Afghanistan: Afghanistan Rural Business Support Project

Sovereign Project | 40586-012

Summary

The Project objective is to sustainably increase farm incomes in four rural districts in Afghanistan by linking farmers, agri-processors, and traders into profitable production, processing, and marketing industries through the establishment of four Rural Business Support Centers (RBSCs) one district in each of four provinces as follows:

o Dawlat Abad District, Balkh Province

o Bamyan District, Bamyan Province

o Daman District, Kandahar Province

o Rodat District, Nangarhar Province

Latest Project Documents

Title Document Date
Rural Business Support Project Nov 2006

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Project Name Afghanistan Rural Business Support Project
Project Number 40586-012
Country Afghanistan
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 9100-AFG: Afghanistan Rural Business Support Project
Japan Fund for Poverty Reduction US$ 18.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change
Sector / Subsector Agriculture and Natural Resources - Agricultural production
Gender Equity and Mainstreaming
Description

The Project objective is to sustainably increase farm incomes in four rural districts in Afghanistan by linking farmers, agri-processors, and traders into profitable production, processing, and marketing industries through the establishment of four Rural Business Support Centers (RBSCs) one district in each of four provinces as follows:

o Dawlat Abad District, Balkh Province

o Bamyan District, Bamyan Province

o Daman District, Kandahar Province

o Rodat District, Nangarhar Province

The Project will serve as a locii of rural business activity for both male and female clients, bringing farmers and processors/traders together in four regionally-established RBSCs and providing material and technical assistance to these groups. Incentives for farmers to participate in the Project are: technical and financial assistance for farm-level production and agricultural inputs, and an assured market for their agricultural products. Incentives for processor/trader participation include: physical plant infrastructure housing processing/marketing activities, assistance with capital, and assurance of supply of products. The expected key performance indicators are (i) RBSC established and operating profitably. (ii) Annually 5,000 and 3,600 farm families benefiting from new long- and short-term income generation opportunities respectively with average family income increased by 40%; 9,000 farm families indirectly benefiting through participation in Center activities. (iii) 40 producer/marketing associations and 4 cooperatives established and operating at a profit. (iv) 50% of producer beneficiaries engaged at least once in training and capacity development activities. The proposed project will be implemented over 48 months.

Project Rationale and Linkage to Country/Regional Strategy

Estimates suggest that 60 80% of Afghanistan's population lives in dire poverty, and suffers from food insufficiency, consuming less than 2,100 calories per day. Half of all children under 5 are malnourished. An Afghan woman dies in childbirth every 30 minutes. Over 70% of adults are illiterate. Poverty is particularly acute in rural areas, where up to 80% of the population resides. The livelihoods of over 85% of rural people are directly tied to agriculture.

Poverty is Afghanistan's most challenging problem and the most critical constraint on its economic development. Most people find themselves in a poverty trap not earning enough to

accumulate capital to start the investment and accumulation cycle needed to improve their living conditions. Businesses hesitate to invest in potentially productive areas because major

investments, which may not be feasible, are needed. Business investors are searching for opportunities to develop agri-processing facilities, but they want assurance that the raw inputs for their businesses are available in adequate quantities and that the agricultural resources that could increase productivity are in place. The project stems from knowledge of Afghanistan and the experience that significant economic development, including job creation, can be stimulated by the type of value-added processing planned through this Project.

The Project is based on the notion that economic development is a process incorporating a series of interrelated activities, and that an agricultural production and marketing system provides an ideal set of interrelated activities that are easily understood and implemented.

Impact The Project aims to increase farm incomes in the project area by enabling farmers, agri-processors and traders to engage in profitable production, processing and marketing industries along selected value chains.
Project Outcome
Description of Outcome

Increased incomes for potato producers , increased in yield of potato production and decreased potato losses in Bamyan province due to RBSP value chain interventions.

Income increased for oil crop growers and oil seed processor; yield increased for oil crop growers, and oil seed processing units established in the provicnes of Balkh and Nangrahar.

Carpet production and carpet designs improved and carpet weavers income increased.

Project beneficiaries stisfaction

Progress Toward Outcome

The geographic coverage was increased from 1 district to multiple districts in three provinces. Due to security no activeis are being undertaken in Kandahar Province. The initial approach of using rural business support centers in each location was modified during intital porejct phase. The Project adopted a more focused approach to the selection of the commodity value chains, a more strategic approach to the provsion of interventions that are clearly delineated in terms of targeted outputs that would not overlap or duplicate activities in other ongoing projects. Rural farm households have benefited from project activities in oilseed production and processing, carpet weaving, improved potato production and storage facilities and associated trainings. The total number of associations organized and developed by RBSP was 41, including producers (potato, oil crops, and wool producer/weaver), associations and processor (edible oil and carpet) associations. The TOT training results for the 2009 crop year included 535 participants from the targeted districts of Balkh, Bamyan and Nangarhar provinces, which include 485 male and 50 female. Training and technical assistant was provided to 5,999 producers and processors, including 4,430 male and 1,569 female, from the 11 targeted districts. Large number of beneficiaries benefited in the targeted areas.

Pre-feasibilities of the potential priority value chains in the three provinces were completed and recommended Project interventions were made. The 2011 Work Plan (implementation plan) with technical activities by value chain, was submitted to ADB and MAIL and was approved.

A national Project Steering Committee established. Members included representatives from MOF, the Ministry of Rural Rehabilitation and Development (MRRD), MAIL, and civil society organization. ADB and the Government of Japan participates as observers. Very regular tripartite meetings have been held to resolve project issues.

Edible oil processing building have been completed and oil processing and packaging equipments are installed, edible oil refinery system and conveyors equipment to be installed in phase II of the project for the production of refined/eatable edible oil, while additional storage facilities were constructed.

The carpet inputs (wool, cotton) have been distributed to the carpet weavers in Balkh, Bamyan and Nangarhar.

20 tractors as equity have been procured and distributed to farmers.

1100 potato storages have been completed through equity program in 2010 and 2011 in Bamyan province.

20 tractors, looms, wool, and construction of 16 potato storages were piloted for demonstration to the farmers, farmers associations/ cooperatives, traders and carpet weavers.

16 de-linting machines were procured and business development services (BDS) were carried out.

Equity contribution mechanisms were established and have provided support to the identified value chains.

Roots of Peace (RoP)was selected and commenced work in the last quarter of 2007. Their services were completed on 30 Sep 2011. RoP has submitted the FSEC for ADB's review and approval. FSEC is being reviewed and will be submitted to CWER and OSFMD for further process.

Imprest account was fully liquidated and outstanding advance have been returned to ADB JFPR account.

Implementation Progress
Description of Project Outputs Increase rural income generation
Status of Implementation Progress (Outputs, Activities, and Issues)

This output was modified in initial project implementation phase, to be more strategic. Priority value chains were identified for Bamyan, Balkh and Nangarhar provinces. In Bamyan, the Project will focus on the potato value chain and wool/carpet value chain. In Balkh, the Project will focus on the carpet value chain and edible oil value chain. In Nangarhar, the Project will focus on edible oil value chain and wool/carpet value chain.

Pre-feasibilities of the potential priority value chains in the three provinces were completed and recommended Project interventions were made. The 2011 Work Plan (implementation plan) with technical activities by value chain, was submitted to ADB and MAIL and was approved.

A national Project Steering Committee established. Members included representatives from MOF, the Ministry of Rural Rehabilitation and Development (MRRD), MAIL, and civil society organization. ADB and the Government of Japan participates as observers. Very regular tripartite meetings have been held to resolve project issues.

Geographical Location Balkh, Bamyan and Nangarhar Provinces
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
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 Consultants will be recruited by ADB in accordance with its Guidelines on the Use of Consultants. The international consulting firm will be recruited through the quality- and cost-based selection method.
Procurement Goods, services, and civil works to be financed under the Project will be procured in accordinace with ADB's Guidelines for Procurement.
Responsible ADB Officer Mohammad Hanif Ayubi
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Afghanistan Resident Mission
Executing Agencies
Ministry of FinanceMr. Mohammad Asif RahimiKabul, Afghanistan
Timetable
Concept Clearance 31 Dec 2005
Fact Finding -
MRM -
Approval 12 Dec 2006
Last Review Mission -
PDS Creation Date 18 Dec 2008
Last PDS Update 30 Mar 2013

Grant 9100-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Dec 2006 17 Dec 2006 17 Dec 2006 31 Dec 2010 30 Nov 2011 30 Aug 2013
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 19.30 Cumulative Contract Awards
ADB 0.00 12 Dec 2006 0.00 14.99 83%
Counterpart 1.30 Cumulative Disbursements
Cofinancing 18.00 12 Dec 2006 0.00 14.99 83%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory
Title Document Type Document Date
Rural Business Support Project Grant Assistance Reports Nov 2006

Safeguard Documents

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Evaluation Documents

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