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Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 76946-AF

PROJECT PAPER

ON A

PROPOSED GRANT
IN THE AMOUNT OF US$ 74.75 MILLION

TO THE

ISLAMIC REPUBLIC OF AFGHANISTAN


FOR AN

AFGHANISTAN AGRICULTURAL INPUTS PROJECT

May 30, 2013

SASDA

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

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CURRENCY EQUIVALENTS

(Exchange Rate Effective May 30, 2013)


Currency Unit = AFS
AFS 55.2 = US$1

FISCAL YEAR
January 1 December 31

ABBREVIATIONS AND ACRONYMS

AAIP Afghanistan Agricultural Inputs Project


ANDS Afghanistan National Development Strategy
ANSOR Afghanistan National Seed Organization
ARD Agriculture and Rural Development
ARDS Afghanistan Reconstruction and Development Services
Agriculture and Rural Development Strategy
AREDP Afghanistan Rural Enterprise Development Project
ARIA Agricultural Research Institute of Afghanistan
ARTF Afghanistan Reconstruction Trust Fund
CDC Community Development Council
CGIAR Consultative Group on International Agricultural Research
CIMMYT International Maize and Wheat Improvement Center
DA Designated Account
DAIL Provincial-level Directorate of Agriculture, Irrigation and Livestock
ERR Economic Rate of Return
ESMF Environment and Safeguard Management Framework
EU European Union
FAO Food and Agriculture Organization of the United Nations
FM Financial Management
FMA Financial Management Agent
FQCAID Food Quality Control and Agricultural Inputs Directorate
GDP Gross Domestic Product
GoIRA Government of the Islamic Republic of Afghanistan
HLP Horticulture and Livestock Project
ICARDA International Center for Agricultural Research in Dryland Areas
ICT Information and Communication Technology
IDA International Development Association
IMF International Monetary Fund
IOC Incremental Operating Costs
IMST Implementation Management Support Team
IPM Integrated Pest Management
IRDP Irrigation Restoration and Development Project
ISDS Integrated Safeguards Data Sheet

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ISE Improved Seed Enterprise
ISN Interim Strategy Note
MAIL Ministry of Agriculture, Irrigation, and Livestock
M&E Monitoring and Evaluation
MEW Ministry of Energy and Water
MIS Management Information System
MoE Ministry of Economy
MRRD Ministry of Rural Rehabilitation and Development
NADF National Agriculture Development Framework
NERAP National Rural Access Project
NHLP National Horticulture and Livestock Project
NPP National Priority Program
NPV Net Present Value
NSB National Seed Board
NSP National Solidarity Program
OFWMP On Farm Water Management Project
PACBP Public Administration Capacity Building Project
PD Project Director
PDO Project Development Objective
PFM Public Financial Management
PFMRP Public Finance Management Reform Project
PIMS Procurement Information Management System
PL Procurement Law
PMP Pest Management Plan
PP Procurement Plan
PPU Procurement Policy Unit
PPQD Plant Protection and Quarantine Directorate
PSC Project Steering Committee
PSE Private Seed Enterprise
SCA Seed Certification Agency
SCF Standard Conversion Factor
SDA Special Disbursement Unit
SPC Special Procurement Commission
SRFP Standard Request for Proposals
SRFQ Standard Request for Quotations
TA Technical Assistance

Vice President: Isabel M. Guerrero


Country Director: Robert J. Saum
Country Manager: Illangovan Patchamuthu
Sector Director: John Henry Stein
Sector Manager: Simeon K. Ehui
Task Team Leader: Johannes G.P. Jansen

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AFGHANISTAN
Afghanistan Agricultural Inputs Project

CONTENTS

Page
A. Introduction ......................................................................................................................... 9
B. Country Context, Recovery Strategy and Rationale for Proposed Project ......................... 9
C. Bank Response: The Project ............................................................................................. 11
D. Appraisal of Project Activities .......................................................................................... 18
E. Implementation Arrangements and Financing Plan .......................................................... 21
F. Key Risks and Mitigating Measures ................................................................................. 25
G. Terms and Conditions for Project Financing .................................................................... 26

Annex 1: Detailed Description of Project Components ................................................................ 27

Annex 2: Results Framework and Monitoring.............................................................................. 34

Annex 3: Summary of Estimated Project Costs ............................................................................ 38

Annex 4: Operational Risk Assessment Framework .................................................................... 39

Annex 5: Financial Management, Disbursement and Audit Arrangements ................................. 45

Annex 6: Procurement Arrangements ........................................................................................... 57

Annex 7: Implementation and Monitoring Arrangements ............................................................ 75

Annex 8: Project Preparation and Appraisal Team Members ...................................................... 89

Annex 9: Environmental and Social Safeguards Framework ....................................................... 90

Annex 10: Economic and Financial Analysis ............................................................................... 92

Annex 11: Documents in Project Files ....................................................................................... 104

Annex 12: Country at a Glance ................................................................................................... 105

Annex 13: Map ........................................................................................................................... 106

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AFGHANISTAN

AFGHANISTAN AGRICULTURAL INPUTS PROJECT

PROJECT PAPER

SOUTH ASIA

Basic Information
Country Director: Robert Saum Sectors: Agricultural extension and
Sector Manager/Director: Simeon Ehui research (40%), Crops (25%), Central
/ Jack Stein government administration (25%),
Team Leader: Johannes Jansen Agro-industry, marketing, and trade
Project ID: P120397 (10%)
Expected Effectiveness Date: June 11, Themes: Nutrition and food security
2013 (35%), Export development and
Lending Instrument: SIL competitiveness (28%), Conflict
prevention and post-conflict
reconstruction (25%), Infrastructure
services for private sector development
(10%), e-services (2%)
Environmental category: partial B
Expected Closing Date: June 30, 2018
Joint IFC: No
Joint Level: N/A
Project Financing Data
[ ] Loan [ ] Credit [ X ] Grant [ ] Guarantee [ ] Other:
Proposed terms:
Financing Plan (US$ m)
Source Total Amount (US $m)
Total Project Cost:
ARTF: 74.75
Recipient:
Beneficiaries Contribution:
Total Bank Financing:
IBRD
IDA
New
Recommitted

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Client Information
Recipient: Islamic Republic of Afghanistan
Responsible Agency: Ministry of Agriculture, Irrigation, and Livestock (MAIL)
Contact Person: Javid Qaim, Project Director, AAIP/MAIL
Telephone No.: +(93) (0) 795 525 525
Fax No.:
Email: javid.qaim@mail.gov.af

Estimated disbursements (Bank FY/US$ m)


FY 14 15 16 17 18
Annual 5.9 22.8 27.4 10.6 8.05
Cumulative 5.9 28.7 56.1 66.7 74.75
Project Development Objective and Description
Project development objective: Strengthened institutional capacity for safety and
reliability of agricultural inputs and sustainable production of certified wheat seed.
The development objective would be achieved through: (i) strengthening capacity in the
value chain for producing certified wheat seed; (ii) preventing marketing of banned,
hazardous, sub-standard, and unreliable pesticides and fertilizers; (iii) lowering the risk
of introduction and spread of plant quarantine pests into the country; and (iv) improving
farmers access to agricultural inputs of reliable quality.

Project description: The project will build the institutional capacity in the Ministry of
Agriculture, Livestock and Irrigation required for carrying out their public mandate in
the agricultural inputs sector. First, the project will improve the technical and economic
efficiency of the value chain of certified wheat seed. Second, building on the legal and
regulatory framework that the project helped building during the preparation phase, the
project will develop the necessary accredited facilities for plant quarantine networks and
quality control of agro-chemicals. Third, guided by the results of field surveys carried
out during the preparation phase, the project will design and pilot test a demand-led
action plan to improve and develop market based input delivery systems for seeds and
agro-chemicals this will also include ICT applications in agricultural extension and
agro-chemicals quality control. The sustainability of these interventions will be
supported by capacity building programs involving civil servants, farmers and traders.

Component A. Improved Wheat Seed Production. Establishment of a commercially


viable and technically efficient seed production and certification system to improve the
currently unsustainable production system of certified wheat seed.
Subcomponent A1 -Varietal Selection and Production of Breeder Seed. Improve the
efficiency of varietal selection and production of breeder seed in the Agricultural
Research Institute of Afghanistan (ARIA). The project would provide land development
at ARIA farms, farm buildings, farm and office equipment and training and technical
assistance. Subcomponent A2. Production of Foundation and Registered Seed.
Improve the efficiency of multiplication of breeder seed into foundation and registered
seed at the Improved Seed Enterprise (ISE). The project would support land
development on ISE farms, provide farm and office equipment for ISE operations, as
well as training and technical assistance. Subcomponent A3. Coordination of Seed

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Sector. Support to the National Seed Board (NSB) to coordinate the seed industry; and
support to the Afghanistan National Seed Organization (ANSOR) for operating costs and
enhancing its facilitating and coordinating role of the private seed enterprises (PSEs).

Component B. Plant Quarantine Networks and Quality Control of Agro-chemicals.


Improving safety and reliability of agricultural inputs through building and strengthening
the institutional capacity and physical infrastructure for quality control of agrochemicals
and plant quarantine in order to prevent marketing of banned, hazardous, sub-standard,
and unreliable pesticides and fertilizers and lower the risk of introduction and spread of
quarantine pests into the country. Subcomponent B1. Quality Control of Agro-
chemicals. Establishment of physical infrastructure and capacity to implement the
relevant laws including the Pesticides Act including (i) pesticides registration,
administration, and quality control office; (ii) laboratories and equipment; (iii) pesticides
poisoning management centre; (iv) fertilizer quality control inspection system.
Subcomponent B2. Plant Quarantine Network. Support implementation of the Plant
Quarantine Act and Regulations through establishment of physical infrastructure and
capacity to prevent introduction of exotic quarantine insect pests and diseases, and
facilitate export of plant materials by issuing proper quarantine/phytosanitary
certificates. Activities include: (i) nation-wide insect pests and diseases survey and pests
risk analysis; (ii) establishment of 13 plant quarantine stations and Insect Pests and
Diseases Diagnostic facility; (iii) implementation of Pest Management Plan.

Component C. Input Delivery Systems. This component will analyze current


agricultural input delivery systems and pilot improvements to improve farmers access.
Based on analysis of data of two surveys carried out during preparation (farm-level crop
production survey and agricultural inputs value chain survey) a plan of action for
investment activities in inputs delivery systems will be developed and piloted.

Component D. Project Management and Monitoring. Continuation and expansion of


already existing Implementation Management Support Team (IMST) in MAIL tasked
with M&E, MIS, Procurement, FM, implementation of ESMF and PMP. Liaising with
and facilitating project activities at ARIA, ISE, NSB, PPQD, FQCAID.

Safeguard and Exception to Policies


Safeguard policies triggered:
Environmental Assessment (OP/BP 4.01) [x]Yes [ ] No
Natural Habitats (OP/BP 4.04) [ ]Yes [x] No
Forests (OP/BP 4.36) [ ]Yes [x] No
Pest Management (OP 4.09) [x]Yes [ ] No
Physical Cultural Resources (OP/BP 4.11) [ ]Yes [x] No
Indigenous Peoples (OP/BP 4.10) [ ]Yes [x] No
Involuntary Resettlement (OP/BP 4.12) [ ]Yes [x] No
Safety of Dams (OP/BP 4.37) [ ]Yes [x] No
Projects on International Waterways (OP/BP 7.50) [ ]Yes [x No
Projects in Disputed Areas (OP/BP 7.60) [ ]Yes [x] No
Does the project require any exceptions from Bank policies? [ ]Yes [x] No

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Have these been approved by Bank management? [ ]Yes [ ] No
Conditions and Legal Covenants:
Financing Agreement Reference Description of Date Due
Condition/Covenant
Section I.A.4 The Recipient shall by not July 31, 2013
later than July 31, 2013,
update, in accordance with
terms of reference agreed with
the World Bank, the Financial
Management Manual, and
shall thereafter carry out the
Project in accordance with the
updated Financial
Management Manual.
Section IV.B.1, par. (b) No withdrawal shall be made Disbursement
for payments under Category Condition
(2) unless and until the
recipient has: (i) in
accordance with term of
reference agreed with the
World Bank, conducted a
review of plant disease risks
in the Jalalabad area; (ii)
consulted with the World
Bank on the conclusions and
recommendations of such
review; and (iii) implemented
any actions recommended by
the World Bank in a manner
and substance satisfactory to
the World Bank.

Section IV.B.1, par. (c) No withdrawal shall be made Disbursement


for payments under Category Condition
(3) unless and until recipient
has prepared and adopted a
detailed plan setting forth
eligibility criteria, payment
structure and other
implementation arrangements
for the Incentive Payments.

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A. Introduction

1. This Project Paper seeks approval of the Management Committee of the Afghanistan
Reconstruction Trust Fund for a grant in the amount of US$ 74.75 million to the Islamic
Republic of Afghanistan for a proposed Afghanistan Agricultural Inputs Project.

2. The proposed grant would help finance the costs associated with improving the wheat
seed value chain; preventing marketing of banned, hazardous, sub-standard, and unreliable
pesticides and fertilizers, lowering the risk of introduction and spread of quarantine pests into the
country and improving the reliability of sanitary and phytosanitary certification systems for
export commodities; and improving farmers access to agricultural inputs of reliable quality. The
proposed support will be achieved through (A) establishing a commercially viable and
technically efficient seed production and certification system to improve the currently
unsustainable production system of certified wheat seed; (B) improving safety and reliability of
agricultural inputs through building and strengthening the institutional capacity and physical
infrastructure for quality control of agrochemicals and plant quarantine; and (C) analyzing
current agricultural input delivery systems and piloting improvements to improve farmers
access.

3. An appropriate institutionalization of an efficient and independent Seed Certification


Authority is essential for improving the sustainability of seed value chains and this will be
financed by the European Union.

B. Country Context, Recovery Strategy and Rationale for Proposed Project

4. After decades of war and political instability, landlocked Afghanistan remains one of the
worlds least developed nations and one of the poorest countries in the world. Even though
annual GDP growth varied over the past decade varied between 9 percent and 16.2 percent, per
capita income remains very low at US$ 580 per year in 2010/11. A recent Afghanistan Transition
Economics paper prepared by the World Bank predicts a slowdown of average annual economic
growth to 4.9 percent for 2014-2025. However, depending on security situation and increased
production in the mining and agriculture and sectors, annual GDP growth could increase to about
6.7 percent. However, the countrys operating environment remains extraordinarily challenging.
Governance and administrative capacity remains weak, and the rule of law has yet to be widely
institutionalized. Security has worsened in the last three years

5. In 2008, the overall national poverty rate in Afghanistan stood at 36 percent, and more
than half the population is considered vulnerable. At 54 percent, the rural poverty rate is
particularly high. Since over 70 percent of the Afghanistan population lives in rural areas, rural
poverty accounts for almost 84 percent of national poverty. Generally, development needs
remain enormous.

6. Both economic development and poverty reduction in Afghanistan are highly dependent
on the performance of the agricultural sector. The sector accounts for 31 percent of GDP but
provides employment to 59 percent of the labor force.1 About 36 percent of households rely on

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Afghanistan Interim Strategy Note FY12-14 (draft).

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farming as their main source of income, while another 6 percent depend on farm wages as their
main source of income.

7. Despite donor-funded agriculture and rural development programs, Afghanistan lags


significantly behind its neighbors in agricultural productivity. Compared to the pre-conflict era
productivity has declined significantly with the systematic destruction of productive rural
infrastructure, insufficient basic services, and low availability of quality agricultural inputs.

8. Starting with the Agriculture Master Plan prepared in 2005, the Governments strategy for
agriculture has evolved in several stages over the last six years, culminating in a National
Agriculture Development Framework (NADF). MAIL also prepared the ARDS (Agriculture and
Rural Development Strategy) which is a chapter of the ANDS (Afghanistan National
Development Strategy) developed in 2008. More recently a series of four National Priority
Programs (NPPs) have been developed under the Governments Agriculture and Rural
Development (ARD) cluster. Institutional strengthening for improving the supply of quality
agricultural inputs is defined in overall objective 1 of NPP2 (National Comprehensive
Agricultural Production and Market Development). Both the NADF and the ARDS mention
strengthening the delivery of agricultural inputs as an explicit objective. Together with NPP1
(National water and Natural Resources Development) and NPP2 they serve as an overall
framework for the countrys agricultural and food security strategy.

9. Limited access to quality inputs at affordable prices is a key constraint to higher


agricultural productivity. Expanding farm production and crop productivity require increased
availability of high quality seeds; establishment of quality control systems for agrochemical
inputs; and improvements in systems of inputs delivery. The agricultural inputs delivery network
in Afghanistan remains underdeveloped, weakly regulated, and distorted. These are all
challenges of a rather long term nature that require investments and policy action at the farm
level and at the institutional and policy levels. The proposed project will primarily address the
institutional and policy levels without which investments at the farm level will not have the
expected impact.

10. Government increased its attention to these challenges in 2011 assisted by a project
preparation grant from the ARTF. With the assistance of FAO, the Seed Policy (dated 2005) has
been updated and was signed by the MAIL Minister in December 2012. An assessment of
investment requirements (infrastructure, training, equipment etc.) has been completed for the
main agencies involved in the improved wheat seed production chain, including the Agricultural
Research Institute of Afghanistan (ARIA), the Improved Seed Enterprise (ISE), the Afghanistan
National Seed Organization (ANSOR), the Seed Certification Agency (SCA), the National Seed
Board (NSB) and the International Center for Improvement of Maize and Wheat (CIMMYT).

11. The legal framework for pesticides and plant quarantine (in particular the Pesticides Act
and Plant Quarantine Act and their respective Regulations) has been completed and submitted to
the Ministry of Justice for further processing and eventual submission to the Parliament of
Afghanistan. In addition, a detailed assessment of the needs for institutional strengthening and
capacity building of MAILs Plant Protection and Quarantine Directorate (PPQD) and the Food
Quality Control & Agriculture Inputs Directorate (FQCAID) has been completed. An analysis of
the requirements for Afghanistan to comply with the International Code of Conduct on the

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Import and Distribution of Pesticides (as formulated by the Food & Agriculture Organization of
the United Nations), Stockholm Convention, Basel Convention and Rotterdam Convention has
also been conducted.

12. Afghanistan has a National Seed Law (2009), a recently updated Seed Policy, and
Official Seed Rules and Regulations in the process of legal and technical scrutiny. A National
Seed Board (NSB) overviews the seed sector, which consists of variety selection and improved
seed production by public and private sector agencies, and a functioning (but not yet formalized)
Seed Certification Agency (SCA). These organizations not only require institutional
strengthening to make them functional, but also capacity building to support implementation of
their functions.

13. Development of improved wheat seed (which alone can raise yields by up to one-third) in
Afghanistan took off mainly through a number of EU-financed, FAO-executed projects starting
in 2004. However, the improved wheat seed market has been heavily donor driven and based on
subsidies since its inception nearly a decade ago with farmers used to pay only a fraction of the
economic cost of improved wheat seed. This has resulted in overcapacity among the private seed
enterprises (PSEs) that produce certified wheat seed with donors and/or the Government
purchasing the entire amount of certified wheat seed produced each year at excessive premiums
above the price of wheat grain. At the same time upstream in the wheat value chain substantial
inefficiencies remain not only are breeder seed and foundation/registered seed (produced by
respectively ARIA and ISE) rather expensive, but the available varieties do not cover the entire
spectrum of agro-ecological conditions found in Afghanistans main wheat production zones
(insufficient varietal selection and agronomic trials). Both ARIA and ISE also remain heavily
dependent on external assistance (mainly by CIMMYT, ICARDA and FAO). Substantial
investments remain to be made in the seed sector in order to improve its functioning and
transition towards a market for certified wheat seed with minimal external support.

14. Fertilizers and other agrochemicals (pesticides, fungicides, herbicides etc.) are nearly
entirely imported in Afghanistan - but are mostly of unreliable quality. However, Afghanistan
currently lacks the legal and regulatory frameworks, as well as the infrastructure and human
resources to exercise and enforce quality control for fertilizers and other agro-chemicals. Besides
potentially damaging farmers crops, the unreliable quality of most agrochemicals leads to
hazardous situations for human health and the environment (in particular soil and water
resources).

C. Bank Response: The Project


Brief description of Banks strategy

15. The Bank is heavily engaged in the agricultural and rural sector working in close
collaboration with the Ministry of Rural Rehabilitation and Development (MRRD), the Ministry
of Energy and Water (MEW) and the Ministry of Agriculture, Irrigation and Livestock (MAIL).
Together these ministries comprise the Agricultural and Rural Development (ARD) cluster of the
IRoGA which is governed by a Steering Committee whose members include the three ministers
as well as the deputy ministers. In the agriculture sector working with MAIL, the Banks focus is
on improving the agricultural production base and food security through the On Farm Water
Management Project (OFWMP) and the National Horticulture and Livestock Project (NHLP). A

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project that will rehabilitate the physical silo infrastructure and strengthen the institutional
capacity for managing a strategic grain reserve for emergency purposes is awaiting financing.
Under MEW the Bank is currently financing the Irrigation Restoration and Development project
(IRDP which follows seven years of similar investments under the former Emergency Irrigation
Rehabilitation Project). In MRRD the Bank is financing three rural development projects - the
Afghanistan Rural Enterprise Development Project (AREDP), the National Solidarity Project
(NSP), and the National Emergency Rural Access Project (NERAP).

16. A number of important lessons have been learned from a decade of Bank involvement in
the ARD sector in Afghanistan. These include the following: (i) weak implementation capacity
of MAIL requires higher than normal supervision by the Bank task team and heavy emphasis on
capacity building, and makes it necessary to sequence support to public institutions relative to
support to users and consumers; (ii) difficulties in reaching farmers because of the continuing
insecurity and the corresponding lack of information about farmer behavior and response to
opportunities and incentives complicate project design; (iii) despite a number of planning
exercises and strategy documents produced by the Government, a clear sense of investment
priorities based on their expected returns is lacking. The Afghanistan Agricultural Sector Review
which is currently being carried out by the Bank is trying to fill in some of these knowledge
gaps. The proposed project is designed to minimize risks relative to what we might learn later on
and to address lowest common denominator priorities that we are pretty confident need to be
addressed and addressed in the way that we are proposing.

Strategic Approach of the Proposed Project

17. The projects overall strategy is to follow on the policy and legislative and regulatory
instrumentation developed during the preparation phase and build central regulatory and
technical capacity so as to ensure safety and reliability before moving on to demand side. In this
way the projects activities and investments focus MAILs limited fiduciary capacity on
realistically accomplishable procurement and construction before taking on much more
complicated and security challenged farmer level efforts.

18. In the seed sector the project will build on the achievements of earlier projects (mainly
funded by the EU with technical support from FAO) and help transit the improved wheat seed
value chain from a donor-dependent undertaking based on subsidies to an economically
sustainable business. The main focus will be on wheat (the major staple crop) but industrial crops
and horticultural crops may also be included in project activities. The project will focus on
strengthening the production and distribution systems for improved seed of wheat
Afghanistans main staple crop while supporting other food crops including vegetables and
grain legumes where appropriate.

19. Regarding the agrochemicals sector and following the development of the necessary legal
frameworks in the preparation phase, the project will build and strengthen institutional capacity
and physical infrastructure required for quality control of agrochemicals and plant quarantine as
specified in relevant laws and regulations (in particular the Pesticide Act and the Plant
Quarantine Act). This will include prevention of marketing of banned, hazardous, sub-standard,
and unreliable pesticides and fertilizers, as well as lowering the risk of introduction and spread of
quarantine pests into the country.

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20. The project will also support piloting ICT applications in agricultural inputs delivery
systems. Candidate applications include mobile phone-enabled text messaging system to provide
farmers with prices of various agricultural inputs at various locations in the country; a hotline
to provide farmers with information on safe handling and usage of various agro-chemicals; and
mobile phone- based application for input quality verification using unique identifiers such as
scratch codes.

21. To get a better handle on farmers demand for agricultural inputs and the scope and
functioning of the distribution networks for agricultural inputs, the data of two comprehensive
on-going surveys (a farm-level crop production survey and an agricultural inputs value chain
survey) will be analyzed to develop a plan of action for investment activities in inputs delivery
systems. In the second half of the project it is proposed to pilot a number of interventions aimed
at improving farmers access to agricultural inputs.

Project Development Objective

22. The Project Development Objective (PDO) is strengthened institutional capacity for
safety and reliability of agricultural inputs and sustainable production of certified wheat seed.
The development objective would be achieved through; (i) strengthening capacity in the value
chain for producing certified wheat seed; (ii) preventing marketing of banned, hazardous, sub-
standard, and unreliable pesticides and fertilizers; (iii) lowering the risk of introduction and
spread of plant quarantine pests into the country; and (iv) improving farmers access to
agricultural inputs of reliable quality.

23. The proposed indicators to measure progress towards achieving the PDO are:

Number of new varieties submitted for release (rainfed and irrigated)


Seed multiplication factor (breeder to foundation and foundation to registered)
Production of certified wheat seed
List of plant quarantine pests and diseases developed
Number of product samples tested for pesticides residue
Bad pesticide samples intercepted
Pilot investment in input distribution system

Summary of Project Components

24. Component A: Improved Wheat Seed Production (US$ 26.4 million incl.
contingencies). This component will establish a commercially viable and technically efficient
seed production and certification system bringing a maximum degree of sustainability into the
improved wheat seed value chain. The project will strengthen production and distribution
systems for improved wheat seed supporting other food crops, including vegetables and grain
legumes, where appropriate. The project will cover the entire seed chain from research in variety
selection to generate breeder seed, production of foundation and registered seeds from breeder
seed, and multiplication of registered seed into certified seed. The project will encourage
compliance with the seed industry regulatory framework comprising the National Seed Policy
(2005), the Seed Law (2009), and accompanying seed rules and regulations.

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25. Component A consists of three subcomponents:

Sub-component A1: Varietal Selection and Production of Breeder Seed (US$ 11.3
million). The sub-component will support varietal selection and production of breeder
seed in the Agricultural Research Institute of Afghanistan (ARIA). The project would
(i) on ARIA farms located outside the Jalalabad area, provide land development
(including land leveling, minor irrigation works), farm buildings, farm and office
equipment and training and technical assistance; (ii) subject to a disbursement
condition2, provide land development (including land leveling, minor irrigation
works), farm buildings, farm and office equipment and training and technical
assistance to the ARIA farm located in Jalalabad. This component will build on work
by, and collaborate with, CIMMYT regarding development and testing of wheat
varieties.
Sub-component A2: Production of Foundation and Registered Seed (US$ 11.2
million). The sub-component will support multiplication of breeder seed into
foundation and registered seed at the Improved Seed Enterprise (ISE). The project
would (i) on ISE farms located outside the Jalalabad area, support land development,
provide training and technical assistance and farm and office equipment for ISE
operations; (ii) subject to a disbursement condition, support for the establishment of
an ISE farm in the Jalalabad including land development, farm buildings, farm and
office equipment, and training and technical assistance.
Sub-component A3: Coordination of Seed Sector (US$ 3.9 million). This sub-
component will support the National Seed Board (NSB) to coordinate the seed
industry. It will also provide support to the Afghanistan National Seed Organization
(ANSOR).

26. Component B: Plant Quarantine Networks and Quality Control of Agro-chemicals


(US$ 29.9 million incl. contingencies). This component will build and strengthen institutional
capacity and physical infrastructure required for quality control of agrochemicals and plant
quarantine. Project activities will focus on preventing marketing of banned, hazardous, sub-
standard, and unreliable pesticides and fertilizers, as well as lowering the risk of introduction and
spread of quarantine pests into the country. Component B is divided into two main
subcomponents:

27. Sub-component B1: Quality Control of Agro-chemicals (US$ 13.5 million). This will involve
establishment of physical infrastructure and capacity to implement the relevant laws including
the Pesticides Act and various regulations for quality control of agro-chemicals. The specific
activities include establishing: (i) pesticides registration, administration, and quality control
office to organize and establish registration requirements, perform pesticides registration, and
provide support to the Pesticides Board; (ii) pesticides formulation and analysis laboratory to test
the physical and chemical properties of candidate pesticides for registration purposes; (iii)

2
The disbursement condition states that no withdrawal shall be made for payments to support ARIA and/or ISE
farms in the Jalalabad area unless and until the recipient has: (i) in accordance with term of reference agreed with
the World Bank, conducted a review of plant disease risks in the Jalalabad area; (ii) consulted with the World Bank
on the conclusions and recommendations of such review; and (iii) implemented any actions recommended by the
World Bank in a manner and substance satisfactory to the World Bank.

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pesticides quality control laboratory to test samples collected from market and border entry
points by inspectors and issue certificate of compliance; (iv) pesticide bio-efficacy trial
equipment; (v) pesticides residue laboratory to test the presence of pesticides residue in
exportable commodities and issue internationally recognized certificate that would enable
exporters claim pesticide residue free status in consignments; (vi) pesticides poisoning
management centre to provide treatment for the pesticides poisoning cases; (vii) strengthening of
the fertilizer quality control inspection system; and (viii) establishment of well-equipped
fertilizers laboratory for effective testing of fertilizer samples and issuing certificate of
compliance with quality standards.

28. Sub-Component B2: Plant Quarantine Networks (US$16.4 million). This will involve
establishment of physical infrastructure and capacity to prevent introduction of exotic quarantine
insect pests and diseases, as well as to facilitate export of plant materials by issuing proper
quarantine/phytosanitary certificates. The sub-component will support implementation of the
Plant Quarantine Act and regulations. The major activities include: (i) supporting MAIL to
oversee processing and enactment of Plant quarantine Act and Regulations; (ii) nation-wide
insect pests and diseases survey and pests risk analysis to enable the country have a complete list
of insect pests and diseases, list of quarantine pests, area of low pest prevalence, and physical
facilities for fumigation and pest eradication; (iii) establishment of 13 plant quarantine stations;
and (iv) establishment of Insect Pests and Diseases Diagnostic facility; and (v) implementing a
Pest Management Plan.

29. Component C: Input Delivery Systems (US$ 2.5 million incl. contingencies). Under this
component two comprehensive in-depth surveys will be implemented in order to get a better
handle on the functioning of the certified seed production chain, farm-level input use, and
constraints in the entire input distribution supply chain (importers wholesalers retailers
farmers). Survey data would be analyzed to develop an action plan for investments required to
improve input delivery to farmers and better tailor supply to demand. The action plan would be
operationalized (piloted) after mid-term. The first survey involves a detailed account of farm
level production activities for wheat and other major crops, including farm budgets, input use
(especially seeds and agrochemicals), working capital requirements and sources, yields, post-
harvest losses etc. The second survey will focus on input distribution networks for major inputs
(mainly seeds, fertilizers, and other agrochemicals) and will mainly consist of a value chain
analysis at various levels (importers, producers (seed), wholesalers, retailers). Data from these
surveys would be analyzed to develop a feasible plan of action for investment in input delivery
systems. This may include strengthening and expanding Ag Depot and Farm Service Center
programs; piloting creation of alternative forms of input delivery systems with farmer groups,
CDCs etc. This component will also support piloting ICT applications in agricultural inputs
delivery systems in particular a quality verification system supported by mobile phone
applications will be explored to support checks by farmers and traders.

30. Component D: Project Management and Monitoring (US$ 15.9 million incl.
contingencies). This component will host the Implementation Management Support Team
(IMST) in MAIL with overall responsibility for Monitoring and Evaluation, Management
Information System, Procurement, Financial Management, and implementation of the ESMF and
PMP. The following main technical Directorates from the MAIL side will be involved in the

15
preparation and implementation of the project: (i) for Component A: the Agricultural Research
Institute of Afghanistan (ARIA), the Improved Seeds Enterprise (ISE) and the National Seed
Board (NSB); (ii) for Component B: the Directorates for Plant Protection and Quarantine
(PPQD) and Food Quality Control & Agriculture Inputs (FQCAID). Component C will be
implemented by the IMST (mainly the national M&E Specialist supported by an international
M&E Specialist).

The project will be for the duration of five years, starting with the implementation of components
A and B and the preparation of the component C, which will be elaborated for implementation to
start after the Mid Term Review, scheduled after approximately two-and-a-half years from the
start of the project.

Summary of Project Costs


Year 1 Year 2 Year 3 Year 4 Year 5 Total Percent of
Total
Base Cost

Wheat Seed Development


Agricultural Research 1,304,000 3,895,500 3,043,500 1,272,800 624,800 10,140,600 15%
Improved Seed Enterprise Development 732,700 5,024,600 3,440,600 520,400 262,400 9,980,700 15%
ANSOR/PSE 50,000 300,000 270,000 230,000 180,000 1,030,000 2%
National Seed Board 35,000 135,000 35,000 35,000 35,000 275,000 0%
Seed Component Coordination 679,100 520,500 460,500 460,500 60,000 2,180,600 3%
Total Component A 2,800,800 9,875,600 7,249,600 2,518,700 1,162,200 23,606,900 35%
Agrochemicals and Plant Quarantine
Pesticide Regulation, Registration and Safety 291,000 4,736,688 1,522,500 702,000 662,000 7,914,188 12%
Fertilizer 214,000 2,132,083 711,000 528,000 528,000 4,113,083 6%
Plant Quarantine Network 222,312 4,455,872 4,861,429 1,794,200 1,418,200 12,752,013 19%
Pest Management Plan Implementation 18,000 690,300 456,500 427,500 353,000 1,945,300 3%
Total Component B 745,312 12,014,943 7,551,429 3,451,700 2,961,200 26,724,584 40%
Total Component C 50,000 600,000 800,000 800,000 2,250,000 3%
Project Management 2,777,200 3,233,800 3,013,800 2,403,800 2,789,800 14,218,400 21%

Total Project Base Costs 6,373,312 25,724,343 18,614,829 9,174,200 6,913,200 66,799,884 100%
Physical Contingencies 637,331 2,572,434 1,861,483 917,420 691,320 6,679,988 10%
Price Contingencies - 276,968 393,526 278,749 304,181 1,253,423 2%

Total Project Costs 7,010,643 28,573,745 20,869,838 10,370,369 7,908,701 74,733,296 112%

Project processing

31. All new projects in Afghanistan will now be processed under paragraph 11 of OP/BP 10.0.
While the country is slowly moving out of the emergency mode and into a more structured
approach towards agricultural development (as witnessed by the four ARD NPPs), the main
issues to be addressed by the proposed AAIP are mostly of a rather urgent nature. That is, a
satisfactory functioning market for improved seed and a legal and institutional framework
capable of monitoring and controlling the safety and reliability of agricultural inputs are needed
in order to restore the agricultural production base, improve agricultural productivity and help
exploiting Afghanistans agricultural export potential on a sustainable basis.

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Consistency with Country Strategy (ISN)

32. The proposed AAIP is closely aligned with the Bank Groups Afghanistan Interim Strategy
Note (ISN) for FY 2012-14. The ISN FY12-14 has three pillars: (a) institutions and capacity, (b)
equitable service delivery, and (c) growth and jobs. AAIP will directly support the first pillar.
Since nearly 60 percent of employment in Afghanistan is generated by agriculture and more than
70 percent of the population lives in rural areas, agriculture and rural development activities
remain a critical source of growth and job creation. AAIP also indirectly contributes to the third
pillar by supplying a number of essential building blocks that are required for improving
agricultural productivity and contributing to the institutional infrastructure required for
exploiting Afghanistans agricultural export potential.

Expected Outcomes

33. Seed Development. The projects investments in strengthening the entire seed chain is
expected to result in the following outcomes: utilization of advanced breeding lines for variety
trials and agronomic experiments in ARIA; efficient production of breeder, foundation and
registered seeds in ARIA and ISE; improved seed multiplication factors - from breeder to
foundation seed and from foundation to registered seed; improved coordination of the seed
industry by the NSB; and increased production of certified wheat seed to economically
justifiable levels in line with sustainable seed replacement practice. Under the project, ARIA and
ISE would develop land for seed production, provide staff with MSc level training opportunities,
and gradually take the lead in seed development from donors such as FAO and CIMMYT.

34. Plant Quarantine Networks and Quality Control of Agro-chemicals. The project will
conduct the necessary pest and disease surveys and install physical infrastructure for conducting
the necessary bio-efficacy trials to register Pesticides. In Afghanistan pesticides have never been
registered and their distribution, handling, transport and use do not comply with the International
Code of Conduct on the Import and Distribution of Pesticides (as formulated by the Food &
Agriculture Organization of the United Nations) on the distribution and use of pesticides. Due to
lack of registration many banned and substandard pesticides are marketed with potential severe
consequences for human health and the environment. The plant quarantine networks established
under the project will prevent introduction of exotic quarantine insect pests and diseases, as well
as to facilitate export of plant materials by issuing proper quarantine/phytosanitary certificates.
The pesticides residue laboratory would test exportable commodities for Pesticides residues, thus
providing certificates to assure export markets on phytosanitary standards of Afghanistan
products. In addition, the project will install capacity for chemical testing of fertilizers and
accompanying regulatory provisions to impede marketing of low quality fertilizers.

35. Piloting ICT applications and input delivery systems. The farm level survey and input
distribution supply chain survey would provide information to pilot input distribution systems.
Input distribution system pilots are envisaged to begin after mid-term review. Meanwhile, the
project will pilot ICT applications; including a quality verification system supported by mobile
phone applications will be explored to support checks by farmers and traders.

17
D. Appraisal of Project Activities

36. The Bank has appraised the Governments proposal for the project and concluded that the
proposal for the project activities has been prepared satisfactorily. Appraisal was based on
detailed documents prepared by a MAIL Project Preparation Team (PPT) working under the
direction of the Technical Deputy Minister for Agricultural Affairs. These documents include a
Project Implementation Plan, an Environmental and Social Assessment (including an ESMF and
PMP), a Procurement Plan, and a detailed Project Implementation Plan. The latter also includes
the Operations Manual, Procurement Manual, Financial Management Manual and HR Manual.
Appraisal included assessment of the proposed technical approach, economic and financial
analysis, review of environmental and social aspects, review of fiduciary arrangements, and
assessment of governance and institutional arrangements.

37. Technical. The implementation program and technical approach for the project have
been well defined and are detailed in Annex 7. The project consists largely of the rehabilitation,
refurbishment or acquisition and installation of farms, facilities and equipment related to seed
production or the testing of agricultural chemicals. The project involves only minor civil works
(small buildings, walls, land leveling, etc.) that pose no special technical challenges. The project
will finance some sophisticated laboratory equipment requiring special expertise for retrofitting
of buildings to facilitate installation and specialized training for operators. Adequate provisions
have been made for the required technical assistance in preparation of specifications and for
training of operators. Retention of staff trained and maintenance of facilities established under
the project are recognized as risks.

38. Economic and Financial Analysis. This section presents a summary of economic and
financial analysis for the project. A detailed presentation is given in Annex 10.

39. The projects Net Present Value (NPV) is calculated at US$ 34.7 million. The estimated
Economic Rate of Return (ERR) is 19%.

40. Project Benefits. Component A: Improved seed production and seed certification involves
(a) strengthening national institutions for agroecological zone-specific technology development,
and (b) sustainable development of the improved wheat seed production system. The main
sources of benefits include (i) Efficiency gains in wheat seed production which will come from
37% saving in the scarce irrigated lands used for seed production and 14% reduction in the cost
of producing certified seed. This is driven by a 56% increase in the seed multiplication rate,
which will be achieved through 22% increase in the productivity of wheat seed and a 37%
reduction in losses/rejections in the field and lab level production, processing and testing; (ii)
Productivity gains in wheat grain production which will come from a 21% increase in wheat
grain yields among 25% of the farmers. This will be achieved through the development of at
least ten agroecology/cultural condition-specific technology/production packages for wheat,
backed by the supply of quality certified seeds closer to the villages for enhanced adoption.

41. Component B: Plant quarantine networks and quality control of agrochemicals target reliable
quality in pesticides and fertilizers, and proper food safety. The main sources of benefits are a
10% increase in prices obtained for raisin exports to regional and niche markets, and 50%
expansion in the volume of exports of major dry fruits like raisin to niche markets.

18
42. Economic rate of return. The projects cost-benefit analysis is conducted separately for the
main investment activities-sustainable wheat seed production, plant quarantine networks and
quality control of agro chemicals (together accounting for 94% of total project costs) and then
aggregated for the entire project taking total project costs (including contingencies) into account.
Annual incremental economic benefits (undiscounted) at full project development from
improved seed production system investments are assessed at US$ 11.9 m; plus US$ 10.5 m in
increased export gains due to investments in plant quarantine and agrochemicals quality control.
The total annual incremental economic benefits (undiscounted) amount therefore to US$ 22.4 m
and originate from (i) improved efficiency in the production system of improved wheat seed
(30%), (ii) increased wheat yields due to farmer adoption of location-specific wheat technology
packages that include improved wheat seed (23%), and (iii) efficient plant quarantine and quality
control system for agrochemicals (47%). The ERR for project investments varied from 20.5%
(seed system efficiency investments) to 19.5% (quarantine and quality control investments). The
overall project ERR is estimated at 19% and the project is expected to yield a NPV of US$ 34.7
m in 2012 prices over a project cycle period of 25 years.

43. Sensitivity analysis. The sensitivity of project returns was analyzed for a number alternative
scenarios, including a 20% increase in the cost of the project; a 20% drop in project benefits; and
a 25% decrease in projected individual targets regarding seed production efficiency, wheat
productivity and adoption levels, and export gains. As a result the ERR for the project decreases
to a value between 14.6% and 18.2%. Switching value analysis for the project revealed that costs
will have to increase by 62% and benefits will have to fall by 39% to bring the ERR down to
12%. The overall project can withstand the risk of a simultaneous decrease of 20% in benefits
and a 20% increase in costs the resulting ERR at 13.1% will still exceed the discount rate of
12%.

44. Risk analysis. A Monte Carlo risk analysis was carried out evaluating the impact on the
distribution of the projects ERR of a cost escalation of up to 15% escalation in costs, jointly
with a similar reduction (up to 15%) in individual sources of project benefits (including
improved wheat seed system efficiency, enhanced wheat production and increased access to
niche export markets). The expected ERR is estimated at 13.2% and reasonably stable - the
probability of the ERR exceeding the discount rate is 84%.

45. Stakeholder Analysis. Government is committed to the strengthening of the seed supply
system in Afghanistan and the activities proposed under the project are aligned with the interests
of all key stakeholders in the wheat sector.

46. Stakeholders in the fertilizer and pesticides subsectors include farmers, farm supply
retailers, traders and consumers. As noted, chemical input use in Afghan agriculture is low by
international comparators and many stakeholders have limited awareness of their potential
interests or risks in relation to the new regulatory framework being supported by the project. In
this respect it is important to note the extensive stakeholder consultations that preceded the
MAIL Ministers approval of the Pesticide Act and the Plant Quarantine Act.

19
47. An illicit trade in low-quality, mislabeled and/or adulterated agrochemicals is thought to
have developed and to be growing in Afghanistan in the absence of the capabilities to be
developed under the proposed project.

48. Fiduciary. The financial management (FM) capacity of the Recipient has been assessed
and is discussed in detail in Annex 5. Fiduciary risks are rated substantial after mitigation due to
the overall weak control environment in the country and low capacity. Detailed capacity
building, supervision, and controls will be implemented during implementation.

49. Procurement. Procurement capacity and risk has been assessed and is rated substantial
after mitigation measures are implemented. To address procurement risk the procurement sub-
unit will be strengthened by an International Procurement Advisor. Moreover, the establishment
of the IMST and staffing of the IMST with additional procurement consultants to be funded by
the project are expected to strengthen the fiduciary arrangements. A Procurement Plan for the
first 18 months of the project, which has been approved by the Bank, along with the detailed
findings and provision of the procurement assessment, is available in the Project Files.

50. Environmental and Social Safeguards. The Bank has given specific attention to
environmental and social safeguards aspects during preparation. The project is triggering the
following World Bank Safeguards Policies:

Table 1. World Bank Safeguards Policies triggered

Policy Triggered
Environmental Assessment (OP/BP 4.01) Yes
Natural Habitats (OP/BP 4.04) No
Forests (OP/BP 4.36) No
Pest Management (OP 4.09) Yes
Physical Cultural Resources (OP/BP 4.11) No
Indigenous Peoples (OP/BP 4.10) No
Involuntary Resettlement (OP/BP 4.12) No
Safety of Dams (OP/BP 4.37) No
Projects on International Waterways (OP/BP 7.50) No
Projects in Disputed Areas (OP/BP 7.60) No

51. In accordance with Bank safeguards policy requirements, the Government has completed
the following preparation tasks and documents:

o Environmental and Social Management Framework (OP/BP 4.01).


o Pest Management Plan (OP 4.09).
o Public Disclosure. The Banks public disclosure requirements have been met and all
safeguards documents have been disclosed in country and in the Banks Infoshop.

52. The AAIP will help building up the legal and regulatory frameworks, as well as the
infrastructure necessary to exercise and enforce quality control for fertilizers and other agro-
chemicals. The project itself is not promoting the use of fertilizers and other agrochemicals -
rather it aims at strengthening the legal and institutional framework needed for safety and

20
reliability of fertilizers and other agrochemicals. The AAIP is classified as Category B according
to the WB safeguards policy requirements.

53. The AAIP triggers OP/BP 4.01 and OP 4.09. An ESMF and a Pest Management Plan
(PMP) have been developed to effectively address environmental and social concerns and
opportunities resulting from the use of fertilizers and other agrochemicals. Based on the ESMF,
each subproject will undergo a review process to screen for sensitive environmental/social issues
and to ensure that the environmental and social risks can be adequately addressed through the
application of appropriate mitigation measures consistent with standardized guidelines and tools
provided in the ESMF. Sub-projects with attributes registered on the negative list will be
ineligible for support. For each subproject a site specific Environmental and Social Management
Plan (ESMP) would be prepared as an action plan for managing and mitigating safeguards
issues. All proposed sub-projects will undergo safeguards screening.

54. Policy Exceptions and Readiness. The project is compliant with all applicable Bank
policies and will not require any exceptions.

E. Implementation Arrangements and Financing Plan

55. The total cost of the five-year project is estimated at US$ 74.75 million including physical
and price contingencies. The project will be financed from ARTF resources according to the
following plan:

Project Financing Plan (US$ million)

Source \ Currency Local Foreign Total


ARTF 0 74.75 74.75
Total Project Cost 0 74.75 74.75

56. The project will be implemented under the authority of the MAIL, with direct supervision
from the Technical Deputy Minister for Agricultural Affairs. Regular operations will be
conducted by a Project Management Unit already established and functioning with support from
an ongoing ARTF grant. The IMST is led by a Project Director and is staffed with technical
specialists and will house financial management and procurement staff.

57. The IMST will administer all procurement and financial transactions under the project
and will contract for civil works, delivery of equipment, goods and technical assistance to the
various operating entities involved in the project. Consultations and needs assessment conducted
during preparation have established agreement on needs and scheduling, and arrangements are in
place to ensure adequate consultations and coordination during project implementation.

58. Following construction and installation the various units, operating under regulations and
procedures either in place or to be developed with technical assistance provided by the project,
will be responsible for ongoing operations.

21
Proposed financial management and disbursement arrangements

59. A PFM performance rating system has been developed for Afghanistan by the Public
Expenditure and Financial Accountability (PEFA) multi-agency partnership program, which
includes the World Bank, IMF, EU, and other agencies. Afghanistans ratings against the PFM
performance indicators portray a public sector where financial resources are, by and large, being
used for their intended purposes as authorized by a budget that is processed with transparency
and has contributed to aggregate fiscal discipline.

60. Financial management and audit functions for the proposed project will be undertaken
through the agents contracted under the IDA-financed Public Financial Management Reform
Project II. This is the primary instrument for continuing to strengthen the fiduciary measures put
in place for ensuring transparency and accountability of funds provided by the Bank and other
donors. Under these contracts, two advisersFinancial Management and Auditare responsible
for working with the Government and line ministries to carry out these core functions. The
former, the Financial Management Agent (FMA) is responsible for helping the MoF maintain the
accounts for all public expenditures, including IDA-financed projects and for building capacity
within the Government offices for these functions. The latter, the Audit Agent is responsible for
providing technical assistance to the Control and Audit office in the performance of annual
audits.

61. The project will be managed and implemented by the Ministry of Agriculture, Irrigation
and Livestock (MAIL). An Implementation Management Support Team (IMST) of staff directly
employed by MAIL has already been established in MAIL in Kabul as part of the preparation
phase of the project. This IMST will be strengthened and consist of heads of different
components whose primary task will be to supervise and coordinate the activities of the project.
The expanded IMST will be supported by a small team of international advisors. The individual
advisors will be contracted and dedicated to the project to manage and support the IMST with
program implementation. Furthermore, there will be long-term national and short-term
international consultants recruited to work in the four Directorates of MAIL. These consultants
will report to the IMST in the first two years after which they will be handed over to the
respective MAIL Directorates.

62. Based on the Governments strategy to build the capacity of the civil servants and merge
the IMST within the structure of the ministry, the project will strive to have a smoother transition
of its activities from contracted staff in the IMST to civil servants in MAIL Directorates. In the
first year of implementation, the project will have a financial management consultant to work
directly with the Finance and Administration Directorate of MAIL. The consultant will be
responsible for the financial management of the project and training civil servants in World
Bank-related financial processes and procedures. The consultant will report to the Director of
Finance of MAIL, and the Project Director. After the initial phase of transition, the project will
transfer all of the financial management consultants of the project to the Finance and
Administration Directorate of MAIL and the consultants will be working under the Director of
Finance. The consultants will carry out the financial management of the project and undertake
capacity building of the civil servants.

22
63. Interim Un-Audited Financial Reports (IUFRs) will be prepared by the IMST every
quarter and submitted to the Bank within 45 days from the end of the quarter. Consolidated
project reports will be prepared, reviewed, and approved by MoF, supported by the FM Adviser.

64. A Designated Account (DA) will be opened at Da Afghanistan Bank (DAB, Central
Bank) in the name of the project on terms and conditions satisfactory to IDA. The DA will be
maintained by MoF. Withdrawal applications for new advances and expenditure reports will be
submitted monthly. Detailed financial management arrangements for the project can be found in
Annex 5.

Fund Flows

65. Fund management for the project will follow existing procedures. As with all public
expenditure, all payments under the project will be routed through MoF. The FM Adviser will
assist MoF in executing and recording project payments. In keeping with current practices for
other projects in Afghanistan, the DA will be operated by the Special Disbursement Unit (SDU)
in the Treasury Department of MoF. Requests for payments from DA funds will be made to the
SDU by the IMST finance unit through the Finance and Administration Department of MAIL.
All documentation will be maintained by the IMST finance unit.

66. In addition to payments from DA funds, the IMST finance unit through the Finance and
Administration Department of MAIL can also request the SDU to make direct payments to
consultants or consulting firms, contractors and suppliers; and special commitments for contracts
covered by letters of credit. Such requests will follow World Bank procedures. All withdrawal
applications to IDA, including advances, reimbursement, direct payment special commitment,
will be prepared and submitted by MoF.

Accounting and Reporting

67. The finance unit of IMST will maintain essential project transaction records using
computerized accounting system/Excel spreadsheets and generate required monthly, quarterly,
and annual reports.

68. A draft FM Manual has been prepared by the FM unit of the PM. Approval by the Bank
of the final FM manual by July 31, 2013 is a legal covenant. The FM manual includes: i) roles
and responsibilities for all FM staff, ii) documentation and approval procedures for payments, iii)
project reporting requirements, and iv) quality assurance measures to help ensure that adequate
internal controls and procedures are in place and are being followed.

69. The FM Manual also defines project financial management in accordance with standard
Afghan government policies and procedures including use of the Government Chart of Accounts
to record Project expenditures. Overall Project accounts will be maintained centrally in SDU,
which will be ultimately responsible for recording of all Project expenditures and receipts in the
Governments accounting system. Reconciliation of Project expenditure records with MoF
records will be carried out monthly by the FM unit of the project.

23
Disbursement method

70. Disbursements from the grant will be made using advances, reimbursement, direct
payment, and payments under Special Commitments including records or against reports, in the
form of statements of expenditures, as appropriate.

Audit of Project Funds

71. The Auditor General, supported by the Audit Agent, is responsible for auditing the
accounts of all IDA and ARTF-financed projects; it will also be responsible for this Projects
audit. Annual audited project financial statements will be submitted within six months of the
close of GoIRAs fiscal year.

72. The Bank-funded projects already or currently being implemented by MAIL (NHLP and
OFWMP) have no overdue audit reports. The key issues raised in these projects audit reports up
to Solar Year 1390 have been resolved satisfactorily.

Audit Responsible Entity

73. The responsible entity for the audit report is the Ministry Agriculture, Irrigation and
Livestock.

Procurement arrangements

74. Procurement for the project will be administrated in accordance with the WBs Guidelines:
Procurement under IBRD Loans and IDA Credits dated January 2011. Guidelines: Selection
and Employment of Consultants by World Bank Borrowers dated January 2011 and the
provisions stipulated in the Financing Agreement. In addition, the WBs Guidelines on
Preventing and Combating Corruption in Projects Financed by IBRD Loans and IDA Credits and
Grants dated October 15, 2006 revised January 2011 has been shared with the recipient.

75. The WBs Standard Bidding Documents, Requests for Proposals, and Forms of Consultant
Contract will be used. Civil works and goods following National Competitive Bidding (NCB)
procedures shall be procured using the agreed Standard Bidding Documents (SBDs) for
Afghanistan. In case of conflict/contradiction between the World Banks procurement
procedures and any national rules and regulations, the World Banks procurement procedures
will take precedence as per the Article 4(2) of the Procurement Law July 2008 (Amendments in
January 2009 incorporated) of the GoIRA, the IDA Procurement/Consultant Guidelines shall
prevail. The general description of various procurements under different expenditure categories
are described in Annex 6: Procurement Arrangements. A detailed procurement plan has been
prepared for the first 18 months of the project as part of the Procurement arrangements.

76. The proposed project is implemented by MAIL which has limited, though growing,
experience in handling procurement under Bank Guidelines. In view of this, the IMST will be
equipped with six national procurement staff (Procurement Specialist, two Procurement Officers,
Contracts Manager, and two Procurement Assistants), assisted by a (part-time) International
Procurement Advisor who will be shared with another Bank-assisted project (NHLP). The

24
general description of project procurement under different expenditure categories can be found in
Annex 6: Procurement Arrangements. A procurement plan has been prepared for the first 18
months of the Project and cleared by the Bank.

F. Key Risks and Mitigating Measures

77. Afghanistan is a conflict country and most government institutions are weak, including
the implementing agency for the project (MAIL). The proposed project would be implemented in
a risky environment. The main risks and their mitigation measures are outlined below.

Key Risks Mitigation Measures


The potential impact of escalating Mitigation of security risk is outside the scope of
insurgency-related violence on project the Bank. However, the Bank will continue to
implementation and ability to supervise in monitor developments closely and will modify
parts of the country. programs if necessary. Third party monitoring and
remote sensing/GPS tracking will be used for
monitoring & supervision this process has
already started with the field surveys of
Component C.

Donors who traditionally have engaged in AAIP will continue to highlight the
supplying subsidized inputs to farmers may unsustainability of input subsidies and the
want to continue this and prevent importance of gradually moving to a market-based
development of an economic market for input supply system that guarantees farmers
improved wheat seed. quality inputs at competitive prices.

Whereas Component A of the project builds To strengthen coordination and oversight a Project
on earlier experience gathered in a number Steering Committee (PSC) is established under the
of FAO-executed projects, most activities in chairmanship of the Technical Deputy Minister.
Components B are new to Afghanistan. In All Directors of MAIL Directorates involved in
addition, Component B involves installing the project will sit on the PSC as will the Project
highly technical facilities (laboratories) for Director (PD) of AAIP (secretary), Director-
testing plant materials for exotic pests, General of the Directorate of Programs, Planning
testing pesticides residue levels in food and Policy in MAIL, Chairman of the NSB, and
commodities, and chemical analysis of MoF representative. The PSC will have various
agrochemicals. functions including approving project work-plans.

The proposed new laws and regulations of The existing pesticides regulations and the plant
pesticides and plant quarantine may not be quarantine law may be effectively adopted using
enacted well ahead of the project ending, the laboratory facilities created under the project
which may hinder undertaking of pesticides until the new laws and regulations are in place. In
registration and quality control. the meantime the Minister of MAIL will keep on
pushing in the Ministry of Justice for the new laws
and regulations to be enacted as soon as possible.

Unawareness among pesticides and Well organized training programs by competent


fertilizers traders, and among exporters and specialists and awareness campaign through
importers of plant materials may lead to a different media shall be implemented under the
non-responsiveness towards government project as per pre-set schedules to create mass
efforts in pesticides registration, quality public and target-groups awareness about the

25
Key Risks Mitigation Measures
control of agrochemicals and phytosanitary government initiatives under the project.
certification services.

Cost recovery issue of registration services


and laboratory analyses

Support to ARIA and ISE activities in Inclusion of following disbursement covenant in


Jalalabad station is risky because of legal agreement: no disbursements shall be made
occasional occurrence of soil-borne wheat in favor of expenditures related to wheat variety
disease (Karnal Bunt) research or seed production in or around
Jalalabad until the GoIRA has conducted,
according to TOR satisfactory to IDA, a review of
plant disease risks posed by a serious plant fungal
disease suspected in the Jalalabad area, and
consulted with the Bank on the conclusions and
recommendations of such review and thereafter
taken actions in a manner and substance
satisfactory to IDA

Insufficient buy-in from Heads and other Project will be governed by a Project Steering
senior staff of participating Directorates Committee (PSC) chaired by the Technical
Deputy Minister and consisting of Directors of the
four MAIL Directorates involved in the project,
AAIP PD (secretary), Director-General of the
Directorate of Programs, Planning and Policy in
MAIL, Chairman of the NSB, and MoF
representative.

Project will include an incentive payment scheme


for senior staff in participating Directorates
(performance payments against specific
deliverables etc.)

Once they have obtained degree training Under the CBR project MAIL is working on an
Civil Servants may not want to return to the overhaul of the civil servant pay scales which
Ministry. should allow returning trainees to receive better
compensation.

G. Terms and Conditions for Project Financing

78. ARTF financing of the project will be 100%, inclusive of taxes.

26
Annex 1: Detailed Description of Project Components
AFGHANISTAN: Afghanistan Agricultural Inputs Project

Component A: Improved Wheat Seed Production (estimated cost US$ 23.6 million excl.
contingencies)

79. This component will assist the Government of Afghanistan in strengthening the existing
chain for wheat seed production to become sustainable and commercially viable. The project will
strengthen the seed production and distribution systems with a focus on wheat, the countrys
main staple crop, while supporting diversification into other main food crops including
vegetables and grain legumes where appropriate. The project will cover the entire seed chain,
with focus in variety development and production and distribution of foundation and registered
seeds. In addition, the project will invest in the seed industry regulatory framework comprising
the national seed policy, the seed law and seed rules/regulations. It will build on the existing
institutional system, while developing the infrastructure and human capacity needed to transition
from the present donor driven situation into national systems with minimal external support.

80. Within the framework of the national seed policy and seed law, this component will invest
US$ 23,606,900 in the main institutional structures in the seed chain; namely the Agricultural
Research Institute of Afghanistan (ARIA) for both variety development and breeder seed
production, the Improved Seed Enterprise (ISE) for the production of foundation and registered
seed, the national seed association (ANSOR), and the National Seed Board (NSB) in MAIL
responsible for coordinating all seed industry functions. While ARIA is a Government
department under MAIL, the ISE is a state-owned enterprise. Component A is organized into the
following subcomponents:

81. Sub Component A1: Varietal Selection and Production of Breeder Seed (US$ 10.1 million
excl. contingencies). According to needs assessment results, ARIAs seven seed related
Departments (Cereal Crop Improvement, Commercial and Legume Crop Improvement, Seed
Multiplication, Agronomy, Plant Protection, Agricultural Machinery and Planning/Data
Analysis) working at the Headquarters in Kabul and 16 farms/stations located in the major agro-
ecological zones are all significantly short of qualified staff, essential equipment and facilities
including laboratories. The project will therefore provide a total of US$ 10,140,600 for
strengthening ARIA activities including support for conducting relevant field experiments on 11
research stations (IOC); land development (irrigation, land leveling) and rehabilitation of
buildings at 10 research stations; equipment (farm, office, computer, energy, cars, motorcycles)
at 11 research stations; plus support to ARIA HQ mainly consisting of consultants (national and
international), training and capacity building and support for workshops and IOC. In
accomplishing its tasks, ARIA will work closely with the CGIAR Centers, mainly ICARDA and
CIMMYT.

It is important to note that Sub-Component A1 includes an amount of US$ 548,000 for the ARIA
farm in the Jalalabad area. However the projects assistance to the Jalalabad ARIA farm is
subject to a thorough study of plant disease risks in the Jalalabad area (disbursement condition).
This is because of unconfirmed reports of occasional outbreaks of Karnal Bunt which, if
confirmed, run the risk of spreading to other areas of Afghanistan. Therefore, disbursement of

27
grant funds to the ARIA farm in the Jalalabad area will be allowed if and only if the conclusions
and recommendations of such study confirm the absence of significant disease risk in that area.

Indicators for sub component A1 include (i) number of new wheat varieties (irrigated and
rainfed) submitted for release; (ii) developed farm land area in ARIA; (iii) number of staff
trained in ARIA; (iv) number of advanced lines tested in variety trials; and (v) number of
agronomic experiments conducted.

82. Sub Component A2: Production of Foundation and Registered Seed (US$ 10.0 million excl.
contingencies). The needs assessment of ISE reveals weaknesses in staff capacity, equipment and
facilities, and its status as a state-owned enterprise is unlikely to change in the short-term.
Therefore, the project will strengthen the ISE in foundation and registered seed production
providing a total of US$ 9,980,700. Due to the shortage of developed land and weak ownership
of most of its land, ISE produces about 70% of foundation and registered seed on rented land and
with contract growers. The project proposes to develop about 800 ha of land owned by the ISE to
produce 50% of foundation and registered seed. The project will provide a total of US$
9,980,700 for strengthening ISE activities including institutional support to ARIA HQ in Kabul
(mainly consultants (national and international), training & capacity building and IOC);
buildings at 7 stations (incl. HQ); land and irrigation development at 6 farms; and equipment
(farm, office, computer, energy, cars) at 7 stations (incl. HQ).

It is important to note that Sub-Component A2 includes an amount of US$ 1,304,800 for the
establishment of an ISE farm in the Jalalabad area on government-owned land. Even though
currently foundation and registered seed is being produced in Jalalabad, this is done through
contract growers since ISE does not currently have a farm in Jalalabad. Similarly to the
disbursement condition for ARIA under Sub-Component A1, the projects assistance to ISE in
Jalalabad is subject to a thorough study of plant disease risks in the Jalalabad area and would
be allowed if and only if the conclusions and recommendations of such study confirm the
absence of significant disease risk in that area.

Indicators for sub component A2 include (i) increase in wheat seed multiplication factors
(breeder seed to foundation seed and foundation seed to registered seed); (ii) developed farm
land area in ISE; (iii) number of staff trained in ISE; (iv) percentage of foundation seed area
rejected; and (v) percentage of registered seed area rejected.

83. Sub Component A3: Coordination of Seed Sector (US$ 3.5 million excl. contingencies). On
the whole, the success of the seed industry would depend largely on effective coordination of all
essential functions - including regulation, production, certification and marketing of seeds. The
National Seed Board (NSB) shall perform this coordinating role for which it will need support
for enforcing the national seed policy and seed law, organizing regular meetings, undertaking
specific studies and investigations as necessary, preparing relevant documentation, etc. To
enhance the capacity of NSB for this purpose, the project shall allocate the sum of US$ 275,000.
As regards the private sector, support will be given to ANSORs operating costs for enhancing
its facilitating and coordinating role of the PSEs (US$ 200,000). An amount of US$ 0.9 million
is budgeted for the PSEs in-country training in business development and diversification, and
market development support and seed promotion activities (in cooperation with the bank-

28
supported Afghanistan Rural Enterprise Development Project (AREDP). Finally an amount of
$2.2 million is reserved for international consultants, study tours etc.

An important indicator for subcomponent A3 is the percentage of certified seed that is purchased
by farmers themselves (instead of through donors or Government).

Component B: Plant Quarantine Networks and Quality Control of Agro-chemicals


(estimated cost US$ 26.7 million excl. contingencies).

84. This component aims to build and strengthen institutional capacity and physical
infrastructure required for quality control of agrochemicals and plant quarantine. Project
activities will focus on preventing marketing of banned, hazardous, sub-standard, and unreliable
pesticides and fertilizers, as well as lowering the risk of introduction and spread of quarantine
pests into the country. Component B is organized into 2 sub-components:

85. Sub-Component B1: Quality Control of Agro-chemicals (US$ 12.0 million excl.
contingencies). This will involve establishment of physical infrastructure and capacity to
implement the relevant laws including the Pesticides Act and various regulations for quality
control of agro-chemicals. Specific cost items include refurbishment of buildings, equipment,
training, technical assistance (consultants), study tours and support to operational expenses. The
following activities are proposed: (i) establishment of a pesticides registration, administration,
and quality control office (PRA&QCO) to organize and establish registration requirements,
perform pesticides registration, and provide support to the Pesticides Board (US$ 1.8 m); (ii)
establishment of a pesticides formulation and analysis laboratory (PFAL) to test the physical and
chemical properties of candidate pesticides for registration purposes (US$ 1.9 m); (iii)
establishment of a pesticides quality control laboratory (PQCL) to test samples collected from
market and border entry points by inspectors and issue certificate of compliance (US$ 1.9 m);
(iv) installation of pesticide bio-efficacy trial equipment (US$ 0.4 m) (v) establishment of a
pesticides residue laboratory (PRL) to test the presence of pesticides residue in exportable
commodities and issue internationally recognized certificate that would enable exporters claim
pesticide residue free status in consignments (US$ 1.9 m); (vi) establishment of a pesticides
poisoning management centre to provide treatment for the pesticides poisoning cases (US$ 0.14
m); (vii) strengthening of the fertilizer quality control inspection system (US$ 2.6 m); and (viii)
establishment of a fertilizer laboratory for effective testing of fertilizer samples and issuing
certificate of compliance with quality standards (US$ 1.5 m).

Indicators for sub component B1 include: (i) number of pesticide samples chemically analyzed
for registration; (ii) number of bad pesticide samples intercepted; (iii) number of pesticide
samples subjected to-bio-efficacy trials; (iv) number of staff trained in PPQD.

86. Sub-Component B2: Plant Quarantine Networks (US$14.7 million excl. contingencies). This
will involve establishment of physical infrastructure and capacity to prevent introduction of
exotic quarantine insect pests and diseases, as well as to facilitate export of plant materials by
issuing proper quarantine/phytosanitary certificate. The sub-component will support
implementation of the Plant Quarantine Act and regulations. Specific investments will include
buildings, equipment, technical assistance (consultants) and support to operating costs. The

29
following activities are proposed: (i) follow-up of plant quarantine act and regulations for their
processing and approval (US$ 0.3 m); (ii) nation-wide insect pests and diseases survey and pests
risk analysis to enable the country have a complete list of insect pests and diseases, list of
quarantine pests, area of low pest prevalence, and physical facilities for fumigation and pest
eradication (US$ 0.9 m); (iii) establishment of 13 plant quarantine stations (1 at MAIL
headquarters, 1 at Kabul international airport, 1 at the Kabul customs offices, 1 at Kabul central
post office, 1 at Islam Qala, and 8 at various border entry points (US$ 8.1 m), (iv) establishment
of Insect Pests and Diseases Diagnostic facility at PPQD (US$ 1.7 m),(v) PD & PPQD
Directors office and general support (US$ 1.8 m) and (vi) Pest Management Plan
Implementation (US$ 2.0 m).

Indicators for sub component B2 include: (i) listing of plant quarantine pests and diseases; (ii)
number of product samples tested for pesticides residues; (iii) number of phyto-sanitary
certificates issued; (iv) number of quarantine inspections carried out; (v) number of fertilizer
samples tested for chemical purity; (vi) number of fertilizer lots inspected; (vii) number of staff
trained in FQC&AID.

Component C: Input Delivery System (estimated cost US$ 2.3 million excl. contingencies).

87. The ongoing preparation phase will undertake two comprehensive in-depth surveys to collect
data that would be analyzed to develop a plan of action for investment activities in inputs
delivery systems. The first survey involves a detailed account of farm level production activities
for wheat and other major crops, including farm budgets, input use (especially seeds and
agrochemicals), working capital requirements and sources, yields, post-harvest losses etc. The
second survey will focus on input distribution networks for major inputs (mainly seeds,
fertilizers, and other agrochemicals) and will mainly consist of a value chain analysis at various
levels (importers, producers (seed), wholesalers, retailers). By mid-term review (MTR) of the
project, data from these surveys would have been analyzed to develop a feasible plan of action
for investment in input delivery systems. It is proposed that the project will seek additional
financing at MTR to support investment activities that would be outlined in the plan of action.

88. Component C would also support piloting ICT applications in agricultural inputs delivery
systems. Candidate applications include the following: (i) mobile phone-enabled text messaging
system to provide farmers with prices of various agricultural inputs at various locations in the
country (an expansion of the already existing Malomat application for agricultural commodity
market prices); (ii) a hotline to provide farmers with information on safe handling and usage of
various agro-chemicals perhaps together with video demonstrations installed in provincial
DAIL offices; and (iii) mobile phone- based application for input quality verification using
unique identifiers such as scratch codes.

Indicators for Component C include: (i) field surveys completed; (ii) action plan for investment
in input distribution system developed; (iii) ICT applications piloted; and (iv) pilot investment in
input distribution system.

30
Component D: Project Management (estimated cost US$ 14.2 million excl. contingencies).

89. This Component will host the Implementation Management Support Team (IMST) with
overall responsibility for Monitoring and Evaluation, Management Information System,
Procurement, Financial Management, and implementation of the ESMF and PMP.

Capacity building

During the first 18 months of project implementation, the following programs are proposed to enhance the
knowledge of the staff of MAIL:

1 2 3 4 5 6 7
o Expected outcome /
N Estimated Estimated Start Closing
Activity Description
Cost (US$) Duration Date Date Comments
1 English Language Starting dates
Training Program in 90,000 5 months - - are July 2013
Kabul (18 persons) and Jan 2014
2 Starting dates
14 MSc Scholarships 150,000 Two years - - are Jan and Aug
2014
3 - Starting date
2 PhD Scholarships 25,000 Four years -
Jan-2014
4 - Will be in July
Short Courses and
80,000 15 days - 2013 and Jan
Workshops Abroad
2014
5 - Jan-2014
In country training
27,000 To be decided -
courses

6 Specialized Training - Will be in July


courses Abroad: 2013 and Jan
Agricultural Research 2014
310,000 To be decided -
Management in 2013 and
Experimental Design in
2014
7 - Will be in July
Travelling Field
40,000 5 days each - 2013 and Aug
Workshops (5 zones)
2014
8 English Language - Starting date
Training Program in 22,000 5 months - Aug-2013
Kabul for 10 persons
9 - Starting date
7 MSc Scholarships 75,000 Two years -
Jan-2014
10 Specialized course in - Starting date
Management/Technical 150,000 3 months - Jan-2014
(10 persons)
11 In country Trainings - Jan-2014
8,000 To be decided -
together with ARIA
12 - Will be in Oct-
Production planning
2013, and
workshops for summer 30,000 5 days -
March and Oct-
and winter crops
2014
13 Training of PSEs staff in 100,000 To be decided - - Starting date

31
1 2 3 4 5 6 7
o Expected outcome /
N Estimated Estimated Start Closing
Activity Description
Cost (US$) Duration Date Date Comments
Management and Jan-2014
Marketing
14 Support to Seed - Starting dates
Promotion and Market 140,000 To be decided - Aug-2013 and
development Jan-2014
15 Study Tour Abroad 100,000 10 days - - June-2014
16 Trainings/Study tours for - July-2014
75,000 To be decided -
Seed Department Staffs
17 Seminars on rights and - Oct-2013 and
obligations of inputs Jul-2014
wholesalers and retailers 70,000 To be decided -
on products quality with
media coverage
18 Communication campaign - Oct-2013 and
(TV, Radio, newspapers, 40,000 To be decided - Jul-2014
posters, mosques, etc.)
19 Various ESMF related - Oct-2013 and
95,000 To be decided -
trainings Jul-2014
20 Intl course in Pesticides - Starting date
25,000 3 months -
Registration (1 person) Nov-2014
21 Pesticides Administration - Nov-2014
overseas study tour (10 150,000 14 days -
persons)
22 MSc in Pesticides - Starting date
Chemistry (for PFAL 1 17,500 Two years - Jan-2014
person)
23 Intl course in pesticide - Starting date
formulation analysis (1 50,000 6 months - May-2014
person)
24 Intl course in pesticide - Starting date
formulation analysis (1 25,000 3 months - Aug-2014
person)
25 - Starting dates
MSc in Pesticide
35,000 Two years - Jul-2013 and
Chemistry (2 persons)
Jan 2014
26 1 specialists 6 months - Starting date
special intl course in 50,000 6 Months - May-2014
Pesticide Quality control
27 Spec. intl course in - Starting date
Pesticide Quality control 50,000 3 months - Aug-2014
(2 persons)
28 MSc in Pesticides Residue - Starting date
35,000 2 years -
Chemistry (2 persons) Jul-2014
29 Intl course in pesticide - Starting date
residue analysis (2 100,000 6 months - Jul-2014
persons)
30 Technicians Skill - Oct-2014
development training (1 2,000 To be decided -
person)
31 Intl training in fertilizer - Starting date
140,000 2 months -
quality control (7 persons Oct-2014

32
1 2 3 4 5 6 7
o Expected outcome /
N Estimated Estimated Start Closing
Activity Description
Cost (US$) Duration Date Date Comments
from mobile teams)
32 - Starting dates
MSc training in Fertilizer
35,000 Two Years - Jul-2013 and
Chemistry (2 persons)
Jan-2014
33 Intl training in fertilizer - Starting date
20,000 2 months -
quality analysis Oct-2014
34 Intl training in Fertilizer - Starting date
Quality Analysis (2 40,000 2 months - Oct-2014
persons)
35 - Starting dates
MSc in Plant Protection
70,000 Two years - Jul-2013 and
(Quarantine 4 persons)
Feb-2014
36 MSc training in Plant - Starting dates
Pathology (1 person) and 35,000 Two years - Jul-2013 and
Entomology (1 person) Feb-2014
37 Intl training in Mycology - Starting date
(1 person from PPDDL), Sep-2014
Bacteriology (1 person
60,000 2 months -
from PPDDL) and
Entomology (1 person
from PPDDL)
38 Intl training in Plant - Starting date
pathology (2 persons from Sep-2014
60,000 2 months -
PPDDL) and entomology
(1 person from PPDDL)
39 Capacity Building for - July-2014
45,800 To be decided -
PMP
40 Advisory Services for To be decided - April and Oct-
62,500 -
PMP 2014
41 Support to IPM research 20,000 To be decided - - Jul-2014
42 To be decided - Dec-2013 and
Short Term FM Training 40,000 -
Feb-2014
43 Short Term Procurement To be decided - Oct-2013 and
40,000 -
Training Jan-2014
44 Short-Term Trainings To be decided - Nov-2013 and
40,000 -
(other) Jan-2014
45 To be decided - Oct-2013 and
M&E trainings 40,000 -
Jan-2014
TOTAL 2,914,800

33
Annex 2: Results Framework and Monitoring
AFGHANISTAN: Afghanistan Agricultural Inputs Project

Project Development Objective (PDO): Strengthened institutional capacity for safety and reliability of agricultural inputs and sustainable production of certified wheat seed

Target Values Responsibility Description (indicator


PDO Level Results Unit of Base Data Source/
Freq. for Data definition, etc.)
Indicators* Measure line YR1 YR2 YR3 YR4 YR5 Methodology
Collection
Indicator One: Annual farm
Ratio of Foundation seed
Wheat seed Ratio 14.8 14.8 17 20 25 26 Annual budget survey IMST & ISE
(FS) to Breeder seed (BS)
multiplication factors for ISE
Annual farm Ratio of Registered seed
Ratio 9.6 9.6 13 16 22 23 Annual budget survey IMST & ISE (RS) to Foundation seed
for ISE (FS)
Indicator Two: Annual farm
Annual production of
Production of Certified MT 24000 24000 25000 26000 28000 30000 Annual budget survey IMST & ISE
certified seed by PSEs
wheat seed for ANSOR
Indicator Three: End of Project MIS IMST &
Listing of plant the PPQD
Binary 0 0 0 0 0 1
quarantine pests and Project
diseases
Indicator Four: Periodic Periodic survey IMST &
Product samples tested Number 0 0 0 0 80 100 survey & MIS FQCAID
for pesticides residues
Indicator Five: Monthly Progress IMST &
Bad pesticide samples Number 0 0 0 0 50 75 monitoring & PPQD
intercepted Project MIS

Component A: Improved Seed Production and Certification:

Intermediate result Annual Progress IMST & Varieties submitted to


indicator One: monitoring & ARIA Varietal Release
New wheat varieties 3 5 5 project MIS Committee of MAIL
Number
submitted for release

34
Intermediate result Six- IMST & Land fully developed with
indicator Two: monthly Progress ARIA laser leveling, irrigation
Hectares,
Developed farm land 60 60 245 408 447 447 monitoring & and equipment support for
Cumul.
Project MIS wheat seed production
area in ARIA
Quarterly Progress IMST & Staff training includes
Intermediate result
Number, monitoring & ARIA MSc and PhD degrees,
indicator Three: 0 36 92 183 235 248
Cumul. Project MIS short-term programs (both
Staff trained in ARIA
in-country and abroad)
Intermediate result IMST & ISE Land fully developed with
Indicator Four: Progress leveling, irrigation and
Hectares, Six
Developed farm land 80 80 465 855 904 904 monitoring & equipment support for
Cumul. Monthly
Project MIS wheat seed production
area in ISE
Quarterly Progress IMST & ISE Staff trained includes
Intermediate result monitoring & MSc degree, short-term
Number,
indicator Five: 0 10 21 42 51 57 Project MIS programs (both in-country
Cumul.
Staff trained in ISE and abroad)
Intermediate result Annual Progress IMST & ISE Expressed as percent of
indicator Six: Monitoring & area planted with BS
% 12 12 11 9 6 5
Foundation seed area Project MIS rejected for want of the
rejected required quality
Intermediate result Annual Progress IMST & ISE Expressed as percent of
indicator Seven: Monitoring & area planted with FS
% 29 29 24 18 12 8
Registered seed area Project MIS rejected because of
rejected inferior quality
Intermediate result Yearly Baseline, IMST Percent of certified wheat
indicator Eight: midterm and seed produced purchased
Percentage of certified end of project by the farmers
seed production % 0 0 0 3 4 5 farmer survey
purchased by farmers
(instead of donors
and/or government)

35
Component B: Quarantine Networks and Quality Control for Agro-chemicals:

Intermediate result Six - Progress IMST & Number of pesticide


Indicator Nine: monthly monitoring & PPQD samples brought by the
Pesticide samples Number 0 0 0 0 15 25 project MIS importers for pesticide
chemically analyzed formulation analysis
for registration
Intermediate result Six - Progress IMST, PPQD Number of pesticide
Indicator Ten: monthly monitoring & & ARIA samples cleared and
Pesticide samples Number 0 0 0 0 10 20 project MIS subjected to bio-efficacy
subjected to-bio- trials
efficacy trials
Intermediate result Monthly Progress IMST & Number of phytosanitary
Indicator Eleven: monitoring & PPQD certificates issued for
Phytosanitary Number 0 0 0 0 500 1100 project MIS export of agricultural
certificates issued products
Intermediate result Monthly Progress IMST & Number of quarantine
IndicatorTwelve: monitoring & PPQD inspections done on the
Quarantine inspections Number 0 0 0 0 500 1000 project MIS imported consignments
carried out

Intermediate result Monthly Progress IMST & Number of fertilizer


Indicator Thirteen: monitoring & FQCAID samples brought by the
Fertilizer samples project MIS importers for chemical
tested for chemical Number 0 0 0 0 100 150 purity testing
purity

Intermediate result Monthly Progress IMST & Number of fertilizer lots


Indicator Fourteen: monitoring & FQCAID tested for ensuring
Number 0 0 0 0 500 1500
Fertilizer lots project MIS registered chemical purity
inspected

36
Monthly Progress IMST, PPQD Staff trained includes
Intermediate result monitoring & & FQCAID MSc degree training and
Indicator Fifteen Number, Project MIS short-term programs (both
0 0 55 84 119 119
Staff trained in PPQD Cumul. in-country and abroad)
& FQCAID

Component C: Input Delivery Systems:

Intermediate result Yearly Progress IMST


Indicator Sixteen: monitoring &
Field surveys Binary 0 1 0 0 0 0 Project MIS/
completed Outsource
Intermediate result Six- Progress IMST
Indicator Seventeen: monthly monitoring &
Action plan for Project MIS
investment in input Number 0 0 0 1 0 0
distribution system
developed
Intermediate result Six- Progress IMST
Indicator Eighteen monthly monitoring &
Number 0 0 0 1 1 0
ICT applications Project MIS
piloted

37
Annex 3: Summary of Estimated Project Costs
AFGHANISTAN: Afghanistan Agricultural Inputs Project

Base Costs Base Costs plus Contingencies


Component Civil Works Goods Technical Incremental Total Civil Works Goods Technical Incremental Total
Assistance and Operating Assistance and Operating Costs
Training Costs Training

Seed 8,461,800 3,432,600 6,547,500 5,165,000 23,606,900 9,447,600 3,804,867 7,315,990 5,801,510 26,369,967
Agrochemicals and Plant Quarantine 1,338,000 9,335,884 7,597,300 8,453,400 26,724,584 1,490,742 10,393,046 8,522,561 9,533,187 29,939,537
Component C 2,250,000 2,250,000 2,250,000 2,250,000
Project Management - 453,300 5,898,000 7,867,100 14,218,400 - 498,630 6,596,018 9,079,144 16,173,792
Total 9,799,800 13,221,784 20,042,800 23,735,500 66,799,884 10,938,342 14,696,543 22,434,569 26,663,841 74,733,296

Percent 15% 20% 30% 36% 100% 15% 20% 30% 36% 100%

Project Financing Plan (US$ million)

Source \ Currency Local Foreign Total


ARTF 0 74.75 74.75

Total Project Cost 0 74.75 74.75

38
Annex 4: Operational Risk Assessment Framework
AFGHANISTAN: Afghanistan Agricultural Inputs Project

1. Project Stakeholder Risks Rating: Moderate

Description : Risk Management:

Other donors current perceptions and policies regarding Highlighting the unsustainability of input subsidies and the importance of gradually
input supply may present a risk in the sense that some moving to a market-based input supply system that guarantees farmers quality inputs at
donors who have engaged in supplying subsidized inputs competitive prices. Donor appetite for continuing with subsidies has significantly waned.
to farmers may want to continue this at least in the short
run.

Other donors and organizations may be involved in The project has been prepared in full collaboration with FAO, EU and CIMMYT which
similar projects but not be aware of current project. are the main donors and organizations involved with improved wheat seed and
agrochemicals / plant quarantine.

Farmers may be unaware of the benefits of intensification The experience with improved inputs in other Bank-supported projects (e.g. HLP and
in general and the use of quality inputs in particular. NHLP) suggests that farmers are quite willing to adopt improved inputs once they have
seen their benefits. The project will engage in substantial capacity building activities and
demonstration exercises.

Financial risk is particularly high in rural areas and the The experience with private seed enterprises and Ag Depots has shown that once the
agriculture sector which may affect the willingness of the private sector sees profitable opportunities they will come in. The project aims at
private sector to invest in input delivery. streamlining the institutional and regulatory infrastructure and this will lower private
sector risk. Moreover the project will offer capacity building opportunities to traders,
shopkeepers etc.

There may not be enough ownership by MAIL in MAIL has high level of ownership in this project, as this would be their first agricultural
sustaining the project investments inputs development program. MAIL also acknowledges, and supports, increased
coordination and clear alignment with GoIRAs NPPs. There is, however, the risk of their
commitment not being adequately expressed in budgetary terms in the long run.

39
Resp: MAIL/AAIP Status:
Stage: Prep/Impl Due Date: 7/1/2013
Ongoing

2. Operating Environment Risks


3. Implementing Agency Risks (including fiduciary)
3.1. Capacity Rating: High
Description : Risk Management:

Although a number of other Bank-assisted projects have AAIP would coordinate with the CBR project planned CB support that should lead to
helped to build capacity, MAIL is still relatively weak in mainstreaming of management and implementation functions and responsibilities within
terms of technical capacity (managerial, technical and MAIL structure. AAIP would also transfer to MAIL the existing capacity for FM within
fiduciary) and ability for decision making. There is a the project, to be shared with other MAIL projects
general lack of technical and managerial capacities in
MAIL at the Central, Regional, Provincial, and District
levels.

Procurement: The project includes some complicated An IMST (Implementation Management Support Team) is already established and
procurement (Supply and Installation) and ICB Goods. includes national procurement specialists. During implementation national staff will be
beefed up and supported by an internationally recruited Procurement Advisor who will
provide training and technical assistance. The Bank will also provide regular training and
procurement clinics.

Component B requires more than 20 International Some of the short-term positions with more or similar experience and skill requirement
Consultants of different technical fields and skills and have been merged together to increase their assignment period and to reduce the number
most of them are on short-term basis, which may cause of consultants to overcome the short-term as well as procurement problem of too many
unavailability of competent consultants and delay the international consultants. Moreover, to overcome this problem institutional and personal
process of laboratory establishment and operation. contact as well as well circulated procurement initiative shall be made well ahead of time
for their procurement.

Financial Management: Weak internal controls may lead Minimize use of Designated Account, maximize direct payments to consultants.
to misappropriation of funds and delay in preparation and Presence of FM Agent at the Treasury of Ministry of Finance, responsible for processing
submission of acceptable financial reports and payments, transaction recording and reporting. Presence of Audit Agent at the Control and
disbursements. Audit Office, responsible for external audit of the project.

40
Legal: The proposed new laws and regulations of The existing pesticides regulations and the plant quarantine law may be effectively
pesticides and plant quarantine may not be enacted well adopted using the laboratory facilities created under the project until the new laws and
ahead of the project completion, which may hinder regulations are in place. In the meantime the Minister of MAIL will keep on pushing in
undertaking of pesticides registration and quality control. the Ministry of Justice for the new laws and regulations to be enacted as soon as possible.

Stage: Status:
Resp: MAIL Due Date:
Implementation Ongoing
3.2. Governance Rating: Substantial
Description : Risk Management:

Management capacity in most line directorates of MAIL The project in the first quarter of implementation will develop a clear set of procedures to
remains relatively weak even if improvements are being be followed for incentive payments to selected civil servants which will be linked to
made. This may hamper project governance. results.

Potential nepotism in hiring project staff may affect The Bank will closely follow recruitment processes of positions in the procurement plan
implementation. in order to maximize transparency. The Bank will conduct periodic post-procurement
reviews in which positions that fall under IOC will be scrutinized.

Status:
Resp: MAIL Stage: Prep/Impl Due Date:
Ongoing
4. Project Risks
4.1. Design Rating: Substantial
Description: Risk Management:

Whereas Component A of the project builds on earlier Besides investments in infrastructure, the Project entails substantial capacity building,
experience gathered in a number of EU-financed, FAO- training and awareness raising activities throughout the lifetime of the project. Both
executed projects, most activities in Components B are components A and B were prepared with the support of highly recognized and widely
new to Afghanistan. In addition, Component B involves experienced international consultants.
installing highly technical facilities (laboratories) for
testing plant materials for exotic pests, testing pesticides
residue levels in food commodities, and chemical analysis
of agrochemicals.

Unawareness among pesticide and fertilizer traders, and Well organized training programs by competent specialists and awareness campaigns
among exporters and importers of plant materials may through different media shall be implemented under the project as per pre-set schedules to

41
lead to a non-responsiveness towards Government efforts create mass public and target-groups awareness about the Government initiatives under
in pesticides registration, quality control of agrochemicals the project.
and phytosanitary certification services.

Once they have obtained degree training Civil Servants Under the CBR project MAIL is working on an overhaul of the civil servant pay scales
may not want to return to the Ministry. which should allow returning trainees to receive better compensation.

Stage: Status:
Resp: MAIL/AAIP Due Date: 1/7/2013
Implementation Ongoing
4.2. Social & Environmental Rating: Moderate
Description: Risk Management:

Environmental and social safeguards management and An ESMF and PMP were developed and disclosed. The budget includes substantial funds
(especially) implementation in Afghanistan is weak for implementation of the PMP and safeguards monitoring activities as set out in the
because their value-added is not yet fully realized or ESMF. ESMF provisions will be incorporated in bidding/contract documents with
appreciated. AAIP falls in the category B and triggered accompanying translation in local languages and will be reviewed with contractors by
Pest Management (OP/BP 4.09) and Environmental IMST management prior to start of construction work. Site-specific Environmental
Assessment (OP/BP 4.01). Management Plans (EMPs) will also be developed. The IMST includes a dedicated
safeguards sub-unit.

Support to ARIA and ISE activities in Jalalabad region is Inclusion of following covenant in legal agreement: no disbursements shall be made in favor
risky because of possible occurrence of soil-borne wheat of expenditures related to wheat variety research or seed production in or around Jalalabad until
disease (Karnal Bunt). the GoIRA has conducted, according to TOR satisfactory to IDA, a review of plant disease risks
posed by a serious plant fungal disease suspected in the Jalalabad area, and consulted with the
Bank on the conclusions and recommendations of such review and thereafter taken actions in a
manner and substance satisfactory to IDA

Encroachment of some ISE land. ISE has lots of land and project will make sure to make investments only on land that is
free of squatters or other settlements.

ISE does not own any land in Jalalabad and would require Project will not make any investments in Jalalabad before hand-over issue is resolved.
the NDVA to hand over some of their land to them.

Inadequate preparation capabilities and capability in


contract management and construction supervision Maximum care will be taken to ensure good contractors are selected as per Bank
procurement rules.

42
coupled with increasing insecurity and mixed contractor
performance could result in implementation delays and
poor delivery quality. Stage: Status:
Resp: MAIL/AAIP Due Date:
Implementation Ongoing
4.3. Program & Donor Rating: Moderate
Description: Risk Management :

AAIP is already widely known in the donor community, AAIP during implementation will ensure that it maintains the already established relations
not the least because its preparation was done in close with related projects financed by other donors.
collaboration with other donors and organizations
involved in agricultural input development. However,
there remains the potential challenge of rivalry among Stage: Status:
donors. Resp: MAIL/AAIP Due Date :
Implementation Ongoing

Rating:
4.4. Delivery Monitoring & Sustainability Substantial
Description: Risk Management:

Cost recovery issue for agrochemicals registration In order to ensure that the facilities are utilized as envisaged in the project, during and
services, laboratory analyses etc. beyond the life of the project, a combination of service-based payments and sufficient
public funds may be needed. However, it can be expected that once traders etc. see the
benefits of these services provided, there will develop a willingness to pay for them.

Stage: Due Date: post- Status:


Resp: MAIL/AAIP
Implementation project pending
Rating:
4.5. Other Substantial
Description: Risk Management:

Insufficient buy-in from Heads and other senior staff of Project will be governed by a Project Steering Committee (PSC) chaired by the Technical
participating Directorates. Deputy Minister and consisting of Directors of the four Directorates involved in the
project, AAIP PD (secretary), Director-General of the Directorate of Programs, Planning
and Policy in MAIL, Chairman of the NSB, and MoF representative.

Project will include an incentive payment scheme for senior staff in participating

43
Directorates (performance payments against specific deliverables etc).

Resp: MAIL/AAIP Stage: Due Date: July 1, Status:


Implementation 2013 pending

5. Overall Risk Following Review


Implementation Risk Rating: Substantial

44
Annex 5: Financial Management, Disbursement and Audit Arrangements
AFGHANISTAN: Afghanistan Agricultural Inputs Project

Country Issues

90. The Bank has gained substantial experience and understanding of the financial management
(FM) environment in Afghanistan through the large number of projects under implementation
over the years. In addition, the Bank funded Public Financial Management (PFM) reforms3
undertaken by the GoIRA continue to support the enhancement of the fiduciary environment to
ensure transparency and accountability in the use of funds provided by the Bank and other
donors.

91. A PFM performance rating4 was carried out in 2005. The FM performance indicators
generally portray a public sector where financial resources are, by and large, being used for their
intended purposes. This has been accomplished with very high levels of support from
international firms; this assistance will continue to be needed over the medium term if these
ratings are to be maintained.

92. In spite of undeniable gains made in reconstruction since the end of 2001, the challenges
facing Afghanistan remain immense; among them the security situation in the region, corruption
and continued prevalence of a large illegal and illicit economy. Various priorities of the
Government are funded through the annual budgeting process. With regard to executive
oversight, the national assembly plays an active role. The public sector remains weak; lack of
qualified staff in the civil service together with delays in civil service reforms have led to
shortages of qualified counterparts in the Government.

93. Though capacities to track expenditures and monitor expenditure outcomes have improved,
they need rapid and substantial strengthening. The World Bank is financing a Financial
Management Advisor to assist the Ministry of Finance, an Audit Advisor to assist the Control
and Audit Office, and a Procurement Advisor to assist in Procurement related activities. Also an
Internal Audit function is being developed within the Ministry of Finance with World Bank
financing. Donors are financing consultants and advisors to assist the Da Afghanistan Bank in
local as well as foreign currency operations. The activities carried out under the existing PFM
Reforms projects are helping the Government to ensure that appropriate fiduciary standards are
maintained for public expenditures, including those supported by the Bank and the donor
community.

3
The Public Financial Management Reforms Project (PFMRP) is the primary instrument to continue and enhance
the fiduciary measures put in place during the past years to help ensure transparency and accountability for the
funding provided by the Bank and other donors.
4
A PFM performance rating system using 28 high-level indicators that was developed by the Public Expenditure
and Financial Accountability (PEFA) multi-agency partnership program was applied in Afghanistan in June 2005.
PEFA is comprised of the World Bank, IMF, EU, and several other agencies. The system is structured around six
core dimensions of PFM performance: i) budget credibility, ii) comprehensiveness and transparency, iii) policy-
based budgeting, iv) predictability and control in budget execution, v) accounting, recording, and reporting, and vi)
external scrutiny and audit. The PEFA report is available in the Banks files.

45
94. The operations support provided by the three Advisors is expected to continue for the
medium term. Challenges still remain in attaining the agreed upon fiduciary standards and also
to further enhance them.

95. Risk Assessment and Mitigation. The table below identifies the key risks that the project
may face and indicates how these risks are to be addressed.

Risk Risk Risk Mitigation Measures Residual Risk Condition of


Rating negotiations,
Board or
Effectiveness
(Y/N)
Inherent Risks
Country Inherent Risk M Source - PFM study. M N
Project Financial Management H Financial Management S N
Risk Consultants in the IMST and
Finance and Administration
department of MAIL will
provide financial management
support to the project.
Perceived Corruption H Government commitment, S N
internal controls and the internal
audit unit of MAIL will help to
reduce the high level of
perceived corruption.
Overall Inherent Risk H S
Control Risk
1. Weak Implementing Entity H The project will be supported S N
with an Implementation
Management Support Team
(IMST) of staff directly
employed by MAIL. High-level
management of the project and
strategic policy guidance in its
implementation will be provided
through Program Coordination
Meetings (PCMs), chaired by
the Minister of Agriculture,
Irrigation and Livestock
(MAIL).
2. Funds Flow S Direct payments to consultants, M N
suppliers etc. from the
Designated Account (DA) by
SDU-MoF. In addition direct
payments from the Credit
Account to consultants and
suppliers, special commitments
for contracts covered by letters
of credit are also envisaged.

3. Budgeting S The annual budget derived from M N


the annual work plan shall be
finalized and presented to the
MAIL Budget Committee

46
Risk Risk Risk Mitigation Measures Residual Risk Condition of
Rating negotiations,
Board or
Effectiveness
(Y/N)
(MBC) for approval by IMST
through the Finance and
Administration department of
MAIL, after which it will be
submitted to Ministry of
Finance.
4. Accounting Policies and S Will follow international M N
Procedures standards. Project accounting
procedures and details of the FM
arrangements have been
documented in an FM Manual
and cleared by the Bank.
5. Internal Audit H Internal Audit department of S N
MAIL will undertake the audit
of the project. The internal audit
unit is strengthened with
recruitment of internal audit
consultants under NHLP and
OFWMP of the World Bank
6. External Audit H Will be audited by CAO with S N
support from Audit Advisor.
7. Reporting and Monitoring H Will provide regular information S N
that will comply with agreed
format of financial reports.
OVERALL CONTROL RISK H S
DETECTION RISK S Adequate accounting, recording, M N
and oversight will be provided in
project procedures. Oversight by
SDU MOF of all advances/ M-
16 supported by Financial
Management Advisor.
RISK RATING: H=HIGH RISK;
S=SUBSTANTIAL RISK;
M=MODEST RISK; L=LOW RISK

Strengths and Weaknesses

Strengths

96. The Government provides assurance to the Bank and other donors that the measures in place
to ensure appropriate utilization of funds will not be circumvented. The Public Financial
Management Reform Project to enhance FM in treasury operations, public procurement, internal
audit in the public sector, and external audit by the Auditor General continue to demonstrate
good results.

47
97. The implementing line ministry (MAIL) has implemented/ is implementing other Bank
funded projects prior to this, so the agency has experience in implementing Bank projects and
following Bank procedures.

Weaknesses and Action Plan

98. The main weakness in this project, as in many others in Afghanistan, is the ability to attract
suitably qualified and experienced counterpart staff especially for Financial Management. The
FM consultants recruited under this project are expected to strengthen fiduciary arrangements.

Action Plan To be reviewed at Initial Supervision


Significant Action Responsible Agent Completion
Weaknesses Date
Shortage of qualified MAIL A FM unit was
and experienced FM Recruitment and retention of the FM staff in established
staff MAIL. during project
preparation this
unit will be
strengthened for
implementation
Project internal Financial Management Manual developed, and IMST 31 July 2013
controls and reviewed and agreed with the World Bank.
procedures need to be
defined
Interim reports need Un-audited interim financial report formats for IMST Confirmed
to include required the project confirmed.
information

Implementing Entity

99. The AAIP will be set up, managed and implemented by the Government of Afghanistan
through Ministry of Agriculture, Irrigation and Livestock (MAIL).

100. An Implementation Management Support Team (IMST) of staff directly employed by


MAIL has already been established in MAIL in Kabul as part of the preparation phase of the
project. This IMST will be strengthened and consist of heads of different components whose
primary task will be to supervise and coordinate the activities of the project. The expanded IMST
will be supported by a small team of international advisors. The individual advisors will be
contracted and dedicated to the project to manage and support the IMST with program
implementation. Furthermore, there will be long-term national and short-term international
consultants recruited to work in the four Directorates of MAIL. These consultants will report to
the IMST in the first two years after which they will be handed over to the respective MAIL
Directorates.

101. The Implementation Management Support Team (IMST) will monitor overall
implementation of the Project. Each implementing and support unit will have a coordinator/head
that will manage overall implementation of the component, and report directly to the Project
Director, Program Coordination Meetings (PCMs) and the Bank through the IMST.

48
102. Based on the Governments strategy to build the capacity of the civil servants and merge
the IMST within the structure of the ministry, the project will strive to have a smoother transition
of its activities from contracted staff in IMST to civil servants in MAIL directorates. In the first
year of implementation, the project will have a FM consultant to work directly with the Finance
and Administration department of MAIL. The consultant will be responsible for the financial
management of the project and training civil servants in World Bank related financial processes
and procedures. The consultant will report to the Director of Finance and Administration of
MAIL, and the Project Director. After the initial phase of transition, the project will transfer all
of the FM consultants of the project to the Finance and Administration Directorate of MAIL and
the consultants will be working under the Director of Administration and Finance. The
consultants will carry out the financial management of the project and undertake capacity
building of the civil servants. Pending approval by Bank management and an agreement between
MoF and MAIL, civil servants designated to the project will receive educational benefits and
performance based incentives. A detailed plan setting forth eligibility criteria, payment structure
and other implementation arrangements for the Incentive Payments will be developed at the
beginning of project implementation and a corresponding disbursement condition has been
included in the grant agreement.

Project coordination and monitoring

103. MAIL has the responsibility for overall project implementation, coordination, and
monitoring. The IMST will work closely with the relevant departments within MAIL to facilitate
this function. IMST is also responsible for: (a) assuring steady progress of execution in
accordance with an implementation schedule reviewed and approved by the World Bank, (b)
ensuring adequate and smooth transfer of skills to the civil servants by the project consultants,
and (c) ensuring that transparency and high ethical standards are maintained throughout the
process.

Project oversight

104. Oversight and strategic policy guidance in for implementation will be provided through
PCMs chaired by the Minister of MAIL. These meetings will include; Deputy Ministers,
Director of policy and plan, Project Director (AAIP) and other concerned international advisors.
Program Coordination Meetings (PCMs) will be held to monitor the progress of existing projects
and programs, provide guidance and take necessary measures to ensure their satisfactory
performance, and assess potential and need for new projects. The PCMs will be held at least once
a month.

Budgeting

105. The budget for the AAIP will be managed by the finance unit of the IMST and the
Finance and Administration department of MAIL. The finance unit of the IMST will coordinate
the preparation of annual work plan and the derivation of annual budget. The annual plans and
budgets will be approved by the MAIL Budget Committee (MBC). The MBC will be comprised
of the Director of Finance, Director of Planning, Project Director of AAIP and the Agriculture
Budget Sector Manager from Ministry of Finance. The MBC shall be responsible for initiating,

49
coordinating, obtaining and summarizing all information and data during the budgeting process.
The Committee is also responsible for ensuring that each stage of the budget process is
completed in accordance with the budget timetable. Under the supervision of Deputy Minister
for Finance and Administration the Committee will be responsible to ensure that: i) detailed
instructions are issued for the preparation of each years budget; ii) time set for budget
preparation are strictly followed by other line executives; iii) established procedures and formats
for the preparation of budgets are carefully followed; iv) detailed work during consolidation is
done and required accounting assistance is provided to other members of the project team.

106. The finance unit of the IMST and the Finance and Administration department of MAIL
will be responsible for ensuring that the project budget for each fiscal year is captured in the
Governmental Development Budget of that fiscal year. The finance unit of the IMST will
coordinate quarterly budget reviews to ensure adequate budgetary discipline, and control and
place budget review reports before the MBC for its consideration and guidance. At year end the
finance unit of the IMST will ensure that it seeks MoF approval of unutilized budget amounts as
carried-forward budget for the following year. Approval to carry forward unutilized budget
amounts ensures uninterrupted disbursements while waiting for the Parliaments approval of the
New Years budget. The finance unit of the IMST should seek approval for carrying forward
unutilized budget amounts forty-five (45) days before the end of the fiscal year.

107. The budgeting process and the key roles of the finance unit of the IMST and the Finance
and Administration department of MAIL on compilation and periodic budget reviews are
detailed in the FM Manual. The annual work plans and the annual budgets will be submitted to
the Bank for review and approval, not later than three months before the end of the fiscal year
(i.e. by September 20th).

Funds Flow

108. Project funds in the form of advance up to a ceiling of four (4) months worth of project
expenditures to be financed out of the funds in the designated account and replenishment thereof
will be deposited in the Designated Account (DA) to be opened and maintained at the Da
Afghanistan Bank (DAB). The DA will be operated by the Special Disbursement Unit (SDU) in
the Treasury Department of MoF. Requests for payments from the DA will be made to the SDU
by the finance unit of the IMST when needed. In addition to payments out of DA, the SDU at the
request of the finance unit of IMST, can request the Bank for i) direct payments from the Grant
Account to consultants, consulting firms or suppliers, and ii) special commitments for contracts
covered by letters of credit, and iii) reimbursements. These payments will follow World Bank
procedures.

109. All project payments will be made either by check or directly paid into the bank accounts
of the international/ local firms. Requests for payments in regional offices will be submitted to
the finance department of the Directorate of Agriculture and Livestock (DAIL). Payment orders
along with other relevant forms will be prepared by the finance manager in DAIL and submitted
to Mastufiat after the approval from Director of Agriculture. Mastufiat will review the supporting
documents along with other relevant forms submitted and will then issue the check to Da

50
Afghanistan Bank (DAB). The cashier of DAIL will collect the check from Mastufiat and will
withdraw the cash from DAB.

110. Expenditures will be paid after relevant approvals from MAIL and in accordance with the
approval mechanisms documented in the projects FM Manual. Where it is observed by the
finance unit of IMST that a recipient has utilized the funds to finance activities other than those
stated in the approved work plans, these would be considered as ineligible expenditures and the
amounts would need to be refunded to the ARTF/World Bank.

111. Cash advances may be taken from the DA, and held and managed by the finance unit of
the IMST to meet operating expenses. New cash advances will only be made when all other prior
cash advances have been justified through submission of SOEs to the SDU.

112. The Finance and Administration department of MAILs controls, accounting, and
preparation of SOEs was assessed and found inadequate; therefore, FM consultants will be
recruited under the project to provide technical assistance.

FUNDS FLOW CHART

World Bank / ARTF

Direct
Provides SOEs ARTF payments
with supporting documentation, replenishes
reconciliations, Designated
& requests replenishment transfers to Account
Designated Account, or requests
Direct Payments

SDU (MoF) Designated


Account

Payments
Consultants/
Suppliers, etc

Invoices
MAIL

FUND FLOW DIAGRAM

51
Accounting

113. Overall project accounts will be maintained centrally in SDU, which will be ultimately
responsible for recording all project expenditures and receipts in the Governments accounting
system. The SDU will maintain a proper accounting system of all expenditures incurred along
with original supporting documents to enable IDA as well the Auditor General to verify these
expenditures. The FM Adviser in the MoF/SDU will use the Government's computerized
accounting system, AFMIS, for reporting, generating relevant financial statements, and
exercising controls.

114. The finance unit of the IMST and the Finance and Administration department of MAIL
will: i) supervise preparation of supporting documents for expenditures; ii) prepare payment
orders (Form M-16); iii) obtain approval for M-16 forms from the relevant authority depending
on the payment amount; and iv) submit them to the SDU for verification and payment. Whilst
original copies of required supporting documents are attached to the Form M16, the project will
maintain photocopies of these documents for record retention purposes. Reconciliation of project
expenditure records with SDU records will be carried out monthly by the finance unit of the
IMST. In addition, the FM Adviser in the MoF/SDU will use the Government's computerized
accounting system, AFMIS, for reporting, generating relevant financial statements, and
exercising controls. The finance unit of the IMST will maintain essential project transaction
records using accounting system and spreadsheets and generate required monthly, quarterly, and
annual reports.

115. The FM Manual, prepared by finance unit of the IMST and approved by the Bank on
May 15 2013, includes: (i) roles and responsibilities for all FM staff; (ii) accounting,
documentation and approval procedures for payments; (iii) project reporting requirements; and
(iv) quality assurance measures to help ensure that adequate internal controls and procedures are
in place and are being followed. The FM Manual establishes project financial management in
accordance with standard Government policies and procedures including use of the Government
Chart of Accounts to record project expenditures. The use of these procedures will enable
adequate and timely recording and reporting of project expenditures.

Internal Control & Internal Auditing

116. The finance unit of the IMST and the Finance and Administration department of MAIL
will be responsible for coordinating FM activities for the project with the SDU. Project-specific
internal control procedures for requests and approval of funds are described in the FM Manual
including segregation of duties, documentation reviews, physical asset control, asset verification,
and cash handling and management.

117. The project will be subject to review by the internal audit department of MAIL. Internal
audit consultants have been recruited under the NHLP and OFWMP of the World Bank and will
assist the internal audit department of MAIL to perform the audit of the project. The internal
audit to be conducted by the internal audit department will use a risk-based approach. The
internal audit consultants will work along with the internal auditors of MAIL and undertake their
capacity building.

52
118. The frequency of the internal audit exercise should be at least every six months. A copy
(English version) of each internal audit report should be provided to the World Bank upon
completion.

119. The Bank also reserves the right to conduct an external review of the project activities
and financial flows.

External Audit

120. Annual project financial statements will be prepared by SDU - MoF detailing activities
pertaining to the project as separate line items with adequate details to reflect the details of
expenditures within each component. The project financial statement will be audited by the
Auditor General, with the support of the Audit Advisor, with terms of reference satisfactory to
the Bank. The audit of project accounts will include an assessment of: (a) adequacy of the
accounting and internal control systems; (b) ability to maintain adequate documentation for
transactions; and (c) eligibility of incurred expenditures for Bank financing. The audited annual
project financial statements will be submitted to the Bank within six months of the close of fiscal
year. All agencies involved in implementation and maintaining records of expenditures would
need to retain these as per the Bank records retention policy.

121. The following audit reports will be monitored each year in the Audit Reports Compliance
System (ARCS):

Responsible Agency Audit Auditors Date


MAIL SOE, Project Accounts and Auditor General June 22
Designated Account

122. The Bank-funded projects currently being implemented by MAIL (NHLP and OFWMP)
have no overdue audit reports. The key issues raised in these projects audit reports up to Solar
Year 1390 have been resolved satisfactorily.

Financial Reporting

123. Financial Statements and Project Reports will be used for project monitoring and
supervision. Based upon the FM arrangements of the project, Financial Statements and Project
Reports will be prepared monthly, quarterly, and annually by the finance unit of the IMST. These
reports will be produced based on records from three sources: (i) Projects accounting system;
(ii) expenditure statements from SDU (as recorded in AFMIS); and (iii) bank statements from
DAB.

124. The quarterly Project Interim Unaudited Financial Reports will show: (i) sources and uses
of funds by project component, and (ii) expenditures consolidated and compared to
governmental budget heads of accounts, the project will forward the relevant details to
SDU/DBER with a copy to the Bank within 45 days of the end of each quarter. The Government
and the Bank have agreed on a pro forma report format for all Bank projects.

53
125. The annual project accounts to be prepared by SDU from AFMIS after due reconciliation
to records maintained at the finance unit of the IMST, will form part of the consolidated
Afghanistan Government Accounts for all development projects. This is done centrally in the
Treasury Department of MoF, supported by the Financial Management Advisor.

Disbursement Arrangements

Project Components

126. ARTF will finance this project at 100%, including taxes. The table below shows the
allocation of ARTF proceeds in 3 separate disbursement categories.

ARTF Financing by Category of Expenditure

Category Amount of the Percentage of Expenditures to be Financed


Grant Allocated (inclusive of Taxes)
(expressed in USD)

(1) Goods, works, non- 72,397,200 100%


consulting services,
consultants services,
Training and Incremental
Operating Costs for the
Project (except for Part
1(b)(ii))

(2) Good, works and 1,852,800 100%


Consultants services for
Part 1(b)(ii) of the Project

(3) Incentive Payments 500,000 100%

TOTAL AMOUNT 74,750,000

127. Incremental Operating Costs means the Project-related incremental expenses incurred
on account of Project implementation support and management including the rental of office
space; the operation, maintenance, rental and insurance of vehicles; fuel; communications
supplies and charges; advertisements; books and periodicals; office administration and
maintenance costs; bank transaction charges; utility charges; domestic travel and per diem.

128. Disbursements under category (2) have been made conditional upon a thorough review of
plant disease risks in the Jalalabad area in particular Karnal Bunt which is a debilitating disease
affecting the wheat crop. While the possibility of this disease being present in the Jalalabad area
is surrounded with controversy, its needs to be ruled out in order to eliminate any risk of the
disease spreading to other areas of Afghanistan. Therefore, no withdrawal will be made for
payments under Category (2) unless and until the recipient has: (i) in accordance with term of
reference agreed with the World Bank, conducted a review of plant disease risks in the Jalalabad

54
area; (ii) consulted with the World Bank on the conclusions and recommendations of such
review; and (iii) implemented any actions recommended by the World Bank in a manner and
substance satisfactory to the World Bank.

129. The project will include incentive payments to selected civil servants working with the
project staff. These payments will be made dependent on outputs and outcomes as defined in the
Results Framework. Therefore, disbursements under category (3) have been made dependent on
the recipients preparation and adoption a detailed plan setting forth eligibility criteria, payment
structure and other implementation arrangements for the incentive payments.

130. A grace period of four months after the closing date of the project will be allowed for
claiming eligible expenditure incurred on or before the closing date. Disbursements procedures
will follow the World Bank procedures described in the World Bank Disbursement Guidelines
and the Disbursement Handbook for World Bank Clients (May 2006).

131. Summary reports. Summary sheet with records evidencing eligible expenditures should
be provided for payment against contracts for civil works valued at US$ 500,000 or more; goods
and non-consulting services valued at US$ 200,000 or more; consulting firms valued at US$
100,000 or more and individual contractors valued US$ 50,000 or more. Reports in the form of
Statements of Expenditure will be used for all other contracts or expenditures.

132. Designated Account (DA). A single segregated designated account in US dollars will be
opened at DAB for a ceiling of advance to the designated account up to four (4) months' worth of
project expenditures to be financed out of the funds in the DA. The SDU in MoF will manage
payments from and new advances/replenishments to this account. Other transfers in the form of
cash advances may be taken from the DA, and held and managed by the finance unit in the
IMST. MAILs controls, accounting, and preparation of Statements of Expenses (SOEs) have
been assessed as satisfactory. New cash advances will only be made when all other prior cash
advances have been justified through submission of SOEs to the SDU. Expenditure reporting on
the designated account will be submitted on a monthly basis and requests for fresh advances will
be made as needed.

133. Direct payments. Third-party payments (direct) and Special Commitments will be
permitted for amounts exceeding the minimum application size. All such payments require
supporting documentation in the form of records (copies of invoices, bills, purchase orders, etc.
and letter of credit for Special Commitment).

134. Preparation of withdrawal applications. The finance unit in the IMST will prepare
Summary Reports and forward those reports to the SDU for further processing into withdrawal
applications. The SDU will review withdrawal applications for quality and conformity to
Treasury procedures, and then obtain the required signatures. Selected IMST and SDU finance
staff will be registered as users of the World Bank Web-based Client Connection system, and
take an active hand in managing the flow of disbursements.

55
Financial Management Covenants

135. MoF shall submit audited financial statements for the project within six months of the
end of each fiscal year. The Projects audit report will cover the financial statements, the
Designated Account, and SOEs, in accordance with terms of reference agreed with the
Association.

136. Un-audited project interim financial reports will be submitted by IMST finance unit on a
quarterly basis to the World Bank and a copy to SDU-MoF within 45 days after the end of each
quarter.

137. Special financial management covenant. The implementing entity will ensure that key
FM staff is retained throughout the duration of the project in order to ensure smooth project
implementation.

Supervision Plan

138. During project implementation, the Banks FM team will supervise the projects financial
management arrangements. The team will:
Review the projects quarterly un-audited interim financial reports as well as the projects
annual audited financial statements and auditors management letter.
Review the projects financial management and disbursement arrangements (including a
review of a sample of SOEs and movements on the Designated Account and bank
reconciliations) to ensure compliance with the Bank's minimum requirements.
Review the agencys performance in managing project funds to ensure that it is timely,
accurate, and accountable. Review Internal Audit reports. Particular supervision emphasis
will be placed on asset management and supplies.
Review of financial management risk rating, compliance with all covenants, and follow
up on the action plan.

Conclusion

139. The FM arrangements, including the systems, processes, procedures, and staffing are
adequate to support the project - subject to implementation of the items listed in the action plan.

56
Annex 6: Procurement Arrangements
AFGHANISTAN: Afghanistan Agricultural Inputs Project

Country Context

140. The World Bank has gained substantial experience and understanding of the procurement
environment in Afghanistan. This has been through its involvement in the interim procurement
arrangements put in place under the Emergency Public Administration Project (2002) and
experience gained working with institutions with current responsibility for procurement
functions including the Afghanistan Reconstruction and Development Services (ARDS). As part
of the broader review of Afghanistans Public Finance Management (PFM) system, the World
Bank carried out two assessments (in June 2005 and September 2007) of the procurement
environment based on the baseline and performance indicators developed by a group of
institutions led by the World Bank and OECD/DAC.

141. The first key issue identified through the procurement assessment is lack of ownership
and a procurement champion in the Government. This is a serious impediment to reform and to
inter-Ministerial dialogue. A second, related issue is the lack of capacity in line Ministries, as
evidenced by their inability to define and communicate effectively the desired functional
specifications. The lack of capacity is also evident in the local private sector: while the number
of bids is reasonably high, there is a lack of understanding on application of public procurement
rules.

Government Reforms in Procurement

142. With donor assistance, Afghanistan has made considerable efforts to establish the Legal
and Regulatory Framework for public procurement over the last seven years. A new
Procurement Law (PL) reflecting international best practice in public procurement has been
adopted in November 2005 replacing the earlier procurement regulations, and it radically
transforms the legal and regulatory framework. While the law provides a modern legal system
for procurement, effective implementation of the law may encounter difficulties in the current
weak institutional structure and capacity. As per the Law, a Procurement Policy Unit (PPU) was
established under the Ministry of Finance (MoF) to provide oversight for implementation of the
PL through the creation of secondary legislation, standard bidding documents, provision of
advice, creation of the necessary information systems for advertising and data collection. The
PPU has issued several circulars regarding implementation of the PL, including Rules of
Procedures for Public Procurement (Circular: PPU/C005/1386 of April 12, 2007) and
Procurement Appeal and Review Mechanism (Circular: PPU/N001/1385 of March 18, 2007).
PPU/MoF has developed and mandated the use of Standard Bidding Documents (SBDs) for
Goods and Works (Circular PPU/C024/1388 of June 10, 2009); Standard Requests for Proposals
(SRFPs) (Circular PPU/C029/1388 of January 13, 2010); and Standard Requests for Quotations
(SRFQs) (Circular PP/C026/1388) for national and international procurement of goods/works
and consulting services following national procedures as per the PL. A Procurement Information
Management System (PIMS) has been developed and is being piloted in three ministries. In
addition, the PPU web site facilitates publication of procurement notices and contract awards,
besides similar action under the ARDS website and web sites of the line ministries as applicable.

57
143. The Procurement Law has been revised in July 2008 and amended in January 2009 at
which time it was issued as a new Law by the Ministry of Justice (Official Gazette Number 957,
29.10.1387 (18 January 2009)). The revised Rules of Procedures for Public Procurement has
been issued as circular PPU/C027/1387 of November 18, 2009.

144. The Special Procurement Commission (SPC) comprised of the Ministry of Justice and
Ministry of Economy (MoE), under the chairmanship of MoF approves high-value contracts.
These approvals will be according to Article 91 of the Afghan Public Procurement Law.

145. In the absence of adequate capacity to manage procurement activities effectively, some
interim arrangements have been put in place to improve Afghanistans procurement
management. A central procurement facilitation service, the Afghanistan Reconstruction and
Development Services Procurement Unit (ARDS PU), has been established under the
supervision of MoE to support line ministries and project implementing agencies.

146. The Government and the Bank have agreed on a program for country-wide procurement
reform and capacity building, leading to the transition from centralized to decentralized
procurement services. The above is implemented by an international consultant under the
supervision of PPU/MoF and financed under the Public Administration Capacity Building
Project (PACBP) and the Public Finance Management Reform Project (PFMRP). There have
been several training programs conducted by the consultant at basic, intermediate and advanced
levels. The implementation of the procurement reform component of PACBP should be
considered with due priority to ensure that fiduciary standards are further enhanced and that
capacity is developed in the Government to maintain these standards.

General Procurement for the Afghanistan Agricultural Inputs Project

147. Procurement for the Afghanistan Agriculture Inputs Project (AAIP) will be administrated
in accordance with the World Banks Guidelines: Procurement of Goods, Works, and Non-
Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers
dated January 2011; Guidelines: Selection and Employment of Consultants under IBRD Loans
and IDA Credits & Grants by World Bank Borrowers dated January 2011; and the provisions
stipulated in the Financing Agreement. In addition, the World Banks Guidelines on Preventing
and Combating Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants
dated October 15, 2006 and updated January 2011 has been shared with the recipient. The
World Banks SBDs, SRFPs, and Forms of Consultant Contract will be used. Civil works and
goods under International Competitive Bidding and National Competitive Bidding (ICB, NCB)
procedures shall be procured using the agreed SBDs for Afghanistan.

It has been agreed by both parties that in the event of a conflict between IDA
Procurement/Consultant Guidelines, as per Article 4 (2) of the Procurement Law July 2008
(Amendments in January 2009 incorporated) of the GoIRA, the IDA Procurement/Consultant
Guidelines shall prevail.

58
148. Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by
IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and updated January 2011,
shall apply to the project.

Procurement of Works

149. The proposed grant would finance a number of works including office buildings, farm
structures (threshing floors, equipment shelters, seed storages, on-farm irrigation canals),
laboratory buildings and plant quarantine stations. The World Banks SBDs for all ICB and
National SBD agreed with (or satisfactory to) the World Bank will be used. Threshold for ICB
civil works will be equivalent or more than US$5,000,000 equivalent per contract; threshold for
NCB works will be less than US$5,000,000 equivalent per contract. All civil works estimated to
cost US$100,000 equivalent or less per contract can be procured through the shopping procedure
according to paragraph 3.5 of the procurement guidelines. It is envisaged that almost all of the
works will have estimated cost of less than US$5 million and hence will be procured under
National Competitive Bidding (NCB). Works are of relatively small value and widely
distributed, hence it is not feasible to package them together and follow ICB procedure.

Procurement of Goods and Non-Consulting Services

150. Goods to be procured under this project will include laboratory equipment, office
furniture, office equipment, IT equipment, farm equipment, vehicles, motorcycles, etc.
Procurement of goods will be done using Banks SBD for Goods for all contracts following
International Competitive Bidding (ICB) procedures. National SBDs agreed with, or satisfactory
to IDA, will be used for the procurement of goods following National Competitive Bidding
(NCB) procedures. Shopping shall be in accordance with paragraph 3.5 of World Banks
Guidelines. All contracts estimated to cost more than US$200,000 per contract shall be procured
following ICB procedures. Contracts estimated to cost more than US$50,000 equivalent per
contract and less than US$200,000 per contract shall be procured following NCB procedures.
All contracts estimated to cost less thanUS$50,000 equivalent per contract shall be procured
following Shopping procedures. Goods which meet the requirements of paragraph 3.7 of World
Banks Guidelines may be procured following direct contracting procedures with the prior
agreement of IDA.

Selection of Consultants

151. The proposed grant would finance several consultancy assignments. The Banks
selection procedures for hiring of consultants will be followed.

152. Firms: A number of consultancy firms may be hired under the project for e.g. technical
design, M&E etc.

153. Individual Consultants: The Grant will finance several managerial, technical and
fiduciary individual consultancy assignments to advice and monitor project implementation.
While these consultants will mostly be part of the IMST (see organizational chart on page 78),
the Grant will also finance (mostly technical) individual consultants who will be stationed in and

59
help the various MAIL Directorates and other participating organizations implement the project.
The Banks procedures for hiring the services of individual consultants will be followed.

154. Hiring of managerial, technical, procurement, financial management and legal staff shall
be prior reviewed by the Bank regardless of contract value.

155. MAIL under the current project has hired national and international individual
consultants. MAIL will conduct a performance appraisal for each consultant and keeping in mind
the result of the performance the consultants either will be terminated or will be rehired
following SSS.

156. Shortlists of consultants. Services estimated to cost less than US$100,000 equivalent
per contract may be composed entirely of national consultants in accordance with the provisions
of paragraph 2.7 of the Consultant Guidelines. The selection methods applicable for consultants
are Quality- and Cost-Based Selection (QCBS), Quality-Based Selection (QBS), Consultants
Qualifications (CQS), Least-Cost Selection (LCS), Fixed Budget Selection (FBS) and Single-
Source Selection (SSS) for firms and Section V of the World Banks Guidelines for Individual
Consultants. The threshold for CQS will be less than US$200,000 per contract.

Operating Costs

157. Incremental expenses incurred project implementation and management, including


contract staff in the IMST (but excluding Project Director and fiduciary, legal and safeguards
staff), installation, operation and maintenance of vehicles, computers and equipment (office,
laboratory, farm), communication and insurance costs, office administration cost, banking
charges, utility charges, domestic and international travel and per-diem, and project allowances
of civil servants and individual consultants hired, but excluding salaries of civil servants, will be
covered under the project.

158. Training of project staff and civil servants. The project will support short-term
training (for project staff and civil servants) as well as longer-term (degree) training (only for
civil servants). The cost of short-term training would mainly cover the travel, hotel and per-diem,
training materials and field trip and will be borne by the project.

Assessment of the agencys capacity to implement procurement

159. The Ministry of Agriculture, Irrigation and Livestock (MAIL) will have overall
responsibility for all procurement under the project - with the assistance of the international and
national procurement specialists to be hired under the project. Procurement activities under this
project will be carried out by the project procurement unit (which is part of the IMST) under the
overall responsibility of MAIL.

An assessment of the capacity of MAIL was been carried out by Aimal Sherzad, Procurement
Specialist in September 2012. The assessment reviewed the overall organizational structure of
MAILs Procurement Directorate, and the project procurement unit for implementing the project
and interactions. Keeping in mind decree 45 of the President of the Islamic Republic of
Afghanistan and the ongoing move towards streamlining the procurement units of projects in

60
MAIL, the current project procurement staff will gradually be transferred to the MAIL
Procurement Directorate - but working solely for the Project. This will help to further develop
capacity of the procurement directorate of MAIL.

160. MAILs Procurement Directorate is headed by a Director of Procurement, who is funded


under the Banks Capacity Building for Results (CBR) project, and assisted by procurement
advisers / specialists who are consultants funded by different donors. These procurement
advisers / specialists have experience of carrying out procurement under Bank funded projects.
The MAIL Procurement Directorates civil servants, who will also be involved in procurement
activities of the Project, have weak capacity and limited experience of procurement under Bank-
funded projects. MAIL has previously implemented a Bank funded project (HLP), and is also
currently implementing two others (NHLP and OFWMP); it therefore has experience in
implementing Bank projects and following Bank procedures. However procurement under these
projects was carried out mainly by consultants of the respective Project Implementation Units.

161. During the procurement capacity review it was revealed that the AAIP procurement unit
has two staff members with some experience in handling of non-complex and medium contract
packages goods and consultancy firms. However they do not have enough capacity to handle
complex and large value contracts.

162. Based on the assessment the procurement risk is assessed as High (subject to revision
after completion of the Procurement Risk Assessment and Monitoring System (PRAMS)).

163. To mitigate the risk, the following measures are needed to be taken.

(i) The projects procurement unit needs to be substantially strengthened and assisted by an
International Procurement Advisor (IPA). The advisor shall have clear ToR to train AAIP
procurement staff and provide advice on the complex and large value contracts to the
projects procurement unit.
(ii) As and when needed the procurement unit on case by case basis may seek help and
advice of the Procurement Directorate of MAIL.
164. MAIL has to ensure that competent procurement consultants are hired and available
throughout the project period. The establishment of the IMST and staffing of the IMST with
additional procurement consultants to be funded by the project are expected to strengthen the
fiduciary arrangements. However, a major challenge will be the projects ability to attract
suitably qualified and experienced procurement consultants/specialists.

Procurement Risk Mitigation Monitoring Plan

165. MAIL will ensure that all invitations for bidding (REOIs) are given wide publicity using
the projects own website (if existing) and the websites of MAIL, Afghanistan Reconstruction
and Development Services (ARDS), United Nations Development Business (UNDB) and
national newspapers. Furthermore for individual consultants, REOIs/vacancy notices will be
published on the following websites: www.acbar.org, www.devnetjobs.org and
www.reliefweb.int.

61
166. With regard to procurement complaints, MAIL will be guided by Articles 71-72 of
Procurement Law 2008 (revised January 2009) and World Bank Guidelines. MAIL will inform
the Bank as soon as a procurement complaint is received and subsequently on the final outcome.
MAIL shall establish a system to register and monitor the receipt and resolution of complaints.
The progress of such action will be reviewed by the Bank during supervision missions.

167. MAIL will prepare a Procurement Monitoring Activity Schedule for procurement of
goods/works, and a Selection Monitoring Activity Schedule for consultants and update the
schedules on a monthly basis. The above schedules will facilitate to monitor the time taken for
procurement/selection activities and take remedial actions for delays. All bid/proposal
evaluations will be completed within the following time periods: (a) 5-7 working days for
shopping; (b) 21 and 35 working days for NCB and ICB procedures respectively; (c) 10 working
days for individual consultants; and (d) 15 working days for firms for REOI evaluation, 21
working days for Technical Evaluation Reports (TER) and 21 working days to conclude contract
negotiations.

168. The framework of the procurement risk mitigation monitoring plan as given below has
been agreed with MAIL. This will be updated during implementation support/supervision
missions (ISMs - at least once every six months) and will be part of each missions Aide
Mmoire.

Procurement Risk Mitigation Framework


Procurement Process indicator Sources of information and Use of Performance
process/step means of verification information target to be
for risk achieved
mitigation
1 General GPN Published. Documentary evidence filed in To ensure that 100%
Procurement MAIL. GPN is widely
Notice published to
increase
transparency.

Number of responses Existence of updated response To increase 100%


received against GPN. registration file in MAIL. competition.

REOI/IFB published. Copy available in procurement To ensure 100%


files. 10% of procurement files SPN/REOI is
will be verified. widely
published to
increase
REOI/Invita transparency.
tion for Bids
2
and Bidding
Minimum bidding time Deviations to be collected from To ensure 100%
process
provided [4 weeks for procurement files. competition.
NCB and RFP and 6 weeks
for ICB and RFP with
complex assignments].

Attention of Copy to be available on file. To ensure 100%

62
Procurement Process indicator Sources of information and Use of Performance
process/step means of verification information target to be
for risk achieved
mitigation
firms/individuals who 10% of the procurement files competition.
expressed interest against will be verified.
GPN while issuing
REOI/SPN was called.

Number of Bid Documents Sale of bid documents register To ensure 100%


sold and number of firms and confirmation from competition.
which confirmed consultants about receipt of
participation against RFP
RFP. 10% procurement files
issued.
will be verified.

Clarifications/addendums Copy to be available on file. To ensure 100 %


issued. 10% of the procurement files transparency.
will be verified.
3 Preparation Cleared by IDA without Number of cases to be Capacity Continued
of Bid seeking collected from procurement building progress
Documents/ clarifications/comments. files. measures
RFPs
initiated by
International
Procurement
Advisor.

4 Bid Bid opening minutes sent Timeliness to be verified from To ensure 100%
Submission to all bidders immediately procurement files. transparency.
for all procurements / and
to the Bank for prior
10% of the procurement files
review contracts.
will be verified.

5 Bid Formation of Bid Deviations to be collected from To expedite 100%


Evaluation/ Evaluation Committee procurement files. finalizing of
REOI and before bid closing. bids/proposal
proposal
evaluation.
evaluation

Timeliness of Evaluation: Deviations to be collected from Finalization of Compliance


(a) 5-7 working days for Procurement Activity bids/proposal and
shopping procedure; (b) 21 Schedule. evaluation in continuous
and 35 working days for improvement
timely
NCB and ICB procedures in timelines
respectively; (c) 10 manner. for all
working days for activities.
individual consultants; (d)
15 working days for firms
for REOI evaluation, 21
working days for TER and
20 working days to
conclude contract
negotiations.

63
Procurement Process indicator Sources of information and Use of Performance
process/step means of verification information target to be
for risk achieved
mitigation

Number of re-bids. Procurement files. Continuous


improvement
for reduction
in number of
re-bids.

Bid Cleared by Bank without Data to be collected from To improve


Evaluation seeking procurement files. procurement
Report and clarifications/comments. process.
6
Technical
Evaluation
Report
Contract Contracts awarded within Deviations to be collected from To improve 100%
Award original bid validity. Procurement Activity procurement
Schedule. process.

(a) Contract award Data to be collected from To ensure 100%


published within 14 days procurement files. transparency.
7 of NOA.
(b) Average time taken for
publication of award.

(c) Number of awards not


published.

Delivery time: Percentage Data to be collected from To improve


of Contracts completed/ procurement files. procurement
delivered within original process.
schedule as mentioned in
Contract.

Liquidated damage: Data to be collected from To improve 60%


Percentage of Contracts procurement files. procurement
Delivery/
8 having liquidated damage process
Completion
imposed for delayed
delivery/completion.

Completion rate: Data to be collected from To improve 90%


Percentage of Contracts procurement files. procurement
fully completed and process.
accepted.

Average number of days Data to be collected from To improve 100%


taken to release payment in procurement files. procurement /
line with contract payment
9 Payment provisions.
process.
Late payment: Percentage Data to be collected from To improve 20%

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Procurement Process indicator Sources of information and Use of Performance
process/step means of verification information target to be
for risk achieved
mitigation
of cases (considering each procurement files. procurement
installment as a case) with process.
delayed payment.

Procurement complaints Complaint register. To ensure 90%


pending over 60 days. transparency.

Resolution of complaints Complaint register and To ensure 0%


10 Complaints resulted in modification of procurement files. transparency.
contract award.

Resolution of complaints Complaint register. To ensure 70%


within 15 working days. transparency.
Complaints forwarded to Complaint register. To ensure 100%
MOF for independent transparency.
review.

11 Contract Unresolved disputes over Procurement files. To ensure 10%


dispute 60 days. transparency.
resolution
Number of procurement To improve 80% of
staff trained in Civil procurement MAIL
Service Institute. process. procurement
staff to be
trained
during first
Procurement
year and
12 Capacity Procurement training plan.
100% by
Building
second year.

Number of staff trained To improve One staff


outside Afghanistan. procurement during first
process. 18 months.

Governance and Accountability (GAC) agenda

169. All contract opportunities and contract awards will be widely published on the internet,
ARDS website, MAIL website and when required in UNDB.

170. MAIL will set up a system to ensure that staff/consultants who handled the procurement
process/contract management/contract execution do not join the consultants/contractors. This
will be reviewed during ISMs. Other actions include the following (see also table above): (a)
implementing agencys officials / staff to be alerted about any fraud and corruption issues; (b)
bidders to be alerted against adopting fraud and corruption practices; (c) award contracts within
the initial bid validity period, and closely monitor the timing; (d) take action against any corrupt
bidder in accordance with law of the Government of Afghanistan; (e) preserve records and all
documents regarding public procurement, in accordance with the Procurement Law provisions;

65
(g) publish contract award information in UNDB online, ARDSs website and agencies
websites within two weeks of contract award; (h) ensure timely payments to the
suppliers/contractors/ consultants and impose liquidated damages for delayed completion and, (i)
enforce a procurement filing system.

Procurement Plan

171. The Borrower, at appraisal, developed a Procurement Plan (PP) for the first 18 months of
project implementation, which provides the basis for the procurement methods. This PP has
been agreed between the recipient and the Banks Task Team and is available in the IMST
office. It will also be available in the Projects database and in the World Banks external
website. The PP will be updated in agreement with the Project Team annually or as required, in
order to reflect project implementation needs and improvements in institutional capacity.

Frequency of Procurement Supervision

172. In addition to the prior review supervision to be carried out from World Bank offices, the
capacity assessment of the Implementing Agency has recommended two ISMs each year.

173. Procurement post review. In addition to prior review, World Bank staff and / or World
Bank appointed consultant(s) will carry out post procurement reviews/audit annually as well as
during the ISMs.

Appendix: Procurement Plan

A. General

1. Project Information:

Country/Borrower: Islamic Republic of Afghanistan


Project Name: Afghanistan Agricultural Inputs Project (AAIP)
Implementing Agency: Ministry of Agriculture, Irrigation and Livestock (MAIL)
Grant No: XXXX

2. Banks approval Date of the Procurement Plan: April 10, 2013

3. Date of General Procurement Notice: April 20, 2013

4. Period covered by this procurement plan: July 2013 December 2014 (18 months)5

5
No procurement will be done unless included in the PP (original and revised) and approved by the Bank. The PP will be
updated by the MAIL annually or as required to reflect the actual implementation needs of the project.

66
B. Goods and Works and Non-Consulting Services

1. Procurement Methods and Thresholds

Procurement Method Threshold for Methods Comment


(US$)
1. ICB (Works) 5,000,000 Equivalent or more
2. ICB (Goods) 200,000 Equivalent or more
3. NCB (Works) 5,000,000 Equivalent or less
4. NCB (Goods) 200,000 Equivalent or less
5. Shopping (Goods ) 50,000 Equivalent or less
6. Shopping (Works) 100,000 Equivalent or less
7. ICB (Non-Consulting Services) 200,000 Equivalent or more
8 NCB (Non- Consulting Services) 200,000 Equivalent or less

2. Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as stated in
Appendix 1 to the Guidelines for Procurement.

The thresholds have been finalized based on the capacity assessment of the MAIL procurement unit
including the consultants presently hired by MAIL. The review thresholds may be modified subject to the
review of the capacity of MAIL.

Procurement Method Prior Review Threshold Comments


US$
1. ICB (Goods & Works & Non- All Contracts Equivalent or more
Consulting Services)
3. NCB (Goods and Non-Consulting 200,000 Equivalent or more
Services)
2. NCB (Works) 500,000 and first 5 Contracts Equivalent or more
for works following NCB
4. Direct Contracting (Goods) All regardless of value

3. Prequalification. No contracts are foreseen to require prequalification at this point. Should


contracts at a later stage require prequalification, bidders shall be prequalified in accordance with
the provisions of paragraphs 2.9 and 2.10 of the Guidelines.

4. Procurement Packages with Methods and Time Schedule

1 2 3 4 5 6 7 8
Do- Expected
Pre-
Ref. Contract Estimated mestic Bank Bid-
Method Qualifi-
No. (Description) Cost (US$) Prefe- Review Opening
cation
rence Date
G.001 21 Vehicles (for IMST
ICB No No Prior 1-Jul-13
, Components A and B) 940,000
G.002
8 Vehicles (for
ICB No No Prior 1-Jan-14
Components A & B) 357,000
G.003
Motorcycles NCB No No Prior 1-Jul-13
146,900

67
1 2 3 4 5 6 7 8
Do- Expected
Pre-
Ref. Contract Estimated mestic Bank Bid-
Method Qualifi-
No. (Description) Cost (US$) Prefe- Review Opening
cation
rence Date
G.004
Motorcycles NCB No No Prior 1-May-14
139,100
G.005 Lab Equipment (for all
labs under component ICB No No Prior 1-Apr-14
5,560,598
B)
G.006
Agricultural Machinery ICB No No Prior 1-Jan-14
1,094,000
G.007 IT Equipment and
NCB No No Prior 1-Jul-13
Computers 130,000
G.008 IT Equipment and
NCB No No Prior 1-Jan-14
Computers 167,700
G.009 Office Furniture &
NCB No No Post 1-Jul-13
Equipment 96,312
G.010
Office Furniture &
NCB No No Prior 1-Feb-14
Equipment 195,000
W.001 Kabul: Canal Lining,
Laser Land Leveling,
Tube Well, Water
Reservoir, Office
Building, Machinery
393,200 NCB No No Prior 1-Apr-14
Repair Workshop,
Threshing Floor,
Fence, Rehabilitation
of Greenhouses, Seed
Storage Facility
W.002 Herat: Boundary Wall,
Canal Lining, Laser
Land Leveling, Office
Building, Threshing
Floor, 2 Tube Wells
with Water Reservoirs,
Refurbishment of
1,780,000 NCB No No Prior 1-Jan-14
Office Building,
Equipment Shelter,
Machinery Repair
Workshop, Conversion
of existing Tube Wells
from Diesel to
electricity
W.003 Kunduz: Boundary
Wall, Canal Lining,
Laser Land Leveling,
Office Building,
969,500 NCB No No Prior 1-Jan-14
Threshing Floor, Tube
Well with Water
Reservoir,
Refurbishment of

68
1 2 3 4 5 6 7 8
Do- Expected
Pre-
Ref. Contract Estimated mestic Bank Bid-
Method Qualifi-
No. (Description) Cost (US$) Prefe- Review Opening
cation
rence Date
Office Building,
Storage building,
Machinery Repair
Workshop, Building for
ISE Regional Station,
Equipment Shelter,
Seed Storage Facility
W.004 Kandahar: Boundary
Wall, Canal Lining,
Laser Land Leveling,
Office Building,
Threshing Floor, Tube
259,000 NCB No No Prior 1-Jan-14
Well with Water
Reservoir, Office
Building, Machinery
Repair Workshop, Seed
Storage Facility
W.005 Balkh: Boundary Wall,
Canal Lining, Laser
Land Leveling,
Building for Gene
Bank, Threshing Floor,
Machinery repair
1,555,500 NCB NO NO Prior 1-Jan-14
Workshop, 4 Tube
Wells and Water
Reservoirs, Building
for ISE Regional
Station, Equipment
Shelter
W.006 Bamyan: Canal Lining,
Laser Land Leveling, 51,500 NCB No No Post 1-Jan-14
Threshing Floor
W.007 Nangarhar: Canal
Lining, Laser Land
Leveling, Fence, Office
Buildings, Threshing 254,000 NCB No No Prior 1-Jan-14
Floor, Machinery
Repair Workshop,
Equipment Shelter
W.008 Helmand: Canal
Lining, Laser Land
Leveling, Tube Well
and Water Reservoir,
Office Building, 245,600 NCB No No Prior 1-Jan-14
Threshing Floor,
Equipment Shelter,
Machinery Repair
Workshop
W.009 Badakhshan: Boundary 214,500 NCB No No Prior 1-Jan-14

69
1 2 3 4 5 6 7 8
Do- Expected
Pre-
Ref. Contract Estimated mestic Bank Bid-
Method Qualifi-
No. (Description) Cost (US$) Prefe- Review Opening
cation
rence Date
Wall, Canal Lining,
Laser Land Leveling,
Threshing Floor,
Vehicle Shelter, Seed
Storage
W.010 Takhar: Canal Lining,
Laser Land Leveling,
Tube Well and Water
174,000 NCB No No Prior 1-Jan-14
Reservoir, Office
Building, Threshing
Floor, Vehicle Shelter
W.011 Parwan: Boundary
Wall, Canal Lining,
Laser Land Leveling, 2
Tube Wells and Water
Reservoirs, Building
for ISE Regional 1,125,000 NCB No No Prior 1-Jan-14
Station, Seed Storage
Facility, Machinery
Repair Workshop,
Equipment Shelter,
Threshing Floor
W.012 Remodeling for PPQD
and FQAICD for
PRAL and FQAL
building for PR office,
PFAL, PQCL and
PPDDL, Construction
of 4 rooms at PPQD, 570,000 NCB No No Prior 1-Jan-14
HQ Renovation of PQS
at Kabul customs,
Construction of 4
Rooms at Kabul
International Airport
for PQS
W.013 Construction of PQS at
768,000 NCB No No Prior 1-Jan-14
8 border posts
TOTAL 17,186,410

5. Goods, Works and Non Consulting Services:

C. Selection of Consultants

1. Selection Methods and Thresholds

Selection Method Threshold US$ Comments


1. CQS for Firms 200,000 Equivalent or less
2. QCBS,QBS, FBS, LCS, SSS Depending on the nature and
complexity of assignment

70
2. Prior Review Threshold: Selection decisions subject to Prior Review by World Bank as stated in
Appendix 1 to the Guidelines Selection and Employment of Consultants:

Selection Method Prior Review Threshold US$ Comments


1. Competitive Methods (Firms) 100,000 Equivalent or more
2. Competitive Methods (individuals) 50,000 Equivalent or more
3 Single Source (Firms)/Individuals All regardless of value

3. Shortlist comprising entirely of national consultants: Shortlist of consultants for


services, estimated to cost less than US$100,000 equivalent per contract, may comprise entirely
of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant
Guidelines.

4. Any Other Special Selection Arrangements: [Not Applicable]

Consultancy Assignments with Selection Methods and Time Schedule

1 2 3 4 5 6
Ref. Description of Estimated Selection Bank Expected
No. Assignment Cost Method Review Proposal
(US$) Submission
Date
Technical Surveys of
S.001 Farms and 350,000 QCBS Yes 1-Jul-13
Architectural Design
Sub-Project-wise
Preparation of
S.002 Environmental and 70,000 CQS Yes 1-Jul-13
Social Management
Plans (ESMP)
Technical
S.003 Advisor/Plant 320,000 IC Yes 1-Aug-13
Breeder (Intl)
Experimental Design
S.004 320,000 IC Yes 1-Aug-13
Specialist (Intl)
S.005 Intl Seed Consultant 160,000 IC Yes 1-Jul-13
Intl Technical
S.006 200,000 IC Yes 1-Aug-13
Advisor (Agronomist)
Lab Design Specialist
S.007 40,000 IC Yes 1-Jul-13
(Intl)
Pesticide Registration
cum Training
Consultant for
S.008 20,000 IC Yes 1-Dec-14
Pesticides
Registration Office
(Intl)
Pesticides
Formulation Analysis
S.009 cum Quality Control 20,000 IC Yes 1-Dec-14
Consultant for PFAL
under PPQD (Intl)
S.010 Pesticide Analytical 12,000 IC Yes 1-Dec-14

71
1 2 3 4 5 6
Ref. Description of Estimated Selection Bank Expected
No. Assignment Cost Method Review Proposal
(US$) Submission
Date
Technician for PFAL
under PPQD (Intl)
Fertilizer Legal and
S.011 Regulatory specialist 40,000 IC Yes 1-Aug-13
(Intl)
Fertilizer Analytical
Chemist cum
S.012 Training Specialist 20,000 IC Yes 1-Dec-14
for FQAL under
FQCAID (Int'l)
Fertilizer Analytical
S.013 Technician for FQAL 12,000 IC Yes 1-Dec-14
under FQCAID (Int'l)
Plant Quarantine cum
Training Specialist
S.014 20,000 IC Yes 1-Dec-14
PQN under PPQD
(Intl)
Sr. Agrochemicals
cum Plant Protection
Specialist /Advisor in
S.015 IMST for Project 300,000 IC Yes 1-Jul-13
Director's &
Directorates' Support
(Int'l)
PM Consultants (Intl
S.016 40,000 ICs Yes 1-Feb-14
- 2 positions)
S.017 Project Director SSS No 1-Jul-13
108,000
Senior Technical
S.018 SSS No 1-Jul-13
Advisor (Intl) 360,000
S.019 M&E Advisor (Intl) IC Yes 1-Jul-13
120,000
Financial
S.020 Management SSS No 1-Jul-13
54,000
Specialist
Financial
S.021 Management Advisor IC Yes 1-Jul-13
90,000
(Intl)
S.022 Senior FM Officer IC Yes 1-Jul-13
25,000
S.023 FM Officer (2) SSS No 1-Jul-13
50,000
S.024 FM Assistant IC No 1-Jul-13
12,000
S.025 Cashier IC No 1-Jul-13
14,400
Procurement
S.026 SSS No 1-Jul-13
Specialist 54,000
Contracts
S.027 IC Yes 1-Jul-13
Management Officer 36,000

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1 2 3 4 5 6
Ref. Description of Estimated Selection Bank Expected
No. Assignment Cost Method Review Proposal
(US$) Submission
Date
Procurement Advisor
S.028 IC Yes 1-Jul-13
(Intl) 90,000
Procurement Officer
S.029 IC Yes 1-Jul-13
(Works and Goods) 36,000
Procurement Officer
S.030 Services (Consultant IC Yes 1-Jul-13
36,000
Services)
Procurement
S.031 SSS No 1-Jul-13
Assistant 27,000
Procurement
S.032 IC No 1-Jul-13
Assistant 27,000
S.033 Environment
72,000 IC Yes 1-Jul-13
Specialist
S.034 Gender and Social
72,000 IC Yes 1-Jul-13
Safeguard Specialist
S.035 Environment and
Social Safeguards 75,000 IC Yes 1-Jul-13
Advisor (Intl)
S.036 Preparation of
Environmental &
Social Safeguards 15,000 IC No 1-Jul-13
Training Manual
(local languages)
S.037 Preparation of
Environmental &
10,000 IC No 1-Jul-13
Social Safeguards
Operational Manual
TOTAL 3,327,400

Agreed Procedures for National Competitive Bidding


(a) Standard bidding documents approved by the Association shall be used.
(b) Invitations to bid shall be advertised in at least one widely circulated national daily
newspaper and bidding documents shall be made available to prospective bidders, at least
twenty eight days prior to the deadline for the submission of bids.
(c) Bids shall not be invited on the basis of percentage premium or discount over the
estimated cost.
(d) Bidding documents shall be made available, by mail or in person, to all who are willing
to pay the required fee.
(e) Foreign bidders shall not be precluded from bidding.
(f) Qualification criteria (in case pre-qualifications were not carried out) shall be stated in
the bidding documents, and if a registration process is required, a foreign firm determined to
be the lowest evaluated bidder shall be given reasonable opportunity of registering, without
any hindrance.
(g) Bidders may deliver bids, at their option, either in person or by courier service or by mail.
(h) All bidders shall provide bid security or a bid security declaration form as indicated in the
bidding documents. A bidders bid security or the declaration form shall apply only to a
specific bid.

73
(i) Bids shall be opened in public in one place preferably immediately, but no later than one
hour, after the deadline for submission of bids.
(j) Evaluation of bids shall be made in strict adherence to the criteria disclosed in the
bidding documents, in a format, and within the specified period, agreed with the Association.
(k) Bids shall not be rejected merely on the basis of a comparison with an official estimate
without the prior concurrence of the Association.
(l) Split award or lottery in award of contracts shall not be carried out. When two or more
bidders quote the same price, an investigation shall be made to determine any evidence of
collusion, following which: (A) if collusion is determined, the parties involved shall be
disqualified and the award shall then be made to the next lowest evaluated and qualified
bidder; and (B) if no evidence of collusion can be confirmed, then fresh bids shall be invited
after receiving the concurrence of the Association.
(m) Contracts shall be awarded to the lowest evaluated responsive bidders within the initial
period of bid validity so that extensions are not necessary. Extension of bid validity may be
sought only under exceptional circumstances.
(n) Extension of bid validity shall not be allowed without the prior concurrence of the
Association (A) for the first request for extension if it is longer than four weeks, and (B) for
all subsequent requests for extensions irrespective of the period.
(o) Negotiations shall not be allowed with the lowest evaluated or any other bidders.
(p) Re-bidding shall not be carried out without the Associations prior concurrence.
(q) All contractors or suppliers shall provide performance security as indicated in the
contract documents. A contractors or a suppliers performance security shall apply to a
specific contract under which it was furnished.

74
Annex 7: Implementation and Monitoring Arrangements
AFGHANISTAN: Afghanistan Agricultural Inputs Project

General

174. The project will be established, managed and implemented by the Government of
Afghanistan through the Ministry of Agriculture, Irrigation and Livestock (MAIL).

175. The project will work with four Directorates of MAIL (Plant Protection and Quarantine
(PPQD), Agriculture Research Institute of Afghanistan (ARIA), Food Quality Control and
Agricultural Inputs (FQCAID), and Independent Seed Enterprise (ISE)) and their respective
offices and research stations in the provinces. In addition AAIP will strengthen the capacity of
the Private Seed Enterprises (PSEs), Afghanistan National Seed Organization (ANSOR) and
National Seed Board (NSB). Furthermore, the project will work with MAILs General
Directorate of Policy and Planning through its Private Sector Directorate in later years of
implementation. The main focus of the project would be to build the capacity of the manpower
of the above institutions, provide them with necessary tools and techniques and elevate the
overall performance of these institutions.

176. The project will be implemented over a period of 5 years. Following a two-year
preparation phase, project implementation is expected to start in July 2013. Project activities and
implementation are expected to peak in the second and third years of the project. The last two
years of the program will be used to consolidate program activities to ensure sustainability and
continuity.

Overall implementation arrangements

177. High-level management of the project and strategic policy guidance during
implementation will be provided through the existing Program Coordination Meetings (PCMs),
chaired by the Minister of MAIL and including the following participants: MAIL Technical
Deputy Minister for Agricultural Affairs, Director of Policy and Planning Directorate, Project
Directors (among which the PD AAIP) and concerned international advisors in MAIL. The
purpose of the PCMs is to monitor the progress of existing projects and programs and review the
potential and need for new projects. The PCMs are held at least once a month. In addition, there
will be an AAIP Steering Committee (SC) composed of the Technical Deputy Minister for
Agricultural Affairs (chair), PD AAIP (secretary), the four Directors of the MAIL Directorates
involved in the project, Director-General of the Directorate of Programs, Planning and Policy in
MAIL, Chairman of the NSB, and MoF representative. The SC will have the responsibility of the
approval of the annual work plan of the project and approving its deliverables - and will meet
every three months.

Budget Committee

178. The annual budget derived from the annual work plan shall be presented to the MAIL
Budget Committee for approval, after which it will be submitted to the Ministry of Finance
(MoF). The MAIL Budget Committee is comprised of the Director of the Finance Department in

75
MAIL, General Director of the Policy and Planning Directorate, PD AAIP and the Agriculture
Sector Manager of MoF. The MAIL Budget Committee shall be responsible for initiating,
coordinating, obtaining and summarizing all financial information and data during the budgeting
process. This Committee is also responsible for ensuring that each stage of the budget process is
completed in accordance with the budget timetable. Under the supervision of the MAIL Deputy
Minister for Finance and Administration, the Committee will be responsible for ensuring that:

i. Detailed instructions are issued for the preparation of each financial years budgets;
ii. Time set for budget preparation are strictly followed by other line executives;
iii. Procedures and formats for the preparation of budgets are carefully followed;
iv. Detailed work during consolidation is done and required accounting assistance is
provided to other members of the project team.

179. Moreover, the Budget Committee will meet on a monthly basis and will be responsible
for coordinating the annual budget process and mid-year review process, review of periodic
budget reports, analysis of variances and first level of overall project budget.

Project Management Unit

180. An Implementation Management Support Team (IMST) consisting of project staff


employed by MAIL has already been established in MAIL in Kabul for project preparation - but
will be substantially strengthened for implementation. The IMST will be responsible for
managing and monitoring the overall implementation of the Project. The latter will be guided by
a Project Implementation Plan (already developed) and a number of already prepared manuals
including the Operations Manual, Human Resources Manual, Financial Management Manual,
and Procurement Manual.

181. The core of the IMST will consist of heads of different sections (including Operations,
Seed, Plant Protection and Quarantine, Construction, Safeguards, and M&E) whose primary task
will be to supervise and coordinate the activities of AAIP. The IMST will be supported by a
small team of international advisors to support the IMST with project implementation. The
international advisors will include a Senior Technical Advisor, Seed Advisor, Plant Protection
and Quarantine Advisor, Financial Management Advisor, Procurement Advisor, Safeguards
Advisor, and M&E Advisor. In addition to the staff above, there will be long-term national and
short-term international consultants recruited to work in the four participating Directorates of
MAIL. These consultants (to be financed by the project) will report to the heads of their
respective sections in the IMST in the first two years and then to the respective Directorates.

182. The IMST will be headed by a Director who will be responsible for:

Providing leadership for the strategic planning and implementation of the Project;
Reporting to the PCM;
Supervising the performance of the project;
Ensuring the accountability and transparency of program operations;
Ensuring coordination of project activities and operation with relevant projects and
initiatives of the Government of Afghanistan and donors; and

76
Serving as primary representative and advocate for the project with all external parties.

183. The project has four components: (A) Improved Wheat Seed Production; (B) Plant
Quarantine Networks and Quality Control of Agro-chemicals; (C) Input Delivery Systems; and
(D) Project Management and Monitoring. The IMST implements the fourth component through
four support units: (1) Operations (incl. subunits for financial management (FM), procurement,
administration, and training); (2) Construction; (3) Monitoring and Evaluation; and (4)
Safeguards. In addition to these support units, there are two core implementing units (seed and
plant protection & quarantine). Each of the latter (as well as the four support units mentioned
above) has a coordinator/head that manages overall implementation of the respective component
and reports to Project Director (AAIP) directly as well as indirectly to the PCMs and the Bank
through the IMST. Implementing units develop their annual activity plan and budgets,
implementation and procurement plans and send them to the FM and Procurement subunits
respectively for consolidation and further processing. The implementing units are required to
develop these plans (and present them to program management for approval) at least three
months prior to the beginning of next fiscal year.

184. Regarding Component C, this component will crystallize out further during
implementation of the project. Two field surveys (farm survey and inputs supply chains survey)
have been brought forward to the preparation phase (which closes on June 30, 2013) and the data
are currently being analyzed. Based on the results of these surveys, specific interventions by the
project regarding agricultural inputs distribution networks will be designed during the course of
implementation. These may include strengthening and expanding Ag Depot and Farm Service
Center programs; piloting creation of alternative forms of input delivery systems with farmer
groups, CDCs, etc.; and education and extension programs to demonstrate selected input
technology packages as well as farm machinery and equipment. As noted earlier, a number of
ICT-based interventions are also being considered.

185. The total number of staff (national plus international, full-time or part-time) envisaged in
the IMST during implementation is 80 persons (a detailed organizational chart for the IMST can
be found on the next page). In addition, a total of 66 staff (national plus international, full-time or
part-time) will be stationed in the various Directorates. Even though the AAIP will have its own
FM and procurement staff, it has been agreed that at least one FM staff and one procurement
staff will be placed in the respective Central Department of MAIL.

186. Reporting Lines: The Project Director (AAIP) will report directly to the Technical
Deputy Minister for Agricultural Affairs. The heads of the different sections (Operations, Seed,
Plant Protection and Quarantine, Construction, Safeguards, and M&E) report to the PD.

Financial Management Arrangements

187. Structure of the FM subunit within AAIP. Core financial management functions of AAIP
will be handled by the FM subunit within the project with support from the Central Finance
Department in MAIL. The FM subunit of the project is headed by a Finance Specialist
responsible for overall management, utilization, accounting and reporting on financial resources
of AAIP. The FM Specialist will be supported by an International FM Advisor and a number of

77
national FM officers and assistants. All financial transactions will be processed from the IMST
in Kabul.

Organizational chart AAIP IMST


AAIP Steering Committee

1- Dep Minister (Agriculture) --- Chairman


DM Agriculture
2- Project Director AAIP ---- Secretary
3- Director ARIA ----- Member DG Programs and
4- Director ISE ----- Member Policy
5- Director PPQD --- Member Steering committee
Plant Protection &
6- Director FQCAID --- Member Quarantine Directorate Deployed
(PPQD) AAIP Staff
7- DG Programs, Policy and Planning
8- Chairman, NSB
Agriculture Research Deployed
9- Representative, MoF
Project Director Institute Afghanistan (ARIA) AAIP Staff

Food Quality Control &


Agricultural Inputs Deployed
Secretary Directorate (FQCAID) AAIP Staff
Improved Seed Enterprise Deployed
Sr. Technical (ISE) AAIP Staff
Advisor

IT
Translator
Specialist

Deputy Director
Operations (Nat) IT Officer

Financial Env & Social


Admin&Logistics Training Procurement Seed
Management Safeguards
Manager Coordinator Specialist Coordinator
Specialist Spec
Sr. Plant Prot &
M&E Social Quarantine
Sr. A & L FM Advisor Training Procurement Seed
Specialist Safeguards/ Coordinator
Officer (Int) Officer Advisor (Int) Advisor (Int)
Legal Gender
M&E Sr. PP
Specialist Seed Officer Specialist Specialist
Advisor (Int) A&L Procurement
Fertilizer Sr. FM Publ. Sector (Int) Sr. Civil
Assistant Officer Safeguards
Officer Engineer
Fertilizer MIS Advisor (Int) PMP
Specialist Support FM Officer Procurement Seed Officer
(Int) Specialist Specialist
Staff (8) (2) Priv. Sector Sr. Constr
Assistant
Supervisor
Sr. M&E Plant
Logistics FM Contracts
Officer Pathologist (Int) Field
Officer Assistant Manager
Engineers (7)
M&E Entomologist
Officer Transport Procurement (Int)
Cashier
Assistant Officer
M&E Agrochemicals
Assistant Procurement Specialist
Assistant
Quarantine
Inventory
HR Officer Specialist
Assistant

Plant Prot &


Quarantine
Officer

Payments cycle. All payments will be initiated by the FM subunit of AAIP, approved by the PD
and authorized by H.E the Minister or Technical Deputy Minister for Agricultural Affairs.
Payments are routed through the MoF. After MoF review and approve the payments they issue
checks to Da-Afghanistan Bank and payments are made from the Designated Account of AAIP.

188. Documentations. Each implementing unit in AAIP will maintain a proper filing system
and keep up-to-date all program related documents in their respective units (both hard and
electronic copies). These documents shall be used by the 6-monthly Implementation Support and
Supervision Missions to review progress of the project as well as by internal and external
auditors.

78
189. Accounting and reporting. The FM subunit in AAIP is using a database developed in MS
Access. AAIP FM staff has been trained in the use of this software. The project has been using
this system since the beginning of the preparation phase to record all project related transactions,
as well as for generating monthly and quarterly Financial Monitoring Reports. The project will
further improve this accounting system during implementation.

190. Internal audit and control. The internal audit function in the project will be performed by
the internal audit department of MAIL. The latters capacity has been assessed by the Banks
FMS for the project and was found adequate. Past experience with Bank-assisted MAIL projects
that did have a dedicated internal audit officer has shown that this has not contributed to capacity
building of the Ministry in this area.

191. External audit. An External auditor is assigned by the Governments Control and Audit
office each year following the completion of the financial year. Audit reports related to AAIP
will be submitted to the World Bank within six months after the close of the Afghan financial
year (December 21).

192. The FM subunit has already been established during preparation phase of the project and
the same will continue during implementation. The project will be maintaining accounting
records through the utilization of the computerized accounting system that is already in place.
The same is satisfactory to the World Bank. The FM subunit of the project will maintain relevant
accounting records and generate required periodic reports on the program activities. A draft FM
Manual has been prepared and submitted to the Bank. This manual is currently under revision
and approval by the Bank no later than July 31, 2013 is a legal covenant. The manual will also be
submitted for approval by the internal audit department of MoF and the authorities in MAIL
immediately following its approval by the Bank.

Transition Road Map

193. Based on the Governments strategy to build the capacity of the civil servants and hand
over as many activities as possible to the civil servants, the project will strive to have a smoother
transition of its activities from contracted staff in the IMST to civil servants in the participating
MAIL Directorates/Departments. The first Department where this transition would begin is the
Finance Department of MAIL. Project activities related to other Directorates/Departments will
be handed over to them during the life of the project based on a properly developed plan and
depending on the capacity being built in these Directorates/Departments.

194. In the first couple of years, the project will have one of its Finance Officers based in the
MAIL Finance Department. This person would have the responsibility of preparing certain
documents for the project, following up on AAIP financial documents inside MAIL, and training
civil servants in World Bank-related financial processes and procedures. The person will have a
dual reporting duty: to the MAIL Finance Director and to the AAIP PD. After this initial phase
of transition, the project will transfer its entire FM staff to MAILs Finance Department. At that
stage, the projects FM subunit will directly report to the Director of Finance in MAIL. However,
this transition would still be subject to the capacity being built in the MAIL Finance Department
and the experiences of other projects, e.g. NHLP.

79
195. In order to be able to eventually absorb all activities of its projects, MAIL will have to
improve its procurement, FM and internal audit functions by giving more training to the
Ministrys civil servants. AAIP has allocated a significant portion of its budget to trainings that
will be conducted in-country and out-of-country. In addition to formal trainings, the project will
also provide on-the-job training opportunities to civil servant staff on deputation from the
MAILs Finance, Procurement and Administration Departments. In order to sustain the
development of capacity within MAIL, the latter will identify civil service staff who are
qualified and display initiative and the willingness to work and learn and offer them capacity
building opportunities.

Monitoring and Evaluation

196. The IMST will have overall responsibility for M&E activities in the project. The M&E
support unit would be responsible for developing systems and procedures for appropriate
collection and analysis of data, and presentation of information, including content of various
monitoring reports. This role is important to ensure that the M&E system of the project provides
feedback for project monitoring, management and learning. Under the leadership of the PD, the
M&E team will coordinate and supervise the activities of an M&E support agency to be engaged
as consultants under the project.

197. The M&E system to be adopted in AAIP would consist of the following broad
components: (i) concurrent monitoring of physical and financial progress in MAIL Directorates
using formats developed by the IMST; and (ii) M&E support agency to assist in monitoring PDO
and intermediate outcome indicators through surveys. The IMST will engage various
consultancies for undertaking three surveys; MIS software development; decentralization of
various MIS modules to MAIL Directorates; operation and maintenance of the MIS; and
capacity building.

198. Concurrent monitoring. The purpose is to assess physical and financial progress in
implementation against timescales, and resource use against budgets. The IMST will provide
MAIL Directorates with formats and guidelines for data capture and validation. The IMST is
responsible for reporting on physical progress of implementation and expenditure on a six-
monthly basis.

199. M&E agency. A survey firm was engaged in the preparation phase of AAIP to conduct
two baseline surveys for component C of the project a technical farm survey and a supply
chain survey for agricultural input distribution networks (importers wholesalers retailers).

Some of the baseline data have been collected as part the technical production farmer survey
under component C of the project. Data from this survey are currently being analyzed a
draft report is expected by April 30, 2013. Other baseline data has been obtained as part of
needs assessments conducted during preparation for the various MAIL Directorates
involved in the project. The purpose of baseline data is to establish benchmarks for
measuring the performance of the project. The sample for baseline survey (technical
production farmer survey) was developed to capture data from major wheat production
districts and different agro-ecological zones.

80
Some of the modules in the technical production farmer survey would be repeated at mid-
term and at end of the project - to provide data for assessing the projects performance
against baseline benchmarks. The mid-term survey and end-of-project surveys will involve
the same sample used in the baseline survey.

200. Management Information System (MIS). A comprehensive and well-functioning MIS is


critical for this project. The MIS is an integrated data and information capture system to support
project management actions and also provide regular inputs to the Results Framework. The MIS
will provide data to assess performance of participating Directorates against approved work-
plans and generate lessons for their further strengthening. Currently, MAIL has an MIS system
covering several Directorates. The first step in establishing the project MIS will involve
assessing the adequacy of the existing system in supporting project activities. The Bank-assisted
On Farm Water Management Project has developed an excellent MIS system which will serve as
a model for the MIS system to be developed for the AAIP.

201. Reporting. The objectives of the projects M&E activities are to provide feedback to
project management, to support self-learning by participating MAIL Directorates, and to
measure the projects performance. MAIL management action at various levels will be guided by
the following reports: (i) six-monthly consolidated reports by IMST covering all project
activities by all involved Directorates; (ii) survey reports (baseline, mid-term and end-of-project)
by the M&E agency; (iii) consolidated mid-term implementation report by IMST covering all
project activities by the involved Directorates, and which will also draw on the mid-term survey
report prepared by the external M&E agency; and (iv) MIS data.

202. The six-monthly reports submitted by IMST to the Bank will include the following
information: (a) up-to-date physical and financial expenditure data compared to annual and end-
of-project targets (measuring progress towards PDO); (b) implementation monitoring
information to assess adherence to project procedures and processes; (c) compliance with the
ESMF, and problems encountered, if any; (d) performance data including indicators outlined in
the results framework and collected through the mechanisms outlined in the results framework;
and (e) successes and problems encountered during the reporting period with suggested remedial
actions.

Implementation of Project Components

Component A: Improved Wheat Seed Production


203. All activities under the seed component will be coordinated by an IMST based seed team,
headed by a Seed Program Coordinator, who will be assisted by two Seed Officers (focusing on
respectively the public seed sector and the private seed sector). The (national) Seed Program
Coordinator will receive support from an International Seed Program Adviser, who will be hired
on short term basis (nine months in the first year, six months in the second year and three months
each in the third and fourth years). Main task of the seed team will be to plan and organize all
project supported activities regarding seed, like provision of equipment, land improvement,
construction, etc., international and national training, and monitoring/advising regarding seed
policy. Furthermore, the team will liaise and coordinate with the project partners, including

81
ARIA and ISE; the projects construction team which oversees and controls physical works in
the various ARIA and ISE farms; and other projects and organizations that deal with seed.

204. All seed production and related activities supported by the project will be implemented
by the partner organizations. Qualitative and quantitative progress will be their responsibility, but
IMST staff will closely monitor progress against project objectives. In order to assist in technical
implementation and on-the-job training, as well as to facilitate liaising with AAIPs IMST,
ARIA and ISE will be provided with project-hired national plant breeders (ARIA) and
agronomists (ISE): eleven in ARIA (one in HQ and one in each of ten research stations) and
seven in ISE (one in HQ and one in each of six farms/production centers). The latter will be full
time staff starting from year one to year four and answerable to the Directors/Managers of the
organizations in which they work. Furthermore, ARIA will be supported with one International
Research Adviser (consultant) for four months in year one, twelve months in year two and six
months each in years three and four, whose primary task will be to advise the ARIA Director on
all research related issues. Another international consultant (Experimental Design Specialist) will
be provided to ARIA, to train and organize its statistical/data analysis department. This person is
scheduled for four, twelve, six and three months, respectively in year one, two, three and four of
the project. Similarly, one international consultant (Seed Production Adviser) will be provided to
support ISE. This person will be hired for a total of 18 months: six months each in years one and
two and three months each in year three and four.

Land development and irrigation


205. During the detailed institutional needs assessments of ARIA and ISE carried out during
project preparation, estimates have been made of the needs for land development and irrigation
at the various ISE farms and ARIA stations. Details of these assessments including physical
works that need to be undertaken and their estimated costs can be found in the project files. Land
development mainly consists of leveling, which is required more on the ISE farms than at the
ARIA stations. Irrigation works include mostly lining of canals in order to reduce water losses,
but also in some cases new canals are needed. On some of the farms wells need to be made with
storage basins to provide new or additional water sources.

206. In order to undertake these land development and irrigation works, there is a need for
topographic surveying and land mapping. Procurement of a consultancy firm for carrying out
these tasks and develop a design and development plan for each farm/station has already started.

207. The land mapping and survey results, as well as designs and development plans will form
part of the tendering documents for the procurement of contractors who will execute the
necessary physical works. As much as possible, local contractors will be hired in each region for
implementation of these works (mainly land leveling and irrigation works) on both ISE farms
and ARIA stations in the respective regions. These contractors may or may not be the same as
the ones that will be hired for the construction of buildings, boundary walls etc. in any case the
latter will be tendered separately.

208. For the supervision of the civil works a dedicated team of civil engineers will be
appointed by the project. This team will consist of the Construction support unit in the IMST in

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Kabul plus seven field engineers in the field. Together they will supervise all land development,
irrigation and construction works in the respective regions. For this purpose, each engineer based
in the regions will be provided with a motorcycle. The field engineers will report to the
Construction support unit whose head in turn will report to the Project Director.

Construction of buildings
209. Construction works will include office buildings, boundary walls, storage facilities,
machinery workshops and threshing floors at both ARIA stations and ISE farms (details for each
ISE and ARIA farm can be found in the project files). The process will be similar as described
above for land development and irrigation works, even though through separate tendering and
contract award procedures. For the design of the various buildings, an architectural firm will be
hired by the IMST for the design of the buildings for all locations. Based on the designs, works
will be tendered in each region separately for local contractors to implement. Supervision will be
done by the same team of field engineers as mentioned above.

210. During the institutional needs assessments, detailed lists have been prepared of
equipment to be provided to the various ARIA stations and ISE farms (details in project files).
These lists contain all types of equipment including office furniture, computers and other office
equipment, vehicles, farm machinery and equipment etc. For the purchase of these different
types of equipment, the procurement rules as laid down for the project in the Procurement
Manual will be followed and implemented by the procurement support unit of the project.
However, in order to specify the details of particularly the farm machinery and equipment for
tendering purposes, the National Seed Program Coordinator (in close liaison with the respective
responsible staff of MAIL, ARIA and ISE) will collect brochures and catalogues from firms that
are known to have supplied similar equipment in the past (e.g. to FAO projects or other donors
projects) or can be found on the internet.

211. A procurement plan has been developed that ensures that items will be procured in line
with planned activities (taking into account e.g. the time that construction activities will take), in
order to avoid storage of procured items over long periods of time. However, some of the
equipment is quite specialized (like seed cleaners, planters, etc.) and require training of
operators. For this, instructors will be invited from suppliers of such equipment. In order to
avoid that such instructors need to travel to Afghanistan multiple times, where possible similar
items will be procured and distributed in bundles.

212. It has been recognized that ANSOR, although a private sector organization, functions as
an essential facilitator and service provider in the seed sector. ANSOR coordinates the private
sector and forms the liaison and interlocutor between the Government and PSEs. It will be
instrumental to channel support provided by the project to the PSEs through ANSOR. The
project will supply ANSOR with operational funds and funds for conducting bi-annual
workshops, in which seed production for respectively the winter and summer crops are planned.
All PSEs as well as ARIA and ISE participate in these meetings. ANSOR and PSE activities will
be closely coordinated by one of the Seed Officers in the IMST. All seed activities to be financed
by AAIP will be planned in close coordination between them. At the beginning of the year, a
budget proposal will be made by ANSOR for the agreed amount and submitted for approval to

83
the AAIP Project Director. ANSOR will then submit monthly bills, which will be verified by the
Seed Officer, approved by the Project Director and disbursed by AAIPs finance support unit.

213. Support to PSEs will be in the form of training and marketing support. Marketing support
will be through the organization of field days and establishment of demonstration plots, as well
as preparation of extension and promotion materials and other forms of communication. For the
preparation of these materials and for training, use will be made of (mostly national) consultants.
Planning of these activities as well as logistic support and services, like selecting and hiring of
consultants, will be done jointly between the AAIP seed officer (responsible for engaging with
the private sector) and ANSOR.

214. Financial support to the National Seed Board (NSB) will be handled by the IMST.
Secretarial support will be provided for communication and other administrative expenses of the
NSB and an allowance will be given for its members to compensate them for travel and time
spent for the attendance of meetings. The AAIP National Seed Program Coordinator is
responsible for providing technical as well as logistic support, maintaining relations and handling
all finances related to supporting the National Seed Board.

215. Modalities for the cooperation with CIMMYT will be defined during implementation.
CIMMYT is essential to ARIA for variety selection and related agronomic work and plays an
important role in the provision of training and technical support to ARIA. CIMMYT has recently
assured funding for the next five years of work in Afghanistan. CIMMYT is expected to take an
essential role in ensuring coordination of all partners and their activities, operating with or within
ARIA.

Component B Plant Quarantine Networks and Quality Control of Agro-chemicals

216. The activities under component B will take place mostly in the Plant Protection &
Quarantine Directorate (PPQD) and Food Quality Control & Agricultural Inputs Directorate
(FQCAID) of MAIL. The Agrochemicals & Plant Protection team based in the IMST is
responsible for the proper planning, organization, coordination, supervision and technical
monitoring of all activities under component B. This team will comprise a (national) Senior Plant
Protection and Quarantine Specialist as head and one Plant Protection and Quarantine Officer
(both for the entire project duration); as well as one Agrochemicals Specialist, one Plant
Quarantine Specialist and one Pest Management/IPM Specialist (all starting from middle of
second year). The team for Component B will be supported by a Senior International
Agrochemicals & Plant Protection Specialist/Advisor (intl) for 6 months in the 2nd year
followed by continuous support in the last 3 years of the project. Furthermore, an Entomologist
and Plant Pathologist (both intl and required during 3 months each for the implementation and
analysis of the National Pest and Disease Survey that will be carried out under the project) will
also be part of the Agrochemicals & Plant Protection team. The latter under the direction and
guidance of the Project Director/Senior Technical Advisor will liaise with the Directorates
(PPQD & FQC&AID) to ensure that the planned activities for each directorate are undertaken in
a timely fashion, show satisfactory progress and proper quality, and are followed by the
subsequent planned activities as per the projects implementation schedule. The Agrochemicals
& Plant Protection team will also support the M&E team with technical information and data for

84
progress and quality monitoring within the results-based M&E framework. The other national
and international specialists and technicians to be recruited for each major activity/sub-
component and who will be stationed in PPQD or FQC&AID will remain accountable for their
tasks performance to the respective Directors of these Directorates to which the activity/sub-
component belongs.

217. The processes for purchase of laboratory equipment will start immediately after the
inception of the project - with the objective of completing the procurement of laboratory and
other office equipment and furniture by the end of 2nd year. During the needs assessments carried
out as part of the projects preparation phase, detailed lists of laboratory equipment, office
equipment, pesticides bio-efficacy trial equipment, vehicles, motorbikes and furniture have been
prepared for the various departments of PPQD and FQC&AID. For the purchase of the
equipment, the procurement rules as laid down for the project for each category of items, will be
followed and implemented by the procurement team in the project. In case of most of the
laboratory equipment, exact specifications have already been developed. However, in case of
further clarification and requirements of specification and any other technical details for any
equipment and furniture, the Agrochemicals and Plant Protection team in the IMST will closely
work with the Procurement team and complete the process. The procurement plan ensures
streamlining of procurement activities with other planned activities (in particular construction) in
order to avoid storage of expensive items over longer periods.

218. Top most priority will be given to the development of designs for the Plant Quarantine
Stations (PQSs) along with laboratories, designs for remodeling of rooms for laboratories
(Pesticides Formulation Analysis Laboratory (PFAL), Pesticides Quality Analysis Laboratory
(PQAL), Pests and Diseases Diagnostic Laboratory (PDDL) and all PQSs laboratories under
PPQD; and Pesticides Residue Laboratory (PRL) and Fertilizer Quality Analysis Laboratory
(FQAL) under FQCAID. A (national) Architect Consultant will be contracted for 6 months each
in 1st and 2nd year and an International Laboratory Design Specialist for 2 months at the
beginning of 1st year and for 3 months in the 2nd year. These engineers will provide all drawings
of designs, specifications (including bills of quantities etc.) and tender documents in the first
quarter of the 1st year. This will enable outsourcing the construction firm for starting construction
of the PQSs and remodeling of laboratory rooms starting middle of the 2nd year. The national
Architect Consultant and the Construction unit of the IMST will supervise the construction
works at the PQSs and laboratory remodeling sites.

219. Most of the equipment to be purchased for the various laboratories that will be
established under the project is highly technical and sophisticated. Most of them will require
technical supervision by competent personnel during installation. For this, provision of specialist
Consultants for the respective laboratories are included in the projects procurement plan. Such
manpower will be recruited matching the time of the purchase/delivery of the equipment.
However, in procuring the equipment, conditions for installation and performance warranty with
security money provisions (10% of price) may be laid down in the tender documents in
particular for specialized equipment such as GC, GCMS, LCMS, HPLC, Spectrophotometer,
Evaporator, Soft X-Ray machine, Fluorescent and Stereo Microscopes, etc. Experience and
reputation of the companies in the supply and after sale service will be included as a key criteria
for technical evaluation of bids.

85
220. A nation-wide pests & disease survey and pest risks analysis will be implemented in the
3rd year of the project. These activities will be carried out under the technical supervision and
guidance of a team comprising one national and one international Plant Pathologist, one national
and one international Plant Entomologist. This team will first train at least 10 other specialists
from PPQD and 10 Plant Protection teachers from agricultural university(ies) before
commencing the survey. The strengthened PDDL of PPQD under the direct guidance of the
Director of PPQD will coordinate and help implementing the pests & disease survey and pest
risks analysis as well as provide all necessary diagnostic facilities to be procured and installed
by the project. For establishing the PDDL and demonstrating as well as training laboratory staff,
technical assistance will be provided consisting of one international Plant Pathologist, one
international Entomologist (both to be recruited for 3 months), and one national Plant Pathologist
and one Entomologist (both deployed on full-time basis). The international experts will train the
laboratory team in diagnostic skills regarding insect pests and diseases. This will enable
provision of diagnostic services to PQSs in critical cases as well as to the nation-wide pest and
disease survey.

221. As per the Pesticides Act and Regulation and the Fertilizers Procedures, there is a
provision of forming a Mobile Inspection Team consisting of officials representing relevant
MAIL departments/directorates. The same Mobile Inspection Team shall carry-out the inspection
for both pesticides and fertilizers, given that both categories of inputs are mostly traded/found in
the same stores/shops. The officials for the Mobile Inspection Team should be selected in
accordance with the Pesticides Act and Regulations as well as the Fertilizer Procedures. The
responsibility of constituting the Mobile Inspection Team should lie with the authority
designated by the Act/Regulation. The officials of the Mobile Inspection Team thus selected
should be provided with overseas short term (2 months) training on pesticides and fertilizers
inspection procedures.

222. Both the Pesticides Act and the Plant Quarantine Act have been approved by the MAIL
Minister and submitted to the Ministry of Justice. For expediting their approval process,
necessary follow-up actions will be taken by the Legal Specialists in the IMST. It is envisaged
that the approved updated Pesticides Act/Regulations and Plant Quarantine Act/Regulations shall
pave the ground for establishing and administering an effective pesticides registration system and
plant quarantine system respectively. But since the approval process usually takes time, it is not
certain exactly when both Acts and Regulations will be enacted. Given this reality, the pesticides
registration activity and plant quarantine services will be initiated/implemented in accordance
with the existing Act/Regulations, which will be further strengthened as soon as the updated
submitted Act/Regulations are enacted.

Training and Capacity Building


223. Capacity building forms an important element of the AAIP. A thorough assessment of
available staff and their capacity was made during the institutional assessment carried out as part
of project preparation. Based on this assessment a training program to respond to training needs
of all Directorates involved in the project was drafted. Under Component A of the project
training for ARIA and ISE staff will be provided in a number of ways - including on-the job
training, provided by the international and national consultants stationed at ARIA and ISE HQ

86
and regional stations and farms (not specified in the training schedule), PhD training for two
candidates from ARIA, MSc training for candidates from ARIA and ISE (33 in total), specialized
and advertised short courses abroad, and in-country training. The topics of the various courses
and numbers of participants have already been defined, including identification of specific
courses and training institutes (details in Training Manual available in Project Files). It is
foreseen that most of the PhD, MSc and specialized training courses will be held within the
region. For in-country training courses, trainers will be hired from reputable institutes in and
outside the region (e.g. national research institutes, CGIAR institutes etc.). The Training
Coordinator together with the Training Officer will implement the already prepared training
plan.

224. MSc candidates will be sent in two batches; one batch will be selected in the first year
and sent in the second year, and one will be selected in the second and sent in the third year of
the project. PhD studies will be joined in the first batch of MSc students. One year will be
required for selection of candidates, selection, contacting and reserving seats at the various
universities and training institutes, and for preparation of the selected candidates. Candidates will
be selected in a competitive process, but as a matter of principle, it is aimed to have at least one
candidate from each regional station/farm and from each participating department at ARIA HQ.
Selected candidates will be offered a four to five months intensive English language training
course in Kabul immediately after their selection. All PhD and MSc students, before undergoing
the training, will be obliged to sign a document that will commit them to return to their
respective Departments and continue working there for at least five years after completing their
studies. Whereas PhD and MSc courses will be offered to eligible candidates with a maximum
age of 35, specialized short courses will mainly focus at the age group above 35 years. Courses
advertised, mainly by the international CGIAR institutes, and in-country training courses will be
open for all age groups.

225. For Component B, human capacity development is a pre-requisite for studying different
matrices by operating the modern analytical equipment. Therefore overseas training for different
Specialists/Technicians is as a major activity under this component. The Training Manual
(available in the Project Files) includes the identification of training venues for the proposed
training programs for civil servant staff of PPQD and FQCAID. The Training Coordinator
together with the Training Officer will implement the already prepared training plan so that all
overseas training such as 13 MSc, 6 months training for 6 Specialists, 3 months training for 8
Specialists/Technicians, 2 months training for 63 Specialists/Officials/Technicians and 2
administrative study tours may be processed in the 1st year of the project. It is envisaged that
most of the training will take place in the neighboring countries. Candidates for MSc degrees
will be selected in a competitive process. In the selection process, the respective Director will
have a pioneering role. Just like for ARIA and ISE staff under Component A, selected candidates
from PPQD and FQAID will participate in a four to five months intensive English language
training course in Kabul immediately after their selection. All MSc candidates, before
undergoing the training, will be obliged to sign a document that will commit them to return to
their respective Departments and continue working there for at least five years after completing
their studies. Candidates for short-term training will also be selected on a competitive basis
preferably from the respective department/stations/sections in which case also the respective
Directors will have a pioneering role.

87
226. Intensive in-country training for traders, handlers and users of pesticides and fertilizers
forms part of component B of the project. In-country training on plant quarantine aspects for
exporters, importers and growers of plants and plant materials will also be conducted. For each
of these trainings, provisions of international and national consultants specialized in pesticides,
fertilizer and plant quarantine training are included in the project. However, for smooth and
systematic implementation of these trainings, the Training Coordinator in the IMST will, in
addition to overseas training, prepare an in-country training plan in consultation with the
Agrochemicals and Plant Protection team in the IMST. This plan will be discussed with the
Directors of PPQD and FQCAID before finalization.

Safeguards

227. The PMP addresses the projects concerns relative to the risks associated with the use of
agrochemicals in Afghanistan to deal with the control of pests and diseases. The PMP is
compliant with the World Bank Safeguard Policies on Pest Management (OP 4.09 and BP4.01
Annex C) and consistent with the priorities for agricultural investments and policies under the
National Agricultural Development Framework (NADF), implemented through National Priority
Program 2 by MAIL in collaboration with the development partners.

228. The IMST has already been created and partially staffed during the preparation phase of
the project and includes an (national) Environmental Safeguards Specialist. For the
implementation phase of the AAIP the safeguard staff in the IMST will be strengthened by
adding a national Social Safeguards and Gender specialist an an (international) Safeguards
Adviser.

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Annex 8: Project Preparation and Appraisal Team Members
AFGHANISTAN: Afghanistan Agricultural Inputs Project

NAME TITLE / FUNCTION

Johannes (Hans) G.P. Jansen Task Team Leader and Sr. Agricultural Economist, SASDA
William Magrath Lead Natural Resources Specialist, SASDA
Najla Sabri Operations Analyst, SASDA
Samuel Kugbei Seed Specialist, FAO
Mahbubar Rahman Agrochemicals Specialist, FAO Consultant
Selvarajan Sundaramurthy Senior Economist/Cost-Benefit Specialist, FAO
Siddharta Raja ICT Policy Specialist, TWICT
Rajiv Sharma Wheat Specialist and Country Representative, CIMMYT
Mohammad Arif Rasuli Senior Environmental Specialist, SASDI
Abdul Durani Social Development Specialist, SASDS
Zohra Farooq Financial Management Specialist, SARFM
Nargis Yousuf Financial Management Specialist, SARFM
Chau-Ching Shen Senior Finance Officer, CTRFC
Aimal Sherzad Procurement Specialist, SARPS
Marjorie Mpundu Senior Counsel, LEGES
Abdul Raouf Zia Senior Communications Officer, SAREX
Zabiullah Ahrary Team Assistant, SASDO
Venkat Ramachandran Program Assistant, SASDO

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Annex 9: Environmental and Social Safeguards Framework
AFGHANISTAN: Afghanistan Agricultural Inputs Project

229. The prevalence of pests and diseases, and lack of quality pesticides and chemical
fertilizers are major constraints for agriculture productivity in Afghanistan. Farmers access to
quality and safe inputs is insufficient and knowledge regarding their safe transport, storage, use
and disposal remains weak. In addition, agricultural inputs delivery networks remain
underdeveloped and weakly regulated. As a result farmers often rely on outdated and low quality
pesticides and fertilizer available in unregulated markets. Together these factors may lead to
adverse human health effects during crop production and consumption, contamination of the
environmental resources (soils, water, air) and negative economic impact. The AAIP will help
building up the legal and regulatory frameworks, as well as the infrastructure necessary to
exercise and enforce quality control for fertilizers and other agro-chemicals. The project itself is
not promoting the use of fertilizers and other agrochemicals - rather it aims at strengthening the
legal and institutional framework needed for safety and reliability of fertilizers and other
agrochemicals. Therefore, the social and environmental impacts of the project are expected to be
positive. The AAIP is classified as Category B according to the WB safeguards policy
requirements.
230. The AAIP triggers OP/BP 4.01 and OP 4.09. An ESMF and a Pest Management Plan
(PMP) have been developed to effectively address environmental and social concerns and
opportunities resulting from the use of fertilizers and other agrochemicals. The ESMF sets out
specific mitigation and enhancement measures to address the social and environmental aspects of
project interventions, including safeguards screening guidelines for sub-projects. Based on the
ESMF, each subproject will undergo a review process to screen for sensitive
environmental/social issues and to ensure that the environmental and social risks can be
adequately addressed through the application of appropriate mitigation measures consistent with
standardized guidelines and tools provided in the ESMF. Sub-projects with attributes registered
on the negative list will be ineligible for support. For each subproject a site specific
Environmental and Social Management Plan (ESMP) would be prepared as an action plan for
managing and due diligence of safeguards issues.
231. The project envisages a significant amount of physical works including construction of
new buildings and the rehabilitation of existing ones. Since this includes a number of
laboratories, liquid waste resulting from the laboratory operations may contain chemical
substances which can contaminate water quality. The ESMF comprises screening list to be used
to identify such cases.
232. The PMP addresses the projects concerns relative to the risks associated with the use of
agrochemicals in Afghanistan to deal with the control of pests and diseases. The PMP is
compliant with the World Bank Safeguard Policies on Pest Management (OP 4.09 and BP4.01
Annex C) and consistent with the priorities for agricultural investments and policies under the
National Agricultural Development Framework (NADF), implemented by the Ministry of
Agriculture, Irrigation and Livestock in collaboration with the Development Partners.
233. To adequately address the key safeguard issues, the following safeguards activities and
measures are proposed: (i) implementation of the PMP; (ii) enhancing the skills and abilities of
farmers, through training in appropriate technologies, including Integrated Pest Management

90
(IPM) approaches in collaboration with other projects; (iii) providing guidelines for
establishment of a Grievance Redress Mechanism in the project as well as guidelines for public
consultations; (iv) development of a Pesticide Poisoning Training Manual; and (v) development
of a set of Occupational Health and Safety Guidelines.
234. No land acquisition will be funded or take place under this project, and only existing
government land will be used for seeds multiplication and upgrading of physical infrastructure
on ARIA and ISE farms. Before any project-funded physical work can start on any government
land, documentation is required that the land is free of squatters, conflicting claims and other
encumbrances.
235. Insofar as the project engages with farmers for training and capacity building purposes,
the PMP discusses the IPM approach where the pesticide should be the last resort and priority
would be given to natural and agriculture pest control methods. Both the ESMF and the PMP
have best practice guidelines for the proper identification, storage and application of pesticides if
they are to be used by farmers.

236. The PMP addresses the projects concerns relative to the risks associated with the use of
agrochemicals in Afghanistan to deal with the control of pests and diseases. The PMP is
compliant with the World Bank Safeguard Policies on Pest Management (OP 4.09 and BP4.01
Annex C) and consistent with the priorities for agricultural investments and policies under the
National Agricultural Development Framework (NADF), implemented by the Ministry of
Agriculture, Irrigation and Livestock in collaboration with the Development Partners.

237. Safeguards training and capacity building is an essential element of the project design.
The safeguards team (which will be strengthened for implementation) will be responsible for the
following safeguards activities and measures: (i) implementation of the PMP; (ii) enhancing the
skills and abilities of farmers, through training in appropriate technologies, including Integrated
Pest Management (IPM) approaches in collaboration with other projects (NHLP, OFWMP, FAO
IPM project etc); (iii) providing guidelines for establishment of a Grievance Redress Mechanism
in the project as well as guidelines for public consultations; (iv) development of a Pesticide
Poisoning Training Manual; and (v) development of a set of Occupational Health and Safety
Guidelines.

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Annex 10: Economic and Financial Analysis
AFGHANISTAN: Afghanistan Agricultural Inputs Project

238. The project focuses on the safety, reliability and sustainability of agricultural inputs for
Afghanistans agricultural sector. Project interventions are designed to strengthen national
institutional capacities for (A) Improved wheat seed production through efficient selection and
validation for agro-ecology/cultural condition-specific wheat technologies and production
packages; and sustainable and decentralized production of breeder, foundation, registered and
certified quality seeds of agro-ecological zone-specific wheat varieties; and (B) Plant quarantine
networks and quality control of agrochemicals for reliable quality in pesticides and fertilizers,
and proper safety in agriculture products and commodities available in the country.
239. The projects cost-benefit (CB) analysis was conducted separately for the main
investment components - sustainable wheat seed production, and plant quarantine networks and
quality control of agro chemicals - which together account for about 95% of total project costs
(excluding project management costs 75% of total costs including project management costs).
The CB analyses for these components are then aggregated for the entire project taking total
project costs (including contingencies) into account. The analysis and with/without project
assumptions are based on the data collected from multiple sources including project
preparation documents (PIP)6, FAO documents7, CIMMYT reports8, and published statistical
reports by the Government of Afghanistan9. Wheat crop budgets are formulated for the north,
east and south west production zones and aggregated based on wheat area shares using the data
from a cost-of-production survey covering 1913 farmers for winter and spring irrigated and
rainfed wheat crops10. Project costs and benefits are estimated at 2012 prices over a period of 25
years with 12% as the opportunity cost of capital. Economic costs are derived by using a SCF of
0.85 to 0.90 for non-traded inputs and commodities and parity prices for wheat and fertilizers
(urea and DAP) using secondary published sources11.

6
Project Implementation Plan, Afghanistan Agricultural Inputs Project (AAIP), Ministry of Agriculture, Irrigation and Livestock,
Sept 2012.
7
Sam Kugbei and Shahabuddin Shahab, Strengthening National Seed Production Capacity in Afghanistan: Analysis of the seed
market in Afghanistan, GCP/AFG/018/EC, Food and Agriculture Organization of the United Nations, 2007; Sam Kugbei, Small
Scale Seed enterprise- Startup and Management, Guidelines and Business skills for Seed producers in Afghanistan, Ministry of
Agriculture, Irrigation and Livestock & Food and Agriculture Organization of the United Nations, Kabul, Afghanistan, 2008; and
Project Progress Report, Variety and Seed Industry Development, July-Dec 2011, GCP/AFG/045/EC, SPOO, FAO, Kabul; FAO
Variety and Seed Industry Development Project Progress Report, Dec 2011; National Seed Board- Seed Testing Laboratory
Database; and ISIDSP Component-A on Seed Draft Report, July 2012.
8
CIMMYT Annual Report, 2011, International Maize and Wheat Improvement Center, Kabul, Afghanistan.
9
Agriculture Prospects Report, Ministry of Agriculture, Irrigation and Livestock, General Directorate of Planning and Policy,
Statistics and Marketing Information Office, various years; and Afghanistan Statistical Year Book, 2011-12, Central Statistics
Organization.
10
A Note on the 2008 Cost of Production Survey, Support to the Food, Agriculture and Animal Husbandry Information
Management and Policy Unit (FAAHM) in developing an Agricultural Statistics and Market Information System
(GCP/AFG/042/EC).
11
Agricultural Commodity Price Bulletins, various volumes, 2012, Ministry of Agriculture, Irrigation and Livestock, General
Directorate of Planning and Policy, Statistics and Marketing Information Office.

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Project Benefits

240. The Seed Production component accounts for 46% of project costs, including
contingencies and apportioned management costs. The main sources of benefits are efficiency
gains in production of improved wheat seed and productivity gains in wheat grain production.
241. Efficiency gains in wheat seed production will come from (i) 37% saving in the scarce
irrigated lands used for seed production and (ii) 14% reduction in the cost of producing certified
seed, which are mainly driven by 56% increase in the seed multiplication rate (weighted across
FS/RS/CS (Foundation Seed/Registered Seed/Certified Seed) using area as weights). Enhanced
seed multiplication rates will be achieved through 24% increase in the productivity of wheat seed
(weighted across FS/RS/CS using area as weights) in the public sector farms (for FS and RS) and
private sector farms (for CS), and 37% reduction in losses/rejections in the field and lab level
production, processing and testing. Details can be found in Tables A10.8 A10.11 at the end of
this Annex.
242. Productivity gains in wheat will come from 21% increase in wheat grain productivity
(weighted across irrigated and rainfed wheat using area shares), adopted by 25% of wheat
farmers. This will be achieved through the development of at least ten agro-ecological
zone/cultural condition-specific technologies/production packages for wheat, backed by supply
of quality certified seeds closer to the villages for enhanced adoption. More importantly, the
project will, by improving human capacity and infrastructure facilities, strengthen national public
and private sector institutions for sustaining the project-led technology adaptation, production
package development specific to cultural conditions, and efficient seed production system
initiatives, which will have sustainable system-wide impacts. The CB analysis is limited to the
quantifiable benefits only i.e. efficiency and productivity gains.

243. Efficiency gains: Currently, Table A10.1: Improved seed production system impacts on
the seed system in Afghanistan is scarce resources
producing about 24,000 MT of
Efficiency Gains Unit WOP WP Change
certified wheat seeds annually,
sufficient to replace seed on 7.5% of Production of wheat CS MT 30000 30000 0%
1/
the total wheat area. Supply of CS Seed production efficiency
has been increasing in the recent past Productivity t/ha 2.7 3.3 24%
in response to high price premium Seed Production Losses 2/
% 41% 26% -36%
over grain and assured demand by Seed Multiplication rate Ratio 13 20 55%
donors and the Government. Savings in scarce resource
Possible without project (WOP) Irrigated lands used Ha 20663 12935 -37%
scenarios include the following: (i) Public farm lands Ha 710 342 -52%
the existing seed production system
Private farm lands Ha 19953 12593 -37%
may collapse as a result of lack of
BS/FS/RS requirements MT/yr 2583 1617 -37%
demand in case price premium 1/
Weighted across foundation, registered and certified seed production systems
would continue to be high and using area shares as weights. BL and WOP values remain the same.
donors and Government would no 2/
Losses include field level rejections, seed cleaning and lab level rejections.
longer buy; (ii) current supply levels
may be maintained if donors and/or Government continue to buy; (iii) the existing seed
production system may become more efficient and responsive to market demand by farmers

93
which can be expected to develop as prices would come down and supply of improved seed
varieties adapted to specific agro-ecological conditions would improve. Which of these three
scenarios would become reality under a WOP situation is difficult to predict. Until now, the
entire supply of CS has been bought by the Government and/or donors at a high premium of
approximately 109% over and above the grain price (average across three years). While on the
one hand, production of CS will continue to increase in anticipation of assured procurement by
the Government and/or donors, it may also reach levels that are too high for the Government
and/or donors to support. Hence, it is projected that CS production may at best go up to about
30,000 MT during the next five years, sufficient to replace seed on about 10% of the total wheat
area. This quantity of CS has also been indicated by the Bank as being the maximum size of the
market for that seed in case of no distortions12. Since it is not clear as to how the market for CS
will develop, the WOP situation assumes a production of CS of 30,000 MT. But producing
30,000 MT of CS more efficiently (i.e. cheaper) is likely to stimulate demand for CS. This
implies that under the WP situation, the probability of the wheat seed market to evolve gradually
in response to this demand for CS can be considered higher than under a WOP situation (the
latter of course in the absence of subsidies).

244. Project interventions include improvements in infrastructure facilities like land (1,341
ha), purchase of equipment, and strengthening human capacity in ARIA/ISE and ANSOR/PSE
institutions. About 17 farms and 472 staff members from ARIA/ISE have been identified for
receiving some form of project assistance. The projected benefits due to improvements in the
wheat seed production system include enhanced wheat seed productivity by 24% and reduced
seed production losses by 36% (Table A10.1). As a result the seed multiplication rate is
projected to improve by 55% which in turn leads to a saving of 37% in scarce irrigated land
resources required compared to producing 30,000 MT of CS under the WOP situation13. About
7,728 ha of irrigated lands are released from seed production and used for producing other crops.
Using wheat as a proxy, the incremental value of saved irrigated land resources is estimated at
US$ 3.3 m per year.

245. A project-led efficient wheat Table A10.2: Efficient seed production system impacts
seed production system will reduce
the cost of producing CS as follows Efficiency Gains Unit WOP WP Change
(Table A10.2): (i) the quantity of raw Production of wheat CS MT 30000 30000 0%
wheat seed procured for producing Contract Growers for CS No. 6234 4149 -33%
30,000 MT of clean certified seeds
Raw seed procured MT 41656 36765 -12%
will decrease by 12%; (ii) the
number of contract growers to be Registered Seed used MT 2325 1547 -33%
managed by the PSEs is reduced by Wheat seed productivity MT/ha 2.7 3.3 21%
1/3rd; (iii) wheat seed productivity
Procurement cost for RS $ m/year 1.8 1.2 -33%
increases by 22% due to improved
management and training; and (iv) Total cost for raw seed $ m/year 18.8 14.9 -21%
registered seed requirements decline Processing/cleaning cost $ m/year 3.1 2.8 -12%

12
National Target for Certified Wheat Seed Production staff note prepared for H.E. Minister of MAIL, World Bank, 23 June
2011.
13
Details regarding the impact of improvements in the wheat seed supply chain on the production of FS, RS and CS are detailed
in Tables A10.5 through A10.8.

94
by 33%. Consequently, the costs of procuring registered seed and raw wheat seed (for CS
production) and processing/cleaning of the latter to produce 30,000 MT of clean CS are
projected to decrease by US$ 4.9 m per year. About 90% of the raw seed that is rejected while
cleaning/processing is disposed of as wheat grain. With lower quantities of raw seed needed and
smaller losses in the production process of CS, an annual decrease in proceeds from sale of raw
seed as grain of US$ 1.5 m is expected under the WP situation. As a result, the net annual
incremental benefit due to a more efficient seed production system is estimated at US$ 3.5 m.
The cost of production of certified wheat seed under the WP situation is expected to decrease by
US$ 115 per metric ton (MT) at full project development. This will help the development of a
market based wheat seed system by making quality wheat seed more affordable for Afghan
farmers.

246. Annual incremental economic benefits due to efficiency gains from the improved seed
system are assessed at US$ 6.8 m, resulting from savings in scarce irrigated land resources
(49%) and reduced unit cost of certified wheat seed production. These gains will gradually build
up starting from Year 4 onwards to reach full benefits by Year 10, matching with the gradual
development of infrastructure and human capacity. The analysis used a time lag of three years to
account for the production cycle of breeder seed to certified seed.

Table A10.3: Strengthened National Institutions for recovering lost yield opportunities

Wheat grain yield Unit Kabul Nangarhar Baghlan Kunduz Balkh Takhar Herat Average1/
Identified variety t/ha 3462 4781 5670 9067 5136 9061 7016 6313
Best yielding variety t/ha 4240 6179 6758 9759 5793 9214 7285
Deviation % 22% 29% 19% 8% 13% 2% 4% 0%
Source: CIMMYT Annual Report 2011, International Maize and Wheat Improvement Center, Kabul, Afghanistan.
1/
Average across seven locations.

247. Productivity gains: Due to the lack of trained manpower and well-developed
infrastructure facilities in national institutions like ARIA and ISE, currently wheat varietal
screening for identification/selection/ validation is limited to seven locations. Varietal selection
is done based on the average performance of advanced lines across these locations. Limited
institutional capacity prevents development of agro-ecological condition-specific production
packages. Analysis of CIMMYT data revealed that generic technology and production package
recommendations for all agro-ecological situations results in missing best-yielding cultivars for
site-specific agro-ecological conditions. The current approach precludes taking advantage of
possible yield gains between 13 and 29% in four out of seven locations (Table A10.3).
Strengthening national institutions in collaboration with international organizations, supported by
human capacity and infrastructure development interventions will help to capture these yield
advantages through the development of agroecology-specific technologies and production
packages. Using crop budgets, incremental economic benefits due to location-specific
technologies and production packages are estimated at US$ 85 per ha, weighted across rainfed
and irrigated varieties based on their respective overall area shares (55:45). In the WP situation,
30,000 MT of quality CS would allow seed replacement on approximately 240,000 ha of wheat
area each year. In the WP situation where wheat seed becomes more affordable for farmers due
to a more efficient wheat seed production system, increased wheat productivity due to the use of

95
agroecology-specific varieties and agronomic technologies is conservatively estimated to occur
on 25% of the total wheat area. The incremental economic benefits due to productivity gains are
estimated at US$ 5.1 m per year at full development. The benefits will start from Year 4 onwards
and gradually improve over time as adoption rates increase - reaching the full potential by Year
10, matching with the institutional development investments and expected agro-ecological zone-
specific technology development.

248. The Quarantine Networks and Agrochemical Quality control component accounts for
50% of project costs, including contingencies and apportioned management costs. The main
sources of benefits are higher price realization for exports and expansion in the volume of
exports of agricultural commodities.
249. Afghans export potential is assessed based on a three-year average, ending 2011/12 (TE
2012), valued at constant 2012 prices. Total value of average annual exports is US$ 373 m,
consisting of agricultural (60%) and non-agricultural products (40%). Major agricultural
exports include fresh fruits and dry fruits accounting for 71% of total agricultural exports.
Major crops like raisin, almond, grapes and
pomegranate account for 47% of total farm
Farm Dry Fruit
Exports Exports Exports
exports. Out of these, raisin and almond are
dominating commodities in Afghanistans
export basket. In value terms, raisin and
almond together account for 26% of total
exports, 44% of total agricultural exports, and
67% of total dry fruits exports (Fig. A10.1). In
Total

terms of individual export commodities, next


to carpet, raisin is the most important export 0% 20% 40% 60% 80%
commodity accounting for 16% of total exports Fig. A10.1 Value shares of raisins and
and 27% of farm exports. This CB analysis almonds in Afghanistan annual exports, TE
considers major export crops like raisin and 2012
almond which together earn about US$ 100 m foreign exchange annually.

250. Raisin is the number one agricultural export commodity of Afghanistan. About one-fifth
of the grapes produced are processed to produce about 32,000 MT of raisin annually. About
87% of raisin is exported, accounting for 17% of the total annual agricultural export value.
Major regional raisin export destinations are the Russian Federation, countries that border
Afghanistan (Pakistan, Iran, Kazakhstan) and India. Raisin exports to EU and USA markets are
small (Fig. A10.2) though expanding (as per latest
Europe
5% export statistics, the share of the EU alone in
Afghans raisin exports reached 16% in 2011). In
Russia general however, export growth potentials for raisin
55%
are yet to be fully tapped. USA and EU markets are
USA complicated export destinations for Afghan raisins
Bordering
Countries
3% because of quality issues and lack of adherence to
India 25% international food safety standards by Afghan
12% processors. The Russian market is also quite
Fig. A10.2: Afghan raisin export shares demanding as far as quality is concerned. Quality
(%)

96
certificates for export are issued in Afghanistan, but their recognition as a phytosanitary
certificates abroad is limited.

251. Given that the EU is the worlds largest importer of raisins (annually over 300,000 MT),
accounting for 50% of the worlds raisin imports, Afghanistan aims to increase its raisin
production and target the EU market to increase exports. Currently, the USA and Turkey
account for 61% of the EUs total raisin imports, followed by Iran and Chile which together
have a market share of about 11%. AAIP investments in quarantine network infrastructure,
trained manpower and facilities for enforcement of regulatory mechanisms would help to
compete with other exporting countries and increase the share of Afghanistans exports in EU
markets.

252. Export benefits: Market assessments by the RAMP14 project concluded that prevailing
cultivation, harvesting, drying and packaging methods in Afghanistan result in dry fruit products
that do not meet the high quality standards in international markets. In particular, Afghan exports
are currently unable to meet phytosanitary standards for food imports in first-tier markets such as
Europe and the United States. In addition, testing facilities for certifying raisins against
international grades and standards are extremely limited in Afghanistan, and some tests required
by certain importers are not available at all. At the same time, demand for dried fruit imports in
Europe has been steadily increasing over the past few decades; domestic production in Europe
has been dwindling because it cannot compete with imports from countries with lower labor
costs. Therefore, Europe represents a potentially attractive market for Afghanistan if it can meet
the high phytosanitary and quality standards set by the European Union15.
253. However, currently more than 95% of Afghan exports Table A10.4: Potential profit margins as
in value terms of these commodities are to bordering and a % of estimated CIF prices for Afghan
regional countries while a negligible share is going to other exports
markets for better price16. For example in the EU, Afghan Export Profit Export
Commodity Margin Origin
almonds are priced competitively when compared to other
Exports to Russia
leading suppliers to European markets, but barely present in
those markets. Despite CIF prices for almonds from suppliers Raisin 138% Iran
in the USA being 40 to 60% higher than CIF prices from 179% Chile
Afghan suppliers, the USA dominates the EU import market Exports to the European Union
for almonds with a share of 60%17. Similarly CIF prices for Raisin 44% Iran
raisins from Afghanistan for the Russian market are much 91% Turkey
more competitive than those from Iran or Chile. The potential Almonds 47% USA
profit margins for raisin exports to Russia are substantial,
varying from 138% to 179% as evidenced by competing countries for exporting raisins to the

14
Rebuilding Agricultural Markets Program (USAID).
15
Alene Mc Mahon, Case Study of the Poultry and Grape/Raisin subsectors in Afghanistan: Guided Case Studies in Value Chain
Development for Conflict Affected Environments. Micro report # 106, USAID, March 2008.
16
Agriculture Trade Reports, 1389 and 1390, 2010/11 and 2011/12, USAID Agricultural Credit Enhancement, Ministry of
Agriculture, Irrigation and Livestock, General Directorate of Planning and Policy, Statistics and Marketing Information
Department.
17
Market Brief: Almonds, An Overview of Export Potential, USAID Agricultural Credit Enhancement, Ministry of Agriculture,
Irrigation and Livestock, General Directorate of Planning and Policy, Statistics and Marketing Information Department of the
General Directorate of Policy and Planning, Afghanistan, 2011.

97
Russian market like Iran and Chile (Table A10.4). Even in the EU market, CIF prices for raisins
from Afghanistan suppliers are more competitive than Iranian and Turkish exports. The potential
average profit margins for exporting raisin to EU markets vary from 44% to 91% as evidenced
by competing countries like Iran and Turkey18.

254. The most important legal requirements for taking advantage of profitable export
opportunities for commodities such as raisins, dried fruits, almonds and nuts concern food safety
(especially tracking and tracing maximum residue levels), food additives and food labeling. The
lack of physical and institutional infrastructure, as well as human capacity to adequately control
the quality and safety of agricultural produce in order to meet the quality and hygienic standards
for export to European and U.S markets remains a major problem19. Establishment of quarantine
networks in combination with quality control systems for agrochemicals will facilitate the
exploitation of export opportunities in niche markets for agricultural commodities. This will
incentivize Afghan producers to increase production of commodities such as raisins for exports
to niche markets. At full project development, the share of Afghan raisin exports destined for
niche markets is projected to increase from 20% (WOP) to 30% (WP) while export unit values
are supposed to increase by 10% (WP). These assumptions are modest as compared to the
untapped potential that exists both in regional markets (especially Russia) and first tier
international niche markets (EU). Incremental raisin exports to niche markets are projected at
2800 MT/year. The incremental export unit value of US$ 208 per MT is assumed to benefit
(already existing) exports of 19,600 MT to regional markets (mainly Russia) as well as increased
exports to niche markets (EU). This way the incremental economic benefits from raisin exports
are projected at US$ 10.5 m/year at full project development, stemming from incremental
exports to the EU (61%) and incremental export value (39%). These benefits will start from year
4 onwards, in parallel with the infrastructure and institutional development investments for
quarantine and quality control envisaged under the project.

255. The estimated project benefits are considered conservative due to the following reasons:
(i) the project-led strategy for strengthening national public and private sector institutions to
increase the efficiency of the improved wheat seed value chain is likely to have system-wide
impacts in the longer term that go beyond wheat. At the same time cost-benefit analysis is
limited to quantifiable economic benefits covering only efficiency and productivity gains in
wheat;
(ii) for the WOP situation, the analysis considered an optimistic scenario in which current
supply levels of certified what seed are not only maintained but also would increase to 30,000
MT over the next five years, under the assumption that the procurement price for certified wheat
seed would continue to be supported donors and/or the Government. But donor appetite for
doing so has waned and it is doubtful that the Government can afford to keep on stepping in (as
they did in 2012);

18
Market Brief: Raisins, An Overview of Export Potential, USAID Agricultural Credit Enhancement, Ministry of Agriculture,
Irrigation and Livestock, General Directorate of Planning and Policy, Statistics and Marketing Information Department, 2011.
19
Annual Report, Afghanistan Chamber of Commerce and Industries, 2008/09 to 2010/11; Apricots in Afghanistan, A Value
Chain Approach, National Union for Horticulture Development in Afghanistan (NUHDA), June 2008.

98
(iii) the analysis assumes a relatively modest farmer adoption rate of certified wheat seed (25%).
However it is likely that eventually a substantially larger share of farmers is likely to adopt since
the seed component of the project will not only focus on wheat seed but rather will develop at
least ten agroecological condition-specific wheat production technology packages that consist of
both adapted certified wheat seed and improved agronomic practices. On average these packages
are assumed to result in a 21% increase in productivity. In addition, production cost of certified
wheat seed supply will be reduced by 14% reduction and located closer to the villages for
enhanced adoption;
(iv) plant quarantine networks and agrochemical quality control infrastructure to be installed
together with improvements in institutional capacity are likely to facilitate accessing niche
markets for a wide range of agricultural export commodities. However, only raisins were
considered in the CB analysis; and
(v) most of the agrochemicals currently available in the market and used by farmers are of
dubious quality. Profit margins are squeezed due to higher production cost as farmers are
charged high prices for inferior quality chemicals. Improvements in agrochemicals quality
control are likely to help squeezing out inferior products and improve profit margins across
major crops. However these are not captured in the CB analysis because of lack of data.

Economic Analysis

256. Economic Rate of Return.


Component A (Improved Wheat Table A10.5: Economic Analysis Summary (US$ m)
Seed Production) accounts for Economic Analysis
46% of total project costs Project Interventions PVC PVB NPV FRR
(including contingencies and Seed System Development 25.9 47.1 21.2 20.5%
apportioned management costs). Quarantine Networks and
The estimated annual incremental Agrochemicals 26.1 43.0 16.9 19.5%
economic benefits (undiscounted) Overall Project 55.4 90.1 34.7 19.0%
from investments in improved
wheat seed production are estimated at US$ 11.9 m at full project development to be realized
from year 10 onwards. Efficiency gains in the seed production system due to project
interventions account for 57% and productivity gains due to location-specific wheat technology
packages supported with improved quality seed account for 43% of incremental benefits. The
economic rate of return for the seed system development investments is estimated to be 20.5%.
For this intervention, the project is expected to yield a net present value of US$ 21.2 m in 2012
prices over a period of 25 years (Table A10.5).
257. For overall project analysis, benefits from investments in improved wheat seed
production and those in plant quarantine and agrochemicals quality control systems are
aggregated. Project costs include the costs of all project components, including contingencies.
Annual incremental economic benefits (undiscounted) due to project interventions are estimated
at US$ 22.4 m, at full project development. Contributions to project benefits originate from
wheat seed system efficiency improvements (30%), wheat production gains (23%) and plant
quarantine & agrochemicals quality control (47%). The estimated ERR for the project as a whole
is 19% with a corresponding NPV of US$ 34.7 m.

99
Sensitivity and Risk Analysis Table A10.6: Sensitivity Analysis Summary (NPV in US$ m)

258. Sensitivity analysis simulates Sensitivity Scenarios NPV ERR


the impact of a 25% fall in projected Base Level 34.7 19.0%
individual benefits - including Changes in projected benefits:
efficiency gains in wheat seed Efficiency gains seed production -25% 27.8 17.8%
production, yield gains, and increases
Yield gains -25% 29.9 18.2%
in agricultural exports. As a result the
Export increases -25% 24.0 17.1%
projected ERR falls to between 17.1
and 18.2% (compared to the base Escalation in project costs (+20%) 23.7 16.2%
level ERR of 19%). Sensitivity Fall in projected benefits (-20%) 16.7 15.6%
analysis points towards the more Delayed Implementation (-2 years) 14.2 14.6%
significant impact of delayed project Change in base level Costs and Benefits
implementation, lower project Costs +20% and Benefits -20% 5.6 13.1%
benefits or escalation of project costs Switching Values
reducing the overall ERR to Costs increase (+ 62%) 4.2 12.6%
respectively 14.6%, 15.6% and 16.2% Benefits decrease (-39%) 2.5 12.6%
(Table A10.6). The projected NPV is
also significantly reduced - by 32 to 59% from the base level. A simultaneous increase in costs
by 20% and decrease in benefits by the same percentage leads to a significant reduction in the
projects overall rate of return the projected ERR decreases to 13.1%. A switching value
analysis was also performed and indicated that either costs will have to increase by 62% or
benefits will have to fall by 39% for the ERR to decrease to just above the discount rate of 12%.
The projects overall rate of return is more sensitive to changes in benefits than to changes in
costs.

259. Risk analysis considered cost escalation and Table A10.7: AAIP: Risk Analysis
missing individual project targets (in terms of Summary (NPV in US$ m)
efficiency gains in wheat seed production, yield gains, Risk Summary NPV ERR
and increases in export values) as the relevant set of Expected value 5.60 13.2%
risk variables to estimate the effects of uncertainty on Standard deviation 5.90 1.2%
projected rates of return of the project; and determined Minimum -13.1 8.9%
the confidence limit for realizing the expected Maximum 26.2 17.2%
economic returns. For this a Monte Carlo simulation Coefficient of variation 1.05 0.09
model was used to analyze the distribution of Probability of negative
outcome 17.7% 0.0%
incremental benefits and costs by modeling the likely
distribution for each of the four identified critical risk variables.
100%
260. Risk analysis considered the impact on the
80%
distribution of the ERR of a simultaneous increase in
60%
probability

40%
project cost of up to 15% and a decrease in project
20%
benefits of up to the same percentage. Simulated
0% ERRs, based on multiple runs (1000), ranged from
8% 10% 12% 14% 16% 18% 8.9% to 17.2% with a coefficient of variation of 9%.
Fig. A10.3: Cumulative Distribution of ERR The expected ERR of 13.2% as estimated by the risk
model is considered reasonably stable, given that the
probability of the ERR exceeding 12% level is 84% (Table A10.7 and Fig. A10.3).

100
Table A10.8: Private Seed Enterprises - Production Model for Certified Wheat Seed
PSE Level Analysis Unit WOP WP
Certified Seed Production Tons 30000 30000
Field Level
Contract Growers Number 6234 4149
Registered Seeds Used Tons 2325 1547
Seed rate Kg/Ha 125 125
Wheat area planted with Registered Seed Ha 18601 12379
Wheat seed fields rejected % 17% 10%
Average wheat productivity (Raw Seed-Gross) Tons/ha 2.70 3.30
Wheat seed produced (Raw Seed-Gross)
Potential Tons/year 50275 40850
Actual Tons/year 41656 36765
PSE Level
Seed Enterprises Number 92 61
Seed Procured from the contract growers Tons/year 41656 36765
Proportion of wheat seeds losses % 22% 15%
Cleaned wheat seeds produced Tons/year 32671 31250
Lab Level
Seed lots tested Number/year 3283 2897
Seed lots rejected % 8% 4%
Wheat seed produced (Clean Seed-Net) Tons/ha 30000 30000

Table A10.9: Improved Seed Enterprise- Production Model for Registered Wheat Seed
ISE Level Analysis Unit WOP WP
Registered Seed Production Tons 2325 1547
Field Level
Wheat area planted with Foundation Seed Ha 1931 535
Seed rate Kg/ha 125 125
Foundation Seeds Used Tons/year 241 67
Wheat seed fields rejected % 29% 8%
Average Wheat Productivity (Raw seed/Gross) Tons/ha 2.50 3.6
Wheat Seed Produced (Raw seed/Gross)
Potential Tons/year 4820 1926
Actual Tons/Year 3422 1772
ISE Level
Wheat Seed Produced/Procured (Raw seed/Gross) Tons/Year 3422 1772
Proportion of wheat seeds rejected % 26% 10%
Cleaned wheat seed produced Tons/Year 2527 1595
Lab Level
Seed lots tested Number/year 176 49
Seed lots rejected % 8% 3%
Wheat seed produced (Clean Seed-Net) Tons/ha 2325 1547

101
Table A10.10: Improved Seed Enterprise - Production Model for Foundation Wheat Seed
ISE Level Analysis Unit WOP WP
Foundation Seed Production Tons 241 67
Field Level
Wheat area planted with Breeder Seed Ha 130 21
Seed rate Kg/ha 125 125
Breeder Seeds Used Tons/year 16 3
Wheat seed fields rejected % 12% 5%
Average Wheat Productivity (Raw seed/Gross) Tons/ha 2.55 3.75
Wheat Seed Produced (Raw seed/Gross)
Potential Tons/year 333 78
Actual Tons/Year 295 74
ISE Level
Wheat Seed Produced/Procured (Raw seed/Gross) Tons/Year 295 74
Proportion of wheat seeds rejected % 16% 8%
Cleaned wheat seed produced Tons/Year 247 68
Lab Level
Seed lots tested Number/year 77 12
Seed lots rejected % 3% 2%
Wheat seed produced (Clean Seed-Net) Tons/ha 241 67

Data sources: FAO Variety and Seed Industry Development Project Progress Report, Dec 2011; National Seed Board- Seed Testing Laboratory
Database; and ISIDSP Component-A on Seed Draft Report, July 2012. Reference Years 2007-11.

102
Table A10.11: Impact Summary of an Efficient Seed Production System

Unit WOP WP Unit WOP WP


Certified Seed Production Tons/Year 30000 30000 Certified Seed Production Tons/Year 30000 30000
Efficiency Measures Resource Needed
PSE level PSE level
Wheat Productivity t/ha 2.7 3.3 Irrigated land area ha 18601 12379
Seed Rejection/Loss Rate % 40% 27% RS requirements t/year 2325 1547
Seed Multiplication Rate Ratio 12.9 19

ISE level for RS ISE level for RS


Wheat Productivity t/ha 2.5 3.6 Irrigated land area ha 1931 535
Seed Rejection/Loss Rate % 52% 20% FS requirements t/year 241 67
Seed Multiplication Rate Ratio 9.6 23.1

ISE level for FS ISE level for FS


Wheat Productivity t/ha 2.6 3.8 Irrigated land area ha 130 21
Seed Rejection/Loss Rate % 28% 14% BS requirements t/year 16 3
Seed Multiplication Rate Ratio 14.8 25.7

Aggregated with area as the weight Unit WOP WP Aggregated Unit WOP WP

Wheat Seed Productivity (CS/RS/BS) t/ha 2.7 3.3 Irrigated Land Area Ha 20663 12935
Seed Rejection/Loss Rate % 41% 26% Public Farm Land Area Ha 710 342
Seed Multiplication Rate % 12.6 19.6 Private Farm Land Area Ha 19953 12593
BS/FS/RS requirements t/year 2583 1617

103
Annex 11: Documents in Project Files
AFGHANISTAN: Afghanistan Agricultural Inputs Project

1. Pest and Pesticide Management Plan (PMP)

2. Environmental and Social Management Framework (ESMF)

3. Integrated Safeguards Data Sheet (ISDS - appraisal)

4. Project Implementation Plan (PIP) including Financial Management Manual, Procurement


Manual, HR Manual, Operations Manual

5. Procurement Plan (18 months)

6. Detailed project budget (5 years)

7. Detailed institutional assessments of ARIA, ISE, PPQD and FQCAID

8. Training Manual

104
Annex 12: Country at a Glance
AFGHANISTAN: Afghanistan Agricultural Inputs Project

105
Annex 13: Map
AFGHANISTAN: Afghanistan Agricultural Inputs Project

106

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