DATA SHEET

Republic o f Taj ikistan Land Registrat ion and Cadastral System for Sustainable Agr icu l ture

Date: June 12, 2009 Country: Republic o f Tajikistan

System for Sustainable Agriculture

Task Team Leader: Jessica Mo t t Sector Manager: John Kellenberg

Environmental category: B

Responsible agency: Project Management Unit in Agency for Land Management, Geodesy, and

Board approved X RVP approved -

Does the restructured Project require any exceptions to Bank policies? Have these been approved by Bank management? I s approval for any policy exception sought from the Board?

lrYes Yes -No xNo

I F Y e s xNo I

Revised project development objective/outcomes The revised Development Objective i s to expand farmland restructuring activities which were initiated under the Farm Privatization Support Project to enable more rural people to become independent farmers and take management decisions in response to market forces.

The revised outcomes include 0

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Does the restructured project trigger any new safeguard policies? No.

37,500 land use certificates (reduction from 75,000) issued for family farms during the project period in accordance with agreed standards. 50% o f rural households (reduction from 75% and reworded) in 38 raions have at least one member well informed about land use rights and farmland restructuring processes. Rural people perceive that economic status in family farms exceeds that o f un-restructured farms in comparable agro-ecological zones.

Revised Financing Plan (US$ million.) Source Local Foreign Total

Borrower IBRD/IDA Others

0.07 6.40 0.25

0.00 3.60 0.00

0.07 10.00 0.25

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Introductory Statement

1. This Project Paper seeks the approval o f the Executive Directors to introduce the following changes in the Tajikistan Land Registration and Cadastral System for Sustainable Agriculture Project (P089566) and accompanying amendments to the Project’s legal documents. The proposed restructuring supports mid-term review adjustments to the project design and reflects other changes in terminology, implementation arrangements, and specific activities which have been informally adopted since Project approval. The revisions include the following elements : 0 Use o f updated terminology for the Project Development Objective and activity descriptions; 0 Revision o f the project results targets and project implementation period so that they

realistically reflect political and technical constraints; 0 Update o f the Project’s implementation and procurement arrangements; 0 Revision o f the detailed description o f land policy and environmental land management

activities, and associated refinement o f the environmental management framework (EMF); 0 Reduction in the scope o f the Pest Management Plan and i ts incorporation into the EMF; 0 Adjustment o f the area covered by Project activities; and 0 Update o f costs and financing allocations.

Project Background and Reasons for Restructuring

2. (PDO) in the Project in the Project Appraisal Document (PAD) was to expand farm privatization through a repeater project to enable more rural people to become independent farmers and take management decisions in response to market forces, by providing them secure land use rights certificates distributed in a transparent and fair manner, and providing essential complementary support services. land registration; (b) farm information and irrigation support; (c) project management and coordination; and (d) policy development. The total project cost i s estimated at US$10.6 mil l ion o f which Special Drawing Rights (SDR) 6.8 mil l ion (US$lO mil l ion equivalent in 2005) i s financed by IDA. IDA has financed 100% o f all project expenditures including social @e., social security) charges except for other operating costs (the portion o f operating costs other than these charges), which have been financed at 90%. The IDA Grant was approved by the Board in April 2 1 , 2005 and became effective October 10,2005.

Original Project Design and Approval, The original Project Development Objective

The original Project had four components: (a) farmland privatization and

3. Adjustments During Initial Implementation. Immediately after Board approval through mid 2006, the task team, in response to Government requests and discussions, informally agreed to several changes in terminology, implementation arrangements, specific activities within components, and changes to the project area. These changes differ from details described in the PAD and, in some cases, the Development Grant Agreement (DGA). These revisions were documented in aide memoires submitted to the Government by Bank staff, and Implementation

’ The Development Grant Agreement (DGA) had a simpler wording for the DO: “to assist the Recipient to expand farm privatization activities under the Farm Privatization Support Project by providing private individuals or groups of farmers with secure land use right certijkates and with essential complementary support services”. The PAD and DGA DOs were the same in substance. Project discussions and documents have mainly used the PAD version o f the DO.

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Status Reports to Bank management, but until now have not been reflected in any formal project restructuring. These initial changes included:

Use o f updated terminology for the Project, including replacing the term “farm privatization” with “farmland restructuring”.2 Change o f the Project Management Unit (PMU) from the P M U which handled the Farm Privatization Support Project and i s housed in the Ministry o f Agriculture building, to a new P M U physically located within the Agency for Land Management, Geodesy and Cartography (ALGC), in response to Government’s request. Redirection o f the policy component budget to support cotton debt analysis, in response to a request by government, and increased concerns about demands for resolution o f cotton debt prior to farmland re~tructuring.~ Removing project support for the purchase o f laboratory equipment for pest management research, because the government had not established arrangements to sustainably finance the operation o f this equipment. With the dissolution o f the Farm Information and Advisory Service (FIAS), awareness and training programs on farmland restructuring are being contracted to non-government organizations (NGOs) as consultancies. Update o f the description o f the Project area to reflect the adjusted l i s t o f Project r a i ~ n s . ~ Expansion o f the resources devoted to mapping to include more extensive development o f a new, more transparent and accessible coordinate system for base maps and cadastral plans.

4. Problem Status andAction Plan. On June 30,2008 the PDO and the implementation progress ratings were downgraded to moderately unsatisfactory, mainly because only 3 5 7 land use certificates had been issued at that time, compared to the original total Project target o f 75,000. As recognized in the PAD, this Project inherently involved substantial risks o f opposition by vested interests who feared that the Project would curtail their opportunities for rent-seeking, especially in cotton growing areas. This opposition proved to be even stronger than originally anticipated, but recently economic realities and donor consensus are now helping to convince the government that agricultural growth requires farmland restructuring. The September 2008 Mid-Term Review (MTR) identified the main constraints and developed an action plan to raise project performance to a satisfactory level. This action plan included issuance o f key directives from government and then subsequent implementation o f these directives by April 2009. These directives include (a) instructions to local authorities and ALGC that they cooperate in project activities within specific time-bound parameters, (b) recognition o f the new coordinate system as a basis for the legal cadastre, and (c) delegation o f authority so that newly equipped and trained Regional Land Cadastre Centers (RLCCs) can better use their increased capacity to produce certificates. The MTR also included detailed consideration o f

“Farm privatization” caused confusion because the farms have been nominally privatized but with l i t t le change in the farm structure and management arrangements. Most farms still need to be restructured into independent family farms in order for the farmers to be able to take management decisions in response to market forces. Other updates in terminology include the reference to Regional Land Cadastre Centers (instead o f Regional Land Registration Offices) and definition of “UPN” to mean “unique parcel number”.

The original design envisaged support for a separate policy unit which would work on a broad range of policy topics.

In response to the needs of other Bank-financed projects (the Cotton Sector Recovery Project, and the Ferghana Valley Water Resource Management Project), some raions (districts) have been added, with some compensatory exclusion o f other raions. This has increased the number o f raions with substantial irrigated lowlands from to 7 to17. See Annex 4 for details.

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changes in Project activities, results targets, timeframes, costs and financing. Bank supervision has verified satisfactory progress with the agreed action plan. Government directives have addressed key organizational bottlenecks to land use certificate issuance and their implementation has begun. The pace o f farmland restructuring i s now accelerating, with a cumulative total o f 2488 land use certificates issued as o f April 30,2009, and arrangements for further acceleration have been initiated.

5. has taken into account the adjustments which had already been made since Project approval, and also other design revisions that would be required for the Project to achieve i t s PDO. These additional revisions include:

MTR andproject restructuring revisions. The MTR and subsequent Bank supervision

Revising Project results targets so that they realistically reflect political and technical constraints that were not fully anticipated during the original project design. This also requires extension o f the Project completion and Closing Dates, so that Project activities could continue through September 201 1 in order to meet the revised targets. The revised results targets also take into account the adjustments in Project activities. Reorienting and renaming the integrated pest management (IPM) and demonstration subcomponent to focus on building knowledge and sk i l ls in the broader environmental land management agenda (including IPM) for restructured farms. Refinement o f the environmental management framework to reflect the updated LRCSP design. Refinement o f the procurement arrangements to more explicitly specify arrangements for contracting self-financed government agencies for selected project activities (concerning establishment o f new geodetic coordinate system, orthophoto processing, and land certificate processing and production), which cannot be currently undertaken by the private sector in the Tajikistan context. This also includes contracting arrangements for cadastre survey and demarcation. Updating component costs and financing allocations, but without change in the total SDR value o f the IDA grant amount.

Proposed Changes and Expected Outcomes

6. formally restructure the Project and amend the DGA, to reflect the MTR and other agreed revisions.

Government Request. On April 24,2009, the Ministry o f Finance sent a request to

7. terminology and ensure greater clarity, the D O i s reworded as follows: to expand farmland restructuring activities which were initiated under the Farm Privatization Support Project to enable more rural people to become independent farmers and take management decisions in response to market forces. Although the component structure has been retained, details o f the project description now more accurately reflect actual activities and plans. See Annex 1 for summary.

Revised Development Objective and Description. To reflect the updated Project

This rewording updates the original PAD version o f the DO. I t also transfers to the project description some o f the original PAD and DGA DO text which referred project activities rather than intended impacts. The revision does not change the actual substance o f the DO.

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Outcomes. The revised outcome targets are the following: 37,500 land use certificates (reduction from 75,000) issued for family fa rms during the project period in accordance with agreed standards. 50% o f rural households (reduction from 75% and reworded) in 38 raions have at least one member well informed about land use rights and farmland restructuring processes, and have increased knowledge about farm management. Rural people perceive that economic status in family farms exceeds that o f un-restructured farms in comparable agro-ecological zones.

Intermediate Results. The revised intermediate result targets comprise Survey and mapping capacity and spatial databases established. Land use certificate applications submitted in the Project area cover 360,000 shareholders. 75,000 people trained on land use rights and the process o f restructuring farms into family and individual holdings. 120 ha cotton demonstrations initiated on family farms and visited by 2242 people, and improved seeds distributed to 161 ha on family farms. 5,000 ha o f agricultural lands (reduced from 1 0,0006) restored through-farm irrigation and water management rehabilitation, and covered by functioning water user organizations. 720 local specialists receive training in environmental land management. Debt assessment completed and influenced the cotton project design and policy dialogue.

10. Explanation for Changes in Results Framework. The reductions from original targets largely reflect a more realistic understanding o f the political and economic constraints to farmland restructuring, and the corresponding reductions in project scope and increases in unit costs. Even with these reductions, the Project i s s t i l l justified because o f the importance o f farmland restructuring to water user associations (and associated irrigation investments), cotton development, land administration, agricultural growth, and many other development objectives. The reduction in irrigation reflects the proportionate decrease in Project financing allocated to that subcomponent. The results framework has also been simplified and reworded to increase clarity and to ensure reliable measurement and reasonable attribution within the Project period. The revised results framework i s attached in Annex 2.

1 1. although, as mentioned above, there are some changes in the scope and nature o f detailed activities. In some cases, the component names have been revised to reflect the updated terminology and revised scope o f detailed activities. Annex 1 provides an updated description o f activities by component and notes key changes from the original project design.

12. Project Area and Geographical Coverage. As mentioned above, the specific raions are different from the original design in order to include the areas o f other Bank-financed projects. The original Project design had inconsistent information on the number o f raions included in the project area. In the revised design, the Project area will cover 38 raions. However, unlike the

Project Components. The project component structure remains basically the same

Reduction in irrigation target i s due to delays in farmland restructuring, which i s a prerequisite for on-farm irrigation, and also due to the need to reallocate project funding in order to maximize results for land use certificates.

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original design, the farmland restructuring will not necessarily cover 100% o f the farms in a given raion. The reduced targets for total certificates and beneficiaries take into account this partial coverage. See Annex 3.

13. Project Time Period. The revised project design envisages Project completion by September 30, 201 1 (instead o f March 3 1,20 lo), and Project closing by March 3 1, 20 12 (instead o f September 30,201 1). The six months between completion and closing takes into account ongoing risks and builds incentives for cost-effective project expenditures, while retaining a focus on timely achievement o f results targets. The extended project period reflects the project history as well as a more realistic assessment o f future implementation capacity. Effectiveness on October 1 1,2005 took place six months after the Board presentation. The need for an extension o f the Closing Date stems largely from establishment o f a new PMU. Li t t le project implementation and expenditure took place until mid-2007 due to weak technical and procurement capacity. The main accomplishments in 2006 and 2007 were the LRCSP support for the cotton debt analysis and the improved cotton seed demonstrations, for which follow-up i s now supported under the World Bank-financed Cotton Sector Recovery Project.

14. Project Management Unit. The Project i s s t i l l implemented by the Recipient through i t s PMU. However, as mentioned above, a new P M U which i s closely associated with the ALGC has been established. This has helped to “mainstream” the Project with the relevant government agency and strengthen prospects for institutional ownership and sustainability, but also contributed to significant initial implementation delays, increased costs, and other challenges in establishing fiduciary and management capacity in a new unit.

15. New Coordinate System for National Cadastre, and Delegation to the RLCCs. The DGA will include covenants that oblige the recipient to take into account directives issued in February 2009 and described in paragraph 4 above.

Consistency with Directives on Cooperation of Local Authorities and the ALGC, Use of

16. Partnershigs. LRCSP has established constructive partnerships with a range o f donor- financed projects, including the EU TACIS support for geodesy and photogrammetry, the Sida support on land registration, the USAID Land Reform Project, the F A O K I D A Land Strategy support, and others. There are mutual synergies between the LRCSP financing o f government investments and operations, and the donor support in technical assistance and training. Even though these partnerships are not formal co-financing for LRCSP, their contributions are being taken into account in the design o f the Project restructuring.

17. carrying out survey, mapping and certificate issuance activities and explicitly refers to these activities as technical services (Le., services other than consultants’ services). The legal amendment includes explicit reference to using Force Account (FA) procedures for the recruitment o f the Project Research Institute (Fazo) which undertakes the government’s geodesy and mapping work and i s installing the geodetic coordinates and carry out orthophotogrammetry. The updated project design also includes a provision for the Project to contract individual “surveyors” based on Section 3.2 1 “Service Delivery Contractors” o f the Consultant Guidelines. If any o f the surveyors competing for a contract i s a government official or a civi l servant, then

Procurement. The updated DGA now includes explicit text about contracting for

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(s)he shall be meeting eligibility requirement in Section 1.1 1 (d) o f the Consultant Guidelines. The restructured Project would continue to use all other existing arrangements for procurement including applying the same procurement and consultants’ guidelines. Procurement has been rated as moderately unsatisfactory due to a vacancy in the procurement specialist position. However, this rating i s expected to improve because a replacement has recently been contracted. In spite o f staff turnover, the quality o f procurement planning and status reporting has improved during the past year.

18. Financial Management. The restructured Project would continue to use existing financial management arrangements. Due to staff turnover during the past year and problems with the financial management software, financial management i s currently rated as moderately unsatisfactory.- However, a contract to resolve the software problems i s being processed. Also all the financial management staff positions are now filled. Thus this rating i s expected to improve within the next six months, when the accounting software i s expected to be fully operational and after staff have been trained and had more time to more fully establish good financial management performance.

19. Project Costs. In retrospect, the technical costs o f the farmland restructuring component were underestimated at appraisal. They did not contain adequate provision for the establishment o f a new geodetic network, for the satellite imagery, for the photogrammetric equipment, and for the RLCCs. These inputs directly contribute to the farmland restructuring, and will also be useful for other purposes outside the scope o f the Project. Also, the marginal unit costs o f farmland restructuring (e.g. , community consultation and collection o f applications, survey and demarcation, certificate processing and production, and issuance) per land use certificate are now estimated at an average o f US$49 per certificate over the entire project period, compared to an average o f US$27.50 estimated originally. The specific unit costs for any given certificate will vary significantly, depending on location (e.g., flat lands with orthophotos versus remote mountainous areas requiring more survey work) and a range o f other operational factors. The average cost estimate also assumes that marginal costs will decline over time, as the process becomes more and more efficient. Efforts will be made during implementation to reduce these marginal unit costs back down to an average o f US$22 per certificate by mid-201 1. To ensure attention to improving the efficiency o f farmland restructuring within the specific regional context, the marginal costs and the incremental number o f certificates for each RLCC will be explicitly monitored on a quarterly basis. The scope and corresponding costs o f the on-farm irrigation subcomponent and the environmental land management subcomponent have been reduced. The project management component costs are estimated to increase mainly due to an extra year o f project implementation, but also because additional staff and training were required for a new PMU. Significant contingencies are retained due to the potential fluctuation o f the SDWUS$ (and the fbture US$ equivalent value o f the IDA grant), the potential for a significant increase in project staff salaries, and other uncertainties. Annex 3 provides a summary o f original and revised estimates o f project costs by component.

20. had been disbursed. Financing allocations have been adjusted to take into account the revised scope and costs o f project components. The reduced support for on-farm irrigation reduces the amount o f beneficiary contribution. Also, in response to the government’s request and consistent

Financing and Disbursement Allocations. As o f June 1 1 , 2009,4 1 % o f the IDA Credit

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with the Country Financing Parameters, disbursement allocations are consolidated to ease Project administration. This includes an increase in the percentage for operating costs from 90% to 100% to address the current fiscal crisis. All other eligible Project costs are already financed at 100%. The allocation for grants to water user associations (financed at 100% o f grants disbursed) will remain as a separate category, and a new category will be added for all other eligible project expenditures, with 100% financing. The new category 7 will become effective upon Government countersigning o f the DGA amendment. Sees Annex 3 for specific numbers.

2 1. revised results framework and other aspects o f the project design. It now includes a section which monitors compliance o f raions and others in the agreed time-bound performance standards. As mentioned above, the marginal unit costs o f farmland restructuring will be monitored for each RLCC. The updated Project design retains a provision for a follow-up project impact survey, which will be analyzed in comparison with the 2007 baseline survey on the Knowledge Attitudes, and Practices o f Farmers Concerning Land Use Rights and Farmland Restructuring.

Project Monitoring. The Project progress report formats have been updated to reflect the

Analysis

22. Justification of Cost Revisions. The higher unit costs o f the revised Project design and corresponding reductions in scope o f activities that are more peripheral to the D O are well justified for a number o f reasons. The geodetic network, base orthophotos, and increased staff capacity, even at higher costs than originally anticipated, have potential future benefits across a number o f sectors, including infrastructure, land administration, and natural resource management. The marginal unit costs per land use certificate may also be significantly higher but are s t i l l worthwhile, given the fundamental importance o f farmland restructuring to enable farmers to make management decisions free o f government interference and directives and the associated impacts on agricultural growth, and the viability o f a wide range o f development investments. They also s t i l l fit within international norms, which vary widely. The establishment o f a new P M U within the implementing agency, although more costly and a major contributor to implementation delays, has strengthened institutional ownership. The Cotton Sector Recovery Project (CSRP), which started after LRCSP, has now taken over the cotton debt resolution agenda and the improved cotton seed improvement activities. In addition, as part o f i t s own restructuring CSRP will increase i ts provision o f support to pest management, since that i s which i s more central to i t s Project focus. Regarding the redirection o f the LRCSP policy support, other donors are addressing many aspects o f the broader land agenda, especially land policy and legal reform.8

’ Al l applications for the new category 7 will need to be dated after the date o f countersignature, but these applications can include expenses that have been incurred and paid prior to the date o f countersignature. N o disbursement will be allowed under categories 1,2,3,4, and 6 after the date o f countersignature.

The USAID Land Reform Project provides support to legal reform, institutional analysis, legal aid, and other matters, and has directly partnered with LRCSP in the farmer survey and in publicity. Sida i s providing support on land registration. FAOKIDA has provided support on land strategy, gender issues in the land agenda, and other matters. EU Tacis has provided technical assistance in photogrammetry and geodesy, and agricultural policy. The IFC Housing Finance Program i s supporting legal reform and professional training.

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23. safeguard categories o f the Project or trigger new safeguard policies. However, consistent with the change in project activities, the Environmental Management Framework (EMF) has been updated through an EMF Addendum (attached as Annex 5). As explained in Annex 5, parts o f the original Pest Management Plan (PMP), which was a description o f the original I P M and demonstration subcomponent, are no longer relevant to the revised project design. Pest management will therefore be handled as an integral part o f the EMF rather than through a separate PMP. Board approval o f the LRCSP restructuring, and the associated revised results and timeframe, will improve the prospects for Project success (enabling improvement in Project status ratings). LRCSP restructuring does not involve any exceptions to Bank policies.

Safeguards and other Bank Policies. The Project restructuring does not affect the

Benefits and R i s k s

24. country level risks due to Tajikistan’s fragile and deteriorating macroeconomic and fiscal conditions, serious problems in the banking system, problematic reputation for governance, and weak implementation capacity. The LRCSP directly addresses land use rights, one o f the key underlying problems associated with the country economic issues. The high level o f IDA financing for the Project helps to insulate it from fiscal problems. However, government limits on project staff salaries has been, and i s likely to continue to be a significant issue, which the Bank has been addressing through the Country Portfolio Review process. Efficient financial management and processing o f withdrawals should help address the risk o f a potential loss o f project funds as a result o f commercial bank failure. Governance i s being addressed through increased transparency, good communication and strict compliance with the Bank’s fiduciary guidelines.

Country Risks. Any Bank-financed project in Tajikistan faces significant inherent

25. Sector Policy and Implementation Risks. The original Project design already identified several key risks correctly and rated many o f them as significant. The design o f the restructured Project takes into account implementation experience and further strengthens risk mitigation.

The more realistic results targets and the February 2009 directives on raion cooperation and other matters directly addressed the fact that opposition during 2007 and 2008 by vested interests to farmland restructuring, was higher than anticipated. The LRCSP policy support for debt analysis in 2006-2007 directly addressed the issue of cotton related debts being used as an excuse to discourage farmland restructuring. This analysis raised serious questions about the fairness and legality o f this debt. The Government i s currently developing arrangements to wr i te this debt off. In the future, increased collaboration with initiatives supported by other donors should help mitigate this risk by ensuring that the write-off i s implemented and farmers are not charged for these old debts. The LRCSP’s initiatives on the legal and operational reform in the future need to address issues such as social (i-e., social security) taxes (currently levied at a flat rate per certificate basis, regardless o f production potential) and purchase o f trees which are discouraging rural famil ies from applying for their own land use certificates. Although the inclusion o f a higher proportion o f cotton growing lands in the LRCSP area has increased risks associated with the vested interests in cotton, the associated pressures from these projects on local authorities to proceed with farmland restructuring helps to mitigate

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this risk. The additional. complementary support from these projects and the inclusion o f more irrigated lowlands with higher productivity potential also increases the extent o f expected economic and poverty reduction benefits. For more than five years, the government has consistently supported farmland restructuring in i ts Poverty Reduction Support Plans and National Strategies but implementation has been limited. LRCSP i s now supporting tangible implementation in more efficient and consistent ways. A new international farmland restructuring advisor financed by the Project will help project implementing partners to develop flexible procedures which take into account the range o f situations encountered at the field level. These include partial restructuring with uneven allocations o f land as well as regularizing farms which are already operating at the field level but which do not yet have documents. The government and donor project teams have occasionally proposed legal changes which had the potential, if enacted, to undermine land use rights and the farmland restructuring process. The World Bank actively monitors relevant legal proposals and communicates concerns. This practice, combined with increased P M U capacity, i s expected to prevent the enactment o f legal reforms which could significantly and adversely affect the achievement o f the PDO. A significant risk remains that the Government will not promptly implement other reforms to eliminate government interference in farm management decisions (e. g., what to grow, from whom to purchase inputs, etc.) in a fully meaningful way. This interference i s partly a legacy o f the Soviet command and control economy, and has been continued due to strong vested interests. The continuation o f this interference would limit the ability o f LRCSP to achieve i t s full potential benefits. Nevertheless, based on the experience o f the Farm Privatization Support Project, farmland restructuring under LRCSP i s s t i l l expected to result in incremental agricultural growth benefits, especially when associated with subsequent investment in on-farm irrigation and water user associations. Furthermore, progress in farmland restructuring and tenure rights i s expected to help increase the political support for the other reforms which would eliminate inappropriate government interference over the longer term.

26. Fiduciary Risks. The 2008 country fiduciary review rated the financial management and procurement performance and capacity as unsatisfactory. The MTR action plan included steps to improve fiduciary capacity and performance. Government has made a good faith effort to respond to the fiduciary review findings in a responsible and appropriate way. Staff turnover after the MTR exacerbated the situation in the short term, but in spite o f this, the Project has improved in the performance o f i t s internal financial controls, budgeting, and procurement planning. More recently the P M U has largely completed the capacity building steps, and the remaining steps are scheduled. The P M U has recently hired the full complement o f financial management staff and has contracted a well-qualified procurement specialist. The P M U financial staff have participated in Bank training and an international financial management advisor i s expected to provide additional guidance. The fiduciary r isks are high but deemed acceptable. Fiduciary compliance will require very close continuing supervision in the short term.

27. integration into a market economy and associated economic growth, and on a range o f sectors

Benefits. Farmland restructuring will have wide ranging impacts on poverty reduction,

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(agriculture, private sector development, public sector management, banking, environmental management, etc.). Within agriculture, it i s a particularly important prerequisite for irrigation investments, since experience in Tajikistan has shown that farmland restructuring i s essential for wel l functioning water user groups that need to manage on-farm irrigation systems. Within Europe and Central Asian countries in transition, experience demonstrates that farmland restructuring also normally precedes the establishment o f a national land and real estate registration system and the associated benefits o f an immovable property market.

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Annex 1 Revised Project Design

Revised Project Design Development Objective: The objective of the Project i s to assist the Recipient to expand farmland restructuring activities under the Farm Privatization Support Project to enable more rural people to become independent farmers and take management decisions in response to market forces.

Components Part A - Farmland Restructuring and Registration o f Land Use Rights: (a) enhance and expand farmland restructuring activities and regularize land use rights, and to issue and register land use right certificates, in a systematic, fair, and transparent way; (b) build capacity for farmland restructuring and the registration of land use rights by establishing and supporting seven RLCCs; and (c) develop the national cadastre and support issuance and registration of land use certificates by establishing survey and mapping capacity and spatial databases. Part B - Information for Farmers and Irrigation Sumort 1. Information for Farmers: educate the population o f participating regions on the farmland restructuring process, land use rights, and independent farm management practices. 2. On-farm Irrigation and Water Management: Support to W A S and farmers’ organizations for on-farm irrigation and water management systems rehabilitation, including the retrofitting required due to the smaller size of farms, and strengthening their capacity to implement these activities. 3. Environmental Land Management: Support (a) the improvement of cotton seed demonstrations and the associated dissemination o f associated information, and (b) capacity-building among local agricultural and environmental specialists to advise and train farmers in assessment and monitoring of environmental conditions and in implementation o f improved agro-ecological practices (including IPM) for the enhancement o f sustainable productivity.

Part C - Proiect Management and Coordination: Strengthen the Recipient’s capacity for Project management, monitoring and evaluation, including audit, procurement and financial management activities. Part D - Policv Development: Strengthen the Recipient’s policy capacity, including: (a) with regard to analysis o f farm debts in cotton growing areas, and (b) collaboration with selected policy and legal reform initiatives in agriculture, land administration, water management and farmland restructuring.

Implementation Arrangements New PMU established which i s closely associated with the ALGC

ALGC

More explicit reference to direct contracting o f Fazo for geodetic and orthophotogrammetry activities Output-based contracts being used for some o f the survey and demarcation activities

Consultant contracts being used to carry out most awareness and training programs A Project Implement Unit under the PMU carried out the farm debt analysis, and PMU staff and consultants collaborate in selected policy and legal reforms

Key changes from oripinal design

“Farmland restructuring” replaces “farm privatization”. Some text moved from DO to description of components.

Updates name o f RLCC. Includes more explicit reference establishment of survey and mapping capacity and spatial databases. Clarifies that registration activities are focused on registration of land use rights.

Deletes reference to Farm Information Advisory Service which i s no longer functional.

No change in type o f activities.

Deletes pest management research equipment and other inputs (for details see Annex 5). Broadens capacity building and training of local specialists from specific IPM focus to broader area o f environmental land management changes subcomponent name from Integrated Pest Management and Demonstrations to reflect revised focus of activities. N o change in type o f activities.

Deletes reference to Farm Privatization Policy Office which was not established. Adds explicit reference to analysis of farm debts.

LRCSP i s not being managed by the PMU which handled the Farm Privatization Support Project ALGC took over functions o f State Land Committee as a result o f the 2006 government reorganization Fazo’s role was less prominent in original project design RLCCs wil l not directly cany out all survey and demarcation activities related to farmland restructuring Farm Information Advisory Service i s no longer functioning and therefore not available for this task Farm Privatization Policy Office was not established

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Annex 2 Project Results

Updated PDO: to expand farmland restructuring to enable more rural people to become independent farmers and take management decisions in response to market forces

Outcome Indicator

Number of certificates issued to family farms’’ during the project period in accordance with agreed standards”, as an indicator for farmland restructuring and farmer independence Percent o f rural households in 38 raions that have at least one member who i s well informed about land use rights and farmland restructuring processes, and has increased knowledge about farm management, as an indicator of farmer independence and farmer ability to take management decisions” Rural people perceive that economic status in family farms exceeds that o f un- restructured farms in comparable agroecological zones, as a proxy to measure farmers becoming more market oriented.18

Pre Project Baseline (2006) 0

5 Yo

Not ’

explicitly measured 19

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10

I 1

12

13

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I S

16

17

18

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March 2009 Actual

2141” (2488 by April 2009)

2007 baseline survey indicates significant differences.20 2008 studies provide further evidence”

Sept 2007 PAD Targee

20,000

30% (did not include increased knowledg e about farm managem ent)

Not estimated

Sept 2010 PAD Target

75,000

75% (did not include increased knowledge about farm managemen t)

Not estimated

Sept 2009 Target (MTR y;;$cm)

20% (roughly estimated based on awareness and training program coverage and evaluations)

Anecdotal findings during field visits and surveys financed by others verify differences

Sept 2010 Target (MTR Revision)

18000

33% (roughly estimated based on awareness and training program coverage and evaluations)

Anecdotal finding during field visits and surveys financed by others verify differences

Sept 2011 Target (MTR Revision)

37,50014

50%” (as assessed by impact evaluation)

Final survey findings verify significant differences

September 2007 i s used to indicate the original timeframe for the mid-term targets.

“family farms” refers to farms managed by no more than 5 nuclear families or no more than 25 adult shareholders.

“agreed standards” refers to restructuring resulting in family farms through a process which i s socially inclusive, i s transparent, i s regarded as fair by local inhabitants and reflects good conflict management practice, takes into account current land use (rather than prescribed land use based on out o f date maps and government instructions) and i s increasingly efficient.

Includes 504 certificates produced with funding from Ferghana Valley Water Resource Management Project, under guidance from LRCSP staff.

Cumulative total o f at least 1000 by 30 Dec 2008, 1500 by 3 1 Mar 2009, and 2,250 by 30 June 2009.

Reduced from original to take into account political and technical constraints.

Knowledge o f women and vulnerable people will also be assessed to verify social inclusion.

This estimate i s not based on rigorous measurement but rather i s an extrapolation on the progress since the 10% level which was estimated based on findings of the 2007 survey, taking into account awareness and training program coverage and evaluations.

Reduced from original to take into account political and technical constraints.

Findings from baseline survey indicate that earlier indicator of US$/ha agricultural output i s not feasible to measure and directly attribute as farmland restructuring impact. Hence since 2007 perceptions about changes in economic status have been used instead.

Not explicitly measured but anecdotal evidence indicates that differences are significant.

For example, percentage ofjoint stock company farms, collective dekhan farms, and family/individual dekhan farms with improved economic status were 34.9%, 55.6%, and 62.2%/60.0% respectively in 2007 baseline survey.

12

Intermediate Indicator for Each Component

Sept 2010 PAD Target

750,000 (implicit)

7

Not specified

75,000

10,000

Component A: (i) # shareholders covered by applications made in project areas (cumulative)22 Component A: (ii) number of Regional Land Cadastre Centers established Component A: (iii) Survey and mapping capacity and spatial databases established and accessible2’

Sept 2009 Target (MTR Revision) 110,000

7

Geodetic network completed and being used for legal cadastre; and orthophotos covering 6,000 km2

36,000

0

Component B 1 : rural people trained on land use rights and the process of restructuring farms into family and individual holdings ” Component B2: # ha of agricultural lands restored through-farm irrigation and water management rehabilitation, and covered by functioning water user organizations Component B3 pre-MTR: ti ha o f improved cotton seed demonstrated on fields D f household farms (cumulative)

- 21

22

23

21

25

26

27

Pre Project Baseline

0

4

Old secret geodetic network and almost no digital maps

0 (under this project)

0

0

March 2009 Actual

39,600

7 established by December 2007 Geodetic network coordinates being installed, skill acquisition initiated and and new coordinates recognized for legal cadastre.24 52,872

026 (under this project)

BY September 2008 MTR, 120ha2’

Sept 2008 PAD Target

Not available

7

Not specified

45,000

1,000

250 ha

Sept 2010 Target (MTR Revision)

2 5 0,O 0 0

Orthophotos cover an additional 4,000 km2; 1.e. a cumulative total of 10,000 km2

50,000

2.500

120 ha

Sept 2011 Target (MTR Revision)

360,000

7

New coordinates and 10,000 km2 orthophotos used for legal, cadastre and other purposes; and new geodetic network accessible and in wide use 75,000

5,000

120 ha

See ECRAO Food Security Program - Phase 11, The Economic Effects of Land Reform in Taiikistan, July, 2008, and FA0 Regional Office for Europe and Central Asia, Taiikistan - December 2008 Cotton Farmer Survev. February 2009.

This indicator replaces original indicator on number of former collective and state farms (CSF) covered, since CSF coverage i s partial under revised project design. Project will also monitor provision o f data to facilitate state registration of immovable property.

This result was implicit in the original project design but not reflected in the original results agreement. Its achievement i s benefiting not only farmland restructuring but a range o f other sectors include energy and transport infrastructure.

Modern zero and first order coordinates for geodetic network established nationwide and second order coordinates being established. 49 specialists have acquired new skills in GPS, GIS, and digital photogrametry. A Februry 8,2009 ALCG resolution officially adopts the new coordinate system for the legal cadastre.

Project will also monitor farm management training, which i s expected to reach at least 15,000 farmers.

Subcomponent will begin only after “deep” farmland restructuring has been completed in at least 70% o f a command area of an irrigation system, with each farm resulting from the restructuring held by individuals or families who have their own certificates.

These demonstrations were visited by 2242 farmers, and improved seeds were distributed to 160 ha.

13

Intermediate Indicator for Each Component

Sept 2009 Target (MTR

Component B3 post MTR: # o f local specialists receiving environmental land management training (cumulative) Component D: Policy analysis conducted**

Sept 2010 Target (MTR Revision)

Pre Project Baseline

0

No policy unit or work on post- conflict land tenure issues

March 2009 Actual

0

BY September 2008 MTR: Debt assessment completed and influenced cotton project design and policy dialogue

Sept 2008 PAD Target

Not available

Policy unit establishe d, 3 workshop

completed

action research underway

S

, and

Sept 2010 PAD Target

Not available

Training program completed, Action research on post- conflict land issues completed

Debt assessment completed and influenced cotton project design and policy dialogue19

assessment completed and influenced cotton project design and policy dialogue 3o

Sept 2011 Target (MTR Revision)

720

Debt assessment completed and influenced cotton project design and policy dialogue”.

28 Revised indicator reflect use of policy component hnds for cotton debt analysis rather than broader policy agenda that was originally envisaged.

However improved understanding of farmland restructuring policy issues evident from Component A support.

However, action initiated on farmland restructuring policy issues from Component A support

However, policy reforms on farmland restructuring policy issues evident from Component A support.

29

30

3’

14

Annex 3 Adjustment to Costs and Financing

Table 1: Project Costs by Component

roject componen

Project Financing Source 0 rig i n a I Estimate through March 2009

Actual Financing

IDA Grant 10.00 3.78

Government 0.10 0.7

Beneficiaries 0.50 0.00

Total 10.60 3.85

Table 2: Financing

Revised Estimate

1 0 . 0 0 ~ ~

0.07

0.25

10.32

32

' 33

Formerly the t i t le o f the subcomponent was Integrated ,Pest Management and Demonstrations.

Final actual US$ value o f the IDA financing i s likely to differ from original due to changes in SDR/US$ exchange rate.

15

Disbursement Allocations (US$ million)

Total

I Category

10.00 10.000

I Original I Revised Allocation I Percentage

16

Annex 4 List o f Project Raions

Khorog Regional Office: Kalaikhumb (Darvaz), Vanj, Rushan, Ishkashim, Shugnan, Roshtkala, Murgab

Gorno Badadhshan Cadastre zone and Khorog RLCC: Darvaz, Vanj, Rushan, Shugnan,

Notes: 0

0

0

Differences between the original and revised design are noted in italics Farm Privatization Support Project areas are indicated with underline Raions that include significant areas o f irrigated lowlands (including cotton) are indicated with highlighting

Other Changes in Geographic Coverage. The original Project design envisaged that the Project would fully cover 300 former collective and state farms (CSFs). In the revised design, the Project area will involve 3 8 raions, but farmland restructuring will not cover 100% o f the agricultural area. LRCSP will support the restructuring o f only portions o f former CSFs and only a portion o f all CSFs. The project work program i s now being defined in terms o f farms in their current partially restructured status, not the former CSF areas. This i s because many o f these former CSFs areas have already been partially restructured, although most are not yet divided into family parcels and do not yet support a market oriented incentive framework.

3 4 This l i s t i s based on the map in the PAD. The PAD text incorrectly referred to 36 raions, and included a table incorrectly listing only 34 raions. The DGA did not specify the project area.

17

Annex 5 Supplemental Addendum to the Environmental Management Framework

Background

The adjusted project design focuses on “environmental land management” (ELM) which will integrate pest management with other environmental concerns instead o f separately addressing “pest management” and “environmental management”. This approach will increase attention to address environmental r isks that may arise for newly independent farmers. Also a clear comparison o f environmental status between (a) larger farms which are only partially restructured and (b) smaller independent family farms where the restructuring process has been completed and where farmers have the rights and freedom to manage their land in response to market forces can provide an improved basis for assessing the environmental impact o f farmland restructuring.

For this purpose this addendum revises the Environmental Management Framework (EMF - vol. 1 o f the Environmental Assessment (EA)). The amended Development Grant Agreement will refer only to the EMF, not the Pest Management Plan (PMP - v01.2 o f the EA). As explained below, certain parts o f the PMP will remain applicable, but only as a part o f the EMF including this Addendum. This EMF addendum reflects the updated subcomponent workplan and budget which were developed during the MTR. This workplan i s based on the study, assessment and dissemination o f the environmentally sound good examples o f the agricultural practices o f local farmers in different agro-climatic conditions o f the project areas. The overall revised project design focuses mainly on addressing the potential environmental risks associated with farmland restructuring activities. However, in accordance with the original EMF, it also continues to address environmental compliance regarding on-farm irrigation investments. The revised project design excludes additional financial support for crop demonstration beyond what was financed through 2008. It also excludes investments in pest management research equipment. Neither crop demonstrations nor testing equipment are central to farmland restructuring and would be more appropriately supported under other projects which have a technical agricultural focus. Also, regarding the laboratory research equipment, currently there are no arrangements to ensure sustainable financing and use o f such equipment.

Environmental Management Framework

The EMF remains generally applicable with the following modifications: the scope (components, costs, etc.), institutional arrangements (time period, farmland restructuring process, allocation o f implementation responsibilities), project area, terminology, and other aspects o f the project design would be as described in this Project Paper, rather than the description in the original EMF. Subject to taking into account this revised project design, the EMF provisions direct impacts (irrigation and rehabilitation works and infrastructure rehabilitation) and the indirect impacts (tenure reform and water management) remain applicable. Portions o f the original EMF regarding Monitoring and Supervision are somewhat modified due to the revised project design. Wh i le the basic responsibilities o f the P M U environmental specialist will continue and will also include supervision o f the ELM

0

0

18

subcomponent, the specialist’s reporting and interactions with other agencies will be less intensive. Also, since the Farmer Information Advisory Service and Farmer Training Center are no longer functional, the training activities will be undertaken through consultant contracts, under the technical supervision o f the environmental specialist. The training activities will focus on those described under the revised ELM subcomponent design rather than those outlined in the original PMP. The original EMF matrix guidelines regarding infrastructure rehabilitation and irrigation activities (Tables I-A and I - C) remain fully applicable. The original EMF matrix guidelines regarding farm privatization, (Table I-B) included impacts related to land use which also remain applicable. However this matrix also focused on pest management issues and actions in accordance with the original Pest Management Plan. The revised project design has changed the actions as described in detail below.

Pest Management Plan

In both i t s original and revised design, the LRCSP did not include direct procurement or use o f pesticides, apart from very small applications associated with the improved cotton seed demonstrations. These demonstrations, which received project support initially but are not being further financed under the Project, have shown, inter alia, a way to decrease the use o f pesticides. There has always been, and continues to be, l i t t le reason to believe that there will be a major increase in pesticide use as a result o f the Project. Rather than a program to manage and mitigate harmful project impacts, the original PMP was a description o f a program to support and promote integrated pest management. Matrix 1 below l i s t s the original elements o f this program and the way they have been affected by project restructuring.

Original Project Design IPM training of 1000 raion environmental specialists

IPM block demonstrations, covering 5000 ha of family farms)

IPM Treatment Ag Equipment

Revised Project Design ELM (including IPM) training of at least 720 raion environmental specialists Demonstrations of improved cotton seed covering 120 ha of family farms (plus an additional 40 ha of larger farms). A l l other demonstrations dropped. ELM program includes activities to identify examples of good ELM practices on existing farmer’s fields and use them as training sites. Dropped

Explanation MTR found that the original project design did not give sufficient attention or resources to broader ELM agenda After finalization and approval of PMP, Government requested initial focus of demonstrations on improved cotton seed (which did contribute to reduce pesticide usage as well as improved productivity). MTR found IPM demonstrations overly ambitious and not essential for PDO, and use of existing good practice a more appropriate way to promote ,

good ELM by independent farmers.

Not necessary because IPM demonstrations were dropped. Use of existing farmer good practice examples wil l rely on farmer-financed equipment and ensure that IPM equipment i s financially feasible and cost-effective.

19

Original Project Design Laboratory equipment for pest management research, with operational costs covered by revolving fund based on repayment of pest treatment supported under an earlier Bank-financed

Revised Project Design Dropped

Explanation Revolving fund never established, so investment judged not sustainable. MTR also found this investment not essential for PDO.

project. IPM Advisor in Policy Unit

IPM Publicity

Other IPM training Agricultural Policy (IPM)

Environmental Land Management Advisor subcomponent IPM addressed within ELM training materials Final conference on ELM Dropped

Broader TOR appropriate for ELM

Integration appropriate for ELM subcomponent

Conference appropriate for ELM subcomponent LRCSP policy support redirected to farm debt

Specialist in Policy Unit

Recent evidence indicates that the statement in the original PMP about farm privatization (Le., farmland restructuring) being expected to lead to an increase in production inputs such as agro- chemicals appears to be erroneous at least in the short term. Surveys o f farmers on newly restructured farms shows that they tend to purchase fewer inputs due to limited access to credit. In cotton growing areas, family farm are more likely than larger farms to grow non-cotton crops which do not require as many agrochemicals. The planned ELM comparative study should provide more definitive findings in this regard.

I analysis

In other regards, the original PMP provides useful background information on pest management and I P M which will be taken into account in the ELM training activities. The ELM description outlined below and Matrixes 2 and 3 (which take the place o f PMP Tables 6 and 7) however, replace the portions o f the PMP which describe LRCSP’s I P M support. LRCSP will no longer be held accountable to implement the original PMP.

Specialist

Other research mentioned but not explicitly funded

Strengthening environmental land management capacity

IPM subcomponent, but other EMF responsibilities retained. MTR added to provide more definitive findings and insights for training program

Comparative study of ELM on larger and on family farms.

The general approach o f the LRCSP ELM subcomponent i s to build knowledge using interactive training methodology on agro-ecological management by newly independent farmers in ways which enhance sustainable productivity. The need to accurately identify possible land degradation problems and risks and understand ecosystem interactions would enable farmers to choose less hazardous agricultural soil improvement and pest management techniques. Through a training o f trainers program, LRCSP will develop institutional and human capacity, promote sustainable agricultural technology transfer and adoption, and facilitate experiential learning for making informed decisions in integrating scientific and traditional knowledge to solve location- specific problems.

20

The LRCSP ELM subcomponent will support capacity buildings in the environmentally sustainable land use research with training o f raion level and other local agricultural and environmental specialists for further advice and training for farmers.

On the basis o f the study o f the best agricultural practice this subcomponent will improve communication between research institutions, farmers and extension agents and contribute adoption o f promising options generated by farmers with scientific support.

The ELM subcomponent will integrate I P M with other environmental land management. In addition to the cotton seed demonstrations which have already received support during the initial years o f the Project, starting in 2009 the ELM subcomponent comprises studies, training and dissemination methods described in the EMF to support capacity buildings in environmental land management and pest control:

- Design and implementation o f a training o f trainers program in ELM (so that raion level environmental, agricultural and land officers, N G O technical specialists, water user associations and others can better advise and train newly independent farmers in improved agro-ecological practices). It i s proposed that trained staff will be encouraged to train other farmers and assess environmental risks and changes on the lands o f newly independent farmers. Trainings will focus on learning methods through agro-ecosystem analysis and discussions, field visits and field days to existing examples o f good and bad practices, and mass media campaigning. The aim o f training i s to strengthen the ability o f local agricultural, environmental, land and water officers and specialists to identify environmental risks and sustainability o f farmers lands in different agroclimatic and soil conditions and also in different methods o f land use and crops, to identify pests, determine damage thresholds, make prudent control decisions safely and cost-effectively to control land degradation and pests. Study comparing actual environmental practices on larger partially restructured farms with independent family farms.

-

-

The PMU, after making an assessment o f existing capacity and needs for training, will seek proposals from national research institutions/NGO sector in Tajikistan for the study o f both best and ineffective agricultural practices, preparation o f illustrated clear training materials (booklets, albums, videos, etc) and development o f training modules for trainers.

Agricultural/Environmental specialist o f the P M U o f LRCSP will: - - -

Coordinate the activities at the regional and local project level; Monitor compliance with the EMF; and Ensure that environmental concerns are adequately addressed in the training program for water users associations which will be supported under the On-Farm Irrigation Subcomponent.

The detailed implementation schedule and costs are available in project fi les.

21

0 0

0

e,

‘In

N