• Reference: P-TZ-AAZ-001
• Approval date: 24/11/2004
• Start date: 20/07/2005
• Appraisal Date: 10/07/2004
• Status: OngoingOnGo
• Implementing Agency: MIN OF AGRIC, FOOD,COOPERATIVES
• Location: North West Regions of Tanzania

The project has three major components based on the demand driven approach and one project management component. The following outputs will be attained under the project:

- Farmer Capacity Building:

(i) 25 districts will have the capacity to train participatory farmer groups through participatory adult education methods;

(ii) 250,000 farmers in 10,000 participatory farmer groups with an average of 25 members each, trained in technical, organizational and managerial subject matters through participatory adult education methods.

- Community Planning and Investment in Agriculture:

(i) 25 districts will have the capacity to plan, manage and monitor District and Village Agricultural Development Plans;

(ii) 25 District Agricultural Development Plans prepared and implemented;

(iii) 750 Village Agricultural Development Plans prepared and implemented including agriculture related micro-projects, small infrastructures and agricultural technology investments;

(iv) Improved market access through the improvement of 500 km of feeder roads; and

(v) Improved water control for agriculture through the construction of 25 water harvesting structures.

- Support to Rural Micro-finance and Marketing:

(i) 200 operationally sustainable Savings and Credit Cooperatives (made up of 8,000 Savings Groups) with each cooperative having on average 1000 members and TZS 40 million in savings after six years of operation; and

(ii) Marketing information network established and functioning in 25 districts.

- Project Coordination and Management: A Project Coordination Unit (PCU) was established to coordinate the activities of the implementing districts and agencies.

The specific objective of the project is to increase agricultural productivity and incomes of rural households in the project area, within the overall framework of the Agricultural Sector Development Strategy.

The Government considers the improvement in farm incomes of the majority of the rural population as a precondition for the reduction of rural poverty in Tanzania. Its vision is for decentralized development efforts that provide for a modernised agriculture sector and the creation of an enabling environment for improving agricultural productivity and profitability, improving farm incomes, reducing rural poverty and ensuring household food security. Within the ASDP framework, this project falls under Sub-Programme A: Agricultural Sector Support and Implementation at District and Field Levels. As such districts and villages, their (agricultural) development plans (DADPs) and Village Agricultural Development Plans (VADPs) and empowerment of communities are at the core of this project.

The project will lay the foundation for the design and implementation of more effective Village Agriculture Development Plans (VADPs),

(i) by creating and strengthening the capacity of large numbers of participatory farmer groups and networks, so as to increase production, productivity and profitability, and

(ii) strengthening the capacity of local government authorities (LGAs) concerned with the facilitation, preparation and execution of VADPs and DADPs. This will generate demand for specific services and infrastructure, which should create an environment that will lead to business oriented VADPs. The project is demand driven adopting a participatory development approach whereby specific activities and investments are determined by the PFGs and communities.

The mode of training for farmer capacity building is the Farmer Field School (FFS) methodology, a participatory community-based process which is already widely used in many donor-funded projects in Tanzania for strengthening farmer and extension skills. Farmer Field School and PFG ' type intervention models have started to reach relatively large number of farmers in a relatively short time, they are now ready for full-fledged up-scaling. Gender mainstreaming in the project is being done with a focus on gender responsive and equitable participation for development planning and implementation, as well as ensuring participation of women and other vulnerable groups in project implementation and community representation and decision-making. Microfinance and marketing activities which have not yet started, will build on existing or newly formed participatory farmer groups and networks, and will aim at running farming as a business, rather than as subsistence agriculture.

Capacity building of local government authorities (LGAs) will enable them to provide adequate planning and implementation support. Funds are being made available to implement VADPs of a substantial number of villages in each district. Villages with higher potential and better accessibility are the first to be targeted. The project is also providing support to communities to purchase agricultural equipment and technology, establish agriculture related micro projects and infrastructures at the village level or establish medium-sized inter-village infrastructures that will open up areas that are remote or poorly accessible.

At design, the project was in line with the Bank's key policy documents at the time which include:

(i) Vision Statement, which regards agriculture, given its importance to African economies, as the starting point for supporting overall production growth and improving living standards in the regional member countries.

(ii) Poverty Reduction policy, which aims to support the RMCs in their efforts towards poverty reduction and considers that agriculture and rural development will continue to be the engine of pro-poor growth in Africa;

(iii) Agricultural and Rural Development Sector Bank Group Policy (2000), which seeks to promote sustainable use of natural resources, strengthen rural institutions, support improvements in agricultural productivity and create an economic environment conducive for the commercialisation of agriculture, enhanced food security and increased poverty reduction; and

The project was also designed in line with Tanzania-CSP for the 2002-2004 ADF IX cycle, which indicates that Bank's support to agriculture and rural development is to be provided within the overall framework of Tanzania's Rural Development Strategy and Agricultural Sector Development Strategy (ASDS).

The main production output of this project will be from the increased productivity and intensification of agricultural production, as a result of farmer capacity building in an enabling environment. The projections on increased crop production as a result of the project are based on the assumption that all together 0.55 million out of 1.5 million households in the project area will benefit directly from the project. Of these 0.55 million households, 0.3 million will increase production by 15 percent, 0.2 million by 20 percent, and 50,000 by 25 percent. Based on these projections, it is anticipated to achieve an overall production increase of six percent, with a projected incremental value of TZS 40 billion per year. This projected six percent increase in crop production is modest, and should not in itself give rise to strong price fluctuation.

Financial Analysis:

The proposed project is expected to yield considerable benefits to participating farmers and to the whole economy of the 25 districts concerned. The main quantifiable benefits will be increased production. Farm models suggest potential increases in farmer income of 30-50 percent over several years.

Economic Analysis:

The economic analysis was carried out over a 20-year period. The Economic Internal Rate of return (EIRR) for the entire project, calculated over the project life is 24 percent. The Net Present Value at 12 % discount rate is TZS 46.38 billion (UA 28.56 million).

MPYISI Edson Rurangwa - OSAN1

Finance source	Amount
ADF	UAC 43,000,000
Government	UAC 15,014,200
Delta	UAC 800
Total	UAC 58,015,000