The Commodity-oriented Poverty Reduction Programme in Ha Giang Province

Transcription

1 The Commodity-oriented Poverty Reduction Programme in Ha Giang Province Supervision report Main report and appendices Mission Dates: Jan 2016 Document Date: 29-Jan 2016 Project No Report No: 4023-VN Programme Management Department

2 Mission Dates: Jan 2016 Document Date: 29-Jan 2016 Project No Report No: 4023-VN Programme Management Department

3 Contents Abbreviations and acronyms ii A. Introduction 1 B. Overall assessment of CPRP implementation 1 C. Outputs and outcomes 2 D. CPRP implementation progress 8 E. Fiduciary aspects 10 F. Sustainability 12 G. Other (impact) 13 H. Conclusion 14 Appendices Appendix 1: Appendix 2: Appendix 3: Appendix 4: Appendix 5: Appendix 6: Appendix 7: Summary of project status and ratings Updated logical framework: Progress against objectives, outcomes and outputs Physical progress measured against AWP&B, including RIMS indicators Progress Against Previous Mission Recommendations Financial: Actual financial performance by financier; by component and disbursements by category Compliance with legal covenants: Status of implementation Knowledge management: Learning and Innovation i

4 Abbreviations and acronyms AWPB CC CDB CPC CPRP CPMB CIG DARD DONRE DOTI DPC DPI DPPR DPSG FU GACA IFAD KM M&E MOF MPI NTP-NRD PCO PIM PPC P-PC PSC RIMS MOSEDP SIP SCG TOT USD VCAP VNĐ WU WDSF Annual work plan and budget Climate change Community Development Board Commune People s Committee The Commodity-oriented Poverty Reduction Programme Commune Programme Management Board Community interest groups Department of Agriculture and Rural Development Department of Natural Resource and Environment Department of Trade and Industry District People s Committee Department of Planning and Investment Decentralized Programme for Poverty Reduction District Programme Support Group Farmer s Union Government Aid Coordination Agencies International Fund for Agriculture Development Knowledge Management Monitoring and Evaluation Ministry of Finance Ministry of Planning and Investment National Target Programme on New Rural Development Programme Coordination Office Programme Implementation Manual Provincial People s Committee Public Private Collaboration Programme Steering Committee Results and Impact Management System Market-Orientated Socio-Economic Development Plan Strategic Investment Plan Savings and Credit Group Training of trainers US Dollar Value Chain Action Plan Vietnam dong Women s Union Women s Development Support Fund ii

5 A. Introduction 1 1. The Commodity-oriented Poverty Reduction Programme (CPRP) came into force on 30 March 2015 and is due to be completed on 31 March The Project Overall Goal is: Sustainably improved income and reduced vulnerability of rural poor households in targeted Ha Giang communes. The Project Development Objective is: Targeted private agricultural enterprises, cooperative groups and farm households collaborating profitable and sustainably in a climate adapted, market oriented new provincial rural economy. The total programme cost is USD 33.7 million, of which the IFAD loan is USD 20 million, Government of Vietnam contribution USD 9.5 million and beneficiary contribution USD 4.2 million. Project activities cover 30 communes in 5 districts. 2. The first IFAD Supervision Mission of CPRP was undertaken in partnership with the Provincial Project Coordination Office (PCO) during January The majority of the time, January, was spent at the field, at provincial, district and commune levels. The Mission Report with all appendices was consolidated 28 January, and a formal wrap up meeting was held 29 January in Ha Noi. The mission objectives were to: (i) review the initial progress in the project implementation as per project design document and identify issues and solutions for improvement in the start-up of the project activities in the ground; (ii) review follow up actions after the 2015 IFAD support mission; (iii) provide technical support to the PCO and implementing partners to the extent possible and as required; and (iv) agree with the provincial authorities and the PCO on prioritized actions to ensure project's right direction during the second year of the implementation. 3. At provincial level, the Supervision Mission met with staff of PCO and partner agencies including Department of Agriculture and Rural Development (DARD), Department of Planning and Investment (DPI), Women s Union (WU), Farmers Union (FU) and Cooperative Alliance (CA). In addition, the mission visited four communes in four districts of Xin Man, Hoang Su Phi, Quang Binh and Bac Quang. During these visits, the mission met with District Peoples Committees, District Programme Support Groups, Commune Programme Management Boards, local DARD, FU and WU representatives. A preliminary debriefing was held with the PCO and implementing partners in Ha Giang on 27 January and a final wrap up meeting was held on 29 January in Hanoi with the PSC, IFAD Vietnam and GACA representation. 4. The Supervision Mission would like to extend sincere thanks to the Ha Giang Provincial People s Committee (PPC), PCO, representatives of line agencies, local governments at the district and commune levels, rural households and private enterprises for their kind support and cooperation. B. Overall assessment of CPRP implementation 5. The likelihood of achieving development objectives of the CPRP in Ha Giang is ranked as moderately satisfactory. The annual implementation progress is also assessed as moderately satisfactory. The mission appreciates efforts made by the provincial agencies and the project management units of the CPRP for the past nine months. Progress is noted especially in the following areas: (i) Management structure. establishment of the project management system at all levels including PSC, PCO, DPSGs, CPMBs and VMBs, which constitute a solid foundation for advancing the project in the forthcoming years; (ii) Planning for market-led and CC adapted development. Market-oriented SEDP planning mechanism established and rolled out in 40 communes including 10 non-project communes; pilot CBDRM and CCA plans developed for 5 project communes; (iii) Propoor community investment. Approved 55 infrastructure schemes in 30 project communes for CIF funding; finalized guidelines for CIG and P-PC co-financing for private sector value chain development; (iv) Rural Finance. established WDSF at the province capital with the district and 1 Mission composition: The mission comprised: Mr. Nguyen Thanh Tung, IFAD CPO, Team Leader, Microfinance, Institutions and Project Management specialist; Mr. Sauli Hurri, Private Sector Engagement and Value Chain Specialist; Mr. Nguyen Ngoc Quang, SEDP, Targeting, Monitoring and Evaluation Specialist; Mr. Truong Cong Huu, Financial Specialist; Ms Huong, Interpreter. In addition, Mr. Henning Pedersen, IFAD Country Director, Ms. Nguyen Yen Hai, MPI Deputy Director General, Ms. Pham Thuy Anh, Office of Government, Mr. Bui Chi Kien, MARD and Mr. Vu Duy Tuan,MOFA. participated the mission during January. 2 Important dates include: Project effectiveness 30 March 2015 Project Completion 31 March 2020 Loan closing date 30 September

6 commune networks; mobilized 1,739 villagers (54.2% from poor HHs) to join 125 Savings and Credit Groups. 6. As of 31th Dec 2015, the total project accumulated disbursement is USD million against a total approved project cost of USD million. This includes disbursement of USD million from the IFAD loan. 7. In addition to the detailed agreed actions by this Aide Memoire, the mission recommends that the following overarching issues receive specific attention during the coming year: (i) Integration with NTP-NRD. PCO, DPSGs, CPMBs and VMBs are well aware of the potential synergies with the NTP- NRD and efforts of integration have commenced. However, the integration of plans and activities at the commune level requires strengthening to optimize the use of various resources; (ii) Decentralization. Local management capacity has been established through the previous DPPR, SIDA, 135 and 30A programmes. However these capacities at the DPCs and their technical divisions are yet to be fully mobilized to implement the CPRP programme; (iii) Private sector partnership. Awareness of staff at district and commune levels on the roles of private sector, PP-C strategy and instruments should be strengthened; the development of the Strategic Investment Plans to underpin the private sector engagement has been delayed; (iv) Procurement: While the overall procurement systems are in place and appropriate, the CPRP needs to strengthen the application of its practices for engagement of consulting services. Agreed action Responsibility Agreed date Integration with NTP-NRD: To optimize the use of various commune level resources, integrate CPRP and NTP-NRD plans, activities and monitoring efforts to the extent possible. PPC, PSC, PCO, NRD CO, PSR CO Through 2016 Decentralization: PSC and PCO to define specific CPRP accountabilities and resource allocation for DPCs/DPSGs; provincial line agencies to identify plans and resource allocation for their district-level technical divisions. Private sector partnership: (i) DPCs to conduct district level workshops for market oriented commodity development to raise local awareness of the P-PC opportunity and identify potential partners; (ii) DARD to take accountability for completion of the SIPs and appropriate support to be mobilized for the effort. Procurement: Strengthen practices for engagement of consulting services, and rectify current contracts with nonqualified service providers. PSC, DPI, DARD, FU, WU, DONRE, PCO, DPCs DARD, PCO, DPSGs Q2/2016 Through 2016 PCO Q1/2016 onwards C. Outputs and outcomes Component 1: Capacity building for market-led development Overall assessment of the component is rated moderately satisfactory Sub-Component 1.1: Commodity-based investment planning 8. The subcomponent is rated moderately satisfactory. Against the target of developing three first Strategic Investment Plans (SIP) and support of project communes in VC identification during 2015, the CPRP achievement by now includes: (i) DARD Project Implementation Board was established to draft the SIPs and initiate commune support, (ii) A team of national consultants was fielded for the SIP development, (iii) The consultant team completed two draft SIPs (Shan tea and medicinal plants), where the quality still requires significant improvement per DARD and SM assessment, (iv) Two further SIPs have been initiated (acacia and pig) to be drafted by the DARD staff, (v) DARD has prepared a guideline for the communes to draft VCAPs during 2016 and onwards, that will support the local market oriented development planning processes. 9. Strategic Investment Plans have not yet been finalized or approved, due to (i) recruitment of a non-qualified service provider, (ii) lacking experience of DARD and PCO and limited involvement of technical staff in the process, and (iii) yet missed opportunity to use the existing SIPs and commodity analysis reports from the project design process. This delay has been an obstacle for initiation of all 2

7 Value Chain activities, most importantly the Public-Private Collaboration and commune VCAPs, thus the SIP development is an urgent issue for the CPRP management. Meanwhile the project intensifies its efforts to complete new and existing SIPs, it is suggested that P-PC competition is already announced and private sector partners should be looked for throughout the whole Agricultural sector. P-PC competition and drafting of SIPs can be a simultaneous process, and P-PC competition results can be used as inputs for SIP value chain identification. Agreed action Responsibility Agreed date To be able to conduct market oriented commodity planning and PCO, DARD Q1/2016 support the communes in VC planning, strengthen the DARD Project Implementation Board through: (i) recruit local TA as team leader of a DARD value chain working group, (ii) organize technical trainings to the working group members, (iii) institutionalize the unit as a DARD technical team/section, (iv) provide appropriate allowance to members. Urgently complete the five first SIPs by end of Q1/2016. Identify commodities for five further SIPs per P-PC and VCAP demand, and complete these during Engage PCO/DARD specialists to lead the task. Terminate the current SIP support contract, and hire qualified international/national TA to assist the DARD specialists. PCO, DARD By March 2016 and onwards During Q2/2016, DARD and DPCs to support communes in drafting of VCAPs, to be used as input for MO-SEDP and VC investment instruments. CPCs, PCO, DARD, DPCs Q2/2016 Sub-Component 1.2: Commune MoSEDP 10. The subcomponent is rated moderately satisfactory. Against the late AWPB approval in June 2015, a significant amount of work related to MoSEDP has been implemented. To date, achievements include: (i) agreement to assign DPI as the implementing agency for MoSEDP; (ii) recruitment of a team of consultants to develop MoSEDP manual; (iii) implementation of pilot CBDRM and CCA plans in 5 project communes as inputs for development of climate informed MoSEDP manual; (iv) organisation of MoSEDP introduction workshops in 5 districts with participation of 127 participants; (v) ToT training for 32 provincial staff in MoSEDP implementation; and (vi) TOTs further train 187 district and commune staff as key facilitators to develop and implement MoSEDP in 40 communes, including 30 project communes. In terms of targeting, the project appropriately involved project beneficiary groups in MoSEDP consultations, including villagers among which 35% are women, and 55% are poor/near-poor. 11. However, due to early stage of the project, various areas of MoSEDP implementation require improvement: (i) Commune and village officials still have insufficient understanding and knowledge about MoSEDP, leading to limitations in quality; (ii) Turnover of commune leaders and staff after the recent Party meetings causes capacity gaps and requires additional MoSEDP refresher trainings; (iii) MoSEDP manual is still long and complicated, and requires simplification; (iv) Commune VCAPs, as an important input for MoSEDP, are yet to be initiated (see sub-component 1.1); (v) Private sector has limited role in development and implementation of the MoSEDP plans; (vi) Apart from the project budget, further financing resources at commune level are yet to be identified and integrated into MoSEDP; (vii) A proper action plan including budget allocations is still missing for MoSEDP roll-out throughout the 5 project districts. The mission agreed on following actions: 3

8 Agreed action Responsibility Agreed date Organise technical workshops to share and discuss about PCO/DPI 2016 experience and lessons in the first MoSEDP year. Review and revise MoSEDP manual to make it more simple and PCO/DPI 2016 focused, ensuring it is appropriate for communes and villages. Conduct refresher MoSEDP trainings for commune and village PCO/DPI 2016 staff in current 40 MoSEDP communes, and initial trainings for additional communes in 5 project districts. Develop and implement a comprehensive action plan with (i) appropriate budget allocation (provincial budget, project budget, and other financial sources) for MOSEDP roll-out throughout the project districts, and (ii) clarified private sector mapping and engagement mechanism in MoSEDP (e.g. service provision, capacity building). PCO/DPI 2016 onwards Sub-Component 1.3: Climate adaptation technologies 12. The subcomponent is rated moderately satisfactory. This sub-component focuses on identification and assessment of climate change adaptation models for replication in the project areas. Achievements to date include: (i) MoU signed between PCO and DARD assigning DARD as the lead agency in identification and assessment of adaptation models; (ii) DARD established a task force for implementation of the MoU; (iii) Manual developed to guide the identification, assessment, and selection of CCA models for replication; and (iv) TOT training organized on approaches and methodologies for model identification for 25 staff of DARD and FU at provincial and district levels. 13. At the initial stage, the project only achieved 35% of annual targets under this sub-component, thus significant improvement is required. (i) The implementing agency (DARD) and partners (FU, WU) at all levels have not properly understood the logic of the sub-component: results should lead to upscaling of the identified practices through investment instruments in other subcomponents; (ii) Currently only DARD was tasked with CCA model identification. This prevents learning from CCA experiences by other government agencies (DOST, DOIT, DONRE) private sector and NGOs. A more broad-based contribution by various relevant stakeholders is essential for the CCA model identification and selection process. Agreed action Responsibility Agreed date Develop a concrete action plan for rolling out the process of model identification and assessment. Pay attention to the sequencing of the process: (i) model mapping, identification, selection, assessment, (ii) ToTs, farmer trainings for agriculture and investment planning, (iii) replication through CIG cofinancing, PPC fund, and SCG loan. PCO/DARD February 2016 onwards Disseminate the manual and relevant information to all stakeholders at all levels. Involve other stakeholders beyond DARD to the implementation of the subcomponent 1.3. PCO February 2016 onwards Component 2: Building pro-poor commodity investment Overall assessment of the component is rated moderately satisfactory Sub-Component 2.1: CIF and CIG co-financing 14. The subcomponent is rated moderately satisfactory. The sub-component consists of two physical investment instruments, Commune Investment Fund (CIF) and farmers' Common Interest Group (CIG) co-financing. 15. The Commune Investment Fund is to invest 5.4 million USD for target communes' infrastructure development in the course of the project implementation. The PCO will competitively select infrastructure works to be financed, based on proposals prioritised in the commune SEDPs. In the first year of project implementation, the CIF investment is still at planning stage. To date, the progress includes: (i) CIF manual developed and approved by PCO. The manual includes a set of selection criteria with special focus on value chain targeting and climate change adaptation; (ii) 4

9 Various meetings and trainings at districts and communes organised to disseminate information about CIF; (iii) The establishment of Commune Infrastructure Supervision Boards in project communes are underway; and (iv) Through MoSEDP process, 55 infrastructure investments in 30 project communes have been identified. Evaluation regarding appropriateness and effectiveness for 55 infrastructure investments has been completed. 16. Despite good preparation for CIF implementation, constraints and challenges still persist: (i) The civil work proposals in the first year were not based on appropriate CCA and VC assessments. These were not yet integrated to the 2015 MoSEDP; (ii) Awareness and capacity of district and commune staff regarding CCA and VC oriented infrastructure investment is still limited; (iii) Mobilisation of additional resources (135, 30A, New Rural Development) to add to CIF in infrastructure investment requires improvement; and (iv) Hasty disbursement of commune CIF in large single investments will limit the space for later support of value chain action plans. 17. The CIG co-financing instrument is to financially support commodity upgrading investment plans of at least 300 CIGs with total amount of 1,5 million USD. As of now, the progress includes: (i) agreement with the Farmers' Union to establish, capacitate and mobilize FU-led CIG investment planning support units in each commune, (ii) FU-led farmer-to-farmer agricultural trainings initiated, (iii) agreement with the DPCs to establish CIG co-investment appraisal boards at each project district, (iv) finalization of the CIG co-financing manual which is of adequate quality, and soon to be shared with the IFAD Country Office for comments, (v) development of an overall roadmap for the CIG support and co-financing, with the aim to initiate first co-investments with trained CIGs during Q3/ The project plans to deliver 75 CIG co-investments during 2016, however the preparatory work is still at very early stage. This leads to some anticipated risks as follows: (i) The rural farmer households have only very limited planning skills, and limited technical knowledge about upgraded farming models. The groups require intensive support in order to meet the standard requirements for co-investment programme. The CPRP has not yet established a CIG support mechanism, thus the trainings as well as investments are in the risk to be delayed; (ii) The selection of best CIG proposals to receive co-investments needs to be done in a transparent and systematic manner, thus the district level appraisal units need to be capacitated for the purpose; (iii) The first round of CIG co-investments should be about 5 grants in each district, and the process should be carefully assessed and revised prior to a second larger round; (iv) The poverty targeting requirement of 50% poor/near-poor CIG members may become an obstacle to CIG establishment in communes where poverty rates are not among the highest. 5

10 Agreed action for Commune Investment Funds Responsibility Agreed date Promote force account method for CIF implementation where appropriate, and ensure O&M mechanism for all investments. PCO, CPCs 2016 onwards Avoid hasty disbursement and ensure availability of CIF funding CPCs 2016 for support of value chain action plans during the coming years. Continue providing capacity building for district and commune PCO staff on CIF, with special attention to CCA and VC requirements. Agreed action for CIG co-financing During Q1: (i) PCO and FU to organize TOTs to establish a qualified support mechanism for the CIG investment planning at the communes, (ii) Communes to establish new CIGs and review potential to strengthen existing CIGs, (iii) Targeted 50% participation of poor/near-poor applied at district level instead of CIG-level. PCO, FU, DPCs, CPCs Q1/2016 During Q2: (i) Conduct agricultural trainings and investment planning trainings for the CIGs, (ii) Establish and capacitate appraisal boards in each district. During Q3: (i) Initiate the first round of CIG co-investments in each district, (ii) conduct trainings and support to further potential CIGs for expansion of the programme. During Q4: (i) thoroughly evaluate the CIG process and its results, and revise practice as required, (ii) subsequently, implement remaining CIG co-investments of PCO, FU, DPCs, CPCs PCO, FU, DPCs, CPCs PCO, FU, DPCs, CPCs Q2/2016 Q3/2016 Q4/2016 Sub-Component 2.2: Rural Financial Services 19. The subcomponent is rated satisfactory. The implementation progress to date includes (i) establishment of the subcomponent implementation board by the provincial WU; (ii) signature of the agreement between PCO and the WU on partnership; (iii) procurement of technical assistance to formulate an operational manual for Women's Development Support Fund (WDSF); (iv) survey conducted on ethnic minorities' demand for finance service in four project communes; (v) organization of two workshops on draft WDSF operational manual; (vi) communication meetings on SCG opportunity in 119 project villages; (vii) 1,739 villagers (54.2% from poor HHs) have registered to join 125 SCGs; (viii) training for 50 staff at province and district levels on final WDSF operational manual and 14 accountants on the WDSF financial management; (ix) issue of Decision on WDSF Establishment by the WU on 14 January Following issues need attention: (i) delay in formulation and approval of the subsidiary agreement between the MOF and the PPC for provision of funds; (ii) the WDSF operational manual needs improvement in terms of financial management and business planning; (iii) all WDSF staff at the provincial office and district branches are part-time and lack incentives for travelling to remote villages; (iv) development of SCGs for the poor ethnic minorities in difficult-access villages is a very challenging process due to the geographical conditions as well as the presence of subsidized finance sources such as the VBSP; (v) existing SCGs by DPPR yet to be mapped by the WDCF for potential inclusion in the new scheme and for lessons learnt. To the extent feasible, it should be considered to transfer the accumulated capital of the existing SCGs worth about VND 8 billion to the WDSF. 6

11 Agreed action Responsibility Agreed date Finalize and approve the subsidiary agreement between the MOF; PCO; Q1/2016 MOF and the PPC. WDSF; PPC Urgently finalize the operational manual and its templates, WDSF Q1/2016 especially for financial management. Recruit international TA to improve WDSF manual and formulate WDSF; PCO 2016 WDSF strategy and business plan. Conduct training and experience exchange among districts for WDSF; PCO Continued best approaches in SCG mobilization; Conduct training for WDSF and relevant PCO staff for financial management of microfinance institutions. Consider recruitment of local fulltime TA for the WDSF at WDSF, PCO Q/2016 province and district levels; Provide appropriate incentives for all staff to travel to remote locations. A survey should be conducted to map out the existing SCGs by the DPPR. Following the survey and if considered feasible, PPC should issue a decision to transfer the existing DPPR SCGs to the WDSF. Relevant experiences are available in other IFAD provinces including Ha Tinh. PPC; PCO; WU Q2/2016 Sub-Component 2.3: Public-Private Collaboration 21. The subcomponent is rated moderately satisfactory. The P-PC fund will be used for a competitive co-investment programme to support pro-poor value chains in collaboration with minimum 30 enterprises, cooperatives and business households. Progress to date includes (i) initiation of Strategic Investment Planning as explained at 1.1; (ii) identification of some potential partner enterprises in the value chains of cannas, beef, tea and honey;(iii) development of guidelines for the P-PC grant distribution, co-investment implementation process and respective responsibilities, to be shared with the IFAD Country Office in due time for comments; (iv) development of an overall roadmap for P-PC implementation, with the aim to initiate first P-PCs during Q3/ The P-PC process is at a very initial stage and preparations are pending due to delayed SIP process. In addition to such continued delay, the anticipated other risks for this sub-component include: (i) Private sector investment in agricultural sector is limited in rural Ha Giang and identification of partner enterprises may be challenging, (ii) The business planning capacities of the potential partner enterprises are limited vis-a-vis P-PC requirements, (iii) The provincial agencies have no experience in preparation, implementation or financial assessment of PPP in agriculture, (iv) There are no local BDS providers available in Ha Giang. Agreed action Responsibility Agreed date Meanwhile drafting SIP documents, simultaneously initiate the P- PCO, DARD Q1-2/2016 PC competition. Open the call for proposals to investments in any agricultural value chain. District level commodity workshops to be held to disseminate DPCs, DARD Q1-2 /2016 information about P-PC opportunity and identify potential P-PC partner investors. Identify and engage national quality BDS to support drafting of PCO Q2/2016 first P-PC proposals. Establish and capacitate the P-PC appraisal board to assess and PCO, PPC Q2/2016 select best co-investment proposals. Initiate the first P-PC round with the aim to co-invest with 3 PCO Q3-Q4/2016 enterprises/coops and 10 business households during Thoroughly evaluate the P-PC process after 1st round of coinvestments, PCO Q1/2017 revise practices as necessary, and engage DPCs to partly implement the 2nd round of P-PC. Until further notice, all potential investment proposals are to be submitted to IFAD country office for review. PCO Effective as of now 7

12 D. CPRP implementation progress 23. Project management performance. Rated as moderately satisfactory. The project start-up workshop was held on 28 January The official date CPRP entry into force was 31 March The PIM and AWPB were approved by IFAD and PPC in June During the last six months, the project management system has been fully established at all levels, including PSC, PCO, DPSGs and CPMBs. In view of the remoteness of the villages from commune centers, Village Development Boards (VDBs) have also been established. Cooperation agreements between the PCU and provincial line agencies DARD, DPI, DONRE and WU have been signed. 24. In addition to the PIM, manuals have been issued for Financial Management, Procurement, M&E and CIF. Technical implementation guidelines have been prepared for CIG Support, PP-C Grant Facility and MoSEDP. Experiences by other similar IFAD projects including AMD and SRDP were utilized in formulation of the guidelines. Training programmes were organized on the implementation modalities and for the innovative approaches, such as MoSEDP, value chain development and private sector engagement. The project has procured office facilities and vehicles as required. 25. The mission identified the following issues: (i) District line agencies, DPSGs and CPMBs have limited awareness on project innovative instruments and management approach. This in particular relates to the changing role of public agencies from implementers to facilitators of private sector and farmer investment; (ii) The current practice in distribution of allowances to members of DPSGs and CPMBs should be modified to encourage the involvement of all relevant technical divisions/staff; (iii) Some of the fulltime additional staff to CPMBs are young graduates and lack experience in the project localities; (iv) Technical manuals for SCGs, CIGs and PP-C should be submitted to IFAD for review and comments in order to benefit from experiences by other IFAD projects. Agreed action Responsibility Agreed date Leadership capacity building: Organize training courses for DPC PCO, DPSGs Continued agencies and CPC staff on project approaches such as P-PC, market-oriented production, CIG and value chain methods. Convene project orientation workshops to launch the AWPB 2016 in all project districts; Priorities for discussion should be on SIPs, VCAPs, CIG, PP-C and SCGs. PCO, DPSGs, PSC January 2016 Review the availability of counterpart funds. Subsequently, establish appropriate levels of allowances to ensure adequate incentives for all staff, especially to travel to remote villages. Promote decentralization of activities to district and commune levels, including tasks in private sector engagement, CIG coinvestments, value chain coordination, district WDSF operations, and roll-out of MoSEDP in non-project communes. PCU, PPC, DPI Q1/2016 PCO, DPCs Q1/ Coherence between AWPB and Implementation. Rated as moderately satisfactory. The AWPB was approved in June As reported by the PCO, by end of 2015 the project implemented 85% of activities planned under the AWPB. The disbursement progress was 58.44% of the AWPB total approved budget. To ensure coherent implementation of the AWPB the project has paid efforts for accelerating implementation by co-implementing agencies, namely the WU, DARD and DPI. Priorities of the AWPB 2015 were selected for: (i) development of required implementation manuals including PIM, MoSEDP, CIF, WDSF, CIG and PP-C; (ii) bench-mark RIMS survey; (iii) studies on SIPs VCAPs; (iv) implementation of MoSEDP in 30 project communes and 10 non-project communes. All of these activities have built foundation for intensive field-level implementation in the forthcoming years. In order to accelerate modification and approval of the AWPB the mission suggests the following actions be considered by the PSC. 8

13 Agreed action Responsibility Agreed date Agency Coordination and AWPB adjustment: Hold biannual PSC meetings to review performance and agree follow-up actions and relevant AWPB adjustment. PSC meetings should be convened at the district level (rotating the host district for sharing experience as conducted under DPPR). PSC, PCO 2016 and onwards Approval of AWPB adjustments: PPC to authorize PD to approve modifications of AWPB if no change in level of IFAD and counterpart funding required. PSC, PCO First Quarter Monitoring and Evaluation. Rated as satisfactory. M&E in the first year focused on setting up the monitoring system and related capacity building for staff. To date, a manual with all monitoring tables has been developed and distributed to M&E staff at all levels for implementation. Various M&E training courses have been organised for M&E staff. The bench-mark RIMS survey was conducted by the project establishing a baseline database for project management. An IFAD support mission was organised to operationalize the log-frame, to include concrete targets, and to provide simple and focused indicator measurement system where data can be captured by regular monitoring instead of large size sample surveys. In the coming time, the project is suggested to pay particular attention to development of a simple and focused set of M&E tools to capture three levels of project indicators, with focus on measurement of income increases and CC adaptation results. A specific capacity development plan should be rolled out accordingly. 28. Gender focus. Rated as moderately satisfactory. The project has paid attention to gender issues. Women account for 35% of all beneficiaries in capacity building activities by the project; and 35% of MoSEDP members were female. Through field consultations, the mission notes that women have initially played a significant role both as beneficiaries and actors in the implementation of the project activities. In order to further guide project staff and partners to practical mainstreaming of gender aspects into project activities, the mission suggests the project to develop gender mainstreaming guidelines and provide capacity building for project staff and partners in this respect. Agreed action Responsibility Agreed date Develop a simple gender mainstreaming manual with clear instructions to involve and empower women in project activities. Provide training courses following the manual. PCO Poverty focus. Rated as moderately satisfactory. The project poverty focus is adequate. 30 selected project communes are among the poorest and most difficult communes with poverty rate (31.3% poor, 21.39% near poor) being considerably higher than the provincial poverty rate (23.2% poor, 14.82% near poor). Project statistics reflect that participation of the poor in initial project activities is high. Under specific activities, proportion of poor and near poor participating in MoSEDP was 55%, and in capacity building activities approximately 50%. Through field visits the mission observed that the poorest groups within the project areas are (i) the ethnic minorities (Hmong, Dao, and Nung), and (ii) the HHs with women as head (husband passed away or disability). Future project activities particularly SCG, and CIG co-financing should pay a specific attention to these groups. 30. Effectiveness of targeting approach. Rated as moderately satisfactory. Initial project implementation records and field observations show that project activities are reaching out to the marginalised groups including ethnic minorities, poor, and women. Especially the MoSEDP instrument was highly appreciated by partners and communities as an important planning tool to mobilise resources and empower people. In the future, the project is suggested to decentralize activities to lower levels when appropriate, to ensure effective targeting. 31. Climate and environment focus. Rated as moderately satisfactory. Within the project framework, climate change adaption and environmental protection are among the key objectives of the project. All the project instruments ranging from planning (MoSEDP) to implementation (model identification, CIF, CIG, and PPC) include CCA as key indicator for implementation. Sub-components 1.3 (Climate adaptation technologies) and 2.1 (CIF and CIF co-finance) are specifically designed to meet the climate adaptation and environmental objectives. The project is in early stage of 9

14 implementation and concrete activities related to climate and environment are yet to be initiated. However, the mission notes that the plans to implement the above mentioned instruments indicate an adequate focus in climate and environmental outputs, outcomes, and impacts. 32. Innovation and learning. Rated as moderately satisfactory. The project design introduces a number of innovative rural development instruments to the Ha Giang province. At the current initial stage of implementation, MoSEDP and SCG/MFI approaches have already been initiated successfully and learning impact is effective. For the other innovative instruments including SIP, VCAP, CIG coinvestments and P-PC co-investments, the process has been initiated through first workshops however progress of implementation and learning is still limited. The skills and knowledge of staff at all levels is limited for market oriented instruments, and coordination between agencies at various levels is still to be strengthened. The mission thus recommends to carry out a comprehensive capacity building framework to ensure efficient delivery of the innovative instruments including P-PC, CIG fund, MoSEDP, enterprise to farmer extension and farmer to farmer extension. 33. Partnerships. Rated as satisfactory. The CPRP Coordination Office has made significant efforts to integrate various project processes with the National Target Programme for New Rural Development. This partnership has strategic relevance to the IFAD Vietnam operations. Also, in activity implementation, the PCO is closely partnering with all relevant line agencies including DARD, FU and WU at provincial, district and commune levels. Partnership with enterprises, cooperatives and business households for VC development is planned to be initiated during E. Fiduciary aspects 34. Financial management. Rated as moderately satisfactory. The finance and accounting management system has been established and decentralized as required. The mission has agreed with the CPRP that the FMM should be reviewed and amended in contents as per details explained below, and training courses are to be held accordingly. This is to ensure smooth disbursement and appropriate accountability for all project operations. 35. Financial management at provincial IAs level. The mission acknowledged that the financial and accounting management systems at provincial IAs has been established in accordance with the agreement between PCO and IAs. The PCO directly controls payments to the IAs based on the approved AWBP/QWBP and the availability of funds. 36. Financial management at Women Union. The Women's Support Development Fund (WSDF) was established mid-january, The operational manual is still to be issued and the draft lacks essential guidance for credit and accounting transactions. A training course on finance and accounting for the WSDF was held in December However: (i) The accounting and financial management system is yet to be set up. The operational manual currently suggests the use of an inappropriate system. This issue should be addressed and an appropriate accounting system should be adopted without further delay. (ii) The mission notes that the WSDF has yet to develop a comprehensive business plan for its operations and delivery costs. (iii) The mission notes that the WSDF is facing challenges in recruitment of qualified accountants that have experience in accounting or banking. 37. Financial management at district and commune level. The mission visited 2 districts and 2 communes (Quang nguyen commune Xin Man district, Yen Thanh commune - Quang Binh district). The financial and accounting management was assessed moderately satisfactory in one district and two communes. For Quang Binh district, the Mission requested the accountant to update accounting books and submit to PCO for review and approval. Overall however, there are a number of short comings in finance management at decentralized levels such as incorrect application of cost norms for staff expenditures. Internal control system for districts and communes should be substantially strengthened as soon as possible. 38. Withdrawal application and justifications. To date, the project has submitted four WAs of the processing of the last one is still pending. The process of WA submission for the IFAD Loan has been managed satisfactorily. However, a new appropriate format for verification of expenditures at communes, districts and state treasury should be adopted for streamlining and accelerating the processing the WAs. 39. Disbursement. Rated as moderately satisfactory. As of 31th Dec 2015, the total project accumulated disbursement is USD million against a total approved project cost of USD

15 million. This includes disbursement of USD million from the IFAD loan, equivalent to 3.26%. 40. Counterpart funds. Rated as satisfactory. Accumulated disbursement of counterpart funding as of 31/12/2015 is USD million. For the fiscal year 2015, the counterpart funding was allocated fully as per AWPB. 41. Beneficiary contribution. Beneficiary contribution is yet to be mobilized. The beneficiary contribution will be a part of infrastructure works, CIG and P-PC co-investments once rolled out. Accounting books for transactions should be improved to cater for beneficiary contributions both in cash and in kind, and FMM manual updated accordingly. 42. Project Accounting. The CPRP accounting system has set up is operating at the required central and decentralized levels. However, computerized accounting systems are yet to be applied. Currently PCO is in the process of choosing an appropriate software for the purpose. 43. Internal control system. Adequate procedures are in place for assets management. However as noted above, the internal controls should be strengthened for cost norms of staff expenditures. 44. The Quality and Timeliness of Audits. Rated as moderately satisfactory. The 2015 audit report and financial statements for LOAN No will be received by IFAD before the deadline in June Compliance with loan covenants. Rated as moderately satisfactory. The project complies with the terms and conditions established in the financing agreement. The financial reports, audit reports, AWPBs, procurement documents are timely submitted to IFAD and GoV as required. 46. Procurement. Rated as moderately unsatisfactory. A review of the projects procurement plan has identified that the project has been able to undertake the procurement of goods on a timely basis, however the issues as identified under paragraph 1.1 of this supervision report has significantly delayed implementation. The project should prepare, update, monitor its procurement plans during the course of implementation seeking IFAD approval consistently on any material changes to the procurement. The format for the procurement plan is available under Module E ( pages 29 to 33) of the IFAD Project Procurement Handbook. The assessment of procurement and contract documents at PCO revealed that PCO applied appropriate procedures for the procurement of goods. The mission has observed weaknesses in the ability of the project to shortlist firms based on their qualification and procedural lapses in the procurement of consultancy services (Firms) identifying a need to mitigate risks in this area. One such service provider selected to provide key inputs under subcomponent 1.1 vital to the implementation of this project has not been able to deliver on scope of work as such the mission has requested the immediate termination of contract in accordance with the provision of the contract. Expenditure against this contract will not be considered as eligible expenditure by IFAD in accordance with the provisions of IFAD s Procurement Guidelines and the General Conditions. The bidding documents and contract files were properly maintained. 11

16 Agreed action for financial management and disbursement Responsibility Agreed date Review and amend the FMM: (i) include details for financial PCO Q1/2016 procedures, fund flows, advance and liquidation procedures for the Force Account method based on Decision 1670/QD-UBDN dated 14/08/2013; (ii) issue accounting books for commune and district levels including sections for beneficiary contributions; (iii) simplify the format of commune and district financial reports; (iv) issue a format for disbursement verifications at commune, district and province. For the above, organize training courses accordingly. In collaboration with DoF, agree on the financial procedures PCO/DoF Q1/2016 related to co-investments with CIGs and P-PC partners. Agreed action for internal control and accounting Verify the project expenditures at all levels in terms of eligibility PCO/District Q1/2016 and cost norms, especially for additional staff payments. Rectify ineligible payments (e.g. trainer fees to project staff) and strengthen internal supervision in terms of financial management. Support Teams/Commun e support teams A computerized accounting system to be selected and put in to PCO Q1/2016 operation as soon as possible, for all levels starting at PCO. Agreed action for financial management at the WSDF The WSDF operation manual with appropriate formats on WU Q1/2016 accounting and credit should be issued as soon as possible. A qualified consultant to be mobilized for assistance. The Mission recommends that accounting regime for the WSDF should follows to Decision 479/QD-NHNN dated 29/4/2004 and WU Circular 10/TT-NHNN. Agreed action for procurement 1. Update, monitor and revise procurement plans and submit revision to IFAD for approval. 2. Revise the procurement plan ensuring all procurement of consultancy services establishes IFAD prior review as a risk mitigation measure. 3. Additional training for the Project on the procurement of consultancy PMU PMU IFAD and PMU Periodically To be decided To be decided F. Sustainability 47. Institution building. Rated as moderately satisfactory. Institution building is an integrated part of the CPRP design in terms of development of community-based institutions and enhanced institutional capacities of the local government agencies, private sector and farmer associations. In the coming period, the project should consider sustainability frameworks for the following institutions: CIGs, collaborative groups, SCGs, Village Management Boards, Infrastructure Community Supervision Boards, the Commune-level MoSEDP planning implementation groups, WSDF, and the PP-C supported private sector value chains. 48. Empowerment and social sustainability. Rated as moderately satisfactory. It is early to evaluate the empowerment and social sustainability of the project. However, the mission observed positive indication for the coming year including: (i) the MoSEDP process and subsequent CDF investments will increase the empowerment of the project beneficiaries and local implementing partners in communes and villages; and (ii) the innovative financing instruments (CIG, SCG, PPC) will likely strengthen the capacities of the HHs in market access and economic development, and facilitate the participation of the poor, the women and the ethnic minorities. 49. Quality of beneficiary participation. Rated as moderately satisfactory. To date, early field activities show positive signals of quality of beneficiary participation. MoSEDP processes involved 56,168 with 31,786 poor/near beneficiaries in identification and planning of project activities at commune level. The voices of these groups, therefore, are raised and heard in the process of setting 12

17 priorities for investments. Funding and full managerial ownership decentralized to commune level, increased motivation significantly. Considerable amount of challenging work remains to be done to facilitate beneficiary participation in market oriented planning for economic development. 50. Responsiveness of service providers. Rated as moderately satisfactory. The planning process for farmer trainings and various financing instruments shows high commitment and responsiveness by all stakeholders. The Farmer Union is establishing local farm planning support units, DARD has established a specific Project Management Board for CPRP activities, Women's Union is committed to development of the WDSF, and the PPC is in overall committed to support the project development. However, the mission notes that the TA by a recruited Hanoi-based consultancy group to develop Strategic Investment Plans has failed to deliver useful support and the contract should be terminated. 51. Exit strategy. Rated as moderately satisfactory. The project is at initial stage, exit strategy not yet required. Regarding PPP and CSA investments, project should already at planning stage pay attention to exit strategy issues including assets management and shifting of full ownership to implementing partners. 52. Potential for scaling-up. Rated as moderately satisfactory. There is high potential for scalingup utilization of the project instruments including the local planning instruments MoSEDP and Value Chain Action Plans to all communes in Ha Giang. Support for institutional reforms and capacity building for DARD to implement the Agriculture Sector Restructuring and for the provincial FU to implement the farmer-to-farmer extension approach are significant scaling up opportunities. The implementation guidelines for CIF, CIG and PP-C co-financing will also be possible for replication under the NTP-NRD phase II and Agriculture Sector Restructuring Scheme. IFAD and the World Bank are currently assisting MARD in developing the framework for operationalization of the NTP-NRD phase II. It is envisaged that the experiences from CPRP as well as other IFAD supported provinces will constitute key inputs to this exercise. G. Other (impact) 53. Impact on physical and financial assets. Rated as moderately satisfactory. The project design has various instruments that are to impact on physical and financial assets, most importantly CIF, P-PC, CIG and SCG, the rollout of which is prepared for and starting up during Baseline data is readily made available, and the initial impact is expected to be seen at SM Impact on food security. Rated as moderately satisfactory. The 2015 RIMS survey results show that among the CPRP target households 18% suffer one hunger season per year with average length of 2,7 months. 1% of the households suffer another hunger season in a year. The survey also shows that 63% of children under 5 years have either acute or chronic malnutrition. A goal among the CPRP targets is to reduce the child malnutrition with 30%, for which purpose the programme has a specific poverty-targeting approach to include at least 50% of poor and near-poor households in the CIG groups and SCG groups, both of which will contribute to the increased food security through improved agricultural production capacities. The CPRP result of improved food security is expected to show in the mid-term RIMS survey. 55. Impact on incomes. Rated as moderately satisfactory. The IFAD Vietnam has introduced a financial analysis method to measure impact on incomes for the project investment instruments P-PC and CIG co-investment fund. These co-investments are to be initiated during 2016, and income increase is very likely to be satisfactory in these sub-components of the CPRP project. Also for the CIF and SCG instruments, the results-based management system is currently being improved, ensuring measurable increase of incomes through all project sub-components. 56. Impact on quality of natural assets and climate resilience. Rated as moderately satisfactory. The project is at initial stage, impact on natural assets and climate resilience is still to be determined. However, as mentioned in the part Climate and Environment focus, climate change adaptation is among the key objectives of this project. The climate informed instruments including MoSEDP, CIF, CIG, and P-PC are foreseen to create positive impact on quality of natural asset improvement and climate resilience. 57. Policy impact. Rated as moderately satisfactory. It is expected that the project will have substantial policy impact at both provincial and national level rural development frameworks as 13