Tajikistan: Farm Analysis and Awareness-Raising for Debt Resolution

Sovereign Project | 33042-032

Summary

The impact of the TA is to ensure that farm debt resolution successfully proceeds under the Government's Farm Debt Resolution Strategy (FDRS). The outcome of the TA is to ensure that the governing body for implementation of the FDRS, the Independent Commission, establishes fair, timely and systematic mechanisms for farm debt resolution on a per-farm basis. The TA is expected to result in farm analyses/farmer awareness processes being completed on a schedule agreed upon between farmers, creditors, and the IC, and about 50% of indebted farms finalizing debt workout arrangements within five years of TA completion.

Latest Project Documents


Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Project Name Farm Analysis and Awareness-Raising for Debt Resolution
Project Number 33042-032
Country Tajikistan
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 4664-TAJ: Farm Analysis and Awareness-Raising for Debt Resolution
Poverty Reduction Fund US$ 800,000.00
TA 4664-TAJ: Farmer Analysis and Awareness-Raising for Debt Resolution (supplementary)
Canada (CIDA) US$ 500,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Finance - Inclusive finance

Gender Equity and Mainstreaming No gender elements
Description The impact of the TA is to ensure that farm debt resolution successfully proceeds under the Government's Farm Debt Resolution Strategy (FDRS). The outcome of the TA is to ensure that the governing body for implementation of the FDRS, the Independent Commission, establishes fair, timely and systematic mechanisms for farm debt resolution on a per-farm basis. The TA is expected to result in farm analyses/farmer awareness processes being completed on a schedule agreed upon between farmers, creditors, and the IC, and about 50% of indebted farms finalizing debt workout arrangements within five years of TA completion.
Project Rationale and Linkage to Country/Regional Strategy

In 2004, ADB completed a comprehensive study of cotton farm debt. It documented $240 million in estimated unpaid debt (principal and accumulated interest) as of January 2004. Of this amount, approximately $180 million is due to formal creditors, rather than overdue payments for electricity, water, and salaries. About 108 of the large cotton farms account for 70% of the debt. The unpaid cotton debts are closely associated with low productivity and poor profitability. The TA workshop in 2004 spurred engagement of other funding agencies. The World Bank, the United States Agency for International Development (USAID), and the Department for International Development (DFID) studies, all involving detailed consultation processes at the farm level, deepened the ADB finding that for the agriculture sector, particularly cotton, to be more productive and profitable and reduce poverty, an integrated approach is required that includes reforms in policy, institutions, and structures at the farm level. While the National Bank of Tajikistan (NBT) and the Government had started addressing cotton debt default, the ad hoc nature of the process provided insufficient results. A unified approach was clearly demanded, one that required a four-way arrangement between farmers, creditors, the Government, and funding agencies.

The Government has responded to this significant challenge. On 4 March 2005, the President of Tajikistan approved the Cotton Farm Debt Resolution Strategy. It has a two-part approach to facilitating debt workouts between private lenders and private borrowers. One part focuses on short-term measures to ensure fair and equitable resolution of the debt on a farm-by farm basis. The second part focuses on the medium-term policy, legal, and institutional measures to enable a properly functioning cotton market. These reforms include such complex areas as land reform and farm privatization. The strategy calls for the establishment of the IC to oversee implementation.

The IC was established in May 2005, including senior ministers, representatives of two nongovernment organizations (NGOs), and the World Bank and ADB resident representatives. Commissioners developed the terms of reference, action plan, and guiding principles during an ADB-led, multidonor-funded retreat. The first priority of the action plan is the startup of the debt analysis and workout strategy for each farm. The most crucial step now is to commence farm debt reviews on an initial subset of heavily indebted farms, as they hold more than two thirds of the farm debt and employ a large proportion of the impoverished cotton workforce. Based on the initial farm debt reviews, standardized farm debt review and restructuring protocols can be established for use on all other farms. A database can also be established, using data generated in the farm reviews and incorporating information from a variety of sources, to track progress and provide a starting point for the farm-by-farm reviews. The TA will provide technical support in these important initial tasks. A loan-cum-grant, Sustainable Cotton Subsector Project, is being designed to provide significant additional assistance to the subsector (see 38603-TAJ Farm Productivity Improvement) and a proposed Japan Fund for Poverty Reduction project is expected to provide substantial assistance to cotton farm workers to increase and diversify their income sources.

Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nationwide; farm reviews in Vose, Yovon, Mastchoh, Zafarabad
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

The TA will engage two international consultants for a total of 9 person-months (pm) as a Farm Management Specialist (5 pm) and a Cotton Production Specialist (4 pm). Ten domestic consultants (for 63 person-months) will be recruited as Legal Counsel (7 pm), Accountant (7 pm), Social Scientist (8 pm), Farm Management Specialist (8 pm), Land Management Specialist (6 pm), two Bookkeeping/Analysts (6 pm each, total 12 pm), Database Specialist (6 pm), Farmer Awareness Specialist (5 pm), and Cotton Specialist (4 pm).

Individual consultants will be recruited in accordance with the Guidelines on the Use of Consulting Services and other arrangements acceptable to ADB for selection of domestic consultants.

Responsible ADB Officer Betty Wilkinson
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Office of the President Mr. Matlubhon S. DavlatovOffice of the President, Dushanbe, Tajikistan
Timetable
Concept Clearance 21 Dec 2004
Fact Finding 03 May 2005 to 10 May 2005
MRM -
Approval 04 Oct 2005
Last Review Mission -
PDS Creation Date 23 Feb 2006
Last PDS Update 18 Apr 2008

TA 4664-TAJ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
04 Oct 2005 07 Mar 2006 07 Mar 2006 31 Oct 2006 31 Dec 2007 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,300,000.00 145,000.00 0.00 0.00 0.00 1,445,000.00 04 Oct 2005 1,169,923.43

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.