateral requirements which cannot

be met by most smallholder farmers. Other supply side constraints are inappropriate products and

lending methodologies and high transaction costs of lending in rural areas. Demand side constraints

include lack of commercial orientation by most farmers, poor financial literacy, production of low value

crops and high post-harvest losses. The Programme seeks to overcome these constraints by

supporting Farmers, their Cooperatives and other agribusiness partners to access sustainable

agricultural financial services which are commercially viable and yet appropriate and affordable by the

target groups. This will be achieved through attracting the formal financial sector in provision of

agricultural loans through provision of information, facilitation and technical assistance.

42. Access to finance is key factor to enable productivity improvements through the timely

acquisition of inputs and small to medium-scale capital assets, such as processing equipment, small-

scale agricultural machinery, draught animals for land preparation and transportation, and value-

addition facilities. Savings products are also critical for farmers to mitigate the risk of natural disasters

typically associated with agriculture, and the Programme will facilitate linkage to ongoing and

emerging initiatives where opportunities exist. Cooperatives, traders and agro-processors also need

financing to be able to aggregate farmers’ marketable surplus and invest in value-addition and

processing. In order to bridge the supply-deficit gap, the Programme will assist irrigation smallholder

farmers, viable rainfed farmers in associated watersheds and other actors in the marketing chains to

improve their productivity by promoting enhanced access to financial services through promoting

linkages with Micro-finance Institutions (MFIs), RuSACCOs and commercial banks.

43. To address the liquidity constraints that MFIs and RuSACCOs are facing, and to support the

adoption of appropriate financial services for SME development, the Ministry of Industry has

developed a Small and Medium Enterprise Finance Project which will be cofinanced by the World

Bank and the European Investment Bank. The SME Finance Project will have four components: (i)

Component 1: Financial services to SMEs; (ii) Component 2: Enabling environment for SME Finance;

(iii) Component 2: Business Development Services to SMEs; (iv) Component 4: Project management,

communication and impact evaluation. The project will inject liquidity into MFIs through the

Development of Ethiopia (DBE) through two main windows, including (i) Lease finance to SMEs and

(ii) SME lending.50

50 Furthermore, it is envisaged that IFAD finances a complementary project to support agricultural finance under the

2019-2021 PBAS cycle to respond to the expected increasing demand of financial services from smallholders and other

agribusinesses.




59

44. The Programme will support the utilization of warehouse receipt systems (WRS) by smallholder

irrigation farmers. Warehouse receipt systems enable smallholder farmers to access credit by using

their output as collateral. This satisfies farmers’ cash needs at harvest time and allows them to wait

for a better offer or price at which to sell their commodities thus giving them a result gives them better

bargaining power. WRS can enable standard storage service provision on a credit basis; so farmers

can pay for the service after their product is sold; which can reduce the incidence of post-harvest

losses. Finally, the system allows farmers to create a financial identity. In a WRS, the opening of

individual accounts is mandatory, hence, the account records a farmer’s financial history and can

demonstrate their creditworthiness to financial institutions should farmers require further financial

support in the future. PASIDP II will provide technical support to strengthen the warehouse receipt

systems.

Subcomponent B.2: Capacity Building and Empowerment of Smallholder Farmers

45. The expected outcome of Subcomponent B.2 is “improved crop husbandry practices in the

irrigation schemes and watersheds”.

46. Agricultural Development Plan (ADP). Given the peculiarity of the target areas, each scheme

and adjacent watersheds will be facilitated to develop its own detailed ADP, taking into consideration

priorities of local communities, market opportunities and the resource base. The ADPs will be

prepared with the full participation of the IWUAs, cooperatives and WMTs. They will define all

Programme interventions.

47. Farmer Research Groups (FRGs). PASIDP II will use FRGs as key vehicles to enhance

farmer experimentation and promote innovation on climate smart options. The Programme will

establish and facilitate 400 FRGs, in both PASIDP I and PASIDP II schemes. FRGs members will be

selected and organized on the basis of willingness to participate, capacity to innovate and

representativeness of the various social groups and gender. These FRGs will setup their byelaws,

choose their representatives, and share their knowledge and technologies with the wider community.

Support will be provided for national agricultural research institutions and the relevant Woreda

specialists in establishing and facilitating FRGs, both within irrigated lands and watersheds.

48. The following areas of experimentation could be envisaged: (i) selection of productive and

water efficient varieties of cereals, fruits, vegetables and forages; (ii) experimenting on legumes

striving well with residual moisture after the irrigated crop is removed, which would enhance soil

fertility, serve as a break crop for pests and as animal feed; and (iii) integrated pest management

(IPM) options to enhance quality of marketable commodities, reducing yield losses and improving

water productivity. PASIDP II will institutionalize the FRG approach by generating evidence, distil

success factors and by promoting it to sister programmes (e.g. AGP) and upcoming projects.

49. Agronomic extension support. The Programme also tackle the issues related to soil fertility

management, integrated pest management (IPM), labour-saving technologies and access to improved

seed, in common with the irrigation farmers:

a. Integrated pest management. Given the fact that only few commodities have been promoted

in irrigation schemes to date, there is a huge build-up of pests and diseases. PASIDP II will

introduce and facilitate integrated pest management (IPM) principles, which would reduce

costs but also improve environmental health. Each scheme would integrate IPM principles,

whereby clean seed, crop rotation, uprooting of infested plants, careful management of farm

implements and pesticides are used complementarily. The ratio of break crops in the

cropping pattern should be at least 20%.

b. Water efficient soils and soil fertility. One other key constraints reducing water productivity is

soil fertility decline, particularly for growing high value, perennial and vegetable crops. In

most cases, these command areas were traditionally under low input cereal based rain-fed

systems, degraded by erosion and aggravated by nutrient mining. In general, badlands are

responsive only to combined water and fertilizer applications. The returns from irrigation




60

farming (crop and livestock) would substantially increase only when there is a targeted

application of inputs, with very specific combination of nutrients. There are well established

targeting tools, which could help in improving productivity while reducing production costs.

c. Water saving agronomic practises. The Programme support adoption of strategies to help

farmers to apply water saving agronomic practices that would reduce evaporation and

maximize transpiration (e.g. minimum tillage, mulching) and use the residual moisture for

growing complementary enterprises (forages, food legumes).

d. Labour-saving technology. The Programme will promote time and energy saving, gender

responsive and nutrition-sensitive technologies and practices.

50. PASIDP II through ASAP will conduct training scheme-level events to help communities

streamline climate change adaptation strategies into their day to day farm activities. The Programme

will develop local level Climate maps and scheme level posters to create adaptive capacity of the local

communities and extension services. The scenario analysis is going to be complemented by plans

with different strategies by context for niche specific climate smart adaptation and institutional

interventions.

51. The Programme will start by inventorying best scheme and water management practices in

Ethiopia, characterise them and avail the best-bets for project planners and implementers. The

inventory will include Climate smart water management strategies and agronomic practices that would

help in systematically mapping, capturing, storing, and efficiently utilizing runoff and surface water

emerging from farms and watershed in a sustainable way for both productive purposes and

ecosystem services. Climate smart interventions will be integrated into these systems by conducting

agronomic training events, women-specific trainings, for communities, woreda experts and

development agents. These climate smart interventions would decrease unproductive water losses

(runoff, evaporation, conveyance losses, deep percolation) from the system, as well as improve the

water productivity of the respective farms and schemes to increase returns per unit of water and

labour investment51.

52. Improved seed availability. In order to help ease smallholder farmers’ access to good quality

seeds, the Programme will facilitate the establishment of alternative seed systems which will entail

commercial seed multiplication by skilled farmers as an enterprise within the irrigation areas. The

Programme will work to ensure that the Regional and Woreda experts and regional research institutes

support this endeavour. The Woreda agents will support communities adopting three channels of

seed systems, beyond the commonly established government seed nurseries, namely: (i) supporting

groups of farmers (e.g. FRGs) to produce and market quality seeds of crops that are of interest to the

local community in the respective schemes; (ii) strengthening BoA nurseries and establishing

communal nurseries in the command area of the new schemes for own use and selling to other sister

schemes on at least one ha of land, with easy access to irrigation water; and (iii) establish alternative

seed sources including through traders. The Programme will facilitate access to start-up seeds and

inputs through linkage with private sector providers. The capacity of the development agents will be

improved through targeted on-job training to support both rain-fed and irrigation farming. Training of

development agents will include facilitating collective action for adoption of climate smart

technologies, choice of marketable and climate resilient technological options, facilitating functional

seed systems and scaling-up best-bet options for enhancing water productivity and income of farms in

command areas and watersheds.

53. Nutrition-Sensitive Agriculture. The PASIDP II will focus on nutrition-sensitive agriculture.

This approach will involve strategies to improve the nutritional quality, safety and adequate

consumption of the selected foods through the following activities:

51 Amede et al. 2014. Managing Rainwater for Resilient Dryland Systems in Sub-Saharan

Africa: Review of Evidences. In: Melesse A., etal. 2014. Nile River Basin. Springer Verlag.




61

a. Water points for household consumption as additional benefits as part of the labour saving

technologies reducing women’s time burden for fetching water will be promoted, as well as

simple ferro-concrete tanks at homestead level;

b. Own-consumption pathway for nutrition. This intervention will focus on farmers as producers

and consumers of the selected commodities. It will in general promote the establishment or

improvement of home gardens as a means of enabling production of nutritionally sound

produce for own consumption. Establishment of home gardens is one of the successful

interventions undertaken by PASIDP. They are an important strategy to address household

food and nutrition security while providing additional income to women. The Programme will

undertake sensitization, awareness and capacity building activities on nutrition-sensitive

agriculture. The capacity of food and nutrition officers at the Woreda and extension officers

at the community levels will be strengthened as the vehicle for mainstreaming nutrition.

Interventions will focus on improving the nutritional quality, nutrient preservation, processing

and safety of the selected commodities. Promotion and nutritional education will facilitate

adequate utilization and dietary diversity;

c. Market pathway for nutrition. This approach will focus on influencing the food environment,

resulting in an improved access to and awareness of nutritious and diverse foods in the

market, increased market availability and demand. It will include interventions, such as

value added product development and awareness of nutrient-dense varieties of legumes

that are rich in micronutrients. Farmers will be linked with local private business enterprises

that are committed to nutrition enhancement, at the country level, under the platform of the

Scaling-Up Nutrition Business Network;

d. Community-based participatory monitoring system. The community-based nutrition

monitoring system will be established as part of the research tools that will be used for

improved characterization of the value chain. It is a system to measure changes in food

practices, food group consumption and local perceptions on food production, processing,

storage, marketing, preparation and consumption. Programme implementers will track

progress on nutritional outcomes related to dietary diversification, food and nutrition

Knowledge, Attitudes and Practice (KAP).

Subcomponent B.3: Watershed Management

54. The objective of this Subcomponent is to improve land and water management on 60,000 ha in

rain-fed areas adjacent to areas selected for irrigated agriculture, building on Ethiopia’s successful

community-based watershed management approach. The interventions would include the following:

a. Specific Assistance through Farmer Research Groups (FRGs). It is proposed that each FRG

be provided with access to a demonstration and adaptive trials intervention to promote CA.

b. Agronomic Support. In addition, these sites would also tackle the issues related to soil fertility

management, integrated pest management (IPM), labour-saving technologies and access to

improved seed, in common with the irrigation farmers.

55. To tackle the socio-economic root causes of land degradation, investments in the rain-fed areas

will be guided by a landscape approach, integrating socio-economic benefits from land and

environmental sustainability in a wider geographic zone. The interventions will lead to measurable

and valuable improvements in productivity of the land, and thereby provide improved incomes for the

users, while at the same time ensuring restoration and maintenance of environmental capacity.

Planning and execution of interventions will be done in a participatory manner, using the tested and

proven approaches to watershed management under the Community-Based Integrated Natural

Resources Management Project (CBINReMP). In areas where no landscape approach has been

adopted yet, the Programme will support the full process from the initial stages. In addition to the

activities mentioned above, interventions in these cases will include: a) training of beneficiaries and




62

government staff on watershed/rangeland management; and b) provision of tools and materials to

implement the planned interventions.

56. Experience with watershed management has shown that it is essential to combine restoration

and protection interventions with productivity and income-oriented interventions. Based on

experiences from earlier projects, such as CBINReMP, PASIDP II will support a range of the most

successful multi-benefit interventions specific to the local context such as: a) introduction of

conservation agriculture (see below), b) grazing land management through area closures and ‘social

fencing’; c) planting of fruit trees; d) participatory forest management; e) introduction of energy-saving

technologies; and, f) introduction of sustainable energy production technologies. All of these initiatives

will be supported by programme investment, in partnership with the communities which use the land,

guided by the WMTs through the Micro-Watershed Management Plans and ADPs.

57. Watershed management teams (WMTs). The Watershed Management Teams are formed

under Water sector policy and strategy and the Community Based Participation and Development

Guidelines. They are mandated to rehabilitate degraded watersheds, conserve water and soil and

mitigate climate change. This is done primarily by changing the way in which farmers use the land.

This could involve introduction of production techniques such as conservation agriculture for rainfed

cropping, and fodder production and conservation using exotic species already in local use, as well as

by constructing physical structures, such as water storage facilities, benches, terraces and planting of

appropriate plant materials such as trees, including fruit trees, and different types of grass,

Appropriate forms of watershed management/rehabilitation are essential to protect catchments for

dams and streams. It will also reduce or avoid, damage to irrigation facilities through siltation and

inundation, as well as damage to public facilities (roads, bridges) and private property (buildings, land,

crops) downstream. It can greatly reduce incidents of soil erosion and landscape degradation, while at

the same time, providing for enhanced production and income-generating opportunities in the

watersheds. There are thus private as well as public benefits from investment in improved watershed

management.

58. These would be formed from the community of farmers using the watershed areas as soon the

associated irrigation scheme has developed an acceptable feasibility plan. The programme would

provide the necessary training and mentoring for the establishment and initial operation of the WMTs.

The training, to be provided by a competent service provider with support from public officials and

institutions, would cover the following topics, as well as others to be identified during programme

implementation;

a. Formation of the WMT and appointment of office bearers;

b. Training of office bearers in leadership and determination of rules and procedures for micro-

water shed management;

c. Techniques of micro-water shed management;

d. Techniques for construction and maintenance of anti-erosion and anti-degradation

structures;

e. Biological techniques for erosion and degradation management and restoration of degraded

areas; and,

f. Enhanced rainfed agriculture and livestock management systems compatible with

sustainable catchment management.

59. Micro Watershed Management Plan (MWMP). The WMT would be engaged, with appropriate

technical support, to develop and adopt a viable MWMP) at the same time as the associated irrigation

scheme is having its detailed design process. There would be close cooperation and sharing of

information between these two planning processes, to ensure compatibility. The Programme’s specific

approaches to be employed will depend on the agro-ecological zone and the existing efforts in terms

of landscape approach in that particular area, from the SLMP or through other interventions. In areas

where community-based watershed management interventions have already been introduced,




63

PASIDP II investments will aim at supporting and enhancing that process. In such cases, the

Programme will pay specific attention to: a) integration of multiple-benefit interventions; b) improved

climate-informed planning, through mapping and capacity building; c) introducing water harvesting;

and d) specific soil and water conservation measures directly protecting the irrigation schemes.

60. Rainfed agriculture will remain the main livelihood activity in most of the watersheds adjacent

to the PASIDP II irrigation schemes. Most farmers employ rudimentary production techniques, with

manual or draught animal powered tillage, do not use improved seed or fertiliser, and apply manual

weed control. As a result, they derive very modest yields in good years and crop failures in years of

poor rainfall. Moreover, their lands suffer from high levels of run-off, soil erosion, and depletion of

organic carbon and crop nutrition. PASIDP II will conduct an assessment of good agricultural

practices in the different agro-ecological zones for rain-fed and irrigated areas to identify how to

introduce changes in land and crop management practices to build agricultural productivity and

resilience of the farming systems. These incremental investments will be based on reducing labour for

land preparation, improved timeliness of planting and weeding and improved post-harvest

management. FRGs and field days will be used to refine and evaluate these approaches. To link to

on-going activities in Ethiopia working on GIS and Earth Observation approaches to targeting,

monitoring and planning of watershed use, PASIDP II will work with the Ethiopian Soil Information

System. This will complement the planned activities on LDSF and provide PASIDP II with improved

recommendations on, for example, crop and variety choose based on predicted climate, fertiliser

recommendations and investment in degradation hot-spot areas. Further, the application of a range of

synergistic techniques, broadly known as Conservation Agriculture (CA) can lead to the virtual

elimination of water run-off and associated elimination of soil erosion, with a concurrent build-up of

soil organic carbon and beneficial soil fauna. Improved soil water availability and food security in rain-

fed zones will be a major driver for improved household resilience. The techniques employed in CA

are: (i) use of zero-tillage techniques (minimal soil disturbance, weed control through effective

herbicide such as glyphosate); (ii) maintenance of crop residue on the soil surface after harvest (no

burning, grazing or harvesting of crop residues); (iii) appropriate crop nutrition, ensuring plants have

sufficient nutrition to promote root growth to gain access to moisture deep in the soil profile; (iv) crop

rotations, to minimise pest build-up and promote improved soil fertility. The result is that there is in-situ

water harvesting without the need for physical structures. Moreover, there is a wide range of

mechanical equipment now available to suit any size of CA application, from an individual manually

based system to those where there are medium or large-scale requirements. This equipment has the

capacity to greatly enhance the personal productivity of the farmer as well as enabling application of

CA to improve productivity per unit of area.

61. The Programme will provide a range of training and support activities to enable the wide

introduction and application of this technology, within the ambit of improved watershed management.

It is proposed that a large proportion (up to 70%) of the total area of 60,000 ha of rainfed farm lands,

within watersheds adjacent to irrigation schemes, would benefit from these interventions. Component

C: Programme management, M&E, and Knowledge Management

Subcomponent C.1. Learning and Knowledge Management

62. PASIDP II will document evidence of profitable water-saving strategies and climate-smart

interventions, and facilitate knowledge exchanges between farmers to scale-up adoption of these

practices. It will exploit opportunities to produce a wider range of targeted communication products by

distilling key lessons and outputs, for example through biannually monitoring and feed-back

mechanism, exchange visits, write-shops, etc... The Programme will also ensure inter-regional

learning through exchange visits, video clips and policy dialogue. Key outputs are synthesised, easy-

to use water management guides are developed and communication products are widely

disseminated, in the field, at events, etc. The communication and knowledge sharing tools would

reach rural households with climate-smart irrigation technologies and practices; document repository

to archive reports and briefs and other outputs (including presentations, posters, video, etc.) and




64

Policy ‘briefs’ to inform decision makers. Key outputs and insights will be availed through the websites

of IFAD and Ministry of Agriculture and Natural Resources.

Box CGIAR Centres as potential service providers to PASDIP-II

The CGIAR centres, which have a strong presence in Ethiopia and have been closely working with the national system

dwell on multiple agricultural and environmental issues in Ethiopia would be major sources of knowledge and

technologies. As best service providers for providing technical assistance to the national partners implementing PASDIP

II, the CGIAR centres major engagement would be:

i. Helping to ensure quality control of technical inputs ;

ii. creating national capacity in technically complex areas of CG comparative advantage

iii. bringing in experience and expertise which might not otherwise be available to the project team and

government, with a strong preference for Ethiopian based institutions or Ethiopians if possible but who might not

otherwise be contracted by government

iv. helping facilitate peer learning with experts and site specific case studies outside the country for a select group

of project and non-project persons

v. helping in critical analysis of trends and changes in the small-scale irrigation development in the country;

including their economic viability and long-term sustainability

CGIAR

Centre

Good and Services to be

delivered in PASDIP-II

The 'How' Methods and approaches

International

Water

Management

Institute

(IWMI)

Capacitate local engineers in

estimating water budgets and

minimizing upstream and

downstream tradoffs, using

hydrological modelling and

collective actions

Using SWAT modelling, and in close collaboration with the

national institutions, the water budgets of each watershed and

scheme will be estimated, water allocation for upstream and

downstream users estimated and potential trade-offs established

and potential solutions sought.

Develop guidelines on resilient

construction standards in close

collaboration with the national

partners

Based on the SWAT analysis, climate analysis for establishing

extreme events, and considering the watershed ecosystem

health, various typologies of construction standards will be

developed and integrated into the design process.

Support and facilitate the national

systems to develop alternative

water sources (water harvesting,

shallow wells etc)

By comparing results from SWAT modelling with the planned

command areas and watersheds, the team will establish the

water deficit of each scheme across seasons. Using

participatory processes and modelling results, various water

sources will be identified and developed across the water

gradients of the landscape

International

Crops

Research

Institute for

Semiarid

Tropics

(ICRISAT)

Develop and deliver a Scheme-

based Climate analysis for

representative schemes in each

region in collaboration with

national partners

In close collaboration with the Ethiopian Metrological Authority

and the MoANR, clean the available met data, conduct statistical

programmes to fill missing data and generate a draft climate

scenario analysis using various downscaling models. Present the

climate analysis maps and figures to the local government

authorities for developing and facilitating climate smart

interventions. Present the maps to the local communities for

community action, help them to develop CC adaptation

strategies, while considering the local resources and priorities.

Inventory, characterisation

and targeting of best practices in

irrigation climate smart

agriculture, based on the climate

analysis results

Together with local universities and research institutions, conduct

a national inventory of best practices for CC adaptation from

representative location; develop typologies and introduce and/or

expand the use of these best practices at scale across schemes.

Develop guidelines and posters for each category of intervention

to be used by local actors and DA.

Conduct capacity needs

assessment for managing and

intensifying command areas and

watershed

In close collaboration with SMIS, conduct capacity needs

assessment for representative schemes in all regions, develop

easy to understand guidelines, conduct training of trainers

(ToTs), and equip the local institutions in cascading the trainings

to the scheme level actors. Mentor key local professionals in

training methods and communication.




65

Developing watershed typologies

and intensification strategies for

use by governmental and non-

governmental institutions

In close collaboration with the regional research institutes and

selected Universities, develop watershed typologies to guide

action. It will consider the climate analysis information, the local

farming system, current ecosystem health, and investments

todate in rehabilitating the watershed

Capacitate the national systems

in formation, and facilitating of

FRGs for climate adoptive

agronomic practices

After identifying potential research institutes and agricultural

universities, which are in close by towns to the schemes, conduct

training on how to organize and facilitate FRGs. Help in

identifying pressing farm and watershed issues (entry points) that

would attract attention of local communities for experimentation,

and supervise and guide the local learning process over time and

space. Avail critical inputs for the innovation process.

Using participatory processes,

identify, multiply and distribute

improved resilient crop varieties in

the watershed

Together with the selected research institutions, help

communities in each scheme to exploit market potential and high

yielding crops suitable to the specific schemes. Help in

establishing local seed systems by training and availing start-up

materials, and create scheme-level capacity in seed

multiplication, storage and seed quality control

Conduct Gender-specific training

on farm level diversification

options

In each schemes, work with the local institutions to identify farm

niches for women and integrate gender specific commodities that

would help women to improved their income and improve

household nutrition; with particular emphasis on home gardens

Organize training for

communities, woreda experts and

extension on climate smart,

irrigation agriculture

In close collaboration with SMIS, conduct capacity needs

assessment for representative schemes in all regions, develop

easy to understand guidelines, conduct training of trainers

(ToTs), and equip the local institutions in cascading the trainings

to the scheme level actors. Mentor key local professionals in

training methods and communication.

Facilitate knowledge exchange

between regions in watershed

and climate smart agriculture

The team will enable the national system to capture, synthesize

and share key lessons as they emerge in the form of briefs,

guidelines, posters, reports, clips and other communication

materials as they emerge. Produce quality policy briefs,

synthesized from various progress schemes and share them with

policy makers for influence and action.

World

Agroforestry

Centre

(ICRAF)

LDSF Assessment The land degradation surveillance framework is built around a

hierarchical field survey and sampling protocol using sites that

are 100 km2 (10 x 10 km) in the planned schemes. Within each

site, 16 tiles are created and random centroid locations for

clusters within each tile are generated. Each cluster consists of

10 plots, with randomized centre-point locations falling within a 1

km2 area. It has a strong analytical framework built into it for

modelling and mapping of a range of indicators of ecosystem

health.




66

Appendix 5: Institutional Aspects and Implementation Arrangements

A. Approach

1. PASIDPII implementation will involve various government institutions and partners, including

private sector entities that will play different roles at various levels for effective delivery of Programme

benefits to the intended beneficiaries. Implementation of the Programme will be governed by four

main principles: a) alignment with the Federal Government of Ethiopia (GOE) systems and

procedures, especially those governing public expenditure management and procurement, and

integration of Programme implementation into relevant institutions in decentralized government

structure; b) greater empowerment of beneficiaries to take a leading role through their grassroots

institutions in Programme implementation; c) cooperation with the private agricultural service

providers and various players in the priority agricultural commodity value chains; and, d) stronger

partnerships and harmonization with the Government’s development partners and other stakeholders

in the sector. The implementation arrangement for each Programme component will be provided in

the detailed Programme Implementation Manual (PIM).

2. PASIDP has successfully developed effective implementation arrangements, from federal level

down to Kebele level, and created a mode of operation that has streamlined planning, financial

management, procurement, monitoring and reporting systems that can effectively support PASIDP II

implementation. The institutional arrangement for oversight, management and coordination of PASIP

II implementation will be built on the existing arrangement established under the PASIDP, with some

adjustments to reflect new dimensions and scope of the new phase, strengthen the capacity of

Programme Implementing Agencies and build vertical and horizontal institutional linkages. This will

allow continuation of efforts and bring to PASIDP II the lessons, achievements and experiences of the

first phase; enhance sustainability and cumulative impacts of the Programme. The Programme

institutional arrangement for coordination will be undertaken in four levels, in accordance with the

Government's decentralized structure − Federal, Regional, l offices and Woreda.

B. Overall Responsibility and Orientation

3. Federal Government – The Ministry of Agriculture and Natural Resources (MoANR) will

assume the responsibility of overall execution of PASIDP II, under the leadership of the State Minister

of Natural Resources and technical support from the directorate of Small Scale Irrigation (SSI). The

MoANR will oversee Programme implementation; ensure that the Programme is aligned with sector

priorities and complements the Programmes/Projects and initiatives of the other development partners

supporting the sector.

4. The National Programme Steering Committee (NPSC) chaired by the State Minister of

Natural Resources will provide overall policy and strategic guidance on Programme focus,

priorities and institutional strengthening. The aim is to: a) ensure that the Programme is moving in the

right direction towards achievement of its development objective; b) contribute to the higher level

sector policy and strategic goals, under GTP2; and c) is implemented in harmonization and alignment

with other Programmes and initiatives in the sector. The committee membership will include few state

ministers from the relevant ministries, such as Ministry of Water Resource Management (MoWRM),

Ministry of Marketing and Trade (MoMT), Ministry of Environment and Forestry (MoEF), etc. It will also

include executives of the relevant institutions, such as the Federal Cooperative Agency (FCA),

Ethiopian Agricultural Research Institute (EARI),) and others as deemed necessary and in alignment

with the strategic focus and approach of the Programme. In order to enhance efficiency, the Federal

Programme Management Unit (describe below) with support of experts drawn from relevant

directorates and institutions will serve as the technical arm of the NPSC. The technical team will

review in detail technical documents, such as physical progress and financial reports, work plans and

budget, procurement plans, technical studies and evaluation reports and distil issues that need




67

attention, decisions and/or guidance from the NPSC. The frequency of the NPSC meetings will be

aligned with Government budget cycle and other critical Programme specific approval requirements.

C. Programme Coordination and Management

Federal level

5. The Federal Programme Coordination Management Unit (FPCMU) established during the

first phase of the Programme will continue to provide day to day management and supervision of the

Programme, under the leadership of a national Programme coordinator and reporting to the State

Minister of Natural Resources. The skill mix of the FPCMU will be strengthened in areas of value

chain and marketing, natural resources management, procurement, rural finance and M&E. The

FPCMU will be responsible for: a) support delivery of Programme to beneficiaries by managing and

coordinating technical backstopping, capacity building activities, flow of information and tracking

Programme results, harmonize implementation approaches, assist regions on procurement of large

goods, works and services, and link the regions with federal level institutions; b) manage

disbursement of funds to Programme implementing agencies; c) strengthen the national level

partnerships and build synergies with other development partners in the sector to ensure that PASIDP

II interventions complement and does not duplicate interventions of other development partners,

especially those supported by the AGP 2 and SLMP 2; d) establish and coordinate a National

Learning Forum (NLF) to facilitate inter-regional experience sharing, and interactions with other

stakeholders, including other IFAD financed Programmes and projects financed by other donors,

relevant development partners and other actors, such as input suppliers and output traders; e) play

an important role in backstopping and guiding the regions and other Programme implementation

entities to ensure that the Programme is implemented in accordance with agreed approach and

processes for delivering each of the Programme components, and provide timely technical advice

necessary to facilitate implementation and achievement of intended results; f) ensure quality of

Programme implementation through regular implementation reviews and follow-up on key processes,

especially during the first twelve months of the Programme implementation; g) review and

consolidate the draft progress reports, AWPBs from the different implementing agencies and other

technical documents, with support of subject matter technical experts, prior to submission to the

NPSC for guidance, decision and approval. The FPCMU will also organize and coordinate analytical

work and studies, such as value chain/market analysis to inform priority setting and guidance; conduct

Programme mid-term review, impact assessments and Programme completion evaluation.

Regional level

6. In all regions the Programme will be executed by the respective Bureaux of Agriculture. The

Heads of the Regional Bureaux of Agriculture will provide overall leadership for implementation of

PASIDP II. They will ensure that the Programme is implemented in accordance with the agreed

regional priorities, and in alignment with federal strategic agricultural development goals. The

Regional Programme Coordination and Management Unit (RPCMU) under PASIDP will be

strengthened to ensure that the regions have adequate capacity to implement the Programme in

accordance with the overall strategic priorities and contribute to achievement of the Programme

objectives, through the following organizational mechanisms.

7. Regional Programme Steering Committees (RPSCs), chaired by the heads of Regional

Bureaux of Agriculture and Natural Resources will provide policy and strategic guidance in planning,

prioritization and implementation of Programme investments. This will be done in accordance with the

Government vision and medium term goals for agriculture development in the region, and overall

Programme approach and implementation strategy. It will approve the annual work plans and budgets

and key Programme documents, such as implementation progress, financial and audit reports. The

RPSC is expected to provide guidance in the process of selecting priority commodity value chains in

the Programme target areas in a more focused manner, so as to see tangible results in productivity,

ability to access markets and increase income of Programme beneficiaries. The RPSC will be

strengthened to include heads of relevant Bureaux and institutions, such as market and trade,




68

cooperative agency, environment protection, land use management and Agricultural Research

Institutes.

8. Regional Thematic Team (RTT) will be established to provide technical support to the RPSC.

Members of the team will be drawn from the relevant technical bureaus and institutions. The role of

the RTT will be to review Programme documents, including physical and financial progress reports,

procurement documents, Annual Work Plans Budgets, and synthesize issues or areas that need

decision and guidance of the RPSC.

9. Regional Programme Coordination and Management Units (RPCMU) – The RPCMU, led

by a regional coordinator, will assume the primary responsibility of the day to day management of

PASIDP II in all Programme regions. They will provide both managerial and technical leadership in

implementation of the Programme in their respective regions. The RPCMUs will ensure that the

Programme is efficiently and effectively delivered in accordance with the agreed planning and

prioritization approaches/guidelines and regional priorities/value chains; approved work plans and

budgets and ensure that interventions are technically and economically sound and sustainable to

deliver the intended results and impacts. The RPCMU will perform the following functions: a)

undertake regular supervision visits to review quality of supported investments and services, provide

technical advice and support required to address implementation challenges; b) review and

consolidate, AWPB, physical and financial progress reports from zonal offices and submit to FPCMU;

d) facilitate flow of funds to Programme implementing agencies; e) organize annual Regional

implementation Review Meetings (RRMs) for all Programme implementing entities, relevant

development partners, such as AGP 2 and SLMP 2, and other stakeholders and value chain partners;

f) serve as secretariat to the RPSC, and convene the RTT as needed. Due to variations in regional

organizational and operational structures and priorities, a differentiated mix of experts in the RPCMU

will be adopted. The core RPMU experts will include M&E specialist, Financial

Management/procurement Officer, market/value chain specialist irrigation engineer, agronomist, and

water and natural resources management officer.

10. Woreda Technical Teams – The success of the PASIDP II will to a large extent depend on the

capacity of the Woreda to manage, coordinate and facilitate the delivery of the Programme on the

ground. The implementation of PASIDP II on the ground will involve technical staff in Woreda

agricultural offices, grassroots institutions/organization, such as Irrigation Water User Associations

(IWUAs), Watershed Management Teams (WMTs), primary cooperatives societies, producer

organizations, credit and saving groups, farmer groups, and various actors in priority values chains.

Based on experiences from PASIDP, it is proposed to have a PASIDP II designated Woreda

coordinator. The core skill mix will include irrigation engineer, value chain/market officer, agronomist,

natural resource management and M&E officer. The team will be led by a Woreda Programme

Coordinator (WPC). The WTT will be responsible for providing technical on-site support in

implementation of Programme interventions in target Kebeles to ensure that the Programme is

implemented appropriately and in a coherent manner. The WTT will: a) facilitate their respective

Kebeles in identification of priority interventions in accordance with agreed regional priorities and

overall Programme approach and strategy for planning and prioritization of interventions; b) prepare

Woreda AWPBs and submit to zonal coordination offices; c) supervision of Programme activities and

technical backstopping; d) preparation of monthly and quarterly reports and submission to zonal

coordination office; e) develop capacity of farmers’ organizations at grassroots level, such as IWUAs

and cooperative societies, to enhance their technical capacity and management skills, f) convene

annual Woreda implementation Review Meetings (WRM), that will bring together implementing

agencies from all Kebeles, value chain partners and other donor financed projects to reflect on

Programme implementation progress, learn and share best practices/innovations, discuss

implementation issues and challenges, and build partnerships. The capacity of Woreda will be

strengthened based on capacity needs assessment.

11. Kebele Focal Persons (KFPs) – Based on lessons from the first phase, the roles and capacity

of Kebele-based Development Agents (DAs) will be strengthened to enhance Programme delivery




69

efficiency. The KFPs will consist of 2-3 full time DAs drawn from Government staff, who will serve as

an extended arm of the WTTs, linking Kebeles to Woredas. The KFPs will be the frontline

implementation Programme delivery agent who will provide day to day Programme implementation

support and guidance. They will provide support in determining priority market driven interventions

through local participatory planning processes with a focus on market, but inclusive for the food

insecure and vulnerable/poorest groups. They will also coordinate delivery of technical support to

beneficiaries and other local based implementing partners. Specifically, the KFPs will: a) provide

direct technical support, services and guidance to beneficiaries, including grassroots institutions,

such as IWUA and Watershed Management Teams; b) facilitate partnerships and collaboration with

various development partners and other donor funded Programmes at Kebele level, to ensure

adequate collaboration and harmonization of PASIDP II activities with the other relevant

Programmes/Projects; c) mobilize and organize beneficiaries for interventions that requires collective

actions, such as watershed management, in collaboration with community associations; d) play key

roles in training, facilitating and supporting farmer group formation, farmer networking and assisting

groups and farmer organizations to access services and support they need; e) facilitate access to and

dissemination of innovations through Farmer Training Centres and other local avenues; f)

collaborate with research institutes in conducting on-farm trials and demonstrations of good

agricultural practices in Programme sites; g) liaise with Woredas to ensure availability of extension

materials for interventions/innovations relevant to PASIDP II beneficiaries, such conservation farming,

climate smart interventions and agronomic practices, etc.; h) lead participatory planning and priority

setting process, prepare Kebele annual work plans and budgets and send to Woreda for aggregation;

and i) prepare monthly implementation progress reports and submit to Woreda for review and

necessary actions.

12. Technical assistance by ATA. PASIDP II introduces new initiatives to deepen and enrich

achievements under PASIDP I. These new initiatives are intended to promote agricultural

transformation through sustainable development of small scale irrigation both in terms of conserving

and efficient use of natural resources as well as promoting sustainable systems for developing

irrigation value chains. ATA, upon request of MoANR will provide technical and analytical support to

operationalize PASIDP II interventions, and coordinate multiple stakeholders as necessary. ATA will

also bring on board and oversee specialized services providers and develop/roll out an action plan for

south-south cooperation to build capacity in innovative areas, including the setting-up of market

access alliances, the mainstreaming of climate-change innovations, and access to rural finance.




70

Terms of Reference for the Climate Change Adaptation Specialist

Program Objectives

IFAD and the Ethiopian Government have jointly developed a participatory small scale program that is intending

to reduce vulnerabilities of rural communities and increasing agricultural productivity in Ethiopia. The main

innovations in the design of PASIDP II are: (i) mainstreaming of participatory planning and selection of schemes

in order to ensure long-term sustainability; (ii) developing agri-business linkages and market access in order to

mitigate marketing risks that were perceived by farmers, in particular for perishable high-value crops; (iii)

integration of climate change adaptation strategies, including adjacent watershed improvement and

management, building on the successful experiences with the Community Based Integrated Natural Resource

Management Project (CBINReMP); (iv) promotion of improved crop husbandry and access to inputs as well as

improved access to financial services, so as to achieve the targeted yields and to improve water productivity of

farms and schemes; (v) an enhanced focus on gender and youth mainstreaming; (vi) mainstreaming nutrition-

sensitive agriculture; and (vii) aligning to IFAD’s Social, Environmental and Climate Change Assessment

Procedures (SECAP) and its international engagements with respect to climate change resilience.

PASIDP II ensures that communities will move to climate resilience agriculture, which would enable them to

continue invest in managing their schemes and their farm through participatory scheme development, local

capacity building and a differentiated scheme management. The programme will enable farmers to learn new

skills, shift to more intensive, climate-smart, high value crops and livestock products that will satisfy market

requirements and enhance productivity of more food, feed and income per unit of water. PASIDP II also

anticipates beneficiaries to have a spill-over effect on the neighbouring communities, including non-irrigators, and

positively influence the whole production system

Tasks

An experienced climate change adaptation specialist will be recruited for three years, with a possibility of

extension during the period of September 1, 2016 to August 30, 2019 to facilitate the adaptation capacity and

improved implementation of PASIDP II by the Bureau of Agriculture and Rural Development of regional

governments in Ethiopia, taking into account the overall objectives of the program (see the attachment for

details).

Approach: Working with National, Regional and Woreda coordination units, the staff will:

1. Work with multi-disciplinary team of irrigation engineers, social scientists and other experts to support Climate resilient small scale irrigation which would bring increased benefits to farmers. Work in close collaboration with the regional PCU in facilitating integrated irrigation development and mainstreaming climate change adaptation strategies into PASIDP II and beyond;

2. Back stop national, regional and woreda experts in compiling adaptation strategies on crop and livestock yield, natural resource management and household benefits;

3. Develop and strengthen partnership between the various bureaus and regional agricultural research institutions so that expertise and technologies from the various institutions reach farmers’ fields and schemes;

4. Organize training events, cross-site and cross-regional visits, and expert meetings on various technical and institutional climate adaptation strategies,;

5. Assess the policy and regulatory framework at the Regional level (and Federal, if needed) on climate change adaptation strategies, particularly from the perspective of watershed management, irrigation agriculture and collective action.

6. Review incentives being used in natural resource management (NRM) programs and/or projects with water management components such as the Food Security Project and the Productive Safety Net project in Ethiopia and make specific recommendations on specific incentives that will generate and sustain community interest in participatory watershed management programs.

7. Review the proposed schemes areas in each Region, and develop a watershed planning and management regime using MoARD’s Community Based Participatory Watershed Development Guidelines as the starting point for the site-level design.

8. Design and implementation methodology/process for implementation of the demonstration projects with a view to:

a. Demonstrating best practice in improved scheme management on a micro-watershed basis b. Facilitating FRGs and other adaptive experimentation of different practices to test and/or adapt

the practices to local conditions




71

c. Undertake evaluations of each practice in terms of its social acceptability, profitability, and environmental acceptability

d. The methodology should allow for the identification of key knowledge gaps in necessary to facilitate adoption and replication within each Region/demonstration site and define research or other programs to address those knowledge gaps.

9. Develop an environmental management framework to guide local community groups, woreda, research institutions, etc to pre-screen best management practices, technologies, and livelihoods for potential environmental impacts and to guide the development mitigation measures, where necessary.

10. Assess the capacities of the implementing agencies (Bureaus, Woredas, Kebeles, community Organizations) for each of schemes, and recommend required capacity enhancement programs. Recommend a possible sequencing or phasing in of the FRGs and other demonstration sites. This might reflect both technical and administrative (local capacity) considerations.

11. Assess the capability and facilitate action of regional government research institutions to partner within local actors to support FRGs in each Region.

12. With the MoARD, identify key knowledge gaps in the information on irrigation and SLM within each Region/demonstration site and define targeted research or other programs to address those knowledge gaps.

13. Design an outreach program for local (regional/agro-ecological zone) dissemination of demonstrated best practices. Distil key lessons across schemes and regions, compile and publish reports on agricultural success factors and institutional learning;

14. Support the national coordinator in communications and compilation of knowledge; facilitating workshops and reaching experts engaged in SSI in the regions

We are seeking candidates with the following qualifications, skills and interests:

1) PhD or MSc in environmental sciences, Agronomy, soil science, natural resources management or related fields; with at least three years of experience in climate smart interventions;

2) Considerable practical agricultural experience, including experience on on-farm experimentation and working with farmers;

3) Experience with adapting agricultural practices to local biophysical and socio-economic conditions; 4) Record of compiling, publishing and sharing knowledge; 5) Ability to work with people at various skills and institutions; 6) Willingness to stay a considerable time away from home; 7) Commitment to improve irrigation agriculture, system productivity and address rural poverty

The position invites an attractive salary aligned with IFAD-supported projects in Ethiopia.




72

Terms of Reference for the Audit of the Participatory Small scale Irrigation Development Programme

(PASIDP) II Loan Number ......./Grant Number for the year .......

1.0 BACKGROUND

The Government of the Federal Democratic Republic of Ethiopia is in the process of appointing External Auditors

for the audit of the Participatory Small scale Irrigation Development Programme (PASIDIP) II. The following

are the terms of reference (‘ToR’) on which the Ministry of Agriculture and Natural Resources (MoANR)

agrees to engage audit firm ‘the Auditor’ to perform an Audit and to report in connection with the Financing

agreement with the International Fund for Agricultural Development (IFAD) concerning PASIDIP II. These ToR,

therefore, have been developed to guide the process of appointing the auditors, and guide the selected auditors

to conduct an audit of the PASIDIP II Financial Statements.

2.0 OBJECTIVE OF THE AUDIT

The objective of the audit is to provide the MoANR with an appropriate level of assurance about the proper use of

the funds provided to the PASIDIP II according to the provisions of the Financing agreement.

3.0 NATURE AND SCOPE OF AUDIT

(i) The audit will be carried out in accordance with the International Standards on Auditing (ISAs) and the International Public Sector Accounting Standards (IPSAS) and will include such tests and reviews as the Auditor considers necessary under the circumstances with a view to obtaining relevant and reliable evidence on which to base the audit opinions;

(ii) In compliance with the Code of Ethics for Professional Accountants issued by the IFAC. Although ISRS 4400 provides that independence is not a requirement for agreed-upon procedures engagements, the Contracting Authority requires that the auditor also complies with the independence requirements of the Code of Ethics for Professional Accountants.

(iii) In accordance with International Standards on Auditing and in line with IFAD’s Guidelines for Programme Audits.

Special attention will be paid to establishing whether:

(i) The Programme Financial statements and accounts have been prepared in accordance with IPSAS or other applicable standards and give a true and fair view of the financial position of the Programme at the end of the fiscal year;

(ii) The proceeds of the loan have been used in accordance with conditions stipulated in the Financing agreement with due attention to economy, efficiency, and solely for the purposes for which the financing was provided;

(iii) Government contribution in cash and through foregone duties and taxes and other services has been accounted for in the Financial Statements;

(iv) Beneficiary contributions as provided for in the programme design document and financing agreement have been adequately captured in the Financial Statements

(v) Goods, Consultancy Services, and Civil Works financed out of the proceeds of the grant have been procured in accordance with stipulations in the Financing agreement and Government of the Federal Democratic Republic of Ethiopia financial and procurement regulations and procedures;

(vi) All necessary supporting documents, records and accounts have been kept in respect of all programme financial transactions including expenditures reported in Statements of Expenditures and the Designated Account;

(vii) The Designated Account has been used in accordance with the provisions of the Financing agreement.

4.0 RESPONSIBILITIES OF THE PARTIES TO THE ENGAGEMENT

MoANR, the Borrower’s Lead Implementing Agency (LPA).

a) The Federal Programme Coordination and Management Unit (FPCMU)/MoANR is responsible for providing consolidated Financial Statements for the services financed by the loan and for ensuring that these Financial Statements can be properly reconciled to the FPCMU/MoANR records and accounts (including all Programme Regional Bureaus and implementing partners) in respect of these services.

b) The FPCMU/MoANR accepts that the ability of the Auditor to perform the procedures required by this engagement effectively depends upon the FPCMU/MoANR, Regional Bureaus and implementing partners providing full and free access to its staff and records and accounts.

c) The FPCMU/MoANR shall provide the auditors with all the necessary documentation to perform the assignment properly; in particular the following information shall be provided to the auditors before the beginning of the assignment:

i. The Financing agreement;




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ii. Annual Progress Report; iii. Programme Implementation Manual; iv. Financial Management Manual; v. Organizational charts along with names and titles of senior managers; vi. Names and qualifications of officers responsible for financial management, accounting and

internal audit. vii. Description of information technology facilities and computer systems in use and viii. Copies of the minutes of negotiations, the Programme design document, the annual work

programme and budget and the Letter to the Borrower.

‘The Auditor’ refers to the Auditor who is responsible for performing the agreed-upon procedures as specified in

these ToR, and for submitting a report of factual findings to the FPCMU/MoANR.

The Auditor shall provide:

A. A separate opinion on Programme Financial Statements (PFS)

(i) The auditor will be required to provide an opinion on the financial statements of the programme, and that of

the adequacy and performance of the financial, accounting and internal control systems that are put in

place, in the programme financial management and operations. Therefore, the expressed opinion must

cover funds received into the programme, the expenditures incurred, and the financial position as at the end

of the relevant accounting period. The underlying disbursement procedures together with the rules and

regulations governing disbursement, and the extent to which they are complied with must be determined

and opinion expressed.

(ii) The expressed opinion must also cover the confirmation of the legitimacy of the expenditure claims made

by the programme management through Withdrawal Applications, and that they are in accordance with the

covenants of the Financing Agreement. Where ineligible expenditures are identified as having been

included in Withdrawal Applications and reimbursed, the Auditor will note these separately.

(iii) Minimum content of the PFS:

a) Yearly and cumulative statements of sources and application of funds, which should disclose separately IFAD’s funds, Co-financiers’ funds, Government of Ethiopia funds and beneficiaries funds;

b) Statement of sources and application of funds by category of expenditure; c) Statement of sources and application of funds by component; d) Yearly and cumulative SOEs by withdrawal application and category of expenditures; reconciliation

of the Designated Account; e) Reconciliation between the amounts shown as received by the Programme and those shown as

being disbursed by IFAD should be attached as an annex to the PFS. As part of that reconciliation the auditor will indicate the procedure used for disbursement (replenishment to the designated account, reimbursement or direct payment) and indicate whether the expenditure is fully documented or uses the Summary of Expenditures format;

f) Notes accompanying the Financial statements; g) Cumulative status of funds by category and by component; h) A statement of comparison between the actual expenditures and the budget estimates for the fiscal

year; i) Full disclosure of cash and bank balances; and j) Other statements or disclosures relevant to the Programme .e.g. financial monitoring reports,

statement of fixed assets (for disclosure purposes). B. A separate opinion on the use of the Designated Account; The auditor is also required to audit the

activities of the Designated Account associated with the Programme including the authorised allocation, replenishments, interest that may accrue on the outstanding balances, and the year-end balances. The auditor must form an opinion as to the degree of compliance with IFAD procedures and the balance of the Designated Account at year end. The audit should examine:

a) the eligibility of withdrawals from the Designated Account during the period under review; b) the operation of the Designated Account in accordance with the relevant financing agreement; c) the adequacy of internal controls within the Programme appropriate for this disbursement

mechanism; and d) the use of correct exchange rate(s) in conversion of other currencies other than the reporting

currency (where applicable). C. A separate opinion on Withdrawal Application Statement / Statement of expenditures / Summary of

Expenditures (SOEs); The audit will include a review of SOEs used as the basis for submitting withdrawal

applications. The auditor will carry out tests and reviews as necessary and relevant to the circumstances. SOE expenditures will be carefully compared for eligibility with relevant financial agreements, Letter to the Borrower and with reference to the Programme appraisal report for guidance when necessary. Where




74

ineligible expenditures are identified as having been included in withdrawal applications and reimbursed, auditors will note these separately. A schedule listing individual SOEs withdrawal applications by reference number and amount should be attached to the PFS. The total withdrawals under the SOE procedure should be part of the overall reconciliation of IFAD disbursements described above. The auditor’s opinion should deal with the adequacy of the procedures used by the Programme for preparing SOEs and should include a statement that amounts withdrawn from the Programme account on the basis of such SOEs were used for the purposes intended under the Financing agreement.

D. A separate management letter addressing the adequacy of the accounting and internal control systems of the Programme, including compliance with IFAD’s Procurement Guidelines and such other matters as IFAD may notify the FPCMU/MoANR to include in the audit.

The auditor is requested to:

a) Comment on economy, efficiency and effectiveness in the use of Programme resources; b) Comment on achievement of planned Programme results; c) Comment on legal and financial obligations and commitments of the Programme and the extent of

compliance or non-compliance thereof; d) Comment on systems and procedures such as improvements in accounting, information technology

or computer systems, and operations that may be under development, on which the auditor’s comments are necessary to ensure effective controls; and

e) Comment on other activities on which an auditor may consider it appropriate to report E. Auditors shall certify :

a) Whether the PFS are drawn up in conformity with international accepted accounting standards (IFRS or IPSAS) in accordance with the National Proclamation of moving to international financial reporting standards;

b) Whether the PFS are accurate and are drawn up from the books of accounts maintained by the Programme;

c) Whether the provisions of the Financing agreement are adhered to; d) Whether Procurement has been undertaken by the Programme in accordance with the Financing

agreement and IFAD Procurement Guidelines; e) Carry out a physical verification of any significant assets purchased and confirm their existence and

use for Programme purposes; f) Whether the Programme has an effective system of financial supervision or internal audit at all

levels; and g) Whether the expenditure claimed through SOEs are properly approved, classified and supported by

adequate documentation.

5.0 OUTPUTS OF THE AUDIT

The expected outputs of the audit assignment comprise the following:

(i) Audit Plan: The Auditor will be expected to reproduce an Audit Plan within one (1) week of receipt of

Programme Financial Statements. It is expected that the Programme Finance Manager will prepare, and submit to the Auditor, Programme Financial Statements on a timely basis.

(ii) Audit report: This report should contain the overall opinion that the Programme Financial Statements

and accounts have been prepared in accordance with International Financial Reporting Standards/IPSAS or other applicable standards covering the minimum content indicated in 4.0 above.

(iii) Management Letter: The Management Letter (Report).

6.0 TIME FRAME FOR DELIVERY OF AUDIT REPORT AND MANAGEMENT LETTER

The Auditor is expected to submit the final Audit Report and Management Letter to MoANR by the last

working day of December of each fiscal year of engagement to facilitate submission of the same to IFAD

in accordance with the provisions of the financing agreement.




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Details and Terms of Reference for the position of the Programme Finance Manager

Job Purpose: The Programme Finance Manager will be required to design and implement the necessary

accounting and financial management systems to address the programme’s needs in responding to the

objectives. The systems to be designed, should focus on but should not be limited to budgeting, accounting,

internal control, reporting and external auditing.

Key responsibilities:

1. Develop, implement, modify, and document record-keeping and accounting systems, making use of the accounting software implement the accounting software;

2. Prepare, examine, and analyze accounting records; 3. Perform or ensure regular reconciliations are prepared for relevant account balances for review and

endorsement by the programme coordinator; 4. Prepare examine, and analyze monthly, quarterly (Quarterly Interim Financial Reports) and annual financial

reports; 5. Analyze operations, trends, costs, incomes, financial commitments, and obligations, so as to prepare

Programmeions and provide advice to the National Programme Coordinator accordingly; 6. Develop, maintain, and analyze budgets comparing budgeted costs to actual costs on periodic basis; 7. Prepare or update existing forms and manuals for accounting and bookkeeping personnel, and direct their

work activities; 8. Ensure and maintain a proper filing system for Programme accounting records; 9. Ensure compliance with relevant financial procedures, guidelines and standards; 10. Initiate or conduct inventories and other relevant controls on assets; 11. Supervise the work of the Programme’s Accountants or any other accounting staff assigned to the

Programme;1 12. Compile and consolidate SOEs for the FPCMU, implementing partners and Regional Bureaus for approval; 13. Liaising with the Accountants and Procurement officers at FPCMU and Programme Regions to ensure that

SOEs are prepared in a timely manner and forwarded to FPCMU for consolidation and preparation of withdrawal applications;

14. Survey operations to ascertain accounting needs and to recommend, develop, and provide solutions to financial problems;

15. Advise Programme management about issues such as resource utilization and other matters pertaining to financial management;

16. Prepare the Programme for external audits within the stipulated time-frames; 17. Help build PASIDP II’s capacity in accounting and financial management.

Reporting.

The Programme Finance Manager shall be a full time member of the Programme coordination and management

team and shall report to the National Programme Coordinator but work hand in hand with MoANR Director of

Finance.

Qualification and Experience:

a) A Bachelor’s Degree in Accounting from a recognized university; b) Additional professional qualification such as CPA, ACCA, etc are a requirement; c) Must possess at least 7 years of experience in accounting and financial management of which at least

5 years must be working experience with donor-funded Programmes/projects; d) Must be computer literate with demonstrable proficiency in Microsoft Word and Excel and any other

relevant application; e) Must have excellent writing, presentation and interpersonal skills, excellent analytical skills and ability

to effectively communicate with a broad range of audiences




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PROGRAMME PROCUREMENT OFFICER TERMS OF REFERENCE 1. Job Purpose

To ensure that all procurements under the PASIDP II are carried out in line with IFAD Procurement guidelines, PASIDP II Financing Agreement and Government of the Federal Democratic Republic of Ethiopia legal framework and procurement systems; are delivered on time, to the required specifications; and are consistent with the overall Programme budgets, Procurement Plans and objectives. 2. Key responsibilities

a) In consultation with the Programme Coordinator, coordinate the preparation and consolidation of the Programme Procurement Plans and periodically update the plans based on the IFAD guidelines and ensure IFAD’s approval of the same;

b) In cases of procurement actions requiring IFAD’s clearance and ‘no objection’, review any procurement related documents for compliance with financing agreement, PDR or the procurement plan, whichever is appropriate; coordinate the dispatch and delivery of the documents to IFAD for review and closely follow up for timely responses;

c) Assist in the preparation of specifications and bills of quantities for procurement of goods and works and preparation of terms of reference for selection of consultants;

d) In consultation with the Project Coordinator and stakeholders prepare bidding documents, requests for proposal documents based on Standard Bid Documents (SBD) for the IFAD’s review and clearance;

e) Prepare Specific Procurement Notices (SPN); Expression of Interests (EoI), Request for Quotations/shopping, ensure timely publications, collection of bids/RFP/RFQ and prepare relevant paper work for receipt of bids/proposal;

f) Coordinate the Evaluation Committees’ meetings, provide guidance and assist in the preparation of evaluation reports following the IFAD’s standard evaluation guidelines and ensure internal approval of procurement evaluation reports and decisions prior to submission of the evaluation reports to IFAD for review;

g) Follow up procurement related correspondences and document submissions, facilitate timely analysis and responses to request for clarifications, complaints and issues raised in the procurement contract implementation with clients and IFAD for speedily actions;

h) Ensure safekeeping and handling of bid securities, performance securities and advance payment guarantees to ensure the validity, timely extensions and timely releases;

i) Provide support in preparation of the final contracts and ensure timely distribution of copies of contract agreements to relevant stakeholders including IFAD;

j) Ensure timely and proper arrival of goods and other deliverables, receipt of payment invoices, goods receiving reports and reconcile financial and technical proposals/offers against final invoices for the action of the Finance Manager;

k) Take immediate action for short landed and missing items and follow up for claim settlements and report to the Project Coordinator;

l) Maintain proper records of all procurement documentation and develop a monitoring and reporting system in line with the IFAD's progress reporting requirements;

m) Prepare periodic status reports (monthly, quarterly and annual) on procurement implementation under the programme and keep stakeholders and IFAD informed of procurement status;

n) Support Regions and other stakeholders in procurement capacity building and other related activities; 3. Reporting.

The procurement Officer will be housed in the Directorate of Procurement and Property Administration. She/he will report to the Programme Coordinator as the general supervisor and technically to the Director, Procurement and Property Administration. . 4. Qualifications

a) A Bachelor’s degree in either purchasing and supply management; Economics; Finance, Business Administration or any other relevant field;

b) A post graduate diploma from the Chartered Institute of Purchasing and Supply (CIPS) or equivalent 5 years’ experience in procurement practise of which 3 years should be in project procurement;

c) Minimum of 2 years working experience in bilateral or multilateral donor funded programmes with specific responsibilities in procurement of goods, works and services will be an added advantage;

d) Familiarity with national procurement systems will be an essential requirement; e) Computer literate with demonstrable proficiency in Microsoft Word, Excel, Project and Access, or

equivalent; f) Excellent writing, presentation and interpersonal skills; and g) Excellent analytical skills and ability to effectively communicate with procurement stakeholders.




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Appendix 6: Planning, M&E and Learning and Knowledge Management

A. Planning

1. Annual work planning and budgeting (AWPB) development. The FPCMU will draft the

annual work planning and budgeting (AWPB) involving each level of Programme participants, starting

with the primary stakeholders at the scheme and micro-watershed level. These will identify the

activities according to their needs and priorities through a participatory planning process. The

Woreda, in collaboration with the Zonal office, will prepare the AWPBs and submitted to the

respective Regions where they will be reviewed and consolidated by RPCMUs to produce Regional

AWPBs. The Regional AWPBs will be reviewed and approved by the respective RPSCs before being

submitted to the FPCMU. The FPCMU will review and consolidate the Regional AWPBs based on the

Programme’s overall operational and financial targets in particular will define programme activities,

outputs and results; review and adjust approaches based on implementation experience; and set

realistic targets each year. The FPCMU will then produce to the Programme-wide AWPB for a given

year which would be submitted to the Federal Project Steering Committee (FPSC) for review and

approval. Finally, the AWPB would be submitted to IFAD, at least 60 days before the commencement

of the proceeding programme year, for its review and expression of ‘No Objection’. The annual

planning and implementation cycle will be aligned with GOE’s planning cycle. The fiscal year goes

from July to June while budget preparation extends from January to May.

2. Annual reviews and planning. Starting with the preparation of the AWPB for Programme

Year 2, there will be a process to review the previous year’s performance, generate lessons learned

and incorporate the experience in the proceeding year’s AWPB. It should analyse and summarize the

previous year performances and challenges, highlighting the rationale and recommendations for the

proposed activities. In addition, it will reflect and document the planning system including the local

level planning and the approval processes. In summary, the AWPB would present the Programme

background, past experience and results (the basis for future plans), the following Programme year’s

plan in summary, what it will cost (the financial summary including a Procurement Plan) and then

details of planned activities. An annotated outline of the AWPB will be provided in the Programme

Implementation Manual. It will also include a plan for staff capacity development and training,

whenever warranted.

B. Monitoring and Evaluation (M&E)

Purpose and Scope

3. PASIDP II’s M&E system will be guided by the Programme’s Theory of Change (TOC)52 and

the Logical Framework (Logframe) to ensure the efficacy of the programme in delivering results and

the systematic dissemination and use of relevant information to generate lessons learned. In line with

the overall Programme result based management approach, the system will collect appropriate and

timely information to track programme progress towards outputs, outcomes, impact and sustainability.

4. The system will generate, aggregate and systematically record formal data, both qualitative

and quantitative, from various levels (Regions, Woredas, Kebeles and schemes and micro-watershed

level) and will enable project management at all levels, local communities and other stakeholders to

keep track of interventions progress against the AWBP and determine if: i) the programme is on-track,

on-time and on-target; ii) funds are used as intended; iii) the programme is implemented as planned.

Through the analysis and communication of this information, project managers of each component will

be able to evaluate/assess outcomes achievement, track progress, identify implementation

bottlenecks, make informed decisions and take timely corrective action when needed. The system will

52 See Annex 1 of this Appendix for the Narrative Description of the Theory of Change




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provide information to conduct thematic studies, document and incorporate lessons learned into

programme implementation. The system will use also “informal” monitoring and communication, such

as discussion with staff or beneficiaries in the field, observing behaviours of different stakeholders etc.

5. The system will be fully integrated in each component and sub-component, which means that

each component manager will be fully responsible to report on implementation of activities, outputs

and outcomes, and the related activities will be backed by budgets within the respective

components.53

Approach

6. The M&E system will collect, analyse and report on data at three different levels of programme

implementation: (i) outputs; (ii) outcomes; and (iii) impact.

7. Output monitoring. Output monitoring will measure the progress of activities and

achievement of outputs against annual targets in the annual work plan and budget (AWP&B) for each

programme component. The system will integrate physical and financial reporting to allow cost-

effectiveness and efficiency analyses. Wherever possible, data will be disaggregated by gender,

particularly those related to training.

8. Outcome monitoring. Outcome monitoring measures the short-term and medium-term

changes coming about as a result of the programme interventions. Outcomes will be monitored

regularly (at least annually). The main outcomes indicators are presented in the Logframe. They

include IFAD’s Results and Impact Management System (RIMS) indicators (integrated with those of

SECAP and ASAP). An effort is also made to align the Programme’s indicators with GOE’s higher

level agricultural sector GTP II performance indicators and the SDGs indicators. Managers of each

component will be fully responsible to report on outcomes; while for the analysis of other higher level

outcomes the FPCMU M&E unit may need to conduct Annual Outcome Surveys. It is relevant to start

outcome monitoring at the time of the baseline survey and continue on an annual basis to allow

tracking of the validity of the proposed theory of change. In addition, the project will undertake special

studies to understand the impact of the Programme interventions on the communities, especially the

smaller more vulnerable farmers’ youth and women.

9. Impact monitoring. Impact evaluation is the process which will assess the contribution of

PASIDP II in achieving the overall goal of the Programme – Increased prosperity and improved

resilience to shocks –. The evaluation of programme impact will be conducted at the federal and

regional levels under the supervision of monitoring and evaluation experts. Specialized monitoring

and evaluation consultants will be mobilised to establish the baseline situation and assess

Programme impacts at the end of the Programme. The baseline serves as a point of comparison

(before and after the programme) preferably using panel data. Baseline surveys, with sex and age

disaggregated data, will include a household survey to assess socio-economic level of beneficiaries

and a gender analysis and will be conducted during year 1, and results used to accurately inform the

result based logical framework baseline and target values. In addition each scheme feasibility study

will provide baseline data to assess individual schemes performance and results. IFAD mandatory

RIMS indicators will also be included. The impact survey will be conducted at the end of the

programme to strengthen the assessment of effectiveness and impact. Three workshops will be

organized to share the process, approach, methodology, information collected and lessons learnt

during the baseline survey conducted in Year 1, the MTR and the final impact survey.

10. In addition, PASIDP II will conduct an impact evaluation at end of the Programme with a

specific focus on gender and youth to inform modifications of interventions for greater impact on

women’s social and economic empowerment and level of youth employment. To build institutional

capacity at Government level the Programme proposed to adopt a “learning by doing approach” which

consists of including in each evaluation one government staff member as part of team. The person will

be selected by the MoANR/PPD directorate. Impact on indirect beneficiaries will be assessed through

53 An M&E manual describing the M&E system, procedures and tools will supplement the PIM.




80

case studies conducted during and the end of programme implementation, especially when some

innovation is applied and tested being.

Characteristics of the M&E system

11. Result based M&E system. The planning, monitoring and evaluation will focus on high level

objectives/outcomes indicators selected during the Programme’s theory of change development

process and consistent with the Logframe to track Programme progress towards outputs, outcomes,

impact and sustainability.

12. Participatory approach. To improve the Programme performance and build capacity of local

partners, PASIDP II will promote participatory M&E tools. The programme will mobilize the future M&E

system users in reflecting critically on how the project or programme will be measured, in identifying

and analysing change, and in acting on results. During the start- up phase, a series of

meetings/workshops and M&E capacity building trainings will be provided to all users to discuss the

M&E approach/system, and allows participants to develop ownership of the concepts and categories

and identify the indicators, discuss the reporting format, define responsibilities and frequency. During

the M&E system implementation phase, the project will overcome technical restrictions and fear of the

formal procedures required in using M&E methods by empowering all users to produce data /

knowledge that is useful to their own action and management needs; adopting simple methods and

monitoring formats to be used by beneficiary communities to track project milestones –focusing on

results—and budget use and to identify implementation problems and best practices. The Programme

(FCPMU) will facilitate periodic structured discussions/workshop to share main issues, solutions and

results.

13. Community-based participatory monitoring system. The community-based nutrition

monitoring system will be established as part of the research tools that will be used for improved

characterization of the value chain. It is a system to measure changes in food practices, food group

consumption and local perceptions on food production, processing, storage, marketing, preparation

and consumption. Programme implementers will track progress on nutritional outcomes related to

dietary diversification, food and nutrition knowledge, attitudes and practice (KAP) through the food

KAP survey.

14. Adopt innovative tools. The Programme proposes to adopt the SenseMaker-based PM&E

approach which is a practical and cost-effective way to capture the voice of smallholders, consumers

and other market system actors, thereby providing fast feedback on the dynamics and trends in

informal market systems for programs and policy makers to design and adapt relevant interventions

and policy recommendations. SenseMaker is a new and innovative approach based on the collection

of large amounts of micro-narratives that are interpreted by the storyteller. By doing so, respondents

make a primary assessment of their stories, add a deeper layer of meaning to the stories and remove

the potential bias of a third party interpreting the data. A pattern detection software (SenseMaker®)

analyses the micro-narratives and turns the original qualitative data into aggregated statistical data

and patterns, which allows for generating insight into real-time issues and fast-response measures. It

provides valuable information for outcome and impact measurement and assists chain actors and

supporters to gain insights in people’s perceptions, to understand dominant and deviant patterns and

to guide future interventions. The Land Degradation Surveillance Framework (LDSF) is another field

implementation tool for land health surveillance, designed for sampling entire landscapes in order to

provide baselines of land resources (e.g. soil and vegetation) and socioeconomic profiles (e.g.

household indicators), as well as a framework for monitoring and evaluating project interventions and

their impacts on land and people54.

54 http://www.worldagroforestry.org/downloads/Publications/PDFS/TM11192.pdf




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15. Institutional Roles55. The overall responsibility for Programme monitoring and evaluation will

rest with the FPCMU M&E officer and supported by his counterparts at the Regional levels. At the

Woreda level, the Woreda Coordinators will be responsible for the overall M&E activities, including

coordinating the monitoring activities undertaken at the Kebele level by the development agents and

smallholder producer organizations. Programme managers of each component will be responsible to

analyse and evaluate/assess outcomes achievement, track progress, identify implementation

bottlenecks, make informed decisions and take timely corrective action when needed.

16. Focus on Capacity building. Based on the lessons learnt from PASIDP I and other IFAD

projects to overcome one of the main challenge for project M&E effective implementation which has

been identified as the high staff turnover also by the Country Programme Evaluation, PASIDP II will

provide robust capacity building activities and continuous training (at least 1 per year) to M&E

Officers, FPCMU staff, Regional M&E staff, Woreda staff and IWUAs. The purpose of the training will

be to provide skills in planning, monitoring of activities, data analysis, audit of data, gender in M&E,

RIMS and other specific technical skills and M&E tools to support the preparation and implementation

of the Programme’s M&E activities and to continuously work on strengthening its monitoring system

and the quality of data collected.

17. Training will also be provided in order to help local communities or those responsible for taking

action at schemes level to identify their stakes in M&E as well as the key dimensions that they wish to

be measured through M&E, identify the most suitable indicators and interpret the data collected from

these groups’ own perspective. Overlapping components can mean households participate in more

than one activity with the risk of double counting when calculating the number of households reached

by Programme. These problems can be overcome by training of staff responsible for progress

reporting to use a common reporting format and carefully defining how participating households will

be counted.

18. Gender. The Programme will use gender analysis for monitoring. Gender analysis will

consider women’s roles in production, reproduction, and the management of community and other

activities. The Programme will use simple techniques such as direct observation, focus groups, and

time-use studies (for example, women’s typical daily routine in terms of housework, income

generation, and personal time). Performed consistently as part of Programme M&E, gender analysis

will helps build a picture of women’s growth as individuals and social beings (for instance, it can

assess changes in their standing in the household and in the community). In addition, the Programme

will design and collect data disaggregated by gender to be able to assess the different impacts of the

intervention on women and men.

19. Monitoring and Evaluation Manual. The M&E manual will be developed and finalized during

the Programme start-up phase to ensure that outlines and the procedures of the system will be

agreed up-on by all users and are in line with IFAD’s Results and Impact Management System

(RIMS) and ASAP financing requirements. The manual will refine the data collection and analysis

system based on the project’s Theory of change and the Logframe. At this stage, a start-up Workshop

will be organized to help participants to familiarize with Programme strategy (Logframe) goals and

objectives and the use/utility of the M&E and MIS system. Specific indicators will be developed with all

users who are likely to choose to focus their M&E requirements on their areas of specific interest.

Institutional linkages, roles/responsibilities and communication of monitoring at the community,

Kebele, Woreda, Regional and Federal levels will be also discussed. The Workshop will provide

inputs during the manual design. The manual will provide a detailed indicator description entailing

indicator’s definition, measurement unit, level of disaggregation, data collection, analysis and

55 IFAD’s Research and Impact Assessment Division has been consulted during design and has earmarked resources

to support the PCMU through resources and technical support for rigorous impact assessment (ref. Annex to this

appendix).




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reporting, the data collection formats and the communication plan56. The Manual will be available for

use during the first Programme Year.

20. Data Collection and Management. PASIDP II will make use of different data collection and

management methods to measure the changes in the performance indicators. In particular, the

system will make sure that data to be collected will be generated by the regular work of the

Programme, and by the irrigated and rainfed farming systems, value chain entities etc. and each

component manager will be fully responsible to report on implementation of activities, outputs and

outcomes, and the related activities will be backed by budgets within the respective components.

PASIDP II will employ Management Information System (MIS), and Participatory Monitoring and

Evaluation methods and tools.

21. Management Information System (MIS). A web-based MIS will be developed to manage the

monitoring indicators as well as the scheme/micro-watershed level baseline data to be generated in

the Programme. The web-based MIS will seek to minimize time spent on generating data for reports,

facilitate more rigorous analysis, and enable the MIS to be accessible from remote area by all

stakeholders over internet. The MIS will be established during the start-up phases of the Programme

by an experienced international TA with the support of a national consultant upon assessment of

information needs for decision making at various levels. PASIDP II will support the supply of 100

tablets in selected Kebeles with access to electricity in an attempt to establish the database and get

connected to the MIS. Access to internet connectivity will also be supported through the Programme

by creating wireless access points on the Woreda Net.

22. Reporting and Performance Information Flow. PASIDP II will report the Programme

implementation performance based on the identified indicators, agreed standard reporting

formats/tools and frequency by all implementing partners. The primary source of information will be

Kebeles where the development agents compile reports and learning outcomes from IWUAs,

Cooperatives, and WMT. Kebele reports will be prepared monthly based on a simple reporting format

to be developed as part of the M&E Manual. Woreda reports will be compiled on a quarterly basis

from all participating Kebeles and other implementing partners at Woreda level. Reports generated at

Woreda level will be sent to the Regional PCMU. Regional PCMU will compile the quarterly

performance information based on the Woreda data compared to the AWPB as well as the various

qualitative pieces of information generated through the Woreda and regional level review and learning

platforms. The quarterly regional reports will be compiled at Federal PCMU and constitutes PASIDP II

quarterly reports to be submitted to MoANR planning and programming directorate. At Federal level,

the PCMU will also prepare bi-annual and annual reports, which is expected to provide information on

the overall progress of the Programme compared to the AWPB and will be communicated to IFAD.

The bi-annual and annual progress reports will constitute the basic piece of information for the

Supervision Missions.

C. Learning and Knowledge Management

23. A learning and knowledge management strategy will be developed during the first year of

PASIDP II by the FCPMU M&E officer, KM officer in consultation with regions, Woredas and Kebeles

with the TA of an international KM consultant. The IFAD KM strategy57 will be the reference

document. The strategy will outline systems, processes and responsibilities to ensure that the

Programme will generate, capture, document, package, use and disseminate knowledge and lessons

learnt throughout the programme as well as externally. The system will include the five aspects of

integrated KM&L as developed by IFAD-Africa: information management, M&E, innovation and

experimentation, internal and external communication and learning and adaptation. A KM workshop

56 To create a learning environment, the communication plan will include not only formal reports but also

communication efforts that seek feedback about interim findings, and discuss what actions are needed, inspiring and

helping those involved with the project to reflect critically on progress, to learn from mistakes and to generate ideas for

making improvements. 57 IFAD. 2007. Knowledge Strategy 2007-2010




83

will be organized to help participants to familiarize with the KM strategy (systems, processes,

responsibilities and products) and how to use and disseminate knowledge and lessons learnt

throughout the Programme as well as externally.

24. Learning system. PASIDP II learning systems comprise monthly, quarterly, bi-annual and

annual review meetings/workshops, capturing information on progress, lessons and finding solutions

for implementation constraints at different levels. These review platforms will serve as a learning

event, as well as to monitor and influence the process through which results are supposed to be

achieved. Short report from each workshop will capture workshops results and provide feedback that

would be factored into the Programme’s AWPB for the succeeding year, thus closing the circle of

participatory, demand-driven planning and implementation. The report will also document how lessons

learnt are used in decision-making. The report format will be developed during the KM strategy.

25. At Kebele level the review and learning workshop will be held on a monthly basis chaired by

the Kebele Administrator, and facilitated by a trained community learning facilitator. The MST M&E

specialist will rotate and participate each month in a different Kebele. The events will be attended by

leaders of IWUAs, Cooperatives, VCA and WMT. It will be open to the larger community membership

in the Kebeles. During the meeting smallholder producer organizations will present their respective

implementation plans to members as well as the Kebele Administration based on the approved

AWPBs. Some of the Kebele learning events will be in the form of field days and technology

demonstration events where community members would acquire, share and learn new

technology/knowledge. The event will also monitor the community-based watershed management

activities; members would provide feedback on the different aspects as well as helping manage

potential watershed-related conflicts among the multiple land users in the watershed. Participatory

tools such as “most significant change”, and “story telling” and “participatory monitoring and

evaluation” (PME) may be used at these meetings. A short report (max 5 pages) will be prepared and

shared with the Regional PMU.

26. At Woreda level review and learning workshop will be organized on a quarterly basis and

chaired by the head of the Woreda Agriculture and Natural Resource Office. The event will be

attended by representatives from the Woreda implementing partners and all Programme Kebeles. It

will monitor the performance of the Programme implementation in the Woreda based on the AWPB.

The event will also be encouraged for knowledge sharing and learning between Kebeles, including

field trips in the Woreda. A short report (max 5 pages) will be prepared and shared with the Regional

PMU.

27. At Regional level review and learning workshops will occur bi-annually assessing the

performance of AWPB implementation where all implementing partners present their progress and

review the Woreda lessons and issues referred to the Regional events. A short report (max 5 pages)

will be prepared and shared with the FCPMU.

28. The Federal review and learning workshop will happen once in a year for annual Programme

performance evaluation, learning and sharing. The lessons and experience learned would all be used

in preparation of the following Programme Year’s AWPB.

29. Communication. PASIDP II will provide space for capturing, documenting and disseminating

of Programmes’ lessons and innovations using different technologies. It will involve both internal and

external communication. Within the Programme, the KM function will closely work with the M&E

system to support the capturing, documenting and sharing of information and lessons. The

Programme will document and distribute proceedings of the internal learning events. Community level

learning will be strengthened through the use of participatory videos to document the participatory

M&E process. The Woreda office will be capacitated through computer and video cameras to support

the process at Kebele level. In addition, a local level technical support will be provided. Selected video

will be copied onto DVDs for Farmers Training Centre use. External communication will be equally

important for creating visibility and influencing evidence based policy towards participatory small scale

irrigation for poverty reduction and climate resilience. While participating in external learning fora, like




84

the national agricultural water management platform, PASIDP II will use these platforms for gathering

evidence based on which the directions shifts of certain policies could be influence. In addition,

PASIDP II will test the use of the participatory videos to promote the Programme approach and

interventions widely. PASIDP’s experience of using the regional and national broadcasting agency will

be strengthened.

30. Learning notes on Programme implementation (good practices and lessons), also focusing on

smallholder resilience, would be developed by the FPCMU and the relevant implementation partners.

In addition, the Programme would publish a semi-annual newsletter based on good practices and

human interest stories, ensuring that information assembled is gender sensitive, and reflects the

success stories related to vulnerability reduction and livelihood diversification as a means of risk

management.

31. Capacity building. Knowledge management capacity building strategy will be developed

based on a detailed needs assessment. Capacity building interventions will include providing training

on basic skills, exposure visits, awareness and attitude change, and technical and material support.




85

Annex to Appendix 6

Considerations for an approach to rigorous impact monitoring supported by IFAD’s Research

and Impact Assessment (RIA) Division

1. The Research and Impact Assessment Division (RIA) within the Strategy and Knowledge

Department (SKD) of IFAD plans to support to the M&E efforts of PASIDP II by providing the technical

input to the impact assessments and by co-financing the M&E and impact data collection activities.

The lessons from IFAD's corporate-level IFAD9 Impact Assessment Initiative emphasize the

importance of including impact assessment activities into the design of the project to increase the

likelihood of attributing the impact of the project more accurately and enhancing the learning potential,

the need to strengthen the collaboration among the project stakeholders, implementers, and

evaluators to monitor and assess the performance of a project, and the necessity to collect various

outcome indicators which correspond closely to the project's logical framework apart from poverty

outcomes.

2. The results from the ex-post impact assessment of the first phase of the PASIDP project

(PASIDP I) as part of the IFAD9 Impact Assessment indicate that there are increases in productive

asset accumulation, food expenditures, and crop revenues. However, there are no significant impacts

of the project on livestock asset accumulation, non-food expenditures, or input investments (improved

seeds, fertilizer, and pesticides). One major limitation of the impact assessment of PASIDP I is the

absence of reliable baseline data to enhance its quality and statistical rigor. Thus, a strong case could

be made to plan an ex-ante impact assessment for PASIDP II at the inception phase of the project to

collect the necessary outcome indicators of the beneficiaries before the roll-out of the project

activities, which will greatly enhance the extent to ensure the necessary level of statistical rigor and

increase the extent to which one can attribute the impact of the project

3. Central to the logical framework of PASIDP II is to improve help its beneficiaries increase

income and improve resilience. In light of this project goal, a significant portion of the M&E system will

be devoted to assessing the impact of PASIDP II on the two main outcomes of interest related to

PASIDP II: increased income and improved resilience to shocks. To achieve this purpose, two

necessary steps are required: (1) collection of baseline and subsequent household income,

expenditures and resiliency levels of the beneficiaries, and (2) use of appropriate rigorous statistical

approach to measure the changes in the income and resilience levels within the context of the

activities implemented during the course of PASIDP II.

4. A critical step is conduct a rigorous impact evaluation is to collect the baseline dataset ex-ante;

before the actual roll-out of the project activities. To facilitate this ex-ante impact evaluation, it is

necessary to collect information on poverty prevalence, income and expenditure levels, and

household resilience before the roll-out of project activities for both the beneficiaries (treatment) and a

valid comparison group (non-beneficiaries). A panel household survey will be conducted at multiple

time periods during year 1 before the actual roll-out of the irrigation schemes to the beneficiary

communities to fully capture the seasonal variation of agricultural activities. After the project activities

have been fully rolled-out, two additional rounds of follow-up household surveys of the same structure

will be conducted on the same households in the baseline round. These household surveys from

these three rounds will be used to assess the changes in the poverty levels, income and expenditure

levels, and resiliency of the project beneficiaries over the course of the project life: at baseline, at

midline, and at endline.

5. Measuring the impact of an investment in agricultural infrastructure project such as PASIDP II

on poverty alleviation is difficult due to the underlying differences in the characteristics of the

communities which are covered by the project and the communities that are not covered by the

project. This is because the presence of an irrigation project is likely to be correlated with

geographical suitability, community-level unobserved characteristics, and pre-existing local conditions

such as access to markets and roads. For instance, projects may have been implemented in areas

that are expected to perform strongly, such as in communities with sufficient access to markets and




86

roads, or may have targeted beneficiaries based on factors that indicate the highest need, such as

communities with high poverty or drought prevalence. In the context of PASIDP II, the targeting

strategy of the project aims to select the communities to receive the project based on the following

criteria: (1) high level of poverty and food insecurity, (2) potential for small-scale irrigation, (3) not

covered by the Agriculture Growth Programme, phase 2 (AGP-II), and (iv) rural areas. These

selection criteria are likely to result in communities being covered under PASIDP II to be

systematically different from the communities not being covered under PASIDP II, and thus making

the two groups of communities not directly comparable.

6. A key feature in the design of PASIDP II is the promotion of a participatory approach for

communities in the design, construction, operation, and maintenance of the small-scale irrigation

schemes and other related capacity building or training activities. Given the requirements of having

the beneficiary households to become a member in the water user associations (WUA's), pay water

user fees, and contribute labor supply, a household may only choose to participate in the project if

only they foresee a positive net returns from participation. These expected positive returns, however,

may be correlated to food security and income, which are the two main goals of the project. Further,

the design of PASIDP II outlines that irrigation beneficiaries will be households that have land areas

on average less than 0.5 ha. As a result, it is possible that households that which will receive the

benefits from the project are also ones systematically different from those which do not in terms of

land ownership size, and likewise making the two groups not statistically comparable.

7. The "gold standard" to overcome the two main assessment challenges mentioned above is the

use of a randomised controlled trial (RCT). With this method, some communities will be randomly

assigned (or randomly delayed) to receive the project while the others will not receive of the project

(or will receive it later). Subsequently, the differences between the average outcomes of the two

groups will be compared to assess the impact of the project. Given the context of PASIDP II, a

randomized phased-in approach is suggested to be used to assess the impact of PASIDP II on the

outcomes of interest.58 The projected 150 irrigation schemes covered under PASIDP II will be built

gradually throughout the life of the project: 20 schemes in year 2, 45 schemes in year 3, 45 schemes

in year 4, and 40 schemes in year 5. Taking advantage of this staggered roll-out plan, a reasonable

strategy to design the impact assessment of PASIDP II is to roll out the irrigation schemes across the

years with stratification by their locations, and subsequently by their expected performance. Among all

the planned irrigation schemes in each region, they will be ranked in descending order according to

their net present value (NPV) and their internal rate of returns (IRR), classifying them into different

quintiles. Within each quintile, a certain number of irrigation schemes to be built in each project year

will be randomly selected. To implement this design, one would need to identify all the woredas and

kebeles for all the 150 schemes in year one, in order to have a full baseline survey.

8. During the implementation of PASIDP I, feasibility studies were undertaken on 8,300 ha of 69

irrigation schemes that have not yet been constructed. These 69 schemes are the initial candidates

for construction under PASIDP II, but their feasibility studies will be subjected to a full review of

compliance with new ESMF quality standards, and subsequently if needed updated. Additional

schemes will be identified and studied during PASIDP II implementation in order to reach a total of

14,800 hectares of approximately 150 irrigation schemes.

9. Given these circumstances, the design of the impact assessment for PASIDP II it is only

possible to evaluate the impact of the 69 schemes whose feasibility studies had already been

conducted and available at the time of the project design unless the 150 can be identified ex-ante.

This is mainly due to the fact that the remaining 81 irrigation schemes to be identified at a later stage

may be systematically different from the schemes selected prior due to several reasons including

selection criteria and targeting, local institutional capacity of the project implementers, or willingness

58 De Janvry, A., Dustan, A., and Sadoulet, E. (2011). Recent advances in impact analysis methods foro ex-post impact

assessments of agricultural technology: options for the CGIAR. Report prepared for the workshop: Increasing the rigor

of ex-post impact assessment of agricultural research: A discussion on estimating treatment effects, organized by the

CGIAR Standing Panel on Impact Assessment (SPIA). University of California at Berkeley.




87

to participate in the project of the community. As a result, the assessment design to estimate the

impact of PASIDP II for the remaining 81 irrigation schemes yet to be identified will have to developed

at a later stage according to the selection criteria and other necessary contextual requirements. It will

be possible to have an impact evaluation “add-on” at the later stage once these schemes are

identified.

10. Among the 69 schemes that had already been identified at the inception of PASIDP II, a

baseline household survey will be conducted on at least 8-10 households per community in the

communities where these schemes are located during year 1, with two rounds of follow-up household

surveys to be conducted at midline and endline. To strengthen the design of the impact assessment

of the 69 schemes already identified at the inception of PASIDP II, accurate information about the

geographical locations (GPS coordinates) and proximity variables regarding access to transport

services and road infrastructure (e.g. distance to the nearest paved road, distance to the nearest

town, time required to reach the nearest urban center or district capital, etc.) would need to be

collected at scheme-level and cross-checked to ensure quality and accuracy and prioritize the roll out

of the program. The collection of accurate geographical and proximity indicators may be done in

collaboration with RIA, who will help provide technical support regarding the data requirement and the

methodology to collect the necessary data.

11. The project will finance at least US$150,000 for three waves of the household survey

(baseline, midline, and endline) as part of the impact assessment activities. RIA will co-finance the

remaining cost of the data collection activities and will provide technical support, conditional on the

possibility of identifying the locations where all irrigation schemes will be built, and the number of

irrigation schemes which are planned to be built within each year of the project duration. The amount

will differ depending on whether all the locations of the irrigation schemes can be identified before the

roll-out of the activities (ex-ante), or after the roll-out (ex-post), and the capacity to design the roll-out

plan of the irrigation schemes in each year of the project in a staggered phased-in approach after the

consultation with RIA. Ex-ante impact assessment studies are of superior quality, and are statistically

more rigorous than ex-post studies because researchers can collect information of the non-beneficiary

communities before the project rolls out, and thus ensure greater internal validity of the study, the

extent to which causal conclusions from a study can be warranted. In addition to the data collection

activities, RIA will provide technical support for the project management unit (PMU) team from the

EMoA and other interested government officials by organizing impact assessment workshops and

other related learning events in Addis Ababa, Ethiopia.




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Appendix 7: Financial management and disbursement arrangements

1. In accordance with IFAD’s Guidelines for Financial Management Assessment (FMA) at design,

a financial management assessment was carried out at two levels; overarching Country assessment

and Project level assessment.

Overarching assessment:

2. Financial Management Assessment: Ethiopia’s inherent risk is medium as measured by

Transparency International’s Corruption Perceptions Index (CPI). The country’s annual CPI in 2014 of

3.3 puts it at 110th position out of 175 countries. This is a slight improvement from the previous year’s

rank of 111 (with same rating of 3.3) which still falls in the medium-risk category.

3. IFAD’s Rural Sector Performance score (RSP) – RSP provides a focused assessment of the

potential risk in the rural sector. It is an indicator of accountability, transparency and corruption in the

rural areas. The 2014 RSP E (ii) score for Ethiopia is 4.00 down from 4.25 of 2013; this is a medium

risk category.

4. Public Expenditure and Financial Accountability (PEFA) – A Public Financial Management

(PFM) Assessment was undertaken by the World Bank under the auspices of the Public Expenditure

and Financial Accountability (PEFA) Program in 2014 and a report was issued in April 2015. The

assessment covered individual Regional States, for which scores were later aggregated at Federal

level. Compared to the 2010 assessment, there were improvements both at Regional and Federal

level, with the total high scores of A, B and B+ increasing from 13 to 20 of the 27 and 28 parameters

scored respectively. Notable among the strong areas was improvement in the legal and regulatory

framework, high compliance to the strong internal controls and improvement in external audit and

related oversight. The main weak areas noted in the report were in accounting and internal audit

exacerbated by capacity constraints associated with high staff turnover.

5. Project Specific Assessment: As required by IFAD Financial Management assessment

guidelines, the summarized project assessment scores at design are as follows:

Initial Risk

Assessment

Proposed

mitigation

Final Risk

Assessment

Inherent Risk

1. TI Index - - M

2. PEFA - - M

Control Risks

1. Organization and Staffing H Par 6 - 8 M

2. Budgeting H Par 9 - 11 M

3. Funds Flow and Disbursement

arrangements

M Par 10 - 18 M

4. Accounting systems M Par 20 -21 M

5. Internal Controls M Par 22 - 23 M

6. Reporting and Monitoring M Par 24 - 26 M

7. Internal Audit H Par 27 M

8. External Audit L Par 28 L

PASIDP II Fiduciary Risk @ Design M M

H/M/L = High Medium and Low risk as per the Guideline Note on undertaking Financial Management

Assessment at design




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6. Proposed financial management organisation structure – The MoFEC, as the

representative of the borrower, will represent GOE on all matters pertaining to PASIDP II. MoANR is

assigned the responsibility of Lead Executing Agency and will ensure the overall oversight for the

implementation of Programme at National level with its roles reflected at Regional level in the

respective Bureaux of Agriculture (BoA). This includes the provision of general policy directions for the

implementation, coordinating, implementing and ensuring coordination with other relevant agencies

(including hosting of the Federal Programme Coordinating and Management Unit ( FPCMU)).

7. The FPCMU finance team shall be composed of a Finance Manager and an Accountant. The

FPCMU finance team will be responsible for the accounting function of the Programme, including

consolidation of FPCMU and Regional Programme Coordinating and Unit (RPCMU) accounts,

preparation of annual financial statements, periodic financial reporting and overseeing the

arrangements for audits, in accordance with GOE’s procedures and IFAD’s audit guidelines. The

recruitment of the finance team will be on performance based contract and their responsibilities will

clearly be spelt out in their TORs which will be a basis of their evaluation. Sample TORs have been

included in the PIM. Except for the Programme finance manager who will be recruited competitively,

the MoANR will assess competencies of existing finance staff before opening up vacant positions.

8. Owing to challenges that have been experienced in accounting, delays in justifications and

financial reports, participating Woredas will each assign an Accountant and to manage the accounting

requirements at their level. As part of start up, the Woreda Accountants will receive training on the

Programme accounting requirements including IFAD procedures and guidelines. They will also

receive regular technical backstopping from RPCMUs.

9. Budgeting: Budgeting – The Programme will be implemented on the basis of approved

Annual Work Plans and Budgets (AWPBs). The budgeting process will be done jointly between

PASIDP II FPCMU, RPCMUs, Woredas and implementing partners. FPCMU will consolidate the

budget, present it for approval by the Programme Steering Committee (PSC) and submit the

estimates to MoFEC for inclusion in the National estimates. A No Objection from IFAD will be required

for each AWPB during the implementation. To facilitate proper budget monitoring and control,

FPCMU will provide budget templates to RPCMUs and partners that mirror its code/chart of accounts

reflecting components, categories and activities together with funding sources (IFAD, ASAP, Co-

Financier, GOE and beneficiaries).

10. The annual planning and implementation cycle will be aligned with GOE’s planning cycle,

following the fiscal year from July to June while budget preparation extends from January to May. The

Regional project management team will pick from the various Woredas and implementing agencies

their budgets for inclusion in the Regional AWPB, which then will be submitted upon approval to

FPCMU for consolidation. The consolidated budget will be approved by the PASIDP II National

Steering Committee and later submitted to IFAD for No Objection.

11. To overcome persistent delays in submission of AWPBs experienced under PASIDP I, the

AWPB submitted to IFAD will be one to be submitted to MOFEC for consolidation, before

Parliamentary approval as waiting for this approval will delay the submission leading to none

compliance with loan covenants. Upon approval parliamentary approval, IFAD will require information

for confirmation of the budget.

12. Funds Flow and Disbursement Arrangements – Foreign funds flow into PASIDP were from

IFAD loan and Grant managed through two designated accounts. Under PASIDP II, there will be

funding from IFAD and ASAP but a single designated account shall be maintained. Disbursements will

be done under the SMART statement of expenditure (SOE) procedures and the ASAP co-financing

managed on a parallel basis with IFAD funding for the investment in knowledge management, pro-

poor agricultural value chain development and agricultural productivity and resilience categories.

13. A designated bank account will be opened in the National Bank of Ethiopia (for the IFAD loan

and the ASAP grant). This designated account will be managed by MoANR in accordance with GOE

procedures. A corresponding operating account in Ethiopia Birr (ETB) managed by MoANR will be




90

opened in a commercial bank acceptable to the Fund. There will also be dedicated operating bank

accounts managed by the respective Bureaus of Agriculture and implementing partners to receive

both the loan and grant funds and the individual Regional State Governments’ contribution. To

facilitate traceability of funds, coding of the chart of accounts will reflect GOE contribution.

14. Funds into the Designated Account shall be disbursed following the replenishment mechanism.

The initial disbursement will be based on advance of six months forecast expenditure which will be

deposited in to the designated account. The second and subsequent disbursements shall be

contingent upon submission of SOEs for at least 30% of the previous withdrawal amount clearly

providing details of expenditure against approved categories of expenditure or 90 days since

submission of the last withdrawal application and as shall be advised from time to time in the Letter To

the borrower (LTB).

15. Funds from the designated account will be transferred to the Programme Operating account in

local currency managed by FPCMU from where costs at FPCMU shall be incurred and transfers to

RPCMUs and other implementing partners shall be done.

16. The funds flow chart attached depicts the use of the standard disbursement methods including

(a) Direct payment method for bigger payments over USD 100,000; (b) use of designated account;

and (c) reimbursement if the Government of Ethiopia has pre-financed any transactions. Detailed

instructions for disbursements will be included in the LTB issued for PASIDP II and the PIM.

17. Expenditure justifications/reporting and monitoring – Participating Regions and

implementing partners will open dedicated bank accounts for PASIDP II. Specific activity tagged cash

advances for the first AWPB will be transferred by the FPCMU to RPCMUs and implementation

partners. Subsequent transfers shall be based on justifications submitted to FPCMU. To facilitate

budget monitoring and reporting at the Regional level, cashbooks generated within accounting

software coded in line with FPCMU chart of accounts will be used and the data generated will be

consolidated and reported by FPCMU using accounting software.

18. To mitigate delays in justification and submission of reports from Woredas and implementing

agencies, technical backstopping will be provided by Assistant Accountants from RPCMUs supported

and followed up by an Accountant from FPCMU. This support will be included the Terms of Reference

of Accountants. At Woreda level, the Woreda Accountants will be responsible for the justifications,

among other tasks. In addition, trainings for Accountants at start up and during implementation will

cover among other aspects reporting requirements including a reporting calendar. Besides, entities

failing to submit justifications within the required timeframe will not be replenished with additional

funding until full compliance has been achieved.

19. To ensure proper implementation of disbursement methods and smooth tracking of funds, will

ensure that under PASIDP II:

a) Training of staff designated to implement PASIDP II in IFAD disbursement methods as

documented in the disbursement handbook;

b) Release funds for the first six months to implementing partners in the form of work plan based

advances other than general transfers. Each work plan based advance shall be accompanied

with a breakdown of activities financed and financial returns should reflect progress on the

funded activities;

c) The chart of accounts will be structured to facilitate recording and reporting of transactions by

financier/source of funds, by project component, expenditure categories and activities. This will

facilitate consolidation of reports and traceability of funds without having to open multiple bank

accounts.

d) At implementing partner level, to facilitate proper monitoring of utilisation of financial resources

and control commingling of funds, it has been deemed necessary to propose maintaining of

separate bank accounts by each of the implementing partners to which funds will be transferred.




91

20. Accounting Systems: PASIDP is currently using peach tree accounting software at FPCMU and

RPCMU, while most Woredas are using manual systems. The Peachtree accounting software is not

properly and uniformly coded to facilitate data capture and reporting by financier, programme

components, expenditure category and activity. MOFEC is not keen at introducing standalone

accounting software, instead it is advocating for the government’s Integrated Budget Expenditure

(IBEX) accounting system as it will ease data migration to IFMS when it is rolled out in two to three

years.

21. Since the streamlined IBEX has little flexibility, MOFEC has agreed to adopt IBEX on a

standalone basis, modified for projects. The IBEX team has designed a project chart of accounts that

is being piloted with the AGP-2 at the MoANR. Accordingly, the Programme will move to IBEX

accounting system which has already been implemented at MoANR and is being rolled out to Regions

and Woredas. The IBEX team will facilitate the design of the chart of accounts for PASIDP II reflecting

the funding sources, programme components, programme Subcomponents, expenditure categories

and activities in both USD and ETB. This should also enable the project to easily generate withdrawal

applications under the newly introduces SMART SOEs. This will be done jointly by the finance and

M&E team at PASIDP II to harmonise reporting on both physical and financial progress.

22. Internal Controls, Policies and Procedures: GOE systems will be applied in the

implementation of PASIDP II. Adherence to the internal control framework will be verified during the

annual internal and external audit exercises (see below) and reported to IFAD in the form of an

internal audit report and Management letter, in line with IFAD’s audit guidelines. Compliance to the

internal controls will also be part of the fiduciary checks performed during supervision missions and

external Audit.

23. In order to complement the GOE internal control mechanisms, specific internal controls will be

set up at the Programme level as follows:

a) There will be monthly bank reconciliations sent to the Programme Finance Manager on a

monthly basis to facilitate proper treasury management. Reconciliations will be signed off by

Coordinators both at RPCMU and FPCMU;

b) Budget control will be supported through the Programme accounting software, which will be

reflected in the financial reporting templates at Regional and Woreda levels;

c) Programme will identify central filing places at the Region and Federal levels to facilitate

traceability and quick access to documents during Supervision and Implementation Support

Missions and audits. Details on internal controls shall be provided in the PIM;

d) There will be monthly cash counts at Woreda level to reconcile the cash position as a means

of monitoring large amounts of cash being held at Woredas due to difficulties involved in

reaching their banks; and

e) The Programme will maintain an updated fixed asset register, identifying assets

codes/numbers to ease physical verification.

24. Financial Reporting Arrangements: The FPCMU will be required to prepare and submit

separate quarterly financial reports to account for activities funded, no later than 60 days after the end

of each quarter. The FPCMU and RPCMUs will maintain adequate filing system of all relevant

supporting documentation, including returns (in original) with copies of bank statements submitted by

programme staff and implementing partners. In line with IFAD’s requirements, documentation will be

reviewed by supervision missions and audits. The financial reports will be designed to provide

relevant information to management, financiers and other stakeholders monitoring the programme’s

performance. Implementing partners will be required to submit simplified quarterly financial reports to

FPCMU for validation with their replenishment requests and for inclusion in the Programme reports.

25. To facilitate timely consolidation, RPCMUs and implementing agencies reporting to FPCMU will

be required to submit their financial reports to FPCMU not later than 45 days after the end of each




92

quarter. Regions and implementing agencies failing to submit quarterly reports within the required

timeframe will not be replenished with additional funding until full compliance has been achieved.

Woredas and Implementing agencies reporting to RPCMUs, shall submit their quarterly financial

reports within 30 days following the end of each quarter. Similarly, Woredas and implementing entities

failing to submit quarterly reports within the required timeframe will not be replenished with additional

funding until full compliance has been achieved. Thus the frequency of fund transfers will depend on

the timely submission of reports by each implementing entity.

26. Financial reporting will be in accordance with International Public Sector Accounting Standards

(IPSAS) cash basis and will be facilitated by properly coded accounting software. The Programme will

prepare monthly and quarterly financial management reports for management decision making and

control. IFAD will, in addition to the annual audited financial statements, require interim financial

reports on a six-monthly interval that will be prepared in accordance with IFAD financial reporting

guidelines.

27. Programme internal audits: The Internal audit department of MoANR will include PASIDP II in

its internal audit plans. Internal audits will be undertaken and the six monthly internal audit reports

submitted to PSC. IFAD will require submission of management action plans and progress of

implementation of recommendations as part of the mandatory annual report. As part of start up,

internal audit staff assigned to the project will be trained in IFAD procedures. Supervision missions will

report on the activity of the internal audit with respect to PASIDP II by reviewing their reports and

assessing management’s responsiveness to any recommendations formulated as a complementary

measure. Internal controls will also be verified during the annual audit exercise by external audit and

reported to IFAD in a Management letter, in line with IFAD’s audit guidelines.

28. External audits: The external audit of the project’s funds will be implemented by the MoANR.

PASIDP statutory audit services have been provided by the Audit Services Corporation (ASC). Under

PASIDP II the Office of the Auditor-General (OFAG) will conduct the audit themselves or will contract

private audit firms acceptable to IFAD to conduct the audit on their behalf. The cost of hiring a private

audit firm will be met by the project. Audit of PASIDP II will be conducted in accordance with

International Standards on Auditing, under specific TORs generated in line with the IFAD audit

guidelines. In compliance with IFAD’s General Conditions, the PASIDP II financial statements,

prepared by the FPCMU, will be audited on an annual basis and the audit report together with the

related management letter submitted to IFAD no later than six months after the end of each fiscal

year. Internal control issues that will be identified in the course of the audits will be documented and

an action plan submitted to IFAD together with the audit report. IFAD will check the status of

implementation of the action plan during missions. Sample Terms of Reference for external audit

are attached at Appendix 1

29. Start up and retroactive financing: To facilitate early start-up of the Programme, it has

proposed that GOE will pre-finance some activities whose costs will be reimbursed by IFAD upon

effectiveness of the programme. This will cover agreed eligible costs during the preparatory period

from 1 July, 2016 to 31 December 2016. Reimbursement will be based on submission of supporting

documentation and justification including evidence of outputs such as the baseline study report,

AWPB, PIM, training needs assessment report. Items of eligible expenditure will include baseline

survey, studies and selection of appropriate scheme sites, training needs assessment, workshops,

completion of on-going schemes that are within PASIDP II Woredas, salaries and allowances and

operating costs in aggregate amounting to the equivalents of USD 1,994,000 as shown in the table

below.

Summary of eligible items for retroactive financing

Expenditure category Activities Amount (USD)

Consultancies Baseline study 116,000

Studies and selection of appropriate scheme sites 120,000

Training Needs assessment 139,000

Workshops Workshops 102,000




93

Works Completion of PASIDP on-going schemes within

PASIDP II Woredas

1,022,000

Salaries and allowances Salaries and allowances 382,000

Operating costs Fuel and lubricants 83,000

Office running expenses 30,000

Total 1,994,000

30. Supervision Plan (FM) – In light of the medium residual FM risk, in the first year of

implementation, the supervision plan will include site visits that will involve, inter alia, visits to the

implementers (contractors and Woredas). The supervision process will be complemented by desk

review of progress and financial reports, the Programme’s annual financial statements, internal audit

reports, and annual audits. However, IFAD will be expected to provide implementation support on an

ongoing basis, even when at the start the residual risk has been assessed as medium.

Implementation support will help staff to quickly adapt to the learning curve. The fact that IFAD has an

In-Country Office will help in the endeavour of ongoing implementation support provision.




94

PASIDP II Funds Flow Chart

Legend

Funds flow

Documentation/ payment approvals

IFAD

GoE

Designated

Account

Pooled Operating account at

MoANR/ FPCMU

Beneficiaries

RPCMUs

WOREDAS

Implementing

Partners

Contractors

Suppliers

Service

Providers




96

Appendix 8: Procurement

Overarching Country Assessment

1. IFAD’s General Conditions provide for use of the Borrower’s procurement regulations, provided

they are deemed to be consistent with IFAD’s guidelines. This is in line with the various commitments

of the international donor community to work towards increasing the use of national systems where

they are compatible with the requirement of the donors. The IFAD procurement guidelines and

handbook require an assessment of national procurement systems as part of project design. The

assessment has been done in two stages: (i) overarching country assessment and (ii) project specific

assessment.

2. Overarching Country assessment: The Federal Democratic Republic of Ethiopia has enacted

a procurement law that governs public procurement in the Country. The applicable law and

regulations are contained in: a) Federal Democratic Republic of Ethiopia Procurement and Property

Proclamation number 649/2009 (proclamation); b) the Public Procurement Directive of June 2010;

and c) Public Procurement Manual of December, 2011. There also exist guidelines in the

management of fixed assets, stock and Standard Bid Documents.

3. The Federal Democratic Republic of Ethiopia’s legislative and regulatory framework will be

used in the implementation of procurement activities under PASIDP II in as far as they are consistent

with IFAD’s procurement guidelines. This is consistent with article 6(1) of the Procurement and

Property Proclamation which provides that “To the extent that this Proclamation conflicts with an

obligation of the Federal Government under or arising out of an agreement with one or more

other states or with an international organization, the provisions of that agreement shall

prevail”.

4. Proclamation No. 649/2009 established the Ethiopian Federal Public Procurement and Asset

Administration Agency’s (FPPA), a body responsible for regulation and monitoring of Federal bodies’

public procurement activities. It is the FPPA that issued the Public Procurement Manual which covers

and lays down procedures for procurement of goods, works and consultancy services.

5. The Ministry of Agriculture and Natural Resources (MoANR) is a federal ministry and its

procurement system is governed by public procurement legislative framework. The Regional States

and two City Administrations have their own procurement proclamations and directives. The

proclamations and directives are drafted using the Federal procurement proclamation as prototype.

6. The National level procurement assessment point to risks arising out of shortage of qualified

procurement staff, high level of staff turnover, lack of proper institutional structures for procurement

management, poor record keeping, absence of systematic procurement performance M&E, and

significant delays in completing procurement activities. These weaknesses mirror the Ethiopia 2010

Country Procurement Assessment Review (CPAR) by the World Bank and are prevalent at

MoANR/PASIDP II, as well as the Regional Bureaus of Agriculture, Zones and Woredas. These have

been put into consideration in the course of design of PASIDP II.

7. Overall the Country’s legal framework provides an adequate operational environment for

procurement, including procurement for works under PASIDP II. The procurement assessment notes

that the following will require improvement to ensure that procurement processes in practice are fully

compliant with the legislative and regulatory framework.

a) Linking procurement planning to budgets to maximise advantages of use of procurement plans. Currently procurement plans are made after budget allocation and are not usually followed. In some cases, plans have been submitted well after the budgets have been approved; and

b) Increasing awareness of procurement procedures of all staff involved in procurement activities.




97

8. Project Specific Assessment: Government of Ethiopia (GoE) procurement arrangement is

that for all projects implemented within the Federal Ministries or Bureaus at Regional State level,

procurement services are rendered by Procurement Officers pooled within the procuring entity.

Accordingly, procurement activities of PASIDP II will be managed by the Directorate of Procurement

and Property Management at MoANR and by the Procurement and Property Management Processes

in the respective Regional Bureaus.

9. During the design mission, a procurement assessment was carried out on MoANR the lead

implementing entity in accordance with the IFAD procurement guidelines and handbook. The

assessment also drew lessons from the implementation of procurement under PASIDP I. Below is a

summary of the assessment.

Table 1: Summary of Procurement Risks /Findings and Actions (Risk Mitigation Matrix)

No Major findings/issues Actions proposed Responsibility Targeted

date

1 Inadequate procurement

capacity under PASIDP

II as there was no

provision for recruitment

of a procurement

personnel

a) Employment of a qualified and

procurement proficient Procurement

Officer and an Assistant Procurement

Officer acceptable to IFAD as focal

points for the Programme within the

procurement pool at FPCMU/MoANR

to support the Programme at all levels;

b) Provide basic procurement training

offered in the procurement of goods

and equipment, works and

consultancy services to procurement

staff of Federal and Regional levels as

appropriate;

c) Staff involved in the implementation of

procurement activities such as tender

committee members should be

provided procurement clinics on

procurement procedures under IFAD

financed Programmes;

d) Provide procurement staff at the

FPCMU, RPCMUs and Woredas with

the necessary facilities to create

conducive working environment

including equipment to enable them

support procurement activities in the

Regions and Woredas.

MoA/ FPCMU By

Programme

effectivenes

s




98

No Major findings/issues Actions proposed Responsibility Targeted

date

2. Inadequate procurement

planning and monitoring

and follow-up of

procurement activities

a) Make procurement planning a

requirement as part of the annual

work plan and budget;

b) Train procurement staff in the

preparation and updating and

monitoring of procurement plans at all

levels;

c) Make the use of simplified

procurement plans mandatory for use

in the Woredas.

MoANR/

FPCMU,

RPCUs,

Woredas, and

other

Implementing

agencies

During

Programme

implementat

ion

3. Written procedural

manuals/systems in

place including code of

ethics. Under PASID I,

the draft PIM developed

at design was never

approved and never

updated to align it with

new developments

including the Ethiopian

Federal Procurement

and Property

Administration

Proclamation

a) Prepare a procurement module of

PASIDP II PIM which should provide

detailed step by step procedures for

the implementation of the procurement

activities of the Programme to reflect

thresholds;

b) Include procurement code of ethics in

the procurement module of the PIM;

c) Disseminate the PIM to all

implementing agencies of the

Programme.

MoANR/

FPCMU

During

Programme

implementat

ion

4. Lack of capacity in

procurement data

management and

maintenance of

procurement audit trail

Inadequate facility for

storage of procurement

records

a) Procurement clinic on procurement

records keeping to be provided to

procurement staff of the PASIDP II;

b) Provide adequate facility, including

office space, shelves and lockers, for

safe keeping and storage of

procurement records.

MoANR/

FPCMU,

RPCUs/Woreda

s/other

Implementing

Agencies

During

Programme

implementat

ion

5. High level of staff

turnover

When providing training to the

Procurement Officers, identify an

additional staff within the pool to be

trained alongside the Programme

specific specialists.

MoANR/

FPCMU

During

Programme

implementat

ion

6. Lack of experience in

contract administration

and management in the

focal organization and

RPCUs

Provide training to staff in contract

management.

MoANR/

FPCMU

During

Programme

implementat

ion

10. Under PASIDP II initial59 thresholds will be as follows:

Threshold

Procurement Method USD

Goods Up to 10,000 Request for Quotation (RFQ) using Govt approved list

>10,000 - 200,000 National Competitive Bidding (NCB). IFAD prior review for goods above

USD 100,000

59 Thresholds will be determined in the Letter to the Borrower and can be revised by the Fund from time to time.




99

Threshold

Procurement Method USD

>200,000 International Competitive Bidding (ICB). Prior review by IFAD

Services Up to 10,000 Least Cost Selection (LCS) - Other methods such as Fixed Budget and

Quality Based Selection (QBS) may be used depending on the

assignment.

>10,000 – 20,000 Quality and Cost Based selection (QCBS)

>20,000 – 100,000 QCBS- Expression of Interest/ Prior review by IFAD for services of

value of USD 50,000 and above

>100,000 QCBS- Expression of Interest/ International advertisement and Prior

review by IFAD

Works Up to 50,000 Request for Quotation (RFQ) using Govt approved list

>50,000 - 1,000,000 NCB and prior review for works of USD 100,000 and above

>1,000,000 ICB and prior review

11. Procurement organisation structure: PASIDP II procurement will be managed by the

Directorate of Procurement and Property Administration, drawing from the pool of specialists. ) Under

PASIDP I, there was no specific recruited procurement officer(s) for the Programme. As a

consequence, officers in the MoANR procurement pool prioritised procurement actions for their

respective projects; this led to delays in PASIDP procurements. Under PASIDP II, provision has been

made for a procurement officer and an Assistant Procurement officer who will handle PASIDP II

procurement at FPCMU and support RPCMUs in executing their procurement plans.

12. A Procurement Officer and an Assistant Procurement Officer will be recruited competitively and

engaged on a performance based contracts as a contribution of the Programme to the pool of

specialists during the PASIDP II implementation period. The Procurement Officer will technically be

responsible to the Director of Procurement and Property Management with a dual reporting line to the

Programme Coordinator. He/She will be the focal point to handle all procurement aspects of PASIDP

II assisted by an Assistant Procurement Officer.

13. Procurement planning: Procurement planning will follow the Government of Ethiopia planning

calendar. Due to the medium inherent risk ranking of the Government of Ethiopia procurement

systems; the IFAD prior review thresholds for PASIDP II will be equivalents of USD 100,000 for

goods, services and for works for the start. This may however be reviewed depending on the

performance of the project during implementation.

14. The Procurement plan for each year will be consistent with the Programme’s AWB and its

target date of implementation including list of procurement of works, goods, and services to be

procured under the Programme yearly with estimated cost and method of procurement shall be

detailed in appropriate formats for each budget year. Items procured outside the procurement plan

and the related AWPB will be declared mis-procurement and the related expenditure will be ineligible

for financing from the IFAD loan proceeds.

15. A Procurement Endorsement Committee will be the overall approval authority as it will approve;

(i) all procurement plans; (ii) draft advertisements and other bidding documents; (iii) specific terms and

conditions relating to contract amounts, completion periods, stages and conditions of part

payments;(iv) all the contracts above US$10,000 (or as shall be specified in the Letter to the

Borrower) and (iv) variations/amendments of contracts that have been cleared by the Committee.

16. PASIDP II procurement will follow the methods provided for in the Procurement and Property

Proclamation and IFAD Procurement guidelines. All PASIDP II ICB procurements will be carried out

and managed centrally at the FPCMU. NCB and local shopping may be carried out at the Regional

level in case bulking opportunities may not be feasible at the FPCMU. In this regard, Regions/BoA will

have to submit their procurement plans for inclusion in the consolidated PASIDP II procurement plan.

Efforts should be made by the Procurement Officer to ensure that the best contract packaging

possible, including consideration of what lots can be bulked in a package for which it is possible to

find a supplier or bulking opportunities.




100

17. The consolidated PASIDP II Procurement Plan will be submitted together with the AWPB to the

National Programme Steering Committee for approval, and the Directorate of Procurement and

Property Administration as appropriate for information/inclusion in the MoANR annual Procurement

Plan and later to IFAD for a no objection as part of the PASIDP II AWPB.

18. Bidding Documents: The conduct of a transparent and successful procurement is dependent

on the quality of bidding documents. Thus, to guard against mis-procurements, it will be essential that

bid documents get very well prepared. Under PASIDP II, the GOE standard bid documents will be

used and adapted to suit each specific procurement item. On-the-job training will be carried-out for

PASIDP II management by MoANR and/or IFAD in the preparation of these documents. IFAD

clearance of the Standard Bidding Documents under PASIDP II will be a requirement.

19. In accordance with IFAD procurement guidelines, where international competitive bidding is

used, the World Bank’s Standard bidding documents and related guidelines will apply in all cases.

20. National and local duties and taxes for all procurement financed from proceeds of the IFAD

grant will be covered by GOE. All procurement will be executed only against approved procurement

plans and AWPBs, specifying items to be procured, responsibility for the procurement and the

appropriate procurement methods. IFAD missions and annual external audits will, on a sample basis

review the procurement processes including bid documents. A detailed procurement cycle will be

included in the PIM.




101

Procurement Plan (first 18 months)

Loan #: Bid Documents Bidding Period Bid Evaluation

Description* Lot Number Estimated

Amount in US $

Procurement

Method

Pre-or

Post

Qualificati

on

Prior or Post

Review Plan vs. Actual

Date

Proposed

Date

No-

objection

Bid Invitation

Date

Bid

Closing-

Opening

Bid

Evaluation

Report

No-

objection

Date

Contrac

t Award

Date

Cont

ract

Sign

atur

e

Vehicles and Motorcycles

Lot1: Vehicles 131,000

NCB Post Prior Plan M1 M1 M1 M3 M3 M3 M4 M4

Lot2: Motorcycles 291,800

Computer and printers

Lot1: Computers 107,400

NCB Pre Post

Plan M1 M1 M1 M2 M2 M2 M3 M3 Lot 2: Internet connectivity of

Woredas/Zones 35,000

Lot 3: Tablets for MIS 40,000

Actual

Office consumables and

stationery

Lot 1: Assorted consumables

and stationary

NCB-

Framework contracts

Post Prior Plan M3 M3 M3 M4 M4 M5 M5

Actual

Equipment

Lot1: 100 Cameras 109,300 NCB Pre Post Plan M3 M3 M4 M4 M5 M5 M6 M6

Lot 2: GIS equipment 109,300

Lot 3: Instruments for catchment

water budgeting 111,500

Lot 4: Equipment for WRB 218,600

Actual

Office facilities for

cooperatives

Acquisition of office facilities 13,900 NCB Pre Post Plan M3 M3 M4 M4 M5 M5 M6 M6

Rent or construction 27,900

Actual

Agricultural Inputs

Lot 1: Inputs for intensification 800,000

NCB/LS

Post

Prior

Plan M4 M4 M5 M5 M5 M6 M6 M6 Lot 2: Improved genetic material 219,700

Lot 3: Home garden inputs 257,900

Actual

Total Cost 2,473,300

Plan

Actual




102

Appendix 9: Programme cost and financing



Components by Financiers

(US$ '000) IFAD loan IFAD grant ASAP Beneficiaries GoE Total

Amount % Amount % Amount % Amount % Amount % Amount %


1. Irrigation Scheme Participatory Planning and Preparation 4 771 68.6 1 000 14.4 288 4.1 - - 893 12.8 6 952 4.8

2. Small-scale Irrigation Infrastructure Development 77 455 79.4 - - 1 000 1.0 4 452 4.6 14 631 15.0 97 537 67.1

Subtotal 82 226 78.7 1 000 1.0 1 287 1.2 4 452 4.3 15 523 14.9 104 489 71.9


1. Agribusiness Linkages and Market Access 2 445 86.5 - - - - - - 383 13.5 2 828 1.9

2. Capacity Building and Empow erment of Smallholder Farmers 1 260 15.6 - - 5 625 69.4 - - 1 215 15.0 8 100 5.6

3. Watershed Management 7 866 41.6 - - 2 891 15.3 7 621 40.3 510 2.7 18 887 13.0

Subtotal 11 571 38.8 - - 8 516 28.6 7 621 25.6 2 108 7.1 29 815 20.5


1. Learning and Know ledge Management 996 50.8 - - 672 34.2 - - 294 15.0 1 963 1.4

2. Program Management, Monitoring and Evaluation 7 206 79.8 500 5.5 524 5.8 - - 797 8.8 9 028 6.2

Subtotal 8 203 74.6 500 4.5 1 196 10.9 - - 1 091 9.9 10 990 7.6

Total PROJECT COSTS 102 000 70.2 1 500 1.0 11 000 7.6 12 072 8.3 18 722 12.9 145 294 100.0




103



Expenditure Accounts by Financiers

(US$ '000) IFAD loan IFAD grant ASAP Beneficiaries GoE Total

Amount % Amount % Amount % Amount % Amount % Amount %

I. Investment Costs

A. Works 78 594 79.5 - - 1 000 1.0 4 452 4.5 14 831 15.0 98 876 68.1

B. Equipment and Materials 535 63.8 - - 178 21.2 - - 126 15.0 839 0.6

C. Vehicles 758 85.0 - - - - - - 134 15.0 891 0.6

D. Goods, Services and Inputs 8 055 48.0 - - 916 5.5 7 621 45.4 195 1.2 16 786 11.6

E. Consultancies 3 954 47.0 1 500 17.8 1 989 23.6 - - 969 11.5 8 412 5.8

F. Trainings 4 142 33.4 - - 6 475 52.1 - - 1 801 14.5 12 417 8.5

Total Investment Costs 96 037 69.5 1 500 1.1 10 557 7.6 12 072 8.7 18 056 13.1 138 222 95.1

II. Recurrent Costs

A. Operating cost 2 390 84.6 - - - - - - 434 15.4 2 825 1.9

B. Salaries and Allow ances 3 572 84.1 - - 443 10.4 - - 233 5.5 4 247 2.9

Total Recurrent Costs 5 963 84.3 - - 443 6.3 - - 667 9.4 7 072 4.9

Total PROJECT COSTS 102 000 70.2 1 500 1.0 11 000 7.6 12 072 8.3 18 722 12.9 145 294 100.0




104



Project Components by Year -- Totals Including Contingencies

(US$ '000) Totals Including Contingencies

2017 2018 2019 2020 2021 2022 2023 Total


1. Irrigation Scheme Participatory Planning and Preparation 1 384 1 585 1 576 976 167 1 264 - 6 952

2. Small-scale Irrigation Infrastructure Development 1 242 15 362 27 409 27 849 25 675 - - 97 537

Subtotal 2 626 16 948 28 985 28 825 25 841 1 264 - 104 489


1. Agribusiness Linkages and Market Access 544 566 576 586 546 5 5 2 828

2. Capacity Building and Empow erment of Smallholder Farmers 1 320 1 656 1 616 1 354 1 284 869 - 8 100

3. Watershed Management 327 2 480 5 216 5 551 4 656 656 - 18 887

Subtotal 2 192 4 703 7 408 7 491 6 486 1 531 5 29 815


1. Learning and Know ledge Management 466 329 109 392 233 135 298 1 963

2. Program Management, Monitoring and Evaluation 2 198 1 369 1 077 1 311 947 1 028 1 099 9 028

Subtotal 2 665 1 697 1 186 1 703 1 180 1 163 1 397 10 990

Total PROJECT COSTS 7 483 23 348 37 578 38 019 33 507 3 957 1 402 145 294




106

Appendix 10: Economic and Financial Analysis

1. This Appendix presents the financial and economic analysis of PASIDP II. The financial

analysis aims at demonstrating that on-farm income generating activities, as proposed in the

Programme, are profitable and therefore sustainable for farmers. On the flip side, the economic

analysis aims at demonstrating that, from an economic and societal perspective, the Programme as a

whole is viable, taking into account, as much as possible, all quantitative and non-quantitative benefits

in situations with and without Programme.

A. Financial analysis

2. Thirteen crop budgets were prepared to show the impact of the proposed investments

investments in areas rainfed and irrigated areas. These are: (1) irrigated maize, (2) rainfed maize, (3)

irrigated wheat, (4) rainfed wheat; (5) rainfed sorghum; (6) rainfed teff; (7) irrigated onion; (8) rainfed

onion; (9) irrigated tomato; (10) irrigated chickpea, (11) rainfed chickpea, (12) irrigated faba beans,

(13) rainfed faba beans. Table 1 summarizes the yield assumptions. It is assumed that yields in

adjacent watersheds are 0.90% of those in irrigated conditions for farmers who own lowlands and

0.80% for farmers who only own land in the adjacent watersheds.

Table 1: Assumptions for crop yields

Crop Without programme

(rainfed)

With programme (irrigated)

With programme (rain-fed,

farmers with lowlands)

With programme (watershed)

Maize 1,500 kg/ha 3,000 kg/ha 2,700 kg/ha 2,400 kg/ha

Wheat 1,500 kg/ha 2,700 kg/ha 2,430 kg/ha 2,160 kg/ha

Chickpea 700 kg/ha 1,800 kg/ha 1,620 kg/ha 1,440 kg/ha

Faba beans 700 kg/ha 1,800 kg/ha 1,620 kg/ha

Tomato 5,000 kg/ha 20,000 kg/ha

Sorghum 1,000 kg/ha

2,000 kg/ha 1,600 kg/ha

Teff 700 kg/ha

1,500 kg/ha 1,350 kg/ha

Onion 4,000 kg/ha 10,000 kg/ha 9,000 kg/ha

3. These farm models capture the multitude of coping strategies developed by farming

households in the Programme area. On the basis of the above crop models, six farm models with a

without and with programme situation. These farm models illustrate (i) the impact of agricultural

production in areas ‘close’, and ‘far-away’ from markets, (ii) in highlands, medium altitude and

lowlands; (iii) irrigation/watershed or watershed. All farms are 1 hectare in size. The introduction of

new technologies and irrigation schemes will increase their productivity, update their skills set to

manage with more modern farming techniques and compete with the emergence of larger farm

holdings in Ethiopia. In the without project situation, farmers (models A, B, C and D) cultivate only 1

ha of rain-fed crops. In the with programme situation, they cultivate 1 ha of rain-fed crops during the

rainy season and 0.4 ha of irrigated crops during the dry season. Yield increases are the result of (a)

irrigation; (b) the use of inputs and improved seed provided through the FRGs and extension groups;

(c) better management in the watersheds, due to input supply and extension support. Models E and F

simulate farmers that have only 1 ha in the adjacent watersheds. They only cultivate during the rainy

season. Higher yields result from better land management, access to seed and inputs.

Table 2: Financial farm models

Without programme With programme

Rainy season cultivation Rainy season (rainfed) and dry season (irrigation)

cultivation




107

Model A: Highland with

limited access to market

Rain-fed crops (1 ha):

Maize, teff

Rain-fed crops (1 ha): maize, teff, wheat, chickpeas

Irrigated crops (0.4 ha): maize, faba beans

Model B: Highland with good

market access


Maize, wheat

Rain-fed crops (1 ha): wheat, chickpeas, onions

Irrigated crops (0.4 ha): maize, faba beans, tomatoes

Model C: Middle lands with

limited access to markets


Sorghum, teff, beans

Rain-fed crops (1 ha): sorghum, teff, faba beans

Irrigated crops (0.4 ha): maize, chickpeas

Model D: Humid area with

market access


Sorghum, beans

Rain-fed crops (1 ha): sorghum, faba beans, onions

Irrigated crops (0.4 ha): maize, chickpeas, tomatoes

Model E: Watershed with

limited market access


Maize, teff

Rain-fed crops (1 ha): maize, teff, wheat, chickpeas

Model F: Watershed with

good market access


Maize, wheat

Rain-fed crops (1 ha): maize, wheat, chickpeas

4. The farm models test the profitability of the investments in irrigation schemes and improved

watershed management. The table below summarizes the incremental net benefit flow of the 6 farm

models over a period of 10 years, as well as key financial performance indicators (IRR, return to

family labour, NPV and B/C ratio). A discount rate of 10% was used on all models to reflect the

opportunity cost of capital in Ethiopia. Overall, the farm models of the Programme are financially

sound, with farmers involved in irrigation having significantly higher incomes than those that have only

land in the adjacent watersheds.

Table 3: Financial farm models cash flow

B. Programme costs and indicators of the logical framework

5. The following table provides information on Programme costs and beneficiaries. The average

cost per beneficiary of PASIDP II (IFAD contribution) is approximately US$ 1,145, which is

acceptable.

Table 4: Programme costs

Component

Cost IFAD, ASAP

million US$ Household Cost

US$/Household

A. Investment in Small-scale Irrigation Infrastructure 84,5 46 250 1827

Model A: Highland

area with limlited

acces to the market

Model B: Highland

area with acces to

the market

Model C: Middle lands

area with limlited acces to

the market

Model D: humid

area with acces to

the market

Model E: Watershet

area with limlited

acces to the market

Model F: Watershet

area with acces to the

market

PY1 -43 243 -42 316 -45 495 -40 250 -14 260 -16 417

PY2 9 229 13 278 6 982 14 522 657 -3 883

PY3 12 124 19 566 11 994 22 090 4 027 5 618

PY4 12 079 19 666 12 094 22 090 3 983 5 718

PY5 12 079 11 666 12 094 14 090 3 983 5 718

PY6 12 079 19 566 11 994 22 090 3 983 5 618

PY7 12 079 19 666 12 094 22 090 3 983 5 718

PY8 12 079 19 666 12 094 22 090 3 983 5 718

PY9 12 079 19 566 11 994 22 090 3 983 5 618

PY10 12 079 19 666 12 094 22 090 3 983 5 718

1,38 1,70 1,40 1,73 1,42 1,7921 607 54 070 17 558 67 841 5 174 6 905

IRR 22% 38% 19% 45% 18% 18%

245 373 259 376 185 294

F

I

N

A

N

C

I

A

L

A

N

A

L

Y

S

I

S

Farm models' net incremental benefits -NIB

(in ETB)

B/C NPV (ETB) @ 10%

Return to family labour




108

B. Investment in Capacity for Sustainable Agriculture 20,1 100 000 200

C. Programme management, monitoring and evaluation

9,9 100 000 99

Total 114.5 108 750 1,052

6. The key logical framework indicators that are directly sourced from the logical framework are

presented in Table 5.

Table 5: Logical framework indicators derived from the EFA

Outcome Indicator Baseline Final

Improved income and food security for rural households on a sustainable basis

Number of households 0 108,750

Increase in farm income from irrigation/rain-fed (1 ha)

Farm model A (ETB) 5,210 18,772

Farm model B (ETB) 7,833 29,072

Farm model C (ETB) 5,499 19,583

Farm model D (ETB) 6,298 29,840

Farmers have sustainable access to irrigation schemes

Ha of irrigation schemes 0 15,000

Number of farmers 0 37,500

Farmers have increased market-oriented skills and capacity for sustainable agriculture.

Yield increases

Maize 1.5 MT/ha 3.0 MT/ha

Onion 4 MT/ha 10 MT/ha

Chickpea, faba bean 0.7 MT/ha 1.8 MT/ha

Number of ha of watersheds 0 60,000

Increase in household income from agriculture

Farm model E (ETB) 5,295 9,674

Farm model F (ETB) 9,108 14,973

C. Economic Analysis

Main assumptions and shadow prices

7. An economic analysis has been carried out to assess the economic viability of the Programme

as a whole from the perspective of the country’s economy and of the general interest.

8. A cost-benefit analysis was carried out to assess the economic viability of the proposed

Programme. The analysis was conducted over a 20-year period and in constant 2016 prices.

Economic benefits considered in the analysis are: (i) the incremental net economic benefits from crop

production in the irrigation schemes (models A, B, C, D); (ii) the incremental net economic benefits

from crop production in the rain-fed watersheds (models E, F); (iii) the net benefits of PASIDP I

farmers who receive agronomic support and market access support (conservatively estimated at 10%

of net benefits received by PASIDP II farmers); (iv) revenues of jobs created along the value chain

(estimated at ETB 36/day); (vi) benefits from the agribusiness linkages, market access and agronomic

support for PASIDP II farmers have not been integrated as they overlap with those from the crop

models; (vii) the economic cost of the Programme has been calculated using COSTAB; corrections

have been made in order to avoid double counting (mainly the investments in irrigation schemes and

watersheds). The adoption rate of technologies is 75%. Financial prices and costs and benefit

streams derived from the financial crop models have been transformed into economic values. All the

investment, replacement and recurrent costs related to the activity and crop models are already taken

into account in the calculation of the models’ profit margins for each crop.

9. Assumptions regarding shadow prices are presented in the table below. For the purpose of the

analysis , an opportunity cost of capital of 10% is taken for the calculation of NPV, based on: (i) 10

year Ethiopian Government bond yield of 6.7% (December, 2014); (ii) Bir deposit rate of 5% (March

2016); and (iii) Interest rate spread in Ethiopia of 5.0% (March 2016). Financial prices were collected




109

by the field team during March and April 2016 and their economic values were calculated by using a

standard conversion factor of 0.78 for imported chemicals and 1.02 for exported agricultural goods.

10. To calculate the economic NPV, future net incremental benefits were discounted using a social

discount rate. The choice of the discount rate is based on the recent recommendations of the World

Bank found in the “Technical Note on Discounting Costs and Benefits in Economic Analysis of World

Bank Projects”. This Note recommends to use a 5 percent discount rate in World Bank’s project

evaluations. This discount rate was adjusted to 6,5% and applied in the context of Ethiopia.

11. While a shadow price of 0.8 was used for labour to compensate for higher than average

unemployment in rural areas.

Table 6: Shadow prices

Item Conversion factor

Imported chemicals 0.78

Exported agricultural goods 1.02

Crops for domestic market 1.00

Labour 0.80

Investments in schemes, equipment 0.87

Aggregation of beneficiaries and phasing

12. PASIDP II will have 108,750 beneficiaries of which (i) 46,250 households in irrigation schemes

(0.4 ha per household), most of them will also have fields in the watersheds (1 ha per household); (ii)

an additional 37,500 farmers will only benefit from the interventions in the watershed (1 ha per

household), (iii) 15,000 households that received investment support under PASIDP I will also receive

agronomic and market access support; and (iv) additional 15,000 jobs will be created, on top of those

in the benefitting households. The shift from 1 rain-fed cropping season to 1 or 2 irrigated and 1

rainfed, in addition to marketing and processing the additional activities will lead to job creation. These

have been estimated at 1 job per ha of irrigated crops, so a total of 15,000 additional jobs.

Considering an average household size of 6 in the Programme area, this adds up to 652,500

household members.

13. Component A and B is expected to lead to (i) strong increase in crop production and marketing

in 15,000 ha irrigation schemes, from 1 rainfed cropping season to 1 or 2 irrigated and 1 rainfed

season; this would lead to strong increases in farm income (ii) higher yields in 60,000 ha of adjacent

watersheds; (iii) additional job creation for 15,000 young and landless people, who are not member of

the households that own irrigation schemes or watersheds; (iv) improved market access and higher

yields for 15,000 farmers that received investment support under PASIDP I.

14. The analysis identifies all the possible quantifiable incremental benefits generated by the

PASIDP II's implementation at the crop, farm and programme level (without entering into

infrastructure benefits). The benefits stream corresponds to: (i) the farmers’ benefits analysed in the

financial analysis – i.e. increased agricultural production in the upstream as well as in the downstream

area; The illustrative financial models described previously have been used as a basis for the

calculation of the overall (economic) benefit stream, after conversion of the financial prices into

economic values. For the purpose of this analysis, the benefits derived from 75,000 hectares have

been aggregated and treated as a whole. The numbers of physical activities (properly phased in time)

were multiplied by their respective net economic returns per unit as calculated in the crop budgets. An

adoption rate of 70% at full development was used in the calculations.

15. In addition to the quantified benefits described above, the PASIDP II is expected to generate a

number of benefits that would be extremely difficult to evaluate in monetary terms. The loss of soil,

soil erosion, flooding and damage by natural disasters were not quantifiable by the field team during

the mission. Reliable data and the issue of negative accounting were major issues in trying to

establish a method for their measurement. Estimation of the net benefits from natural resource




110

rehabilitation and erosion control measures, intensification and diversification of farming systems

remain difficult to quantify.

Table 8: Phasing of implementation (ha)

Programme economic cash flow

16. The Programme economic cash flow represents the overall Programme aggregation of

economic costs and benefits. It includes the net incremental benefits of each financial model in

economic terms, converted with shadow prices, and multiplied by the number of direct beneficiaries of

each category. It also includes additional revenues earned by young people that found a job, as well

as incremental net revenues from PASIDP I farmers that received agronomic and marketing support

under PASIDP II.

17. In order to estimate the Programme’s economic viability, in terms of Economic Internal Rate of

Return (EIRR), the cash flow calculated includes the Programme base costs (as extracted from the

COSTAB tables). These costs include all investment and recurrent costs for components 1, 2 and 3 -

mainly for operation and maintenance. A public cost after the initial programme investment period is

estimated at 5% of the economic cost per annum.

Table 9: Programme economic cash flow, benefits and costs for the first ten years

Summary of economic costs and benefits

PY1- - - - - - - -

6 416(6 416)

PY2 - - - (529) (885) - 324 (1 091) 7 067 (8 158)

PY3 (2 583) (2 592) (2 756) (577) (963) 1 127 647 (10 125) 6 544 (16 670)

PY4 (5 064) (5 066) (5 761) 1 394 1 632 3 662 645 (13 151) 5 768 (18 919)

PY5 (3 203) (3 015) (4 550) 4 268 5 153 6 197 647 2 430 5 015 (2 586)

PY6 (474) 99 (2 365) 2 959 4 055 8 451 647 10 886 7 445 3 441

PY7 5 646 6 626 3 602 702 1 788 8 451 647 26 324 5 135 21 190

PY8 4 827 6 114 2 882 2 108 3 188 8 451 647 26 563 3 525 23 038

PY9 4 822 6 118 2 887 5 112 6 201 8 451 647 31 079 3 525 27 554

PY10 5 057 6 353 3 122 6 333 7 422 8 451 647 33 614 3 525 30 089 PY11 6 935 8 226 4 995 6 333 7 413 8 451 647 39 235 3 525 35 710

PY12 6 935 8 231 5 000 6 333 7 422 8 451 647 39 248 3 525 35 723 PY13 6 935 8 231 5 000 6 333 7 441 8 451 647 39 262 3 525 35 737 PY14 6 935 8 232 5 001 6 333 7 448 8 451 647 39 270 3 525 35 745 PY15 6 935 8 244 5 013 6 333 7 448 8 451 647 39 288 3 525 35 763

PY16 6 935 8 244 5 013 6 333 7 448 8 451 647 39 288 3 525 35 763

PY17 6 935 8 244 5 013 6 333 7 448 8 451 647 39 288 3 525 35 763

PY18 6 935 8 244 5 013 6 333 7 448 8 451 647 39 288 3 525 35 763

PY19 6 935 8 244 5 013 6 333 7 448 8 451 647 39 288 3 525 35 763

PY20 6 935 8 244 5 013 6 333 7 448 8 451 647 39 288 3 525 35 763

Cash Flow

('000 US$)

NET INCR.

ECONOMIC COSTS

('000 (US$)PASIDP I

farmers

Total Ec. NIB

('000 US$)

Employed

youth

NET AGGREGATED INCREMENTAL BENEFITS (000 US$)

Model E:

Watershet

area with

limlited acces

to the market

Model F:

Watershet

area with

acces to the

market

Model A:

Highland area

with limlited

acces to the

market

Model C: Middle

lands area with

limlited acces to

the market

Model B:

Highland area

with acces to

the marketE

C

O

N

O

M

I

C

A

N

A

L

Y

S

I

S

PY 1 PY 2 PY 3 PY 4 PY 5 PY 6 PY 7

Number of hectares

Ha of operational irrigation area 0 0 3,000 5, 300 5, 300 4,800 0

Ha of watershed development started 8,000 18,000 18,000 16,000 0 0

Irrigation area (ha) cumulative 0 0 3,000 8,300 13,600 18,400 18,400

Watershed area (ha) cumulative 8,000 24,000 44,000 60,000 60,000 60,000

Number of beneficiaries

Farmers in irrigation 0 6,167 20,042 33,917 46,250 46,250

Farmers in watersheds 8,000 23,000 34,500 37,500 37,500 37,500

Youth employment 0 2,000 6,500 11,000 15,000 15,000

PASIDP I farmers that receive agronomic and marketing support

5,000 10,000 10,000 10,000 10,000 10,000

Total number of beneficiaries 13,000 41,167 70,792 92,417 108,750 108,750




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ERR, NPV and sensitivity analysis

18. The ERR of 28.8% over 20 years is profitable from an economic standpoint, with a net present

value of US$ 165.2 million per annum. Starting from a very low level of production, Programme

activities will lead to substantial results with efficient investments, good basic management and

adequate supply of inputs. While the analysis considers achievable yield increases, the biggest

challenge will lie in the continuous farm maintenance and also supply of inputs to reach an enhanced

production level.

19. The sensitivity analysis assessed the effect of the main risks for the Programme and the adverse situations that would arise and have a negative impact on the Programme in terms of benefits and costs and various lags in time. The sensitivity analysis indicates a solid resilience to increases in costs. The adoption rate and time lags of benefits are the most sensitive factors.

Table 10: Summary of economic analysis and sensitivity analysis

Link with the risk matrix IRR (%) NPV (US$)

Base case 28.8% 165 227.74

Combination of risks affecting output prices, yields and adoption rates

27.6% 143 948.96

26.3% 122 670.18

Increase of input prices or construction material

27.8% 227 333.89

26.7% 221 512.77

Risks affecting adoption rates and low implementation capacity

25.9% 141 185.24

23.2% 118 610.12

20. The graph below depicts and compares over time Programme’s net benefits and incremental

costs alongside Programme cash flow. After the initial investment period, the annual net economic

benefit amounts to approximately US$ 36 million per annum.

Graph: Programme economic cash flow (000 US$)




112

(30,000)

(20,000)

(10,000)

-

10,000

20,000

30,000

40,000

50,000

PY1 PY2 PY3 PY4 PY5 PY6 PY7 PY8 PY9 PY10PY11PY12PY13PY14PY15PY16PY17PY18PY19PY20

Cash Flow ('000 US$)

NET INCR. ECONOMIC COSTS ('000 (US$)

Total Ec. NIB ('000 US$)




114

Appendix 11: Draft programme implementation manual

Overall Approach to Programme Implementation

The implementation of the Participatory Smallholder Irrigation Development Programme (PASIDP) would be guided by five inter-related and mutually supportive principles; these are:

Full and effective participation by all stakeholders throughout the processes of planning and implementation, with particular emphasis given to participation by the target group;

Technical viability, especially the reliability of water supply to provide for the command area as planned;

A landscape approach to watershed management, ensuring that irrigation command areas and downstream private and public facilities are protected. It is also essential to simultaneously provide for sustainably enhanced productivity within watershed areas contiguous with irrigation schemes;

Inclusiveness for all community members associated with the irrigation schemes, whether or not they are actively involved as irrigation farmers; and,

To ensure financial viability, training in agribusiness skills and market access must be readily available to all the participating farmers.

Effective Participation by all stakeholders. The approach will be taken that the investments concerning PASIDP supported developments must be jointly identified, designed, constructed and implemented, with particular assurance required for full participation by smallholder farmers. Several institutional initiatives will support this approach. These will include:

the formation of Irrigation Water Users Associations (IWUAs) from the commencement of the scheme identification and feasibility study;

engagement of Primary Cooperatives (PCs) to develop the business case for the investment; and,

formation and engagement with Watershed Management Teams (WMTs) to plan and guide investment to enhance the sustainable use of the watersheds.

It will be important that targeted smallholder clients are effectively involved in key decisions, and they are given all relevant information in order to participate. This includes information on matters such as the design of the scheme, the likely costs of water supply and the viability of market access for produce. This participation will, ensure effective scheme ownership by the smallholder clients.

Technical Viability. Irrigation schemes are a device used to provide for full crop water requirements beyond the rainy season. They are used to provide confidence to farmers that they can extend their production period well beyond the period when rainfall is received. This means that farmers are able to engage in production systems that provide greater opportunities for productivity and profit. However, to do so requires a greater commitment of purchased inputs and labour. For this to be fully effective, farmers need to have certainty about the reliability of water supply, especially in years when there is low rainfall. If information about the technical viability of the scheme is not accurately provided to farmers, then they may take production and financial risks unknowingly. It will be crucially important that accurate estimates of the technical viability of the schemes are made, and that these are made available to farmers to allow them to assess risks and adopt appropriate risk minimization methods.

Landscape Approach to Development. Irrigation schemes cannot exist sustainably in isolation from the surrounding watershed and catchment landscape, especially in the sloping and hilly terrain common in the programme areas. There are implications for the irrigation schemes in terms of their sustainability if the contiguous watersheds are unstable, and prone to high levels of soil erosion, run-off and degradation. This can result in damage to the schemes themselves, insecure water supplies for irrigation and damage to downstream facilities. Accordingly, the PASIDP approach will involve investment in the watersheds contiguous with the schemes, to ensure a stable and productive hinterland. The investments in the watersheds will be both environmentally sustainable and commercially viable for the users.

Inclusiveness. Not all members of a community identified for irrigation development will be able to, or choose to become irrigation farmers. This will be determined by their capacity, access to land and preferences




115

for production and associated commercial risk. However, it is important that there is inclusiveness in the benefits of the overall investment. Community members who are unable or unwilling to become irrigation farmers will nevertheless receive access to the benefits of the investment. This may be in the form of incremental labour, skilled or semi-skilled employment, enhanced rainfed agriculture in the watershed, or other activities associated with the investment in watershed areas. Particular attention will be paid to the employment needs of women and youth, and the programme will provide specific training to enable them to participate.

Financial Viability. The programme will seek to ensure the financial viability of all schemes. This is necessary to enable their sustainable operation through ongoing contributions to operation, maintenance and renewal costs, as well as providing for enhanced income generation by the participating farmers. The programme will embed training in agri-business skills and initiatives to ensure reasonable access to markets for all investments, both in irrigation and watershed development. Proposals will need to be able to demonstrate financial viability prior to investment decisions being taken.

PROGRAMME IMPLEMENTATION MANUAL

TABLE OF CONTENTS

Page

1 INTRODUCTION …………

A Purpose and Contents the PIM

B Overall Approach to Programme Implementation

C Documents Referred and Acknowledgements

2 PROGRAMME SUMMARY

I Strategic Context and Rationale

II Programme Description

III Programme Implementation

IV Programme Costs, Financing, Benefits and Sustainability

3 TARGETING AND SELECTION CRITERIA

A Loan Covenants, and Implications for Implementation

B PASIDP II Approach to Development

C Selection Criteria: Small Scale Irrigation Schemes

D Selection Criteria: Watershed Development Activities

4 PROGRAMME MANAGEMENT …

A Introduction

B Programme Coordination

C Federal Programme Coordination Management Unit

D Regional Programme Coordination and Management Units

E Woreda and Kebele Level Organisations

5 FINANCIAL ADMINISTRATION AND MANAGEMENT ……

A Flow of Funds

B Types of Accounts

C Special Account

D Programme Accounts

E IFAD Disbursement Procedures

F Check List for Withdrawal Applications

G Annual Financial Statements

H Audit Procedures

I Project Completion

J Notes to Financial Statement

Application for Withdrawal

Summary Sheet Forms

Special Account Reconciliation Statement

Application for Special Commitment

6 PROCUREMENT PROCEDURES ………

A General Conditions of Procurement

B Procurement Methods

C Procurement Procedures

D Review of Procurement Decisions

E Procurement Committees




116

F Guidelines for Evaluation of Bids

G Bid Evaluation Summary Checklist

H Procurement Method: Goods and Work

I Procurement Method: Services

J PASIDP Financing Rules & Procurement Methods

7 CAPACITY BUILDING & TRAINING ………

A Introduction

B Key Factors for Success

C Training Needs Assessment

D Training the Woreda and Kebele staff

E Training for Primary Cooperatives

F Training IWUAs

G Training WMTs

H Implementation Arrangements

Tables

8 IWUAs & LEGAL INSTRUMENTS

A Traditional Water User Groups

B Water User Cooperatives

C Water user Associations

D Ensuring Legal Status to IWUAs

E Ethiopian Water Laws & Standards

F Model Regulations for IWUA Establishment

G Model Statues of IWUAs

H Model Scheme Agreement

9 SMALL-SCALE IRRIGATION DEVELOPMENT …

A Component Objectives

B Key factors for Success

C Programme Interventions and Unit Costs

D Executing Agencies

E Milestones

F Implementation Procedures

G Checklist for Validating Scheme Selection

H Outline Format for Validation Report

I List of Schemes Constructed under PASIDP I

10 AGRICULTURE DEVELOPMENT ………

A Component Objectives

B Key Success Factors

C Component Activities

D Implementation Arrangements

E Guidelines for Preparation of ADP

F Outline Format for ADP Report

11 MANAGEMENT INFORMATION SYSTEMS…

A Introduction

B Approach

C Measuring results

D PASIDP Monitoring Indicators

E Learning

F Impact Measurement

G Assessing RIMS Indicators

H Staffing

I Logical Framework Planning

J Establishing Participatory MIS

K Indicative List of Baseline Data for Scheme

L PASIDP Logical Framework

12 TECHNICAL ASSISTANCE

A Introduction

B TOR for the Preparation of PIM [not included]

C TOR for M&E Technical Assistant

D TOR for Training Needs Assessment Study




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E TOR for Legal Study

F TOR for Design Review & Supervision

G TOR for Specialists for Implementation Support

H TOR for Procurement Specialist

I TOR for Irrigation Agronomist

SUP. RESULT-ORIENTED ANNUAL WORK PLAN & BUDGET

A Introduction

B Model Format for AWP&B

C Pointers for Preparation of AWP&B

D AWP&B

Table 1: Result-oriented AWP&B

Table 2: Procurement Plan

Table 3: Training Schedule

Table 4: Staff Deployment




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Appendix 12: Compliance with IFAD policies

I. Compliance with IFAD Policies

1. The design of the PASIDP II is aligned to the Strategic Framework 2016-25, the Targeting Policy – Reaching the Poor (2010), and the Gender Equality and Women’s Empowerment (2012). The Programme will ensure that women and youth equally benefit from programme interventions. PASIDP II will be implemented in compliance with IFAD’s Policy on Improving Access to Land and Tenure Security, the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests and the Framework and Guidelines for Land Policy in Africa. As such, before supporting any development intervention that might affect the land access and use rights of communities, it will ensure that their free, prior and informed consent (FPIC) has been solicited through inclusive consultations based on full disclosure of the intent and scope of the activities planned and their implications. The Programme is aligned to IFAD’s Natural Resources Management Policy and Climate Change Strategy.

II. Social, Environmental and Climate Assessment Procedures

(SECAP)

A. Major landscape characteristics and Issues (environmental, social, natural resources and climate)

2. Ethiopia is Africa’s second largest country by population, with more than 96 million people and growing at a rate of over 3% annually. More than three quarters of the population in Ethiopia live in rural areas, contributing some 45% of GDP, most of the country’s food crop production, and 90% of the export value (World Bank, 2011). The country’s rapidly growing population relies on a fragile natural resource base for livelihood security. In recent decades, the country’s farming systems have been subject to critical rainfall variability leading to fluctuations in production and, in some years, severe food crises in parts of the country. Current scientific evidence suggests that global climate change will lead to greater rainfall variability (World Bank, 2011), which will further impede the country’s farming sector.

3. Structurally, in many parts of northern Ethiopia, agriculture is affected by declining farm size. Units of land divided up by each generation are declining, in many cases to plots that are insufficient in size to support food security. On these small plots, typically 0.5 ha or less, many smallholders are trapped in low productivity. They are forced to convert already low levels of assets (e.g. livestock) into cash. As a result, many highland farmers have little capacity, even if willing, to engage in agricultural intensification. Coupled with lack of land, variability and unpredictability in rainfall persists, which is a key reason for Ethiopia, now ranking as one of the countries at most ‘extreme risk’ from the effects of climate change. Some 50% of Ethiopia’s land area is arid or semi-arid, and largely represents the lowland areas of the country, either kola or bereha. In such areas, the coefficient of inter-annual rainfall variability around the mean is as high as 30%. Per capita cereal production is already low at about 150 kg per person per year and since the 1980s, Ethiopia has had a structural food deficit.

4. The Government has embarked on a massive soil and water conservation programme, with farm households contributing some 60 days each year (2 months) for completion. Ethiopia’s livestock sector is vast; the 10th largest in the world. Livestock and livestock products contribute an estimated 16% of national GDP. However, in recent years, a complex set of factors, increased rainfall variability, rising temperatures, invasive species, conflict and overgrazing, are forcing huge changes within pastoral communities. The Government is responding with a range of approaches, including emphasising (controversially) greater sedentarisation.

5. PASIDP II is, thus, being planned to partly contribute towards the achievements of the Government's soil and water conservation programme goals.

B. Potential project’s social, environmental, and climate change impacts and risks




119

6. The Programme area covers four regions of Ethiopia. These include: Amhara, Oromia, Southern Nations Nationalities and Peoples Region (SNNPR), Tigray. Hence, interventions will be applied across a number of livelihood zones. In areas that have climates that vary from semi-arid to humid, in the lowlands/rift valley which contain nearly all of the important areas for cereal cultivation, the livelihood is mostly based on a mixed crop-livestock system. The highland annual cropping and farming system, in contrast, is dominated by a wide range of cereals, oil crops and food legumes.

Table 3. Various scheme scenarios, climate-related risks and potential interventions

Scheme Scenario Characteristics Climate-related risks Possible Solutions/ interventions

Schemes in very short growing periods (<70 days); water from upstream highlands

Limited control over water sources

Extreme floods

High maintenance costs

Strong structures; considering extreme events;

Improved watershed management

Schemes in very short growing periods (<70 days), perennial sources

Strong upstream-downstream competition;

huge water losses

Vulnerable communities; high risk of crop failure

Improved water management;

Enforced byelaws

Water fees

Semi arid (90-120 growing days); seasonal water available

Strong on-site competition

Conflict,

Over exploitation

Develop alternative water sources;

Enforced byelaws

Water fees

Semi, humid, occasional drought (>120 growing days)

High rainfall, irrigation only supplementary

Siltation of canals

Destruction of headwork

Strong structures;

Integrated watershed management;

Water fee for cleaning

C. Environmental and Social Category 7. Social, Environment and Climate Assessment Procedures (SECAP) – The categorisation of the PASIDP II was reviewed under IFAD's SECAP and the Ethiopian Environmental Assessment procedures. The majority of interventions, including irrigation schemes, are expected to have only limited and site-specific environmental and social risks that can be readily remedied by appropriate preventive actions and/or mitigation measures. However, it is probable that a number of irrigation schemes will be included that may have significant implications that affect a broader area and are not readily remedied. This may include physical resettlement and/or economic displacement, and loss of environmental services provided by a natural ecosystem. Therefore, the Programme will be preliminary classified as Category A. Since the exact sites and interventions are not known at this stage, an Environmental and Social Management Framework (ESMF) has been developed for the Programme, whereas Environmental and Social Impact Assessments (ESIAs) will be done during Programme implementation, only for those schemes classified as Category A. For category B projects, Environmental Management Plans will be prepared. The Ethiopian regulations also require that for every Environmental and Social Impact Assessment (ESIA), there is a need to prepare a Local Community Plan for Environmental Management through a Woreda Community Association..

8. SECAP defines an operational framework for integrating social, environment, and climate aspects into IFAD operations. It sets out a minimum risk assessment process that will apply to PASIDP II. SECAP will also help to foster the key links between poverty, environmental, climate, and social issues and for example development irrigation and agriculture. Generally, the application of SECAP to PASIDP II interventions will address the social, environmental and climate impacts associated with the Programme’s design and implementation by: a) adopting the guiding values and principles in SECAP (Environmental Assessment (EA), Free Prior and Informed Consent (FPIC) and Resettlement Action Plan (RAP)) to promote high social and environmental benefits; b)




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mainstreaming social, environmental and climate mitigation and adaptation sustainability (SECAP and ASAP) considerations into all PASIDP II activities; and c) ensuring effective stakeholder’s equity, consent, engagement, and compensation including a procedure to respond to alleged complaints from project-affected individuals/communities.

9. As part of the early design Mission programme, the Ethiopian environmental assessment procedures (EIA guidelines) were assessed. Based on the Ethiopian regulations, the small and medium scale scheme assessments will be prepared at the Regional level. While high scale projects are reviewed by the Federal government, the ‘’light EIAs’’ remain in the realm of the regional offices. What is missing in the Ethiopian regulations are the social aspects/perspectives which are integrated in the SECAP procedures. These will be provided by potentially applying FPIC and RAP when appropriate.

10. The design and implementation of PASIDP II are meant to: a) contribute to improve land, water and energy productivity in rain-fed and irrigated agro-ecosystems; b) generate increased and more equitable income from agricultural and natural resource management and ecosystem services in rural and peri-urban areas; c) enhance the decision making power of women and marginalised groups and increase the benefits derived from agriculture and natural resources; d) through SECAP, the Programme will contribute to climate proof the investments; e) to mitigate the impacts of climate change (CC); and f) increase the resilience of communities through enhanced ecosystem services and productivity in agricultural landscapes.

11. CC is omnipresent in most parts of the country and represents a new level of impacts that are not inward up but outward down. Along with the effects and impacts of CC, comes also a level of national and regional knowledge both at the Federal and Regional levels. The Agricultural Transformation Agency (ATA), based in Addis Ababa, is leading the CC, adaptation and mitigation platform in Agriculture. The Adaptation for Smallholder Agriculture Programme (ASAP) will facilitate the process of mitigating the effects of those risks by increasing the ability of low income communities to adapt to environmental and economic variability, demographic shifts shocks and long term changes and thus to building Resilience and Livelihoods. ASAP will provide an incremental platform for adaptation best practices in PASIDP II.

12. Free Prior and Informed Consent (FPIC) and Resettlement Action Plan (RAP) – During the course of PASIDP II implementation FPIC and RAP may be triggered by the following ’safeguards’: a) climate and economic displacement and migration within Ethiopia and towards the frontier regions; b) climate change and variability effects on gender; c) land certification and tenure in the highlands compared to little or no certification in the lowlands; and d) the Programme base potential resettlements. An FPIC plan will be drafted and will be finalized prior to Programme commencement. It will be discussed and agreed upon with community representatives including pastoralist traditional institutions and Government. In this respect, the dropout pastoralists need their specific FPIC process to choose among diverse livelihood strategies. The FPIC plan will indicate requirements for Programme agreement linking with any RAP requirements and clearly stating that the Programme will not finance any forced resettlements.

13. Some of the Programme activities, such as construction of the different structures, will have a positive socio-economic impact on the communities due to the provision of local employment opportunities and an increase in local market sales. This will provide short-term positive benefit to the local communities and families. Labourers’ wages are estimated at amounts which exceed the annual household income of residents of the Kebele. Assuming that a formerly non-productive family member was employed by the Programme, this would result in a doubling of family income. If this additional spending power, as well as a portion of that of the skilled workforce, were concentrated in local communities, it would be a substantial boost to the local economy.

D. Climate Risk Classification 14. A new dimension of impacts, that may be qualified as 'externals' effects, impacts and risks need to be included in the ESIA analysis. These are climate change impacts. Traditionally, an ESIA would not look at effects, impacts and risks that are not inherent to the project itself (and directly caused by the project). Ignoring the external impacts and effects (caused by, for example, floods and droughts on the project and its goods, infrastructures, ecosystems and people) would greatly diminish the value of the ESIA instrument. The impact and risks of CC vary from the Highlands to the Lowlands where




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they are very significant and impact the environment, access and availability to water resources and natural resources as well as livelihoods. In general, the classification of risks will vary from medium in the highlands to high in the lowlands because of the real drought threat.

15. ASAP will assess its interventions in the PASIDP II target areas. It is noted that there is no lack of CC data in all regions of Ethiopia and also of actors with interest in the effects of CC (legislators, civil societies, universities and research centres). ASAP will deepen the knowledge of adaptation and climate risk reduction in Ethiopia. This will be the first steps for ASAP in Ethiopia.

E. Institutional Objectives, Monitoring and Evaluation 16. PASIDP II design has included a strong capacity building programme to ensure an efficient M&E system during the course of Programme implementation. A ‘needs assessment’ will be undertaken to identify gaps and, accordingly, design specific interventions to address the identified gaps. Experience sharing visits and training key stakeholders in participatory methods and bio-physical data collection and analysis tools will help to build the human capacity and also be an incentive for them to be involved in learning oriented M&E system. It is noted that PASIDP did not include environmental monitoring in its M&E system. This is because the SECAP was not in application with its elements and requirements. PASIDP II will ensure that environmental monitoring is included in the M &E system. It is expected that the M&E system will monitor major short-term (yearly) quantified outputs, a few medium-term outcomes and one or two long-term impacts, including the RIMS impact (climate resilience). The M&E activities, related to SECAP objectives in PASIDP II, should be able to answer the following questions, when applicable: a) extent to which the Programme demonstrates awareness and analysis of current and future climate risks; b) extent to which the Programme includes explicit measures to reduce the vulnerability of livelihoods to climate shocks and stresses; c) extent to which the Programme is adopting measures for the restoration or sustainable management of natural resources; d) extent to which the Programme is developing the capacity of community groups and institutions to manage climatic and environmental risks; and e) extent to which climate-related considerations are integrated in a coherent, consistent and logical manner across the design of the Programme.

17. Geo-referenced Baseline and Targets – One of the main purposes of the Programme M&E system is to track changes on the performance indicators. This will require the establishment of baseline and target to compare the changes in the targeted beneficiaries for each of the indicators. Comparison with non-beneficiaries will be undertaken, where applicable, based on the availability of secondary data. Preliminary baseline and target are already established for most of the indicators on the basis of economic and financial analysis. Targets on environmental-related indicators will be added once the baselines in the environmental evaluations are undertaken. A more targeted and geo-referenced baseline data is to be developed in PASIDP II.

18. Each ESIA Category A has a mandatory requirement to present a baseline. As part of the SECAP training during the launch of the Programme, it will be made clear that for each ESIA to be done, a baseline will have to be undertaken the data set/parameters needed will be established, mostly environmental and socio economic data. It was established that CC data was available in most of the Regions. In addition, ASAP vulnerability analyses will be done and the data obtained exploited. All baselines are to be undertaken in conjunction and under guidance from the M&E Specialist.

19. Data Collection and Management Tools – One of the tools is the FAO’s Self-evaluation and Holistic Assessment of climate Resilience of farmers and Pastoralists (SHARP). It was developed in a collaborative manner with numerous contributors in the context of ongoing GEF-financed climate change projects. SHARP is both a learning tool as well as a monitoring and evaluation tool that works by first identifying areas of poor resilience and providing a baseline upon which changes can be assessed. It fills a void in farm system resilience assessments carried out in an integrated participatory, yet scientifically sound manner.

20. Lessons Learned – Implementation of PASIDP has many lessons on what worked well and what did not work well; these will help make PASIDP II a better Programme. Best practice irrigation schemes from PASIDP will be identified in each region based on a set of criteria, including the processes and achievement proven to produce sustainable agricultural and water management practices. These sites will, thus, be designated as learning sites for the different exposure visits to be undertaken in PASIDP II. In this regard, it is noted that best practices in adaptation (and




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mitigation) to climate change will also need to be documented for Ethiopia. Although proper adaptation technology and techniques may not have been used in PASIDP, they are quite common in Ethiopia and information is available in the different Regions. In addition, research organisations/universities are undertaking this type of work. It is noted that the nature and types of irrigation development schemes are fundamentally water-based management structures (diversion mainly) in the Highlands compared to collection infrastructures, both micro and medium sized (water harvesting) water collection schemes and reservoirs.

21. PASIDP II aims at improving the living standards of the target beneficiaries through increasing their food, nutrition and income security. This will be specifically achieved through:

Increasing Cropping Intensity – In Ethiopia there is a Climate Resilience Green Economy (CRGE) strategy which includes agriculture (crop and livestock sectors), forest and other sectors. There are community watershed and sustainable land management programme (SLMP) and those programmes are implemented in different parts of the country. World vision, Ethiopia, is working on Farmer-Managed Natural Regeneration (FMNR) projects in the degraded farmlands and communal lands. This contributes to ecosystem service enrichment for local communities and benefits from carbon revenues for the communities. Communities have developed and utilized the carbon revenues earned from sustainable development and market’s stabilization in the lean seasons. The projects can be scaled up in Ethiopia. World Vision has also implemented energy efficient cooking stoves and biogas in more than 16 Woredas. The efficiency of these projects has been proven and so are the project’s implementation methodologies and modalities. Similar projects can be brought to landscape level by designing tailor-made solutions in different sites of PASIDP II;

Sustainable intensification of watershed: ASAP will facilitate improved management of watersheds in about 40,000 ha of land, adjacent to the various irrigation schemes. It invests to convert the degraded watersheds to more productive and economically viable systems that would improve the resilience of the schemes by reducing erosion, increasing infiltration and water yield and enhancing biomass production that would enhance carbon sequestration. A combination of activities will be employed, including conducting about 490 community training events, using participatory GIS maps to help communities understand their landscapes and identify degradation spots. Given the huge diversity of the country, at least three different watershed typologies are considered for ease of guidance and operationalization, namely a) degraded but recently conserved watershed through SLM, and Productive Safty-Net programmes. These are predominant in the four highland target regions of Amhara, Tigray, SNNRP and Oromia, b) watersheds that are yet to be conserved and managed by PASIDP-II. These are located mainly in the dry lowlands; and c) naturally conserved and forested watersheds, which are predominant in Bale, Oromia region. PASIDP will develop differing watershed intensification strategies to sustainably manage these watershed while benefiting local communities to generate food, feed and income from the additional investments. For instance, watersheds in Group A, may demand more water saving strategies along with high value commodities while in Group C the need would be only to value addition and sustainable use of the resources. By adopting rainwater management, households will diversify the cropping systems, including perennial crops, and increase their household income to invest on their farms as a result of water availability. The watersheds will be intensified with fruits and high quality perennial and annual forages, which would enhance livestock production but also reduce methane emissions. Low quality livestock feed is the major sources of emission in Ethiopia60. Managing water at watershed scale brings an accompanied benefit of managing runoff, controlling soil erosion, and improving overall scheme productivity61. In schemes where the water is emerging beyond the immediate watersheds (particularly in the dry lowlands), the downstream communities will have access to upstream information from upstream water monitoring stations, which are going to be facilitated by the project. Water monitoring instrumentation will be established in close collaboration with key players. The possibility of payment for environmental services will be studied by the project to ensure continual flow of water from the immediate upstream highlands to the dry lowlands.

60 Herrero, etal.2013. Biomass use, production, feed efficiencies, and greenhouse gas emissions from global livestock

systems. http://www.pnas.org/content/110/52/20888 61 Amede etal., 2014




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Modern Irrigation – The designed irrigation scheme type most common in PASIDP is the diversion weir irrigation type, representing the implementing of modern irrigation schemes on already existed local rivers (e.g. Hararu) and introducing modern irrigated farming practices. Along with traditional irrigation systems, the modern schemes propose and design night storage ponds. For example, in Hararu out of the total designed 69 ha land, 32 ha (i.e. 46.73%) of the total designed irrigable land, water supply is released/supplied from the main canal and weir (i.e. from day flow of the river), while for the rest 36.76 ha (i.e. 53.73% of total designed irrigable land), water supply is released/supplied directly from the overnight storage pond. Adapted water infrastructures are key to face climate change. In this context of water-smart agriculture, these structures must be accessible by all designated parties, capable of managing water resources adequately and sustainably, and to use conservation technologies that reflect the local conditions while guaranteeing the quality and quantity of water. Thriving agro-forestry, rangelands management and ecosystems rejuvenation are the result of water smart agriculture.




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Appendix 13: Contents of the Project Life File

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Appendix 14: Risk Management

I. The PARM Initiative

The Platform for Agricultural Risk Management (PARM www.p4arm.org) is a G20 initiative hosted in

IFAD that focuses on mainstreaming agricultural risk management on agricultural investment plans in

developing countries. In Ethiopia PARM has initiated its process supporting the GoE through the ATA

on the identification and prioritization of the major risks affecting agricultural sector. In the meantime

key activities have been planned with some strategic national as ATA, the Extension Services and

International (FAO HQ and Country office…) partners in order to mainstream the new methodology

proposed by PARM on Agriculture Risk Management (ARM). In this framework the first analysis of

risks in the agricultural sector in Ethiopia undertaken by PARM are being used to contribute to the

PASIDP II project design process both at project and policy level. PARM also participated to the

second project design mission in order to identify the potential risks affecting the project results

thorough the integration of the holistic agricultural risk management methodology. This appendix also

includes information from meetings and discussions with the CPM, the FAO-TCI team leader and

other colleagues (PTA, ECD…) followed by interviews with some farmers of PASIDP project and the

PASIDP I management units in April 2016.

II. Agricultural risk analysis and methodology

The methodology proposed by PARM (ref. PARM website) to assess and prioritize the major

agricultural risks through a holistic approach means that many potentially correlated risks are

assessed and afterwards prioritized as biological, market, weather related, political, infrastructural etc.

Three main risk characteristics are considered in order to rank and prioritize the risks: the frequency,

the severity and the potential maximum severity (or worst case scenario) caused by an unpredictable

event/risk. For each specific risk a score is calculated following a quantification methodology in order

to make the prioritization more objective facilitating also the development of potential worst scenarios.

Furthermore the risks are analysed at different layers, typically three: macro (regional/national), meso

(provincial/district) and micro (community) levels. For each risk the layer of responsibility is also

assessed in order to define the role of the main strategic and technical actors active on ARM. For

instance, some major shocks of which the frequency is low or moderate but the severity is often very

high (extreme droughts or market outbreak) require macro level players to be managed, given the

limited capacity at meso and micro level to pool or transfer these risks. The farmers have the

responsibility to manage the most frequent but with low severity risks (such as small price variations)

while some meso level risks, can be managed through specific ARM tools that allow the transfer or

pooling of some risks (contract farming, insurances...).

III. Agricultural Risks Assessment in Ethiopia

According to the PARM risk assessment study carried out in 2015-2016 due to the fact that Ethiopian's agriculture is predominantly rain-fed, farmers are exposed to major weather-related risks such as drought, floods, windstorms and hailstones. Emerging evidence suggests that the incidence and severity of these yield-reducing risks is increasing as a result of climate change. Access to yield-enhancing inputs by smallholder farmers may be uncertain due to underdeveloped inputs markets as well as difficulties in obtaining timely production finance. They also tend to be vulnerable to pre-harvest such as pests and diseases but at the post-harvest level, often encounter considerable challenges accessing markets. Postharvest losses tend to be very high because of limited access to efficient storage and postharvest handling facilities and they may also be exposed high volatility in prices. Unlike farmers in developed economies, farmers usually have little or no means to mitigate these risks. The main pre-harvest and postharvest risks affecting agricultural value chains in Ethiopia include weather risks such as droughts, floods and hailstorm as well as biological risks such as plant and animal diseases and pests. Also identified are uncertainties in inputs and output markets which lead

http://www.p4arm.org/




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to variability in farm output and household income, in part because they impact on farm household investment decisions. Other risks such as policy uncertainty and challenges such as infrastructure constraints have also been identified. Based on the risk analysis, the following emerged as agricultural risks worth prioritising in Ethiopia by PARM risk assessment study:

i. Weather and climate risks: drought, which is at its severest when El Niño occurs and erratic rainfall (delayed rainfall during planting and/or late rains during the harvest). The risks of flood, though very frequent, ranked too low to be prioritised largely because of the low level of severity in terms of average annual losses and the cost associated with the worst case scenario.

ii. Livestock and crop pests and diseases, which joint second respectively in the ranking of agricultural risks in Ethiopia.

iii. Price risks but mainly for food crops, less for export crops. Price risk is rather low in the livestock industry. Worth noting is evidence that inter-year price uncertainty is relatively higher than intra-seasonal variation in prices.

iv. Inputs risks: rising inputs prices.

v. Exchange rate variability but mainly in terms of severe episodes of over-valuation of the domestic currency (that is steep depreciation of the currency in real terms).

Table 1: Scoring of agricultural risks in Ethiopia

Risk Average annual severity Average frequency

Worst case scenario Score*

Drought High High Very high 4.25

Livestock diseases and pests Medium Very high High 3.90

Plant diseases and pests Medium High Very high 3.85

Price risk: food crops High Medium Very high 3.85

Inputs risk: rising prices Medium High High 3.60

Erratic or variable rainfall Medium Very high Low 3.40

Exchange rates variability Low High Medium 2.87

Floods Low Very high Low 2.62

Policy risk: export ban Very low High High 2.50

Policy risk: price subsidy Very low Very high Very low 1.93

Price risk: export crops Medium Medium Very low 1.55

Interest rates variability Very low Medium Very low 1.55

Price risk: livestock Very low Very low Very low 1.00

Policy risk: land policy Very low Very low Very low 1.00

Inputs risk: quality variability Very low Very low Very low 1.00

Earthquake Very low Very low Very low 1.00

Volcanic activity, wildfire etc. Very low Very low Very low 1.00

*scores from assessment of average annual severity, frequency and severity during a worst case scenario

IV. PASIDP II agricultural related risks and management tools/recommendations

The PASIDP II programme area covers four regions of Ethiopia. These are Amhara, Oromia,

Southern Nations, Nationalities and Peoples Region (SNNPR), and Tigray. According to PARM Risk

assessment Study the four regions have to face some major common risks (plant-livestock pest and

diseases and price volatility) while extreme weather related events differ by region (see Tab 3.)

The discussions and meetings held with farmers and PASIDP project team during the second project

design mission (April 2016) confirmed the range of risks identified by PARM national risk assessment

study. However the farmers met in Amhara region considered more relevant the seasonal price




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variations than pest and diseases. All farmers however agreed about the risk priority given to droughts

and floods. Tab. 3 Current exposure to agricultural risks in the regions covered by PASIDP II

Very High/High – Medium - Low

Referring to the PASIDP II outcomes some specific measures are proposed to contribute to better

management of the related risks.

Component 1: Investment in Small-scale Irrigation Infrastructure

Irrigation schemes and watershed infrastructures are expected to contribute to strengthen the capacity of smallholder farmers to manage natural hazards improving the yields through the augmentation of the number of cropping cycles per year (from 1 to 2-3). However this objective is achievable for weather risks which severity is moderate/low and likely for extreme events that can be managed at macro level essentially. In addition the impact of some existing risks already affecting the farmers in the area covered by the project (price, diseases…) could get worse given the higher production expected once the irrigation investment is finalized and if specific measures are not taken accordingly. It is strongly recommended that:

- a study on the scope of the extreme events not covered by the irrigation systems. A threshold of events that cannot be handled by the irrigation system will be defined if possible in terms of severity and frequency (e.g. a drought of less of xx mm during the planting season, which occurs every x years). The FPCMU develops at the beginning of the PASIDP II synergies and when possible formal agreements with national and international partners active on emergency and social protection programs in order to ensure a rapid response in case of major risks would occur in the areas covered by the project. In particular with the Productive Safety Net Programme (PSNP) and the Disaster Risk Management and Food Security Sector (DRMFSS) which lead different actions (Early Warning System, Emergency Food Security Reserve, Emergency Nutrition Coord. Unit).

- It is recommended that the emergency intervention criteria followed by the DRM are revised taking into account the capacity of the irrigation systems to manage some events as defined in the study (first bullet point).

- RPCMU identify at the beginning of the PASIDP II synergies and when possible formal agreements with services providers and market players (contracting farming, MFI, certified/resistant inputs suppliers..) in order to transfer some type of risks (price volatility, pest and diseases…) from SHF to market.

Therefore is strongly recommended that the information and knowledge systems are reinforced:

Risk category Risk

High risk Moderate/low risk

Weather risks Drought Amhara, Oromia, SNNP and Tigray

Flood Amhara, SNNP, and Tigray

Delayed/late rains Amhara, Tigray, Oromia and SNNP

Biological and environmental risks

Plant pests and diseases

All regions

Livestock diseases All regions

Inputs risk Rising prices All regions

Quality variability All regions

Price risk Food crops All regions

Export crops All regions

Livestock All regions

Policy risks Land policy risk All regions

Ban on exports Maize-growing regions

Price subsidies Wheat-growing regions

Macroeconomic risks

Exchange rate risk All regions

Interest rate risk All regions

Other natural risks Landslide All regions

Wildfire All regions

Earthquake All regions

Volcanic activity All regions




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- the FPCMU develops at the beginning of the PASIDP II synergies and when possible formal agreements with national bodies collecting and disseminating the information on meteo, price, pest and diseases…

- key information (such as weather forecast, market price trends…) is collected and disseminated by FPCMU and RPCMU to the Zonal Coordinator and Development Agents

- key information (such as weather forecast, market price trends…) is accessible to SHF/FO-IWUAs

- if possible, the definition of an index that allows to follow the severity of the drought in each Woreda using available indicators or information

- any information about financial programmes or pilots available in the working areas are made available to potential users

Component 2: Investment in Capacity for Sustainable Agriculture

Smallholder farmers are expected to manage different risks. However given their limited

organizational capacities and weak interconnection at regional/zonal/woreda and kebele level new

risks may occur or the existing ones more affecting once the project fully operational. This is the case

for instance of soil fertility and the price variations due to the new crop intensification.

For this reason strenghtening the capacity of SHF since the inception phase of the project, as planned

in the PASIDP II, is strongly recommended. Below some key activities:

- connecting the diffferent smallholders of the irrigation schemes in order to jointly develop annual production plans. Objective of this action is to boost farmers to diversify seasonal productions which seems to represent one of the major risks expressed by farmers due the low prices caused by the high productions of the same commodities. The diversification of productions would also contribute to better manage some specific pest and diseases which represent one of the main risk affecting farmers.

- undertake a market study to evaluate the capacity of the local markets to uptake the new production.

- facilitating the access to new markets of SHF/FO-IWUAs in order to reduce the price risk caued by the limited uptaking capacities of local markets

- setting-up farmer unions at regional/Zonal level able to coordinate the SHF-IWUAs based at kebele/woreda facilitating so the access to markets, service providers (rural finance tools…) and the information needed to manage daily activities and related risks

- ensuring the timely circulation of essential information to the SHF/FO-IWUAs on meteo forecasting, woreda/kebele production predictions/prices, pest and diseases….linkage between SHF/FO-IWUAs and extension services, radio brodcasting may play a key role

- training SHF/FO-IWUAs thorugh the Ext. Services on weather, agronomic and market management risks and measures

Component 3: Programme Management, Monitoring and Evaluation, and Knowledge

Management

The organizational framework of the project requires a strong interconnection between the highest

(Federal) and lowest (Kebele) levels in order to ensure the correct support to SHF/FO-IWUAs to

manage the most severe risks. A structured flow of information in the two directions (top-bottom-top)

is required in order to facilitate the connection of the PMUs at National, Regional, Zonal, Woreda and

Kebele. In addition considering the market as a risk (and also an opportunity) in order to facilitate the

linkage between the producers and the markets an analysis of the most marketable commodities and

a mapping of the main buyers and services providers at Woreda, Zonal and Regional level is also

recommended.

Given the cross-cutting relevance of the information as a key instrument to manage many risks both

at national than kebele level, an information officer in charge to collect, analyse and disseminate the

information could help, possibly linked to the Extension Service System in place in support to the

PASIDPII.




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Appendix 15: Questions on scaling up to be considered at design stage

Vision

1. What is to be scaled up? Are the lessons learned from previous interventions sufficiently rigorous to justify bringing them to scale?

The Government of Ethiopia (GOE) and IFAD are moving to a programmatic approach with a longer-term vision for lending in the Ethiopian small-scale irrigation subsector. The first phase of the Participatory Small-scale Irrigation Development Programme (PASIDP), which was implemented during the period 2008-2015, has contributed to reduce the country’s vulnerability to adverse climate risks and drought, and to reduce rural poverty and food insecurity. The project was considered successful by the Country Programme Evaluation in 2015. This second phase will complete and fine-tune the intervention model that was developed under the first phase and pilot the geographical expansion that would mainly be undertaken under the third phase, the final vision being to scale up the Programme nationwide. It will also scale up successful interventions and lessons learned under the Community-Based Integrated Natural Resource Management Project (CBINReMP).

2. If a project is innovating/testing a new model/approach, to what extent has the project identified the areas and approaches for accumulating knowledge during implementation in order to guide future decisions on scaling up?

The main innovations in the design of PASIDP II in order to complete the small-scale irrigation model are: (i) mainstreaming of participatory planning and selection of schemes in order to ensure sustainability; (ii) developing agri-business linkages and market access in order to mitigate marketing risks, in particular for perishable high-value crops; (iii) integration of climate change adaptation strategies, including adjacent watershed improvement and management, building on the successful experiences with the Community Based Integrated Natural Resource Management Project (CBINReMP); (iv) promotion of improved crop husbandry and access to inputs as well as improved access to financial services, so as to achieve the targeted yields and to improve water productivity of farms and schemes; (v) an enhanced focus on gender and youth as priority target group; (vi) mainstreaming nutrition-sensitive agriculture; and (vii) aligning to IFAD’s new Social, Environmental and Climate Change Assessment Procedures (SECAP) and its international engagements with respect to climate change resilience.

3. What is the appropriate ultimate scale of the intervention the IFAD project or programme supports in the country? In other words, how many people, households, districts, etc., could and should ultimately be reached? What will be the economic impact?

PASIDP II will have 100,000 beneficiary households, of which 37,500 households in irrigation schemes with fields in adjacent watershed. Small-scale irrigation allows households to evolve from one rain-fed crop per annum to one or two irrigated crop cycles in addition to one rain-fed crop cycle, which enhances their food security and allows them doubling their incomes from agriculture. In addition, 37,500 households in adjacent watershed will be




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trained in watershed management and conservation farming; 10,000 households that benefited from PASIDP I irrigation schemes will be linked up to markets and receive agronomic support; about 15,000 additional jobs will be created, of which 5,000 on the farms. The ERR of 26.3% over 20 years is profitable from an economic stand point with a Net Present Value of US$ 155 million.

4. Where will sustainability come from in the future and what is the rationale in the choice of the key partners?

The model developed in phase 1 will be specifically strengthened by including focus om market access to ensure commercial viability as a driver for sustainable engagement of the farmers and their agri-business partners. In addition, the programme will provide support for watershed management activities and climate change adaptation, to enhance the geo-ecological sustainability. Partnerships with ATA for commercial aspects, as well as with national and international agricultural research institutions are included in the design to ensure adequate technical support during implementation.

5. To what extent is a scaling-up approach able to maintain selectivity and simplicity in project design? Is the project avoiding the risk of adding complexity while scaling up?

To maintain simplicity and focus, the marketing aspects will largely be addressed by ensuring linkage to existing markets through more rigorous analyses as part of the feasibility studies, facilitation and capacity strengthening. Regarding the watershed management activities, the project will largely scale up the successful activities and interventions from CBINReMP. Hence, the additional complexity is expected to be manageable with additional implementation support, which will be provided through the ASAP grant, the IFAD grant and IFAD directly.

Pathways

6. What is the likelihood that the key drivers of the scaling-up process will be able to lead and sustain the efforts beyond the project?

Access to and efficient use of water resources is a key priority guiding the agricultural development agenda of Ethiopia. Refining the existing models for irrigation and enhanced watershed management receive thus much attention by political decision makers and thought leaders. In addition, the expected benefits and incentives which are fully integrated in the local economy will provide a strong basis for replication and scaling up.

7. Are the economic and financial benefits sufficiently attractive to drive expansion and sustain the initiative in the long term?

Yes.

8. Has the project identified the right “spaces” that will permit the intervention to grow to the desired scale? Is the project sufficiently integrating policy engagement and knowledge to open the necessary spaces?

Irrigation is a key area of the second Growth and Transformation Plan (GTP II). Given the intended scale of investment by the Government, IFAD is only able to provide a relatively small contribution in terms of its financial capacity. However, the investment is seen also as a vehicle to strengthen the model, with the intent to ensure replication of successful approaches through additional investment.

9. Is the government providing the required fiscal space to sustain project financing?

The Government is strongly committed to implementing the GTP II, and has in the past demonstrated its commitment to maintain public goods, including infrastructure, that has been developed through projects (see SCP1, SCP 2 and PASIDP).




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10. Are actions likely to be coordinated with partners and the momentum maintained?

Yes. The Government has demonstrated strong interest and ownership throughout the design process for this Programme. In terms of coordination, the agricultural sector in Ethiopia can be seen as a model for many other countries.

Managing the process

11. Are there adequate procedures for documenting the progress, lessons learned and impacts of the scaling-up effort?

Yes. PASIDP II will document evidence of profitable water-saving strategies and climate-smart interventions, and facilitate knowledge exchanges between farmers to scale-up adoption of these practices. It will exploit opportunities to produce a wider range of targeted communication products by distilling key lessons and outputs, for example through biannually monitoring and feed-back mechanism, exchange visits, write-shops, etc... The Programme will also ensure inter-regional learning through exchange visits, video clips and policy dialogue. Key outputs are synthesised, easy-to use water management guides are developed and communication products are widely disseminated, in the field, at events, etc. The communication and knowledge sharing tools would reach rural households with climate-smart irrigation technologies and practices; document repository to archive reports and briefs and other outputs (including presentations, posters, video, etc.) and Policy ‘briefs’ to inform decision makers. Key outputs and insights will be availed through the websites of IFAD and Ministry of Agriculture and Natural Resources

12. Does the project’s M&E system track whether the scaling-up process is moving in the right direction, as identified at the design stage?

Yes, the project has a sound Logframe with clear targets in terms of outputs, outcomes and results.

13. How will the information generated by M&E be fed back to key stakeholders and the broader public, and used to make necessary course corrections?

Through the Woreda Technical Teams (WTTs): The success of the PASIDP II will to a large extent depend on the capacity of the Woreda to manage, coordinate and facilitate the delivery of the Programme on the ground. The implementation of PASIDP II on the ground will involve technical staff in Woreda agricultural offices, grassroots institutions/organization, such as Irrigation Water User Associations (IWUAs), Watershed Management Teams (WMTs), primary cooperatives societies, producer organizations, credit and saving groups, farmer groups, and various actors in priority values chains. Based on experiences from PASIDP, it is proposed to have a PASIDP II designated Woreda coordinator. The core skill mix will include irrigation engineer, value chain/market officer, agronomist, natural resource management and M&E officer. The team will be led by a Woreda Programme Coordinator (WPC). The WTT will be responsible for providing technical on-site support in implementation of Programme interventions in target Kebeles to ensure that the Programme is implemented appropriately and in a coherent manner. The WTT will: a) facilitate their respective Kebeles in identification of priority interventions in accordance with agreed regional priorities and




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overall Programme approach and strategy for planning and prioritization of interventions; b) prepare Woreda AWPBs and submit to zonal coordination offices; c) supervision of Programme activities and technical backstopping; d) preparation of monthly and quarterly reports and submission to zonal coordination office; e) develop capacity of farmers’ organizations at grassroots level, such as IWUAs and cooperative societies, to enhance their technical capacity and management skills, f) convene annual Woreda implementation Review Meetings (WRM), that will bring together implementing agencies from all Kebeles, value chain partners and other donor financed projects to reflect on Programme implementation progress, learn and share best practices/innovations, discuss implementation issues and challenges, and build partnerships. The capacity of Woreda will be strengthened based on capacity needs assessment.

14. Have obstacles and risks been identified and addressed through mitigation measures?

Yes. They are referenced in Section F of the PDR.