CHANGE IN SCOPE:
ADB's Board on 14 August 2009 approved a major change in Project scope. The key elements of change are as follows:
(i) component 1 has changed focus from resolving the debt of cotton farmers in four pilot districts to addressing poor accessibility to quality cottonseeds. MOA-owned plant quarantine facilities will be upgraded and two seed-cleaning facilities will be leased to farmer organizations. MOA will be the implementing agency for the redesigned component 1;
(ii) the original target beneficiaries, under component 2, Agriculture Financing Innovation, for the subloans were farms that had resolved their debt as a result of original component 1 activities. The target beneficiaries for component 2 have been changed to all farm households in the four pilot districts. In addition, microfinance institutions will be included with the participating commercial banks as eligible financial institutions for onlending to farm households; and
(iii) the change in scope and implementation arrangements resulted in changes to: the outcome statement, outputs, and monitoring indicators of the design and monitoring framework (DMF); the cost estimates; and financing plan. The new outcome statement is improved access to quality seeds, finance, and market infrastructure by cotton farmers.
The project extension till 31 Sep 2012 was granted to allow time for delivery of outputs. Specific milestones to achieve outstanding outputs were agreed with the Government. The agreed milestones have been achieved; all contracts have been completed in due time before the project closure. The project was completed on 30 September 2012.
Component 1: Seed Quality Improvement.
1.1 Two seed-cleaning facilities were to be established in Sughd and Khatlon provinces. Despite repeated advertisements by the PMU there was no expression of interest by farmer-owned organizations to lease seed-cleaning facilities. A private seed-cleaning facility has been established in Sughd province and replication of such a facility there was unnecessary. The Project has therefore established one seed-cleaning facility of larger capacity in Khatlon province.
1.2 The project has completed construction of regional laboratories and border posts and upgraded equipment in airport inspections posts. The outstanding issue was construction of the central plant quarantine laboratory due to lack of approval from the municipality. An alternative site has been found, and necessary approvals/certificates have been received, and the construction has been completed. Upgrade of the central laboratory for SSPPQI was complete in August 2012. Laboratory equipment has been supplied to the central and two regional laboratories, three airports and six border posts of the SSPPQI. All three laboratories started issuing plant quarantine certificates. Vehicles have been procured for four remote plant quarantine border posts (one per each) of the SSPPQI to ensure their effective operation.
Component 2: Agriculture Financing Innovation.
Under the revised scope and implementation arrangements, all farm households in the four districts were eligible borrowers and both microfinance institutions and commercial banks were eligible as participating financial institutions (PFIs) for onlending to farm households.
Change in financial intermediary. ADB advised the MOF on 23 October 2009 that based on international good practice the National Bank of Tajikistan should not function as a financial intermediary and requested that either a commercial bank be identified or the MOF directly performs this function. Agreement was reached for Agroinvestbank to act as the financial intermediary. Government prepared subsidiary loan agreement and sub-credit loan agreements. ADB reviewed and approved these agreements. Funds have been successfully transferred to Agroinvestbank; participating microfinance institutions have been selected; all funds have been fully disbursed to microfinance institutions.
Component 3: Market Development.
TAJ-WIS, the first public-private partnership arrangement in the subsector, successfully implemented the classification and certification of locally grown cotton fiber using internationally recognized cotton-grading standards (UCGS). Three laboratories have been equipped with modern cotton-classing equipment, and accredited by the relevant authorities. The installation of four high-volume instrument (HVI)-testing equipment will allow 100% of the crop to be classed to a broader and higher level of equality. Special cotton fiber bale cutters and tables to implement UCGS have been purchased and installed in 59 gins. An international Cotton Classing and Pricing Specialist and an international Institutional and Commodity Standards Specialist have provided services to improve cotton classing, pricing, and regulation and monitoring of cotton quality. This output has been however negatively affected by the continuing role of Tajikstandard in cotton grading which has rendered the investment in TAJ-WIS problematic as its competitiveness has been continually undermined by the ongoing classification of cotton by Tajikstandard.
Construction of two customs bonded warehouses has been completed using a private-public partnership structure.
Component 4: Project Management.
The PMU has been fully operational. An effective and transparent accounting system has been in place, and a framework for the project performance monitoring system (PMS) and a gender action plan (GAP) have been developed. All audit reports have been submitted in due time.