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LESSONS:

Participatory Irrigation Sector Project

sector: Agriculture, Natural Resources, and Rural Development | country: Indonesia

Institutional coordination. The project developed good coordination across the three executing and implementing agencies both horizontally and vertically, which was essential to deliver project outcomes that relied on an integrated approach.

Appropriateness of a participatory approach. The project has shown that the participatory approach in irrigation development and management is a feasible concept and that farmers are eager to be involved with irrigation operation and maintenance (O&M) and management. The involvement of water users association and water users association federation in the irrigation commission provided a good approach to address irrigation water distribution, cropping patterns, and O&M planning and implementation.

Farmer involvement in rehabilitation. Water user association involvement in rehabilitation works yielded better quality and more efficient implementation than similar works implemented by contractors. The water users association and water users association federation were also willing to contribute their own resources to the work program.

Participative irrigation development and management system. The project was transformative in developing the national system for participatory irrigation management and development. In most project provinces, this approach is now applied to the government’s own provincial and district programs.

Roles, tasks, and capacity of water users associations and federations. Further support is needed at district and provincial level to ensure water users association and water users association federation develop into effective and sustainable organizations. Sufficient district and provincial level resources should be allocated to ensure that project gains are sustained and enhanced.

Operation and maintenance of rehabilitated infrastructure. Greater focus should be placed on O&M arrangements, which should be incorporated into the participatory irrigation management agreement with district governments. The Rencana Pengembangan dan Pengelolaan Irigasi (district irrigation management plan) is an effective planning mechanism that provides appropriate O&M for district systems using a needs-based budget approach.

Agricultural development. The agricultural program was initially limited to classroom training, but adjusted to promote field level agriculture demonstrations and rehabilitation of tertiary irrigation canals. It was very successful and contributed to the high economic returns of the project.

Financial management. The use of prorated financing across the three sources of funds for all expenditure categories should be avoided. Adequate initial advances to imprest accounts should be provided to minimize pre-financing of loan activities through government temporary accounts. The fund flow mechanism adopted by Directorate General of Regional Development for regional activities should not be used in future projects.

Lessons from Validation

Indonesia: Participatory Irrigation Sector Project

The PCR (project completion report) identified a number of lessons derived from the implementation of the project. While all of these are appropriate, this validation highlights mainly two of these as they have wide applicability across developing countries and within ADB. The first lesson deals with the reinforced conviction that WUA (water users association) and/or WUAF (water users associations’ federation)-guided participatory irrigation management can be successfully implemented at the district level and in the lower levels in developing countries. The participation of farmers in these schemes improved project implementation as compared to the situation when there was exclusive reliance on administrators and contractors. The second lesson relates to the need to avoid overwrought arrangement for project disbursements. In this project, prorated financing arrangements from three different fund sources across each category of expenditure constrained the flow of funds. The size of imprest accounts should also be large enough to provide adequate cash flow for the executing agencies to operate while disbursement applications are being processed. This is particularly applicable for sector projects.

Lessons from Project Evaluation

Indonesia: Participatory Irrigation Sector Project

Irrigation financing. A key goal under the project was to help the project areas sustain irrigation operation and maintenance (O&M). This had been a long-standing challenge for the agriculture sector. During and after the project, progress has been made to increase O&M spending for the national and provincial irrigation schemes. However, increasing the districts’ commitment to irrigation O&M (and capital investment) has been more difficult than envisaged at appraisal. Because of progress made in decentralization, districts are increasingly empowered to make spending decisions and may not consistently prioritize irrigation. Under its multiyear national irrigation programs and the national government provides special budget allocation transfers to the provinces and districts. These transfers become part of the local budgets with earmarked restrictions for irrigation. However, even for this funding there is a varying degree of compliance in the use of these allocations. To help address this situation, the evaluation recommends that various options are explored, including giving local governments more incentives (e.g., matching finance) to allocate more funds to irrigation, or finding mechanisms to better enforce the earmarked use of the transfer funds (as agreed between the national and subnational governments).

Project design and scope. The project was generally well designed. Its institutional arrangements effectively aligned the budgets and tasks of each project stakeholders, and promoted a more independent operation of local agencies. The planning agencies at the national and local levels effectively coordinated the line agencies. It is noted that the project scope of activities was rather narrow focusing mostly on irrigation capacity building and rehabilitation. This focused approach was helpful to allow simpler project implementation. However, experience under the project pointed to two lessons. First, the focused intervention in water delivery needs to be implemented in conjunction with complementary projects or in appropriate (water-short) locations to ensure that higher-level project outcomes (e.g., increased yields and improved incomes) can be better realized. Second, a rigid and narrow scope of activities may not be optimal for projects that aim to support decentralization. Decentralization fosters more independent and bottom-up decision making by local governments and communities, and it is therefore better supported through projects that allow a broader and flexible menu of activities.

Staff training. In its delivery of capacity building training, the project design resulted in positive lessons. Staff training modules adopted under the project generally supported routine work functions of district and provincial agencies (e.g., planning, participatory consultations, construction management), rather than only project specific tasks (e.g., loan disbursements and project-specific reporting). Further, there were efforts to follow up on the training sessions with hands-on activities that made use of the training materials. The only shortcoming was that quizzes or short tests should have been administered in the training sessions to help gauge if knowledge transfer had taken place.

Tracking of capacity improvement. As a part of the continuing institution building, agriculture sector indicators can be improved by including more service performance indicators for agencies. For irrigation, these can be the extent of water loss in irrigation systems and irrigation service coverage during dry seasons. For agricultural extension, there is a need for the Ministry of Agriculture to monitor to what extent farming practices are actually changed and influenced by the extension programs delivered.

Presentation of risks in appraisal report. Reflecting on the project preparation process, the evaluation notes that the project team was fully aware of the risks to the project during its implementation. These risks emanated from the planned updating of the Water Law in 2004 and associated key irrigation regulations, and the impending government-wide decentralization process. The exact implications on how institution structures and procedures would change and the timing of these changes were not known. The report and recommendation of the President did not discuss the full extent of these risks, perhaps due to space limitations or a concern over further delays to the project’s approval. This points to a continuing need for the project review process in ADB to allow a flexible project design if warranted, for example during this uncertain period in early 2000s for Indonesia. A more forthcoming discussion on risks and a flexible design at approval would have made it easier later to change the project scope and financing approach. This would have reduced the project implementation challenges and delays.

Reduction of administrative burden. Government staff feedback on project implementation suggests a need for ADB to improve client service and reduce administrative and paperwork burden. This can be done by simplifying project disbursement (ensuring sufficiently large imprest account replenishment thresholds and simpler cost-sharing arrangements). The sector project modality used for the project required a large volume of reports because each of the 1,614 schemes handled by the project was recognized as a subproject. Although proposed investments should be subjected to feasibility studies, efforts should be made to reduce report generation in future projects (e.g., by combining scheme assessments, simplifying the feasibility study format, and delegating feasibility review to the respective districts and provinces).

Monitoring and evaluation. The project effectiveness, efficiency, and impact assessments suggest a need for high-quality outcome and impact data at the project level. In addition to self-evaluation by line agencies and project offices, future projects should consider allowing more independent entities to gather key data (e.g., on yields and cropped areas, incomes, and farmers’ views on irrigation and extension service quality). This can be done by the local planning or finance agency, or an agency of the local parliament.

Pursing project impacts–rice self-sufficiency versus income improvement. Strategic discussions during project implementation among the project stakeholders often led to confusion between the goals of increasing rice production toward self-sufficiency, which is a national strategic goal, and the urgent need to improve incomes from farming. This is not a new issue, and it is one that is common in many countries. In moving forward with sector dialogue and preparation of new projects, these sometimes competing needs should be continuously discussed particularly regarding the acceptable trade-off between staple food (rice) self-sufficiency (as a part of a national security plan) and its economic costs in terms of fiscal subsidy burden on the national and local budgets, as well as in terms of lower farm incomes.

Adapting to new trends. The project household surveys point to emerging trends in the agriculture sector that future projects need to take into account. These include (i) the growth of contract farming to meet agro-processing and large wholesalers’ needs, (ii) the emergence of more commercially oriented farming, (iii) the consolidation of small land plots (especially in Java), (iv) more dynamic labor movement into and out of rural areas, and (v) the movement of youth away from agriculture. Household data at project completion showed that about 90% of labor inputs for paddy land preparation in project districts were hired labor and tractor services. There are also challenges from conversion of fertile and irrigable farm lands into nonagricultural uses and increasing competition for water. Discussions at the central and local levels pointed to the need to consider innovative water-saving technologies for some crops, such as using sprinkler irrigation for contoured lands, as water-saving technologies are becoming cheaper to implement.

Land acquisition. In relation to the project’s land acquisition assessment, this evaluation recommends that in future projects that rely on voluntary land contributions or acquisitions from beneficiaries, a clear mechanism should be identified on how such contributions are agreed upon and compensated, if necessary, among the members of beneficiary groups (e.g., water user associations). Further, these contributions should be accounted for as counterpart funds to the project.

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