commercial smallholder support project in bắc kạn and cao bằng · ggs green growth strategy...
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Document Date: 4-Jul 2016
Project No. 2000000968
Report No: [Insert report number]
Asia and the Pacific Division
Project Management Department
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn
and Cao Bằng
Final project design report
Main report and appendices
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
i
Contents
Currency equivalents iii
Weights and measures iii
Abbreviations and acronyms iv
Map of the Project area vi
Executive Summary vii
Logical Framework xxi
I. Strategic context and rationale 1
A. Country and rural development context 1
B. Rationale 4
C. Project area and target group 7
D. Development objective and impact indicators 9
E. Project Outcomes 9
F. Lessons learned and adherence to IFAD policies 21
II. Project implementation 22
A. Approach 22
B. Organizational framework 23
C. Planning, M&E, learning and knowledge management 26
D. Financial management, procurement and governance 31
E. Supervision 33
F. Risk identification and mitigation 34
III. Project costs, financing, benefits and sustainability 35
A. Project costs 35
B. Project financing 36
C. Summary benefits and economic analysis 37
D. Sustainability 39
E. Environment classification 40
List of Tables
Main Report
Table 1. Main CSSP risks and mitigation measures. xiii
Table 2: Estimation of Total Number of Project Beneficiaries 8
Table 3: Estimation of Total Number of Poor/Near Poor and Women Project Beneficiaries 8
Table 4. WSCG development by province 18
Table 5. Key positions of Provincial Project Coordination Unit 24
Table 6. Project staffing at district and commune levels 25
Table 7. Project Costs by Component and Output 36
Table 8. Financing Plan by Component and Outcomes (USD ‘000) 37
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
ii
Appendices
Appendix 1: Country and rural context background 41
Appendix 2: Poverty, targeting and gender 64
Appendix 3: Country performance and lessons learned 86
Appendix 4: Detailed Project description 98
Appendix 5: Institutional aspects and implementation arrangements 160
Appendix 6: Planning, M&E and learning and knowledge management 186
Appendix 7: Financial management and disbursement arrangements 198
Appendix 8: Procurement 212
Appendix 9: Project cost and financing 223
Appendix 10: Economic and Financial Analysis 259
Appendix 11: Draft Project implementation manual 280
Appendix 12: Compliance with IFAD policies 282
Appendix 13: Contents of the Project Life File 286
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
iii
Currency equivalents
Currency Unit = Vietnamese Dong (VND)
USD1.0 = 22,400
Weights and measures
1 kilogram = 1000 g
1 000 kg = 2.204 lb.
1 kilometre (km) = 0.62 mile
1 metre = 1.09 yards
1 square metre = 10.76 square feet
1 acre = 0.405 hectare
1 hectare = 2.47 acres
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
iv
Abbreviations and acronyms
ARD Agriculture and Rural Development
APIF Agribusiness Promotion Investment Fund
AWPB Annual work plan and budget
BDS Business development services
BIDV Bank for Investment and Development in Viet Nam
BMPs Better Management Practices
CAA Climate adapted agriculture
CBG Competitive Business Grants
CC Climate change
CCA Climate change adaptation
CCAP Climate change action plan
CDB Commune Development Board
CGIAR Consortium of International Agricultural Research
CIG Common interest group
COSOP Country Strategic Opportunities Project
CPC Commune People’s Committee
CSSP Commercial Smallholder Support Project
DARD Provincial Department of Agriculture and Rural Development
DARDD District Agriculture and Rural Development Departments
DA Designated Account
DBRP Doing Business with the Rural Poor
DoIT Department of Infrastructure and Trade
DOLISA Department of Labour Invalids and Social Affairs
DoNRE Department of Natural Resource and Environment
DoF Department of Finance
DPC District People’s Committee
DPI Department of Planning and Investment
DPPR Decentralized Project for Poverty Reduction
DRM Disaster Risk Management
DUS distinctiveness uniformity and stability
EA Economic analysis
EFA Economic and Financial Analysis
E2F Enterprise to Farmer
FA Financial analysis
FDD Forest Development Sub-department
FLFA Forest land forest allocation
FPS Forest protection Station
LF2F Lead Farmer-to-Farmer
GDP Gross Domestic Product
GGS Green growth strategy
GHG Greenhouse gas
GSO Government Statistical Office
GoV Government of Viet Nam
ICT Information communication technology
IFAD International Fund for Agriculture Development
IMHEN Institute of Meteorology, Hydrology and Environment
IP Indigenous people
IRR Internal rate of Return
LF Lead farmer
MARD Ministry of Agriculture and Rural Development
masl meters above sea level
M&E Monitoring and Evaluation
MTR Mid-term Review
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
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MFI Micro Finance Institution
MIS Management information system
MoF Ministry of Finance
MoIT Ministry of Industry and Trade
MoLISA Ministry of Labour Invalids and Social Affairs
MoNRE Ministry of Natural Resources and Environment
MOP-SEDP Market-Orientated Participatory Socio-Economic Development Planning
MoU Memorandum of Understanding
NCPT National Centre for Plant Testing
NGO Non-Government Organization
NTP National Target Project
NTP-NRD National Target Project on the New Rural Development
NTP-RCC National Target Program to Respond to CC
NTP-SPR
ODA
National Target Program for Sustainable Poverty Reduction
Official Development Assistance
3PAD Pro-poor Partnerships for Agro-forestry Development
PC Project Coordinator
PCI Provincial Competitiveness Index
PCR Project Completion Report
PES Payment for Environment Assistance
PCU Project Coordination Unit
PFES Payment for forest environment services
PLF Project Life File
PPB Project Preparation Board
PPC Provincial People’s Committee
PPCO Provincial Project Coordination Office
PPSC Provincial Project Steering Committee
RFS Rural Finance Specialist
RIMS Results and Impact Management System
SBV State Bank of Viet Nam
SCG Savings and Credit Group
SECAP RN Social Environmental and Climate Assessment Procedures – Review Note
SEDP Socio-Economic Development Plan
SF IFAD Strategic Framework
SIP Strategic Investment Plan
SEDS Socio-economic Development Strategy
SME Small and Medium Enterprise
SMS Strategic Management Section
SOE Statements of Expenditure
ToR Terms of Reference
ToT Training of trainers
UNFCCC United Nations Framework Convention on Climate Change
UPOV International Union for the Protection of New Varieties of Plants
VAT Value Added Tax
VBARD Viet Nam Bank for Agriculture and Rural Development
VBSP Viet Nam Bank for Social Policy
VC VC
VCU value for cultivation and use
vnSAT Viet Nam Sustainable Agriculture Transformation
VDB Village Development Board
FU Farmers’ Union
VCAP Value chain action plan
VCMDO Value chain management development officer
VND Vietnamese Dong
WB World Bank
WSCG Women’s Savings and Credit Groups
WDF Women’s Development Fund
WU Women’s Union
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
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Map of the Project area
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
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Executive Summary1
1. Background: The Commercial Smallholder Support Project in Bắc Kan and Cao Bằng
provinces (CSSP) is financed through an International Fund for Agricultural Development (IFAD) loan
(USD 42.5 million), an IFAD grant (USD 0.5 million) and co-financing from the Government of Viet
Nam and Project beneficiaries. The CSSP was identified during the development of the Viet Nam
Country Strategic Opportunities Project 2012-2017 (COSOP), which has a strong pro-poor, climate
adapted and market-oriented agriculture development thrust, and was integrated into the pipeline of
projects that received Government of Viet Nam’s (GoV) approval. The CSSP is fully aligned with the
GoV’s Socio-Economic Development Strategy 2016-20 (SEDS), National Target Project on New Rural
Development (NTP-NRD), National Target Project on Sustainable Poverty Reduction (NTP-SPR) and
National Target Project on Response to climate change (NTP-RCC) and the Climate Change Action
Plan (CCAP) for the agriculture and rural development (ARD) sector.
2. Rationale and Approach: To accelerate rural poverty reduction, the GoV and Bắc Kạn and
Cao Bằng provincial governments have identified the need for pro-poor investment in market-oriented
agricultural commodity production and processing systems. This is consistent with the GoV objective
of shifting from a rural growth model built around the state-owned sector with its emphasis on quantity
rather than quality, to one of incentivising smallholder farmers linked to entrepreneurially-driven
private enterprise, to achieve greater productivity and better integration with national and global
markets. More than 70 per cent of workers in the Project provinces are engaged in the agriculture
sector. In the medium term, boosting agricultural productivity to raise farm incomes, lower the need for
labour in the agricultural sector and, eventually, free agricultural workers to move out of farming into
more productive, higher-paying sectors with more growth prospects is a top GoV priority. Improving
agriculture sector productivity, reducing its vulnerability to climate change (CC), expanding private
sector investment, and better targeting public investment, particularly for productive infrastructure and
agricultural value chain (VC) development, are central to improved agricultural productivity and
growth. Significant market demand and opportunities for improved productivity and value addition
exist in the forestry, non-timber forest products (NTFP), livestock, ginger, canna and fruit sub-sectors
in Bắc Kạn, and the cassava, seed peanut, NTFP, bamboo and livestock sub-sectors in Cao Bằng.
Opportunities also exist for eco-tourism development in selected Project districts in both provinces.
3. Building off the NTP-NRD participatory planning principles and process, the Project will be a
pilot for the adoption of climate-adapted, market-oriented socio-economic development planning
(MOP-SEDP) as the legislated provincial planning mechanism. The Project will place strong emphasis
on building an enabling environment for the engagement of the private sector in raising agricultural
productivity, creating rural employment and generating rural income, through developing and
promoting VC linkages between rural households, including poor households, and the growing
demand in urban centres and the global market. This will be accompanied by capacity building for
managing market-led development in both the public and private sectors. The Project will enable
provinces to update their CC adaptation (CCA) strategies and plans and will promote climate-adapted
production and processing technologies. All Project interventions will have a neutral or positive (“no
regrets2”) effect on the ability of communities and enterprises to adapt to CC and related, increasingly
frequent catastrophic weather events, underpinned by the development and systematic expansion of
resource allocation through a climate-adapted MOP-SEDP process. A planned USD 100 million Asian
Development Bank (ADB) Basic Infrastructure for Inclusive Growth in the North-eastern Provinces,
due to commence in 2017, is expected to complement CSSP investments.
1. Mr Garry Smith, Team Leader and Ms Rikke Grand Olivera, IFAD Senior Technical Specialist in Natural Resource
Management (11 to 22 April); Mr Thomas Muenzel, FAO Senior Economist (12 to 22 April); Mr Nguyen Thanh Tung,
IFAD Institutional Specialist (11 to 13 April and 20 to 22 April); Ms. Nguyen Thu Hoai, IFAD Finance Specialist (11 to 13
April); Mr Quang Nguyen Ngoc, Agribusiness Consultant (11 to 20 April); Mr Henning Pedersen, IFAD Country Director
joined the mission in the field from 20 to 22 April 2016. 2 A "no-regrets" approach is a proactive people and place-oriented approach to building resilience to CC that focuses
on transforming, strengthening and protecting assets and livelihoods, including the provision of basic needs (including
security) for all persons.
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
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4. CSSP Project area: The Project will support development in 35 communes in Ba Bể, Na Rì,
Ngân Sơn and Pác Nặm districts in Bắc Kạn province and 35 communes in Hà Quảng, Nguyên Bình,
Thạch An and Thông Nông districts in Cao Bằng province. In two communes in Bạch Thông district in
Bắc Kạn province the Project will support the development of tangerine VCs. The selection of
participating communes at final Project design has been based on, inter alia, (i) poverty rate;
(ii) vulnerability to natural disaster; (iii) commitment of leadership; and (iv) potential for development of
pro-poor VCs. The selected communes will include better market-linked communes as well as
communes that are more remote, but that can be joined-up through VC development. Ethnic
minorities form a large proportion of the population in all Project districts and about 95% of the total
population in the Project area.
5. Target population and expected benefits: The Project target groups are: (i) rural poor, near
poo rand non-poor households with land and labour, including household enterprises; (ii) unskilled
employed rural people; (iii) rural people lacking production land but having business acumen and
desire; and, (iv) key farmers who have the skills to promote commercial agricultural production.
Women and female-headed and ethnic minority households will be prioritised among the
aforementioned target group. The Project proposes specific measures to ensure women’s
participation in relevant activities, including minimum participation rates.
6. It is expected that by the end of the Project at least 72,000 people in 16,000 poor and near-poor
households will be lifted out of poverty, while 30,000 poor, near-poor and non-poor households and
135,000 people supported by the Project will have at least a 20% increase in household assets. This
will be achieved through a combination of capacity building, technology transfer and credit access,
supported by upgraded community infrastructure and co-financing of innovative investment in climate-
adapted farming and processing operations. These include about 23,000 CIG members,
5,500 WSCG3 members, as well as households that will benefit from Agribusiness Promotion
Investment Fund (APIF) investments, enterprise-based vocational training and farm-based extension
provided by the Project. Furthermore, up to 35,000 households in the 70 Project communes will
benefit from at least one community infrastructure investment, particularly market access roads and
irrigation development, including at least 17,600 poor and near poor households (see Appendices 2
and 10 for details).Other participants who will benefit from the Project include (i) government officials
empowered to support market-led growth; and, (ii) private market and VC agri-businesses that find
common interest in promoting viable pro-poor products and services. The Project will also generate
flow-on benefits to the entire rural population of the provinces through: (i) the institutionalization of a
climate-adapted MOP-SEDP process; (ii) an updated and devolved CC strategy and action plan;
(iii) better access to climate adapted agriculture technology and credit; and (iv) institutional
strengthening leading to more climate informed and market-oriented planning.
7. Gender: Poor women and women-headed household are facing significantly greater obstacles
in escaping poverty. In the Project communes in Bắc Kạn, there are 1,612 women-headed
households, of which 823 households are classified as poor. In the Project communes in Cao Bằng,
there are 2,232 women-headed households, of which, 1,225 households are classified as poor. The
Project proposes specific measures to ensure women’s participation in relevant activities, including
minimum participation rates in Village Development Boards (VDBs) and Common interest groups
(CIGs) and for vocational training and credit access. The support of the Woman’s Union and
establishment of Women’s Savings and Credit Groups (WSCGs) and Women’s Development Funds
(WDF) will be vital in this respect.
8. Project goal, objectives, outcomes and approach: The Goal of the Project is: Contribute to
sustainable poverty reduction in Bắc Kạn and Cao Bằng. The Development Objective is: Sustainably
improved income and reduced climate vulnerability of poor and near-poor farm households in targeted
Project communes. The main outcome at the goal level is a 20% improvement in Project commune
poverty reduction above average non-Project provincial commune rate by Project-end for 16,000
households considered poor and near poor in Project area (differentiated data for poor/near poor,
3 An additional 4,000 women will be mobilised into around 260 WSCGs in Bắc Kạn, financed through residual revolving
funds from the former 3PAD.
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Final Project Design Report
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ethnic minority & women-headed households) The main indicators at the objective level are: (i) 20%
improvement in household assets ownership index above non-Project provincial commune average
by Project-end for about 30,000 households in the Project area. (differentiated data for poor/near
poor/non poor, ethnic minority & women-headed households); and (ii) At least 14,000 poor and near
poor smallholder household members whose climate resilience4 has been increased by 30% (gender
and ethnic minority disaggregated).
Project components
9. The Project will have three main outcomes: (i) Provincial participatory planning institutionalised;
(ii) A greener agriculture future; and (ii) Profitable farms linked to finance and markets.
10. These outcomes will follow sequenced, parallel implementation routes. Building off Strategic
Investment Plans (SIP) that identify profitable VC development pathways, and the updated provincial
Climate Change Action Plans that lay out a CC agenda and technologies and processes (with
mitigation co-benefits) for smallholder farmer and enterprise adoption, the Project will: (i) empower
communities and public institutions to develop commune and district-level climate-adapted MOP-
SEDPs that holistically align NTP and Project investments with profitable commodity market and VC
opportunities; and (ii) through the implementation of those investments, assist communities of
smallholder farmers and agri-businesses to associate in various ways to take best advantage of those
opportunities and to co-finance their development. These pathways will merge from the second
Project year onwards.
11. Outcome 1. Province-based Participatory Planning Institutionalised. This outcome will
lead to: Legislated, holistic, participatory, climate-adapted and market-oriented provincial socio-
economic development planning. The outcome has three outputs, which, collectively, underpin the
market-oriented SEDP (MOP-SEDP) planning process: (i) Strategic investment plan; (ii) Climate
change adaptation plan; and (iii) Climate-informed, market-oriented and socio-economic development
plans.
12. Output 1. Strategic investment plan. In the first six months of the Project, the Provincial Project
Coordination Offices (PPCO), supported by international technical assistance, will, in partnership with
their respective DPIs, collectively conduct financial and economic analysis of key commodity and
associated VCs in Bắc Kạn and Cao Bằng provinces to identify and describe at least six Provincial
SEDP-incorporated commodity-based VC Strategic Investment Plans (SIPs) for integration into
commune and district MOP-SEDPs. As part of the SIP analysis, the supporting consultants will
assess constraints to private sector investment in Bắc Kạn and Cao Bằng.
13. Output 2. Climate change adaptation plan. This output will: (i) update the Provincial CC action
plans; (ii) raise district, commune and village level awareness of climate change risks and adaptation
options and prioritize actions to build household and agro-ecosystem resilience and climate adapted
SIPs; (iii) build capacities for CCA integration into the MOP-SEDP process and (iii) ensure strong
climate change adaptation and green growth agendas in the provincial SEDPs (2021-2025). The
“top-down”, technical and scientific, provincial-level climate change action planning and the “bottom-
up” commune and district-level participatory processes to capture local knowledge and understanding
of impacts, vulnerabilities and risks will converge to inform and strengthen both the Provincial CCAP
2016-2020 and the MOP-SEDP process at all levels.
14. Output 3. Climate-informed market-oriented socio-economic development plans. This output
will lead to (i) strengthened public sector market economy skills; and (ii) climate adapted, market
oriented and results-based provincial socio-economic planning. In Cao Bằng, the MOP-SEDP process
4 a resilient household is anticipated to exhibit, inter alia, the following characteristics: i) diversified livelihood and
income streams; ii) improved natural resource and risk management based on better access to knowledge and
adoption of CCA land and water conservation practices; iii) membership of social networks such as Common Interest
Groups (CIGs) and Saving and Credit Groups (SCGs); iv) ability to access credit; v) protection from some climatic
hazards as a result of small-scale community infrastructure; and vi) direct engagement in village and commune level
planning, and influence on provincial financial allocations. These criteria will, amongst others, be developed as a score
card to measure change.
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
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is already institutionalised at commune level, including budget allocation for annual planning activities.
In Bắc Kạn, where participatory village development planning has been implemented under the 3PAD,
further MOP-SEDP capacity building is required. The Project will enable the Bắc Kạn DPI to lead a
capacity building Project for market-led development at commune, district and provincial levels, which
will precede the introduction of MOP-SEDP.
15. The Project will, thereafter, institutionalise a climate-adapted MOP-SEDP process at commune
and district level in both Project provinces. This will require, as a first step, the passage of provincial
legislation authorising the MOP-SEDP planning process and allocating an appropriate budget for its
implementation. In each province, the Political School, with DPI and Project MOP-SEDP staff support,
will integrate the MOP-SEDP process into their curricula and train trainers in its application. At
commune and district level, initially in Project districts and then across the provinces, the Project will
facilitate the integration of climate-adapted commodity and associated VC development planning into
a participatory SEDP process, The resulting MOP-SEDP process will engage relevant entities at the
village, commune and district level, including the effective participation of Village Development Boards
(VDBs) and private enterprise, and be inclusive of all funding sources, including the National Target
Projects (NTPs). The level of women’s representation in MOP-SEDP planning will be mandated in the
supporting legislation. Through the MOP-SEDP process, CSSP will assist DPI to operationalise a
participatory medium-term public investment planning framework.
16. NTP-NRD National Coordination Office (NTP-NRD NCO). A USD 500,000 IFAD grant to the
NTP-MRD NCO in the Ministry of Agriculture and Rural Development, Department of Cooperatives
and Rural Development will be attached to the CSSP. The grant will be used to (i) pilot the integration
of Rural Value Chains into the NTP-NRD leading to the identification of International Financial
Institution (IFI) investment opportunities; (ii) prepare guidelines for NTP-NRD2, including, inter alia,
participatory planning result-based M&E; (iii) build capacity within the NCO and at provincial and
district level for NTP-NRD2 implementation; (iv) pilot the implementation of NTP-NRD2 funded
initiatives and (v) strengthen NCO Operations.
17. Outcome 2. A greener agriculture future. This outcome, which establishes the basis for
climate-adapted green growth in the Project area, includes two outputs: Output 4: Forest land and
forest allocation, and Output 5: CIGs for climate adaptation. The Government of Viet Nam (GoV) is
committed to an ambitious “green growth” agenda and to global carbon emission reduction. The
CSSP will support this process through the promotion of CCA technologies that provide significant
mitigation co-benefits, as well as Projects for forest land and forest use rights certification and
rehabilitation that directly contribute to carbon sequestration.
18. Output 4: Forest land and forest allocation (FLFA). This one-off district-led and commune-
implemented activity in Bắc Kạn will result in a community-based land use plan (LUP) and the
allocation of 17,000 ha of forest land and associated forest to poor households, particularly women-
headed households, in Bắc Kạn Project communes. The LUP-FLFA will lead to the issuance of Pink
Book land use certificates which, for married couples, will be issued in the names of both the husband
and wife, together with forest use right certificates. As part of the allocation process the Forest
Protection Department and district and commune level monitoring units will be supported in
establishing the biomass baseline for forest status monitoring as a support tool for forest
management. DoNRE will monitor the forest land condition.0;
19. Output 5: Common Interest Groups for climate adaptation. This output will lead to: (i) at least
1,000 CIG in Cao Bằng province and 900 in Bắc Kạn province with the capacity to implement
profitable climate change adaptation technologies and practices within a VC framework, with co-
benefits for climate change mitigation; and (ii) forage production integrated into farming systems, with
co-benefits for soil fertility and stability. A wide range of technologies and practices are available to
Vietnamese smallholder farmers to reduce their vulnerability and increase their agro-ecosystem
resilience to CC impacts5, while also providing green growth co-benefits in terms of pollution
prevention and greenhouse gas (GHG) emission reduction. With the support of DARD extension
5 See SECAP RN Para’s. 54 to 63 for a discussion on CC impacts in Bắc Kạn and Cao Bằng provinces.
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stations and the Women’s Union, the Farmer’s Union will support the establishment of a Lead Farmer-
to-farmer (LF2F) extension system that will support CIG establishment and development.
20. Activity 5.1: Common Interest Groups. CIGs, together with eligible cooperatives, household
enterprises and women’s savings and credit groups (WSCGs), will be eligible to apply for
competitively allocated, co-financed climate change adaptation grants supporting both (i) the adoption
of climate adapted technologies and practices; and (ii) the alignment of their agriculture production
systems with emerging value chains. Beneficiary groups could be gender specific or gender
integrated, however, at district level, such groups will, in aggregate, include at least 50% of members
identified by the GoV as poor and near poor households and at least 40% female members. Grants
will focus on innovative production, CCA, risk reduction or value addition investments linked to
profitable commodity chains identified through the SIP process and incorporated into local MOP-
SEDPs. This could include investment in, inter alia: afforestation, irrigation management including SRI
rice, climate-resistant crop varieties and management systems, forage production, biogas and other
by-product utilisation including bio-fertilisers, minimum tillage and organic agriculture. CIG grants will
complement existing NTP-NRD and NTP-Sustainable Poverty Reduction (NTP-SPR) Project support
to poor households.
21. This activity will be amalgamated with the NTP-NRD farmer group grant programme. The
maximum Project grant value of USD 250 per group member and USD 3,500 for one group will cover
up to 50% of the total cost of each investment, with beneficiaries financing at least 50% including a
minimum 25% in cash and the balance in kind. All supported CIG investments must demonstrate
financial and environmental sustainability beyond the initial CSSP assistance. In particular, CIG grants
must be closely linked to VC development under Output 8. A part of each CIG grant could be used by
the group for procurement of technical support services, including LF2F support coordinated by the
provincial Farmer’s Union (FU). All such contracts will be output based. The Project will also provide
“farming as a business” management training to CIG and WSCG members, participation in which will
be a condition of Project support.
22. Activity 5.2 Forage inclusion into farming systems, particularly leguminous forage integrated
into hillside farming systems, offers a cost-effective approach to reducing soil erosion and land
degradation, and hence, strengthening the green economy. To ensure quick impact and longer-term
sustainability, forage Projects require an ample seed supply. The Project will initially focus on
developing selected forages as profitable seed crops, with the forage-based feed as a by-product.
Using an approach of Project procurement of forage seed at competitive prices (but well below import
cost) and free distribution of small quantities of seed to interested farmers, the Project will establish a
demand for low labour input forage technologies that integrate into local farming systems, providing
benefits in terms of animal nutrition, improved soil fertility and stability and reduced labour. The
Project will work closely with the Viet Nam National Centre for Plant Variety Test and Certification with
a view to certifying new, improved forage varieties for use in the Project area.
23. Outcome 3. Profitable farms linked to finance and markets. The result of this outcome will
be: increased public and private investment in sustainable, profitable commodity production and value
addition. The outcome will have three outputs, namely: (i) community infrastructure; (ii) rural financial
services; and (iii) agribusiness competitiveness fund.
24. Output 6: Community infrastructure. Public and collective infrastructure investment grants up to
USD 400,000 per commune6 (including local and NTP-NRD contribution) will be available for
infrastructure investments that provide public good and collective benefits essential to targeted
commodity VC development and/or CCA. This activity will be integrated into the NTP-NRD agriculture
infrastructure investment process, the funding for which will be a government contribution to the
Project. Consistent with NTP-NRD procedures, legislated to meet CSSP requirements, public good
infrastructure investment schemes will be identified and prioritized through the MOP-SEDP process
6 In Bắc Kạn, where USD 700,000 has been allocated for PES payments, commune infrastructure grants will average
about USD 380,000 per commune.
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
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WSCG development by province
Source
of
funds
Bắc Kạn
households
Cao Bằng
households
CSSP
funding 2,200 3,300
3PAD
reflows 4,000 -
Total 6,200 3,300
and evaluated/approved by Commune Development Boards (CDB)7. Beneficiary contribution of total
construction costs of public good infrastructure works will be at least 10 per cent (in kind), with
IFAD/NTP-NRD funding the balance. Individual public infrastructure investments exceeding
USD 60,000 will require no-objection from IFAD. The Project will, wherever practicable, use force
account processes for community infrastructure investments, designed to create jobs for the
vocational trainees and promote community ownership in their operation and maintenance. The
Project will also support on-the-job youth-targeted vocational training. The CSSP will explore an
innovative community-to-community payment for environment services (PES) scheme to protect
upstream catchments supplying water to CSSP-supported
irrigation developments.
25. Output 7. Rural financial services. To effectively
contribute to increased financial inclusion in the rural
communes of the Project target area, CSSP will
substantially support the newly established Women’s
Development Funds (WDF) of the respective provincial
Women’s Unions (WU) and their networks of savings and
credit groups. CSSP will include a major capacity building
Project for the provincial WDFs covering the management,
staff and members of the Funds, and provide the required
equipment and systems to operate the new branch offices in
the CSSP districts. The Project will support the establishment of new WSCGs in both provinces and
provide seed capital for the lending operations of the WDFs. Around 5,500 new low-income
households (of which at least 50% are poor, near-poor or women-headed households) are expected
to join the WSCGs as a direct result of the CSSP investments, covering a significant share of the poor
and near-poor households in the CSSP communes. The capacity building efforts by CSSP are,
furthermore, expected to enable the two WDFs to mobilise an additional 4,000 women into WSCGs.
Their initial loans will be funded largely through revolving funds from the closed IFAD-supported
projects. CSSP will also provide transformation support to the WDFs so that, towards the end of the
Project period, both can be converted into fully sustainable microfinance institutions registered and
supervised by the State Bank of Vietnam.
26. Output 8. Agribusiness8 Promotion Investment Fund (APIF). This output, in line with recent GoV
decisions, will catalyse at least 24 private sector agro-enterprise investment in Bắc Kạn and Cao
Bằng by co-financing investments that improve enterprise competitiveness and value chain linkages
to smallholder farmers, thereby generating incremental markets for raw material and value addition,
leading to increased income and job opportunities among rural households, particularly poor
households. The Project SIP process will identify commodities that have investment potential and that
are in compliance with the provincial SEDPs. The selected commodities will be chosen based on
having strong potential for: (i) export and/or import substitution; (ii) involving rural households to
undertake investments and thereby expanding their production/income and creating incremental jobs;
and (iii) engaging poor farm households. For each selected commodity, a SIP (see Activity 1.1) will be
prepared, including all potential activities within the VCs inherent in that particular commodity
segment. At least 50% of the total number of households benefiting from APIF-supported VC
investments should be represented by poor, near poor or women-headed households. Only legally
registered household enterprises, cooperative societies and companies of at least 12 months standing
will be eligible to apply. Start-up enterprises with financially viable business plans could be eligible for
small grants to support farmer and market linkages and staff training. APIF investments will be
awarded on a competitive basis for capital investments in civil works, equipment (processing,
packaging, energy generation or environment protection), transportation and marketing and
environmental management. The APIF will be established with IFAD co-financing up to 49% of total
investment cost, with the remaining investment being contributed by the benefitting business. Co-
7 In the first Project year, any existing procedure of District Development Board approval will be followed, however, this
will be transferred to the Commune Development Board as soon as their capacity permitted. 8 Includes agriculture, livestock, fishery and forestry sub-sector investments.
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financing will start at USD 15,000 as a minimum and reach up to USD 75,000 as the maximum, while
not exceeding USD 500 per VC supply household. In cases where the potential export/import
substitution and social impact of the proposed Project is extremely high and/ or the investment is
pivotal for developing the respective commodity in Bắc Kạn or Cao Bằng, the maximum APIF grant
could, subject to IFAD's no objection, be up to USD 150,000.
27. The Project will support enterprise staff training and technical advisory services to farmer
suppliers on a cost sharing basis. APIF funds could also fully fund demand-driven applied research
that addresses industry-identified VC technical and marketing constraints or solve pollution, recycling
and renewable energy challenges. Output-based enterprise extension services and enterprise
vocational training Projects, will, if required, be included in APIF funding applications. Up to 30% of a
APIF grant could be used for training purposes or for the purchase of supporting services (business
development services, legal, technical, marketing, standards, applied research, farmer extension,
etc.) for the planned commodity chain investment. Within this limit, the Project will co-finance up to
70% of the cost of (i) vocational training for enterprise staff and (ii) outcome-based enterprise
extension contracts targeting improved commodity production and productivity that include at least
50% of poor, near poor and women-headed farm households. Extension services will, preferably, be
delivered by enterprise staff, however, enterprises could also employ experienced farmers or contract
third party technical advisors (e.g. NGOs, academic institutions, service centres, etc.) to deliver such
services.
28. Project Risks are summarized in Table 1 below9.
Table 1. Main CSSP risks and mitigation measures.
Risks Risk description Probability of
occurrence
Mitigation measures in Project design Comparative
sensitivity analysis
result (Proxy)
Economy External shocks to
macro economy
Medium Higher productivity and reduced cost per unit of quality
outputs
Costs +10%
Benefits -10%
Benefits lagged by 2
years
EIRR 8.3%
Institutional Lengthy process of
assessment and
planning saturates the
dynamics momentum
Provincial governments
cannot (due to lack of
legislation) integrate
commune level NTP
funding into the MOP-
SEDP process.
Uneven dynamics of
groups affect their
success potential
Weak technical and
management capacities
of district line agencies
High to Medium
Build on ongoing IFAD projects’ experience in market-
oriented participatory planning and incorporate into the
CSSP process
Planning and financial integration of CSSP and New Rural
Development measures
New Law on Public Investment and Decree on Medium-
term Public Investment Planning, mitigate this risk.
Clear criteria for identifying potential participating groups
and sound establishment training
Technical support and capacity building provided by
PPCOs and contracted short-term technical assistance,
and access to new techniques and know-how through
APIF grants
Annual capacity assessment and capacity development
plans to fill gaps
Costs +10%
Benefits -10%
Benefits lagged by 2
years
EIRR 8.3%
Ineffective coordination
between provinces,
districts, communes and
agribusiness
undermining
implementation
progress
Medium Legislate MOP-SEDP process.
PAPIF enterprise beneficiaries and CIGs will be involved
in all the steps of preparation, implementation and
supervision.
Performance based contracting of TA providers, including
LF2F advisers
Costs (base case)
Benefits -10%
Benefits lagged by 1
years
EIRR 11.1%
9 A discussion of potentially negative social, environmental and climate risk factors and mitigation measures can be
found in Annex III of the SECAP RN.
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Risks Risk description Probability of
occurrence
Mitigation measures in Project design Comparative
sensitivity analysis
result (Proxy)
Sustainable use of
Project-financed civil
works and Inadequate
capacity for community-
based O&M.
Medium On-the -job vocational training for community members,
particularly of youth;
Community force-account procurement of local works to
increase ownership of the beneficiaries’;
Community training provided on committee establishment,
O&M, normal repair skills, as well as operation cost
arrangement and tariff collection to support sustainable
use of the Project-built works.
Costs (base case)
Benefits -10%
Benefits lagged by 1
years
EIRR 11.1%
Elite capture of Project
investment funds and
benefits
Low to Medium Pro-poor investment policies and planning;
community empowerment, particularly women and youth;
and
close scrutiny and mentoring of all investments.
Costs (base case)
Benefits -10%
Benefits lagged by 1
years
EIRR 11.1%
Market Lack of technical
capacity to respond to
the identified needs
Medium Market-led investment in appropriate technology;
Enterprise-to-farmer (E2F) and LF2F advisory services
APIF agreements link producers’ groups to agri-
businesses and markets
Costs +10%
Benefits -10%
Benefits lagged by
2yrs
EIRR 8.3%
Lower market prices for
commodities
Medium Increased and diversified production and improved value
addition and market access through APIF grants
Costs (base case)
Benefits -10%
Benefits lagged by 1
years
EIRR 11.1%
Financial service
providers unwilling to
support Project
investments
Medium Increased emphasis on savings
Development of new financial products
Investment in profitable, climate adapted production
systems and VCs
Costs (base case)
Benefits -10%
Benefits lagged by 1
years
EIRR 11.1%
Policy Farmers are not treated
as clients
CC does not become a
cornerstone in
agricultural and rural
development policies at
provincial and
subordinate levels
Poor business
environment in the
provinces does not
provide incentive for
APIF investments
Medium Empower farmers through technical training and group
and gender awareness. Train government agencies in
participatory development and cultural awareness.
Substantive and sustained investment in policy dialogue
at provincial level, with strong CC adaptation emphasis
within Project knowledge management.
Support provinces in improving their business
environment as part of Outcome 1 activities
Costs (base case)
Benefits -10%
Benefits lagged by 1
yr.
EIRR 11.1%
Others Natural calamities
including flood and
drought lower output of
farm production
High Improvement of productive infrastructures and adoption of
climate-smart technologies and varieties to advance
production season will help ease the risk;
Access to meteorological and market info by farmers
Costs +20%
Benefits -20%
Benefits lagged by 3
years
EIRR 4.8%
Damages to civil works
built caused by natural
disasters, like floods
and land sliding.
Medium Ensuring climate adapted design and protection measures
taken to avoid any predictable damages;
Government institution are responsible for the repair of
unusual damage that is beyond the community’s ability.
Costs (base case)
Benefits -10%
Benefits lagged by 1
years
EIRR 11.1%
29. Implementation arrangements: The Project will build off the implementation arrangements
developed under the IFAD-financed 3PAD project in Bắc Kạn and the Doing Business for the Rural
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Poor (DBRP) project in Cao Bằng, which have received positive assessments of their impact on
decentralizing project investments to commune and village levels, increasing the participation of
beneficiaries and enhancing the ownership of local authorities, as well as, promoting grass-roots
democracy in poverty reduction. The primary difference between the 3PAD and the CSSP will be the
stronger focus on climate-adapted MOP-SEDP processes, while, compared with the DBRP, the CSSP
will focus more on profitable and sustainable private agri-business engagement in VC development.
The CSSP will also increase focus on Project delivery through government departments and national
Projects in both provinces.
30. The Provincial PPCs will be the owners of the CSSP. Provincial Project Steering Committees
(PPSC) will oversee Project implementation at provincial level. Provincial Project Coordination Offices
(PPCO), each with about 20 staff, will coordinate Project implementation at provincial level. All Project
districts will appoint the DPC Chairperson or Vice Chairperson responsible for agriculture as the
District Project Coordinator and a member of the PPSC. The chief of the district agriculture section will
be the Deputy District Project Coordinator with responsibility to oversee Project implementation at
district level. A fulltime M&E officer, accountant and a Business Linkages Facilitation Officer will be
appointed to support day-to-day Project implementation at district level. The CPC will be responsible
for Project implementation at commune level. The CPC Chairperson will be the Commune Project
Coordinator. The PPCO will recruit commune accountants each responsible for Project financial
administration in 2-3 adjoining communes. The commune agriculture officer will support Project
implementation. The Provincial government will provide suitable office accommodation for the PPCOs
and cover all staff costs The Project will co-finance the upgrading of the PPCO offices (if required),
provide the PPCO with support for staff training and workshops, technical assistance related to
climate change adaptation and value chain development, necessary office equipment, and the
maintenance of vehicles assigned to the Project. Participating provincial departments, districts and
communes will be provided office equipment. A detailed Project Implementation Manual (PIM), will be
prepared by the provincial PPB prior to IFAD Board presentation.
31. Project cost and financing. The total Project costs are provisionally estimated at
USD73.6 million (VND 1,670 billion). Funds allocated to the Project Management are about
USD 9.2 million or 12.5% of the total Project costs. The Project will be financed by: (i) an IFAD Loan,
USD 42.5 million (57.7% of the total Project costs); (ii) an IFAD grant of USD 0.5 million (0.7% of total
Project costs); (iii) Beneficiary contributions, USD 9.6 million (13.0% of the total Project cost); and
(iv) GoV contribution, USD 21.0 million (28.5% of the total Project cost) including taxes and duties
amounting to USD 1.5 million and contribution from government budget of USD 19.5 million.
32. EIRR and NPV. The overall CSSP Project EIRR is 14.9 per cent. The estimated NPV at a
nine per cent discount rate is USD 26.7 million. The BCR of 1.5 indicates a return of approximately
1.5 dollars for every dollar invested. These results indicate that the Project investments yield a
positive rate of return.
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EFA Summary Pages
Table A: Overview of Financial Analysis of Crop, Livestock, Forestry Production and Processing Models
Models used in Analysis Province Unit Production period
Net profit per production period (VND '000)
Return to total labour per person day (VND'000)
FWOP WP Increment FWOP WP Increment
Livestock Production Cow fattening
BK 2 cow 6 months 6,492 16,142 149% 144 359 149%
H'mong Cow fattening /a CB 2 cow 3 months 6,117 22,737 272% 204 253 24%
Black Pig (fattening)
BK 5 porker 8 months 1,609 6,457 301% 32 129 301%
CB 5 porker 10 months 3,454 4,487 30% 55 72 30%
Crossbred Pig (fattening) BK 5 porker 4 months 1,091 4,139 279% 36 138 279% Crossbred Pig (breeding) BK 1 sow 1 year 7,501 11,785 57% 150 236 57%
Chicken BK 200 head 6 months 12,554 15,775 26% 126 158 26%
Crop Production
Annual
Rice - lowland su /b local BK 1 ha 4 months 42,310 51,048 21% 230 473 106%
hybrid CB 1 ha 4 months 20,545 32,087 56% 139 221 59%
wi /c local BK 1 ha 4 months 29,710 41,823 41% 161 387 140%
hybrid CB 1 ha 4 months 19,258 29,200 52% 125 197 58%
Rice – upland su /b local BK 1 ha 4 months 40,585 45,421 12% 221 421 91%
CB 1 ha 4 months 12,929 20,829 61% 82 140 70%
wi /c local BK 1 ha 4 months 30,565 38,498 26% 166 356 115% hybrid BK 1 ha 4 months 19,621 26,788 37% 109 165 52%
Maize – upland
CB 1 ha 4 months 14,775 21,643 46% 95 180 89% Maize - lowland BK 1 ha 4 months 10,271 19,226 87% 68 141 106%
Canna
BK 1,000 m2 10 months 5,142 7,480 45% 147 241 64%
CB 1,000 m2 10 months 4,952 8,774 77% 141 283 100%
Peanut
CB 1,000 m2 3.5 months 1,291 2,316 79% 92 154 67% Ginger
BK 1,000 m2 10 months 15,012 28,301 89% 500 943 89%
CB 1,000 m2 10 months 14,983 21,950 46% 456 616 35% Black Agar
CB 1,000 m2 10 months 9,383 11,883 27% 200 253 27%
Sugarcane
CB 1,000 m2 9 months 1,650 2,318 40% 122 143 17% Potato
BK 1,000 m2 3 months 1,947 3,447 77% 93 164 77%
Cassava
CB 1 ha 10 months 7,669 14,503 89% 111 160 44% Soybean CB 1,000 m2 3 months 652 1,703 161% 72 170 135%
Fodder VA06
CB 1,000 m2 9 months 2,168 3,583 65% 108 138 27% Fodder Mulato 2 BK 1,000 m2 1 year /d 6,680 9,394 41% 84 104 25%
Investment costs (VND million) Financial Internal Rate of Return
FWOP WP Increment FWOP WP Increment
Perennial Crop Production Green Tea (Shan) BK 1 ha 20 years 24.7 36.1 11.4 17.2% 24.9% 7.7% Tangerine CB 1 ha 20 years 82.6 106.7 24.1 19.1% 37.3% 18.2% Plum BK 1 ha 10 years 47.8 45.5 -2.3 26.8% 45.3% 18.5% Banana BK 1 ha 8 years 31.9 36.2 4.3 22.3% 36.6% 14.3%
Forest Production Magnolia conifer BK 1 ha 10 years 23.9 23.9 0 3.6% 12.0% 8.4% Acacia BK 1 ha 10 years /e 17.0 13.3 -4 1.7% 27.1% 25.4% CB 1 ha 9 years /e 41.1 58.1 17 13.7% 22.0% 8.3%
Processing
Glass noodle
CB HH enterprise 1 year 38 72.2 33 23.7% 47.0% 23.3%
Tea BK Cooperative 1 year 62.3 182.1 120 23.5% 38.1% 14.6% Peanut CB HH enterprise 1 year 1,050 1,300 250 18.9% 37.0% 18.1% Cassava CB Med. enterprise 1 year 92,000 112,000 20,000 12.3% 15.8% 3.5% Wood processing (peel) BK Small enterpr. 1 year 395 955 560 15.6% 33.5% 17.9% BK Med. enterprise 1 year 1,500 1,700 200 21.3% 39.5% 18.2%
FWOP = future without Project; WP = with Project \a WP increased to 4 cows. \b Summer-autumn; \c Winter-spring. \d Production period 6 years; \e WP reduced to 8 years.
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Table B: Project Cost and Indicators in Logical Framework
Total Project Costs (USD m): 77.75 IFAD (USD m): 43.00 GOV (USD m): 21.08 Beneficiaries (USD m): 13.67
Beneficiaries /a People: 147,000 Households: 33,000 Districts: 8 (19) /b
Cost per beneficiary 529 USD / person 2,356 USD / household Communes: 70 (179+112) /b
Outcomes/Components and Cost in USD m (% of total)
Outcome indicators Output indicators
Outcome 1: Province-based participatory planning institutionalised
8.11 (10.4%)
At least 80% of provincial communes and districts prepare medium-term climate-adapted MOP-SEDPs.
At least 10 new commodity-based VC SIPs prepared.
National peer reviewed CC adaptation communication and dissemination Project for CCA and MOP-SEDP prepared.
Project provinces have the legislative base, guidelines, tools and staff capacity for district and commune MOP-SEDP implementation.
Outcome 2: A greener agriculture future
17.64 (22.7%)
At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two or more climate change adaptation technology or practices.
Forest land and forest use rights for 17,000 hectares of forest transferred to private households in Bắc Kạn.
Members of up to 900 Bắc Kạn and 1,000 Cao Bằng climate-adapted commodity-based CIGs trained in climate adapted technologies and practices.
Outcome 3: Profitable farms linked to finance and markets
42.30 (54.4%)
SCGs maintain a minimum annual saving rate growth of at least 15% over base-year savings and < 5% non-performing loans in their portfolios.
Of USD 40 million invested in commodity-targeted, climate- adapted infrastructure, commodity production and enterprises development in Project communes, at least 70% of investments show an IRR > 10%.
Seventy Project communes have Commune Infrastructure Supervision Boards capable of supervising, inspecting and maintaining infrastructure activities in their communes by end-PY2.
6,200 new households in Bắc Kạn and 3,300 new households Cao Bằng become members of WSCGs.
At least 12 CIG-linked enterprise applications for APIF funding approved in each province.
Project Management 9.20 (11.8%)
NTP NRD National Coordination Office Grant
0.5 (0.6%)
\a See calculation in Appendix 2, Table 1. \b Districts/communes directly supported under Outcome 2 (Total number of districts/communes benefiting from Outcome 1 – all districts/communes in Bắc Kạn and Cao Bằng). In addition, in two communes in Bạch Thông district in Bắc Kạn province the Project will support the development of tangerine value chains.
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Table C1: Financial Analysis Main Assumptions (see Table A for financial outcomes and production period)
Models used in Analysis Province Unit Unit of output Units of output per production period
(number) Price per unit of output (VND'000)
FWOP WP Increment FWOP WP Increment
Livestock Production Cow fattening
BK 2 cow head 2 2 0% 25,000 30,000 20%
H'mong Cow fattening CB 2 cow head 2 4 100% 25,000 30,000 20%
Black Pig (fattening)
BK 5 porker Kg 240 294 23% 55 55 0%
CB 5 porker Kg 259 270 4% 50 55 10%
Crossbred Pig (fattening) BK 5 porker Kg 365 441 21% 40 40 0% Crossbred Pig (breeding) BK 1 sow Kg 259 342 32% 55 55 0%
Chicken BK 200 head Kg 342 392 15% 80 80 0%
Crop Production
Annual
Rice - lowland su /a local BK 1 ha kg 4,200 4,550 8% 16.0 16.0 0%
hybrid CB 1 ha kg 5,600 7,200 29% 6.5 7.5 15%
wi /b local BK 1 ha kg 4,200 4,900 17% 13.0 13.0 0%
hybrid CB 1 ha kg 5,200 6,400 23% 6.5 7.5 15%
Rice – upland su /a local BK 1 ha kg 3,500 3,850 10% 16.0 16.0 0%
CB 1 ha kg 4,000 5,000 25% 6.5 7.5 15%
wi /b local BK 1 ha kg 3,500 4,200 20% 13.0 13.0 0% hybrid BK 1 ha kg 3,640 4,550 25% 10.0 10.0 0%
Maize – upland
CB 1 ha kg 4,200 5,500 31% 7.0 7.5 7% Maize - lowland BK 1 ha kg 4,200 6,000 43% 6.0 6.0 0%
Canna
BK 1,000 m2 kg 6,000 7,500 25% 1.2 1.3 8%
CB 1,000 m2 kg 5,300 7,700 45% 1.9 1.9 0%
Peanut
CB 1,000 m2 kg 140 205 46% 20.0 20.5 2% Ginger
BK 1,000 m2 kg 1,150 1,850 61% 20.0 20.0 0%
CB 1,000 m2 kg 1,700 2,200 29% 15.0 15.0 0% Black Agar
CB 1,000 m2 kg 500 600 20% 25.0 25.0 0%
Sugarcane
CB 1,000 m2 kg 6,500 7,000 8% 0.9 1.0 11% Potato
BK 1,000 m2 kg 1,100 1,400 27% 5.0 5.0 0%
Cassava
CB 1 Ha kg 9,500 17,640 86% 1.4 1.4 0% Soybean CB 1,000 m2 kg 110 170 55% 16.0 17.5 9%
Fodder VA06
CB 1,000 m2 Kg 6,000 8,000 33% 0.8 0.8 0% Fodder Mulato 2 BK 1,000 m2 kg 11,000 15,000 36% 0.9 0.9 0%
Perennial Crop Production Green Tea (Shan) BK 1 ha kg 2,500 4,000 60% 15.0 18.0 20% Tangerine CB 1 ha kg 27,500 32,500 18% 10.0 14.0 40% Plum BK 1 ha kg 13,000 20,000 54% 15.0 15.0 0% Banana BK 1 ha kg 28,000 32,000 14% 2.5 3.0 20%
Forest Production Magnolia conifer /c BK 1 ha m3 90 25 -72% 600 400 -33% Acacia /c BK 1 ha m3 80 95 19% 400 500 25% Acacia CB 1 ha m3 178 235 32% 1,300 1,500 15%
Processing
Glass noodle
CB kg 1,814 125% 62 65 5% 23.3% Tea BK Cooperative Kg 2,100 3,150 50% 160 200 25% Peanut CB HH enterprise Kg 30,000 80,000 167% 32 32 0% Cassava CB Med. enterprise Kg 7,000,000 9,800,000 40% 8 8 0% Wood processing (peel) BK Small enterpr. m3 1,814 2,592 43% 2,200 2,310 5% BK Med. enterprise m3 4,480 5,760 29% 2,200 5,760 162%
FWOP = future without Project; WP = with Project. \a Summer-autumn; \b Winter-spring. \c WP output excludes additional thinning.
Table C2: Economic Analysis Main Assumptions
Parameter Value Remarks Official Exchange Rate 22,400 USD1=VND (May 2016)
Shadow Exchange Rate 22,400
Standard Conversion Factor 1.0 As commonly applied in recent project designs in Vietnam. As appropriate, financial costs are converted into economic costs by removing taxes and subsidies.
Value Added Tax 10% Included in Project costs as applicable but deducted from Project costs in Economic Analysis.
Labour Conversion Factor (Opportunity Cost of Family Labour)
70%-80% As percentage of cost of hired labour. Given the large variations depending on the season, location and alternative income opportunities, a standard labour conversion factor is not feasible. For the Economic Analysis all family labour is valued at its estimated opportunity costs.
Discount rate /c 9% Equals assumed 6% annual long-term average GDP growth rate in Vietnam + 3% for elasticity of marginal utility of consumption (World Bank Vietnam).
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Table D: Beneficiaries and Phasing
Output PY1 PY2 PY3 PY4 PY5 PY6
5. CIGs for climate CIGs New 400 800 700 0 0 0
Adaptation cumulative 400 1,200 1,900 1,900 1,900 1,900
members new 4,800 9,600 8,400 0 0 0
cumulative 4,800 14,400 22,800 22,800 22,800 22,800
7. Rural financial services WSCGs /a new 79 230 171 80 60 0
cumulative 79 309 479 559 619 619
members new 873 2,195 1,462 560 420 0
cumulative 873 3,068 4,529 5,089 5,509 5,509
8. Agribusiness USD'000 new 300 1,100 2,100 1,908 1,000 0
Promotion Investment cumulative 300 1,400 3,500 5,408 6,408 6,408
Fund (APIF) enterprises /b new 2 7 14 13 7 0
cumulative 2 9 23 36 43 43
VC supply New 600 2,200 4,200 3,816 2,000 0
households /c cumulative 600 2,800 7,000 10,816 12,816 12,816
6. Community
infrastructure - Roads km New 67 135 141 103 0 0
cumulative 67 202 343 446 446 446
villages new 67 135 141 103 0 0
cumulative 67 202 343 446 446 446
HH new 3,365 6,730 7,066 5,148 0 0
cumulative 3,365 10,095 17,161 22,310 22,310 22,310
people new 15,142 30,285 31,799 23,168 0 0
cumulative 15,142 45,427 77,226 100,394 100,394 100,394
- Irrigation schemes schemes new 76 152 160 117 0 0
cumulative 76 229 389 505 505 505
ha new 457 915 961 700 0 0
cumulative 457 1,372 2,333 3,033 3,033 3,033
HH new 4,920 9,839 10,331 7,527 0 0
cumulative 4,920 14,759 25,091 32,618 32,618 32,618
4. Forest land allocation ha new 4,000 8,000 5,000 0 0 0
and use (FLA) cumulative 4,000 12,000 17,000 17,000 17,000 17,000
(pink books) - Bac Kan HH new 2,667 5,333 3,333 0 0 0
cumulative 2,667 8,000 11,333 11,333 11,333 11,333
\a An additional 4,000 women will be mobilised into around 260 WSCGs in Bắc Kạn, financed through residual revolving
funds from the former 3PAD. \b Min. number of enterprises (rounded), based on max. USD 150,000 total investment per enterprise. \c Min. number of households, based on max. USD 500 co-financing per VC supply household.
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Table E: Project Economic Cash Flow (USD ’000)
Year Project costs
/a
Incremental Net Benefits by Outputs /b
Total net incremental
benefits Forest Land Allocation
Community development
Rural Financial Services
Agribusiness Promotion Investment Fund (APIF)
Community Infrastructure
Community Interest Groups
/c
1 -4,368 -295 -4,200 -1,625 -642 -420 -11,550 2 -5,432 -590 -8,158 -2,980 -1,472 -1,201 -19,834 3 -5,871 -369 -6,545 -2,255 -556 -2,086 -17,681 4 -5,546 -194 -1,297 510 293 -1,499 -7,734 5 -4,151 -403 7,426 1,035 528 964 5,400 6 -2,265 -217 8,512 1,140 911 1,257 9,337 7
0 8,964 1,140 911 1,352 12,367
8
0 8,964 1,140 911 1,352 12,367 9
502 8,964 1,140 911 1,352 12,869
10
1,505 8,964 1,140 911 1,352 13,872 11
2,132 8,964 1,140 911 1,352 14,499
12
2,132 8,964 1,140 911 1,352 14,499 13
2,132 8,964 1,140 911 1,352 14,499
14
2,132 8,964 1,140 911 1,352 14,499 15
2,132 8,964 1,140 911 1,352 14,499
16
2,132 8,964 1,140 911 1,352 14,499 17
2,132 8,964 1,140 911 1,352 14,499
18
2,132 8,964 1,140 911 1,352 14,499 19
2,132 8,964 1,140 911 1,352 14,499
20
2,132 8,964 1,140 911 1,352 14,499
NPV at 9% USD million 5.06 34.83 1.27 3.07 3.58 26.72
EIRR USD million 24.7% 26.8% 11.7% 21.6% 18.7% 14.8%
\a Only costs not included in Incremental Net Benefits by Output: Mainly Outcome 1 and Project Management costs. \b Outputs for which economic benefits have been quantified. Including related economic output costs. \c 50% of total costs of farmer group/Mass Organization awareness training on commodity production & CC adaptation deducted.
Table F: Project Economic Outcome and Sensitivity Analysis
Scenario Link to Risk Matrix /a EIRR
ENPV (USD‘000)
Base Case 14.8% 26,718
% Changes to Base Case
Project Costs
Incremental Benefits
Benefits delayed by
+ 10% (i) Increased cost of inputs; (ii) external shocks to macro economy.
13.2% 20,817 + 20% 11.8% 14,917
Base Case
- 20% - 40%
(i) Reduced producer prices/demand; (ii) lack of integration of NTP funding into the MOP-SEDP process; (iii) Community infrastructure investments are not directed to areas of highest financial/economic benefit; (iv) Technical coordination is not responsive to the grassroots level needs; (v) Climate change and disaster impacts.
11.2% 9,573 7.1% -7,572
+ 10% - 10% Combination of the above. 11.5% 12,245 + 20% - 20% 8.6% -2,228
Base Case Base Case 1 year 2 years 3 years
(i) Ineffective inter-institutional cooperation & dialogue on development issues resulting in financing is not disbursed in a timely manner; (ii) Inadequate skills base amongst local service providers; (iii) Financial service providers unwilling to support Project investments.
12.5% 17,266
10.7% 8,595
9.1% 640
Base Case - 10% 1 year
Combination of the above.
11.0% 9,639
+ 10% - 10% 2 years 8.2% -4,066
1 year 9.4% 2,012 Base Case - 20% 2 years 8.0% -4,925
3 years 6.7% -11,289
+ 20% - 20% 3 years 4.8% -23,091
Switching Values /b
Costs + 45% 9.0% 0 Benefits - 31% 9.0% 0
EIRR = Economic Internal Rate of Return. ENPV = Economic Net Present Value. \a See Table 5 in Appendix 10 and Table 1 in Main Report for details. \b Percent change in cost and/or benefit streams to obtain an EIRR of nine percent, i.e., economic viability threshold.
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Logical Framework
Results Hierarchy
Indicators Means of Verification
Assumptions
Name Baseline YR1 Mid-
Term
End
Target Source Frequency Responsibility
Goal:
Contribute to sustainable poverty reduction in Bắc Kạn and Cao Bằng
by Project-end, 25% reduction in the multi-dimensional poverty rate for 16,000 households considered poor and near poor in Project area (differentiated data for poor/near poor, ethnic minority & women-headed households).
0 0 10% 20% Baseline, periodic and impact evaluation surveys
DoLISA statistics
Project start, mid-term and end-Project
Project Coordination Office (PPCO)
Development Objective:
Sustainably improved income and reduced climate vulnerability of poor and near-poor farm households in targeted Project communes.
20% improvement in household assets ownership index above non-Project provincial commune average by Project-end for at least 30,000 households in Project area. (differentiated data for poor/near poor/non poor, ethnic minority & women-headed households).
0 0 Baseline, periodic and impact evaluation surveys;
Provincial statistics
Project start, mid-term and end-Project
PPCO Multi-dimensional poverty approach is introduced by MoLISA, increasing accuracy of poverty indicator
Socioeconomic conditions remain reasonably stable in the Project area and climatic disasters are manageable
Macro-economy continues to improve.
Business regulatory system improves
At least 14,000 poor smallholder household members whose climate resilience score
10 has been increased
by 30% (gender and ethnic minority disaggregated).
11
0 0 10% 25% Baseline, periodic and impact evaluation surveys.
Provincial statistics
Project start, mid-term and end- Project
DARD
10
a resilient household is anticipated to exhibit, inter alia, the following characteristics: i) diversified livelihood and income streams; ii) improved natural resource and risk management based on better access to
knowledge and adoption of CCA land and water conservation practices; iii) membership of social networks such as Common Interest Groups (CIGs) and Saving and Credit Groups (SCGs); iv) ability to access
credit; v) protection from some climatic hazards as a result of small-scale community infrastructure; and vi) direct engagement in village and commune level planning, and influence on provincial financial
allocations. These criteria will, amongst others, be developed as a score card to measure change. Using these resilience characteristics, and drawing on emerging procedures for measuring household
resilience in Viet Nam and the SE Asia region, the Project will develop a weighted scorecard to measure changes in household resilience. 11
Indicator from ASAP
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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Results Hierarchy
Indicators Means of Verification
Assumptions
Name Baseline YR1 Mid-
Term
End
Target Source Frequency Responsibility
Outcome 1 Province-based Participatory Planning Institutionalised
Legislated provincial socio-economic and commodity development planning is holistic, participatory, climate adapted and market oriented.
At least 80% of provincial communes and districts implement medium-term climate-adapted MOP-SEDPs
0 Partial Partial Yes Government decision
Project M&E System
start, mid-term and end- Project
MoNRE with DARD and PPC
Provincial governments committed to participatory market-led socio-economic development planning;
Provincial governments committed to improving competitiveness index
CC planning is strengthened and prioritized;
Government issues enabling decrees for integration of CC and market orientation into SEDP
Output 1
Strategic Investment
Plan At least 10 new commodity-based VC
SIPs prepared; 0 10 10 10 Project M&E
records Annual DPI with input by
DARD and DoIT
Adequate skills available from local /national service providers.
VDBs, CPCs and DPCs can acquire and retain appropriate skills to enable effective climate adapted MOP-SEDP procedures.
Ethnic people enabled to participate;
Inter-institutional cooperation and articulation is maintained and reasonably effective
Output 2
Provincial climate
change action plan
National peer reviewed CC adaptation communication and dissemination Project for CCA and MOP-SEDP prepared.
0 Partial12
Yes Yes Provincial records
Project M&E records
Project start, mid-term and end-Project
PCCAB and PPCO
Output 3
Climate-adapted, market-oriented and results-based SEDPs
Project provinces have the legislative base, guidelines, tools and staff capacity for district and commune MOP-SEDP implementation;
0 Partial13
Yes Yes Commune, district and provincial records.
Project start, mid-term and end-Project
DPI with input by DoNRE
12
Previous CC adaptation strategy updated 13
Legislative base for district and commune MOP-SEDP processes approved
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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Results Hierarchy
Indicators Means of Verification
Assumptions
Name Baseline YR1 Mid-
Term
End
Target Source Frequency Responsibility
Outcome 2
A greener agriculture future
Climate change adaptation technology provide mitigation co-benefits
At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two or more climate change adaptation technology or practices
0 0 30% 100% DARD and DoNRE climate change adaptation and mitigation records;
REDD databases
Project start, mid-term and end-Project
DoNRE ad DARD
Output 4
Forest land and forest allocation
Forest land and forest use rights for 17,000 hectares of forest transferred to private households in Bắc Kạn
?? 0 40% 100% Commune records
DoNRE and DARD records
Annual DoNRE & DARD
Output 5
Common Interest Groups for climate adaptation
Members of up to 900 Bắc Kạn and 1,000 Cao Bằng climate-adapted commodity-based CIGs trained in climate adapted technologies and practices.
0 0 40% 100% Project M&E system
Annual PPCO
Outcome 3 Profitable farms linked to finance and markets
Increased public and private investment in
SCGs maintain a minimum annual saving rate growth of at least 15% over base-year savings and < 5% non-performing loans in their portfolios
0 0 Yes Yes WU records
Project M&E system
Annual WU & PPCO
MOP-SEDPs are prepared and implemented at field level;
Project financing is disbursed in time to support field implementation;
Productivity improvements are
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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Results Hierarchy
Indicators Means of Verification
Assumptions
Name Baseline YR1 Mid-
Term
End
Target Source Frequency Responsibility
sustainable, profitable commodity production and value addition
Of USD 40 million invested in commodity-targeted, climate- adapted infrastructure, rural financial services and enterprises development in Project communes, at least 70% of investments show an IRR > 10%
0 0 USD 15 million
USD 40 million
▪ Business financial records
▪ Case studies
▪ Project M&E system
Annual PPCO
in areas where there is continued growth in market demand.
Smallholders receive fair terms of trade for their products;
Farmers are unwilling to adopt recommended methods and technologies;
Technical service support system is strengthened and responds to the grassroots level needs;
Provincial governments integrate commune level NTP funding into the MOP-SEDP process
No major change in financial climate, lending terms
Financial service providers remain interested to invest in Project targeted commodity chains;
Government completes the regulatory framework for the implementation of MFI legislation
Output 6
Community infrastructure
Seventy Project communes have Commune Infrastructure Supervision Boards capable of supervising, inspecting and maintaining infrastructure activities in their communes by end-PY2.
0 ▪ CPC records
Project M&E system
Annual DPI
Output 7
Rural financial services
6,200 new households in Bắc Kạn and 3,300 new households Cao Bằng become members of WSCGs.
0 500 BK 200 CB
3000 BK
1500 CB
6200 BK
3300 CB
WU records Project M&E systems
Project start, mid-term and end-Project
Women’s Development Funds (WDF)
Output 8
Agribusiness Promotion Investment Fund (APIF).
At least 12 CIG-linked enterprise applications for APIF funding approved in each province 0 0 6 BK
6 CB 12 BK 12 CB
Surveys
Project M&E systems
Annual PPCO & DPIs
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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I. Strategic context and rationale
A. Country and rural development context
1. Since the introduction of a
comprehensive set of economic reforms
known as Đổi Mới (renovation) in 1986, Viet
Nam’s economy has sustained strong
economic growth. Over the last 20 years,
Gross Domestic Product (GDP) growth has
averaged 7.2% per annum, resulting in rapid
poverty reduction: from 28.9% in 2002 to
10.7% in 2010. Consequently, almost 30
million people have been lifted out of poverty
as defined by the national poverty line. The
country became a low middle income country
in 2009 and achieved five out of eight
millennium development goals by 2010.
Under an increased poverty threshold issued
by the GoV Statistical Office in 2014, 17.2%
of the population were considered below the
poverty line. The GoV has recently introduced
a new multi-dimensional poverty index, for
which national statistics are not yet available,
however, the new multi-dimensional poverty
rankings for Bắc Kạn and Cao Bằng
provinces have been used in identifying
CSSP beneficiaries.
2. In recent years, GDP growth has
lagged, averaging 5.2% in the period 2009-
2012, due to world economic stagnation, high
domestic inflation and low private sector business confidence, the latter the result of overleveraged
State Owned Enterprise (SOE) and banking sectors and weak domestic demand. Since 2012,
headline CPI inflation has stabilized, aided by subdued credit growth, easing of food price increases
and stronger external trade and capital account balances, which have enabled foreign exchange
reserves to build up to an import cover of about 3 months, up from 1.6 months in December of 2011.
GDP growth is projected to return to about 6.4% per annum by 2015, however, this will require
renewed attention on a number of structural reforms – with emphasis on the country’s state owned
banks and enterprises.
3. Viet Nam’s economic development has been accompanied by structural shifts in the economy.
Between 1990 and 2012, agriculture’s contribution to GDP declined by more than 20%, to 18% in
2013. The proportion of the labour force engaged in agriculture also decreased from more than 80%
in the 1990s to a provisionally estimated 46.3% in 2014, due to the industrial and construction boom.
4. Notwithstanding the economic transition taking place, towards industrialisation, agriculture
continues to play an important role in maintaining Viet Nam’s economic stability. The agricultural and
rural sectors of the economy have, in recent years, demonstrated solid annual growth of about 4.5%.
Viet Nam is now the world’s second largest exporter of rice and a significant exporter of coffee,
pepper, tea, cashew and seafood. Export earnings from agricultural and aquaculture products have
grown steadily since 1990, reaching USD 22.7billion in 2013, roughly equivalent to record 2012 levels,
contributing to an agriculture trade surplus of about USD 11.5 billion. Industrial crops, vegetables and
livestock production have also developed rapidly and largely meet domestic demand.
Multi-dimensional poverty measurement in
Viet Nam
In 2015, the GoV adopted a multi-dimensional
poverty index that incorporates 11 indicators
including: adult education, child education,
health care, health insurance, house, safe
drinking water, sanitation facilities, health,
shelter, information, accessing to services,
social insurance and social assistance. In the
period 2016 - 2020, the multidimensional
poverty line in Vietnam is expected to be
determined as follows: (i) a household would
be considered as a seriously multi-
dimensionally poor household when it lacks
more than ½ the total basic human needs;
(ii) a household would be considered to be
multi-dimensionally poor when lacking from
1/3 - 1/2 of the total number of basic human
needs; households will be considered as
being near multi-dimensional poor
households if they lack between 1/5 - 1/3 of
the total basic human needs. The new multi-
dimensional poverty ranking system does not
apply any household income targets for
poverty classification.
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5. Although economic development in rural areas has resulted in higher income per capita and
consequent improvements in living standards, it has also brought with it income inequality,
environmental degradation and chronic malnutrition. Despite the gains in per capita income in rural
areas, tackling residual poverty is proving to be a persistent challenge as a consequence of limited
assets, low levels of education and poor health status, particularly amongst ethnic minorities, who are
disproportionately represented among the rural poor.
6. The average income per capita in rural areas is about VND 1 million/month (USD 47) - less
than 50% of that in urban areas. In the CSSP provinces average rural income of poor households is
just VND 400,000 (USD 19) per person per month. The rural poverty rate on the other hand is nearly
three times the urban rate. Many rural households are not considered poor, but maintain an income
level just above the poverty line. With little or no savings or state support (except in Project 30A
districts14
) and an almost total dependence on natural resource gathering and subsistence level
agricultural production, they are vulnerable to unexpected life events, climate shocks and degradation
of land and water resources. Around 90% of total spending of each person living in rural areas is for
basic living costs, and most of their income stems from agriculture-forestry-aquaculture production
and wage income derived from mostly unskilled manual labour. Two third of the country is
mountainous with significant hill side crop cultivation, which is highly vulnerable to soil erosion. Even
though terracing is common, some shifting farming is also practiced and application of soil and water
conservation technologies and practices are often limited. Many studies suggest that the loss of the
fertile top soil in upland crop cultivation systems is more than 8 times higher than the Soil Loss
Tolerance Value which over time effects yields.15
Deforestation of steep slopes, along water causes
and in upper watersheds is another factor that effects soil erosion as well as floods and dry seasons
stream flow. According to FAO, the total forest cover of Viet Nam was 13.8 million ha in 2010
reflecting an important recovery from 9.1 million ha in 1990. The increased forest cover is, however,
mostly coming from monoculture forest plantations and the natural forest which deliver higher levels of
services of soil erosion and flood control, maintenance of stream flows in dry seasons and
conservation of biodiversity, has not been recovered16
.This situation is further exacerbated as a result
of current and predicated CC impacts and their implications on rural livelihoods.
7. Poverty is concentrated in upland areas in the North East and North West Mountains, parts of
the Central Highlands and the Central Coastal region. At end-2014, Bắc Kạn had 10,830 poor and
7,140 near-poor households, representing 14.2 per cent and 9.4 per cent of its total number of
provincial households, respectively. Almost all (94%) of these poor and near-poor households are
ethnic minority households. In the four Project districts there are 6,674 poor and 3482 near-poor
households, representing 21.4 per cent and 11 per cent of the total number of Project district
households, respectively, almost all (98%) from ethnic minority groups. At end-2014, Cao Bằng had
24,397 poor and 12,266 near-poor households, representing 21.4 per cent and 10 per cent of its total
number of households, respectively17
. All of these poor and near-poor households are ethnic minority
households. In the four Project districts there are 9525 poor households and 2823 near-poor
households, all from ethnic minority groups (DOLISA 2014).
8. Viet Nam’s central planning system is complex, involving integrated planning at national,
regional and provincial levels. At the national level, it includes (i) a 10-year "Socio-Economic
Development Strategy" (SEDS); (ii) the associated, two consecutive "Five-year Socio-Economic
Development Plans" (SEDPs) and (iii) national, sectoral development plans that define the sector
specific objectives to be implemented by the line ministries. In addition, at sub national level there are
(i) regional development plans whose purpose is to tailor the objectives of the SEDS and SEDP to the
conditions of the regions in Viet Nam; (ii) the line ministries’ regional and provincial sectoral
development plans; and (iii) the Provincial People’s Committees’ (PPC) annual and 5 year plans for
14
Resolution No. 30a / 2008 / NQ-CP of the Government dated 27/12/2008 on rapid and sustainable poverty
reduction for 62 poor districts 15
Erosion and Nutrient Loss on Sloping Land under Intense Cultivation in Southern Vietnam, Nguyen Van De, et. al.
2007 16
The context of REDD+ in Vietnam Drivers, agents and institutions, CIFOR, 2012 17 According to the poverty lines (adopted by MoLISA) applicable for the 2011-2015 period.
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provincial socio economic development. Under the national SEDP 2011-2015, there are four thematic
areas whose targets orient the planning for the agriculture and rural development sector. These
thematic areas are: Clean Water, the NTP-NRD; the NTP-RCC; and Clean Food & Agriculture. The
SEDP 2016-2020 is currently under preparation.
9. The context and functioning of the SEDP process at the local-levels (commune, district and
province) is of most relevance to the CSSP. It is this five-year plan that establishes the priorities and
defines all public budget and provincial expenditures for the coming years.
10. The Government’s development vision is laid out in its SEDS 2011-2020. The overall goal of the
SEDS is for Viet Nam to become a modern, industrialized country by 2020, placing emphasis on the
quality of growth and efficiency of investment. Sustainable development, human resource
development, improvements in market institutions and public administration, and developing a
synchronous infrastructure system with modern facilities are the major pillars. Under the national
SEDP 2011-2015, there are four thematic areas whose targets orient the planning for the agriculture
and rural development sector. These thematic areas are: Clean Water, the NTP-NRD; the NTP-RCC;
and Clean Food & Agriculture. The SEDP 2016-2020 is currently under preparation.
11. In recognition of the need to further reduce rural poverty, the MARD, in 2008, put forward a
comprehensive strategy on developing “Agriculture, Farmers and Rural Areas” popularly referred to as
Tam Nông, which calls for a partnership between government, farmers, scientists and the private
sector. To realize the objectives of Tam Nông, the NTP-NRD was launched in June 2010 with the
purpose of transforming rural areas, with progress at the commune level measured against a set of 19
“indicators”. The achievements of the NTP-NRD to date are currently being assessed and a new
model that is more accommodating of regional differences is expected to be launched in 2016.
12. Further, in recognition of Viet Nam’s vulnerability to environmental pollution and the impacts of
climate change, the National Green Growth Strategy (GGS) was approved in 2012 to support a low
carbon sustainable development. The main objectives of the GGS are: (i) restructure the economy
and improve the economic institutions by greening existing sectors and encouraging the development
of economic sectors to use energy and natural resources efficiently with higher added values;
(ii) conduct research and enhance application of appropriate advanced technologies to more
efficiently use natural resources, reduce greenhouse gas emissions intensity and to contribute to an
effective response to climate change; and (iii) improve living standards of the people, creating an
environment friendly lifestyle through employment generation from green industry, agriculture and
services; investment in natural capital; and development of green infrastructure. To achieve these
objectives the main strategic tasks and solutions relevant for agriculture and forestry are:
(i) development of a green agriculture based on environmentally friendly structures, technologies and
equipment, enhancing investment in natural capital, proactive prevention and treatment of pollution;
(ii) study the adjustment of master plans, shift animal husbandry and crop production structures, crop
planting seasons, livestock, forestry, aquaculture, irrigation and non-farming activities in rural areas;
(iii) research and apply production processes and economic technologies that efficiently use
seedlings, feed, agricultural materials, soil, water etc., and reduce greenhouse gas emissions from
agricultural production; (iv) replicate widely technologies that treat and reuse by-products and waste
from agriculture production to produce animal feed, mushrooms, materials for industries, biogas and
organic fertilizer while reducing greenhouse gas emissions; (v) speed up progress of afforestation and
reforestation projects, encourage enterprises to invest in production forests to increase forest
coverage to 45% by 2020, improve forest quality, enhance carbon sequestration capacity by forests
and increase standing biomass and secure timber production and consumption; and (vi)implement
programs to reduce greenhouse gas emissions through efforts in Reducing Emissions from
Deforestation and Forest Degradation (REDD), sustainable forest management in combination with
diversifying livelihoods of rural people.18
18
The GGS has set targets to be reached by 2020 including 8-10% reduction in GHG emissions as compared to the
2010 level, application of clean technologies in manufactures will reach 50%, and development investment for
supporting sectors to protect the environment and enriching natural capital will reach at 3-4% of GDP
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13. The GGS integrates and builds on previous policies and action plans to address CC impacts
including: (i) NTP-RCC; (ii) The Action Plan Framework for Adaptation to CC in the Agriculture and
Rural Development Sector, 2008-2020; (iii) MARD’s Action Program in Response to CC of the
Agriculture and Rural Development Sector, 2011-2015 and Vision to 2050 (RCC-ARD); and (iv) The
National Program on Community-Based Disaster Risk Management to 2020.
14. While there is an impressive set of policy frameworks that guide Viet Nam’s development
aspirations, full implementation of those policies remains a continuing challenge. If Viet Nam’s
development gains are to be consolidated, many of the policies that support environmental
sustainability and socio-political equality will need to receive greater funding and implementation
support, otherwise, the gains achieved thus far could be lost.
B. Rationale
15. Bắc Kạn and Cao Bằng provinces, located in north-eastern Viet Nam, with populations of
350,000 and 512,500 people respectively, the majority of whom are from ethnic minority groups19
, are
amongst the ten poorest provinces in Vietnam. Rural development in both provinces is constrained
by; (i) the limited area of agricultural land, 50-60% of which is moderately to severally affected by soil
erosion (study exist for Bắc Kạn only); (ii) the mountainous kaast geography which makes the region
vulnerable to flash floods, landslides and soil erosion; (iii) a changing climate with increased
temperatures and minor reductions in rainfall the last 50 years and future predictions of more intense
extreme rainfall in the north and less intense in the south, and droughts to increase in east and
decrease in the west (see SECAP note for more details on CC trends and predictions)20
(iv) limited
rural infrastructure; and (v) lower literacy levels, particularly amongst the majority ethnic minority
population.
16. Bắc Kạn province has been supported by IFAD through the 3PAD project between April 2009
and 2015, while Cao Bằng was supported through the DBRP, between 2008 and 2014. Both the
3PAD and DBRP have been rated as successful and significant on-going support for the projects
districts is expected through both the NTP-NRD and NTP-SPR. 3PAD and DBRP success included
(see Appendix 2 for details): (i) a sharp drop in household poverty levels, supported by the adoption of
broad strategies for improved productivity; (ii) the mainstreaming (in Cao Bằng) of a comprehensive
decentralization and community empowerment strategy; (iii) infrastructure development supporting
enhanced agricultural production and market access; and (iv) strengthened agriculture VCs in Bắc
Kạn. Areas identified in the 3PAD and DBRP completion report recommendations for future poverty
reduction in the respective provinces include: (i) the promotion of market-oriented production,
focusing on high-value crops and animal production; (ii) building a sustainable LF2F information
network; (iii) the need for sustainable non-State rural financial services, especially for women; (iv) the
strengthening of linkages between enterprises and farmers through APIFs; and (v) the development of
upland production systems with due attention to natural resources management and CCA. These
areas are consistent with the COSOP Strategic Objectives, which include:
enable poor rural provinces to carry out market-led pro-poor rural development;
improve access of the rural poor– particularly women – to commodity and labour
markets;
enhance the capacity of poor rural households to adapt to CC
19
In Bắc Kạn, ethnic groups make up 95 percent of the population including Kinh, (13.9%), Tay (56.4%), Nung (10.1%),
and Dao (14.6%) The remainder of the population belong to the H'Mong (4.15%) Hoa (0.5%) San chi (0.35%) and
others (0.05%) ethnic groups. Cao Bằng is the home to 28 ethnic groups, with Tay people accounting for the largest
proportion (60%), followed by Nung (20%) and Dao (3%). Other Cao Bang ethnicities include the Mong, Kinh, San
Chay, Lo, Hoa and Ngai groups. 20
Even though the exposure to climate change in the northern mountain region is less obvious than in other parts of the
country along the Mekong delta and in coastal areas the vulnerability of the poor population is high because of their low
coping capacity. The Viet Nam Institute of Meteorology, Hydrology and Environment (IMHEN) and UNDP, (2015)
conclude that exposure is variable across the north; ranging from low to moderate in the North East to high and very
high in the North West, but the sensitivity is generally high throughout.
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17. The government has initiated the NTP-NRD with a view to achieving broad-based, market
oriented and pro-poor agriculture growth till 2020, through a partnership between government,
farmers, scientists and the private sector. While the NTP-NRD faces numerous implementation
constraints (see Appendix 1), it is the principal national framework for scaling-up rural development
and many of its planned outcome are consistent with those of the Viet Nam IFAD COSOP 2012-2017,
which provides a sound basis for investment in market-oriented activities. The NTP-NRD is also the
subject of an on-going review supported by the World bank (WB) and IFAD that is likely to sharpen its
focus and is expected to receive substantial central government funding over the SEDP 2016-2020. At
the same time, as mentioned above, the government has approved the National GGS, which is being
rolled out in the provinces via the formulation of provincial green growth plans, which emphasises the
importance of mainstreaming climate change mitigation and adaptation as well as pollution prevention
activities in rural development Projects.
18. Building off the positive 3PAD and DBRP experiences, there is recognition within Provincial
Government of the benefits of decentralised participatory planning, as supported by the NTP-NRD,
and for pro-poor investment in climate-adapted, market-oriented production and value addition to
rapidly reduce rural poverty. The required investments, however, need to be effectively targeted to
enable profitable, cost-effective and sustainable engagement by market entities with poor upland
households. There are numerous constraints in Bắc Kạn and Cao Bằng to market-led growth in terms
of inadequate capacity for market oriented development and investment planning, poor agribusiness
and risk management skills, lack of access to finance and inadequate rural infrastructure, which
combine to increase agriculture investment costs and risks, particularly for upland economic activities.
These costs and risks are amplified by the effects of soil erosion and, particularly, the incidence of
intense rainfalls producing flooding, erosion and unseasonable drought, with resulting crop and
livestock losses. There is an urgent need to alleviate the impact of these factors, to enable profitable
agricultural VC to be fully and sustainably developed.
19. The approach taken by CSSP will be specifically oriented towards the consolidation and up-
scaling of past successful interventions, within the strategic framework of the NTP-NRD, for which a
substantial increase in central government funding is anticipated. Innovations related to climate
adapted and market-oriented participatory planning and poverty reduction have been successfully
piloted in various IFAD-supported projects in Viet Nam, including in Bắc Kạn and Cao Bằng. While the
commitment of Project provinces to these approaches is significant, particularly for the roll out of a
provincial MOP-SEDP process, a more-rigorous and market-oriented approach is required for the
effective stimulation and sustainable financing of private sector investment in agriculture production
and value addition along profitable VCs. The other imperative is that all interventions must be based
on the availability and sustainability of the required natural resources to support the value chain. This
includes the recycling of nutrient and organic residues, treatment of waste water treated, and support
to communities in building their ability to adapt to CC and build their resilience to extreme climatic
events.
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20. The complexity of a modernizing
agriculture sector in Viet Nam extends
beyond what the State can readily
provide—in terms of investment,
expertise, and clear direction in the
face of many uncertain variables. As
elsewhere, the role of the State in the
sector must evolve to focus on
ensuring the provision of core public
goods and regulatory services, while
acting to facilitate farmer and private
sector investment and initiative. The
most common form of State interaction
is through the overall (or more
localized) enabling environment which
government provides for private agro
or rural enterprise investment or trade.
This includes provision of public
infrastructure, regulatory services, and
the maintenance of law and order, and
may also include some specific
incentives/subsidies/services/ resource
allocations which are favorable for agri-
enterprises or investors in certain
locations. In pursuit of certain social or
environmental objectives, the State
may subsidize or otherwise facilitate
certain production practices or
commercial relationships within
agricultural supply chains. In Viet Nam
(and elsewhere), public resources are
used to catalyze new supply chain relationships, especially between agribusinesses and small-scale
farmers (groups). The GoV seeks to pursue various forms of APIF in order to more quickly or
effectively realize key sectoral (economic, social, and environmental) goals. This is reflected in recent
government decrees and policies21. Specifically, the GoV expects APIF initiatives to contribute to:
(i) increasing the volume of rural and agricultural investment, even in the face of fiscal constraints;
(ii) Increasing the quality of sectoral investments and the quality of technical services, including
industry-based services; (iii) fostering innovation, both of a technical and institutional nature;
(iv) Improving management—of natural resources, supply chains, and of various production and
commercial risks; and (v) contributing to more rapid structural change at the primary production level
and within supply chains, to bring about improved efficiencies
21. Within this framework, CSSP will ensure a strong focus on smallholder farmers and household
enterprises and poor rural people. While building on implementation success under the 3PAD and
DBRP, the promotion and inclusion of the private sector under CSSP, particularly agri-enterprises, will
be significantly enhanced. The approach of the proposed Project will include: (i) sound commodity
chain analysis and VC action planning that will establish the Project focus; (ii) institutionalizing more
participatory and market-oriented approaches to socio-economic planning and NTP-NRD
implementation; (iii) building capacity for climate adapted, market oriented development across all
levels of public administration; (iv) vocational training targeting improved productivity and product
competitiveness and local employment, particularly through LF2F and E2F knowledge sharing; and
21
(i) GoV Decree No.: 210/2013/ND-CP on incentive policies for enterprises investing in agriculture and rural area;
(ii) MARD Decision No. 62 on promotion policy on cooperation and development of production links associated with
agricultural development.
Government support to public-private partnership
Decree 210/2013 provides for State incentives and
investment support for enterprises investing in agriculture
and rural areas. Key incentives include:
exemption or reduction of land use levy and land and
water surface rents;
support of up to 70% of the cost of vocational training,
applied research and market information access;
support of 70% of the cost of providing roads, electricity
system, water supply and drainage to the project’s fence;
capital grants of VND 2.0 bn. to VND 5 bn. (USD 90,000
– 225,000) or up to 70% of the total investment costs for
poultry and cattle slaughterhouses, dairy, pig, cattle and
goat farms, macadamia and medicinal plant farms, sea
aquaculture and commodity and food processing
MARD Decision 62 encourages cooperation and links
associated with the production of agricultural products. Key
provisions include:
exemption from land use or land rent;
support partial funding for implementation planning , soil
improvement , complete transport systems , inland
irrigation , electrical systems serving agricultural
production in major field projects;
support for up to 100 % funding of training institutions
and technical guidance to farmers to produce agricultural
products;
Support for up to 30 % in the first year and 20 % the 2nd
year of the actual cost of plant protection chemicals,
labor and machine hire to perform services for plant
protection common to investor members
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(i) co-financing of sustainable pro-poor market infrastructure, commodity production and value
addition. To support the transition to a market-oriented commodity-chain approach, there will be
strong emphasis on building an enabling environment for the engagement of the private sector in
creating rural jobs and generating rural income, through promoting and co-financing the development
of pro-poor commodity chains and market linkages between rural poor households and the growing
demand in urban centres and the global market. These initiatives will be underpinned by building
public sector capacity to plan and implement climate adapted MOP-SEDP processes at provincial,
district and commune levels. The proposed CSSP will also address the financing gap for investments
aimed at providing communities with capacities and access to knowledge and practices to improve
the sustainability of their natural resources and strengthen their resilience and adaptation to a
changing climate and extreme weather events and other naturally occurring calamities at the
commune and household levels.
C. Project area and target group22
22. The Project will support development in 35 communes in Ba Bể, Na Rì, Ngân Sơn and Pác
Nặm districts in Bắc Kạn province and 35 communes in Hà Quảng, Nguyên Bình, Thạch An and
Thông Nông districts in Cao Bằng province. In two communes in Bạch Thông district in Bắc Kạn
province the Project will support the development of tangerine VCs. These districts have been
selected because of their relatively high levels of rural poverty, their production/processing potential,
access to rural infrastructure and markets and because they form the hubs of nascent rural industries
in Bắc Kạn and Cao Bằng (herbs and spices, tubers, fruits, livestock, bamboo and other timber
products, etc.) whose VCs reach into more remote upland communities. Ethnic minorities form the
majority in all Project districts. Commune selection will be based on, inter alia, (i) poverty rate;
(ii) vulnerability to CC and natural disaster; (iii) commitment of leadership; (iv) potential for
development of pro-poor VCs; and (v) level of on-going support projects. Project communes will
include those that are market-linked and other, remoter communes that can be linked through VC
development.
23. Project Target Group. The Project target groups are:
rural poor, near poor and non-poor households with land and labour, including household
enterprises;
unskilled employed rural people;
rural people lacking production land but having business acumen and desire; and
key farmers who have the skills to promote commercial agricultural production.
24. Poor and near poor households will benefit directly from all Project activities. For rural
infrastructure investments, poor and near-poor households will benefit from those investments that
directly improve agriculture production (e.g. irrigation) while poor, near-poor and non-poor households
will benefit from other infrastructure development such as roads. Non-poor households will also
participate in CIGs, WSCG and APIF investments as their participation is recognised as lifting the
overall performance of such investments, however, they would not represent more than 50 per cent of
the total number of beneficiaries of these Project activities.
Clearly, there are overlaps between Project outputs and the resulting beneficiary groups, with some some benefiting from just a single project activity (e.g. a road or footbridge) while other, typically poorer households, could benefit from multiple combinations of group grant, credit access, forest land and forest use rights, etc.
25. Table 2 below provides an estimate of the total number of households expected to benefit from
one or more Project outputs that impact on household wealth - in total about 33,000 households or an
estimated 150,000 people. Of this total, an estimated 30,000 households or 135,000 people are
expected to achieve a 20% improvement in household assets. Table 3 shows the expected number of
poor and near poor households and women, expected to benefit from Project outputs impacting on
household wealth – in total about 19,000 poor and near poor households are expected to benefit while
22
See Appendix 3 for further analysis of beneficiary targeting and gender issues.
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more than 8,000 women will be direct beneficiaries of project wealth-creating outputs. Of this total, an
estimated 16,000 households or 72,000 people are expected to be lifted out of poverty.
Table 2: Estimation of Total Number of Project Beneficiaries
II.
III. Output
IV. Total output bene-ficiaries
Output beneficiaries not benefiting from Output(s): /a/b
5 5 or 7 5 or 7 or 8
5 or 7 or 8 or 6
5 CIGs HHs 15,960 %
7 RF services HHs 4,958 1,487 % 30%
8 APIF HHs 8,971 2,691
% 30%
6 CI /c HHs 31,821 8,032 % 40%
4 FLA HHs 9,067 4,533 % 50%
Total project HHs 32,704 beneficiaries /d people 147,167 \a Taking into account that many beneficiaries will benefit from more than one output.
\b Assumptions.
\c % referring to road beneficiaries. Estimated % of irrigation beneficiaries not benefiting from Outputs 5, 7 or 8: 0%.
\d Avg. no. of persons/HH: 4.5.
Table 3: Estimation of Total Number of Poor/Near Poor and Women Project Beneficiaries
V.
VI. Output VII. HHs
VIII. Total outpu
t bene-ficiari
es
IX. Output beneficiaries not benefiting from Output(s): /a/b
5 5 or 7 5 or 7 or 8 5 or 7 or 8 or 6
5 CIGs Poor/Near Poor 7,980 Women 6,384
7 RF services Poor/Near Poor 2,479 744 Women 4,958 1,487
8 APIF Poor/Near Poor 4,486 1,346
Women 897 269
6 CI /c Poor/Near Poor 15,911 6,364
4 FLA /c Poor/Near Poor 5,440 2,720
Total Project Poor/Near Poor 19,154 beneficiaries Women /c 8,141 \a Taking into account that many beneficiaries will benefit from more than one output.
\b Percentage assumptions same as for Total Beneficiaries Table.
\c Women HHs not counted under FLA and CI.
26. It is noted that in some areas, some ethnic minorities have a degree of dependency syndrome
due to prolonged reliance on government subsidies. This has been reduced in recent years with the
GoV shift from direct support to households to providing incentives and infrastructure in support of
increased agriculture productivity.
27. Other participants who will benefit from the Project include (i) government officials empowered
to support climate-adapted market-led growth; and, (ii) private VC agri-businesses that find common
interest in promoting viable pro-poor products and services.
28. Gender: In the Project communes in Bắc Kạn, there are 1,612 women-headed households, of
which 823 households are classified as poor. In the Project communes in Cao Bằng, there are
2,232 women-headed households, of which, 1,225 households are classified as poor. Poor women
and women-headed household face significantly greater obstacles in escaping poverty. These include
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specific obstacles to their participation in commercial activities, including a general lack of business
planning, farm management and technical skills, less access to factors of production, and time
constraints imposed by cultural and domestic demands. While agriculture and forest land use rights
have been widely allocated, until recently, they were issued in the name of the male household head,
limiting women’s use of the title right for credit application. The Project will implement specific
measures to ensure women’s participation in relevant activities, including the issuance of co-named
land and forest use titles and mandated minimum women’s representation in Project outputs/activities
and committees.
D. Development objective and impact indicators
29. The Goal of the Project is: Contribute to sustainable poverty reduction in Bắc Kạn and Cao
Bằng. The Development Objective is: Sustainably improved income and reduced climate
vulnerability of poor and near-poor farm households in targeted Project communes.
30. The impact indicator at the goal level will be:
20% improvement in Project commune poverty reduction above average non-Project
provincial commune rate by Project-end for 16,000 households considered poor and near
poor in Project area (differentiated data for poor/near poor, ethnic minority & women-
headed households).
31. The main impact indicators at the development objective level will be:
20% improvement in household assets ownership index above non-Project provincial
commune average by Project-end for 30,000 poor, near-poor and non-poor households
in Project area. (differentiated data for poor/near poor, ethnic minority & women-headed
households);
At least 14,000 poor smallholder household members whose climate resilience score 23
has been increased by 30% (gender and ethnic minority disaggregated.
E. Project Outcomes
32. The Project will have three main outcomes: (i) Provincial participatory planning institutionalised;
(ii) A greener agriculture future; and (ii) Profitable farms linked to finance and markets. There is also a
Project Coordination component.
33. These outcomes and outputs will follow sequenced, parallel implementation routes. Building off
a Strategic Investment Plan (SIP) that identify profitable value-chain development pathways, and an
updated Provincial CC Action Plans and associated knowledge dissemination Project, the CSSP will:
(i) empower communities and public institutions to develop commune and district-level climate-
adapted MOP-SEDPs that holistically align climate-adapted NTP and Project investments with
profitable commodity market and VC opportunities; and (ii) through the implementation of those
investments, assist communities of smallholder farmers and agri-businesses to associate in various
ways to take best advantage of those opportunities and to co-finance their development. These
pathways will merge from the second Project year onwards.
23
a resilient household is anticipated to exhibit, inter alia, the following characteristics: i) diversified livelihood and
income streams; ii) improved natural resource and risk management based on better access to knowledge and
adoption of CCA land and water conservation practices; iii) membership of social networks such as Common Interest
Groups (CIGs) and Saving and Credit Groups (SCGs); iv) ability to access credit; v) protection from some climatic
hazards as a result of small-scale community infrastructure; and vi) direct engagement in village and commune level
planning, and influence on provincial financial allocations. These criteria will, amongst others, be developed as a score
card to measure change. Using these resilience characteristics, and drawing on emerging procedures for measuring
household resilience in Viet Nam and the SE Asia region, the Project will develop a weighted scorecard to measure
changes in household resilience.
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Outcome 1: Province-based participatory planning institutionalised.
34. This outcome will ensure that: Legislated provincial socio-economic and commodity
development planning is holistic, participatory, climate adapted and market oriented.
At least 80% of provincial communes and districts prepare medium-term climate adapted
MOP-SEDPs;
35. This Outcome, which underpins Outcome 2 and Outcome 3 results, will, building off a
strengthened SEDP process, provide the capacity building, analysis and services required to reinforce
private sector development of climate adapted commodity-based VC investments that engage poor
upland households. The outcome has three outputs: Output 1. Strategic investment plan;
Output 2. Climate change adaptation plan; and Output 3. Climate-adapted, participatory market-
oriented socio-economic development plans.
36. Output 1. Strategic Investment Plan. In the first six months of the Project, the PPCO’s,
supported by international technical assistance, will, in partnership with their respective DPIs,
collectively conduct financial and economic analysis of key commodities and associated VCs in Bắc
Kạn and Cao Bằng provinces to identify and describe at least six commodity-based VC SIPs per
province for integration into commune and district MOP-SEDPs. The SIP process will involve 5 steps
(See Appendix 4, Annex 1 for details):
background research on the chosen commodity/crop by reviewing websites and other
secondary sources of information concerning the commodities provincial and national
importance, environmental requirements, role in household economies, end-markets, etc.
This will be followed by primary research in the provinces through interviews, focus
groups, surveys and observation involving VC actors (farm households, processors, input
suppliers, advisors etc.);
using the aforementioned information, map the commodity/crop sectors in Bắc Kạn and
Cao Bằng. VC mapping enables the visualization of the product flow from conception to
end consumer through various actors, as well as the supporting markets and enabling
environment affecting the VC;
prepare a table listing the structural and dynamic factors in the VC, and briefly describe
the current situation, opportunities, constraints and recommendations for addressing
those constraints including tangible How, Who and Financing;
prepare a financial and economic analysis of each key VCs detailing the estimated
potential incremental benefits from investment in their development, including, inter alia,
rates of return on investment, increased household income, number and type of
household benefiting; job creation; increased export; import substitution, etc.;
conduct a workshop bringing together key actors from various levels in the VC to vet the
findings of the analysis and discuss if the chosen strategy for increasing VC
competitiveness is valid.
37. An empowered DPI with Provincial Project Coordination Office (PPCO) and national and
international technical assistance (TA) support, will, subsequently: (i) support the integration of
prioritised VC development into the MOP-SEDP programme; (ii) provide mentoring to VC actors and
co-ordinate their capacity development; (iii) coordinate with specialists in specific VCs and in “climate
proofing” agriculture production; (iv) mentor contract negotiations between farmers and other VC
entities; and, (v) facilitate conflict resolution and mediation when required.
38. As part of the SIP analysis, the supporting consultants will assess constraints to private sector
investment in Bắc Kạn and Cao Bằng, with a view to improving provincial competitiveness and the
environment for doing business. They will particularly focus on governance of land and labour markets
and factors affecting business entry issues including registration time, cost and restrictions as well as
assessing the adequacy of provincial incentives and business support services. Current provincial
operating procedures in these areas will be benchmarked against selected high-performance
provinces, which will be visited by Bắc Kạn and Cao Bằng PPC and DPI administrators as part of a
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“twinning” arrangement. The experience of agri-businesses supported through the Project APIF
(output 8) in dealing with provincial administrations will be monitored to measure changes in
benchmarked provincial indicator performance.
39. Output 2 Climate change adaptation plan. The main focus of this output will be to improve the
knowledge base and capacity among key institutional actors to integrate evidence-based, CCA
considerations into policy, strategy and public (government) and private (smallholder farmers, VC
actors and enterprises) investments. To accomplish this, the Project will, through a step-wise
approach:
Step One: during first 6-9 months, the Project will review and benchmark the current provincial CCAPs: o Organize a Thematic Ad-hoc Group (TAG), presided by DPI, comprising high-level
technical staff from the relevant line agencies (DARD, DoNRE, DOLISA) and their associated, specialized institutions. The role of the TAG will be to conceptualize, orient and monitor the technical content and focus of the Project’s support. In addition, they will be charged with leading technical cooperation and exchange between the two Project provinces and with defining the operational mechanisms for coordination of planning and budgeting processes between their various agencies.
o Carry out a national-level study tour for high-level decision-makers and key technical staff from the government institutions represented in the TAG to visit both the provinces most advanced in implementation of their CCAP, as well as to visit the lead, national-level technical institutions that support CCAP development and implementation.
o Contract with a national, lead CCA technical institution to provide technical assistance and support through the lifetime of the Project jointly to both Bắc Kạn and Cao Bằng
24. See Appendix 4, Annex 9 for detailed ToRs.
o Under the direction of the TAG, (i) assess the current status of provincial CCAP implementation; (ii) develop a set of first draft maps of provincial-level CC risks and vulnerability; (iii) develop first draft indicators for CC impact monitoring and; (iv) initiate a program of CC awareness building for key institutional actors at all levels whose participation in subsequent implementation will be critical.
Step Two; before end PY2, the Project will support the provincial CCAP framework through:
o A “top-down” scientific-technical process to refine/update the Provincial CC Action Plans; and
o Down-scaling of the provincial-level medium-term CC impact scenarios to Project district-level through: (i) district-level studies and mapping of CC impact, vulnerability, risks and CCAP priorities; (ii) Project district-level participatory diagnostics of commune-level CC impacts scale and ongoing adaptation, and (iii) integration of the “bottom-up” analysis from communes and villages of vulnerable areas, production systems, and populations resulting from the parallel work on CC concerns into the SEDP process.
Step three: as a parallel procedure linked to the institutionalization of the MOP-SEDP process: o Review existing methodologies for commune-level CC planning;
o develop a district-level zoning methodology, based on commune-level CC adapted planning;
o Pilot and update a commune-level CC planning instrument, building upon experience and prior work in the development of community-based, disaster risk-assessment methodology (MARD) as well as of other, more mature experiences nationally (e.g., CARE’s and OXFAM’s): and
24 It has been proposed by MFI that this activity should be funded from other sources (technical assistance
projects, grants, etc.). Final preparation will have to identify and ensure the availability, in time and quantity,
of these other resources to ensure that proposed outputs are delivered and objectives achieved.
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o Provide capacity building and technical workshops addressing CC adapted planning integration into the SEDP processes at commune and district-levels. This will include: (i) key stakeholder progress reviews and evaluation workshops; (ii) learning and experience-sharing cross-visits by district and commune staff; (iii) field visits and study tours by DoNRE and DARD planning staff; (iv) systematization of processes, results and validation/updating of indicators and; province-wide dissemination of the provincial CCAP through publications, brochures, newspaper, radio programs and others
Step four: during PY2, initiate the systematic integration of CC to smallholder farmers and into the SEDP planning process, supported by: o the development of training materials and methodological guides;
o training of trainers, including Lead Farmers (LF); dissemination through publications, brochures, newspaper, radio programs and, others; Lead Framer-to-farmer (LF2F) extension, cross-visits by district and commune staff and CIGs, etc.;
o field visits and study tours for DPI planning staff; and
o the publication of results in web-based publications and journals.
40. In Project year three, efforts will begin for the province-wide roll out of the climate adapted
MOP-SEDP planning process to non-Project districts and communes. The Project will support non-
Project district/communes through (i) studies and mapping of CC impact, vulnerability, risks and,
CCAP priorities and (ii) district-level, participatory diagnostics of commune-level CC impacts, scale
and ongoing adaptation. Support will also be provided to DPI, DARD and DoNRE in the development
of Bắc Kạn and Cao Bằng Climate-Adapted, Provincial MOP-SEDP for 2021-2025.
41. Additionally, through the mainstreaming of CC adaptation concerns into studies, analysis,
training and technical assistance inputs for other, operational elements of the Project, support will be
provided to achieve: (i) climate-adapted, Project-supported SIPs and VC action plans (VCAPs);
(ii) development of a knowledge base, technical capacity and input supply for priority CCA systems
(e.g., forage development, soil fertility maintenance, soil and moisture conservation, micro irrigation,
etc.); (iii) the transfer of that knowledge to farmers through CIG and LF2F-led processes; and (iv) the
WU and WSCGs applying due diligence procedures in lending that include CCA and natural disaster
risk elements.
42. Output 3. Climate-adapted, participatory market-oriented and results-based planning. This DPI-
led output consists of two Activities: Activity 3.1: Strengthened public sector market economy skills;
and Activity 3.2: Climate adapted, participatory market oriented socio-economic development plans.
Over the last six years, IFAD-supported projects have successful developed and piloted MOP-SEDP
processes in several provinces of Viet Nam, including in Cao Bằng, where the process is
institutionalised at commune level. The CSSP will, following a review of existing planning processes
and supported by empowered communities and public sector institutions, establish a climate-adapted
MOP-SEDP process across all communes and districts in both Project provinces. The PPCO MOP-
SEDP planning officers, supported by a national training institution, will empower the DPI to lead a
Project in capacity building for market-led development at commune and district levels, which will
precede the institutionalisation of MOP-SEDP process. These activities will commence in the Project-
targeted communes/districts and be subsequently rolled out to all communes/districts in Bắc Kạn and
Cao Bằng. The MOP-SEDP process will incorporate the recommendations of the SIP analysis
described under Output 1. Under this output, the CSSP will collaborate with the the World Bank
financed Viet Nam Sustainable Agriculture Transformation Project (vnSAT), which has a nationwide
USD 7 million policy and institutional reform component that aims at strengthening the market
oriented planning processes at central and provincial level.
43. Activity 3.1. Strengthened public sector market economy skills. In Cao Bằng, where the MOP-
SEDP is already institutionalised at commune level, both commune and district staff have a sound
understanding of the market economy. This activity will assist Bắc Kạn government officials to
effectively support the provincial government’s market oriented development strategy. The capacity
building Project will provide public servants with the basic skills to implement a market-oriented
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development strategy. The primary target will be village leaders, elected officials of People's
Committees and People's Councils, Supervision Boards and technical cadres and members of the
mass organisations at commune and district levels; Concise, targeted training programs, delivered by
competitively selected public or private institution(s), will focus on, inter alia, understanding the market
economy and associated roles of government and the private sector, the economics of supply and
demand and impact of market competitiveness, the nature of public and private goods, privatization,
the roles of capital, labour and international trade, and the transition from a planned to a market
economy. Supporting gender equality and environment management cross-cutting training will be
delivered to government staff in both Bắc Kạn and Cao Bằng. Staff in both provinces will also be
trained in group organization and leadership, participatory planning, and results based management
including effective monitoring and evaluation (M&E) and reporting and feedback to management
decision making. Trainees will be introduced to the VC SIPs developed under Output 1.
44. This training Project will be contracted to an academic institution in Viet Nam with appropriate
competencies in market-led economic development. With international technical assistance (TA)
support, the competitively selected training provider will develop the curriculum and apply the training
though a mix of in-province training courses and self-learning Projects including internet-based
information. The appropriate training institution will be identified by the Project Preparation Boards
(PPB) before Project start-up and contracted at start-up to initiate training within 6 months. Training
will focus initially on government staff within the Project districts/communes and, thereafter, be rolled
out to all Bắc Kạn, and on a selective basis, Cao Bằng government staff at commune and district
level. Results will be assessed through the measurement of the establishment of the legislative base,
guidelines, tools and staff capacity for district and commune MOP-SEDP implementation. Terms of
reference for the training Project are detailed in Appendix 4, Annex 2.
45. Activity 3.2 Climate adapted, participatory market oriented socio-economic development plans.
This DPI-led activity, supported by the provincial Political Schools, will build on the MOP-SEDP
process already institutionalized at commune level in Cao Bằng. At commune and district level,
initially in Project districts and then across the provinces, the Project will facilitate the integration of
commodity-based VC development (Outcome 1) and CCA plans (Output 2) into a participatory SEDP
process, The resulting climate-adapted MOP-SEDP process will engage relevant entities at the
village, commune and district level, including the effective participation of VDBs and private
enterprise, and be inclusive of all public funding sources, including CSSP funds and NTP-NRD, NTP-
SPR and NTP-RCC financing. Women’s representation in MOP-SEDP planning will be mandated.
Through the MOP-SEDP process, CSSP will assist the provincial DPIs to operationalise Decree No.
77/2015/ND-CP, prescribing medium-term and annual public investment plans, together with the
Vietnam Public Investment Law 2014 No. 49/2014/QH13.
46. The commune-level MOP-SEDP is a participatory process for establishing medium-term
climate-adapted, market oriented commune development plans that are informed by (i) villagers’
priorities; (ii) market information, (iii) climate adaptation, land use and disaster risk management plans
and (iv) orientation from higher government levels. The MOP-SEDP process will be built around
Decree No. 77/2015/ND-CP, which prescribes medium-term (5-year) and annual public investment
plans. It is expected that the MOP-SEDP process will be conducted intensively for each medium-term
planning period, with a lighter review mechanism for annual investment planning. The resulting
medium-term climate-adapted MOP-SEDP will comprise (i) a narrative including a medium-term
development vision; (ii) specific investment plans for market-oriented infrastructure and agricultural
enhanced production and processing; (iii) specific CCA actions/investments; and (iv) corresponding
planning tables (See Appendix 4, Annex 3 for details).
47. Before MOSEDP implementation, DPI will inform districts and communes about the
committed/available medium term and annual budget financing. Based on this budget provision, the
MOP-SEDP planning process will begin at the village level under the coordination of the NTP-NRD-
established VDB. VDBs in Bắc Kạn and Cao Bằng will be legislated to include at least 30 per cent
female membership and 30 per cent membership from DoLISA registered poor households. Village
level MOP-SEDP meetings will be held at times suitable to women members of the village and will
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require at least 50 per cent women’s participation. The overall responsibility for the commune MOP-
SEDP rests with the CPC. CSSP assistance will be provided through district-based VC and Market
Development Officers (VCMDOs) and by the PPCO MOP-SEDP officers. The MOP-SEDP will be
approved by the Commune Development Board under the oversight of the Commune People’s
Council. The planning process is detailed in Appendix 4, Annex 3.
48. All aspects of the climate-adapted MOP-SEDP process at commune and district level will be
defined in supporting legislation passed by the Bắc Kạn and Cao Bằng PPCs in the first Project year
(PY1). Building off the current Cao Bằng MOP-SEDP manual and informed by the recent Oxfam-led
study of provincial planning systems and procedures (See Appendix 4, Annex 10), a comprehensive
MOP-SEDP guideline/manual will be developed and adapted to the needs of each province. The
MOP-SEDP process at commune and district level will be fully funded by the respective provincial
administrations.
49. NTP-NRD National Coordination Office (NTP-NRD NCO). A USD 500,000 IFAD grant to the
NTP-MRD NCO in the Ministry of Agriculture and Rural Development, Department of Cooperatives
and Rural Development will be attached to the CSSP. The grant will be used to (i) pilot the integration
of Rural Value Chains into the NTP-NRD leading to the identification of International Financial
Institution (IFI) investment opportunities; (ii) prepare guidelines for NTP-NRD2, including, inter alia,
participatory planning result-based M&E; (iii) build capacity within the NCO and at provincial and
district level for NTP-NRD2 implementation; (iv) pilot the implementation of NTP-NRD2 funded
initiatives and (v) strengthen NCO Operations.
Outcome 2. A greener agriculture future.
50. This outcome, which establishes the basis for climate-adapted green growth in the Project area,
includes two outputs: Output 4: Forest land and forest allocation, and Output 5: CIGs for climate
adaptation. The Government of Viet Nam (GoV) is committed to an ambitious “green growth” agenda
and to global carbon emission reduction. The CSSP will support this process through the promotion of
CCA technologies that provide significant mitigation co-benefits, as well as Projects for forest land and
forest use rights certification and rehabilitation that directly contribute to carbon sequestration. The
indicator for successful outcome implementation will be:
At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two
or more climate change adaptation technologies or practices
51. Output 4. Forest land and forest allocation. This output will support the equitable (across wealth
and gender groups) ownership and efficient use of production forest in all communes in Bắc Kạn
Project districts. The Project will create an asset base for future private sector investment in agro-
forestry by assisting DoNRE, DARD and rural communities to implement a participatory forest land
and forest allocation and use planning process leading to the equitable transfer of forest land and
forest use rights (Pink Book) for 17,000 ha of forests to poor households, and the development of
medium-term forest development plans consistent with Programme 30A and similar NTP-SPR
programmes. Pink Books with joint husband/wife title will significantly improve access to collateralized
credit, especially for women. Provincial policies and administrative procedures governing forest land
investment and use will be assessed, improved and decentralized to the commune level and a system
established through DARD to monitor poor household access and use. It is estimated that about
11,300 poor and near poor households in Bắc Kạn will each receive, on average, 1.5 ha of forest land
and associated forest. The participatory forest land and forest use planning and allocation will be built
on experience gained through 3PAD. The underlying principles of the approach will include
compliance with national and provincial regulations and policies, maximizing the participation of
households, the planning of forest land use before land allocation, and ensuring equity in resolving
disputes and sustainable development practices. The capacity of the Project CPCs in forest land and
forest use planning and land allocation will be significantly enhanced. The process, which will be
guided by a manual detailed in the PIM, will be managed by DoNRE for forest land allocation and
conservation and the DARD Forest Protection Department (FPD), DARD Forest Development Sub-
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Department (FDD) for forest allocation and use, with the inter-agency support of the district Agriculture
and Rural Development Departments (DARDD) and district Forest Protection Stations (FPS).
52. The Project will build the capacity of DoNRE and DARD in both Bắc Kạn and Cao Bằng to
monitor forest environmental outcomes through experiential training in participatory forest land and
forest use planning and allocation, physical resourcing to improve mobility and field and information
technology and funding for participatory forest environment monitoring.
53. Output 5: Common interest groups for climate change adaptation. This output, which will
develop and promote CC adaptation technologies and processes that provide mitigation co-benefits,
will lead to: (i) at least 1,000 CIG in Cao Bằng province and 900 in Bắc Kạn province with the capacity
to implement profitable climate change adaptation technologies and practices within a VC framework,
with co-benefits for climate change mitigation; and (ii) forage production integrated into farming
systems, with co-benefits for soil fertility and stability. The output includes two activities: Activity 5.1:
Common interest groups for climate change adaptation and Activity 5.2: Integrating forages into
hillside farming systems.
54. Activity 5.1: Common interest groups for climate change adaptation. A wide range of
technologies and practices are available to Vietnamese smallholder farmers to reduce their
vulnerability and increase their agro-ecosystem resilience to CC impacts, while also providing green
growth co-benefits in terms of pollution prevention and greenhouse gas (GHG) emission reduction.
With the support of DARD extension stations and the WU, the Farmer’s Union (FU) will support the
establishment of a Lead Farmer-to-farmer (LF2F) extension system that will support CIG
establishment and development in line with MOP-SEDP priorities. CIG member groups, together with
eligible cooperatives, household enterprises and WSCGs, will be entitled to apply for competitively
allocated, co-financed climate change adaptation grants supporting both (i) the adoption of climate
adapted technologies and practices; and (ii) the alignment of their agriculture production systems with
emerging value chains. The selection of CIGs/members to be supported through CIG financing
should be based on a competitive mechanism integrated into the MOP-SEDP process at commune
level. CIG co-financing could cover (i) initial capital investment costs, (ii) upgraded farming inputs
through revolving working capital mechanisms, and/or (iii) required technical assistance. Grants will
focus on innovative production, CCA, risk reduction or value addition investments linked to profitable
commodity chains identified through the SIP process and incorporated into local MOP-SEDPs. This
could include investment in, inter alia: afforestation, irrigation management including SRI rice, climate-
resistant crop varieties and management systems, forage production, biogas and other by-product
utilisation including bio-fertilisers, minimum tillage and organic agriculture.
55. The Project will support both gender specific and gender disaggregated CIGs. To be eligible for
the CSSP competitive co-financing, the membership of CIGs must, in aggregate at commune level,
include (i) at least 50% of members from DoLISA-identified poor and near poor households and (ii) at
least 40% female members. All supported CIG sub-projects, managed and owned by the group,
cooperative or household enterprise (not individually), must demonstrate sustainability beyond the
initial CSSP assistance and be linked to APIF financed VC development as detailed in Output 6.
Output 4 activities will be integrated into the NTP-NRD CIG Project and implemented through NTP-
NRD structures at commune and district levels. CSSP will provide each Project district with a Value
chain management development officer (VCMDO), who will support the CIGs and be responsible for
the implementation of competitive co-financing in the district. All CIGs will receive training in group
formation and management and be familiarised with CSSP CCA technologies and practices and APIF
outputs.
56. The maximum Project grant value of USD 250 per group member and USD 3,500 for one group
will cover up to 50% of the total cost of each investment, with beneficiaries financing at least 50%
including a minimum 25% in cash and the balance in kind. VBARD, and especially VBSP expressed
their willingness to participate with loans in this joint financing scheme, especially as the Project co-
financing will significantly reduce the loan-funded amount. The WU-supported SCGs will be another
source of credit. The 20% cash contribution by group members is important to ensure the commitment
to and ownership of the investment by group beneficiaries. The activity will help reduce barriers to
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male and female farmer access to finance, by (i) reducing collateral pressure through co-financing
and utilization of alternative loan securities and (ii) assisting CIGs to improve business plan quality as
per banks' requirements.
57. Up to 25% of each CIG grant could be used by the group for procurement of technical support
services, including LF2F support coordinated by the provincial FUs. All such service provision will be
through standardised output based contracts between the service provider and the CIG. LF2F
advisors will be certified under a CSSP developed and FU managed training and certification scheme,
providing both technical and pedagogic skills. DARD and the WU will support this process. The
Project will also provide “farming as a business” management training to CIG and WSCG members,
participation in which will be a condition of Project support to their respective groups. The farming as a
business training will build off existing training Projects in Viet Nam and the SE Asia region and use
contracted master trainers to train provincial FU trainers of trainers (ToT), who will train LF2F advisers
as business service providers. This activity will, where practicable, be integrated into the overall rural
vocational training Project in Viet Nam
58. Activity 5.2: Integrating forages into hillside farming systems. Many farming systems in the
Project area mine soil nutrients, and cropped areas are prone to severe soil erosion. Forage inclusion
in farming systems, particularly leguminous forages, is possibly the most cost effective approach to
reducing these negative impacts. To ensure quick impact and longer term sustainability, forage
Projects require an ample seed supply. Many upland farmers do not understand the need for
improved animal nutrition and are disinclined to grow forage. The Project could alter this behaviour by
first focusing on developing selected forages as a very profitable seed crop, with the forage based
feed as a by-product. If the forage seed crop is grown close the home, farmers quickly appreciate the
labour reduction in forage based cut and carry feeding and its value as a forage is enhanced. Using
an approach of Project procurement of forage seed at competitive prices (but well below import cost)
and free distribution of small quantities of seed to interested farmers, the Project could quickly
establish a demand for low labour input forage technologies that integrate into local farming systems,
providing benefits in terms of animal nutrition, improved soil fertility and stability and reduced labour.
The forage seed production, purchase and distribution Project will be managed by Project DARDDs
59. Short-term national and international forage specialists will conduct an initial assessment of
forage production opportunities in the Project districts, order initial seed requirements, provide
technical awareness training for DARD provincial and district staff including a domestic study tour to
inspect forage programs. The Bắc Kạn and Cao Bằng provincial DARDs, in collaboration with the
PPCOs and the national consultant will adapt existing forage manuals to meet Project requirements,
raise awareness amongst farming communities and identify farm households and farmer groups
prepared to establish home and village forage tree and grass nurseries and participate in large scale,
broad-based farming systems integrated forage demonstrations. The National Centre for Plant Testing
(NCPT) will support provincial “value for cultivation and use” (VCU) testing of new forage varieties
prior to their registration and multiplication. Based on field results, the Project will refine its seed buy-
back policy and regulations and train farmers in seed production, collection and storage.
Outcome 3: Profitable farms linked to finance and markets.
60. This outcome will lead to: Increased public and private investment in sustainable, profitable
commodity production and value addition The indicators for successful outcome implementation will
be:
WSCGs maintain a minimum annual saving rate growth of at least 15% over base-year
savings and < 5% non-performing loans in their portfolios; and
of USD 40 million invested in commodity-targeted, climate- adapted infrastructure,
commodity production and enterprises development in Project communes, at least 70%
of investments show an IRR > 10%;
61. The outcome will have three outputs, namely: Output 6. Community infrastructure;
Output 7. Rural financial services; and Output 8. Agribusiness Promotion Investment Fund (APIF).
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62. Output 6. Community infrastructure. Infrastructure investment grants up to USD 400,000 per
commune25
(including beneficiary and GoV contributions) will be available for infrastructure
investments that provide public good and collective benefits essential to commodity chain
development and/or CC or disaster proofing. These could include, inter alia, disaster-proof roads,
secondary or tertiary irrigation structures, erosion protection and soil management, sanitation and
waste management, renewable energy or fresh water supply. The scheme will not support purely
private benefit investments. Public and collective good infrastructure investment schemes will, with
consultant support where required, be identified and prioritized by VDBs26
/communes, incorporated
into the medium-term commune MOP-SEDP and verified by the district line agencies in collaboration
with the PPCOs before approval. Beneficiary contribution will be at least 10% of total construction
costs of public and collective good infrastructure works with IFAD contributing 60% and the NTP- NRD
funding 30% of the investment cost. Individual public infrastructure investments will not exceed
USD 60,000 without prior agreement with IFAD.
63. CPCs will be the owners of the public infrastructure sub-projects, however, the VDBs in
benefitting communities will be responsible for managing the implementation of the public and
collective investments. VDBs should have at least: 30% female membership and 30% membership
from DoLISA registered poor households. Beneficiary communities will be required to demonstrate an
ability to support associated long-term operation and maintenance costs. Wherever possible, local
labour, particularly youth and minority people, will be used for works construction, supported by
vocational training when required (see para. 64). Technical oversight committees will be formed as
sub-committees of the VDBs and trained to monitor the work and implementation of contractual
commitments.
64. The community-based public infrastructure Project will be supported by youth-targeted
vocational training in skills that could be quickly applied through the community infrastructure Project.
The Project will, where practicable, use force account processes for community infrastructure
investments, designed to create jobs for the vocational trainees and promote community ownership in
the operation and maintenance. Initial on-the-job vocational training could focus on such skills as
concreting, carpentry, road levelling and surfacing, brick laying, semi-skilled machine operation,
painting and public infrastructure maintenance. Women’s participation in youth vocational training will
be strongly promoted.
65. The CSSP will explore an innovative community-to-community payment for environment
services (PES) scheme to protect upstream catchments supplying water to CSSP-supported irrigation
developments.
66. Outcome 7: Rural Finance Services. To effectively contribute to increased financial inclusion in
the Project communes and to stimulate investment activity amongst smallholder households, CSSP
will support the newly established Women’s Development Funds (WDF) of the respective provincial
Women’s Unions (WU) and their networks of savings and credit groups. This support will be organised
under three inter-related activities: 5.1: Development of Capacity of the WDFs; 5.2: Establishment of
New Savings and Credit Groups; and 5.3: Transformation of SCG Networks into MFIs. Under this
outcome, the CSSP will also support Activity 5.4: Leveraging Capital for Agricultural Commodity
Chains.
67. Activity 7.1: Development of Capacity of the WDFs. The WDFs in both provinces are relatively
new institutions. Although they have the core staff and basic operational systems to conduct financing
operations at their current level, significant capacity building support covering WDF staff and physical
facilities and systems, both at provincial and district levels, is required to effectively implement the
demanding task of scaling up WSCGs under the CSSP, especially during the first two years of Project.
68. In both Bắc Kạn and Cao Bằng, the Project will provide the necessary resources to enable the
WDFs to independently and professionally implement the WSCG expansion and eventually transform
25
In Bắc Kạn, where USD 700,000 has been allocated for PES payments, commune infrastructure grants will average
about USD 380,000 per commune. 26
Village Development Boards are established under the NTP-NRD.
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Table 4. WSCG development by province
Source
of
funds
Bắc Kạn
households
Cao Bằng
households
CSSP
funding 2,200 3,300
3PAD
reflows 4,000 -
Total 6,200 3,300
these WSCG-based financing networks into State Bank of Viet Nam (SBV)-registered provincially-
based microfinance institutions. This will include a comprehensive provincial WDF skills development
Project covering their management, staff and members, and provision of the civil works, equipment
and systems required to operate the new branch offices in the CSSP districts.
69. Activity 7.2: Establishment of New Savings and Credit Groups. The Project will support the
establishment of new WSCGs in both
provinces and provide seed capital for the
lending operations of the WDFs. Around
5,500 new low-income households are
expected to join the WSCGs as a direct
result of the CSSP investments, covering
a significant share of the poor and near-
poor households in the CSSP
communes. The capacity building efforts
by CSSP are, furthermore, expected to
enable the Bắc Kạn WDF to mobilise an
additional 4,000 women into WSCGs
utilising residual funds from the closed
3PAD project.
70. In addition to comprehensive support to WSCG mobilisation and training, the CSSP will provide
seed loan capital to the new groups, for WSCG management, at an average level of VND 15 million
(USD 680) per member. This will encourage the households to invest actively, particularly in new and
diversified earning opportunities in the CSSP-supported key VCs. Each group’s savings mobilisation
and loan management performance will be assessed on a continuous basis by the WDF, and funds
recovered from poorly performing groups will be re-allocated to successful groups. At the same time,
increased attention will be paid by the WDFs to the active promotion of savings in the groups and to
the related target of increasing the self-financing capacity of the WDFs, with less dependence of
externally injected capital.
71. Activity 7.3: Transformation of SCG Networks into MFIs. This innovative activity aims to convert
the WDFs and the provincial WSCG networks into registered, sustainable microfinance institutions.
The target will be to bring the numerous WSCGs under an institutional arrangement that will ensure
an appropriate supervision of these small financial operators and create a sound and safe network for
their institutional growth. At the same time, the transformation will open opportunities for linking
mature WSCGs with financial institutions that have potential for financial intermediation with groups
and their members on a larger scale.
72. In both Bắc Kạn and Cao Bằng, the first step of this transformation process has already been
taken, with the establishment of the WDFs as “social funds”. Their eventual conversion into a
registered MFIs is planned to take place towards Project-end. The aforementioned CSSP investments
in capacity building and direct financial support to the WDF activities under activities 5.1 and 5.2 aim
to ensure that both WDFs will be able meet the MFI registration requirements by 2021-2022. To
improve the chances for both WDFs achieving a successful transformation, the CSSP, in both
provinces over the last two Project years will finance: (i) international TA to support the WDF to design
the 3-year Business Plans for 2021-2023, which is the key attachment required by the SBV for an MFI
registration application, and (ii) an allocation of unspecified transformation support during the last two
Project years that can be used both for capacity building purposes and for physical improvements in
the branch offices to upgrade them to meet the then required MFI standards.
73. Implementation Arrangement. Responsibility for the implementation of CSSP Activities 5.1, 5.2
and 5.3 will be with the Bắc Kạn and Cao Bằng province WDFs. At Project start-up, “Implementation
Agreements” will be signed between the provincial PCCs and the WUs/WDFs, which will define the
responsibilities of each party with respect to CSSP implementation. Models for this type of
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Agreements are available from the IFAD-supported SRDP27
and AMD28
projects. The Implementation
Agreements will specify the resources that CSSP will provide to the WDFs during the Project period,
conditional on WDF performance meeting the criteria agreed for each activity as detailed in the
agreement. These Implementation Agreements will also define the monitoring and reporting
responsibilities of the WDFs for CSSP-related activities. To ensure that all activities under Output 7
are properly planned and executed, each PPCO will recruit a Rural Finance Officer (RFO) to support
and oversee the activities of Output 7 during the six-year Project period.
74. Output 8. Agribusiness Promotion Investment Fund (APIF). This output has two activities:
Activity 6.1: Competitive agribusinesses established; and Activity 6.2: Leveraging Capital for
Agricultural VCs
75. Activity 8.1: Competitive agribusinesses established. The Project will use APIF co-financing to
generate investments and job opportunities among rural enterprises and households, with particular
attention to poor and women-headed households in the Project area, who will form at least 50% of the
total number of households benefiting from APIF-supported VC investments. The aim of the APIF co-
financing instrument is to leverage investment in the agricultural commodity production in difficult rural
areas, initiating a process of value addition by both primary producers and processers. This approach
to promoting agri-business investment in rural areas is consistent with prevailing GoV policies
(see page no. 7, para. 22), but uses a simplified, single grant approach to supporting agri-business
investment in public and private goods and staff and supplier capacity building, with the allocation of
grants resources set, within defined limits, by the investor. This approach, which incorporates the key
elements of Decree 210 and MARD Decision 62, simplifies grant management and has proven
successful in other IFAD investment projects in Viet Nam. The Project will work closely with the Bắc
Kạn and Cao Bằng provinces to draw GoV grant financing into the APIF programme. The APIF,
together with all the other Project instruments, will strengthen agribusinesses and farmers’ groups as
potential loan customer’s banks in Bắc Kạn and Cao Bằng. VC actors will become more creditworthy
clients through improved business planning capacities, reduced collateral pressure, improved VCs,
improved infrastructure, and overall reduced risk to their production, with subsequently reduced risks
for the banks. In line with recent GoV decisions29
, CSSP will catalyze private sector agro-enterprise
investments in Bắc Kạn and Cao Bằng by co-financing up to 49% of investments that generate
incremental markets and value addition for raw material, leading to incremental production and
increased income and job opportunities among rural households, including poor households. APIF
applications with higher levels of own contribution will be assessed as more competitive. The Project,
through the SIP process detailed in Output 1, will identify commodities and associated VCs that have
investment potential and are aligned with the Bắc Kạn and Cao Bằng SEDPs 2016-2020. The
selected commodities/VCs will be chosen based on their having: (i) significant potential for involving
rural households, particularly disadvantaged households, in incremental production and job creation;
(ii) available technologies for improved productivity and CCA; (iii) reasonably assured national or
regional markets; and (iv) potential for export and/or import substitution. At least 50% of the total
number of households benefiting from APIF supported investments should be represented by poor,
near poor or women-headed households.
76. Only legally registered cooperative societies and companies of at least 12 months standing will
be eligible to apply. Entities that are the subject of bankruptcy, criminal investigation, fraud, corruption
or are in default of contractual agreements will be ineligible. APIF investments will be awarded on a
competitive basis for capital investments in civil works, equipment (processing, packaging, energy
generation or environment protection), transportation and marketing, related directly to the core
activity of the investor. The Provincial Project Steering Committees (PPSC) will be responsible for
adopting recommendations for APIF investments, which will be subsequently approved by the
respective Provincial People’s Committee (PPC). Poor people’s income and jobs, value added
27
Sustainable Rural Development for the Poor (SRDP) Project in Ha Tinh and Quang Binh 28
Adaptation in the Mekong Delta (AMD) in Ben Tre and Tra Vinh Provinces 29
(i) GoV Decree No.: 210/2013/ND-CP on incentive policies for enterprises investing in agriculture and rural area;
(ii) Prime Minister Decision No. 62 on promotion policy on cooperation and development of production links associated
with agricultural development
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products, and productivity and market access and gender equality will be important criteria in
investment proposal evaluation, together with commercial viability, environment impact and cost
effectiveness assessments. The APIF Project will be underpinned by a technical, business
management, accounting and Information Communication Technology (ICT) capacity building
program for District and Commune level businesses with a view to improving their farmer service
capacity, profitability and enterprise linkages, both at the local level and to upstream quality suppliers
and markets. It is recommended that provincial Centre for Industry Promotion and Industry
Development Consulting in Bắc Kạn and Young Entrepreneurs Association in Cao Bằng mentor this
Project.
77. An APIF facility will be established with IFAD co-financing up to 49% of total investment cost,
with the remaining investment being contributed by the benefitting business. Up to 30% of APIF co-
financing will be available for the purchase of supporting services (business development services
(BDS), legal, technical, marketing, standards, farmer extension, etc.) for the planned VC investment.
Co-financing will start at USD 15,000 as a minimum and reach up to USD 75,000 as the maximum. In
cases where the potential export/import substitution and social impact of the proposed Project is
extremely high and/ or the investment is pivotal for developing the respective commodity in Bắc Kạn
and Cao Bằng, the maximum APIF co-financing could, with IFAD approval, be up to USD 150,000. In
case of the production of new commodities, the PPCO could recommend to the PPSC that trial
production could be financed at a smaller amount than USD 15 000, but otherwise follow the same
requirement as the mainstream APIF. The enterprise in-kind contribution should not exceed 50% of
total enterprise contribution (i.e. 50% of 51%). The in-kind contribution must be supported by
appropriated documentation stating its value based on market evaluation undertaken by an
independent authorized entirety. The minimum 26% (of total investment) enterprise cash contribution
for APIF investments must be deposited into a designated APIF co-financing Account held by the lead
enterprise and accounted for separately in their books of accounts. The cash contribution cannot be
reduced over the duration of the APIF co-financing period, however, the enterprise can expand this
level using own resources or other (equity and debt) funding. A co-financed APIF investment of
USD 500 should generate opportunity for one household either as labourer or supplier of raw material,
and the full return of investment in incremental household income should be accumulated within 10
years. The CSSP will provide approximately USD 6.4 million (including co-financing) for APIF facility
financing, including USD 2.6 million in Bắc Kạn and USD 3.8 million in Cao Bằng. APIF supported
investments in prioritized commodities/VCs must be within Bắc Kạn and Cao Bằng, but could fall
outside of the 9 nominated Project APIF districts. Examples of potential VC development opportunities
in Bắc Kạn and Cao Bằng are detailed in Appendix 4, Annex 8. Experience from successful 3PAD
investments in value chains in Bắc Kạn is detailed in Appendix 3, Annex 2.
78. The Project will also support enterprise staff training and E2F services on a cost sharing basis.
Output-based E2F services and enterprise vocational training Projects, will, if required, be included in
APIF funding applications. Up to 30% of an APIF grant could be used for training purposes. Within this
limit, the Project will co-finance up to 70% of the cost of (i) vocational training for enterprise staff and
(ii) outcome-based E2F contracts targeting improved commodity production and productivity that
include at least 40% of poor and women-headed farm households. E2F services will, preferably, be
delivered by enterprise staff, however, enterprises could also employ experienced farmers or third
party technical advisors (e.g. NGOs, academic institutions, service centres, etc.) to deliver such
services.
79. CSSP will provide business management training to existing and potential agribusiness
entrepreneurs in Bắc Kạn and Cao Bằng. The training Project will include, inter alia, setting
measurable goals, developing business plans, identifying markets and competitors and setting
marketing strategies and plans, financing your business, financial analysis, keeping accounts and
managing people. One two-week course will be run annual by an experienced business trainer.
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F. Lessons learned and adherence to IFAD policies30
80. The key lessons from the on-going IFAD Viet Nam portfolio include:
(i). The effective application of MOP-SEDP processes in poor province’s needs:
(i) coordination among agencies through PPCOs and technical task forces; (ii) staff
capacity building; (iii) increased CCA awareness; (iv) integration of market information
and VC analysis in the SEDP process; and (v) private sector participation in the planning
process.
(ii). Poverty targeting and gender mainstreaming under the market-oriented approach can
benefit poor rural women and men through: (i) selection of pro-poor market and VC
interventions that create employment and relevant production, processing and marketing
systems for poor people; (ii) LF2F extension and increased use of appropriate climate
responsive technologies; (iii) vocational training opportunities in both farm and non-farm
skills for poor households, targeting youth, ethnic minorities and women; and (iv) market-
based infrastructure and improved connectivity in remote areas.
(iii). Engagement in community decision-making, representation in local institutions, off-farm
employment opportunities, women’s land-use entitlement, and WSCGs for investment
have proven to be successful in empowering ethnic minority people, particularly ethnic
women.
(iv). The voluntary development of CIGs can promote the transition from subsistence- to
commodity-oriented production and serve as a foundation for poor people to cooperate
with better-off groups and private business, including through LF2F extension. Improved
collaboration with mass organizations, such as the FU and WU, and with lead farmers in
facilitating CIG development has been shown to work. CIGs with access to credit, and
WSCGs, have been most successful in this context.
(v). Private stakeholders successfully drive the development of markets and VCs and
investment in agriculture input supply, production and processing, including in poor
areas, when: (i) legislation and policies are in place that enable private sector activity and
strengthen its competitiveness and transparency; (ii) province and district staff have the
capacity to promote the private-sector; and (iii) access to finance, business and technical
skills and market information is possible.
(vi). Partnering with the small- and medium-scale private entities can impart much-needed
technology and business skills to smallholders, in turn opening markets for them.
81. The mission was also guided by the lessons learned from the 3PAD project in Bắc Kạn and the
DBRP project in Cao Bằng, including, inter alia: (i) Project design should be relevant to the SEDP
policy of the Project area; (ii) capacity building at all levels, particularly through LF2F extension, is a
key to Project success; (iii) decentralization to village and commune levels, including beneficiary
“ownership” of infrastructure investments is essential; and (iv) farm enterprise development should be
driven through sustainable VCs. Both projects identified technologies for increased, CC-adapted
agriculture productivity and resulting reduction in household CC vulnerability and improvement in food
security, that will be broadly promoted under the CSSP.
82. Regarding capacity building and training, 3PAD/DBRP lessons include: (i) capacity building of
district and commune level Project staff was a key success factor; (ii) training needs assessments and
subsequently customized practical "real-life" training material improved training outcomes
dramatically, in contrast to “scientific” lectures; (iii) the ToT approach, engaging distinguished village
members and key farmers as trainers, improved outreach to non-Kinh-speakers; (iv) timing of all
farmer training need to be planned along with view on planting and harvest cycles. Regarding
production support, key project lessons include: (i) investment support to improved livelihood should
be conditional on significant beneficiary contribution; and (ii) to be effective. “agricultural models”
require thorough financial assessment, replication planning, capacity building, and large scale roll-out
30
See Appendix 3 for further discussion on lessons learned from earlier IFAD investments in NE Viet Nam.
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instruments, particularly through LF2F extension. (see Appendix 3 for further discussion on DBRP and
3PAD lessons and results)
83. Key IFAD policies The CSSP is compliant with all three strategic objectives elaborated in the
COSOP.
(i) SO1: Enable poor rural provinces to carry out market-led, pro-poor rural Development.
This objective is satisfied through the provincial approach using the market-oriented
SEDP and the VC Approach.
(ii) SO2: Improve access of poor rural people – particularly women – to commodity and
labour markets. This objective is satisfied through the targeting methodology, ensuring
representation of the poor in planning forums and a range of pro-poor engagement
products, particularly those involving provision of rural financial services.
(iii) SO3: Enhance the capacity of poor rural households to adapt to CC. This objective is
satisfied through the outcome employed to finance CC adaptation.
II. Project implementation
A. Approach
84. The approach taken by CSSP will support GoV policy by focusing on enterprise-led growth,
within the strategic frameworks of the NTP-NRD, NTP-SPR and NTP-RCC. which are recognised in
the COSOP as key mechanisms for scaling-up climate-adapted poverty reduction investment in Viet
Nam. The Project will be a pilot for the adoption of climate-adapted, market-oriented participatory
socio-economic development planning (MOP-SEDP) as the legislated provincial planning mechanism.
The Project will place strong emphasis on building an enabling environment for the engagement of the
private sector in raising agricultural productivity, creating rural employment and generating rural
income through developing and promoting VC linkages between rural households, including poor
households, and the growing demand in urban centres and the global market. This will be
accompanied by capacity building for managing market-led development in both the public and private
sectors. The Project will enable provinces to update their CC adaptation (CCA) strategies and plans
and will promote climate-adapted production and processing technologies. All Project interventions
will have a neutral or positive (“no regrets) effect on the ability of communities and enterprises to
adapt to CC and related, increasingly frequent catastrophic weather events. This will be underpinned
by the development and systematic expansion of resource allocation through a participatory climate-
adapted MOP-SEDP process. A planned USD 100 million Asian Development Bank (ADB) Basic
Infrastructure for Inclusive Growth in the North-eastern Provinces, due to commence in 2017, is
expected to indirectly complement CSSP investments, the project being focused on major inter-
provincial roads, not village and commune roads.
85. The organizational and management structure proposed for CSSP is be based on the lessons
learnt under other IFAD projects in Viet Nam and, in particular, the 3PAD and DBRP projects, which
can be summarized as follows:
TORs specifying positions, roles and functions of the PPSCs, PPCOs at all levels and
their reporting system are critically important to ensure effective and timely Project
implementation performance in its early implementation stage;
lack of participation of private sector entities in key decision making processes such as in
meetings of the PPSC, PPCO and planning workshops and the MOP-SEDP process
reduced the effectiveness of the Project’s efforts in development of markets, VCs and
private sector partnership;
Financial management mechanism and flow of funds for all outcomes should be clearly
specified in the Project design and implementation guideline documents;
The IFAD Project management structure should not create a different system operating
in parallel with the existing local institutional setup;
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Complicated structures of outcome lead agencies and co-implementing agencies at the
province level has led IFAD projects to face slow progress at the early stage of
implementation due to unclear roles and responsibilities among provincial agencies. The
Project capacity building interventions should focus on improving the public services at
the district and commune levels to ensure effective decentralization;
There was a lack of effective tools to ensure performance accountability and competition
of the Project districts and communes;
The Project M&E systems have been quite robust in terms of generation of timely and
sufficient data, but less effective was as a management tool for planning, strategizing
and implementation;
Insufficient cooperation/coordination among IFAD projects in the same region in terms of
market linkages, VCs and private sector partnership should be addressed.
86. The Project will adopt similar implementation arrangements to those used for previous IFAD
projects. Changes reflecting their operational and managerial experience and lessons learned will,
however, be incorporated. Project Management will aim at maximizing effectiveness and efficiency
through application of the following principles:
management structure will adhere to the current structure of local institutions, building
capacity to address poverty through market-based approaches;
decentralizing resources to the district, commune and village levels and promote private
sector service and input suppliers and markets;
focusing support in districts with higher productive potential but having strong linkages to
poor upland areas/communities;
applying a “learning by doing” approach to introduce innovations to farmer groups and
target LF2F learning mechanisms for scaling up results;
supporting changes in the roles of the provincial agencies from traditional implementing
bodies to the positions of knowledge sharing and policy/guidelines makers;
mainstreaming the participation of the private sector throughout the planning,
implementation, monitoring and evaluation of the Project activities;
strict implementation of IFAD policies and guidelines in result-based Project
management;
inter-provincial coordination for efficient technical assistance use, synergies development
and reduced implementation costs; and
the development and application of an effective anti-corruption policy.
B. Organizational framework
87. The Bắc Kạn and Cao Bằng PPCs will be the Project Owners. They will establish PPCOs to
coordinate Project implementation in their respective provinces and PPSCs, which will assist the Bắc
Kạn and Cao Bằng PPCs in leading government agencies, mass organizations, the private sector and
communities at all levels to ensure achievement of the Project objectives.
88. Provincial Project Steering Committee. The PPSCs are established by the Bắc Kạn and Cao
Bằng PPCs to inform the PPCs on overall execution of Project implementation and to ensure effective
coordination/integration/ cooperation among all government and donor-funded projects. The PPSCs
will be led by the PPC Chairperson (or a Vice-Chairperson) and composed of Coordinators or Vice-
Coordinators of concerned line-departments. Chairpersons of mass organizations and representatives
from the private sector. The PPSCs will inform the PPCs on matters concerning the strategic
management of the Project, including decisions such as the appointment of the Project Coordinator
(PC) and Deputy PC, approval of the PIM, annual work program and budget (AWPB), and other
decisions related to the Project coordination, orientation and mobilization of resources. The PPSCs
will invite the Chairperson of the provincial Chamber of Commerce and of the local Enterprise
Association (if existent) to join the PPSC. The PPSC will meet on a semester basis to coordinate
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Project implementation, guide planning, review progress, and make recommendations for any
modifications of AWPB as needed.
89. Provincial Project Coordination Office. Bắc Kạn and Cao Bằng will each establish a PPCO
to assist the PPSC in coordination of the provincial agencies and in actual management of
government’s and IFAD resources. The PPCO will report directly to the PPSC and act as an advisory
body of the PPC and secretariat of the PPSC. The PPCO will be established at the administrative
level equal to a provincial department. The PPC Decision on the establishment of the PPCO and
TORs of the PPCO should ensure that the PPCOs function on behalf of the Project Owner, the PPC.
Furthermore, the Bắc Kạn and Cao Bằng PPCs will ensure that their respective PPCOs assist their
PPSC in coordination of all line agencies, relevant GoV and donor funded initiatives and other
stakeholders in the implementation of the Project.
90. The mandate of the PPCO will be to ensure: (i) coherence of the Project approaches and
strategies, and integration among Project activities in order to produce the Project outputs, outcomes
and impact; (ii) coordination and synergy of the co-implementing agencies (DARD, DoNRE, DPI,
DoLISA, DoIT) and technical service providers, and the district and commune level agencies, and
grassroots communities; (iii) mobilization of resources from the private sector, mass organizations,
professional associations, research institutes, technical units and non-government organizations;
(iv) contracting of suitable service providers to undertake various studies, technical assistance and
training; (v) accountable management of IFAD and Government’s resources, including preparation of
the PIM, AWPBs, procurement plans, selection of technical assistance and audit service providers,
establishment and operation of the Project M&E and associated management information system
(MIS), and other functions of the operational and financial management of the Project; and
(vi) knowledge sharing and policy development interventions, in collaboration with co-implementing
agencies.
91. Inter-provincial Coordination. There will be inter-provincial PCU meetings held each semester to enable coordination and cooperation on CC adaptation policies and investments, identification of shared technical assistance providers, inter-provincial value chain planning and implementation, mutual training among similar staff positions and exchange visits/workshops for regional replication and up-scaling. The AWPBs of the provinces will need to ensure the regional approach throughout all the Project activities. An Ad Hoc Technical Assistance Group (TAG) will ensure inter-provincial technical coordination.
92. The two PPCOs will each include about 21 staff as detailed in Table 5 below. DARD, DoNRE,
DPI and DoF staff shall be allocated appropriately for part-time positions. These staff shall be paid
part-time allowance in compliance with GoV ODA regulations.
Table 5. Key positions of Provincial Project Coordination Unit
III. Position IV. No.
V. Project Coordinator VI. 1
VII. Deputy Project Coordinator (Bắc Kạn)
Adviser to the Project Coordinator (Cao Bằng)
Strategic Management Section
MOP-SEDP coordinator (Project Deputy Coordinator) 1
Rural Finance Project Coordinator 1
Rural Finance Officer 1
Commodity and VC Project Coordinator 1
Community-based CCA and DRM Officer 1
Community Infrastructure Development Engineer 1
M&E/KM Coordinator 1
Financial and Administration Management Section
Chief Financial Officer/Chief Accountant – Head of Section 1
Accountant 2
Cashier 1
Chief Procurement Officer 1
Procurement Specialist 1
Commune accountants (responsible for 3 communes each) 12
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III. Position IV. No.
Administration Section
Administrative support officer 1
Interpreter 1
Security Officer/office support 1
Driver 3
Total 2131
93. At each Project district and commune respectively, the CSSP will employ the staff detailed in
Table 6 below.
Table 6. Project staffing at district and commune levels
District Level
MOP-SEDP Support Officer 1
Community infrastructure engineer
Business Development Officer 1
M&E and KM Officer 1
Commune Level
CPC Chairperson (or deputy in charge of economic development) 1
Cadastral officer: facilitating land allocation and infrastructure activities
Agriculture officer: facilitating VC and CIG development activities 1
94. The Project Coordinator, who should have solid experience in working for a previous IFAD-
supported Project, will lead the PPCO. The PC shall be fully involved in the Project design and
negotiation and receive proper training from IFAD on new policies and management skills. The PC, as
the Head of the PPCO, will work full-time for the Project, and will have no additional responsibilities
within any other provincial department. The major responsibilities of the PC will be to ensure that the
involved provincial agencies, districts, communes and villages carry out the Project activities in line
with the Project approach, operating schedules and procedures. The PC will be provided with
adequate executive authorities and accountabilities through a Decision of the PPC. The PC will also
act as Secretary of the PPSC.
95. Project Management at District Level: At the district level, the District People’s Committee
(DPC) will be responsible for coordination of the Project activities and integration with the
organizational structures and mandates of the line agencies and mass organizations at district level.
The DPC Chairperson (or Vice-Chairperson) will be responsible for the coordination of Project
activities. Under guidance of the DPC, and with technical support from DARD and other province
departments, the District Planning and Finance Department (DPFD), District Agriculture and Rural
Development Department, the District Agriculture Extension Station, the District Trade and Commerce
Department, the District Plant Protection Station, the District Veterinary Station and the other
concerned district sections will be mobilized for Project implementation. The provinces will employ
district technical advisors in numbers proportional to the number of underlying communes and level of
Project support at commune level. The GoV will employ a Business Development Officer (BDO) and a
Monitoring and Evaluation (M&E) officer in Project districts.
96. Project Management at Commune Level. The CPC will be accountable for the Project
implementation at the commune level. The commune’s chairpersons and accountant will receive a
Project management allowance in line with government policy. To the extent possible, Project
implementation will be decentralized to the CPCs, which will receive substantial training to develop
their capacities. The MOP-SEDP process will guide Project implementation at Commune level, with
focus on the principles of commodity development and market orientation. At the village level the
Project will utilize VDBs established under the NTP-NRD, building on the experience of similar
structures under the 3PAD. The VDB is assigned to mobilize communities of the village in MOP-SEDP
planning and implementation including an integrated approach to the selection of pro-poor VCs and
31
Excludes commune accounts, who, although employed by and reporting to the NPCO, will work at commune level.
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livelihood support activities, infrastructure scheme implementation and maintenance, development of
saving and credit groups, development of CIGs and the other community initiatives. VDBs should
have at least: 30% female membership; 30% membership from DoLISA registered poor households.
97. Staff Development and Training for the PPCO.
Key units of the leadership training Project will be:
(i). Market Economy Management Concepts, including: (i) roles of the State Agencies and the Private Sector; (ii) Public-Private Partnership/Cooperation in Agriculture and Rural Development; (iii) competition and agricultural competitiveness; (iv) market-oriented local economic development planning – concepts and techniques in the context of CC adaptation; and (v) market and VC techniques in planning development and Project interventions.
(ii). Market and commodity/VC Assessment, including: (i) new market trends (e.g. safe agriculture products, organic production, traceability); (ii) public and private certification systems and standards for agriculture products (national and international); understanding ‘market barriers’ (economic and institutional); and (iii) market and VC assessment methods and identification of viable market opportunities.
(iii). Program Planning for Developing Viable Market Opportunities, including: (i) review of policy and regulatory environment for agricultural market development in Viet Nam and in the Project provinces; incentive mechanisms for promoting agricultural markets; and (ii) feasibility assessment and economic appraisal of market investment proposals and program planning tools.
C. Planning, M&E, learning and knowledge management
Planning
98. Annual Work Plans and Budgets. Successful CSSP implementation requires the government
SEDP and Project AWPB planning process to effectively articulate the views of various public
institutions (government and line agencies), private entities, people’s and communities’ organizations
and groups. This requires building consensus around common objectives, constant communication
and a flexible decision-making structure. The SEDP is the principal planning process and instrument
that government utilizes to orient all public financing of relevance for the CSSP. Through
mainstreaming into the SEDP, the potential exists to institutionalize pro-poor, commodity oriented
development approaches and see them replicated across the Project provinces. The CSSP provides
an opportunity to assist both national and provincial government to learn and develop an appropriate
approach.
99. The Project AWPB details the expected annual results of the Project. Two innovations are
proposed to strengthen the AWPB (and, to some extent, the SEDP) process in terms of its technical
quality, institutional alignment and to enhance coordination among the implementation partners.
These are:
(a) A cross-provincial Thematic Ad-hoc Group, comprised of senior and knowledgeable technical staff from among key stakeholder groups, provide a flexible, temporary mechanism for organizing effective discussion; providing technical accompaniment and oversight to technical studies, evaluations, research and analysis; strengthening technical coordination and; providing useful and timely recommendations to local policy-makers; and,
(b) AWBP Coordination Subcommittee of the PPSC, enabling joint budgeting exercises that integrate and institutionalize Project activities into the line agencies own annual work programs. The Subcommittee will comprise the heads of the agencies (e.g., DPI, DARD, DoNRE, CEM, DoLISA, DoTI) or their representatives, along with the PPCO Coordinator; and
(c) Memoranda of Understanding negotiated and signed by the CSSP and DPI, DARD, DoNRE, CEM, DoLISA and DoTI managers respectively and endorsed by the PPC, which provide annual targets for departmental implementation of CSSP activities.
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100. The basis for investment planning at the community level will be derived directly from the MOP-
SEDP process, which will initiate the preparation of investment plans for the public sector. Communes
will inform/channel potential private investor’s opportunities for investment support under the Project,
and prepare estimates for private sector activity financed by the Project. Specialist PPCO staff will
ensure that this commune-based planning process is genuinely representative and inclusive, as well
as being consistent with CSSP rules and policies. These PPCO officers will provide supervision to the
support staff at the district and commune levels and coordinate with the staff of the General Planning
Section under the DPI to organize the MOP-SEDP planning process in the Project target communes
and districts.
101. The commune plans will, through a district-led process led by the district DPFD, be integrated
into a district MOP-SEDP for negotiation at provincial level.
102. In the first year, the PPCO will also provide and coordinate training workshops on the Project
strategy and approaches, AWPB, and procurement procedures for key stakeholders. This will ensure
an accurate and shared understanding of the Project strategy and information needs.
103. The MOP-SEDP Project Officer, working with the PPCO Coordinator and other PPCO staff, will
incorporate the MOP-SEDPs of the Project communes and districts into the Project AWPB. They will
then assist the PC in drafting the AWPB and its revisions for the PPSC/PPC consideration and IFAD
comments and endorsement.
104. The PPCO will be responsible for the generation of plans not directly derived from the MOP-
SEDP process or planning delegated to DPI, DARD, DoNRE or Committee for Ethnic Minority Affairs
(CEMA) under the respective MoUs to be signed by these institutions and the PPCO. PPCO planning
responsibilities will include provision of specialist support and other specialist training under
Outcome 1, various forms of Technical Assistance under Outcome 2, and the requirements for Project
Management. The consolidated AWPB will reflect both the previous year’s achievements and
performance and anticipated Project progress. The PPCO ensures coordination between other
government agencies and externally financed projects in the Project area. The draft AWPBs will
include a procurement plan (an initial eighteen-month plan and then twelve-month plans for
subsequent years), a detailed description of planned CSSP activities, and the sources and use of
funds. The PC will be ultimately responsible for preparing the draft AWPBs in an accurate and timely
manner.
105. The draft AWPBs will be submitted to the PPSC for review and subsequent PPC approval. The
approved draft AWPB will then be transmitted to IFAD for comments and no objection no later than
sixty days before the beginning of the relevant Project year. An Annual Stakeholder Review and
Planning Workshops at which Annual Performance Report findings and management implications will
be discussed will support the AWPB preparation process.
Monitoring and evaluation
106. The M&E system will monitor performance and assess the impact of the activities. Monitoring
will focus on activities/inputs, outputs, outcomes and performance and risks, while evaluation will
assess the relevance, efficiency, effectiveness and impact on poverty reduction, agri-business
environment and growth and environment, empowerment and partnership, sustainability, replicability,
lessons learned, and knowledge up-take. The M&E system will cover both the operational and
financial aspects of the Project.
107. The Project M&E system will be designed to track and verify the levels of achievement of
Project outputs, the associated outcomes, and the success in achieving the Project objective and its
development goal. These levels are all causally connected as set out in the Project Logical
Framework. The M&E system will also monitor the agri-business environment in both provinces
through independent surveys of Project and non-Project supported agri-businesses in the Project
provinces (see Appendix 6 for details). To a large extent, the M&E system will be participatory,
involving the supported communes in data collection and management. The M&E and KM Officer will
assist the PPCO in the data management in a standardised system, keep a central system to compile
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overall monitoring and evaluation information, and conduct studies to measure overall impacts. The
PPCO Strategic Management Section will be in charge of setting up and operating the MIS and
establishing and ensuring the M&E function, reporting and knowledge management.
108. The Project management information system (MIS) will be established to provide a
comprehensive system of data collection, analysis and exchange. It will bring together physical and
financial records with the main purpose of informing management decisions on Project matters.
Quantitative measures of progress will be supplemented with qualitative information related to the
acquisition of personal and shared skills, group behaviour changes, target groups’ perception,
awareness and attitudes. The MIS will be the sole channel of Project monitoring material and form the
basis of six-monthly and annual reports.
109. In order to ensure that a single and compatible system is implemented, the MIS will be set up
centrally at Project start-up and refinements will be introduced in the light of experience during the first
Project year. It will be based on the Logical Framework, which, together with the MIS, may be
modified at Project Mid-term Review (MTR) to adjust the Project to changing circumstances. The
preparation of reporting formats for use by implementing agencies, particularly the participating
communes, districts, and other partners will be part of the overall design of the MIS.
110. Monitoring: Monitoring will be an integral part of the Project coordination role. All staff will be
involved in strengthening Project progress and performance monitoring in their particular areas of
responsibility. A large part of the monitoring data will be collected and communicated by the
participating communes.
111. The monitoring will provide semi-annual and annual feedback on the extent to which the Project
is achieving its outputs, implementing the activities, identifying potential problems at an early stage
and proposing possible solutions. The accessibility of the Project to all sectors of the target
population, as well as the technical and financial efficiency will be monitored and possible
improvements suggested.
112. Monitoring indicators have been selected for each of the Project’s outcomes as detailed in the
Logical Framework. Wherever relevant and possible, gender-specific data, ethnic minority status and
poverty data as classified by Ministry of Labour, Invalids and Social Affairs (MoLISA) will be collected.
The Project will involve target groups and, when possible, women, in data collection through individual
interviews, focus group discussion or case studies.
113. Project training will be competency based. The performance of training activities will be
monitored through pre and post training knowledge tests with a further test 6-12 months post-training
to determine knowledge retention and adoption. It will not be possible to monitor all training events at
this level; however, random competency monitoring will be applied to all typologies of training events
across the Project life.
114. Evaluation: Project evaluation will be initiated and managed by the Strategic Management
Section (SMS) in two major forms (i) annual outcome/impact evaluations and (ii) thematic evaluation.
At the same time, full reviews at mid-term and at the conclusion of the Project will be conducted by
IFAD and GoV.
115. Impact evaluation: Project impact will be measured from the baseline data, at mid-term and at
Project end. The Baseline Survey will be undertaken shortly after Project start-up to provide a platform
of information from which the follow-on surveys could reveal changes in the households' livelihoods.
Similarly, the Mid-term Survey and the Completion Survey will be carried out just before the MTR and
towards the end of the Project, timed so that that their results will be available for the MTR and PCR.
These follow-on surveys will be carried out in the same manner as the Baseline Survey. Ideally they
will visit the same households so that developments in the course of Project participation can be
measured, and household members who have left the Project area as a result of finding employment
elsewhere will be captured as well. These three surveys will be carried out in conformity with IFAD's
Results and Impact Management System (RIMS) reporting requirements. They will use the standard
RIMS questionnaire form to collect key beneficiary data including household assets and base data
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used to establish the prevalence of child malnutrition in participating households, with a few added
questions to reflect Project-specific impact data. The participating households will be randomly
selected from the Project communes. The data will be processed by a simple custom software
package to be provided by IFAD.
116. As the Project will be establishing investments using business principles and business plans,
there is the opportunity to use data generated during the planning and operation of such investments
to provide for impact assessment. The intention is that the pre-Project baseline, the operational data
(profit and loss, return on investment, returns to labour etc.) will provide the impact assessment at the
micro-economic level. (See Monitoring Framework for detailed indicators).
117. Thematic studies: The PPCO SMS will contract or carry out thematic impact studies that will
look at the impact of activities under Project Outcomes. Such impact assessment will include an
analysis of the effectiveness of: poverty impact of commodity-specific market support activities;
Public and Private Partnership in poverty reduction; impact of micro credits on women; effectiveness
of collective economic models; effect of SME development on the availability of jobs for the poor. The
topics for these thematic studies will be identified in consultation with relevant government
departments during Project implementation, taking into account NTP-NRD, NTP-SPR and NTP-RCC
policies. The Monitoring Framework provides the indicators, collection methods and the usage of the
processed data.
118. Mid-term Review and Completion Review: IFAD and Government of Viet Nam will be
responsible for carrying out two full reviews of the Project achievements: the MTR during Project
Year 3 and the PCR after Project completion. In PY2, the Project Supervision mission will include a
small, independent team of planning specialists who will conduct an assessment of the initial
experience of MOP-SEDP process. Key Questions to be answered during the reviews on the basis of
the indicators contained in the Logical Framework will include: (i) have Project investments enabled
coherent planning for commodity development and poverty reduction; (ii) has Project targeting been
successful; (iii) has the Project assisted the underemployed in getting jobs and have rural marketing
links been forged effectively; (iv) does the Project have the expected financial service outreach;
(v) has decentralised MOP-SEDP process been an effective development tool; (vi) has the Project
contributed good examples to the national policies related to agricultural commodity development; and
(vii) how have changes in the external environment including CC related challenges impacted on
Project beneficiaries.
119. Progress Reporting: The PPCO Coordinator will be responsible for the preparation of six-
monthly and annual provincial progress reports for submission to the PPSC/PPC, and IFAD within a
month from the end of the reporting period. The implementing agencies will be required to provide
their progress reports as an input for PPCOs to prepare a provincial report that will be submitted to
IFAD and Government in a timely and accurate manner. These reports will include the narrative report
as a harmonised source of key data and ensure the trends are highlighted. The reports will record the
financial and physical progress against AWPB targets. The Knowledge Management Officer will
prepare a report on KM survey and analytical work, with a tabular appendix showing the progress in
each Province against the Project indicators. The SMS will be responsible only for the availability of
data as indicated in the Logical Framework. The availability of all other data in the appendix will be the
responsibility of the institutions, assisted by the PPCO in the preparation of the standardised reporting
formats.
120. The implementing agencies will - within 2 weeks from the end of the reporting period - submit
six-monthly progress reports to the PPCO as a condition for release of funds for the ensuing period.
CPCs and DPCs, will report on Project supported SEDP initiatives. The Women's Union and others
will report directly to the PPCO.
121. Annual Results and Impact Reporting: The PPCO will report separately to IFAD on the
Project indicators that overlap with IFAD's COSOP. The information contained in these Annual Results
and Impact Reports will be drawn from the Project MIS, and set in relation to the targets contained in
this Report and those in the AWPB.
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122. Mid-Term Review (MTR): This single report will be prepared by the PPCO and comprise the
assessment of the efficiency as well as the Project achievements to-date, an analysis of the Project
approach and activities, and detailed proposals for the implementation of the second part of the
Project.
123. Project Completion Report (PCR): At the end of the implementation period, a single,
comprehensive PCR will be compiled by the PPCO. The PCR will follow the IFAD guidelines and
format for Project completion reports. The assessment criteria will include: participation of the target
groups, the Project’s strategies and approaches, relevance, finance management, efficiency, outputs
delivery, effectiveness, impacts, sustainability, Innovation, up-scalability and replicability.
Learning and knowledge management
124. Knowledge Management: The Project’s knowledge management will be an essential element
for delivery of Project objectives, especially for learning related to poverty reduction through
commodity development. Two approaches will be taken: (i) a knowledge management program within
the Project for purposes of supporting within and between Project learning; and (ii) support for a
broader program of knowledge management aimed at informing government decision-makers and
influencing policy. Concerning policy development, the opinion of a single province, although
important, is unlikely to sway national policy in areas around the MOP-SEDP or APIF, however, the
collective knowledge of IFAD project experience in these fields in Viet Nam is substantial and will
continue to grow. As such, the IFAD country office must play a role in bringing key Project staff at
provincial level together to collate and evaluate Project outcomes and shape policy recommendations
that can be carried forward to the national level. IFAD Viet Nam has been requested by the Minister
MARD to assist with the development of governments APIF/APIF policy. It is also a member of a
donor group that was recently formed to support DPI with the development of the MOP-SEDP
approach. As such, IFAD Viet Nam is well placed to bring the collective experience of IFAD financed
investments in Viet Nam into national policy and strategic planning discussion.
125. The data management system will ensure that all reporting is completed and that information,
reports and data are available in suitably accessible formats. Evidence based learning is an important
output and the knowledge management system, combined with the evaluations must generate these
evidence backed lessons. Lessons may be about approaches that do not work as well as those that
do.
126. Consistent with the COSOP KM recommendations that projects should establish a “learning
agenda”, the CSSP knowledge management activities will focus around four areas relevant to IFAD’s
investment portfolio in Viet Nam and two areas specific to the CSSP. These include:
IFAD country portfolio KM themes will include:
o private sector investment in uplands areas;
o poor households’ responses to agriculture business opportunities;
o provincial institutions development and implementation of the MOP-SEDP process;
o the evolution of WSCGs into registered MFIs.
Project specific KM themes will include:
o The impact of forest land-use rights allocation on household poverty reduction;
o The role of forages in stabilising hillside farming systems and raising household
livestock production and income.
127. In order to develop and manage the knowledge and information of the Project, the following
activities will be conducted:
(a) Annual knowledge piece. Each PPCO will produce at least one piece (e.g. research paper,
audio-visual, or verbal presentation) per year on some aspect of one of the aforementioned
themes that relates directly to its work. The pieces will be derived from Project
implementation experiences related to the aforementioned KM themes and will be evidence-
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based. The precise topic of the pieces will, within the aforementioned framework, be
determined by the PPCOs and will depend on the nature and stage of the Project. The
method or format for documenting the knowledge and the means of communicating it will
also be determined by the Project as a function of the knowledge it wishes to share and the
audience that it will like to benefit from that knowledge.
(b) Documenting lessons learnt, best practices and cases of success: The M&E and KM
Officer will collect all available relevant information to document lessons learnt, best
practices and cases of success. It could be based on information collected from: progress
reports, meetings and interviews, monitoring and evaluation reports, outputs evidence
provided by targeted groups, market and VC entities and other involved parties.
(c) Developing and delivering a lessons learnt study: Based on the information collected
along Project implementation, the M&E and KM Officer will develop an end of Project
Lessons Learnt Report, analysing the documented lessons learnt, best practices and cases.
It will be first submitted to IFAD and, once feedback has been incorporated, if any, the report
will be shared widely.
(d) Development of material for dissemination: The M&E and KM Officer will produce
communication materials summarizing some of the success stories to be distributed through
networks and policy dialogue. Based on analysis of the documented information, and the
reports, material for dissemination will be produced at the end of the Project; a mid-term
Lessons Learnt Report might be developed. A short film about the Project combining before
and after footage will be shared with target groups, policy makers and other stakeholders.
Recommendations and actions for market and VC development will be developed.
D. Financial management, procurement and governance
128. Financial Management. The provincial PPCOs will be responsible and accountable to GoV
and IFAD for the proper use of funds apportioned to them, in line with the respective legal
agreements, subsidiary financing agreements for financial institutions and contractual arrangements
for service providers. It will provide detailed financial statements of the operations, resources and
expenditures related to the Project for each fiscal year prepared in accordance with standards and
procedures acceptable to IFAD and deliver such financial statements to IFAD within four months of
the end of each fiscal year.
129. Subsequently, audit firms appointed on an annual basis will audit these financial statements.
The auditors will be jointly appointed by the PPCOs following a competitive procurement process
acceptable to IFAD. The selection of the auditors and the audit process itself will comply with IFAD’s
Guidelines for Project Audits and international auditing standards. The cost of the audits will be
financed from Project proceeds. The annual audit, which will be a single process across both
provinces, will be performed in accordance with International Standards on Auditing complemented by
ToR acceptable to IFAD. The auditors will issue separate opinions covering the financial statements,
statements of expenditures and the management of designated accounts. The audited financial
statements and audit reports will be submitted to IFAD within six months after the end of each fiscal
year and after the Project closing date. In addition, the auditors will also issue management letters
outlining any internal control weaknesses.
130. Flow of funds arrangement. IFAD will make funds available to the GoV under the terms and
conditions of the Finance Agreement. Project funds will flow from IFAD via a single Designated
Account (DA) established in a commercial bank acceptable to the IFAD. Government funds will flow to
a separate account.
131. Designated Account (DA): In accordance with the Financing Agreement and Section 4.04(d) of
the General Conditions, immediately after entry into force of the Financing Agreement, the GoV shall
open and thereafter maintain in a commercial bank accepted by IFAD, an account denominated in US
dollars for the purpose of financing the Project, “Designated Account”. The Designated Account will
be operated by the Ministry of Finance (MoF) and will be protected against set-off, seizure or
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attachment on terms and conditions proposed by the Borrower and accepted by IFAD. The Borrower
shall inform the Fund of the officials authorized to operate the DA.
132. Initial Deposit into the Designated Accounts (Authorized Allocation): Upon the entry into
force of the IFAD loan and the Borrower’s request, IFAD will make one withdrawal of USD 2,5 million in
the aggregate, from the Loan Account on behalf of the Borrower and deposit such amount into the
Designated Accounts to carry out the Project
133. Project Account: The PPCOs shall open and maintain in their provincial treasuries an account
denominated in VND for Project operations, the “Project Account”. The Project Account shall be
funded and replenished as necessary from the resources held in the Designated Account, upon
request of the PPCO and in accordance with expenditures incurred under approved AWPBs. The
Project Coordinator shall be fully authorized to operate the Project Account.
134. Counterpart government contributions payments will be made from a Provincial Budget by
arrangement of the provincial Department of Finance, and be used specifically for the Vietnamese
contributions to the Project. These contributions will be received annually/quarterly in accordance with
normal budget procedures.
135. Statements of Expenditure (SOE). The SOE Threshold for all expenditures pertaining to all
categories is recommend to a ceiling of USD 60 000.
136. Financial management. As custodians of funds in the Project Account, the PPCOs will
undertake the following financial management tasks:
(a) Ensure that Project expenditure items and practices are consistent with those of the
Government and IFAD.
(b) Ensure that Project suppliers and locally paid staff are paid promptly and adequately
through liaison with Ministry of Finance and the IFAD Country Office finance staff.
(c) Ensure that Project expenditure is being coded correctly and consistently and that Project
funds are used solely for the purposes for which they were granted and in accordance with
relevant IFAD guidelines.
(d) Establish an asset register for all assets purchased by or provided to the Project in line with
standard IFAD policies.
(e) Check monthly Project financial report for accuracy and appropriateness, and ensure the
Finance Manager is current with events concerning financial reporting issues, errors, trends,
payment delays and related matters. and,
(f) Monitor expenditure on a monthly basis against the approved AWPB in order to prepare and
send timely fund withdrawal applications to IFAD and review expenditure projections to
ensure that expenditure stays within budget. Significant actual or anticipated expenditure
variances against the budget should be included in the monthly report to line management
together with any recommendations for changes to the budget.
137. The Head of Finance and Administration of the PPCOs will be responsible for the actual
management of these tasks, and will report to the PPCO Coordinator.
138. Taxation: The proceeds of the financing may not be used to pay taxes. All taxes are to be borne
by the Government.
139. IFAD Policy on Anti-Corruption and Fraud: It is IFAD‘s policy to require that the staff of IFAD,
(including beneficiaries of IFAD loans) as well as all bidders, suppliers, contractors and consultants
under IFAD-financed contracts observe the highest standard of ethics and integrity during the
procurement and execution of such contracts. Mechanisms for whistle-blowers to access IFAD
systems are provided at the following link: http://www.ifad.org/governance/anticorruption/how.htm
140. Procurement. Procurement of goods, works and consulting services financed by IFAD under
CSSP will be carried out in compliance with the IFAD’s Project Procurement Guidelines (as approved
by IFAD in September 2010 and which may be amended from time to time). The national procurement
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procedures, processes and regulations under the Procurement Law could be applied to the extent that
they are consistent with IFAD Project Procurement Guidelines.
141. As soon as possible after Project commencement, the PPCOs shall submit to IFAD the Draft
AWPB. The Procurement Plan covering the initial eighteen (18) month period of Project
implementation is included in Appendix 8. This shall be updated to cover each succeeding twelve (12)
month period for IFAD review and no objection. Each procurement plan shall include the proposed
contracts, estimated costs and financings sources, methods of procurement, related IFAD review
procedures, time schedules, etc. as specified in the IFAD procurement format.
142. Procurement methods for work and goods packages under the CSSP include (i) national
competitive bidding applied for packages with estimated cost equivalent or exceeding USD 60,000;
(ii) local competitive bidding applied for packages with estimated cost less than USD 60,000;
(iii) procurement with community participation or Force Account applied for infrastructure schemes
that can use intensive un-skilled labour and simple techniques such as concrete roads, lined cannels,
storages, etc. with the estimated cost less than USD 30,000; (iv) direct contracting could be applied
for very small packages with estimated cost less than USD 5,000.
143. Methods for selecting consultants under the CSSP include (i) Quality and Cost Based Selection
applied for service packages with estimated cost equivalent to or exceeding USD 30,000; (ii) Select
Based on Consultants’ Qualifications applied for service packages with estimated cost less than
USD 30,000; (iii) Single Source Selection could be applied only in exceptional circumstances and will
need to be approved by IFAD in the procurement plan.
144. Prior review thresholds. In accordance with IFAD Project Procurement Guidelines the following
shall be subject to prior review by IFAD: (i) any goods contract estimated to cost USD 60,000 or more;
(ii) any work contract estimated to cost USD 60,000 or more; (iii) any consulting service contracts
estimated to cost USD 30,000 or more; and all APIF contracts irrespective of their value.
145. Governance. The PPCs, DPCs, and CPCs will have overall responsibility for program
management and coordination of all departments and other agencies at their respective levels for
146. The PPC, as the Project Owner, will provide oversight to ensure adherence to GoV policies and
norms and the IFAD Loan Agreement. In each province, the PPC will issue a decision enabling the
establishment of the PPCO.
147. The PPSC is established by the PPC to represent the PPC in overall execution of Project
implementation and ensure effective coordination/integration/cooperation among all government and
donor-funded projects. As such, it is the executive agency for Project governance.
148. The PPCO will sign MoU with the DPI, DARD and DoNRE Coordinators outlining those
institution’s CSSP implementation responsibilities and output, outcome and impact targets.
E. Supervision
149. The Project will be directly supervised by IFAD, in accordance with the on-going arrangements
in Viet Nam. The IFAD Country Office will manage the supervision, IFAD staff and consultants will
attend the Project start-up workshops, and specialist consultants and staff will continue to be involved
in supervision and implementation support. The initial supervision and implementation support
mission will take place soon after Project commencement. Further supervision missions will be
undertaken annually and complemented by short and focused follow-up missions as appropriate.
Supervision will be based on IFAD’s operational modalities and practices. As far as possible, the
identity of personnel engaged in supervision and implementation support will not be changed
frequently unless there are compelling reasons to do so. The frequency and composition of
supervision missions will be determined in light of actual requirements and in accordance with IFAD
and the Government.
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F. Risk identification and mitigation
150. The main identified risks for this Project are identified in Table 1. They are:
151. At the Project Goal Level, the risk of external shocks to the macro-economy has the greatest
prominence. This risk is ever present in a relatively open economy such as that of Viet Nam,
particularly with the high proportion of income being derived from export revenue. This is a significant
risk for the Project. At the national level, sound macro-economic policies, including market determined
exchange rates are the main means of mitigation of this risk. The main mitigation measures at the
Project and enterprise levels are the emphasis on sound financial analysis of Projects, with emphasis
on quality and high productivity and low cost per unit of output value.
152. At the Development Objective Level, key risks are associated with that of the maintenance of
stable socio-economic conditions in the Project area and with business regulatory systems. Both
provinces are enjoying economic growth leading to reduced poverty, with the biggest socio-economic
risk associated with climatic disaster. The Project will advance the national agenda for CBDRM and
will ensure that all Project-financed interventions are CC adapted. The relatively weak private
business environments in both provinces are a significant risk and both PPCs have agreed to work
with the CSSP to create more favourable business environment, including benchmarking their
provincial performance against provinces having high competitiveness indices.
153. At the Outcome/Output Levels, an important risk is that there is insufficient skilled and
efficient contractors and service providers to implement the Project in a cost-effective manner.
Rigorous screening and investigation of potential contractors prior to engagement can deal with this
risk adequately. The experience of the IFAD country office and the PPCO in this respect remains vital.
In some circumstances, particularly for the facilitation services being provided to the MOP-SEDP
process, it may prove to be necessary for some intensive training and mentoring of service providers.
This is accommodated under Outcome 1.
154. Associated with this risk is that of the lack of experience of CPCs and DPCs in applying the
MOP-SEDP processes for identification of appropriate VC investments. This is a genuine risk in
communities because of their previous orientation towards production and public investment. This risk
is explicitly recognised in the Project design, and training and mentoring will be provided to change
the skills and mind-sets of the relevant officials. The commitment by both provinces to legislate MOP-
SEDP as the provincial SEDP process will require government officials at all levels to adopt the MOP-
SEDP, further diminishing this risk
155. There is a risk that integrated disaster risk management and vulnerability planning are not
effectively integrated into village, commune and district-level planning, which will particularly threaten
the sustainability of public infrastructure investments. The mitigating factors for this risk are:
(i) substantive investment in CC orientation; (ii) careful screening of all investments proposed; and
(iii) adoption of the closely mentored inclusive approach to participatory planning of development.
156. “Elite Capture” of benefits targeted for poor inhabitants of the Project area is a risk.
Although this risk is significant, there are a number of in-built devices within the Project design that
mitigate this. These include: (i) the use of specially trained district MDOs to assist at commune level;
(ii) the action of the RRA at the outset of MOP-SEDP process; (iii) the careful screening of all public
investments proposed through the MOP-SEDP; (iv) the adoption of the closely mentored inclusive
approach to participatory planning of development; and, (v) the rigorous use of screening and
approval of private investment proposals to ensure that there are strong backward linkages to the
primary target group.
157. Financial service providers may not be sufficiently interested to invest in Project targeted VCs.
Past performance by leading rural financial service providers has demonstrated this risk. It will be
alleviated by: (i) development of new rural financial service providers; (ii) increased emphasis on
savings; (iii) development of new financial products; and (iv) investment in profitable, climate adapted
production systems and VCs.
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158. The allocation of land use title to male household heads is a significant risk to women’s
participation in productive investments. This risk will be addressed by Project acceleration of the
ongoing provincial process of assigning husband and wife’s name to any land use tenure document.
159. A detailed description of potentially negative social, environmental and climate risk factors and
mitigation measures can be found in Annex III of the SECAP RN.
III. Project costs, financing, benefits and sustainability
A. Project costs
160. The main assumptions underlying the derivation of Project costs, estimated Project costs and
financing plan are:
a. The Project costs are based on April 2016 prices.
b. The proposed Project will be financed over a five-year period (2017-2022).
c. Inflation. Inflation in Viet Nam has fallen to about 1.5% in 2016 and is expected to rise to
about 4.4% by 2020. A variable domestic inflation rate consistent with these trend has
been applied. Foreign inflation was set at 2% p.a. over the Project period, based on the
MUV (15) Index.
d. Exchange Rate. The Base Exchange rate for this analysis has been set at VND 22,400
to USD 1 as an official exchange rate prevailing in April 2016 (rounded).
e. The Project costs are presented in both VND and USD. Conversions from current USD
values into Dong use constant purchasing power exchange rates:
f. Taxes and Duties. There is value added tax (VAT) of 10% levied on all imported and
locally procured goods and services, except for agricultural outputs/inputs that are levied
at 5%. Vehicles have a tax of up to 50% depending on an engine power. International
technical assistance does not carry any taxes. For directly recruited local staff the Project
will cover the social insurance charges of 33.5%.
g. The Government will finance the cost of all taxes on goods and services procured under
the Project. GoV will also finance PPCO operating costs and contribute to the cost of
forest land allocation and community infrastructure development.
161. The total investment and incremental recurrent Project costs, including physical and price
contingencies, as detailed in Table 7 are estimated at about USD 73.6 million (VND 1,670 billion).
Physical and price contingencies make up just 2.0% of the total Project costs. The foreign exchange
component is estimated at USD 8.4 million or about 11.4% of the total Project costs. Taxes and duties
make up approximately USD 1.5 million (2.0%). Project Management costs amount to USD 9.2 million
(about 12.5% of the total Project costs). Hard investments in CIGs, FLFA, community infrastructure,
rural financial services and APIF constitute 76% of total project costs and 86% of the IFAD loan
amount. International TA for support to “hard” investments forms 0.8% of total project costs and 1.5%
of the IFAD loan.
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Table 7. Project Costs by Component and Output
B. Project financing
162. An IFAD Loan of USD 42.5 million will finance 57.7% of total Project cost, including 50.4% of
Outcome 1: Province-based participatory planning institutionalised (USD 8.1 million), 62.5% of
Outcome 2: A greener agriculture future (USD 13.7 million), 66% of Outcome 3: Profitable farms
linked to finance and markets (USD 42.1 million) and 22.3% of the Project Coordination Component
(USD 9.2 million). An IFAD grant of USD 0.5 million will support the NTP NRD National Coordination
Office.
163. Beneficiaries will contribute approximately USD 9.6 million (13.0%) as co-financing of the
community infrastructure (at least 10%) and CIG grants (at least 50%, including at least 25% in cash
or credit), as well as in the form of at least 51% of the APIF investments (including not less than 26%
in cash or credit) to be contributed by the benefitting businesses.
164. The Government contribution (28.5% of total costs) will cover all taxes and duties on all Project
inputs that involve funding from the IFAD Loan/Grant and any other external source of funding
associated with the IFAD Loan/Grant (USD 1.5 million (2.0%)). In addition, the Government is
expected to contribute from its budget about USD 19.5 million (26.5%) to cover staff salary costs, its
contribution to the issuance of forest land pink books, forest use certificates and the NTP-NRD
contribution to community infrastructure grants. Table 8 provides a summary by the Project financing
plan by outcomes.
% % Total
(VND Million) (US$ '000) Foreign Base
Local Foreign Total Local Foreign Total Exchange Costs
A. Province-based participatory planning institutionalised
1. Strategic Investment plan 3,136.0 - 3,136.0 140.0 - 140.0 - -
2. Climate change adaptation plan 27,325.8 - 27,325.8 1,219.9 - 1,219.9 - 2
3. Climate-informed, market oriented socio-economic plans 148,333.9 772.8 149,106.7 6,622.1 34.5 6,656.6 1 9
Subtotal Province-based participatory planning institutionalised 178,795.7 772.8 179,568.5 7,981.9 34.5 8,016.4 - 11
B. A greener agricultural future
1. Forest land and forest allocation 56,872.3 - 56,872.3 2,538.9 - 2,538.9 - 4
2. CIGs for climate adaptation 204,485.7 39,977.5 244,463.3 9,128.8 1,784.7 10,913.5 16 15
Subtotal A greener agricultural future 261,358.0 39,977.5 301,335.6 11,667.8 1,784.7 13,452.5 13 19
C. Profitable farms linked to finance and markets
1. Community infrastructure 548,799.8 124,306.8 673,106.6 24,500.0 5,549.4 30,049.4 18 41
2. Rural financial services 98,749.5 7,537.6 106,287.1 4,408.5 336.5 4,745.0 7 7
3. Agriculture Promotion Investment Fund 159,837.4 2,240.0 162,077.4 7,135.6 100.0 7,235.6 1 10
Subtotal Profitable farms linked to finance and markets 807,386.8 134,084.4 941,471.2 36,044.1 5,985.9 42,030.0 14 58
D. Programme Management 178,606.0 11,529.7 190,135.7 7,973.5 514.7 8,488.2 6 12
E. NTP NRD National Coordination Office Grant 11,200.0 - 11,200.0 500.0 - 500.0 - 1
Total BASELINE COSTS 1,437,346.5 186,364.5 1,623,710.9 64,167.3 8,319.8 72,487.1 11 100
Physical Contingencies 5,030.9 764.9 5,795.8 224.6 34.1 258.7 13 -
Price Contingencies 36,765.3 3,789.1 40,554.4 780.1 79.7 859.9 9 1
Total PROJECT COSTS 1,479,142.7 190,918.5 1,670,061.2 65,172.0 8,433.7 73,605.7 11 102
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Table 8. Financing Plan by Component and Outcomes (USD ‘000)
C. Summary benefits and economic analysis
165. Benefits. The Project is expected to generate substantial net incremental benefits for poor
farmers and rural entrepreneurs engaged in the supported commodity chains throughout the
provinces and result in improved poverty reduction in the Project communes32
. The primary benefits
from the Project will come from: (i) increased crop, forest and livestock productivity and production
that is more resilient to CC impacts, resulting from adoption of climate-smart agriculture technologies,
as well as improved access to better and more affordable inputs and their application; (ii) increased
proportion of marketed farm produce, resulting from improved market linkages and outlets;
(iii) reduced losses during production, processing and transportation of produce through innovative
technology and improved rural infrastructure, particularly village to commune access roads and
irrigation development; (iv) enhanced value addition along the VC and improved quality of products
resulting in higher producer prices; (v) enhanced access to longer-term credit and to co-financing for
productive investments; (vi) increased employment either for hired or family labour for both on-farm
and off-farm activities; and (vii) increased government tax revenues.
166. It is expected that by the end of the Project at least 72,000 people in 16,000 poor and near-poor
households will be lifted out of poverty, while 30,000 poor, near-poor and non-poor households
(135,000 people) supported by the Project will have at least a 20% increase in household assets. This
will be achieved through a combination of capacity building, technology transfer and credit access,
supported by upgraded community infrastructure and co-financing of innovative investment in their
farming value chain operations. These include about 23,000 CIG members, of whom 40% will be
women farmers and 50% will be poor or near-poor households, 5,50033
WSCG members as well as
households that will benefit from APIF investments, enterprise-based vocational training and farm-
based extension provided by the Project. Furthermore, up to 35,000 households in the 70 Project
communes will benefit from at least one community infrastructure investments, particularly market
access roads and irrigation development, including at least 17,600 poor and near poor households
(see Appendix 2, Annex 4, Tables 1 and 2 for details).Other participants who will benefit from the
Project include (i) government officials empowered to support market-led growth; and, (ii) private
market and VC agri-businesses that find common interest in promoting viable pro-poor products and
services. The Project will also generate flow-on benefits to the entire rural population of the provinces
through: (i) the institutionalization of a climate-adapted MOP-SEDP process; (ii) an updated and
devolved CC strategy and action plan; (iii) better access to climate adapted agriculture technology
32
It is expected that poverty reduction in Project communes at the end of the Project will be at least 20% above the
average non-Project provincial commune rate. 33
An additional 4,000 women will be mobilised into around 260 WSCGs in Bắc Kạn, financed through residual
revolving funds from the former 3PAD.
Local
IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total (Excl. Duties &
Amount % Amount % Amount % Amount % Amount % Amount % For. Exch. Taxes) Taxes
A. Province-based participatory planning institutionalised
1. Strategic Investment plan 128.2 91.4 - - 12.0 8.6 - - - - 140.2 0.2 - 128.2 12.0
2. Climate change adaptation plan 954.6 76.6 - - 46.6 3.7 244.4 19.6 - - 1,245.6 1.7 - 1,199.0 46.6
3. Climate-informed, market oriented socio-economic plans 3,006.4 44.7 - - 509.3 7.6 3,210.0 47.7 - - 6,725.6 9.1 35.1 6,181.2 509.3
Subtotal Province-based participatory planning institutionalised 4,089.1 50.4 - - 567.9 7.0 3,454.3 42.6 - - 8,111.3 11.0 35.1 7,508.4 567.9
B. A greener agricultural future
1. Forest land and forest allocation 1,626.2 63.8 - - 226.5 8.9 464.6 18.2 232.3 9.1 2,549.7 3.5 - 2,323.2 226.5
2. CIGs for climate adaptation 6,916.7 62.3 - - 129.4 1.2 740.0 6.7 3,325.0 29.9 11,111.1 15.1 1,817.9 9,163.8 129.4
Subtotal A greener agricultural future 8,542.9 62.5 - - 356.0 2.6 1,204.6 8.8 3,557.3 26.0 13,660.8 18.6 1,817.9 11,487.0 356.0
C. Profitable farms linked to finance and markets
1. Community infrastructure 19,130.8 63.6 - - - - 8,114.1 27.0 2,844.7 9.5 30,089.6 40.9 5,549.4 24,540.2 -
2. Rural financial services 4,638.3 96.7 - - 108.1 2.3 48.5 1.0 - - 4,794.9 6.5 360.6 4,326.2 108.1
3. Agriculture Promotion Investment Fund 4,044.7 55.8 - - - - - - 3,199.6 44.2 7,244.3 9.8 103.5 7,140.8 -
Subtotal Profitable farms linked to finance and markets 27,813.7 66.0 - - 108.1 0.3 8,162.6 19.4 6,044.3 14.3 42,128.8 57.2 6,013.5 36,007.2 108.1
D. Programme Management 2,054.3 22.3 - - 471.7 5.1 6,678.8 72.6 - - 9,204.8 12.5 567.3 8,165.8 471.7
E. NTP NRD National Coordination Office Grant - - 500.0 100.0 - - - - - - 500.0 0.7 - 500.0 -
Total PROJECT COSTS 42,500.0 57.7 500.0 0.7 1,503.6 2.0 19,500.4 26.5 9,601.7 13.0 73,605.7 100.0 8,433.7 63,668.3 1,503.6
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and credit; and (iv) institutional strengthening leading to more climate informed and market-oriented
planning.
167. The increased income and employment will result in increased demand for goods and services
in the rural areas in Bắc Kạn and Cao Bằng, which is expected to generate additional income and
employment effects, and further increase government tax revenues. The increased agricultural output
will increase national production, and thereby contribute to growth in overall GDP and national food
security. In addition, foreign exchange earnings/savings are expected from increases in exports
(mainly timber, medicinal plants, ginger and spices) and a reduction in imports (mainly timber).
168. Major institutional benefits expected from the Project are: (i) up to 1,900 CIGs and more than
1,000 newly established WSCGs as well as farmers’ cooperatives supported by the Project are
effectively serving their members; (ii) staff capacity at provincial and district level is built for
preparation of SIPs and market economy management; and (iii) all Bắc Kạn and Cao Bằng districts
and communes are implementing an institutionalised climate adapted MOP-SEDP processes.
169. The main social and environmental benefits expected from the Project are: (i) reduced
vulnerability and increased resilience to climate-change and disaster impacts, resulting from the
implementation of climate-adapted MOP-SEDP at district and commune level; (ii) increased
participation of women and the poor in decision making at local level; (iii) reduced environmental
degradation and conserved natural resource base for sustainable livelihoods of present and future
generations; and (iv) environmentally friendly agronomic practices, energy-efficient processing and
safe disposal of agro-industrial waste products. An overview of the potential Project benefits is
provided in Appendix 10.
170. Financial Analysis (FA). The FA is based on illustrative models for annual crops (21), tree
crops and forestry (9), animal production (7) and processing enterprises (6) which have been
identified for the main commodity chains that are likely to be supported by the Project. The commodity
chains have been selected on the basis of a preliminary analysis of the market demand, constraints,
opportunities and their potential to contribute to poverty reduction in Bắc Kạn and Cao Bằng34
.
Appendix 10 presents the main financial parameters. Detailed enterprise budgets are provided in the
Economic and Financial Analysis Annex in the Project Life File. The FA shows the potential for
significant increases in net profits, return to labour and return on investment resulting from the Project.
Decisions on Project support to investments in farming systems and enterprises will be based on
sound FA, specifically for (i) investment proposals for APIF co-financing; and (ii) business plans for
investments by CIGs and, as appropriate, by SCG members. The financial enterprise budgets
prepared together with the PPB and DARD staff provide the basis for the Economic Analysis of the
Project. Furthermore, it is envisaged that the templates developed will provide the building blocks for
a thorough VC analysis for the main VCs to be supported by the Project, as well as for the above
mentioned FA that will be carried out during implementation (after some modification as required).
171. Economic analysis (EA). The CSSP does not lend itself to the traditional EA of development
projects, as it is demand- and market-driven and it is not possible to determine ex-ante for which
types of eligible commodities and economic activities farmers and enterprises will request Project
support, which technologies and business practices they will actually choose, and what types of
community infrastructures will be funded. Therefore, the EA has been based on (i) an estimated
distribution of farm and enterprise models identified in the FA and conservative assumptions regarding
outreach, adoption and success rate; and (ii) representative models for rural road and irrigation
scheme construction/rehabilitation supported under Output 6. It should be noted that potential benefits
from Outcome 1: Province-based participatory planning institutionalised have not been quantified
separately as (i) this component will contribute to realizing the outcomes expected from Outcomes 2
and 3; and (ii) it is difficult to quantify in economic terms additional benefits resulting from the activities
supported, specifically (a) provincial CCA plan and investment Project preparation; and (b) climate-
informed, market-oriented socio-economic development planning. No economic benefits have been
34
Priority commodity chains identified and analysed during Project design include: timber, ginger, tangerine, canna,
peanut, black agar, banana, h’mong cow and black pig production.
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calculated for the Project coordination component which is a precondition for Project implementation
and achieving Outcomes 1, 2 and 3.
172. Taking into account the total economic Project costs, the economic internal rate of return
(EIRR) of the Project for the base case is 14.8 per cent. The net present value (NPV), discounted at
nine percent is VND 598.5 billion (USD 26.72 million). An increase in Project costs by 10 per cent will
reduce the EIRR to 13.2 per cent, while a decrease in overall Project benefits by 20 per cent will result
in an EIRR of 11.2 per cent. Considering the possibility of a combination of 20 percent reduction in
incremental benefits with a two-year delay in benefits, the EIRR is reduced to 8.0 per cent. The
switching values show that the Project will remain economically viable if benefits decreased by 31 per
cent or Project costs increased by 45 per cent (see sensitivity analysis linked to the Project risk
analysis in Appendix 10).
173. Conclusions. On the basis of conservative assumptions, and given the fact that many potential
benefits that are expected from the Project have not been quantified in economic terms, the Project
can be justified on economic grounds. It should be kept in mind that not all potential economic
benefits (for example: environmental benefits; other direct and indirect benefits of community
infrastructure; and additional direct benefits from Outcome 1 have not been included in the analysis.
Furthermore, the likely multiplier effects mentioned above have not been quantified. Therefore, it can
be assumed that the estimated economic benefits are on the low side of the potential economic
returns that can be expected when the Project is implemented.
D. Sustainability
174. The emphasis of the Project is on enhancement of private sector activity and competitiveness
in the specific sub-sectors targeted for investment. The most important determinant of sustainability of
such investments and, by extension, provision of expected benefits, is their continued profitability. The
approach adopted will provide strong grounds for the expectation that a large majority of investments
will endure. The main tools used by the Project to enhance prospects of private business
sustainability will be:
Enhanced capacity of government staff, farmers and private rural enterprise actors to
analyse and prioritize investment choices;
Rigorous scrutiny of business proposals by CSSP and collaborating financial institutions;
The commitment of a substantial proportion of investment from the client’s own financial
resources;
The complementary public investment in infrastructure designed to improve business
conditions and lower costs; and,
The focussed approach to investment within the Communes provided by the MOP-SEDP
process.
175. The incorporation of the private sector into an enhanced MOP-SEDP process, which will
holistically plan both government and Project resources is critical to the post-Project economic welfare
of the target group.
176. The public investments through the leveraging of market and VC development provide a
different challenge for sustainability of benefits. The experience gained by IFAD and by 3PAD in
supporting this is crucial. The MARD is also supportive of APIF investments and, with donor support,
including IFAD, is preparing national guidelines for APIF that will be adopted by CSSP. The likelihood
of sustainability of the public investments, although not assured, will be further enhanced through the
following measures which are built in to Project design:
The operation of investments will largely be through existing institutions;
The requirement for a relatively significant contribution from the sponsoring agency or
community groups; and,
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The assurance local ownership and participatory planning through the MOP-SEDP
process
E. Environment classification
177. In line with IFAD’s Social, Environmental and Climate Assessment Procedures, the Project is
classified as Category B. While the Project's design and implementation activities may have some
environmental and social impacts on human populations or environmentally significant areas, these
will be small in scale, dispersed and largely site-specific and reversible. The Project’s potential
adverse impacts are relatively minor, and these can be prevented or ameliorated by appropriate
actions and mitigation measures that will be described in an Environment and Social Management
Plan (ESMP) which is a compliance document that accompanies Category B projects (See SECAP,
para. 73).
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Appendix 1: Country and rural context background
41
Appendix 1: Country and rural context background
A National Level
Overview of country development over the recent years:
1 Since the introduction of a comprehensive set of economic reforms known as Đổi Mới
(renovation) in 1986, Viet Nam’s economy has sustained strong economic growth. Over the last
15 years, Gross Domestic Product (GDP) growth has averaged 6.15% per annum, resulting in rapid
poverty reduction: from more than 60% in the early 1990s to 17.2% in 201435
. Consequently, almost
40 million people have been lifted out of poverty. In recent years, however, GDP growth has lagged,
averaging 5.2% in the period 2009-2013, due to world economic stagnation, high domestic inflation
and low private sector business confidence, the latter the result of overleveraged State Owned
Enterprise (SOE) and banking sectors and weak domestic demand.
2 During 2015, Vietnam’s macroeconomic conditions have improved as its economy completes
the seventh year of relative stability, post global financial crisis. With low inflation, a relatively stable
exchange rate, and increased reserves, Vietnam has left the recurrent episodes of macroeconomic
instability that started in 2007. Year on year inflation has fallen from a peak of 23 per cent in August
2011 to 0.9 per cent in October 2015. The official exchange rate has been relatively stable supported
by a new policy to widen the exchange rate band when the currency is under pressure rather than to
defend the currency. The stock of reserves with the Central Bank has more than doubled in the past
two years, with reserves covering about 3 months of imports at the end of 2014. Vietnam’s sovereign
spreads and country default swaps are now hovering at their lowest levels since the onset of global
economic crisis. Along with economic development, Vietnam has also provided opportunities for
greatly enhanced foreign direct investment and international trade. In the last decade, Vietnam’s
international trade turnover has increased more than 6 times (GSO, 2014), showing an open economy
and a commitment to integration.
3 Macroeconomic stability, in the absence of broad structural reforms, however, has not been
sufficient to lift the economy from its recent spell of relatively slower growth. The World Bank update
on economic affairs (World Bank, 2013) notes that policymakers have been consumed in recent years
with trying to stabilize the economy, with the hope that once macroeconomic stability is achieved,
growth will automatically resume. But even as the economy has stabilized, growth is only just starting
to improve. In fact, growth has been below 7 per cent for seven consecutive years, with GDP growth
in 2015 expected to reach 6.4 per cent, up from 6 per cent in 2014. Efforts to stimulate the economy
through tax breaks and accommodative monetary policy have faced diminishing returns, while raising
fiscal deficits and creating new contingent liabilities. Without accelerating structural reforms, especially
in the banking and State owned enterprise (SOE) sectors, Vietnam faces the risk of a prolonged
period of slow growth. A comparison of economic indicators between 2005 and 2014 is shown in
Table 1
Table 1: Major Economic Indicators for Vietnam
Indicator Unit 2005 2014
Population head 83.5 million 90.7 million
GDP USD 52.9 billion 186.0 billion
Inflation Rate % 9.5 9
Exports USD 32.0 billion 150.0 billion
FDI USD 5.8 billion 21.9 billion
Poverty % NA1 17.2%
Life expectancy years 75 76
Source: Vietnam General Statistics Office data and Ministry of Planning and Investment.
35
In 2010, a new poverty line was estimated by the General Statistical Office and World Bank that better reflects living
conditions of the poor. Based on the revised poverty line (equal to VND 653,000/person/month or $2.25/person/day,
2005) and updated monitoring system, the national poverty rate in 2010 was 20.7 percent vs. an official poverty rate of
14.2 percent in 2010 using former MOLISA urban and rural poverty lines of VND 500,000/person/month and VND
400,000/person/month, respectively.
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The National Geography of Poverty
4 The most current estimates (for 2012) put the
percentage of the population below the poverty line at
17.2 percent. Rural areas remain disproportionately
affected by poverty. In 2012, the poverty headcount
ration (at national poverty lines) in rural areas –
22.1 percent – was roughly four times that of urban
areas at 5.4 percent. As about 67 percent of Viet
Nam’s 2014 population lived within rural areas, poverty
may be characterized as predominately a rural
phenomenon. (World Bank, 2015). Poverty also has
strong ethnic and geographic dimensions.
Disproportionate progress has been made in reducing
poverty amongst the different ethnic groups. While
only some 15 percent of the population, these groups
account for more than half the poor, and progress on
ethnic minority poverty reduction has slowed (World
Bank, undated). Rates of poverty have been reported
as 9 percent for the majority Kinh/Hoa peoples and
50.3 percent among ethnic minorities (VASS, 2011).
5 Geographically, data (VASS, 2011) indicate that
the Southeast and the Red River Delta have the lowest
rates of poverty in the country. Whereas, in the
Northwest, where a high percentage of the population
are ethnic minorities, the incidence of poverty is many
times higher at 45.7 percent. The Northeast, Central
Highlands and the North Central Coast displayed
similar incidences of poverty, as did the South Central
Coast and Mekong River Delta.
6 Children and women are particularly vulnerable
and often more strongly impacted by poverty in the
rural areas. In Viet Nam, most poor children live in
rural areas. Among ethnic minority children poverty is especially high. Using multi-dimensional criteria
to assess poverty (i.e., not only economic criteria, but also criteria related to child development needs:
education, health, housing, clean water, sanitation, not working at an early age, and social protection),
the two regions with the highest rates of poverty among children were the Northwest and the Mekong
River Delta. (GSO, 2009).
Agriculture and Rural Development
7 Agriculture generated 18.1 per cent of GDP in 2014 and generated USD 30.86 billion in export
earnings, of which fisheries export comprised USD 7.92 billion. Over the last 20 years, agricultural
growth has assured food security and made a key contribution to economic and social development
and stability. Based on 2014 figures some 68.8 per cent of the population or 60.6 million people live in
rural areas. 36
The economic structure, however, has shifted, with the number of households’
dependent on agriculture reduced from 71.1 per cent in 2006 to 46.2 per cent in 2014, with an
increasing share of households in industry and services, from 25.1 per cent in 2006 to 53.8 per cent in
2014. The sector’s share of employment, however, remains 2.5 times higher than its share of GDP,
indicating relatively low labour productivity. This shift in the rural economic structure varies greatly
among regions. In 2013, the three regions with shares of non-farm households higher than 30 per
cent are the South-East (58.1 per cent), Red River Delta (44.5 per cent) and Mekong River Delta
36
General Statistics Office of Vietnam 2014: provisional figures for 2014.
Figure 1. Provincial poverty head count as
percent of total population.
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(32.2 per cent). In contrast, the Central Highlands, Central Coast and Northern Uplands regions have
more than 80 per cent of their population relying on agricultural incomes, while the share of non-farm
remains relatively low, which has many ramifications for poverty.
8 The annual
rate of growth in
agricultural
production slowed
from an
impressive
average of
5.7 per cent in
1990-2002 to
4.2 per cent in
2002-13. In 2013,
agriculture
exports formed
17 per cent of the
value of total
exports and just
9.8 per cent of
imports, leaving a
healthy, positive
agricultural trade
balance. The ratio of total agro-food export value to agricultural GDP was 70-80 per cent in the early
2010s, much higher than in China or Indonesia and equal to the ratio of total Viet Nam’s exports to
total GDP. The ratio of agro-food imports to agricultural GDP, while only half of that for exports, has
tripled since 1990. Rice remains by far the most important commodity, accounting for about 35% of
the total value of agricultural production in recent years. There has, however, been an important
change in the composition of production away from staple foods to other commodities, in particular
perennial crops such as coffee and rubber, and livestock production, especially pig meat. This reflects
the strong export orientation of perennial crops and the changing preferences of consumers to higher
value products37
. In 2014, total rice production was 45 million tons, an increase of 5 million tons
compared with 2010. Rising agricultural labour costs are slowly forcing efficiency gains
(mechanization and land consolidation) and accelerated production diversification. The livestock
subsector accounts for 25 per cent of agricultural GDP and is projected to rise significantly. The
forestry sector contributes around 1 per cent.
9 Fisheries output rose by an annual average of 4.6 per cent from 2010 to 2014, with
particularly rapid gains in freshwater aquaculture output and shrimp production, which now exceeds
the harvest of wild fish. Overall, the fisheries sector accounted for over 20% of the gross value of
agriculture, forestry and fisheries production and for 3.7 per cent of national GDP in 2012. In 2014,
total output of fisheries reached 6.3 million tons (provisional GSO estimate). Exports of seafood
increased to USD7.9billion in 2014 (an increase of 63 per cent from 2010), making it Viet Nam’s fifth
most valuable export and Viet Nam the third largest seafood exporter globally.
10 Despite this strong performance, a number of constraints remain. Product quality is low, and
Vietnam typically receives significantly lower prices than neighboring countries and market
competitors for its rice, coffee, tea, rubber and aquaculture exports. Agricultural knowledge systems
require significant investment and stronger client and market orientation, while massive infrastructural
investment in water management and transport infrastructure is needed. Rural markets are
characterized by weak farmer access to market information, limited integration along value chains,
low levels of value addition, and continued dominance by state- owned enterprises of some
commodities and markets, notably export markets. These business, market and quality constraints,
37
OECD Food and Agricultural Reviews Agricultural Policies in Viet Nam 2015.
Figure 1. The share of agriculture in GDP, employment, total exports
and imports, 2000-13
Extracted from OECD Food and Agricultural Reviews Agricultural Policies in Viet Nam 2015
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combined with an underdeveloped processing sector, represent a very significant loss of investment,
revenue and employment opportunities, while seriously constraining farm profitability. With higher
rural labour wages and an increasingly scarce natural resource base, the agriculture sector urgently
needs to further diversify production to higher-quality products, promote value addition and
processing, and increase efficiency while ensuring resource-based sustainability.
11 Although 9 million hectares (ha) of agricultural land have been issued to 12 million households
and 11.5 million land-use rights certificates (LURCs) approved, the land reform process is incomplete,
requiring further investment in LURC issuance, land information systems and land-use planning and
consolidation, and the incorporation of customary land tenure into collective land use rights,
particularly for “residential communities” of ethnic minorities. Unsustainable natural resource use,
particularly of water and in the forestry sector, leads to problems of water scarcity and land
degradation, including saline intrusion and loss of biodiversity and flooding. This is amplifying
vulnerability to climate change and natural climate hazards, which are increasing in frequency and
severity. These constraints are compounded by the limited capacity of supporting institutions,
particularly at provincial and lower levels.
12 In its Fourth Assessment the Intergovernmental Panel on Climate Change (IPCC) described the
Mekong and Red River delta as a “hotspot of key future climate impacts and vulnerabilities in Asia”.
Long-term predictions show that expected impacts on the agriculture and rural development sector
will primarily derive from changes in temperature, rainfall and sea level. A 2007 World Bank study
concluded that the one-meter rise in sea level predicted for 2100 would directly result in a loss of
more than 5 per cent of the country’s land area, more than 7 per cent of agricultural lands and 28 per
cent of wetlands, and more than 10 per cent of GDP. It would impact about 11 per cent of the total
populated and urban areas.
The opportunities for rural development of Vietnam:
13 The Government of Vietnam primarily plays facilitating roles in infrastructure development,
public services, and in special programs. It also provides direct support for areas with extremely
difficult conditions in remote and/or mountainous areas. Government investment and support for rural
areas is prioritized towards infrastructure upgrading and development to provide better services for
production, transportation (and trade), and markets. It also provides direct support for non-agricultural
economic activities and development of SMEs and industrial villages in rural areas. In line with
priorities of government, the largest donor-funded activities are focused mostly on infrastructure such
as transportation, irrigation, utilities and other public facilities. ODA funding plays an important role
with 61% of funds goes to rural areas.
14 Involvement of the private sector: The private sector created 86% of the total employment in
Vietnam in 2014 (GSO). Moreover, with the initiation of public-private partnerships, the private sector
plays a more important role in providing education and training services to the poor. While challenges
still exist, the government has recognized the value of foreign investment and private enterprise in
steering economic growth and has made doing business in Vietnam much easier in recent years.
15 Within the policy and investment framework, there are numerous viable avenues for agricultural
and rural development in Viet Nam, building on the successes of the recent past. Viet Nam possesses
a well-educated rural work force, has relatively good rural infrastructure and relatively good physical
environment. All of these factors enable it to be a low cost producer of agricultural commodities. The
most prominent of the agriculture production and processing opportunities for Bắc Kạn and Cao Bằng
provinces are:
wood and wood products for domestic and export markets (particularly Bắc Kạn)
livestock products for burgeoning urban markets in the north-west mountains and
China;
NTFPs, particularly bamboo shoots. medicinal plants and spices for domestic and
export markets;
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specialised local crops including ginger, canna, seed peanuts, tangerines, plums,
truc bamboo, black agar and Shan tea.
Public Sector Planning for rural development
16 The Ministry of Planning and Investment (MPI) has under its jurisdiction the entire planning
process as well as the development of the various strategies and plans, at all levels. The two central
components of the planning system are the 10-year "Socio-economic Development Strategy" (SEDS)
and the corresponding consecutive "Five-year Socio-economic Development Plans" (SEDP). In
addition, there are (i) regional development plans whose purpose is to tailor the objectives of the
SEDS and SEDP to the conditions of the regions in Vietnam; (ii) national sectoral development plans
that define the sector‐specific objectives to be implemented by the line ministries, (iii) at the sub‐
national level, the line ministries’ regional and provincial sectoral development plans, and (iv) the
Provincial People’s Committees’ long‐term and annual plans for socio‐economic development.
17 The current SEDS, covering the period from 2011-2020, focuses on structural reforms,
environmental sustainability, social equity, and emerging issues of macroeconomic stability. It defines
three “breakthrough areas”: (i) promoting human resources/skills development (particularly skills for
modern industry and innovation), (ii) improving market institutions, and (iii) infrastructure development.
18 The SEDP is the primary national planning tool for the implementation of the SEDS. The
current SEDP for the period 2011-2015 focuses on the need to restructure the economy to increase
the share of high value-adding economic activities, improve the living standards of ethnic minority
populations, strengthen environmental protection, and mitigate and prevent the adverse impacts of
CC. The Plan underlines the need to develop favourable conditions for the private sector and to
gradually reduce the contribution of the state sector to GDP. It also outlines the importance of
environmental protection, CC mitigation, and adaption and building resilience to natural hazards.
19 A bottom-up mechanism is employed in the development of the SEDPs, both the five year as
well as the annual SEDP plans. Local governments at the commune, district, and province-levels
develop and submit proposals to the next higher level of government, which are then ultimately and
eventually submitted to MPI, where they are incorporated into the annual SEDP plans.
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Table 2. Types of socio‐economic development planning inputs.
Source: Tan, S. 2012. Reconsidering the Vietnamese development vision of “industrialization and
modernization by 2020”. Working Paper 102. ZEF Working Paper Series. Department of Political and
Cultural Change, Center for Development Research, University of Bonn
20 Of greatest relevance to the proposed Project is the context and functioning of the SEDP
process at the local-levels (commune, district and province). Their five-year plans establish the annual
targets for each Province and, by extension, the annual priorities to be incorporated into each years’
SEDP. Under the SEDP 2011-2015 there are four thematic areas whose targets orient the planning
for the agriculture and rural development (ARD) sector. These thematic areas are: Clean Water, the
National Target Program for New Rural Development, the National Target Program for Response to
CC, and Clean Food & Agriculture.
21 The National Target Program on New Rural Development (NTP-NRD) is to implement the
ARD sector’s “New Agricultural and Rural Development Strategy”. The policy calls for structural
changes that would widely affect policy, legal frameworks, planning, land use, investment and
principal factors of production within the sector and in the rural areas. The intent of the new policy is to
speed up industrialization and modernization of the rural sector. MARD is the lead Ministry for NTP-
NRD implementation. Among others, the policy calls for:
Improved natural resource management and CC adaptation for livelihood security,
and building capacity at grassroots level for promoting sustainable uses of natural
resources to enhance the livelihoods of the farmers;
Decentralization of decision making and resources covering both economic and
social issues;
The transition of the role of the State in agriculture, from service provider to
regulator and facilitator;
A continued transition to market-oriented agriculture and rural economic
development; and
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Economic growth and competitiveness through the creation of non-farm and off-
farm employment opportunities through accelerated market-oriented reforms.
22 Operational details for the implementation of the NTP were defined in a 2010 decision which
detailed program’s eleven components and their institutional and implementation arrangements.
There are three components which are of particular importance in a discussion of climate adapted
investment and in building resilience for adaptation to CC:
General master plan for rural development – including all planning processes for
the development of “new rural areas”, i.e. planning of land use, basic
infrastructure, production of agricultural commodities, agro-industry, craft industry,
provision of services, socio-economic and environmental infrastructure, new
residential areas and improvements to existing residential areas in communes;
Socio-economic infrastructure development − construction of roads, power grids,
clinics, schools, irrigation systems, etc.;
Economic restructuring, development and income improvement – including
restructuring agricultural production towards production of commodities with “high
economic efficiency” and; strengthening extension activities, increasing research
outputs on advanced technologies for agro-forestry-aquaculture production.
Natural Resources Management and Climate Change Adaptation
23 Natural resources management concerns with regard to agriculture and forestry development in
Viet Nam include soil erosion and land degradation, deforestation and degradation and quality and
availability of water resources. Two third of the country is mountainous and hill side crop cultivation,
which is highly vulnerable to soil erosion, is widely used. Even though terraces are common, shifting
farming is also practiced (although reducing following the banning of "swidden” agriculture), and the
application of soil and water conservation technologies and practices is limited in some intensely
cultivated areas. Manny studies suggest that the loss of the fertile top soil in upland crop cultivation
systems is more than 8 times higher than the Soil Loss Tolerance Value, which, over time effects
yields.38
Deforestation of steep slopes, along water courses and in upper parts of watersheds, is
another factor that effects soil erosion as well as floods and dry seasons stream flow. According to
FAO, the total forest cover of Viet Nam in 2010 was 13.8 million ha (41 per cent of total land area of
the country) divided into the three forest management categories used in Viet Nam: Special-use
Forest (16% of total forest area), Protection Forest (36% of total forest area) and Production Forest
(48% of total forest area)39
. The current forest cover represents an important recovery from 9.1 million
ha in 1990, which was a result of high levels of deforestation in the second half of the 20th century.
However, the increased forest cover is mostly coming from monoculture forest plantations and the
natural forests, which deliver higher levels of services of soil erosion and flood control, maintenance of
stream flows in dry seasons and conservation of biodiversity, has only seen limited recovery. It is
estimated that Viet Nam has less than 1% primary forest left 40
.
38
Erosion and Nutrient Loss on Sloping Land under Intense Cultivation in Southern Vietnam, Nguyen Van De, et. al.
2007 39
Production forests are forest lands designated primarily for the production of timber and timber products. They can be
natural or plantation forests. Policy mandates that the production of raw material for forest industry should be prioritized
on these lands. However, some alternatives are allowed in mountain areas where the objectives of forest
rehabilitation/enrichment and livelihood improvements for local peoples can be met through establishment of multi-
purpose species and NTFPs. Protection forests are lands designated for purposes of watershed protection, coastal
zone and island protection, stabilization of lands subject to aeolian processes, environmental protection for large urban
areas and, as buffers on national borders. Multiple use is allowed, depending on how critical its protective function is
considered to be. Protection with agricultural production, aquaculture, scenic landscape management, outdoor
recreation, ecotourism, harvesting of forest products and other benefits for local communities may be permitted.
Special use forests are primarily for biodiversity protection, but contemplate some multiple-use by local communities
outside of the core zone (i.e., in the buffer zone) such agroforestry as a restoration option, or ecotourism and outdoor
recreation activities. 40
The context of REDD+ in Vietnam - Drivers, agents and institutions, CIFOR, 2012
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24 These trends in the general status of the natural resource base for agriculture and forestry
effect the agro-ecosystems overall resilience to current and future challenges from climate change.
Viet Nam has been predicted to be one of the world’s most vulnerable countries and likely to be
significantly impacted by climate change. Globally, it has been ranked as a “Natural Disaster
Hotspot”, ranking 7th on economic risk, 9th on the percentage of land area and population exposed,
and 22nd on mortality from multiple hazards (Dilley et al, 2005). With its “mega deltas” and high
population concentrations within the Mekong and Red River Deltas, the IPCC’s Fourth Assessment
characterized Vietnam as a “Hotspot of key future climate impacts and vulnerabilities in Asia” (Cruz et
al, 2007). Roughly 40 million or more Vietnamese live in and around the deltas and along the coast. A
UK-based firm, specializing in the provision of risk intelligence services to private investors and
organizations, ranked Viet Nam as an “extreme risk” country and 13th of 170 countries in terms of its
vulnerability to the impacts of climate change over the next 30 years (Maplecroft, 2010).
25 Risk related to heavy rainfalls and extreme weather events is not a foreign concept in Viet Nam.
The Vietnamese people have long been subjected to the impacts of natural disasters. Globally, Viet
Nam is one of the ten countries most affected by natural disasters (CRED, 2010). With the majority of
the population living in low-lying river basins and coastal areas, more than 70 per cent of the
population is estimated to be exposed to risks from multiple natural hazards. From 1953 to 2010,
nearly 25,000 people died in natural disasters, another 77 million have been affected and damages
are estimated at over USD 7 billion. Typhoons (tropical cyclones) have been the main hazard. More
than 80 typhoons have hit Vietnam between 1953 and 2010. Floods, with around 60 major events,
have been the second major natural disaster-related cause of loss of life, property and livelihoods. In
terms of human exposure, floods are responsible for almost 60 percent of impacts on the population,
followed by storms and drought. In economic terms, storms are responsible for about 55 percent of
losses, followed by flood and droughts (GFDRR, 2011). National statistics show every year natural
disasters cause an average of 750 deaths and economic losses equivalent to 1.5 per cent of GDP.
Since damage and loss data are chronically underreported, real totals may be much higher. (GFDRR,
2011) and, the trend is increasing. Average annual property losses between 2005 and 2008 from
natural disasters were some three times the long term national average (MONRE, 2010). Scenarios
for future impacts of climate change suggest that these losses will greatly worsen over the course of
the 21st century.
Vulnerability to Climate Change, National
26 Of particular concern is the nexus between weather and climate risk and poverty. In a World
Bank study on the social dimension of adaptation to climate, village-level interviews found that
community members considered factors directly related to climate to be among the main causes of
poverty. In one particular instance, poor households participating in interviews maintained that they
had been non-poor up until 2008 when flash floods caused them to lose a significant portion of their
assets. Due to drought and crop losses the following year they had been unable to recover.
According to the authors of the study “drought and hazard damage were brought up again and again
as a main cause of poverty.” (McElwee, 2010).
27 These are not isolated cases. Research by the Vietnam Academy of Social Sciences (2011)
has shown that among the factors contributing to falling below the poverty line are exposure to risks
from natural disasters, crop and livestock epidemics, harvest losses, and other risks to production.
Factors related to remaining below the poverty lines included lack of natural capital (having no or
insufficient land for cultivation, lacking capital and productive assets, having land but lacking funds for
investment), poor education and awareness, and lack of external support, such as technical
assistance. To all of these factors, women tend to have greater exposure, including those related to
natural disaster and production risks. Poor women are often the most exposed and sensitive due to
their involvement in agricultural livelihoods on disaster-prone lands. They are also the less endowed
and empowered to recover from disruptions and for shifting to alternative livelihoods (Fortier, 2010).
28 In sum, vulnerability to climate change in Viet Nam like in other countries is socially
differentiated. Impacts of extreme weather events are related to poverty status, access to resources,
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and social security systems. Groups that are already the most socially vulnerable (women, ethnic
minorities, and the disabled) are likely to be disproportionally less able to adapt to climate changes.
The rural poor, and especially these socially vulnerable groups, are also exposed to greater risk given
their direct reliance on agriculture and the natural resources base for their livelihoods as well as their
greater exposure to natural disasters and their lack of assets and capital to recover or to shift to
alternative livelihoods.
29 The issue of vulnerability also extends to households of the non-poor. Work by Baluch and Hoa
(2010) suggests that while large numbers of households have moved out of poverty, many have not
moved far above the poverty line and remain vulnerable to exogenous shocks that might cause them
to fall back into poverty. Among the relevant factors (vulnerabilities) identified were global economic
downturns, rises in food and fuel prices and natural disasters (floods).
NRM and CCA policies and strategies
30 In recognition of Viet Nam's vulnerability to environmental pollution and the impacts of climate
change, the National Green Growth Strategy (GGS) for the period 2011-2020 with a vision to 2050
(GGS) was approved in 2012 to support a low carbon sustainable development. The underlying
viewpoint stated in the GGS is Green growth must lead to increased investments in conservation,
development and efficient use of natural capital, reduction of greenhouse gas emissions and
improvement of environmental quality, and thereby stimulating economic growth. The main objectives
of the GGS are: (i) restructure the economy and “perfectize” the economic institutions by greening
existing sectors and encouraging the development of economic sectors to use energy and natural
resources efficiently with higher added values; (ii) conduct research and enhance application of
appropriate advanced technologies to more efficiently use natural resources, reduce greenhouse gas
emissions intensity and to contribute to an effective response to climate change; and (iii) improve
living standards of the people, creating an environment friendly lifestyle through employment
generation from green industry, agriculture and services; investment in natural capital; and
development of green infrastructure. The GGS has set targets to be reached by 2020 including: (i) 8-
10% reduction in GHG emissions as compared to the 2010 level (includes a voluntary reduction of
approximately 10%, and an additional 10% reduction with additional international support), application
of clean technologies in manufactures will reach 50%; and (ii) development investment for supporting
sectors to protect the environment and enriching natural capital will reach at 3-4% of GDP.
31 To achieve these objectives and targets the main strategic tasks and solutions identified in the
GGS relevant for agriculture and forestry are listed below of which the CSSP project, depending of the
priorities of the CIGs, will support (i), (iii) in relation to climate change adaptation, (iv), (v), (vi), (viii), (x)
and eventual xiv:
(i) organize education, awareness raising, and technical assistance activities for communities on
the role and meaning of green growth as well as pragmatic actions that contribute to its
implementation including production and consumption models which are economic, safe,
civilized, respectful of the character of ethnic groups, harmonious and nature friendly
(ii) development of a green agriculture based on environmentally friendly structures,
technologies and equipment; enhancing investment in natural capital; proactive prevention and
treatment of pollution;
(iii) study the adjustment of master plans, shift animal husbandry and crop production structures,
crop planting seasons, livestock, forestry, aquaculture, irrigation and non-farming activities in
rural areas;
(iv) research and apply production processes and economic technologies that efficiently use
seedlings, feed, agricultural materials, soil, water etc., and reduce greenhouse gas emissions
from agricultural production;
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(v) replicate widely technologies that treat and reuse by-products and waste from agriculture
production to produce animal feed, mushrooms, materials for industries, biogas and organic
fertilizer while reducing greenhouse gas emissions;
(vi) speed up progress of afforestation and reforestation projects, encourage enterprises to
invest in production forests to increase forest coverage to 45% by 2020, improve forest quality,
enhance carbon sequestration capacity by forests and increase standing biomass and secure
timber production and consumption;
(vii) implement programs to reduce greenhouse gas emissions through efforts in Reducing
Emissions from Deforestation and Forest Degradation (REDD), sustainable forest management
in combination with diversifying livelihoods of rural people.
(viii) enhance investment in irrigation systems with modern operation equipment to ensure
efficient regulation and protection of water resources, adequate supply of water for agricultural
production with better irrigation, drainage and flood control.
(ix) establish and complete the legal framework and policies to enforce and effectively
implement the Law on water resources, Law on land, Law on mineral resources, Law on
environmental protection and related regulations; to strengthen the use of economic and
administrative instruments based on the “the polluter pays” principle.
(x) encourage local authorities to have policies that prioritise and support green economic sector
development and integrate that in programs for development and poverty reduction,
improvement of landscapes and the environment.
(xi) establish effective administrative organizations, complete the management system for
natural resources and environment protection at the central and local levels.
(xii) apply an integrated management approach and improve management bodies of river basins
and ecological systems.
(xiii) formulate the green accounting system through valuation of natural resources.
(xiv) develop and issue standards for green/ecolabelling of products and issue special policies
on economic-technical assistance that encourage to expand markets and develop green
traditional products where Viet Nam has competitive advantage, including herbal medicines;
eco-agriculture, forestry and fisheries; foods; as well as commodities goods and garments made
from local materials.
32 An Inter-Ministerial Coordinating Board for implementation of the GGS has been established
under the National Committee on Climate Change to direct the implementation of the strategy. The
Board has the Deputy Prime Minister as its Head and the Minister of Planning and Investment as the
standing vice Head, with the four other vice-Heads being the leaders of MoF, MoIT, MARD, and
MoNRE. The Board also includes some other representatives of the ministries, sectors and local
authorities and some associations. The apparatus to assist the Board is located in the MPI, who will
organize and assist the Board in leading and executing the implementation of the GGS. The MoF has
the primary responsibility, in coordination with the MPI, for submitting budget proposals for approval
and ensuring funding for the implementation of the strategy in ministries and sectors under the current
regulations. MoF will also in collaboration with MPI develop policies to encourage all economic
sectors, organizations and individuals to invest in development of the green economy in Viet Nam.
The MoNRE has the lead and coordinate the policy making process for response to climate change in
general, guiding the registration, monitoring, verification and reporting of greenhouse gas emissions
and monitor the implementation of investment policies in natural capital.
33 The GGS integrates and builds on previous policies and action plans constituted to address CC
impacts including: (i) the NTP-RCC; (ii) the Action Plan Framework for Adaptation to CC in the
Agriculture and Rural Development Sector, 2008-2020; (iii) MARD's Action Program in Response to
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CC of the Agriculture and Rural Development Sector, 2011-2015 and Vision to 2050 (RCC-ARD); and
(iv) the National Program on Community-Based Disaster Risk Management to 2020.
34 Payment for Forest Environmental Services. In December of 2010 the Office of the Prime
Minister approved Government Decree 99 establishing the scheme for the implementation of the
Policy On Payment for Forest Environment Services (PFES). Among the stated objectives of the
policy are: to “contribute to ensuring harmony and balance of the living environment; to conserve
biodiversity; to prevent and limit adverse impacts of natural disasters (flood, drought, soil erosion,
desertification, carbon sequestration and retention, air environment pollution; greenhouse gas
emissions; climate change, etc.).” It also recognizes that to be effective, the state will have to move
forward at a strong pace to allocate forest lands and assign or provides contracts for forest use in
order for the PFES to be of use.
35 Among the stipulations already made are: (i) river basin master plans will serve as the basis for
identifying forest areas, liable payers and potential payees of forest environment services payment in
each basin; (ii) the general census on forests, being carried out during 2010-2015, will provide the
basis for the implementation of the policy; (iii) that hydrologic services (water quality, seasonal flows,
other) will be considered and hydropower plants, water supply utilities, industrial water users drawing
from natural sources, and aquaculture facilities will be subject to payments and contribute to the
monitoring of the quality of forest environment services; and (iv) other eligible services will include
carbon sequestration; avoidance of deforestation; habitat services, particularly (fishery) spawning
grounds, food and natural seeds sources. Among the main target groups for the PFES payment are
the 30 per cent of the population that lives in mountainous regions (a high percentage being ethnic
minority people).
36 Details of payments and payment levels are still being worked through, but in the in the interim,
a payment of VND 200,000/ha/yr. has been set for PFES from hydropower and water utilities (Pham,
2009). Additional GoV programs are also providing payments to households and individuals for forest
protection as forms of PFES: (i) Program 661 – VND 100,000/ha/year for forest areas contracted to
the households by the Forest Management Boards; (ii) Program 135 – VND 100,000/ha/year for forest
areas managed by the Commune People’s Committees and Forest Management Boards;
(iii) Program 304 – VND 100,000/ha/year and 15 Kg of rice/individual/month for forest protection; and
(iv) Program 30A – VND 200,000/ha/year and 15 Kg of rice/individual/month for a maximum of 84
months. In addition, MARD Decision 5399 lays the ground in 2016 for piloting sharing of benefits
under the REDD programme, which will pay farmers in pilot districts (including districts in Bac Kan)
VND 100,000/ha/year if an increase in biomass is demonstrated (4m3/year for regeneration and
5m3/year for reforestation). The increase in biomass will be monitored by the Forest
Management/monitoring Boards at the commune level. The CSSP will support the further use of
PFES through the allocation of forest land and by creating synergies where possible with the REDD
pilot in Bac Kan and building further on the experiences from the 3PAD project in negotiating voluntary
payments to upland communes from and lowland communities benefitting from stabilized clean water
flows for irrigation systems and/or ecotourism.
37 In September 2015 Viet Nam submitted its new Climate Action Plan to the UN Framework
Convention on Climate Change (UNFCCC). The plan (GoV, 2015) was developed for the upcoming
COP21 in Paris in December 2015. In it, priority actions and outputs are established for climate
change adaptation in the period 2021 – 2030 (GoV, 2015). The proposed Project will assist the
Provinces of Bắc Kạn and Cao Bằng to develop the knowledge base, institutional capacity and
instruments to carry out a number of the priority actions and achieve desired outcomes identified in
the plan. Specifically:
produce Socio-Economic Development Plans based on climate change scenarios, with a focus on key sectors and regions;
implement disaster prevention plans and measures, protect peoples' lives;
develop infrastructure and make plans for residential areas households and communities [in] areas affected frequently…[by] flash floods and landslides;
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allocate and mobilize resources for community-based climate change adaptation and disaster management; raise awareness and build capacities for climate change adaptation and disaster risk management;
review, adjust and develop livelihoods and production processes that are appropriate under climate change conditions and are linked to poverty reduction and social justice.
develop mechanisms, policies, and …share climate and disaster risks;
implement community-based adaptation, including using indigenous knowledge, prioritizing the most vulnerable communities;
ensure food security through protecting, sustainably maintaining and managing agricultural land; restructuring of crops and livestock; create new climate change resilient varieties; complete the disease control and prevention system;
strengthen the capacity to adapt to climate change at local level;
technology transfer tools to assess climate change impacts, vulnerability, exposure and climate change adaptation measures technology to prevent erosion and protect riverbanks and technology for sustainable agriculture, forestry;
finance for climate change adaptation, mainly…socioeconomic development in the context of climate change [and encouragement and creation of] favorable conditions for private sector investment in climate change adaptation activities.
38 While the GGS reflects GoV priorities 2011 to 2021 with a vision to 2050 the National Climate
Action Plan reflects GoV priorities for the period 2021 to 2030. The CSSP will position the two
proposed provinces so that they will be sufficiently well-advanced at Project closing (2022) to ensure
meeting these medium-to-long term goals. Of particular importance is the commitment at national-
level to evaluate the country’s climate change adaptation activities until 2030 based on the five key
indicators, of which “At least 90% of Socio-Economic Development Plans have integrated
disaster risk management and climate change adaptation”, is to be a principal outcome for the
proposed CSSP. Furthermore, the project will strengthen community adaptation capacities and the
transfer of technologies and practices to prevent erosion and increase resilience of agriculture and
forest production systems and, as such, contribute to the GGS targets of reducing GHG emissions
and investing in protection of the natural capital.
Climate Change in the Northeast of Viet Nam
39 With support from Australia’s Agency for International Development (AusAID), the Vietnam
Institute of Meteorology, Hydrology and Environment (IMHEN) has developed high-resolution climate
Projections for Vietnam in order to provide information and data for the update of the country’s official
climate change and sea-level rise scenarios (IMHEN, 2014). These efforts have provided detailed
information on current climate trends and variability, climate drivers, climate modelling and the climate
ions for Vietnam at the national-level, with subsequent downscaling of the Projections to the level of
the country’s seven climatic regions. The key findings for the North East Region, in which the
proposed Project provinces are located (see Figure 2) are:
Current trends
Annual Temperature has Increased – Annual temperature in the region has increased
significantly by approximately 0.11 to 0.25°C per decade (1961-2010) with the highest
rate of 0.25°C per decade observed in the southern portion of the region.
Minimum Temperature Has Increased More than the Maximum Temperature – While
minimum daily temperature has significantly increased by up to 0.26°C per decade,
approximately, the trend in maximum daily temperature was slightly smaller, with
increases of approximately 0.21°C per decade.
More Hot Days and Fewer Cold Nights – The number of hot days significantly
increased by up to 6 days per decade, while the number of cold nights has significantly
decreased at almost all recording stations by up to 5 days per decade.
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Annual Rainfall Has Decreased – Observations at most inland stations showed a
significant decreasing trend in annual rainfall. The largest decrease is about 6% per
decade in the south. Trends in the east were not significant.
Extreme Rainfall Amounts Have Decreased – The annual maximum 1-day rainfall
amounts and the number of very wet days remain unchanged for almost all stations in
the region, while the annual maximum of 5-day rainfall amounts has decreased
significantly.
40 The last observation is interesting. Even though both the adaptation strategies for Bac Kan and
for Cao Bang mentions extreme rain falls causing flash flooding and landslides as an effect of climate
change this is in fact not sustained by the actual figures. Flash flooding and landslides seem to be
more caused by the topography of the region, worsened by the inadequate management of land,
water and forest resources and lack of erosion and landslide prevention practices in mountain road
construction. This already existing vulnerability, however, can result in high risks looking at future
projections, where extreme rainfalls might be increasing even though difficult to predict.
Projected trends through the 21st
Century
41 Regional and global models were used to project changes in rainfall and temperature by mid-
century (2045–2065) and end-of-century (2080–2099) relative to the baseline period (1980–2000).
Principal findings from these efforts included:
Temperature Increases – Projections from regional models for average temperature
changes by mid-century and end-of-century show very clear warming, with an increase in
annual temperature of about 1.3 to 3.4°C by mid-century and 2.5 to 6.1°C by end-of-
century under the higher (RCP8.5) greenhouse gas scenario. The largest warming is
projected in the SWMS6 (Jun–Sep) and the SIMS6 (Oct–Nov). Less warming is evident
in the lower greenhouse gas scenario (RCP4.5). Both global and regional models agree
on large increases in temperature by end-of-century, with less warming in the lower
(RCP4.5) greenhouse gas scenario. However, projections by the regional models show
slightly less warming in all seasons except for the SWMS (Jun–Sep). The varying
amounts of temperature increase signify the need to consider both mid-range and
extreme changes.
Some Seasonal Decreases in Rainfall – Similar to temperature, projections of seasonal
rainfall changes over time by global models, and the range of changes by end-of-century
for both global and regional models show larger variations in the direction of change than
were projected for temperature. This reinforces the need to consider both mid-range and
extreme changes. Projections from regional models for annual rainfall show large
variations in both direction and amount of change. However, there is medium agreement
on decreases projected for the SIMS6 (Oct–Nov) by mid-century and for the SWMS
(Jun–Sep) by end-of-century.
Slight Increases in Heatwaves – The number and length of heatwaves (consecutive
periods with hot conditions) are projected to increase slightly by end-of-century.
Increase in Hot Days in Some Parts – The number of hot days (days with maximum
temperatures above 35°C) is projected to increase in the lower lying areas of this region.
Since temperature decreases with height, increases in hot days are not projected to
reach the mountainous areas of this region, even by the end-of-century.
More Intense Extreme Rainfall in the North and less Intense in the South – Due to their
rarity, changes in extreme rainfall events (annual maxima of 1-day and 5-day rainfall
amounts) are not easy to project and are often associated with a large degree of
uncertainty. Nevertheless, some projections by regional models show a tendency
towards more intense extreme rainfall in northern parts (where the proposed Project
provinces are located) and less intense extreme rainfall in southern parts of this region.
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Droughts to Increase in East and Decrease in West – Some projections by regional
models show that short-term droughts (3-month consecutive periods with a rainfall
deficit) are expected to occur more often in eastern parts and less often in western parts
of this region. On the other hand, long-term droughts (12-months) are projected to occur
more often and last longer in most parts of this region.
Southwest Monsoon Remain Unchanged – Based upon some projections by regional
models, the length and intensity of the southwest monsoon are expected to remain
unchanged by mid-century, with slight decreases in both evident by end-of-century.
Fewer but Possibly More Intense Tropical Cyclones (Typhoons) – Preliminary analysis of
projections by regional models in this study suggests that the number of tropical cyclones
may decrease in the East Vietnam Sea by mid-century. Other studies support this
decreasing trend and suggest increases in intensity by end-of-century.
Vulnerability
42 A World Bank assessment on the social dimensions of adaptation to climate change in Viet
Nam (2010) identified key biophysical and socioeconomic zones of vulnerability to climate change. In
this assessment, the northern mountainous regions (North East and North West) are concluded to
have low exposure and high sensitivity to climate change. However, as relates to current and historic
exposure to natural hazards and disasters, there are some differences of opinion. Earlier studies
(ADB, 2008; CARE, 2010) concluded that both exposure and sensitivity are high, whereas later
studies (IMHEN and UNDP, 2015) conclude that exposure is variable across the north; ranging from
low to moderate in the North East to high and very high in the North West, with generally high
sensitivity and vulnerability throughout (See Figure 3 in Working Paper Climate Risk Analysis and
Climate Change Adaptation).
43 In the Project region, the principal risks and impacts of concern derive from natural disasters
and their impacts on household and community assets, livelihood systems and, in extreme cases,
loss of human life. Assessments of disaster severity in the Project region (ADB, 2008) have rated as
(i) “severe” the impacts of storms, flash flooding, and droughts during spring and summer causing
limited access to drinking and agricultural water and shortening the growing season; and (ii) as
moderate, the impacts of landslides and fire. The region is also rated as very high in loss of human
life from flash flooding. Flash floods happen annually in late summer, washing down to lowland areas
causing considerable losses to homes and crops. Other climatic, or weather risks, in the region
derive from cold spells (including hoarfrost) in winter killing livestock and causing human illnesses,
wet weather and, intense storms (including hail, high winds).
44 The region’s high sensitivity is a function of its large and largely poor, ethnic minority
population. Some 75% of Viet Nam’s minority populations live in two regions, the Northern Mountains
and Central Highlands. Most minorities remain rural residents, leaving them potentially more sensitive
to climate events by virtue of being more likely to be farmers and to live in rural areas. They are also
more likely to be poor. They also face specific factors of vulnerability that other rural or poor areas
might not. Compared to the Vietnamese (Kinh) majority, minorities continue to be more dependent on
staple goods and traditional agriculture, and less diversified, and they report much lower rates of
agricultural investment, with resulting lower productivity (World Bank, 2009). Access to credit and
financial services is very uneven in minority areas; Kinh report more loans and larger bank loans than
minorities on average, while ethnic minorities report a higher need for credit (Hoang Cong Dung et al.
2006). Minorities also face many barriers in adaptive capacity as well, with the major factor in this
area being much lower levels of education. Dropout rates remain significantly higher for minorities,
resulting in higher rates of illiteracy and lack of language fluency in Vietnamese, which hinders
minorities’ ability to interact with others and take advantage of outside resources (World Bank 2009).
Combined, all of these factors likely make ethnic minorities especially vulnerable to climate changes
and natural disasters.
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B. Bắc Kạn Province
45 Bắc Kạn is a mountainous province of north-eastern Vietnam that shares border with Lạng Sơn
province to the east, Cao Bằng province to the north, Tuyên Quang province to the west and Thái
Nguyên province to the south. The province covers The total land area of the province is 486,841 ha,
of which forest land is 301,722 ha and agricultural land is 30,509 ha. Of the total forest land,
170,000 ha are production forest land suitable for agro-forestry production. The province comprises
one urban municipality (Bắc Kạn) and seven districts: Ba Bể, Bạch Thông, Chợ Đồn, Chợ Mới, Na Rì,
Ngân Sơn and Pác Nặm.
46 At end-2014, the province had 350,000 inhabitants belonging to four main ethnic groups that
make up 94.95 percent of the total population (Kinh, 13.85%, Tay 56.4%, Nung 10.1%, and Dao
14.6%) Smaller ethnic groups include the H'Mong (4.15%), Hoa (0.5%), San chi (0.35%) and others
(0.05%) (see SECAP RN Annex 1 for a detailed description of these ethnic groups). Bắc Kạn is
ranked amongst the 10 least developed of Viet Nam’s 63 provinces, with 14.2 per cent of the total
population living under the poverty line and 9.9 per cent living just above the poverty line (DOLISA,
2014). The Bắc Kạn climate of is typical for northern Vietnam, with a tropical monsoon pattern of a
distinct wet season between April and September with most precipitation in July (on average 263mm),
and a dry season between October and March, when the mean precipitation range per month is 13.0-
70.5mm. Annual rainfall are between 2,145mm in the northern uplands and 1,148 mm in the lower
elevations of the southeast of the province, which gives in general good conditions for rain fed
agriculture in the summer season. In the summer months, temperatures range from 22.9-27.3ºC,
whilst in winter the average temperature is 18ºC, sometimes dropping to as low as 2ºC.
47 Over the past 5 years (2010-2014), there have been positive changes in economic
development of Bắc Kạn province with the annual economic growth rate averaging about 6.4 per cent,
with agriculture, forestry and fishery sector growing at 9% per year; Industry (infrasructure &
construction) declining by 2.1 per cent per year and services rising by 7.8 per cent per year. In 2014
the GDP per capita was about VND 22.4 million and it is expected to reach VND 24.4 million in 2015.
It is estimated that agro-forestry and fishery sector will account for 36.1 per cent of GDP in 2015,
industry - construction for 16.1 per cent, services for 44.9 per cent and production tax account for
2.9 per cent. The structure of the agriculture economy in 2015 is: annual and perennial crops, 52 per
cent; livestock, 22.5 per cent; forestry, 24 per cent and fisheries, 1.5 per cent.
48 Agriculture:41
Bắc Kạn has limited agricultural land; with only 30,509 ha out of 486,841 ha
(about 6%) classified as agricultural land. Most of this land has been allocated to households with the
red book certificate, however, only a few red books show dual ownership by husband and wife.
According to a recent study done by DONRE assessing over 80 per cent of the province’s agriculture
and forest land, soil erosion is widespread with 50-70% of both agricultural and forest land moderately
to severely affected causing productivity losses. Most of the annual rain fed crops are cultivated on hill
slopes with up to 45 per cent to 70 per cent slopes. Terraces are widely used, but there is a clear
need to combine with other soil conservation and fertility management measures and some hillside
fields are not terraced and have no other soil conservation measures like contour bounds or
hedgerows. Agricultural production is insufficient to meet provincial food requirement. Maize, wetland
rice, terraced rice soya bean, taro and sweet potato are the main food crops cultivated. Cash crops
include vegetables, tobacco, seed peanut, tea, tangerine, canna, seedless persimmon and cassava.
The livestock population in 2014 included 67,500 buffalo, 26,310 cattle, 212,000 pigs and
212,000 head of poultry. Aquaculture covers 1,122 ha. Many households in the province have a home
garden ranging from 300 to 1000 square meters producing vegetables, fruit trees and fodder for
livestock.
49 The province is in the upper reaches of 5 major rivers and has an amble network of smaller
rivers and streams with seasonal varying stream flow but relative abundant water resources. The
41
For more details on natural resources and environmental and climate change issues related agriculture and forestry
in the two provinces see the SEAP Review Note prepared for the project including the project’s summery
Environmental and Social Management Plan.
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province has 1,029 small and medium irrigation schemes, 2 irrigation lakes with total volume of
1 million m3, 9lakes with embankment > 15m, 20 pumping stations and over 670 km of permanent
irrigation canals. In 2014, the total irritation capacity was 21,000 ha of 2-crop rice, (up 6,000 ha in
2010), meeting 90 per cent of provincial requirement for rice cultivation. In addition, irrigation facilities
can provide water for over 1,000 ha of vegetable and fish farming areas. Irrigation is in areas with an
available water source an important dry-spell and drought risk mitigation option. However, major
concerns for water quality are contamination from mining (Manganese, tin copper, bauxite, gold, etc.),
agrochemicals, sewage and wastewater from industrial and agro processing facilities with limited or
no treatment, and leakages from landfills. These concerns need to be considered in planning of
irrigation systems, water for livestock and product processing facilities as well as to avoid downstream
adverse impacts. Likewise, (sub)watershed management is a priority to reduce vulnerabilities to flash
flooding and landslides and insure stability in the hydrological cycle, water quantity and quality and
physical stability of watersheds.
50 The forest area provided a forest cover of 70.8 per cent in 2013, one of the highest forest cover
rates in Viet Nam, showing the success of the new policies allocating forest land to communities
introduced at the beginning of the millennium ending moderate rates of deforestation throughout the
1990ies. Between 2001-2014 an area of 47,576 ha was afforested (av. 11,894 ha per year), and
according to the Bac Kan’s recent land degradation study in the period 2005-2010 and in the period
2010-2014 12,846 ha and 9,062 ha respectively were deforested leading to a net increase in forest
cover. The assigned forest management categories are 65% of the total forest area (246,000 ha) as
Production forest, 28 per cent (107,000 ha) as Protection forest, and 7 per cent (26,000 ha) as
Special use forest (see note 39). The annual timber extraction volume is around 150,00 m3. There are
some examples of large areas of production forest in Bac Kan being converted into what should be
“agro forestry” but where the tree crop has been displaced with mono cropped maize, cassava,
cannas, tea and ginger as these are currently more economically attractive. According to government
policies the allocated production forest land should be utilized to produce wood as raw material for
industrial or other commercial uses intercropped with non-forest species the first years until the
canopy shades out this option. Through division of the land with the tree crop in different stages of its
growing cycle, each farmer should ideally always have land for non-forest species intercropping.
However, further work needs to be done to develop and provide technical assistance in economically
attractive and environmentally viable agroforestry farming models for the production forest land.
51 The provincial agriculture development direction to 2020 includes; (i) the intensification of rice
production, including the use of higher quality/production varieties and increase in cropped area to
22,000 ha; (ii) on poorer quality irrigated land, converting the second rice crop to maize, vegetable,
cash crops, flowers or fish production; (iii) the development of a stable canna production area of
1,500 ha; (iv) stabilizing tobacco production on 1,200 ha; (v) replacing 500 hShan Tuyet and O Long
tea varieties and expanding tea processing; (vi) expanding tangerine production to 2,300 ha and
seedless persimmon to 1,200 ha and introducing post-harvest grading and cool storage;
(vii) supporting growth in livestock production to bring its share of the total value of agriculture
production to 28 per cent; and (viii) raising the harvestable forestry area to 100,000 ha with an
average yield of 120 m3 per hectare on a 20-year rotation. Agri-enterprise development focuses on
timber, canna, tea and livestock feed processing supported by improved quality standards and
targeted vocational training.
52 Business Environment. Since the initiation of the 3PAD project, the Bắc Kạn business
environment has improved and numerous policies have been issued to encourage enterprise
investment in the agribusiness sector. The provinces business environment, however, is still amongst
the lowest performing in the country, ranked 59. out of 63 provinces in the 2014 Provincial
Competitiveness Index (PCI). The challenges in Bắc Kạn include: (i) weak transport infrastructure;
(ii) limited availability of trained labour; (iii) fluctuating input and output markets; (iv) expensive land
access in the remote areas; (v) limited access to loans due to missing or inadequate business
planning and long term strategies and limited legal/financial literacy, (vi) the inefficiencies of provincial
credit guarantee and credit interest support schemes.
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53 Agro-industrial development. The DPI reports agriculture value chain opportunities in Bắc
Kạn to include: (i)wood tea, cassava and canna processing; (ii) wooden chopsticks manufacture
export; (iii) ginger cultivation and processing, (iv) paper manufacturing, and (vi) alcohol production. In
addition, these is private enterprise investment interest in producing tobacco, cinnamon, corn, sweet
potato and fruits, however for these crops, there is no local processing capacity. Between 2010-2013,
the value of food processing in Bac Kan has increased from VND 29.7 billion to 91.3 billion, including;
wood processing and bamboo production increasing from VND 30 billion to VND 70 billion; paper
production rising from around VND 10 billion to almost VND 20 billion; and wooden furniture
production increasing from VND 40 billion in 2010 to over VND 52 billion in 2013.
54 Although these numbers show growth, the agro-processing industry remains at a low level of
productivity and quality. To improve investment opportunity in the key commodities areas, the province
has issued a list of investment promoting policies and programmes, covering cattle production and the
supporting feed industry and the processing of oranges, tangerines, apricots, taro, medicinal
products), tea processing plants and fresh ginger. To date, these projects have not yet attracted
investor interest.
55 The main constraints identified by the Department of Trade and Industry (DoTI) include: (i) a
lack of market information and market orientation in agricultural and forestry production systems;
(ii) small-scale and fragmented primary production; (iii) insufficient public infrastructure investment in
roads and market places; (iv) outdated or obsolete production technology; (v) a relatively untrained
workforce; (vi) difficult access to capital; (vii) poor business and cooperatives management skills;
(viii) a lack of strategic business vision; (ix) weak marketing including lacking labels and packaging;
and (x) weak contractual agreements and law. For the agricultural co-operatives, the issues also
include an attitude of dependence from state support, poor accounting and a lack of business
planning.
C Cao Bằng Province
56 Cao Bằng is a mountainous province located in the northeast of Vietnam adjacent to China with
which it has a 333 km border. In addition to China, it shares its borders with Bắc Kạn province to the
south, Hà Giang to the west and Lạng Sơn to the southeast. Cao Bằng has a population of about
520,000 people belonging to 8 different ethnic groups accounting for 92% of the population and
including Tay (41%), Nung (31.3%), Hmong (10.1%), Dao (10.1%), Kinh (5.8%) and San Chay (1.4%)
(see SECAP RN Annex 1 for a detailed description of these ethnic groups). The province has a total
area of 6,707 km2, and includes 97,775 ha (14.6%) of agricultural land, 562,970 ha (78.5%) of forestry
land and 477 ha of aquaculture area. The forest area includes 28,133 ha (5.3% of forest cover) of
production forest, 480,724 ha (91.2%) of protection forest and 18,112 ha (3.4%) of special use forest.
The province comprises one urban municipality (Cao Bằng) and twelve districts: Bảo Lạc, Bảo Lâm,
Hạ Lang, Hà Quảng, Hòa An, Nguyên Bình, Phục Hòa, Trùng Khánh, Thạch An, Thông Nông, Trà
Lĩnh, and Trùng Khánh.
57 Cao Bằng is divided into four main agro-ecological regions: (i) a karst region to the north and
the northeast along the China border with an average altitude ranging from 700 to 1,000 masl
accounts for 32 per cent of the province's area and includes all or parts of the districts of Bảo Lạc,
Bảo Lâm, Thông Nông, Hà Quảng, Trà Lĩnh, Trùng Khánh, Hạ Lang, Quảng Uyên, Phục Hòa and
Thach An. (ii) the region of soil mountains to the west and southwest, which covers about 40 per cent
of the province and includes the districts of Bảo Lạc, Bảo Lâm and Nguyên Bình is characterized
mainly by mountainous terrain strongly split by deep valleys and has an average altitude of 700-
1,000 masl; (Iii) the basin region including the city of Cao Bằng and Hòa An district along Bang river
accounts for 12 per cent of the province’s area; and (iv) the low region (valleys, basins) accounting for
approximately 16 per cent of the province area, concentrated mainly in the districts of Hòa An, Hà
Quảng, Trùng Khánh and Trùng Khánh.
58 Cao Bang has the climate of tropical, alpine continental monsoon, which is distinctive compared
to the climate in other mountainous regions of the Northeast. There are two separate seasons per
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year: hot season (a lot of rain) from April to October and cold season (less rain) from November to
March of the following year. Average temperature in summer is about 25-280C, which climbs to the
highest level (hottest time) in July. The winter average temperature is 14-18̊C, which drops to the
lowest level in January. In winter, on limestone mountains in the north and northeast of the province,
there is often frost, and the average temperature is about 5̊C, which sometimes falls down to 0̊C. In
addition, there are also sub-tropical climates allowing the development a wide variety of animals and
plants. Average annual rainfall in the province is from 1300 to 1500 mm / year, which gives in general
good conditions for rain fed agriculture in the summer season. Average number of rainy days is about
92, and number of sunshine hours are not many (only about 1,500-1,600 hours / year). Average
humidity is around 80%. Cao Bang is also favored with a diverse network of lakes connected by more
than 1,200 rivers and streams of which 5 are mayor river systems. However, water quality and
watershed management concerns are the same as for the Bac Kan province.
59 Over the last years, the provincial economy, which, in 2014 was comprised of agriculture,
forestry and fisheries (21.7%), industry (24.6%) and services (53.7%), has increased annually by an
average of 9.2 per cent, including agriculture growth averaging 3.5 per cent, industry growth
averaging 8.2 per cent and services averaging 9 per cent annual growth. GDP per capita in 2014 was
USD 1,035/capita. The provincial economic vision for the agriculture sector to 2020 is for an average
4.5 per cent growth per year with the agriculture share of GDP falling to 20% by 2020 with animal
husbandry forming about 1/3rd of the agriculture GDP. The vision includes the restructuring of
agriculture and rural economy towards commodity production, improved productivity, quality and
efficiency in line with market mechanisms, linking production to processing, storage and sale of
products. This will include a focus on the “green” production of high value crops including tobacco,
soybeans, peanuts, vegetables, beans and fruit trees including pears, chestnuts, oranges, tangerines
and herbs.
60 Key crops include rice (30,470 ha), maize (39,005 ha), tobacco (3,741 ha), soybean (4,663 ha),
sugarcane (4.266 ha), peanut (1,727 ha), and cassava (3,200 ha). In addition, the province produces
high-quality tea (>200 ha grown at 1,200 masl) anise (4,000 ha), medicinal plants, black agar
(300 ha), chestnut (1230 ha) and fruits (orange, tangerine, yellow pear, blood plum). Livestock
numbers in 2015 include: 101.228 buffalo, 126.321 cows, 383,136 pigs and 2,189,000 poultry. On
average, each household in Cao Bang have about 5000 m2 of agricultural land, and about 1-3 ha of
forestland. About half of forestlands (called by people as forest garden) are used for growing
commercial crops.
61 There is no similar systematic study on the status of the soil in Cao Bang province as the one
recently made for Bac Kan, but according to DoNRE reports the situation is more or less the same
with widespread soil erosion and low soil organic matter throughout the province. Like in the case of
Bac Kan, terraces are widely used, but there is a clear need to combine with other soil conservation
and fertility management measures and some hillside fields are not terraced and have no other soil
conservation measures like contour bounds or hedgerows. Like in the case of Bac Kan, deforestation
throughout the 1990s was turned around in Cao Bang and forest cover was maintained in the period
2000-2005. However, in the period 2005-2010 Cao- Bang’s southern part and western districts
(including the proposed project districts Thach An, Nguyen Binh and southern Thong Nong) again
experiences significant levels of deforestation, which overall may reflect the high population pressure
on land resources. The province has some 400,000 rural inhabitants mainly dependant on agriculture
but only 98,000 ha of agricultural land and 28,000 ha of production forest.
62 Business Environment. In recent years, Cao Bằng has (i) established an Investment
Promotion Centre under DPI to support private sector business registration and investment;
(ii) established a Value Chain Promotion Unit (VCPU) under DARD to support commercial agriculture;
(iii) conducted training and capacity building for enterprises, (iv) organized policy dialogue with the
participation of enterprises; and (v) issued policies to support public-private partnerships in agricultural
production. Despite efforts, the environment Cao Bang for private business and investment is still
among the lowest in Vietnam, with the province ranked 61. out of 63 provinces in the 2014 Provincial
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Competitiveness Index (PCI). The Cao Bang DPI report reports that the key constraints in this regard
include: (i) distant location and bad transport infrastructure, (ii) limited quality labour force, (iii) limited
market orientation of the farmer households, (iv limited provincial budget to invest in economic zones
and industrial parks, (v) limited market promotion activities, mostly only focusing on trade fairs rather
than overall trade promotion, (vi) collective brands not efficiently established and product volumes
rarely meeting buyer demand; (vii) lacking of capacity and/or guidance by circulars to implement the
investment promotion laws and decisions; (viii) limited support to enterprises to deal with
administrative procedures, forcing businesses to use personal relationships; (ix) unsuccessful
investment promotion and business development service (BDS) activity; (x) linkages between farmers
and enterprises and contract farming are still limited, (xii) Cao Bằng's exceptional opportunity of
trading with China has not been fully exploited due to political instability between the countries; and
(xiii) the lack of strategy to attract private capital into agricultural sector. The DPI of Cao Bang has
recommended a number of concrete activities to respond to these challenges, ranging from inter-
agency coordination mechanism to value chain support through enterprises. The full list is available in
the Report on Cao Bang Investment and Business Environment.
63 Agro-industrial development. Agribusiness investment in the province includes (i) sugarcane
cassava tea and bamboo processing, (ii)glass noodle manufacturing, (iii) beverage production;
(vi) wood processing and manufacturing and (v) tobacco processing. The key companies in the
province are the Cao Bằng sugar JSC with capacity production of 1,200 tons of sugar cane / day, the
Quang Minh JTC with capacity of 6.000 m3 of wood products / year, the Cao Bằng bamboo import –
export JSC with capacity production of 200,000 products / year, the 688 bamboo import – export JSC
with capacity of 300 pieces / day, the Dung Phuoc alcohol production JSC with capacity of
30.000 liters of wine / year; Khanh Ha JSC with capacity to produce 30,000 tons of starch / year
(equivalent to 120,000 tons of raw cassava / year); and the Cao Bằng tobacco production JSC with
the capacity to produce of 120.000 tons of material/year (under construction).
64 The challenges facing these and other agribusinesses to invest in Cao Bằng include: (i) a
shortages of inputs to the processing units due to underdeveloped farming (especially for bamboo and
cassava); (ii) limited capacity of staff and limited technology for commodity processing (especially for
wood and sugar); (iii the weak transport infrastructure (iv) insufficient investment incentives; and
(v) fluctuating prices and competition from neighbouring provinces and countries.
Rural Finance
65 Overview of Rural Microfinance in Viet Nam The rural microfinance market in Viet Nam has
traditionally been dominated by state-owned financial institutions and social protection schemes. In
recent years, however, there have been developments that enable the emergence of a robust
microfinance market to serve rural and urban low-income people. In 2005, the Government issued a
decree that allowed the transformation of semi-formal micro finance institutions (MFIs) into licensed
credit institutions. In June 2010, the new Credit Institutions Law (CIL) was passed. It is landmark
legislation that aims to integrate the microfinance sector into the formal financial system, including
improved provisions for creating and regulating MFIs, Peoples Credit Funds (PCFs) and financial
cooperatives. The other key development was the approval by the Prime Minister in 2011 of the
Vietnam Microfinance Development Strategy 2011-2020 (MDS). It aims at: (i) establishing the
required legal and supervisory frameworks; (ii) strengthening policy formulation and supervision
capacity; (iii) increasing the capacity in MFIs, (iv) increasing the banking capacity of the Vietnam Bank
of Social Policies (VBSP) and making it more market-oriented and self-sustaining; (v) developing the
financial infrastructure, including training institutes; and (vi) promoting national financial literacy
campaigns.
66 Despite the above creation of the basic legal framework for microfinance, the
transformation of the sector has, in the past five years, been slow. So far, only three MFIs have been
licensed under the new CIL, and most of the implementing rules and regulations for the CIL are yet to
be drafted and approved. As shown in Table 3, the dominance of the state-owned banks in
microfinance continues. The VBSP is estimated to hold over 60 per cent of the microfinance portfolio,
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followed by the 22 per cent market share of the Vietnam Bank of Agriculture and Rural Development
(VBARD). The network of People’s Credit Funds covers about 17 per cent of the microfinance
portfolio. The share of the three registered MFIs of the microfinance portfolio is minimal, while the
semi-formal and informal service providers such as social funds, Project-linked credit operations and
community-based schemes and groups are estimated to work with around 400,000 customers and
hold a total portfolio of some USD 100 million. In total, for a country of Viet Nam’s size and
development level, the volume of microfinance operations outside the large state-controlled schemes
remain very low.
Table 3: Microfinance Market in Viet Nam (31 December 2014)
Institution Number of Microfinanc
e Customers
Outstanding Microfinance
Portfolio
(USD Million)
Number of Microfinance Depositors
VBSP 5,760,000 4,142 4,600,000
VBARD 1,630,000 1,452 1,130,000
CCF and PCFs 1,800,000 1,051 1,800,000
Formal MFIs 96,000 4 100,000
Semi-formal and Informal Microfinance Providers
384,000 104 420,000
Total 9,760,000 6,753,000 8,050,000
Source: Data collected by the Vietnam Microfinance Working Group from the financial service providers.
67 The policy of the State Bank of Vietnam (SBV) is clearly to encourage the registration of the
semi-formal microfinance operators as licensed MFIs. The current plans include a ruling that this
registration would be compulsory for operators when their outstanding portfolio exceeds
VND 50 billion (around USD 2.2 million). Various IFAD-supported social funds already exceed this
portfolio level, and many of them plan for registration as MFIs in the coming five years. In addition to
increased regulation and supervision, this new status would permit much wider service operations
with the clientele of the social funds. These services would, importantly, include the opportunity of
collecting voluntary savings from the clientele, which would make it easier to finance the expansion of
the lending operations without further injections of external capital from donors or the Government.
Rural Microfinance in Cao Bằng
68 The status of rural microfinance operations in the planned CSSP operational area in Back Kan
and Cao Bằng provinces reflects, to a large extent, the above nationwide picture. The role of VBSP
and VBARD is dominant in both provinces. In Cao Bằng, VBSP has a branch in each of the
11 districts and operates a transaction centre in every commune, each open 1-2 days a week. The
total savings of VBSP in the province is around VND 41.6 billion (all figures below for end of 2014). As
everywhere, with the state-financed VBSP, the loan portfolio is very much higher, at VND 1,646 billion.
Some 90 per cent of the total portfolio is issued for agro-investments of individual borrowers. Most of
the 55,000 individual clients are listed as poor or near-poor.
69 The maximum VBSP loan size is VND 50 million, issued without collateral to groups organised
mainly by the Women’s Union (WU) and the Farmers’ Union (FU), who act as agents for the bank
against commission. The subsidised interest rate is 0.6 per cent per month for classified poor
borrowers, 0.72 per cent for the near-poor and 0.8 per cent for non-poor. In the districts covered by
Project 30A, the poor can borrow an additional VND 10 million at 0.3 per cent per month. As
everywhere in Viet Nam, the repayment performance is very good, with the non-performing loans for
VBSP at a low 0.3 per cent in the province.
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70 In Cao Bằng, VBARD is the leading collector of deposits, with a total savings balance of
VND 4,600 billion. It is also a major agricultural lender, with a portfolio of VND 2,500 billion. Over
25,000 individual households have outstanding loans at VBARD, with an average individual loan of
VND 63 million (some USD 2,800). With a new government policy issued in July 2015, VBARD and
other banks can now lend to agricultural producers up to VND 100 million (USD 4,300) without fixed
collateral. Loan interest rates vary at a low 7 per cent -9 per cent p.a. level, and in the Project 30A
districts this rate is further reduced by 50 per cent. In the previous IFAD-supported project in Cao
Bằng, VBARD was one of the implementing partners through a credit line arrangement. A part of
these funds are still revolving, while a part is already paid back to the Ministry of Finance (MoF)
following the rulings of the Subsidiary Loan Agreement.
71 In addition to VBARD, with its sound liquidity position, a number of other commercial banks
have expressed their interest in participating in the financing of rural value chains, some on the
production side, but mostly in financing the lead companies and traders in the chains. The Lien Viet
Post Bank is a potential partner in these operations, particularly as its provincial savings
(VND 1,400 billion) exceed its provincial loan portfolio (VND 86 billion) by a wide margin. Loans
against valid collateral are issued at around 10% per annum (p.a.). The bank is currently planning to
expand its lending operations from the city to the districts. The Bank for Investment and Development
in Vietnam (BIDV) is the second largest bank in Cao Bằng, with savings of VND 2,400 billion and
loans at VND 1,600 billion. As the state is the main shareholder, BIDV actively implements
government’s agricultural and rural policies. The interest rate on loans is around 10% and no
collateral is required on loans for agriculture up to VND 100 million. The share of non-performing
loans, at 1%, is low. The bank plans to open more branches in rural districts. With its good liquidity
position, BIDV is an appropriate candidate, particularly for agro-enterprise financing. Vietin Bank, with
a 60% government ownership share, has a provincial savings base of VND 880 billion. Of its total
loans of VND 400 billion, some 75% are for around 200 enterprises. These are mainly urban
operations, but, according to the bank’s management, it is willing to expand to agro-processing, if the
investment plans show adequate viability and the projects are generally bankable. Further, the
Vietnam Development Bank also operates in Cao Bằng province, with a portfolio of VND 860 billion.
With its focus on infrastructure and business lending, the bank is a potential partner in value chain
operations with larger processing companies. In total, given the liquidity in the commercial banking
sector, it should be seen as a realistic potential partner when developing commodity value chains
under the planned IFAD-supported intervention in Cao Bằng.
72 The semi-formal and informal microfinance market is relatively poorly developed in Cao Bằng.
None of the three registered Vietnamese MFIs operate in the province. The FU and WU have largely
focused on the above-described operations with VBSP on an agency-based arrangement, not on their
own group-based savings and lending operations. Unlike most of the provinces in central and
southern Viet Nam, Cao Bằng does not have any People’s Credit Funds and is therefore not involved
in the operations of the new co-operative banking network. There have been various small
microfinance schemes in the province, led by NGOs and projects, but all with limited outreach and
poorly developed plans for institutional sustainability.
73 For the purposes of this design process, the group-based financing operations of the WU are of
particular importance. The previous IFAD-supported project, Doing Business with the Rural Poor
(DBRB) did not originally include activities with savings and credit groups or with the WU. During its
later years it, however, issued small loans from project funds to the members of CIGs. In 2013, this
loan portfolio (some USD 68,000) was transferred to be managed by the WU. Similarly, an additional
USD 136,000 was transferred as a grant to support the savings and credit operations of the WU.
These formed the principal capital base for the WU social fund, the establishment of which was
authorised by the PPC in May 2014. The new fund, into which the CIG portfolio was merged, was
called “Fund to Overcome Poverty Together”, below referred to with the generic name Women’s
Development Fund (WDF).
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74 Today, the new WDF in Cao Bằng province is still an infant institution. It operates with women’s
savings and credit groups (WSCGs) in five districts and 13 communes. It has a total of 56 groups with
336 members. The total portfolio is around USD 218,000, with total savings at a low level of
USD 17,000. The average loan size is VND 14.4 million (USD 654), with the average savings at
USD 52. As positive developments, the WDF has: (i) designed an operations manual with DBRP
support; (ii) an Excel-based management information system (MIS) as well as basic but appropriate
governance and management structures; (iii) a perfect loan recovery record; and (iv) five full-time and
one part-time staff members. At the same time, as its operational income is very low, the WDF has no
branches in the districts, and all the field operations of the Fund are still conducted from its head office
in Cao Bằng City.
75 The newly established WDF in Cao Bằng provides an institutional framework for this design
process, upon which a pro-poor financing network can be built to support the economic and social
development of low-income women. Support from the Provincial People’s Committee (PPC) and the
WU, as well as the clearly expressed demand by rural women for the services of the WDF, encourage
the further development of this financial service option, with the ultimate target of establishing a
province-wide independent microfinance network in Cao Bằng.
Rural Microfinance in Bắc Kạn
76 As in Cao Bằng, the state-owned banks clearly dominate the agricultural credit and
microfinance market in Bắc Kạn province. VBSP operates similarly as in other provinces, based on
branches in districts and part-time offices in communes. Its outstanding portfolio is VND 1,270 billion,
covering some 90,000 clients. In rural areas, its coverage of poor and near-poor households is almost
total. VBSP’s savings base is minimal at VND 18 billion and its enterprise and cooperative lending
covers only around 20 relatively small clients. Lending terms and amounts are the same as indicated
above for Cao Bằng, and the highly subsidised Project 30A conditions apply to two districts, Pac Nam
and Ba Be, both CSSP districts. Non-performing loans are just 0.33% of the portfolio.
77 In Bắc Kạn, VBARD is the largest commercial bank and the leading collector of deposits, with a
total savings balance of VND 1,400 billion and around 20,000 depositors. It is also a major agricultural
lender, with a portfolio of VND 2,100 billion. Some 15,000 individual households have outstanding
loans with VBARD. Loan terms are the same as in Cao Bằng. The non-performing loans amount to
3 per cent of the portfolio.
78 Of the other commercial banks, BIDV has, in addition to Bắc Kạn town, operations in two rural
districts. Its total savings are VND 950 billion, with outstanding loans at a much higher level of
VND 2,800 billion. Enterprise loans cover some VND 2,250 billion of the portfolio, making the bank a
potentially interesting partner in company-led value chain investment. Loan terms are the same as in
Cao Bằng, with non-performing loans at 3% of the portfolio. Lien Viet Post Bank in Bắc Kạn also has
high liquidity, with total savings at VND 600 billion from 14,000 clients and loans at VND 100 billion.
The bank plans to upgrade its district offices in Bắc Kạn to full branches and is clearly interested to
co-operate with the planned CSSP. Vietin Bank operates in Bắc Kạn with a portfolio of around
VND 500 billion and total deposits of some VND 343 billion. It plans to open new branches in districts
with good road connections and is interested in expansion into agro-processing and trading projects.
In total, options for co-operation in value chain financing with commercial banks are substantial,
especially if the future management of the new IFAD-supported project takes a proactive approach in
its relations with the leading banks.
79 As in Cao Bằng, semi-formal and informal microfinance is relatively poorly developed in Bắc
Kạn. None of the three registered Vietnamese MFIs operate in the province. The FU and WU have
largely focused on the above-described operations with the VBSP based on an agency arrangement,
not on their own group-based savings and lending operations. Unlike most of the provinces in central
and southern Viet Nam, Cao Bằng does not have any People’s Credit Funds and is therefore not
involved in the operations of the new co-operative banking network. There have been various small
microfinance schemes in the province, operated by NGOs and projects, but all with very limited
outreach and poorly developed plans for institutional sustainability.
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80 Importantly for this design process, the operations of the WU-managed savings and credit
groups are more developed and much better capitalised in Bắc Kạn than in Cao Bằng. The new
Social Fund of the WU in Bắc Kạn originates from the operations of the Agro-forestry Development
Fund (ADF) of 3PAD. This fund issued subsidised loans to the maximum value of VND 3 million per
borrower to low-income households of the Project communes. The scheme was managed by the WU
and especially its commune-level staff. The full capital of the fund, VND 56 billion (USD 2.53 million)
was disbursed to some 11,500 households by end-2013. The repayments of capital have commenced
and the bulk of the ADF funds are to be repaid by households between 2015 - 2017.
81 Following the recommendations of the MTR of 3PAD, a decision was taken to channel all the
reflows from the ADF loans to support the WU-managed SCG activities. The target of moving from the
ADF to the SCG model was to establish a basis for operationally and financially sustainable savings
and credit operations. Initially, starting in 2013, these WU operations with savings and credit groups
were conducted by the WU under a fund called the Savings and Credit Fund. 3PAD allocated a grant
of VND 4 billion (USD 190,000) to the WU to serve as start-up capital for these SCGs lending
operations. Supported by the capital from 3PAD, the WU started to form WSCGs, organised monthly
savings collection from the group members and issued loans to members from the 3PAD grant and
the ADF reflows.
82 The next step in this process was the decision by the PPC on 12 March 2014 to establish a
Social Fund to operate the SCG activities of the WU in Bắc Kạn province. The operations of this
Social Fund, called the WDF, started on 10 June 2014. The Social Fund is a necessary step required
by the SBV regulations when aiming at the later establishment of a registered microfinance institution.
The WDF took over the savings and the portfolio of the WU’s Savings and Credit Fund. Since its
establishment, it has received all the ADF reflows from the 3PAD communes and now manages all the
SCG operations of the WU in the province.
83 During 2015, the development of the WDF in Bắc Kạn has been encouraging and has largely
followed the Business Plan developed in January 2015 with support from a 3PAD-financed consultant.
In addition to its provincial Head Office, the Fund has branches in Na Rì and Ba Be districts. It also
manages groups in Pác Nặm and Ngân Sơn districts from its Ba Bể branch, and in Bạch Thông
district and Bắc Kạn city from the provincial office. At the end of October 2015, the WDF operated with
134 groups having 1,755 members. Its total outstanding portfolio was VND 14.5 billion
(USD 660,000), with the total savings at a much lower level of USD 14,800. The average loan size is
VND 8.2 million, reflecting the low-income of its clientele. The total loan repayments in arrears amount
to just 0.03% of the portfolio.
84 The WDF is a well-capitalised operation, controlling funds of around USD 3 million, which
almost totally originate from 3PAD sources. At the same time, the Fund has ambitious plans for
expansion and greater impact, with a target of reaching some 7,500 women/households by the end of
2017. With this expansion plan and the related portfolio growth, the Fund would start to face fund
shortages towards the end of 2017, even with increased focus on savings collection.
85 By the time the proposed CSSP becomes operational, the WDF in Bắc Kạn is expected to
have achieved full operational sustainability, and the Fund would not require support to cover its staff
and other standard operational costs. At the same time, support for the expansion of its pro-poor
financing operations in the planned Project area and elsewhere in rural Bắc Kạn is well justified. This
is particularly the case as some 80%-90% of the loans issued by the WDF are invested by the
borrowing households in sub-projects in key agricultural value chains, many of which form the core of
the CSSP support to intensify and diversify agricultural production in Bắc Kạn province.
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Appendix 2: Poverty, targeting and gender
Poverty
1. Bắc Kạn is amongst the 10 poorest provinces in Vietnam with one of its 7 districts supported under the national 30A poverty alleviation programme, including one Project districts (Ba Be). At end-2015, under the new multi-dimensional poverty standards
42, Bắc Kạn had 22,706 poor and 9,269 near-
poor households, representing 29.4 per cent and 12 per cent of its total number of provincial households,
respectively Almost all (94%) of these poor and near-poor households are ethnic minority households. In the four Project districts there are 9,988 poor and 2,747 near-poor households, representing 48 per cent and 13 per cent of the total number of Project district households, respectively, almost all (98%) from ethnic minority groups.
2. The primary causes of poverty in the four Bắc Kạn Project districts, as determined through a 2012 DoLISA survey, include lack of production land (31%), lack of access to productive capital (23%), and lack of means of production (12%); lack of business skills (13%) and labour constraints including lack of labour (4%) and sickness (7%).
3. Cao Bằng is also amongst the 10 poorest provinces in Vietnam with 5 of its 12 districts supported under the national 30A poverty alleviation programme, including two Project districts (Hà Quảng and Thông Nông). At end-2015, under the new multi-dimensional poverty standard, Cao Bằng had 52,410 poor and 12,111 near-poor households, representing 42.5 per cent and 9.8 per cent of its total number of households, respectively
43. All of these poor and near-poor households are ethnic
minority households. In the four Project districts there are 10,250 poor households and 1,543 near-poor households, all from ethnic minority groups.
4. The primary causes of poverty in the four Cao Bằng Project districts, as determined through a 2012 DoLISA survey, include lack of production land (54%), lack of access to productive capital (26%), and lack of suitable agriculture land (26%) and labour constraints including lack of labour (5%), old age (8%) and sickness (4%).
5. There are other “cross-cutting” factors which also influence poverty. These include:
(a) Poorly or inappropriately developed infrastructure. In some areas, roads, key bridges and
potable water supplies are either absent or in poor condition. In lowland areas irrigation
systems may be inefficient and inflexible in their means of operation.
(b) Limited knowledge and skills of the producers on market-orientation and organizing collective economic activities. The previous support by IFAD in Bắc Kạn and Cao Bằng contributed substantially to improving the producers’ practices in organizing the production in collective economic models (cooperatives, CIG) and approaching the domestic and international markets. However, most producers are far from capable in applying the advanced production and business management necessary for sustainable income improvement.
(c) Potentially profitable agricultural VCs have not received sufficient investment capital to
be fully and sustainably developed. There are significant potential VCs identified,
including livestock husbandry, wood and wood products, fruits, ginger, canna and
medicinal plants and herbs. Some innovative models which have been demonstrated
which confirm this, particularly in Bắc Kạn. These VCs, however, have not had sufficient
investment from the private sector or from debt financing. The loans offered by VBARD
and other financial intermediaries have been limited to a relatively few households, CIGs,
cooperatives and SMEs due to their lack of capability in formulating a profitable
business/investment plans and lack of collateral.
42
Viet Nam has adopted a national measure of multidimensional poverty, based on the Alkire-Foster method, which
will show the disadvantages poor people face across five different areas: (i) living conditions; (ii) income levels;
(iii) access to education and healthcare; (iv) access to information; and (v) access to insurance and social assistance.
Households that cannot meet over a third of their basic needs in these areas will be identified as multidimensionally
poor, while those lacking more than half will be considered critically poor. 43 According to the poverty lines (adopted by MoLISA) applicable for the 2011-2015 period.
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6. The factors hindering poverty alleviation suggest the strategies for the Project intervention, taking into consideration the IFAD’s country strategy and the local Government’s socio-economic development priorities.
Target Area and population.
7. The Project will investment in awareness and capacity-building related activities to enable climate-adapted agriculture to be implemented throughout the province. However, due to the need to target the poorest and most vulnerable communes, the Project will concentrate its support for physical and commercial investments in 35 communes in 4 districts in both Bắc Kạn and Cao Bằng. The Project will operate wherever possible in NTP-NRD communes. The final selection of communes has been based on, inter alia, (i) poverty rate; (ii) vulnerability to natural disaster; (iii) commitment of leadership; (iv) potential for development of pro-poor VCs; and (v) level of on-going support projects. The commune selection also includes a balance between better market-linked and more remote communes that can be linked through VC development. Appendix 2, Annex 1 contains a detailed summary of the Project communes in Bắc Kạn and Cao Bằng.
8. The main groups of rural people targeted for support under the Project will be:
rural poor households with land and labour, including household enterprises;
unskilled employed rural people;
rural people lacking production land but having business acumen and desire; and,
key farmers who have the skills to promote commercial agricultural production.
9. The Project, to a considerable degree, is self-targeting for the poor. The MOP-SEDP process supports the devolvement of participatory governance to the commune/village level, where poorest live. The Project will bring greater equity to forest land allocation and establish legal production forest land and forest use rights, particularly benefiting poor upland communities and women, who, if married, will have joint ownership of allocated forest land and forests. The community investment program will empower poor upland male and female farmers to choose investments and services that meet their perceived needs, with particular attention paid to women’s priorities. The development of value-chain linked and climate-adapted farming systems and technologies will directly benefit the poor, raising crop and fodder production, diversifying income generating opportunities in the process. Supporting CIGs membership will be identified through the MOP-SEDP process, with minimum quotas on women’s participation, thereby raising transparency and social accountability. The rural credit programme specifically targets women farmers and, with its modest loan size, will be of primary interest to poor women farmers. The selection criteria for support under APIF co-financing will be significantly weighted in support of investments that will benefit the poor. The Project responsiveness to IFADs Project targeting check list is Detailed in Appendix 2, Annex 2.
10. Poor and near poor households will benefit directly from all Project activities. For rural infrastructure investments, poor and near-poor households will benefit from those investments that directly improve agriculture production (e.g. irrigation) while poor, near-poor and non-poor households will benefit from other infrastructure development such as roads. Non-poor households will also participate in CIGs and APIF investments as their participation is recognised as lifting the overall performance of such investments, however, they would not represent more than 50 per cent of the total number of beneficiaries of these Project activities.
11. Annex 4, Table 1, provides a breakdown of the expected physical results and impacted populations for each Project output. Annex 4, Table 2, shows the total beneficiaries based on the expected success rates for each project output. Clearly, there are overlaps between Project outputs and the resulting beneficiary groups, with some benefiting from just a single project activity (e.g. a road or footbridge) while other, typically poorer households, could benefit from multiple combinations of group grant, credit access, forest land and forest use rights, etc. Table 1 below provides an estimate of the total number of households expected to benefit from one or more Project outputs that impact on household wealth - in total about 33,000 households or an estimated 150,000 people. Of this total, an estimated 30,000 households or 135,000 people are expected to achieve a 20% improvement in household assets. Table 2 shows the expected number of poor and near poor households and women, expected to benefit from Project outputs impacting on household wealth – in total about 19,000 poor and near poor households are expected to benefit while more than 8,000
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women will be direct beneficiaries of project wealth-creating outputs. Of this total, an estimated 16,000 households or 72,000 people are expected to be lifted out of poverty.
Table 1: Estimation of Total Number of Project Beneficiaries
Output
Total output bene-
ficiaries
Output beneficiaries not benefiting from Output(s): /a/b
5 5 or 7 5 or 7 or 8
5 or 7 or 8 or 6
5 CIGs HHs 15,960 %
7 RF services HHs 4,958 1,487 % 30%
8 APIF HHs 8,971 2,691
% 30%
6 CI /c HHs 31,821 8,032 % 40%
4 FLA HHs 9,067 4,533 % 50%
Total project HHs 32,704 beneficiaries /d people 147,167 \a Taking into account that many beneficiaries will benefit from more than one output.
\b Assumptions. \c % referring to road beneficiaries. Estimated % of irrigation beneficiaries not benefiting from Outputs 5, 7 or 8: 0%. \d Avg. no. of persons/HH: 4.5.
Table 2: Estimation of Total Number of Poor/Near Poor and Women Project Beneficiaries
Output HHs Total output
bene-ficiaries
Output beneficiaries not benefiting from Output(s): /a/b
5 5 or 7 5 or 7 or 8
5 or 7 or 8 or 6
5 CIGs Poor/Near Poor 7,980 Women 6,384
7 RF services Poor/Near Poor 2,479 744 Women 4,958 1,487
8 APIF Poor/Near Poor 4,486 1,346
Women 897 269
6 CI /c Poor/Near Poor 15,911 6,364
4 FLA /c Poor/Near Poor 5,440 2,720
Total Project Poor/Near Poor 19,154 beneficiaries Women /c 8,141 \a Taking into account that many beneficiaries will benefit from more than one output.
\b Percentage assumptions same as for Total Beneficiaries Table. \c Women HHs not counted under FLA and CI.
Gender44
12. Vietnam's development background is rooted in a feudal and highly patriarchal society derived from Confucian philosophy, with a more recent history of socialist government overlaid by an increasingly market-led economy. Social justice and the role of women have been circumscribed by these features, although, over the past two decades, significant demographic shifts and changes in the role and status of women have taken place. In the "modern" era which began in 1946, women are no longer viewed primarily as wives and mothers, but also as a significant labour force with many of the same potentials and rights as men. The first Constitution of 1946 stated in Article 9 that "All power in the country belongs to the Vietnamese people, irrespective of race, fortune, class, religion..." and that "women are equal to men in all respects" (First Constitution of Vietnam, 1946)
44
This note on gender draws information from multiple sources, but is particularly indebted to the work of Ms. Sandy
Stephens on analysing gender and development issues in Viet Nam.
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13. The current Constitution of Viet Nam enshrines the principle of gender equality, and specifically prohibits the violation of women’s rights. In regard to legal rights, the position of Vietnamese women has improved over the past decades. In 2006, the National Assembly passed the country’s first Law on Gender Equality. This law aims to address a range of issues (such as wage gaps) and eliminate discrimination based on gender. The position of women varies considerably among Viet Nam’s 54 official ethnic groups. Harmful practices such as such as the marriage of young girls and marriage of a widow to her deceased husband’s brother are prevalent among some groups, despite being prohibited by law since 2000. Viet Nam ratified the Convention on the Elimination of all Forms of Discrimination against Women (CEDAW) in 1982, but has not yet ratified the Optional Protocol. Under the 2015 Human Development Report, Viet Nam’s Human Development Index (HDI) value for 2014 is 0.666 — which is in the medium human development category — positioning the country at 116 out of 188 countries and territories. Between 1980 and 2014, Viet Nam’s HDI value increased from 0.463 to 0.666, an increase of 44 percent or an average annual increase of about 1.3 per cent. The country’s score in the Gender Inequality Index for 2014 is 0.308, ranking it 60 out of 155 countries. In Viet Nam, about 25 per cent of parliamentary seats are held by women, and about 60 per cent of adult women have reached at least a secondary level of education compared to about 70 per cent of their male counterparts. For every 100,000 live births, 59 women die from pregnancy related causes; and the adolescent birth rate is 29 births per 1000 live births. Female participation in the labour market is 72.8 percent compared to 81.9 for men.
14. Although women in Vietnam enjoy a large measure of equality under the law and men regard women as partners in the labour force, the practice of social and economic gender equity lags behind both the spirit and the application of legislation and official support for equality. Public life is still traditionally viewed as a predominantly male domain, while women remain responsible for unpaid work in the household. This is particularly true in rural areas and in the highlands, where women also face limited education and employment opportunities, and access to healthcare.
15. Agriculture employs the majority of people in Vietnam, with about 68 percent of women and 58 percent of men working in agriculture. Most women work as unpaid family labour on farms, and their free labour is often assumed in planning agricultural development projects and programmes - 53% of all employed women work as unpaid family labourers compared with 32% of men. Regulations governing minimum wages for women are widely ignored or circumvented by contract and piece-work, and by offering "part-time" menial, low-paid tasks which sometimes add up to more hours for less remuneration than full-time work. In addition, women are responsible for most of the unpaid household and community work which is usually invisible, unrecognised and carries low status.
16. There is almost no gender gap in enrolment and achievements of Vietnamese children in primary schools, but at secondary and tertiary levels, particularly in rural areas, the decline in enrolment is much higher for girls. This is especially clear in poorer families where girls are either needed as productive labour and for the care of siblings, or where preference is shown for boys' education when there is insufficient money for both. Among ethnic minorities access to education is much more limited for both sexes, and gender gaps are more marked at all levels. Illiteracy remains relatively high, with females showing about twice the illiteracy rate of males, and where higher education is valued it is generally valued only for males. Physical isolation usually requires the minority student’s board at secondary and tertiary educational institutions, and it is usually culturally unacceptable for girls and women to leave home before marriage in most minority groups. At tertiary level therefore it is extremely rare to find a female ethnic minority student enrolled in full-time study.
17. Cultural attitudes to women remain a major constraint to their achieving equality and parity with men. Confucian values expressed in dao or ways, stipulate that women should be obedient to their fathers before marriage, to their husbands after marriage, and to their sons upon their husbands' death. A second dao lists four wifely virtues: beauty, hard work, modesty, and faithfulness to one's husband.
18. The Vietnam Women's Union (WU) remains the most active mass organisation in the country, existing since 1930 first to mobilize women for wartime activities, and later as the central organisation for promoting women's issues. Although technically not a Government body, the WU has been supported mainly by Government until the recent past. Under economic reforms the President of the WU retains the right to participate as an equal member in the regular meetings of Government, but inputs into significant policy areas such as macro-economic reform have been very limited. WU resources have not allowed adequate research and analysis of gender issues, nor the monitoring of
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the impact of reform and development on women and on poor families. Research carried out by others e.g. internationally funded projects is ad hoc and confined to rather small geographical areas. WU activities are like those of non-governmental organisations, operating at four administrative levels - central, provincial, district and commune - and reaching through all 53 of Vietnam's provinces to its estimated membership of 10 million. Membership is voluntary, and consists mainly of rural women between the ages of 30 and 50. The small membership fee is routinely waived for poor women who cannot afford to pay. WU membership allows access to credit and training provided by the Union, which now receives significant international donor assistance for the implementation of government policies and programmes oriented to the integration of women in development, as well as for special projects and welfare for women. Their limited human resources, however, are constrained by insufficient technical expertise, and a lack of transport and equipment to carry out their work efficiently. The level of international assistance fluctuates, and varies between provinces, and those most in need tend to receive the least.
19. With limited female participation in decision-making for national and provincial policy and plans, these are heavily biased towards male priorities and preferences. In the agriculture sector the absence of women in macro and in local level policy planning is even more conspicuous, and agricultural policy and resource allocations tend to ignore female needs, favouring for example, cash crops over subsistence, export crops over self-sufficiency in food, cattle over small ruminants and poultry, raw materials production for factories over sustainable community and social forestry, capture fisheries over aquaculture. Official proclamations about gender equity and equality clearly remain to be internalised by men and women in decision-making, and to be applied to resource allocations and Project implementation.
20. Women farmers remain, officially, largely invisible. When they are not seen, they are not addressed by policy, and their needs are routinely overlooked. Farmers are considered male, households’ heads are men, households are viewed as homogeneous, and official inputs to agriculture are directed at men by men. The feminization of farming as a policy issue has barely been recognised in Vietnam or elsewhere so little strategic planning has been done. Instead, an ad hoc approach channels occasional inputs to women as passive recipients of welfare rather than as economic partners in a vital and dynamic production sector. In response, women ignore official proffering and get on with their long and lengthening work day. In Vietnam as elsewhere, policies and plans that are not explicit about including women in rural development effectively exclude them and thereby retard all development. Most policies are silent on gender and on broader issues of equity; plan objectives are gender blind; data are unavailable, inadequate or misleading; resource allocations are extremely limited; women remain invisible and strategies by-pass them; mandates and accountability for gender mainstreaming is absent; and gender awareness and commitment to equity are weak. Job descriptions rarely mention gender, and management is not held accountable for meeting either gender or social objectives. This situation generally pertains at all levels and in most development projects.
21. The trend for men to migrate out of agriculture into more attractive employment (or any employment) in other sectors will continue to place an increasing burden on women farmers. Women left behind will be expected to shoulder more of the agricultural and rural development work in the future, leading inexorably to a longer working day on a natural resource base which may be depleted or degraded due to over-exploitation and misuse. Studies show rural women's work day already significantly longer than that of men and it is lengthening, so labour-saving technologies and more efficient working methods (e.g. in organised groups) is indicated. The fragmentation of women's time which significantly lowers their productivity also needs to be reduced by the provision of child care facilities where this is cost effective. In rural areas this may simply mean one woman in a group taking care of others' children to free the majority from such responsibilities during productive work periods. Communities which can afford it may hire child carers and pre-school education personnel.
22. Labour bottlenecks could limit growth, delay or extend critical periods such as harvesting, and increase the unattractiveness of agriculture as a career for the brightest and best among youth. Low female productivity in agriculture will increase food insecurity, decrease rural household incomes and thereby increase rural poverty. It may also force women into unsustainable practices which further degrade the environment. These issues can be addressed with education, training and technology to lighten the drudgery of women's work, increase their productivity and add value to their production,
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but these will be insufficient without increasing women's strategic intervention potential by enabling them to participate in decision-making and management.
23. Women farmers' lower education levels, their inferior physical strength and their limited access to land and other capital, as well as the constraints imposed by culture and their multiple roles on the farm, in the community and in the household negatively affect their capacity to take advantage of available technological innovations. Men's advantaged position on the other hand enables them to gain access to opportunities, new technologies and other agricultural innovations before women do. This gap needs to be addressed in plans and strategies for achieving gender equity, and to enable women who are "breadwinners" and farmers in their own right, to increase their productivity.
24. Expanding investments in human capital for women will help in the long run to integrate more women in the economy, improving their opportunities and thereby the efficiency and effectiveness of all development. Initiatives will be needed to encourage girls to continue to secondary and tertiary education, and to provide non-formal education and training directly to rural women to enhance their long term productive potential. In the short term, targeted training of rural women will increase their total production, their productivity and incomes, and hopefully increase their leisure time and their options in life.
25. Women's access to land and other capital is far less than that of men, and men control most productive inputs in the farming and forestry sectors. If women are to take increasing responsibility for primary production and processing, barriers around their access to and control over relevant resources must be removed. These include direct access to credit, land, water and other agricultural inputs, women's active participation in organisations including decision-making bodies at all levels, access to extension information and services, access to education and training, and participation in decision-making and management.
26. Credit from the formal banking sector is an input which is relatively in-accessible to women, yet women have shown themselves, particularly through WU managed SCGs to be bankable clients with rates of return often exceeding those of men. It is extremely cost-effective to make special provisions to accommodate women as users of credit in their own right, and this may include changes in rules and regulations especially for collateral, direct extension support to women, special education and training, and the provision of financial packages which complement the provision of credit.
Gender Targeting and Equality Strategy.
27. In conjunction with the Viet Nam Women Union (VWU), the CSSP will promote gender equality as well as women’s participation in village development planning, CIGs, forest land and forest use, rural financial services and market linkage programmes, assisting them to gain equal access to agricultural support and investment opportunities. Specific measures include: (i) gender analysis of the farming systems and value chain development in the Project area is conducted through the SIP; (ii) gender awareness-raising will be conducted at village level and amongst all Project stakeholders at all administrative levels; (iii) all committee members (women and men) will be trained on group formation and capacity strengthening training in participatory decision-making and facilitation techniques, leadership skills, public speaking, confidence building; (iv) ensuring women’s participation in the underlying MOP-SEDP planning process through a minimum 30 per cent women’s representation on VDBs and CDBs; (v) requiring at least 50 per cent women’s participation in village-level MOP-SEDP discussions and decision meetings; (vi) establishing a forest land and forest use allocation process that (a) prioritises women-headed households
45; and (b) amongst other
participating poor and near poor households, requires the signature of both spouses on forest land and forest use certificates; (vii) requiring a minimum 40 per cent women’s participation in CIGs and the strong promotion of female lead farmers under the LF2F programme; (viii) ensuring that both male and female family members have access to group technical training and other capacity development activities, (vii) developing the capacities of extension agents to include women, particularly through female Lead Farmers under the LF2F programme, and, where appropriate, organising special sessions for women; including gender audits in annual farmer groups’ capacity assessments; (ix) technical training materials will include training needs and topics highlighted by women and extension training schedules will ensure that location and timing of delivery are convenient for women
45
In the Project communes in Bắc Kạn, there are 1,612 women-headed households, of which 823 households are
classified as poor. In the Project communes in Cao Bằng, there are 2,232 women-headed households, of which,
1,225 are classified as poor.
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(x) enabling at least 9,600 women to benefit from access to loans under the WSCGs programme and the empowerment of the VWU to manage a sustainable and scalable MFI in each province; and (xii) promoting APIF-generated smallholder farmer contractual agreement targeting poor and women-headed households with contracts jointly signed by both spouses where applicable. (xiii) appoint a Gender specialist to the CSSP PPCO team and undertake gender awareness training of the entire PPCO and district CSSP coordination units; (xiv) disaggregating M&E data and analysis by gender; and (xv) supporting the recruitment of women to ensure gender-balanced Project implementation teams at all levels. Additionally, NSLCP-FSP will support the VWU in building its capacity to own and manage sustainable and scalable MFIs in the Project provinces.
Gender Action Plan
28. A gender aware approach will be a crucial focus of the Project whereby women's position and roles will be recognized and acknowledged and women's economic empowerment will be realized through the development of pro-poor gendered economic opportunities. A gender action plan, to be included in the Project PIM will be developed as per the following outline and will seek to maintain women's access and participation across all components of the Project, from extension to Project evaluation and across all thematic areas of Project activities.
29. The purpose of the gender action plan will be to promote gender equality so that targeted women and men have equitable access to, and control over, resources (e.g., livelihood supports) provided by and benefits (e.g., increased agricultural production, productivity and market access) gained from the Project. The gender action plan will ensure:
Gender equality concepts are adequately introduced to Project staff as well as
women and men from Project communities as much as possible during the Project
work.
Facilitation of women’s/men’s equal and meaningful participation in the Project
activities and their voices heard in decision-making to be ensured by the Project
implementing partners.
Gender sensitive language is used in all documents – resource and information,
education, and communication materials, reports, etc.
Mechanisms and tools are in place to ensure equitable access to and control over
resources
Gender impact assessment of the Project are to be conducted along with periodic
review and learning of the Project.
Sex disaggregated data is to be collected, analysed and used for ongoing Project
development and reporting - with both quantitative and qualitative information.
Gender sensitive organizational policies, practices and staff recruitment for all
levels (from management positions to field level positions). This includes ensuring
that the Project identifies and trains sufficient female Lead Farmers under the
Project.
Ethnic groups inclusion framework
30. Ethnic people in the targeted Project districts have familiarity and considerable local knowledge in agriculture production and climate change adaptation. The Project will abide by the following safeguards to ensure that Project activities are culturally sensitive and do not have any negative impact on livelihoods and practices of the ethnic people:
the PPCO, at the beginning of the Project, clearly defines a list of sub-ethnic
groups and guides the provincial and district government in the collection of data
disaggregated by ethnicity.
undertake a screening with the objective to (a) determine if the impacts on ethnic
groups are significant; (b) identify the level of assessment and institutional
resources required to address indigenous people (IP) safeguard issues; and
(c) determine information and consultation requirements;
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a social impact assessment will be carried-out by the PPCO, with the
data/information used to prepare an ethnic groups development plan. The
assessment will include a gender-sensitive assessment of the affected minorities’
perceptions about the Project and its impact on their social, economic, and cultural
status;
an ethnic groups development plan shall be prepared for both Bắc Kạn and Cao
Bằng. The ethnic groups development plans will be prepared by PPCO with
support of Project financed TA, based on the results of screening, social impact
assessment and meaningful consultations;
meaningful and culturally-sensitive consultation process will be undertaken with all
ethnic groups affected by the projects. They will be properly informed and
consulted about the Project, the scope, implementation schedule and activities, as
well as expected impacts, both positive and negative, on the community and ethnic
groups. Ethnic peoples' aspirations, needs, and preferred options for the projects
will be sought and measures to enhance benefits or mitigate negative impacts will
be considered and recorded;
SCCP Coordination Offices at the district level will ensure that at least two staff in
the unit speak ethnic languages and relevant information and trainings to Project
beneficiaries are delivered in local ethnic languages; and
all M&E data, analysis, and reporting will be disaggregated by ethnicity.
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Annex 1. Project commune poverty details
Table 1. Cao Bằng: Poor and near poor households in CSSP districts and communes at end-2015
No. Commune District
2015
Total Poor HH % Poor
HH
Near Poor
HH
% near
poor HH
Total poor
& near
poor HH
%
Project Area 14,883 10,250 68.87 1,543 10.37 11,793 79.24
1. Ha Quang district 3,387 2,675 78.98 276 8.15 2,951 87.13
1 Quý Quân Ha Quang 282 200 70.92 7 2.48 207 73.40
2 Vân An Ha Quang 219 174 79.45 22 10.05 196 89.50
3 Cải Viên Ha Quang 240 190 79.17 31 12.92 221 92.08
4 Nội Thôn Ha Quang 393 310 78.88 50 12.72 360 91.60
5 Thượng Thôn Ha Quang 491 377 76.78 11 2.24 388 79.02
6 Tổng Cọt Ha Quang 531 425 80.04 49 9.23 474 89.27
7 Sỹ Hai Ha Quang 245 193 78.78 14 5.71 207 84.49
8 Hồng Sỹ Ha Quang 280 219 78.21 33 11.79 252 90.00
9 Mã Ba Ha Quang 254 201 79.13 31 12.20 232 91.34
10 Hạ Thôn Ha Quang 170 131 77.06 9 5.29 140 82.35
11 Vần Dính Ha Quang 282 255 90.43 19 6.74 274 97.16
2. Nguyen Binh district 4,368 2,993 68.52 557 12.75 3,550 81.27
1 Vũ Nông
Nguyen
Binh 356 290 81.46
46 12.92 336 94.38
2 Hoa Thám
Nguyen
Binh 319 210 65.83
64 20.06 274 85.89
3 Minh Thanh
Nguyen
Binh 345 90 26.09
68 19.71 158 45.80
4 Thái Học
Nguyen
Binh 333 190 57.06
38 11.41 228 68.47
5 Tam Kim
Nguyen
Binh 640 294 45.94
125 19.53 419 65.47
6 Triệu Nguyên
Nguyen
Binh 209 161 77.03
30 14.35 191 91.39
7 Phan Thanh
Nguyen
Binh 575 526 91.48
10 1.74 536 93.22
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Final Project design report
Appendix 2: Poverty, targeting and gender
73
No. Commune District
2015
Total Poor HH % Poor
HH
Near Poor
HH
% near
poor HH
Total poor
& near
poor HH
%
8 Ca Thành
Nguyen
Binh 564 491 87.06
39 6.91 530 93.97
9 Thành Công
Nguyen
Binh 647 452 69.86
102 15.77 554 85.63
10 Quang Thành
Nguyen
Binh 380 289 76.05
35 9.21 324 85.26
3. Thach An district 3,654 2,261 61.88 379 10.37 2,640 72.25
1 Đức Thông Thach An 446 334 74.89 18 4.04 352 78.92
2 Canh Tân Thach An 519 314 60.50 28 5.39 342 65.90
3 Minh Khai Thach An 518 429 82.82 38 7.34 467 90.15
4 Thụy Hùng Thach An 290 199 68.62 23 7.93 222 76.55
5 Quang Trọng Thach An 488 362 74.18 41 8.40 403 82.58
6 Vân Trình Thach An 431 147 34.11 82 19.03 229 53.13
7 Trọng Con Thach An 477 300 62.89 94 19.71 394 82.60
8 Đức Long Thach An 485 176 36.29 55 11.34 231 47.63
4. Thong Nong district 3,474 2,321 66.81 331 9.53 2,652 76.34
1 Đa Thông
Thong
Nong 896 578 64.51
60 6.70 638 71.21
2 Lương Thông
Thong
Nong 929 665 71.58
116 12.49 781 84.07
3 Cần Yên
Thong
Nong 438 228 52.05
86 19.63 314 71.69
4 Cần Nông
Thong
Nong 369 270 73.17
28 7.59 298 80.76
5 Thanh Long
Thong
Nong 302 190 62.91
6 1.99 196 64.90
6 Lương Can
Thong
Nong 540 390 72.22
35 6.48 425 78.70
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
74
Table 2. Bắc Kạn: Poor and near poor households in CSSP districts and communes at end-2015
Project Districts and
Communes
Total number of households Based on multi-dimensional poverty standard established by Decision No
59/2015/QD-TTg dated 19 Nov 2015
Poor Households Near-poor Households
No. of HHs Ethnic
Households Total % Total %
Total 35 communes 20,609 19,911 9,988 48% 2,747 13%
Pac Nam District 6,692 6,510 3,402 51% 730 11%
An Thang 264 264 172 65% 44 17%
Boc Bo 943 774 347 37% 98 10%
Bang Thanh 732 730 422 58% 118 16%
Cao Tan 777 774 377 49% 18 2%
Cong Bang 610 608 291 48% 105 17%
Co Linh 811 811 441 54% 79 10%
Giao Hieu 403 401 145 36% 59 15%
Nghien Loan 1,175 1,171 719 61% 88 7%
Nhan Mon 409 409 209 51% 77 19%
Xuan La 568 568 279 49% 44 8%
Ba Be District 6,071 5,751 2,463 41% 995 16%
Cao Thuong 792 784 420 53% 130 16%
Khang Ninh 958 943 310 32% 193 20%
Dia Linh 812 744 349 43% 134 17%
Yen Duong 615 587 277 45% 142 23%
Chu Huong 841 718 353 42% 168 20%
Ha Hieu 642 612 102 16% 57 9%
Phuc Loc 690 678 359 52% 111 16%
Banh Trach 721 685 293 41% 60 8%
Na Ri District 3,897 3,783 1,933 50% 571 15%
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Appendix 2: Poverty, targeting and gender
75
Project Districts and
Communes
Total number of households Based on multi-dimensional poverty standard established by Decision No
59/2015/QD-TTg dated 19 Nov 2015
Poor Households Near-poor Households
No. of HHs Ethnic
Households Total % Total %
Lam Son 487 463 270 55% 57 12%
Vu Loan 420 418 242 58% 51 12%
Van Hoc 243 240 173 71% 13 5%
Cu Le 531 516 250 47% 82 15%
Huu Thac 369 342 152 41% 37 10%
Xuan Duong 532 518 221 42% 107 20%
Liem Thuy 297 294 124 42% 63 21%
Quang Phong 380 357 152 40% 55 14%
Dong Xa 638 635 349 55% 106 17%
Ngan Son District 3,949 3,867 2,190 55% 451 11%
Coc Dan 588 584 350 60% 61 10%
Thuong An 442 440 247 56% 26 6%
Bang Van 719 706 337 47% 60 8%
Duc Van 362 353 201 56% 53 15%
Thuan Mang 556 556 344 62% 35 6%
Huong Ne 324 321 180 56% 37 11%
Lang Ngam 637 602 348 55% 118 19%
Trung Hoa 321 305 183 57% 61 19%
Bach Thong District 973 843 187 19% 151 16%
Quang Thuan 492 417 98 20% 99 20%
Duong Phong 481 426 89 19% 52 11%
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
76
Annex 2: CSSP Targeting Mechanism
IFAD’S TARGETING POLICY - CHECKLIST for DESIGN
Key issue Design response
1. Does the main target group - those
expected to benefit most- correspond to
IFAD’s target group as defined by the
Targeting Policy (poorer households and food
insecure)?
Yes. Both Bắc Kạn and Cao Bằng are
amongst the 10 poorest of the 63 provinces in
Viet Nam. The primary target group are poor
and near poor smallholder farmers, who form
a significant proportion of total poor
households in the Project area. Poor women-
headed households are specifically targeted
including the application of high minimum
participation rates for women in key Project
production and decision making activities.
As poverty at household level is well identified
in Viet Nam, the Project can readily target the
poor and near poor. In the four Project districts
of Bắc Kạn province there are 9,988 poor and
2,747 near-poor households, representing
48 per cent and 13 per cent of the total
number of Project district households,
respectively, almost all (98%) from ethnic
minority groups. In the four Project districts of
Cao Bằng province, there are 10,250 poor
households and 1,543 near-poor households,
all from ethnic minority groups
2. Have target sub-groups been identified and
described according to their different socio-
economic characteristics, assets and
livelihoods - with attention to gender and
youth differences? (matrix on target group
characteristics completed?)
Yes. The level of multi-dimensional poverty in
the Project provinces, districts and communes
was completed in 2015 and the data is
presented in Appendix 2, Annex 1. The
principal targets are poor and near poor
households, including women-headed
households, with quotas set for the level of
poor household and women’s participation.
Given the projects value chain development
thrust, non-poor households will also benefit
from project investments. A detailed
breakdown of the level of household
participation in various project activities is
given in Appendix 2, Table 1.
3. Is evidence provided of interest in and
likely uptake of the proposed activities by the
identified target sub-groups? What is the
evidence? (matrix on analysis of Project
components and activities by principal
beneficiary groups completed?)
Yes. In both provinces, the Project is building
off the experience of prior IFAD development
investment including the 3PAD project in Bắc
Kạn and the DPBRP in Cao Bằng. Lessons
learned from the implementation of those two
project (see Appendix 3) have been central to
CSSP design.
Rural communities in the Project area are
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
77
Key issue Design response
already engaged in participatory socio-
economic development planning, which will be
strengthened and made more climate-adapted
and market oriented. There is ample evidence
in Viet Nam and in the Project provinces and
districts that farmers are committed to
improving their agricultural production and
productivity. The evidence that minority people
in the Project area will take up this challenge
or that farmers will engage robustly with an
expanding agri-business sector is less certain,
but 3OAD and DBRP evidence suggests that
this will not be a major constraint to Project
implementation
4. Does the design document describe a
feasible and operational targeting strategy
in line with the Targeting Policy, involving
some or all of the following measures and
methods:
4.1 Geographic targeting – based on
poverty data or proxy indicators to identify, for
area-based projects or programmes,
geographic areas (and within these,
communities) with high concentrations of
poor people
Yes. The Project is targeting the poorest and
most food insecure provinces of Viet Nam
(both provinces are amongst the 10 poorest of
Viet Nam’s 63 provinces) and the poorest
districts and communes in both Bắc Kạn and
Cao Bằng. provinces. In Bắc Kạn, 48 per cent
of the households in the Project communes
are multi-dimensionally poor, while in Cao
Bằng this figure reaches to 69 per cent
4.2 Direct targeting - when services or
resources are to be channelled to specific
individuals or households
Yes. The project technical services will rely
extensively on lead farmer-to-farmer
extension, financed through CIG-managed
grants, whereby knowledge is transferred in
the local language. This approach has already
been successfully applied in Bắc Kạn. The
Project credit programme specifically targets
poor women and the methodology has been
widely and successfully applied in Viet Nam.
The forest land allocation programme in Bắc
Kạn, which extends an earlier successful
initiative under the 3PAD project, targets poor
households, including women-headed
households. Land use certificates issued to
couples are in the name of both spouses. The
VC development is pro-poor with APIF-
supported agri-businesses required to
incorporate poor-households in proportion to
the size of their co-financing.
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
78
Key issue Design response
4.3 Self targeting – when goods and
services respond to the priority needs,
resource endowments and livelihood
strategies of target groups
Yes. The Project activities and beneficiaries
would be primarily self-targeted. The
identification of project investment activities
and beneficiary groups is driven by the MOP-
SEDP process, which is community based and
demonstrably transparent (See Appendix 4 for
details).
4.4 Empowering measures - including
information and communication, focused
capacity- and confidence-building measures,
organisational support, in order to empower
and encourage the more active participation
and inclusion in planning and decision
making of people who traditionally have less
voice and power
Yes. Through the MOP-SEDP process, all
committee members (women and men) of
Village Development Boards would be trained
on group formation and capacity strengthening
training in participatory decision-making and
facilitation techniques, leadership skills, public
speaking, confidence building.
Beneficiary contributions have been carefully
set to ensure commitment and ownership
without being onerous. A significant proportion
of beneficiary contributions can be made in
kind. For CIGs, where poor households may
have more difficulty meeting beneficiary
contributions, the option exists for them to
increase their in-kind contribution. The VBSP
and LWU WSCG programme have confirmed
their willingness to finance beneficiary
contributions where necessary.
4.5 Enabling measures – to strengthen
stakeholders’ and partners’ attitude and
commitment to poverty targeting, gender
equality and women’s empowerment,
including policy dialogue, awareness-raising
and capacity-building
Yes. Social inclusion and gender awareness
training of the entire PPCOs staff would be
undertaken. Gender awareness trainings
would be also conducted at village level and
amongst all Project stakeholders at all
administrative levels. Both PPCOs include a
gender specialist. The Women’s Union will be
a key Project stakeholder and minimum
women’s and poor household participation in
key activities is mandated. The Project
Coordination Office, Technical Advisory Group
and Project Steering Committee will seek
gender balance in membership. ToRs are all
gender sensitive.
4.6 Attention to procedural measures- that
could militate against participation by the
intended target groups
Yes. Possible procedural constraints for
people from minority ethnic groups and
women have been analyzed and addressed in
the design. Almost 99 per cent of people in the
project area belong a minority ethnic
community and most of the administration at
commune, district and provincial levels are
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
79
Key issue Design response
ethnic people. The capacitation of the VWU for
the implementation of the rural financial
services programme, with its 100 per cent
focus on female borrowers ensures poor
women’s credit access.
Beneficiary contributions have been carefully
set to ensure commitment and ownership
without being onerous. A significant proportion
of beneficiary contributions can be made in
kind. For CIGs, where poor households may
have more difficulty meeting beneficiary
contributions, the option exists for them to
increase their in-kind contribution. The VBSP
and LWU WSCG programme have confirmed
their willingness to finance beneficiary
contributions where necessary.
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
80
Annex 3: Gender and Targeting Checklist
Gender targeting
Key Issue Design Response
1. The project design report contains – and project
implementation is based on - gender-disaggregated
poverty data and an analysis of gender differences in
the activities or sectors concerned, as well as an
analysis of each project activity from the gender
perspective to address any unintentional barriers to
women’s participation.
Yes. Gender differences are analyzed during poverty
analysis and Project activities are gender-sensitive.
The CSSP has taken into account women and men’s
roles, constrains and needs in designing the Project
activities including setting minimum quotas for
women’s participation in a range of activities.
2. The project design report articulates – or the project
implements – actions with aim to:
Expand women’s economic empowerment through
access to and control over productive and
household assets;
Yes. CSSP activities are designed to expand
women’s economic empowerment by facilitating
women’s access to production inputs, technical
training and business development skills. Project-
supported gender-mixed and gender-disaggregated
farmer groups must, in aggregate at district level,
include at least 40 per cent female members, while
individual groups must include at least 50% of
members from community-identified poor households
46. Under Output 5, women will be specifically
targeted to develop WSCGs and, ultimately, MFIs
owned by the provincial WUs. Under Output 4, male
and female farmers will have the opportunity to form
gender-disaggregated and/or mixed gender groups
to increase farm production/productivity and link to
markets. Minimum women’s participation in all
planning decision meetings is mandated by the
Project.
Strengthen women’s decision-making role in the
household and community, and their
representation in membership and leadership of
local institutions;
Yes. CSSP will build women’s capacity to partake in
participatory community needs assessment and
prioritisation, using separate women’s meetings
where appropriate. Women’s participation in all
decision making meetings and in subsequent
implementation management teams must be at least
40%.
Achieve a reduced workload and an equitable
workload balance between women and men.
Yes. Rural ethnic women experience extreme “time
poverty” and the Project is highly conscious of the
need to reduce women’s labour demands. The CSSP
would facilitate separate consultation with women to
ensure the Project activities do not account for
additional workload for women. Trainings and
meetings would be organized in locations and
timings suitable for women beneficiaries. The LF2F
46
IFAD project experience in Viet Nam shows that, dependent on activity and community, some farmer group activities
may be most successful if implemented through gender disaggregated groups. The project will therefore require a
gender balance at the level of the district, rather than within individual groups, but each group, irrespective of its gender
mix, will require 30% participation by community-identified poor households.
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
81
Key Issue Design Response
programme would include female lead farmers.
The Project financial and economic analysis has
assessed likely impacts on women’s labour. The SIP
analysis will include a detailed assessment of female
and male labour responsibilities and time
commitments and will promote labour saving
technology where profitably possible. All VC
investments are expected to provide significantly
higher returns to family labour, enabling the use of
hired labour to help address demand for women’s
labour at critical points in the production cycle.
3. The project design report includes one paragraph in
the targeting section that explains what the project
would deliver from a gender perspective.
Yes. The CSSP Gender Action Plan, essentially
guided by IFAD’s Gender Equality and Women’s
Empowerment Policy47
, aims to enhance women’s
participation and role in agriculture production and
marketing by increasing their access to resources
and empowering them both technically and
entrepreneurially as managers of agriculture
programmes. The strategy is not only to support
women in production but also to move them further
up the value chain by engaging them in processing,
management, marketing, and ownership.
4. The project design report describes the key
elements for operationalizing the gender strategy, with
respect to the relevant project components.
Yes, CSSP activities and investments will contribute
in tackling the major constraints faced by the women
and implementation arrangements concerning
women’s engagement are detailed in the main report
and Appendices 2 and 4.
5. The design document describes - and the project
implements - operational measures to ensure gender-
equitable participation in, and benefit from, project
activities. These would generally include:
Yes, as detailed in the Gender Action Plan.
5.1 Allocating adequate human and financial
resources to implement the gender strategy
Yes. Adequate budget has been allocated in the
design for the implementation of the gender strategy.
The Women’s Union will be represented on the
PPSCs and lead the implementation of Output 5.
Gender action plans with quantifiable targets and
indicators will be developed and the Project AWPB
will be prepared to reflect the requirements of the
action plans.
5.2 Ensuring and supporting women’s active
participation in project-related activities, decision-
making bodies and committees, including setting
specific targets for participation
Yes. Specific measures and strategies are designed
to ensure women’s access to information about
Project activities and their participation in Project
activities, including minimum participation quotas in
all planning meetings.
47
http://www.ifad.org/gender/policy/gender_e.pdf
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
82
Key Issue Design Response
5.3 Ensuring that project/programme management
arrangements (composition of the project management
unit/programme coordination unit, project terms of
reference for staff and implementing partners, etc.)
reflect attention to gender equality and women’s
empowerment concerns
Yes. CSSP will promote a gender-balanced working
team to have at least 20 percent women as
professional staff at in the PPCO technical teams.
Project staff, supporting government agency staff
and service providers will receive gender awareness
training during start up and refresher training after
mid-term. PPCO staff ToRs all require attention to
gender equality.
5.4 Ensuring direct project/programme outreach to
women (for example through appropriate numbers and
qualification of field staff), especially where women’s
mobility is limited
Yes. CSSP will work closely with provincial, district
and commune WU representatives in Project
implementation. The DARD will facilitate women-led
farmer-to-farmer extension services and will develop
meeting and training venues and timetables in
consultation with women beneficiaries.
5.5 Identifying opportunities to support strategic
partnerships with government and others development
organizations for networking and policy dialogue
Yes. CSSP will ensure proper and balanced
representation of women and men and poor
households, including women-headed households in
decision-making/influencing bodies at village and
commune levels.
6. The project’s logical framework, M&E, MIS and
learning systems specify in design – and project M&E
unit collects, analyses and interprets sex- and age-
disaggregated performance and impact data, including
specific indicators on gender equality and women’s
empowerment.
Yes. CSSP will adopt a gender-sensitive M&E
system to address gender issues by reporting and
analysing sex-disaggregated data throughout the
Project cycle. Where appropriate, the Project
logframe indicators are gender-sensitive and ethnic
group-disaggregated.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
83
Annex 4: CSSP Beneficiaries by Project Output
Table 1: Expected CSSP physical results and impacted populations
Output PY1 PY2 PY3 PY4 PY5 PY6
5. CIGs for climate CIGs new 400 800 700 0 0 0
Adaptation cumulative 400 1,200 1,900 1,900 1,900 1,900
members new 4,800 9,600 8,400 0 0 0
cumulative 4,800 14,400 22,800 22,800 22,800 22,800
7. Rural financial services WSCGs /a new 79 230 171 80 60 0
cumulative 79 309 479 559 619 619
members new 873 2,195 1,462 560 420 0
cumulative 873 3,068 4,529 5,089 5,509 5,509
8. Agribusiness USD'000 new 300 1,100 2,100 1,908 1,000 0
Promotion Investment cumulative 300 1,400 3,500 5,408 6,408 6,408
Fund (APIF) enterprises /b new 2 7 14 13 7 0
cumulative 2 9 23 36 43 43
VC supply New 600 2,200 4,200 3,816 2,000 0
households /c cumulative 600 2,800 7,000 10,816 12,816 12,816
6. Community
infrastructure - Roads km New 67 135 141 103 0 0
cumulative 67 202 343 446 446 446
villages new 67 135 141 103 0 0
cumulative 67 202 343 446 446 446
HH new 3,365 6,730 7,066 5,148 0 0
cumulative 3,365 10,095 17,161 22,310 22,310 22,310
people new 15,142 30,285 31,799 23,168 0 0
cumulative 15,142 45,427 77,226 100,394 100,394 100,394
- Irrigation schemes schemes new 76 152 160 117 0 0
cumulative 76 229 389 505 505 505
ha new 457 915 961 700 0 0
cumulative 457 1,372 2,333 3,033 3,033 3,033
HH new 4,920 9,839 10,331 7,527 0 0
cumulative 4,920 14,759 25,091 32,618 32,618 32,618
4. Forest land allocation ha new 4,000 8,000 5,000 0 0 0
and use (FLA) cumulative 4,000 12,000 17,000 17,000 17,000 17,000
(pink books) - Bac Kan HH new 2,667 5,333 3,333 0 0 0
cumulative 2,667 8,000 11,333 11,333 11,333 11,333
\a An additional 4,000 women will be mobilised into around 260 WSCGs in Bắc Kạn, financed through residual revolving
funds from the former 3PAD. \b Min. number of enterprises (rounded), based on max. USD 150,000 total investment per enterprise. \c Min. number of households, based on max. USD 500 co-financing per VC supply household.
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 2: Poverty, targeting and gender
84
Table 2: Expected number of beneficiary households by project output, adjusted
for expected success rates
Total by Output
Output Beneficiaries Unit Total Project Outreach /b
Success rate Effective Project
Outreach
5 CIGs for climate adaptation
CIG members - total
HHs 22,800 70% 15,960
CIG members - poor/near poor /a 50% HHs 11,400 70% 7,980
CIG members - women /a 40% HHs 9,120 70% 6,384
7 Rural financial services
WSCG members - total HHs 5,509 90% 4,958
WSCG members - poor/near poor /a 50% HHs 2,755 90% 2,479
WSCG members - women /a 100% HHs 5,509 90% 4,958
8 Agribusiness Promotion Invest-ment Fund (APIF)
VC supply households - total HHs 12,816 70% 8,971
VC supply HHs - poor/near poor /a 50% HHs 6,408 70% 4,486
VC supply HHs - women /a 10% HHs 1,282 70% 897
6 Community infrastructure (CI)
Road beneficiaries - total HHs 22,310 90% 20,079
Irrigation scheme beneficiaries - total HHs 32,618 90% 29,356
Total road/irrig. scheme beneficiaries /c HHs 35,357 90% 31,821
Total road/irrig. benef. - poor/near poor /a 50% HHs 17,678 90% 15,911
4 Forest land allocation and use (FLA)
Household issued with pink book - total HHs 11,333 80% 9,067
HHs with pink book - poor/near poor /a 60% HHs 6,800 80% 5,440
\a As % of total. \b Based on Output Detailed Cost Table. \c Assumption: 60% of irrigation scheme beneficiaries are also road beneficiaries.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project design report
Appendix 3: Country performance and lessons learned
86
Appendix 3: Country performance and lessons learned
1. Performance. Viet Nam became a lower-middle-income status country in 2010, as average per capita GDP has been above USD 1,000 since 2009. The strongest income growth has been associated with urban areas and export-oriented economic activities. Economic growth in Viet Nam is expected to average 6.5- 7.0% per year in the period 2015-2020, driven by sustained growth in consumption, investment and exports. Despite a downturn in foreign direct investment following the global financial crisis, FDI has risen in recent t\years, reaching USD 21.9 billion in 2014, which, at 11.3% of GDP, is among the highest rates globally and export-oriented foreign investor interest looking forward appears robust.
2. Viet Nam experienced double digit inflation and macroeconomic instability in 2011, leading the Government to introduce remedial measures such as tightening monetary and fiscal policy, reduction in public investment and the budget deficit, control of the trade deficit and export promotion. As a result, inflation has been steadily brought under control (the consumer price index for October 2015 was just 0.9%), public debt is being kept at a safe level, at about 50.5% of GDP by the end of 20124 and the total budget deficit has been reduced to 4.4 % of GDP in 2014. Exports continue to grow. Their total value of exports reached a record USD 150 billion in 2014, which is a 13.6 % increase over 2013, which itself was a 13.2% increase over 2012 levels. Viet Nam balance of trade remained in a surplus of USD 1.5 billion in 2014, up on USD 917 million in 2013, following a 19 years of trade deficit that ended in 2012. Vietnam recorded a Current Account surplus of 4.4% of the country's GDP in 2014. Despite recent surpluses, the current account is expected to remain in low surplus or in deficit in the medium term, due to strong consumption and investment growth and rising profit repatriation by foreign-invested enterprises.
3. Agriculture and rural poverty. Agricultural growth has assured national food security and made a key contribution to economic and social development and stability. Some 68.8 per cent of the population or 60.6 million people live in rural areas – an 11% increase compared with 2006. The increase in rural household numbers is due both to growth of the rural population and to multiplication of households. to 46.2 per cent in 2014, with an increasing share of households in industry and services, from 25.1 per cent in 2006 to 53.8 per cent in 2014. The sector’s share of employment, however, remains 2.5 times higher than its share of GDP, indicating relatively low labour productivity. This shift in the rural economic structure varies greatly among regions. The three regions with shares of non-farm households higher than 30 % are the South-East (58.1%), Red River Delta (44.5%) and Mekong River Delta (32.2%). In contrast, the Central Highlands, Central Coast and Northern Uplands regions have more than 80% of their population relying on agricultural incomes, while the share of non-farm households remains relatively low, which has many ramifications for poverty.
4. The annual rate of growth in agricultural production slowed from an impressive average of 5.7% in 1990-2002 to 4.2% in 2002-13. In 2013, agriculture exports formed 17 per cent of the value of total exports and just 9.8 per cent of imports, leaving a healthy, positive agricultural trade balance. The ratio of total agro-food export value to agricultural GDP was 70-80% in the early 2010s, much higher than in China or Indonesia and equal to the ratio of total Viet Nam’s exports to total GDP. The ratio of agro-food imports to agricultural GDP, while only half of that for exports, has tripled since 1990. Rice remains by far the most important commodity, accounting for about 35% of the total value of agricultural production in recent years. There has, however, been an important change in the composition of production away from staple foods to other commodities, in particular perennial crops such as coffee and rubber, and livestock production, especially pig meat. This reflects the strong export orientation of perennial crops and the changing preferences of consumers to higher value products
48. In 2014, total rice production was 45 million tons, an increase of 5 million tons compared
with 2010. Rising agricultural labour costs are slowly forcing efficiency gains (mechanization and land consolidation) and accelerated production diversification. The livestock subsector accounts for 25 per cent of agricultural GDP and is projected to rise significantly. The forestry sector contributes around 1 per cent.
5. Despite this strong performance, a number of constraints remain. Product quality is low, and Viet Nam typically receives significantly lower prices than neighbouring countries and market
48
OECD Food and Agricultural Reviews Agricultural Policies in Viet Nam 2015.
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competitors for its rice, coffee, tea, rubber and aquaculture exports. Agricultural knowledge systems require significant investment and stronger client and market orientation, while massive infrastructural investment in water management and transport infrastructure is needed. Rural markets are characterized by weak farmer access to market information, limited integration along VCs, low levels of value addition, and continued dominance by state- owned enterprises of some commodities and markets, notably export markets.
6. These business, market and quality constraints, combined with an underdeveloped processing sector, represent a very significant loss of investment, revenue and employment opportunities, while seriously constraining farm profitability. With higher rural labour wages and an increasingly scarce natural resource base, the agriculture sector urgently needs to further diversify production to higher-quality products, promote value addition and processing, and increase efficiency while ensuring resource-base sustainability.
7. Although use rights on 9 million hectares (ha) of agricultural land have been issued to 12 million households and 11.5 million land-use rights certificates (LURCs) approved, the land reform process is incomplete, requiring further investment in LURC issuance, land information systems and land-use planning and consolidation, and the incorporation of customary land tenure into collective land use rights, particularly for “residential communities” of ethnic minorities. Unsustainable natural resource use, particularly of water and in the forestry sector, leads to problems of water scarcity and land degradation, including saline intrusion and loss of biodiversity and flooding. This is amplifying vulnerability to CC and natural climate hazards, which are increasing in frequency and severity. These constraints are compounded by the limited capacity of supporting institutions, particularly at provincial and lower levels.
8. In the period 1993-2014, national poverty incidence declined from 58.1 percent to 17.2% in 2014
49., lifting some 40 million Vietnamese people out of poverty. Rural poverty incidence over a
similar period fell from 66.4% to 22.4% in 2012. Poverty is now predominantly a rural phenomenon: rural people comprised 91 % of total poor people in 2012 a figure that has shown little decline since 1993 when it stood at 95%. It is of particular concern that ethnic minorities, who represent just 13% of the total population, account for almost 30% of poor people, however, poverty rates vary significantly among ethnic groups. Factors for the higher incidence of poverty among minority peoples include: lower enrolment in primary education and earlier departure from formal education; lower quality of endowments in community, educational or physical assets and lower returns on assets; location in isolated, less endowed, more disaster-prone areas; lack of social, physical, human and financial capital; greater dependence on agricultural sources of income; reduced access to employment opportunities and lower received wages; social constraints on the transition from communal to market-based land tenure systems; inability to speak the majority language, i.e. Kinh Vietnamese; and negative stereotyping of minority communities.
9. Women, particularly rural and ethnic women, continue to be disadvantaged in terms of the nature of opportunities and quality of resources available to them, despite the passage of gender equality legislation. Women are overrepresented in economic sectors that are vulnerable in times of economic downturn, including the informal sector, and still lack equal access to land tenure (women hold just 19% of Land Use Right Certificates) and to agricultural credit and technologies. Despite Viet Nam’s progress towards educational equity, girls are more likely to drop out of school as a result of the demands of domestic work. One fifth of ethnic girls have never attended school and, in secondary school, lag behind their Kinh counterparts’ enrolment by 10%. Inadequate knowledge of the benefits of breastfeeding and micronutrients, and lack of women’s time for child and personal care, appear to be the main contributing factors in stunting. Reduction of the persistently high levels of child malnutrition in ethnic communities and of the early departure of minority girls from the formal education system are specific concerns for longer-term poverty reduction.
10. The nexus between climate risk and poverty is of growing concern. The most socially vulnerable groups (women, ethnic minorities and the disabled) are likely to be disproportionally less
49
In 2010, a new poverty line was estimated by the General Statistical Office and World Bank that better reflects living
conditions of the poor. Based on the revised poverty line (equal to VND 653,000/person/month or $2.25/person/day,
APIF 2005) and updated monitoring system, the national poverty rate in 2010 was 20.7 percent vs. an official poverty
rate of 14.2 percent in 2010 using former MOLISA urban and rural poverty lines of VND 500,000/person/month and
VND 400,000/person/month, respectively.
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able to adapt to CC. They are exposed to greater risk, given their frequent direct reliance on agriculture and the natural resource base for their livelihoods, their greater exposure to natural disasters and their lack of assets and capital to recover or to shift to alternative livelihoods, and their susceptibility to climate-related health problems.
11. Past Performance of the IFAD Portfolio. The 2011 IFAD Country Portfolio Evaluation (CPE) found overall performance of the country programme to be satisfactory, particularly in terms of support for decentralization, capacity-building, participatory planning, gender mainstreaming, small-scale infrastructure, development of savings and credit groups (SCGs), and improving rural livelihoods through production for markets. The CPE found that the country programme has had a positive impact on household income and assets, particularly through the women-centred savings and loan programme, increased levels of agricultural productivity, and investment in livestock and improved animal health services. The impact that the country programme has had on the quality of women’s lives and empowerment is positive, while vocational training has been important for income diversification and promoting non-farm employment for rural youth. In terms of efficiency, much has been achieved with regard to Project implementation and management, capacity-building at the provincial, district and commune levels, planning, coordination, monitoring and evaluation (M&E), and direct supervision and implementation support. The CPE noted that in every province in which IFAD has been active there is evidence of a significant reduction in levels of poverty.
12. The CPE also pointed out the need for a holistic approach to the continued development of ethnic minorities in upland areas. There is a need for a strengthened market oriented approach, more comprehensive geographic coverage, a more favourable credit environment for smallholders, more strategic knowledge management, strengthening of partnerships, increased counterpart funding by the Government, and a strategic approach to the conservation of natural resources and the response to CC.
13. Lessons. The key lessons from the on-going portfolio include:
(a) Application of participatory, market-oriented local economic planning processes in poor province needs:
(i) Coordination among agencies through Project steering committees and technical task forces;
(ii) Staff capacity to prepare and implement participatory market-oriented socio-economic planning processes and VC approaches; and,
(iii) Integration of market information and VC analysis in the market-oriented participatory SEDP process.
(b) Poverty targeting and gender mainstreaming under the market-oriented approach with market linkages can benefit poor rural women and men through:
(i) Selection and promotion of pro-poor VCs that create employment and relevant production, processing and marketing systems for poor people;
(ii) Farmer-to-farmer extension and increased use of appropriate technologies for adoption by poor farmers, particularly ethnic minorities;
(iii) Vocational training opportunities for poor households, targeting ethnic minorities and women; and,
(iv) Market-based infrastructure and improved connectivity in remote areas.
(c) For the empowerment of ethnic minorities, and particularly ethnic women, engagement in community decision-making, representation in local institutions, off-farm employment opportunities, women’s land-use entitlement, and women’s SCGs for investment in improved agricultural productivity, livestock production and animal health have proved to be successful.
(d) The voluntary development of CIGs can promote the transition from subsistence- to commodity-oriented production and serve as a foundation for poor people to cooperate with better-off groups and private business. Improved collaboration with mass organizations, such as the Viet Nam Farmers’ Union (VFU) and VWU, and with key farmers in facilitating CIG development has been shown to work. CIGs with access to credit and women’s SCGs have been most successful in this context. Lessons learned from IFAD’s partnering with the private sector through CIG agreements are detailed in Appendix 3, Annex 1.
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(e) Private stakeholders and service providers drive the development of markets, VCs and investment in agriculture production and processing, including in poor areas, where:
(i) Legislation and policies are in place that enable the private sector and strengthen competitiveness and transparency;
(ii) Capacities of province and district staff for private-sector promotion are available;
(iii) Access to finance, skills and market information is possible.
(f) Partnering with the small- and medium-scale private entities can impart much-needed technologies and skills to smallholders – in turn opening markets to them. Lessons learned from IFAD’s partnering with the private sector through APIF agreements is detailed in Appendix 3, Annex 2. Experiences from 3PAD supported APIF investments in Bắc Kạn are detailed in Appendix 3, Annex 3.
14. With regard to CC and disaster risk management, relevant lessons from local experience include:
(a) Policies to adapt to CC need to be focused on poor and vulnerable people;
(b) Adaptation to CC in high-risk, marginalized communities should target “no regret” approaches, i.e. those that have little additional cost in enhancing livelihoods, sustainable agriculture and poverty reduction;
(c) As the poor are the most vulnerable to climate risks, emphasis on improving their incomes is of itself a viable climate-risk adaptation strategy;
(d) Capacities of agricultural and water systems to cope with current weather variability must be enhanced, while remaining sufficiently flexible; and,
(e) Increased long-term investment in agricultural knowledge and dissemination is important in supporting farmer adaptation to CC.
15. The PCR for the DBRP in Cao Bằng attributed the project’s success to (i) the high level of commitment of the PPC and line agencies in the decentralization of resources to poor communes as investment owners as well as in adopting and institutionalizing the MOP-SEDP into the existing local agencies; (ii) innovative approaches introduced from the DBRP with good technical assistance from the LuxDev TA; (iii) effective support for leading enterprises in improving their competitiveness, product promotion and market expansion as well as in connecting them with the CIGs along VCs; (iv) systematic support to the CIGs, especially concerning their annual performance assessment and classification, building stronger linkages with businesses in contract-farming, building capacity for all three parties (enterprises, CIGs, and CIG support group), and better integration of group saving approaches. Besides these key factors, the project would have been more effective if; (i) the project focused on fewer participating districts; (ii there had quicker decentralization from project start up; (iii) pro-poor value chain development focused more on the “actors” in nodes along the VC processes; (iv) earlier and more effective establishment of the VC management unit; (v) a manual for proper management of CIGs was introduced from the outset; and (vi) formation of a social fund through WSCG as a stepping stone for the poor to gradually approach the financial services market instead of the credit line through VBARD.
16. Regarding capacity building and training, DPPB lessons include: (i) capacity building of district and commune level Project staff was a key success factor; (ii) training needs assessments and subsequently customized practical "real-life" training materials improve trainings dramatically, in contrast to scientific lectures; (iii) TOT approach engaging distinguished village members and key farmers as trainers allows outreach to non-Kinh-speakers; (iv) timing of all farmer trainings need to be planned along with view on planting and harvest cycles.
17. Regarding production support, DPPB lessons include: (i) all support should be conditional in terms of investment in improved livelihood and contribution of beneficiary resources; (ii) production models by Project need to be replicable and profitable among target groups; (iii) new technologies should be accompanied by related technical training; and (iv) extension service should be demand driven and engage alternative extension agents.
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Table 1. Key DBRP Results
Key Indicator DBRP Result Lessons for CSSP Design
Percent reduction in
poverty rate in project
districts
Reduced from 49% (2010) to 31.6%
(2013) in project district population
CSSP continues IFAD focus on
agriculture-led poverty reduction, targeting
the poorest households
Reduction in the
prevalence of child
malnutrition (w/h; h/a;
w/a), by gender (children
below the age of five)
By 2014, the proportion of project
children suffering from chronic
malnutrition (too short for one’s age)
was 38.9%, lower than that in 2011
(44.2%) and 2009 (56.3%), and also
lower than that of non-project
children (40.6%).
Child nutrition remains a serious
development issue in Bắc Kạn and Cao
Bằng, and upland Viet Nam in general.
Given the strong community awareness of
child malnutrition impacts and their
solution, the CSSP can directly influence
malnutrition through stronger economic
growth.
Up to 500 CIGs in 10
project districts in Cao
Bang formulated. At least
70% of poor households
participated, by types of
business and production
until 2012
Average revenue of the poor has
significantly improved, especially for
a CIG household with VND 10.7
million in 2013 from crop production
(compared with VND 6.2 million for
non-CIG households) and about
VND 15 million from animal
husbandry (68.5% higher than that
of non-CIG households, only VND
8.9 million)
Grouping farmers and linking them to
markets is an effective, efficient and
sustainable mechanism for raising farm
household income, including for poor
households. Market connection through
value chains further enhances this
process.
CIF construction
145 Km of road
30 irrigation schemes
Two rural markets
2 water supplies
5 electricity schemes
CIF investment in irrigation
schemes showed an h EIRR of
50.3%, while savings associated
with force account procurement
across 64 small scale infrastructure
schemes created savings of
between 29.8% and 236.4% (for
concrete roads).
Community driven infrastructure
investment implemented through force
account procurement provides
considerable cost savings, income for poor
households and increased community
ownership. Investing in vocational training
to boost force account procurement
benefits the poor and rural youth.
At least 1000
households, CIGs and
MSMEs in the province
have access to long-,
medium-, short-term
loans until 2013 (by
gender)
Financial access for poor
households to the project credit line
VBARD has been not successful
due to high interest rates and
collateral requirements
The IFAD project model of developing WU
managed WSCGs with a longer term view
to building an MFI is a more practical and
sustainable mechanism for delivering
credit to poor rural (and ethnic)
households in Viet Nam.
18. The 3PAD project was fully disbursed on time, with a higher beneficiary contribution than originally planned. The PCR for the 3PAD project in Bắc Kạn found that the project approach and strategy of creating the institutional, investment, technological and sociological frameworks necessary to achieve sustainable and equitable poverty reduction and improved livelihoods of the rural poor in Bắc Kạn, upon which the CSSP design is based, fitted well to the national and provincial policies and programs. Project relevance, financial management, efficiency, effectiveness and impacts were all rated as satisfactory. The project sustainability was rated marginally satisfactory due to: (i) the lack of sustainable financial mechanisms to maintain community based forest management committees at the village level; (ii) an insufficient provincial policy base supporting market-based LF2F extension services; (iii) weak leadership of a significant number of CIGs and inadequate FA and WU support; and (iv) the need for further investment in the LWU in support of WSSG group management.
19. Key lessons identified by the PCR included: (i) the original project design was focussed on agro-forestry development for sustainable poverty reduction and lacked appropriate instruments to
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promote agribusiness through market and value chain development; (ii) for decentralization to be effective it must be comprehensive, not only concerning implementation arrangements but also timely budget allocation, local empowerment and regular supervision; (iii) sustainable natural resource management can only be achieved, sustained and replicated if the introduced practices bring local users both immediate and long-term financial benefits; (iv) sustainable and effective pro-poor CIGs require voluntary establishment, competent, business-oriented group leaders, feasible business plans and regular support from responsible agencies; (v) output-based service contract should be based on practical beneficiary training needs and be provided by competent trainers either from the public agricultural extension system or through LF2F services; (vi) an effective APIF model requires competent lead firms with good business models relevant to local agricultural potential smallholder farmer capacity and adequate government support; (vii) the VSCG model works well when there is a clear vision and roadmap and appropriate, early VWU capacity development; and (viii) effective project management requires competent managers, good government human resource policies, particularly concerning staff retention, and an effective M&E system from project inception.
Table 2. Key 3PAD results
Key Indicator 3PAD Result Lessons for CSSP Design
At least 15 per cent reduction in the number of poor households in project area
27.5 per cent reduction in the number of poor households in project area
CSSP continues 3PAD focus on agriculture- and agroforestry-led poverty reduction, specifically, but not exclusively targeting poor and near poor households
5 per cent reduction in the prevalence of child malnutrition (w/h; h/a; w/a), by gender (children below the age of five)
5.2 per cent reduction in child stunting
Child nutrition remains a serious development issue in Bắc Kạn and Cao Bằng, and upland Viet Nam in general. Given the strong community awareness of child malnutrition impacts and their solution, the CSSP can directly influence malnutrition through stronger economic growth.
A 20 per cent increase in the household asset index of poor and ethnic minority households in the project area
The project achieved a 26.1 per cent improvement in the household asset index of poor and ethnic minority households in the project area
Improved agriculture and agroforestry production and productivity can lead to wealth accumulation in the project area. Careful SIP analysis understanding of CC impacts and participatory socio-economic development planning are essential elements of sustainable improvements in agriculture production and productivity and value chain linkage, and will lead to poverty reduction and wealth accumulation
At least 15 per cent of households in project communes experiencing improved food security
The project achieved a 72,2 per cent improvement in project communes experiencing improved food security
See above
Annual income per capita within project districts increases by 20 per cent
The project achieved a 27.5 per cent improvement in per capita income in the project area.
As above
Selected other indicators
Forest land use plans are completed for at least 80% of production forests in project communes.
The project achieved 124 per cent of its target
Forest land and forest use rights allocation to poor and women headed households is strongly demanded and can have a significant impact on poverty reduction a
Beneficiary satisfaction The project achieved an 85% Communities empowered to self-manage
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with agro-forestry technical services and investment support increases by 25 per cent.
improvement in beneficiary satisfaction
project resources show a high level of ownership and commitment.
At least 50 good farmers become trainers and provide services
The project eventually trained and deployed 106 lead farmers, who were effectively employed by CIGs and other farmer groups
LF2F is a highly effective mechanism for technology transfer and should be institutionalised in the project area.
At least 192 infrastructure schemes completed and operational
The project completed 241 infrastructure schemes
MOP-SEDP driven infrastructure development is a high community priority and can contribute significantly to household wealth and market access.
At least 15% of poor households within the Ba be GEF project area benefit from a pilot PES p
100% of poor households in the GEF project impact area benefitted from community-based PES programmes
Inter-community PES payments can be an effective environment measure and will be used to protect water supply in new irrigated areas under the CSSP>
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Annex 1: Lessons learned: Co-investment with farmers
The guideline: "Competitive Small Grants" (CSG) provides the procedures for farmer co-investment. The aim is to introduce productive and sustainable agricultural technologies and practices in poor rural areas. The poverty reduction impact is direct, and sustainability is high as the poor stakeholders are given the accountability and resources for value chain upgrading. Further, the methodology of competition between household proposals enables a learning process for investment planning.
Practical lessons have emerged for a more efficient implementation of farmer co-investments. Following was learned during MTR mission in Tuyen Quang, Ninh Thuan and Gia Lai provinces:
Assessment of the first co-investment competition round should take place prior to second, third and possible further calls for competition. The assessment should assess the competition process weaknesses and strengths and propose revisions for the coming rounds.
Capacity of farmer groups is crucial. Prior to a grant competition, the Project needs to identify farmer capacity levels at the target communes, and accordingly simplify the grant proposal templates to realistic complexity, and organize continuous and comprehensive investment planning support to the farmer groups.
Joint ownership and management of assets by farmer groups need to be agreed upon in writing. The groups need to plan for equal sharing of investment benefits to the group members.
Farmer contribution requirement to the co-investment potentially hinders the participation by poorest households. To allow participation of the poor, projects should encourage establishment of mixed farmer groups between well-off and the poor. Project investment should prioritize mixed groups where all contribute as possible to their capacities, in cash and in kind.
Group revolving funds. In addition to the usual capital investment (e.g. machines, buildings, training), the co-investment can also support working capital for initial input materials such as seedlings and fertilizers. However, by nature such investment tends to provide benefits for only one harvest season. To retain the benefit for a longer period of time, such working capital investment should form the basis for a revolving fund mechanism. The method is that individual members repay their respective portions back into the group’s owned and managed revolving fund. The terms and conditions are decided by the group. The potential uses (working capital and capital investment) of a farmer co-investment illustrated:
1. Initial input
materials for
improved production
2. Machines,
buildings and other
physical investment
3. Training for
improved practices
and efficient use of the
investment
LONG TERM BENEFIT
ONE-OFF INVESTMENT
SHORT TERM BENEFIT
REVOLVING INVESTMENT
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Annex 2: Lessons: Co-investment with enterprises The IFAD Vietnam guideline: "Competitive Business Grants" (CBG) describes requirements and procedures for competitive enterprise co-investment programme. Co-investing with an enterprise aims at two development targets: (i) increased and better supply opportunities for rural farmer households, and (ii) increased and better jobs at the enterprises. Strengthening the enterprise to have higher production volumes and to become more profitable will increase the livelihood impact at the household level and ensure sustainability of the achievement.
Further to the co-investment procedures as per the CBG guideline, some practicalities require special attention. Following are some key lessons learned from APIF investments in Bac Kan:
Management responsibilities and rules of a co-investment scheme need to be agreed in detail and made fully transparent to all stakeholders. Any misinformation will quickly influence the Project reputation among potential private sector partners, making implementation difficult.
Available land for enterprise processing and/or storage units need to be identified, if not already available. As part of co-investment agreement, the details of a specific land area need to be cleared with the relevant provincial authorities, including all related costs and land use.
Procurement will be done by the enterprise, according to sound commercial practices and in line with the Project approved enterprise co-investment manual. Vietnam public procurement law need not to be followed when private sector partners implement the co-investment.
The ownership of assets by the co-investment need to be fully clarified from the beginning of the partnership agreement. In principle, the co-investing enterprise is responsible for all assets management and the full owner of all its own contribution to the sub-project. The Project's contributed co-investment is implemented and managed by the enterprise, and procured assets will be moved to ownership of the enterprise when the agreed commitments are completed.
The disbursement of the Project contribution to a co-investment is made as advance payments to enterprise bank account. All advance payments need to be scheduled in the co-investment agreement per work plan milestones. The payments per investment should be at least two, preferably three or four, with most of the enterprise financing scheduled in the beginning of the work plan. The detailed schedule always depends on the nature of the investment. Below a typical example.
1. USD 40 000
USD 70 000 invested by the project, USD 120 000 by the enterprise
2. USD 75 000
3. USD 75 000
CO-INVESTMENTS SCHEDULED IN THREE TRENCHES:
100% private sector financing
50% private sector financing
50% project financing
50% private sector financing
50% project financing
MILESTONE 1
ACHIEVED
MILESTONE 2
ACHIEVED
ALL TARGETS
ACHIEVED
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Annex 3: Inspiring experiences: Bắc Kạn APIF Co-investments
Ginger production, drying and trading
Lead Firm: Minh Be Agricultural Product Exporting and Processing Company
Project description: Minh Be Company invests in storage and drying facilities and provides support for farmer inputs and capacities in ginger production in Pac Nam.
Investment budget: VND 10,056,348,000
+ Private contribution: VND 5,956,348,000
+ APIF co-investment: VND 4,100,000,000
Cooperation model:
Seedlings and trainings Fresh Ginger
Supply of fresh ginger Dry ginger
Key achievements:
- 528 HHs (including 166 poor, 66 near poor) received seedlings and training 2012-13
- Between 2013 and early 2014, the LF purchased 133.35 tons of ginger from 245 HHs in Pac Nam (including 119 poor, 39 near poor)
- Construction of a facility for ginger processing and trading including storage space, access roads, loading area and a power station
- The households including the poor gained incremental average income of 6,150,477 VND per HH per ginger harvest in 2013
Ginger CIGs Minh Be
Company
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Cannas starch and vermicelli production
Lead Firm: Hong Ha JSC
Project description: The Hong Ha JSC invests in facilities, processing equipment, procures cannas roots from local farmers and provides input materials and production equipment for farmers in Na Ri.
Investment budget: VND 19,165,000,000
+ Private contribution: VND 14,165,000,000
+ APIF co-investment: VND 5,000,000,000
Cooperation model:
Fertilizes, equipment Cannas noodles
Supply of cannas roots Cannas starch
Key achievements:
- In 2013, the LF purchased 3000 tons of cannas roots from 511 households (including 92 poor, 27 near poor) in Na Ri
- In 2014, the LF signed procurement contracts and provided fertilizer to 405 HHs (including 108 poor, 19 near poor) in Na Ri
- Construction, installation and full establishment of full operations of the processing plant for cannas starch (grinding, filtering and drying systems)
- The households including the poor gained incremental average income of 3,414,736 VND per HH per cannas root harvest in 2013
Cannas CIGs Hong Ha JSC
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Poultry production and trade
Lead Firm: Lan Thieu Poultry Facility
Project description: The Lan Thieu Poultry Facility provides inputs and technical support to farmers to raise chicken and purchases the grown chicken from the households.
Investment budget: VND 1,387,000,000
+ Private contribution: VND 774,000,000
+ APIF co-investment: VND 604,000,000
Cooperation model:
Chicks, feed, meds, support Chicken meat
Supply of poultry Eggs
Key achievements:
- 150 farmer households (including 21 poor and 33 near poor) received 200 chicks each and support for purchase of feed, equipment, medicine and technical trainings.
- Lead firm purchased 18 tons of chicken from participating households during the beginning stage (65,000 VND per kg)
- Incubator facility (15,000 eggs/batch) established and operational
- The households including the poor gained incremental average income of 8,620,000 VND per HH per batch of 200 chicken (max 3 batches per year)
Chicken
raising HHs
Lan Thieu
Poultry Facility
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Appendix 4: Detailed Project description
Introduction
1. The CSSP is to be aligned with and support the implementation of national policies and
strategies. Specifically, the Project will support:
MARD’s Tam Nông strategy on Agriculture, Farmers and Rural Areas and its Agriculture-
Sector Development Plan at commune-level to complement investments and integrate
CC response;
Decision 158/2008/QDTTg on the NTP-RCC and MARD’s Action Plan Framework for
Adaptation to CC in the Agriculture and Rural Development Sector through the training
and development of human resources to respond to CC challenges and create
development opportunities, awareness raising and the development of specific
programs/projects in response to projected impacts through the CBA programme
The National Program on Community-based Disaster Risk Management to 2020
(1002/QD-TTg), through capacity building for local government staff at all levels on
managing and implementing; developing participatory community-level hazard and
vulnerability maps, integrating CC concerns and; small-scale works for disaster
prevention, response and management in the community.
Decree No. 772015ND-CP prescribing medium-term and annual public investment plans,
effective on 1st September 2015
Strengthening the national SEDP process to make it more participatory, climate adapted
and market oriented
Project area and target group
2. The Project will support development in 35 communes in Ba Bể, Na Rì, Ngân Sơn and Pác
Nặm districts in Bắc Kạn province and 35 communes in Hà Quảng, Nguyên Bình, Thạch An and
Thông Nông districts in Cao Bằng province. In two communes in Bạch Thông district in Bắc Kạn
province the Project will support the development of tangerine VCs. These districts have been
selected because of their relatively high levels of rural poverty, their production/processing potential,
access to rural infrastructure and markets and because they form the hubs of nascent rural industries
in Bắc Kạn and Cao Bằng (herbs and spices, tubers, fruits, livestock, bamboo and other timber
products, etc.) whose VCs reach into more remote upland communities. Ethnic minorities form the
majority in all Project districts. Commune selection was based on, inter alia, (i) poverty rate;
(ii) vulnerability to CC and natural disaster; (iii) commitment of leadership; (iv) potential for
development of pro-poor VCs; and (v) level of on-going support projects. Project communes will
include those that are market-linked and other, remoter communes that can be linked through VC
development.
3. Project Target Group. The Project target groups are:
rural poor households with land and labour, including household enterprises;
unskilled employed rural people;
rural people lacking production land but having business acumen and desire; and
key farmers who have the skills to promote commercial agricultural production.
4. Other participants who will benefit from the Project include (i) government officials empowered
to support market-led growth; and, (ii) private market and VC agri-businesses that find common
interest in promoting viable pro-poor products and services.
5. Gender: Poor women and women-headed household face significantly greater obstacles in
escaping poverty. These include specific obstacles to their participation in commercial activities,
including a general lack of business planning, farm management and technical skills, less access to
factors of production, and time constraints imposed by cultural and domestic demands. While
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agriculture and forest land use rights have been widely allocated, until recently, they were issued in
the name of the male household head, limiting women’s use of the title right for credit application. The
Project will implement specific measures to ensure women’s participation in relevant activities,
including (i) ensuring women’s participation in the underlying MOP-SEDP planning process through a
minimum 30 per cent women’s representation on VDBs and CDBs; (ii) requiring at least 50 per cent
women’s participation in village-level MOP-SEDP discussions and decision meetings; (iii) establishing
a forest land and forest use allocation process that (i) prioritises women-headed households; and
(ii) amongst other participating poor and near poor households, requires the signature of both
spouses on forest land and forest use certificates; (iv) requiring a minimum 40 per cent women’s
participation in CIGs and the strong promotion of female lead farmers under the LF2F programme;
(v) enabling at least 9,600 women to benefit from access to loans under the WSCGs programme and
the empowerment of the VWU to manage a sustainable and scalable MFI in each province; and
(vi) promoting APIF-generated smallholder farmer contractual agreement targeting poor and women-
headed households with contracts jointly signed by both spouses where applicable.
Development objective and impact indicators
6. The Goal of the Project is: Contribute to sustainable poverty reduction in Bắc Kạn and Cao
Bằng. The Development Objective is: Sustainably improved income and reduced climate
vulnerability of poor and near-poor farm households in targeted Project communes.
7. The impact indicator at the goal level will be:
20% improvement in Project commune poverty reduction above average non-Project
provincial commune rate by Project-end for 16,000 households considered poor and near
poor in Project area (differentiated data for poor/near poor, ethnic minority & women-
headed households).
8. The main impact indicators at the development objective level will be:
20% improvement in household assets ownership index above non-Project provincial
commune average by Project-end for at least 30,000 households considered poor and
near poor in Project area. (differentiated data for poor/near poor, ethnic minority &
women-headed households).
At least 14,000 poor smallholder household members whose climate resilience50
has
been increased by 30% (gender and ethnic minority disaggregated).51
Project outcomes
9. The Project will have three main outcomes: (i) Provincial participatory planning institutionalised;
(ii) A greener agriculture future; and (ii) Profitable farms linked to finance and markets. There is also a
Project Coordination component.
10. These outcomes and outputs will follow sequenced, parallel implementation routes. Building off
a Strategic Investment Plan (SIP) that identify profitable value-chain development pathways, and an
updated Provincial CC Action Plans and associated knowledge dissemination Project, the CSSP will:
(i) empower communities and public institutions to develop commune and district-level climate-
adapted MOP-SEDPs that holistically align climate-adapted NTP and Project investments with
profitable commodity market and VC opportunities; and (ii) through the implementation of those
investments, assist communities of smallholder farmers and agri-businesses to associate in various
50
a resilient household is anticipated to exhibit, inter alia, the following characteristics: i) diversified livelihood and
income streams; ii) improved natural resource and risk management based on better access to knowledge and
adoption of CCA land and water conservation practices; iii) membership of social networks such as Common Interest
Groups (CIGs) and Saving and Credit Groups (SCGs); iv) ability to access credit; v) protection from some climatic
hazards as a result of small-scale community infrastructure; and vi) direct engagement in village and commune level
planning, and influence on provincial financial allocations. These criteria will, amongst others, be developed as a score
card to measure change. 51
Indicator from ASAP
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ways to take best advantage of those opportunities and to co-finance their development. These
pathways will merge from the second Project year onwards.
Outcome 1: Province-based participatory planning institutionalised.
11. This outcome will ensure that: Legislated provincial socio-economic and commodity
development planning is holistic, participatory, climate adapted and market oriented. The indicators
for successful outcome implementation will be:
At least 80% of provincial communes and districts prepare medium-term climate adapted
MOP-SEDPs;
12. This Outcome, which underpins Outcome 2 and Outcome 3 results, will, building off a
strengthened SEDP process, provide the capacity building, analysis and services required to reinforce
private sector development of commodity-based VC investments that engage poor upland
households. The outcome has three outputs: Output 1. Strategic investment plan; Output 2. Climate
change adaptation plan; and Output 3. Climate-adapted, participatory market-oriented socio-economic
development plans.
Output 1. Strategic Investment Plans.
13. In the first six months of the Project, the PPCO Commodity and VC Development teams,
supported by international technical assistance, will, through a mix of theoretical and case-based
training and resource allocation, capacitate DPI and DARD to conduct financial and economic
analysis of commodity and associated VCs in Bắc Kạn and Cao Bằng provinces and to provide
sustainable technical support to Bắc Kạn and Cao Bằng agro-industry. An immediate output will be at
least six Provincial PPC approved commodity-based VC Strategic Investment Plans (SIP) in each
province, for integration into commune and district MOP-SEDPs. An empowered DPI/DARD with
PPCO support, will, subsequently: (i) support the integration of VC development in the MOP-SEDP
programme; (ii) provide technical support to VC development across the Project area; (iii) provide
mentoring to VC actors and co-ordinate their capacity development; (iv) coordinate with specialists in
specific VCs and in “climate proofing” agriculture production; (v) mentor contract negotiations between
farmers and other VC entities; and, (vi) facilitate business registration, conflict resolution and
mediation when required.
14. Based on the commodity chain analysis completed during Project preparation, the PPCO will
select sectors/sub-sectors having investment potential and that are in compliance with the Bắc Kạn
and Cao Bằng Provincial SEDPs. The selected sectors/sub-sectors will be chosen based on having:
(i) significant potential for involving rural households, particularly disadvantaged households, in
incremental production and job creation; (ii) available technologies for improved productivity and CCA;
(iii) reasonably assured national or regional markets; and (iv) potential for export and/or import
substitution. At least 50% of the total number of households benefiting from APIF supported
investments should be represented by poor, near poor or women-headed households.
15. The SIP process will involve 5 steps (See Appendix 4, Annex 1 for details):
background research on the chosen commodity/crop by reviewing websites and other
secondary sources of information concerning the commodities provincial and national
importance, environmental requirements, role in household economies, end-markets, etc.
This will be followed by primary research in the provinces through interviews, focus
groups, surveys and observation involving VC actors (farm households, processors, input
suppliers, advisors etc.);
using the aforementioned information, map the commodity/crop sectors in Bắc Kạn and
Cao Bằng. VC mapping enables the visualization of the product flow from conception to
end consumer through various actors, as well as the supporting markets and enabling
environment affecting the VC;
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prepare a table listing the structural and dynamic factors in the VC, and briefly describe
the current situation, opportunities, constraints and recommendations for addressing
those constraints including tangible How, Who and Financing;
prepare a financial and economic analysis of each key VCs detailing the estimating
potential incremental benefits from investment in their development, including, inter alia,
rates of return on investment, increased household income, number and type of
household benefiting; job creation; increased export; import substitution, etc.;
conduct a workshop bringing together key actors from various levels in the VC to vet the
findings of the analysis and discuss if the chosen strategy for increasing VC
competitiveness is valid.
16. The SIP will be used as the framework for calling agribusiness entrepreneurs to express their interest for investing in Bắc Kạn and Cao Bằng.
Output 2. Climate change adaptation plan.
17. This output will include one activity. Activity 2.1 Mainstreaming climate change adaptation into provincial Agriculture and rural development.
18. Activity 2.1 Mainstreaming climate change adaptation into agriculture and rural development.
The principal objective to be pursued under Activity 2.1 is to mainstream climate change adaptation
into Provincial planning and government’s principal programs for rural development and poverty
reduction52
. To achieve this objective, the program will support efforts by the Project provinces to
develop climate change adaptation as a cross-cutting theme that is integrated into the SEDP process
and, by doing so, ensure the post-project sustainability of program outputs (i.e., institutionalization). A
principal outcome and indicator of success will be a five year (2021-2025), climate-adapted MOP-
SEDPs approved at provincial, district and commune levels.
19. The main focus of the proposed support will be to improve the knowledge base and capacity
among key institutional actors to integrate evidence-based, climate change adaptation considerations
into policy, strategy and public (government) and private (value chain actors and enterprises)
investments. To accomplish this, the Project will take a step-wise approach as follows:
Organizational phase (first 6 to 9 months). At Project outset, an organizational phase will be carried out, consisting of a series of actions to:
o organize a Thematic Ad-hoc Group (TAG), presided by DPI, comprising high-level technical staff from the relevant line agencies (DARD, DoNRE, DOLISA) and their associated, specialized institutions. The role of the TAG will be both to conceptualize, orient and monitor the technical content and focus of the Project’s support. In addition, they will be charged with leading technical cooperation and exchange between the two Project provinces and with defining the operational mechanisms for coordination of planning and budgeting processes between their various agencies;
o garry out a national-level study tour for high-level decision-makers and key technical staff from the government institutions represented in the TAG to visit both the provinces most advanced in implementation of the CCAPs, as well as to visit the lead, national-level technical institutions that support CCAP development and implementation;
o contract with a national, lead CCA technical institution to provide technical assistance and support through the lifetime of the Project. A joint contract with both Project provinces will be preferable. See Appendix 4, Annex 9 for ToRs.
53
52
National Target Programs for New Rural Development (MARD), Sustainable Poverty Reduction
(MOLISA) and, Response to Climate Change (DONRE). 53
It has been proposed by MFI that this activity should be funded from other sources (technical assistance projects,
grants, etc.). Final preparation will have to identify and ensure the availability, in time and quantity, of these other
resources to ensure that proposed outputs are delivered and objectives achieved.
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o Under the direction of the TAG, (i) assess the current status of provincial CCAP implementation; (ii) develop a set of first draft maps of provincial-level climate change risks and vulnerability; (iii) develop first draft indicators for CC impact monitoring and; (iv) initiate a program of climate change awareness building for key institutional actors at all levels whose participation in subsequent implementation will be critical.
Development Phase (PY 1 and 2). This phase, to be completed by the beginning of Project year (PY) three, will comprise a two-pronged approach. One set of actions will support the provincial CCAP framework and consist of a “top-down” scientific-technical process in order to both refine and update the Provincial Climate Change Action Plans (2015-2020) and to down-scale the provincial-level medium-term climate change impact scenarios to Project district-levels. This latter will be accomplished, among others, through:
o district-level studies and mapping of climate change impact, vulnerability, risks and CCAP priorities;
o Project district-level participatory diagnostics of commune-level CC impacts scale and ongoing adaptation; and
o integration of the “bottom-up” inputs from district and commune-level of vulnerable areas, production systems, and populations resulting from the parallel work on climate change concerns into the MOP-SEDP process (see Output 3).
The other, parallel set of actions will be directed at the development of a provincial-level
methodology for the integration into sectoral MOP-SEDPs of commune and district
vulnerability mapping, zoning and community-level climate change adapted planning.
This will be accomplished through:
o a review of existing methodologies for commune-level climate change planning;
o the development of a district-level zoning methodology, based on commune-level climate change adapted planning;
o piloting and updating of a commune- level climate change planning instrument, building upon experience and prior work in the development of community-based, disaster risk-assessment methodology (MARD) as well as of other, more mature experiences nationally (e.g., CARE’s and OXFAM’s) and;
o provide capacity building and technical workshops for addressing climate change adapted planning integration into the SEDP processes at commune and district-levels. This will include: (i) key stakeholder progress reviews and evaluation workshops; (ii) learning and experience-sharing cross-visits by district and commune staff; (iii) field visits and study tours by DoNRE and DARD planning staff; (iv) systematization of processes, results and validation/updating of indicators and; province-wide dissemination of the provincial CCAP through publications, brochures, newspaper, radio programs and others
Additionally, during PY2, the systematic integration of climate change concerns into the MOP-SEDP planning process will be initiated. This will be supported by:
o extensive discussion with smallholder farmers concerning their perceptions of climate change in the project area and the adaptation strategies they are adopting;
o the development of training materials and methodological guides;
o training of trainers;
o dissemination of climate change impacts and adaptive technologies to smallholder farmers through publications, brochures, newspaper, radio programs and, others;
o cross-visits by district and commune staff and lead farmers and field visits and study tours for DPI planning staff; and
o the publication of results in web-based publications and journals.
Consolidation and Roll Out Phase. In PY3, efforts will begin for the province-wide roll out of the climate adapted MOP-SEDP planning process. The Project will support non-Project district: with:
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o studies and mapping of climate change impact, vulnerability, risks and, CCAP priorities; and
o district-level, participatory diagnostics of commune-level climate change impacts, scale and ongoing adaptation.
20. Climate-Adapted, Provincial MOP-SEDP (2021-2025). By PY4 most of the elements for
developing Bắc Kạn’s and Cao Bằng’s Climate-Adapted, Provincial MOP-SEDP for 2021-2025 will be
in place (e.g., the updated sectoral CCAPs, district-level impact/risk/vulnerability dimensioned,
prioritized and mapped, district and commune-level SEDP planning process capturing local needs and
demand for CCA support, information and learning systematized, etc.). Additional support from the
Project will thus primarily consist of assistance to consolidate and integrate the available inputs into
the new five-year climate adapted MOP-SEDP – primarily sectoral and cross-sectoral planning and
review meetings, technical assistance and, specific gap-filling studies. Output 2 activities are
summarised in Figure 1 below.
21. Implementation Risks. It must be noted that the proposed timeframe for organization,
development and roll out of climate change adaptation aspects of the Project is ambitious. If the risks
of slippage and delay are to be managed, it will require that:
the approach for roll out into non-Project districts for the mapping, vulnerability, risks, and priorities will be one where multi-District workshops – with grouping of Districts to be determined on similarity of climatic, biogeophysical, socio-economic conditions – will be used;
for the non-Project District, participatory assessments (of commune-level impacts, scale and ongoing adaptation) similar District groupings should be used with at least two well-structured workshops (lead by the national TA) of several days. Participants should be drawn from technical people (both public and private sector) and carefully selected lead farmers from principal VC CIGs, leaders from SCGs and enterprises to validate study outputs and fill in the “local knowledge”. The first workshop will be to produce a set of draft results that participants could take home and discuss with colleagues, neighbors, etc. A discussion guide should be developed for them to take home to facilitate and standardize discussions. After two or three months, the participants will return for the second workshop to finalize;
financing and budget must be guaranteed and controlled by the Project to ensure needed amounts, responsiveness and timeliness of outputs; and
DPI will have to be fully committed to the schedule and take a strong lead in ensuring it is met.
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Output 3. Climate-adapted, participatory market-oriented and results-based planning
22. This DPI-led output consists of two Activities: Activity 3.1: Strengthened public sector market
economy skills; and Activity 3.2: Climate adapted, market oriented socio-economic development
plans. Over the last six years, IFAD-supported projects have successful developed and piloted MOP-
SEDP processes in several provinces of Viet Nam, including in Bắc Kạn and, in particular, in Cao
Bằng, where the process is institutionalised at commune level. The CSSP will, supported by
empowered communities and public sector institutions, establish a climate-adapted MOP-SEDP
process across all communes and districts in both Project provinces. The PPCO MOP-SEDP planning
officers, supported by a national training institution, will empower the DPI to lead a Project in capacity
building for market-led development at commune and district levels, which will precede the
institutionalisation of MOP-SEDP process. These activities will commence in the Project-targeted
communes/districts and be subsequently rolled out to all communes/districts in Bắc Kạn and Cao
Bằng. The MOP-SEDP process will incorporate the results of the commodity-based SIP analysis
described under Outcome 1.
23. Activity 3.1. Strengthened public sector market economy skills. In Cao Bằng, where the MOP-
SEDP is already institutionalised at commune level, both commune and district staff have a sound
understanding of the market economy. This activity will assist Bắc Kạn government officials to
effectively support the provincial government’s market oriented development strategy. The capacity
building programme will provide public servants with the basic skills to implement results-based
planning, management, monitoring, reporting and learning within the framework of a market-based
economy. The primary target will be village leaders, elected officials of People's Committees and
People's Councils, Supervision Boards and technical cadres and members of the mass organisations
at commune and district levels; Concise, targeted training programs, delivered by competitively
selected public or private institution(s), will focus on, inter alia, understanding the market economy
and associated roles of government and the private sector, the economics of supply and demand and
impact of market competitiveness, the nature of public and private goods, privatization, the roles of
capital, labour and international trade, and the transition from a planned to a market economy. Gender
equality and environment management will be cross-cutting training targets delivered to government
staff in both Bắc Kạn and Cao Bằng. Staff in both provinces will also be trained in group organization
and leadership, participatory planning, and results based management including effective monitoring
and evaluation (M&E) and reporting and feedback to management decision making. Trainees will be
introduced to the VC SIPs developed under Outcome 1.
24. This training programme will be contracted to an academic institution in Viet Nam with
appropriate competencies in market-led economic development. With international technical
assistance (TA) support, the competitively selected training provider will develop the curriculum and
apply the training though a mix of in-province training courses and self-learning programmes including
internet-based information. The appropriate training institution will be identified by the Project
Preparation Boards (PPB) before Project start-up and contracted at start-up to initiate training within
6 months. Training will focus initially on government staff within the Project districts/communes and,
thereafter, be rolled out to all Bắc Kạn, and on a selective basis, Cao Bằng government staff at
commune and district level. Results will be assessed through the measurement of the establishment
of the legislative base, guidelines, tools and staff capacity for district and commune MOP-SEDP
implementation; Terms of reference for the training programme are detailed in Appendix 4, Annex 2.
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25. Activity 3.2. Climate adapted, participatory market oriented socio-economic development plans.
This DPI-led activity, supported by the provincial Political Schools, will build on the MOP-SEDP
process already institutionalized at commune level in Cao Bằng. At commune and district level,
initially in Project districts and then across the provinces, the Project will facilitate the integration of
commodity-based VC development (Outcome 1) and CCA (Output 2) into a participatory SEDP
process, The resulting climate-adapted MOP-SEDP process will engage relevant entities at the
village, commune and district level, including the effective participation of VDBs and private
enterprise, and be inclusive of all funding sources, including NTP=NRD, NTP-SPR and NTP-RCC.
Women’s representation in MOP-SEDP planning will be mandated. Through the MOP-SEDP process,
CSSP will assist the provincial DPIs to operationalise Decree No. 77/2015/ND-CP, prescribing
medium-term and annual public investment plans, together with the Vietnam Public Investment Law
2014 No. 49/2014/QH13.
26. The commune-level MOP-SEDP is a participatory process for establishing medium-term
climate-adapted, market oriented commune development plans that are informed by (i) villagers’
priorities; (ii) market information, (iii) climate adaptation, land use and disaster risk management plans
and (iv) orientation from higher government levels. The MOP-SEDP process will be built around
Decree No. 77/2015/ND-CP, which prescribes medium-term (5-year) and annual public investment
plans. It is expected that the MOP-SEDP process will be conducted intensively for each medium-term
planning period, with a lighter review mechanism for annual investment planning. The resulting
medium-term climate-adapted MOP-SEDP will comprise (i) a narrative including a medium-term
development vision; (ii) specific investment plans for market-oriented infrastructure and agricultural
enhanced production and processing; (iii) specific CCA and CBDRM actions/investments; and
(iv) corresponding planning tables. Before MOSEDP implementation, DPI will inform districts and
communes about the committed/available medium term and annual budget financing. Based on this
budget provision, the MOP-SEDP planning process will begin at the village level under the
coordination of the NTP-NRD-established VDB. VDBs in Bắc Kạn and Cao Bằng will be legislated to
include at least: 30% female membership and 30% membership from DoLISA registered poor
households. Village level MOP-SEDP meetings will be held at times suitable to women members of
the village and will require at least 50 per cent women’s participation. The overall responsibility for the
commune MOP-SEDP rests with the Commune People’s Committee (CPC). CSSP assistance will be
provided through district-based VC and Market Development Officers (VCMDOs) and by the PPCO
MOP-SEDP officers. The MOP-SEDP will be approved by the Commune Development Board under
the oversight of the Commune People’s Council (CPC). The planning process is detailed in Appendix
4, Annex 3.
27. The framework for integrating market orientation into the SEDP from the commune to the
provincial level will have the following elements:
capacity building in, inter alia, the market economy (see Sub-component 1.1), with
particular attention on village leadership and commune level public servants;
Work through existing NTP-NRD VDBs, ensuring equitable representation of women
(30%) and poor households (30%) on VDBs;
the incorporation of commodity chain planning and mentoring of the MOP-SEDP process
concerning market and VC development opportunities
empower VDB members to identify and analyse market and development opportunities
and to articulate their opinions effectively in the MOP-SEDP process;
directly involve agri-business entrepreneurs in the MOP-SEDP process;
integrate all NTP agriculture sector funding (New Rural Development; Response to CC;
Sustainable Poverty Alleviation) at commune level into the MOP-SEDP process;
28. In the medium to long-term, the major opportunity for achieving effective and durable pro-poor
responses to CC lie in synergistically combining concerns for disaster risk management and
adaptation to CC through local planning instruments and processes, i.e., the annual and medium-term
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MOP-SEDPs. As such, the CSSP, building on regional and national approaches, will, in Project
communes, pilot the development, testing, validation and replication of guidelines and tools to ensure
that local land use, infrastructure and economic planning processes for the MOP-SEDP are climate-
sensitive.
29. The CSSP will establish the climate-adapted MOP-SEDP process at district level, which is
expected to further empower the participatory planning process through higher level representation of
community-owned plans to the provincial level. This will be achieved through three tasks: (i) district
Financial and Planning Department (DFPD), DARDD, district Natural Resources and Environment
Department (DNRRD) and District Labour, Invalids and Social Affairs Department (DLISAD) heads, or
their deputies, will participate in the CPC MOP-SEDP decision meeting; (ii) the aforementioned district
department heads will be required to specifically address commune MOP-SEDP priorities in their
submissions to the District MOP-SEDP; and (iii) CPC chairpersons will participate in the DPC MOP-
SEDP decision meeting, representing commune and VDB interests. The alignment of the Project
MOP-SEDP approach with the recommendations of a recent review of decentralised planning in Viet
Nam is detailed in Appendix 4, Annex 10.
30. All aspects of the climate-adapted MOP-SEDP process at commune and district level will be
defined in support legislation passed by the Bắc Kạn and Cao Bằng PPCs in the first Project year
(PY1). A comprehensive MOP-SEDP guideline/manual will be developed, building off the current Cao
Bằng MOP-SEDP manual, and adapted to the needs of each province. The MOP-SEDP process at
commune and district level will be fully funded by the respective provincial administrations.
31. NTP-NRD National Coordination Office (NTP-NRD NCO). A USD 500,000 IFAD grant to the
NTP-MRD NCO in the Ministry of Agriculture and Rural Development, Department of Cooperatives
and Rural Development will be attached to the CSSP. The grant will be used to (i) pilot the integration
of Rural Value Chains into the NTP-NRD leading to the identification of International Financial
Institution (IFI) investment opportunities; (ii) prepare guidelines for NTP-NRD2, including, inter alia,
participatory planning result-based M&E; (iii) build capacity within the NCO and at provincial and
district level for NTP-NRD2 implementation; (iv) pilot the implementation of NTP-NRD2 funded
initiatives and (v) strengthen NCO Operations.
Outcome 2: A greener agriculture future
32. This outcome, which establishes the basis for climate-adapted green growth in the Project area,
includes two outputs: Output 4: Forest land and forest allocation, and Output 5: CIGs for climate
adaptation. The Government of Viet Nam (GoV) is committed to an ambitious “green growth” agenda
and to global carbon emission reduction. The CSSP will support this process through the promotion of
CCA technologies that provide significant mitigation co-benefits, as well as Projects for forest land and
forest use rights certification and rehabilitation that directly contribute to carbon sequestration. The
indicator for successful outcome implementation will be:
At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two
or more climate change adaptation technologies or practices
Output 4. Forest land and forest allocation
33. This activity will support the equitable (across wealth and gender groups) ownership and
efficient use of production forest in Bắc Kạn.
34. The four Project districts in Bắc Kạn include a forest area of about 209,700 ha representing
about 97 per cent of the total land area. Some 19,241 ha are classified as special use forests
including 9,000 ha in the Ba Be national park and 32,148 ha are classified as high value natural
protection forests mainly valuable due to their rich biodiversity. In total, about 41,159 ha are
designated protection forests mainly due to their importance for watershed protection, and some
168,510 ha are production forests. All of the three categories include natural forests, as well as
plantations forests and forest land without forest cover. A large proportion of the natural forest
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(154,723ha) is classified as regenerating forest or rock forests with tress (50,836 ha) mainly on
inaccessible limestone hill sides. Some 20,274 ha have been designated as plantation forest. Various
ownership and management arrangements are currently in place for the forestry land including
allocation to a State-owned enterprise (6,960 ha) and individual households (115,773 ha) for which
forest Land Use Rights Certificates (LURC), known as Pink Books (formerly Red Books), have been
issued by DoNRE, with accompanying forest use right certificates issued by DARD. A total of
87,796 ha of forest is still in the hands of the CPCs. This includes 56,006 ha of production forest land.
Therein the Project will target a large area of so-called forest land without forest, - 26,992 ha in the
production forest category.
35. While some of these forests are remote and relatively difficult to access, both types of forest
lands offer enough potential for a significant productive development and, if allocated to poor
households and communities, will provide a significant source of additional income.
36. The Project will create an asset base for future private sector investment in agro-forestry in Bắc
Kạn by assisting DoNRE and rural communities to implement a participatory forest land allocation and
forest use rights planning process leading to the equitable transfer of forest use rights (Pink Book) to
poor households and the development of medium-term forest development plans consistent with
Programme 30A and similar NTP-SPR programmes. Pink Books with joint husband/wife title will
significantly improve access to collateralized credit, especially for women, with women-headed
households also benefitting from specific targeting and prioritization under this output. Provincial
policies and administrative procedures governing forest land investment and use will be assessed,
improved and decentralized to the commune level and a system established through DOLISA to
monitor poor household forest access and use. It is estimated that about 6,800 poor and near poor
households in communes in Bắc Kạn Project districts will each receive, on average, 1.5 ha of
production forest land. The participatory forest land and forest use planning and allocation will be built
off experience gained through 3PAD. The underlying principles of the approach will include
compliance with National and Provincial regulations and policies, maximizing the participation of
households, the planning of forest land and forest use before land allocation, and ensuring equity in
resolving disputes and sustainable development practices. The capacity of the Project CPC in forest
land use planning and land allocation will be significantly enhanced. The process, which will be guided
by a manual detailed in the PIM, will be managed by DoNRE, with the inter-agency support of the
Forest Protection Department (FPD), DARD Forest Development Sub-Department (FDD), DARDD
and district Forest Protection Stations (FPS) for forest use rights certification.
37. A DoNRE/ADAR partnership will coordinate the process of allocating commune forest land and
forest use rights in Project districts to communities, households and enterprises, overseen by
Commune and Village Forest Management Boards (CFMBs/VFMBs) with balanced, trained gender
representation, bringing the activity of land use planning down to the village level. CFMBs will be
established in each commune under a Decision issued by the chairman of the commune people’s
committee (CPC). Members will include the Board Chairperson – Vice chairperson of the CPC,
commune forest rangers, agro-forestry staff of the commune and representatives of the FU and the
WU of the commune (no more than a total of 5 members from the commune). In addition, each CFMB
will include two members from each VFMB including one man and one woman. VFMBs will be
established in villages/hamlets managing at least 100 ha of forest land and be approved by the
Chairperson of the CPC. The VFMB will consist of the village leader, hamlet patriarch and
representatives of WU and FU with a total of 7 – 9 members, of whom at least 30% will be women.
Both women and men will be trained in community forest management and planning.
38. The CPC will be responsible to undertake Land Use Zoning on a 10 year cycle and Land Use
Planning (LUP) on a five year cycle. Land Use Zoning establishes land use purpose including the
three categories of forest land use purpose (production, protection and special use forest land) while
the Land Use Plan describes any planned changes in land use. The Project will bring the activity of
land use planning down to the village level and prepare village level LUPs as a prerequisite for forest
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and forest land allocation for each village. The capacity of the CPC in forest land use planning and
land allocation will be significantly enhanced.
39. DoNRE, through the PPCO, will contract a suitable mapping and design institution to collect
information, consult with land users regarding forest land boundaries, classify forest land use and
forest type to be allocated, and prepare cadastral maps for forest and forest land allocation and the
documentation required for the issuance of Forest and Land Use Rights Certificates (LURCs). The
processes will be guided by the Project Environment and Social Management Plan (ESMP) and
overseen by the Commune Councils and Commune Forestry Management Boards. The EIMP
process will address: (i) social risks related to ensuring equity and maximizing benefits to poor
households, women and ethnic minorities; (ii) environmental risks related to minimising damage to the
natural resource base and preserving biodiversity; and (iii) institutional un-stainability risks related to
inter-agency cooperation and the future rollout of the land use planning and allocation process across
the province. This programme will focus on, but not be limited to the forest classified land without
forest in the three districts that are currently under CPC management. MoNRE requires the following
compulsory steps for the participatory land allocation process: (i) information dissemination,
(ii) participatory survey with local “expert”, (iii) household applications for LURCs, and (iv) public
posting of results at the commune centre. The Project will adapt guidelines already prepared in Viet
Nam that will strengthen this process including early meetings at village level for information
dissemination, inclusive consultation processes, and appropriate involvement of women and poor
households in the decision making process. The technical service provider will be required to have at
least one staff member on site trained in Project participatory processes and social and environmental
safeguard issues. The main activities involved are:
preparation/ training of CPC staff and CFMB members in forest and forest land allocation processes;
village meetings to create awareness, disseminate policies/ guidelines, establish VFMBs and invite applications from households and community groups;
preparation of a draft plan for the forest and forest land allocation for each village, which will then be aggregates at the commune level;
village meetings to discuss the draft plans plus formal publicizing of the plans to receive comments;
plan finalization and documentation.
submission and approval by the CPC and the DPC.
plan implementation including boundary marking and preparation/issuing of formal forest land/forest use certificates (‘red books’) to communities, or if allocated to households, in the joint names of the husband and wife.
40. The Project will also build the capacity of DoNRE in Bắc Kạn and Cao Bằng to monitor forest
environmental outcomes through experiential training in participatory forest land use planning and
allocation, physical resourcing to improve mobility and field and information technology and funding
for participatory forest environment monitoring. Training programs will include participatory land use
planning and allocation; the application of new cadastral software and general computer training; and
the application of GIS/GPS technologies for forest land use planning and allocation.
Output 5. Common Interest Groups for climate adaptation.
41. This output, which will develop and promote CC adaptation technologies and processes that
provide mitigation co-benefits, will lead to: (i) at least 1,000 CIG in Cao Bằng province and 900 in Bắc
Kạn province with the capacity to implement profitable climate change adaptation technologies and
practices within a VC framework, with co-benefits for climate change mitigation; and (ii) forage
production integrated into farming systems, with co-benefits for soil fertility and stability. The output
includes two activities: Activity 5.1: Common interest groups for climate change adaptation and
Activity 5.2: Integrating forages into hillside farming systems.
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42. Activity 5.1: Common interest groups for climate change adaptation. The provincial policy in
both Bắc Kạn and Cao Bằng, which follows IFAD’s policy in Viet Nam, is that investments in
agricultural production should be financed by loans. At the same time, both the government and IFAD
agree that using competitive co-financing as an interim instrument to support productive projects is
acceptable where they play a catalytic role for innovative investment activities and serve as
demonstration facilities for new farming technologies and crops, particularly when operating with
disadvantaged minorities or when stimulating investment activity supporting CC adaptation. When
selectively utilised, these co-financed investments in new production systems also often provide
public goods in the form of environmental protection, while, at the same time, increasing the incomes
of participating households on a sustainable basis.
43. To support the introduction of new farming technologies, climate adaptation and DRM
strategies or new VC linkages, CSSP will, on a co-financing basis, support innovative investment in
sustainable, climate-adapted, commodity-based production systems by eligible farmer CIG, farmers’
cooperatives or lead farmers (not SMEs or other companies). Selection of farmers to be financed
should be based on a competitive mechanism. CIG co-financing will cover (i) initial capital investment
costs, (ii) upgraded farming inputs through revolving working capital mechanisms, and/or (iii) required
technical assistance. CIG investments must be linked to VC APIF investments identified through the
SIP process and incorporated into commune MOP-SEDPs.
44. The Project will support both gender specific and gender disaggregated CIGs. To be eligible for
the CSSP competitive co-financing, the membership of CIGs must, in aggregate at commune level,
include (i) at least 50% of members from DoLISA-identified poor households and (ii) at least 40%
female members. All supported CIG sub-projects, managed and owned either by the individual
members or as a group activity, must demonstrate sustainability beyond the initial CSSP assistance
and be linked to APIF financed VC development as detailed in Output 6. Activity 4.2 will be integrated
into the NTP-NRD CIG programme and implemented through NTP-NRD structures at commune and
district levels. CSSP will provide each Project district with a VCMDO, who will support the CIGs and
be responsible for the implementation of competitive co-financing in the district. All CIGs will receive
training in group formation and management and be familiarised with CSSP CCA and APIF outputs.
45. The maximum Project group grant value of USD 250 per member and USD 3,500 for one group
will cover up to 50% of the total cost of each investment, with beneficiaries financing at least 50%
including a minimum 25% in cash and the balance in kind. VBARD and especially VBSP and the
VWU expressed their willingness to participate with loans in this joint financing scheme, especially as
the Project co-financing will significantly reduce the loan-funded amount and associated risk The 20%
cash contribution by members/group is important to ensure the commitment to and ownership of the
investment by each beneficiary. The activity will help reduce barriers to male and female farmer
access to finance, by (i) reducing collateral pressure through co-financing and utilization of alternative
loan securities; and (ii) assisting CIGs to improve business plan quality as per banks' requirements.
The co-financing applications, and the subsequent co-financing contracts, must clearly define each
member share of the CSSP grant.
46. Up to 25 per cent of each CIG grant could be used by the group for procurement of technical
support services, including LF2F support coordinated by the provincial FUs. All such service provision
will be through standardised output based contracts between the service provider and the CIG. LF2F
advisors will be certified under a CSSP developed and FU managed training and certification scheme,
providing both technical and pedagogic skills. The Project will also provide “farming as a business”
management training to CIG and Women’s Savings and Credit Groups (WSCGs) members,
participation in which will be a condition of Project support to their respective groups. The farming as a
business training will build off existing training programmes in Viet Nam and the SE Asia region and
use contracted master trainers to train provincial FU trainers of trainers (ToT) who will train LF2F
farming as business service providers. This activity will, where practicable, be integrated into the
overall rural vocational training programme in Viet Nam.
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47. Implementation Arrangements. The overall responsibility of the CIG competitive co-financing
operations under CSSP will be with the CSSP Project Coordinator. At the provincial level, he/she will
be supported in the planning and supervision of the activity by the Commodity & VC Development
Officer (BDO) and other senior staff of the PPCO. At the district level and in the communes, the
coordination and implementation responsibility is with the district-based Business Development
Officers, who will work in close co-operation with the CSSP District Agricultural Section.
48. The processing and approval of the CSSP competitive co-financing to CIGs follows the already
functional procedures of the NTP-NRD CIG programme. At CSSP start-up, Project staff will, in a
proactive manner, inform the districts and communes of the CIG competitive co-financing sub-
component. After the focal commodity chains have been identified through the SIP process (Output 1)
for CSSP operations, the BDOs will have the main responsibility of informing the villages, CIGs and
cooperatives about the investments opportunities in these commodity chains and the competitive co-
financing support that CSSP will offer to successful applicants. The BDOs will also provide more
detailed information on the scheme objectives and rules to interested groups in the CSSP communes
and assist groups in the drafting of business plans and co-financing applications. They will also inform
the CIG members of different options of raising their own contributions from banks and available loan
schemes.
49. The CIGs and cooperatives will submit their co-financing applications to the Village
Development Board (VDB). After assessing them, the VDBs will submit the recommended
applications to the Commune Management Boards (CMBs). The CMBs will assess applications and
submit the recommended applications to the Agricultural Section of the DPC. The Agricultural Section
will review the applications and submit them to the District NRD Steering Committee for final approval
or rejection.
50. The above procedure will be applied during the first two semi-annual approval rounds of the
CSSP competitive co-financing, after which CSSP/IFAD will evaluate the performance of the scheme.
If the system functions smoothly at all level, the final approval of competitive co-financing will then be
decentralised to the commune level for the remaining part of the CSSP period.
51. All competitive co-financing will be disbursed by the communes to the bank accounts of
individual group members, following the division of funds included in each Co-financing Agreement. In
the case of group-managed activity (or group training activity), the funds will be disbursed to a group
account or the account held for the group activity in the name of two group leaders.
52. The benefiting group will submit a report of the Project implementation performance when the
co-financed investment has been completed. Continuous follow-up for the co-financed projects will be
provided by the BDOs and different types of CSSP missions. In cases in which a group or its
members do not follow the co-financing Contracts, the funding to the group will stop immediately and
the commune will request the repayment of all co-financed funds issued to the group. In the event that
a commune fails in their management and follow-up tasks in the competitive co-financing scheme, the
CSSP management is expected to stop the operations with the co-financing of CIGs and cooperatives
in that commune and re-allocate the funds to the other, better performing communes in the CSSP
target area.
53. While the aforementioned principles were agreed to form the core of the CIG competitive co-
financing investment procedure, the final Operations Manual, including eligibility criteria and detailed
co-financing processes, will be developed during 2016, to be ready when the actual implementation is
expected to commence in late 2016.
54. The household income benefits from CIG co-financing are expected to be substantial. The
number of directly benefiting households is expected, when calculated at an average co-financing of
USD 3,500 equivalent and average group size of 12, to be around USD 10,000 households.
Significant flow-on benefits will accrue from technology demonstration through innovative CIG co-
investments. As many of the on-farm investments are expected to follow tested methods for CC
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adaptation and disaster risk mitigation, the benefits for each household and community are expected
to be long-lasting and sustainable.
55. Activity 5.1 Exit Strategy and Scaling-up. CIG members often use a part of their grant to
establish a revolving element to finance ongoing working capital requirements or additional lending
rounds to the poorer group members. Such arrangements were established by CIGs under both the
DBRP and 3PAD are proving sustainable. At the same time, if successfully implemented, CIG grant, if
not rotated, can have a major demonstration effect in their implementation areas, which are, typically,
significantly impacted by both poverty and CC. This could encourage similar investments by other
funding agencies, including the government. Importantly, the inclusion of the financial institutions in
the scheme from the beginning aims at making them aware of investment opportunities of this type, to
finance innovative agricultural projects also in the future, increasingly from their own funds.
56. Activity 5.2: Integrating forages into hillside farming systems. Many farming systems in the
Project area “mine” soil nutrients and cropped areas can be prone to severe soil erosion. Forage
inclusion in farming systems, particularly leguminous forages, is possibly the most cost effective
approach to reducing these negative impacts. To ensure quick impact and longer term sustainability,
forage programmes require an ample seed supply. Many upland farmers do not understand the need
for improved animal nutrition and are disinclined to grow forage. The Project could alter this behaviour
by first focusing on developing selected forages as a very profitable seed crop, with the forage based
feed as a by-product. If the forage seed crop is grown close the home, farmers quickly appreciate the
labour reduction in forage based cut and carry feeding and its value as a forage is enhanced. Using
an approach of Project procurement of forage seed at competitive prices (but well below import cost)
and free distribution of small quantities of seed to interested farmers, the Project could quickly
establish a demand for low labour input forage technologies that integrate into local farming systems,
providing benefits in terms of animal nutrition, improved soil fertility and stability and reduced labour.
57. Short-term national and international forage specialists will conduct an initial assessment of
forage production opportunities in the Project districts in Bắc Kạn and Cao Bằng in order to identify
initial seed requirements and provide technical awareness training for DARD staff including through a
domestic study tour. Terms of reference for an international forage and forage seed advisor are
detailed in Appendix 4, Annex 4.
58. The Bắc Kạn and Cao Bằng DARDs, in collaboration with PPCOs and the national consultant
will adapt existing forage manuals to meet Project requirements, raise awareness amongst farming
communities and identify farm households and farmer groups prepared to establish home and village
forage tree and grass nurseries and participate in large scale, broad-based farming-systems-
integrated forage demonstration trials. Based on field trial results, the PPCOs will refine the seed buy-
back policy and regulations and train farmers in seed production, collection and storage.
59. Forage varieties not registered in the national seed catalogue, but that have already undergone
“distinctiveness, uniformity and stability” (DUS) testing in an International Union for the Protection of
New Varieties of Plants (UPOV) member country only require successful “value for cultivation and
use” (VCU) testing before registration in the Viet Nam national seed catalogue. VCU testing, which
can be done at provincial level, is required over three seasons for varietal registration, however, this
can be reduced to a single season if the variety demonstrates outstanding VCU properties and low
risk. The National Centre for Plant Testing (NCPT) and the MARD Bureau of Cultivation will, with
Project support, facilitate provincial VCU testing of new forage varieties prior to their registration and
multiplication. If, exceptionally, DUS testing is required, the Project will finance the NCPT to conduct
the test. Where forage varieties are subject to royalty payments, the project would negotiate those
payments with the registered owners, however, this is unlikely to be a constraint to the programme as
most of the relevant improved fodders are registered with Consortium of International Agricultural
Research (CGIAR) centres and usually available free for smallholder forage development.
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Approach
60. Appropriate forage development can substantially impact on the viability of the majority Bắc
Kạn and Cao Bằng’s smallholders, through more sustainable livestock development and cropping. It
can also address the broader issues of land degradation and CC adaptation through the introduction
of more resilient strategies and genetic material.
61. The forage initiatives are appropriate to smallholders regardless of holding size. On-farm
strategies require no financial inputs54
, and can be gradually expanded with family labour. There are
significant benefits for small livestock, including pigs and scavenging poultry, in terms of improved
productivity and reduced feed costs. The forage strategies enable an intensification of smallholder
farming systems, and strengthening of livestock/crop interactions.
62. The fodder development approach is based on perceived needs for such interventions amongst
stakeholders, and the experiences of successful programs with smallholders’ systems, and broad-
scale pasture improvement in similar environments elsewhere. It can support a quick shift towards
more sustainable and economically viable livestock enterprises, and can assist in developing
mechanisms to reduce pressures on fragile grazing areas.
63. Benefits may accrue in addition to improvement in livestock productivity. The more vigorous
legumes in grazing land improvement systems could reduce the severity of wildfires. Within cropping
systems, there are marked benefits to soil fertility from the inclusion of well adapted forage legumes,
with or without grazing. Dense swards of Shrubby stylo (Stylosanthes scabra), for example, have
shown some efficacy in reducing the incidence of some species of tick. Conspicuous forage
programmes can provide a convenient entry point for the promotion of other livestock management
interventions.
64. It is not practical to pre-test technical options within a conventional research mechanism. The
forage programme will be based on farmer-led and managed development. This approach has proved
to be highly effective in many similar development environments, with rapid gains achieved in many
countries including Nepal, India, Thailand, and Ethiopia.
65. The approach will encompass:
Quick start-up, involving a wide range of sites and a large number of communities/
individual farmers from the outset. This will rapidly define appropriate genetic material
and development interventions. (The environmental diversity demands such an
approach; extrapolating from a small number of sites is fraught with extreme risk).
Participation of numbers of diverse farmers has been highly effective elsewhere.
Using a wide array of genetic material for each strategy or agro-ecological situation. This
improves the prospects of identifying the most suitable material for a particular site,
reduces the risk of failure, and spreads the seasonal production. The approach will
generally include quick-establishing species, with those which are slower to establish, but
with high productivity or good persistence in the long term. It will, subject to local seed
registration regulations, also involve both commercial and pre-release material. The
programme will not be dependent on pre-screening of genetic material on existing
research sites. Including a broader array of species does not necessarily complicate the
delivery process at field level, because simple mixtures will be used. There will be
considerable flexibility in terms of species mixtures, with composition varying according
to availability and price of various component species.
Close linkage of intensive forage programmes with intensive livestock enterprises.
Monitoring. Farmers and field staff will be at the cutting edge of fodder development, and
will be actively involved in continuous monitoring of performance of species and
strategies (using simple rapid ranking approaches).
54
Assuming free distribution of small quantities of fodder seed and the availability of on-farm labour.
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Free distribution of planting material, in small start-up kits.
Supporting extension materials, including very simple plasticized hand-arounds for
farmers, and basic fact sheets for field staff.
Use of media. The role of mass media in the promotion of appropriate initiatives will be
assessed. This will be done after suitable benefits had been determined from case
studies, and only after there is a well-established capacity for supply of planting material.
Land tenure / land use have been raised as constraints on forage development, but,
while land tenure issues will be addressed by the Project, generally, they in fact do not
present difficulties for forage development.
Development will emphasise low-cost improvement of grazing areas, through legume
oversowing, with seed provided free of charge. Widely scattered sites within any target
community will be sown, with the legumes spreading naturally through grazing stock.
Benefits will accrue, then, to all members of the community.
Traditionally, most cropping areas are grazed communally in the dry season. Dry season
grazing will not impede the survival of the introduced legumes, and in fact will improve
their spread. It is anticipated that dry-season grazing control will gradually increase,
which will enable higher productivity of forages.
The communal land strategies could be implemented without any new by-laws on usage.
66. Grazing land improvement through low-cost oversowing of well adapted legumes has been
shown to be effective in Bắc Kạn under the 3PAD. A logical strategy is to oversow with a broader
array of well-adapted genetic material, and to initiate sowing on very widely scattered sites to
maximise the rate of natural spread. Inclusion of pasture legume species in grassland areas will, over
time, assist in the control of tall grasses and reduce the devastating environmental impact of wildfires.
67. The appropriate pasture/forage development technologies are not sophisticated, and quick
start-up over a broad range of sites is feasible with hands-on, short duration training. Applicable
innovative extension and delivery approaches have been developed in similar environments
elsewhere.
68. Encompassing large numbers of smallholder producers, and broad scale rangeland sowing, will
demand the availability of low cost seed of an array of legume species. Imported seed is expensive,
but there are well-proven technologies for the production of high quality seed at low cost, within
manual production systems on smallholder (rainfed) farms.
69. Approaches have been widely discussed with producers and with livestock/agricultural
extension staff at all levels and there is now widespread support for such a program. At the outset, it
is important to:
emphasise areas with potential for high adoption and satisfactory technical success;
include some small-scale activity in lower potential areas to enable refinement of
approaches and the opportunity for localised training.
70. From the outset, pilot activities will be initiated in all areas, rather than gradually phasing-in
provinces and districts. (Spontaneous exchanges/ adoption between widely scattered districts/
provinces will be relatively very slow; different agro-climatic areas require distinctly different technical
packages.) The program will target the beneficiary farmer group livestock grants.
71. Seed production will require a different approach, and it is imperative that production areas are
selected with the potential for high seed yields. If it is to be successful, clusters of contract seed
producers must be selected on a basis of the site /community suitability for reliable seed production;
these are most likely to be distinct from the other target groups.
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Selecting species for various locations and strategies
72. Species mixtures will typically be broad, to accommodate grazing pressure and edaphic
variations. (Most of the species recommended will be adapted to persistence under the entire rainfall
range.) Mixtures will be gradually modified in the light of local experience, but typically should remain
broad for at least several years, given that it will take time for expression of long term production
potential, persistence, and spread. For example, shrubby stylo is likely to be the most useful species
for grazing land improvement in the long term, but is very slow and inconspicuous during the first two
years. Leucaena will be strongly promoted, and is likely to be the key forage species for smallholder
development. Various varieties well suited to most soil types and rainfall zones in Bắc Kạn and Cao
Bằng, and it has high potential for all livestock production; its successful promotion will depend on use
of superior culitvars, and of intensive establishment and management systems. It also has great
potential for broader scale oversowing development. The range of successful species already being
used for smallholder in Viet Nam will be retained in the programme. These will be complemented by
other genetic material which is not well known in the country.
73. The Project will also promote the use of Vetiver grass (Chrysopogon zizanioides) for hillside
stabilization and for environment waste management linked to APIF investments. Vetiver can be used
to support soil and water conservation, soil moisture improvement, groundwater recharge, recycling
soil nutrients, pest control, mulch, forage, clean up of agricultural contaminated waste water,
protection of farm infrastructure (canals, drains, roads, and building sites).
Smallholder forage development
74. Smallholder forage development will focus on clusters of producers. Development will include
specific forage plots (for seed production/forage replication and for cut-and-carry utilisation) and
legumes established into crops including cassava and maize.
75. Specific forage plots Perennial forage plots will be established, typically of 0.25ha, which is a
manageable area for establishment, protection from grazing, and for cut-and-carry utilisation; this area
is also adequate to demonstrate the production benefits from improved forage supplies. Plots will be
adjacent to the house for efficient utilisation and to enable use of farm-yard manure. Protection from
dry season grazing will be preferable, but is not imperative. (Dry season grazing typically does not
impact severely on the subsequent wet-season productivity.)
76. Plots will be based on broad mixtures. It is crucial to have conspicuous results from the first
year of establishment, if plots are to be protected; in this context, the quick-establishing and very
productive legumes such as Pigeon pea, Leucaena, and sunn hemp will play a key role. Species will
vary depending on site, but will generally include, inter-alia55
:
Grasses:
Mulato II (B. brizantha x B. ruziziensis) and drought tolerant lines of Megathyrsus
maximus for most rainfall areas; the Atherton sterile ecotype of Setaria sphacelata for
higher rainfall areas, and Paspalum atratum for seasonally wet areas. Some Napier
types will be included for conspicuous early results, but will gradually be de-
emphasised56
. Vetiver grass (Chrysopogon zizanioides) will be used for hillside
stabilization. All grasses will be established vegetatively.
Legumes:
Leucaena (cv Tarramba or Cunningham) established in hedgerows at 1m spacing, using
home-grown bare-root/ bare-stem seedlings, and Gliricidia established by cuttings.
Sunn hemp, Pigeon pea, lablab, cowpea, and velvet bean (Mucuna pruriens), using
proven locally available genetic material.
55
See alsohttp://aciar.gov.au/publication/mn062 56
Napier is highly productive, but has inherently low nutritive value, especially when mature. Also, in recent years in
Kenya there have been catastrophic impacts of Napier stunt virus on some lines of Napier. The spread of this virus to
other lines of Napier, and geographically, is unpredictable, but the risks should be accommodated.
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Desmanthus spp, with the selection based on rainfall (D.pernambucanus for higher
rainfall areas, D.leptophyllus/ virgatus for other areas.)
Stylosanthes scabra, S.guianensis, S.seabrana and S.hamata, with the species
depending on soil type; Wynn Cassia, Aztec atro; forage peanut (Arachis pintoi), with the
species determined by rainfall.
Other forages
Rape (Brassica napus) which has been introduced into Ha Giang province as a winter
forage and green manure plant will be tested in Bắc Kạn and Cao Bằng.
Note: some free seeding types including the stylos will be included partly to encourage efficient
spread into adjacent grazing areas.
77. Small back-yard or kitchen nursery areas will be established to enable vegetative planting-out
of key species, particularly the grasses and Leucaena57
, to improve establishment. A more detailed
list of possible varieties is detailed in Appendix 4, Annex 6.
Forage legumes in cropping systems
78. The Project will support existing activities promoted under conservation agriculture programs,
but with more emphasis on leguminous species with high potential for livestock production. Perennial
and self-regenerating legumes will be established by undersowing / under-planting in crops including
maize and cassava, to maintain soil fertility in the long term, and to provide convenient forage for
utilisation by grazing or cutting management. (Note: No grass species will be used in these systems.)
79. The key leguminous species will be Stylosanthes spp, Wynn Cassia, Desmanthus spp, Glenn
jointvetch (Aeschynomene americana), site-specific forage peanut lines, and with Leucaena and
pigeon pea also included in more intensive production systems. Leucaena seedlings and forage
peanut slips will be transplanted at the beginning of the growing season. Most legumes will be direct-
seeded after the first weeding.
Outcome 3: Profitable farms linked to finance and markets.
80. This outcome will lead to: Increased public and private investment in sustainable, profitable
commodity production and value addition The indicators for successful outcome implementation will
be:
WSCGs maintain a minimum annual saving rate growth of at least 15% over base-year
savings and < 5% non-performing loans in their portfolios; and
of USD 40 million invested in commodity-targeted, climate- adapted infrastructure,
commodity production and enterprises development in Project communes, at least 70%
of investments show an IRR > 10%;
81. The outcome will have three outputs, namely: Output 6. Community infrastructure;
Output 7. Rural financial services; and Output 8. Agribusiness Promotion Investment Fund (APIF).
Output 6. Community infrastructure.
82. Infrastructure investment grants up to USD 400,000 per commune58
(including beneficiary and
GoV contributions) will be available for infrastructure investments that provide public good benefits
essential to commodity chain development and/or CC or disaster proofing. These could include, inter
alia, disaster-proof roads, secondary or tertiary irrigation structures, erosion protection and soil
management, sanitation and waste management, renewable energy or fresh water supply. The
scheme will not support purely private benefit investments. Public and collective good infrastructure
investment schemes will, with consultant support where required, be identified and prioritized by
57
For bare root, bare stem transplantation 58
In Bắc Kạn, where USD 700,000 has been allocated for PES payments, commune infrastructure grants will average
about USD 380,000 per commune.
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VDBs59
/communes, incorporated into the medium-term commune MOP-SEDP and verified by the
district line agencies in collaboration with the PPCOs before approval. The PPCO will coordinate and
monitor public infrastructure investment implementation, including construction supervision, and will
annually review performance of the Project communes and make revised allocations as necessary.
Beneficiary contribution will be at least 10% of total construction costs (less taxes) of public and
collective good infrastructure works, with IFAD funding 60% and the NTP- NRD funding 30% of the
investment cost. The beneficiary contribution to the investment can be made in cash and/or in kind. In
kind contributions could be in the forms of labour, local materials, land acquisition, machinery
operation and crops/structures lost for scheme construction. The in-kind contribution must be
supported by appropriated documentation stating its value based on market evaluation undertaken by
an independent authorized entirety.
83. Individual public or collective good infrastructure investments will not exceed USD 60,000
without prior agreement with IFAD.
84. Community People’s Committees (CPCs) will be the owners of community infrastructure
projects, however, the VDBs in benefitting communities will be responsible for managing the
implementation of the public investment. The VDB will establish a community supervision board, with
at least three representatives from the beneficiary groups and 30% women’s participation, for the
supervision of construction works for each scheme. Members of community supervision boards will be
trained in construction supervision and provided sufficient information about investment works.
Beneficiary communities will be required to demonstrate an ability to support associated long-term
operation and maintenance costs. The Competitive Small Grants Manual, developed by the IFAD Viet
Nam Country Office, will form the basis of the Project Implementation Manual (PIM) for this activity.
Wherever possible, local labour, particularly youth and minority people, will be used for works
construction, supported by vocational training when required.
85. The community-based public and collective good infrastructure programme will be supported by
youth-targeted on-the-job vocational training in skills that could be quickly applied through the
community infrastructure programme. The Project will, where practicable, use force account
processes for community infrastructure investments, designed to create jobs for the vocational
trainees and promote community ownership in the operation and maintenance. On-the-job vocational
training could focus on such skills as concreting, carpentry, road levelling and surfacing, brick laying,
semi-skilled machine operation, painting and public infrastructure maintenance. Women’s participation
in youth vocational training will be a priority.
By integrating the CSSP community infrastructure programme into the NTP-NRD, the CSSP will
improve the methodology for NTP-NRD investment planning in Bắc Kạn and Cao Bằng, including
increased participation by women and poor households in priority setting, thereby establishing the
framework for more efficient and effective NTP-NRD investments in the longer term. It is expected
that the NTP-NRD will continue to fund community- and collective-based -infrastructure investment
beyond the life of the CSSP.
Output 7: Rural Finance Services.
86. Rationale. Reflecting the overall development trends in Viet Nam, the financial sector has,
during the past 20 years, gone through a period of major transformation. The rapid expansion in
banking activities and in the volume of their financing operations is considered one of the key factors
behind Viet Nam’s fast economic growth. Despite the overall financial sector progress, however, the
commercial banks still prefer lending to large and known borrowers at the expense of low-income
rural clients and small and medium enterprises (SMEs).
87. Rural microfinance in Viet Nam is almost totally dominated by two government-controlled
financial institutions, the Vietnam Bank of Agriculture and Rural Development (VBARD) and
particularly the Vietnam Bank for Social Policies (VBSP) (see Appendix I for description on rural and
59
Village Development Boards are established under the NTP-NRD.
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microfinance market in Viet Nam). Private, market-based and NGO-based rural microfinance
institutions operate on a very limited scale in Viet Nam. To increase financial inclusion and to improve
the livelihoods of the poor especially in the least served rural communes, continuous attention and
support is required to improve pro-poor financial services delivery.
88. Since the beginning of IFAD’s operations in Viet Nam, interventions in rural finance have been
an integral part of its area-based multi-component Projects. The key lessons for the CSSP design
from the evaluations of these and other rural finance Projects include:
the promotion of community-based women’s savings and credit groups (WSCG) remains a valid intervention for CSSP as they serve as a useful entry point for low-income people to financial services and act as an effective empowerment tool. In previous IFAD-supported interventions, they have consistently shown their capacity to increase the incomes and asset ownership of poor households;
to move the SCGs and their members to the next development stage, the issue of developing SCGs and their networks into more sustainable microfinance schemes requires attention and investment under CSSP;
agricultural VC finance should be seen as a comprehensive, holistic approach that involves the systemic analysis of an entire VC and the relationships among its actors, including all the financial institutions with potential interest in the focal VCs.
89. To effectively contribute to increased financial inclusion in the rural communes of the Project
target area, the design of the “Rural Financial Services” output of CSSP relies strongly on these
lessons learnt, the expected trends and regulatory reforms in the financial markets, and the best
practices developed for rural microfinance and VC financing. The selected approach and interventions
are clearly in line with the current policies of the GoV, which emphasise the need to modernise
smallholder agriculture, to improve the quantity and quality of marketed produce and particularly to
improve the resilience of poor households that face the adverse impacts of CC. One of the key
strategies to reach these targets is the increased, sustainable inclusion of poor and near-poor
households into the financial market.
90. The Output 7 design also reflects IFAD’s current priorities in rural development in Viet Nam.
According to the COSOP 2012-2017, rural finance activities should support the overall objective of
building enabling environments for the engagement of the private sector in providing rural jobs and
generating rural income and for the development and promotion of pro-poor VCs. They should aim to
increase the agricultural productivity and competitiveness of smallholders, enhance opportunities for
market entry and diversify livelihood opportunities for both male and female workers, including off-
farm activities. These principles have been central to selecting the activities for rural finance support
under CSSP. At the same time, the selected approaches and activities are a core part of CSSP’s “no-
regret” approach to CC adaptation, with its focus on improving the income and asset base of
smallholders, in that manner building adaptive capacity in rural households to deal with the existing
and predicted effects of CC.
91. Strategies and activities. The following key strategies and approaches will be followed when
implementing the Rural Financial Services output:
actively expand the community-based women’s savings and credit networks and introduce them into new rural communes, with special focus on women-headed households and minority communities;
develop across the SCG operations a stronger savings focus and internal sustainability, to reduce future dependence on externally injected capital;
develop the capacities of the Women’s Development Funds (WDFs) with the objective of eventually transforming them and their networks of savings and credit groups into registered, sustainable microfinance institutions (MFIs).
92. Output 5 is organised in three inter-related activities:
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5.1: Development of Capacity of the WDFs
5.2: Establishment of New Savings and Credit Groups
5.3: Transformation of SCG Networks into MFIs.
Activity 7.1 Development of Capacity of WDFs
Task 7.1.1 Cao Bằng Province
93. Task Description. The previous IFAD-supported Project, DBRB did not in Cao Bằng originally
include activities with savings and credit groups or with the WU. During its later years, the Project
provided small grants totalling around USD 200,000 to support the savings and credit operations of
the WU. These grants formed the principal capital base for the WU social fund, the establishment of
which was authorised by the PPC in May 2014. The new fund, called below the Women’s
Development Fund or the WDF, operates today in five districts of the Cao Bằng province, although
with a small capital base and the related limited outreach to the rural communes.
94. The new WDF in Cao Bằng is a start-up institution (see description of the Cao Bằng WDF in
Appendix I). It has its core staff and operational systems in the provincial Head Office, but no
branches or staff in the rural districts. To be able to carry out its demanding work for the promotion of
the WSCGs in the province, including the planned CSSP-related tasks, the WDF requires substantial
capacity building, covering both its Head Office and emerging branch staff, as well as major
improvements in its provincial and district level physical facilities and systems.
95. Under Task 7.1.1, the CSSP will enable the Fund to independently and professionally
implement its WSCG tasks and to promote and eventually transform the WSCG-based financing
network in Cao Bằng into a registered microfinance institution. The key CSSP investments in this
process include (see Costs Tables for detailed budgets and descriptions for each rural finance-related
expenditure):
international TA to support the design of a Strategic Plan for the WDF for 2017-2021 (see TOR in Appendix 4, Annex 7);
national TA to assist in updating the operations and manuals of the WDF based on the principles of the new Strategic Plan;
training for the senior operational management, Management Council and Supervisory Board of the WDF in microfinance and in the management of social funds, to be organised by the Vietnam Microfinance Working Group;
initial training courses and refresher courses for the WDF staff at all levels in WDF/WSCG methodologies;
a staff exchange programme between the Cao Bằng WDF and selected, more mature WDFs in Viet Nam;
the procurement of accounting and loan/savings management software, based on experience and specifications from more mature WDFs;
a package of equipment, including computers, for the Head Office of the WDF;
a package of equipment, including computers, for four new district level WDF branches, required for the management and effective implementation of the field operations;
a 4WD vehicle for the WDF Head Office to effectively coordinate and supervise the WDF operations in the province;
motorcycles for WDF district branches for field implementation of WSCG activities;
limited operational support to the WDF during the first two years of CSSP, after which the WDF is expected to cover all its operational costs from its lending-related operational income.
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96. Implementation Arrangements. To ensure that all activities under Output 7.1 are properly
planned and executed, the Cao Bằng CSSP PCO will recruit a Rural Finance Officer (RFO) to support
and oversee this sub-component during the six-year Project period. The TOR for the RFO is provided
in Appendix 5, Annex 2.
97. Responsibility for the implementation of CSSP Activities 7.1, 7.2 and 7.3 in Cao Bằng will be
with the WDF. At Project start-up, an “Implementation Agreement” will be signed between the Cao
Bằng PCC and the WU/WDF, which will define the responsibilities of each of these two parties with
respect to CSSP implementation. Models for this type of Agreement are available from the IFAD-
supported SRDP and AMD projects. The Implementation Agreement will define resources that CSSP
will provide to the WDF during the Project period, conditional on WDF performance meeting the
criteria agreed for each activity. This Agreement will also define the monitoring and reporting
responsibilities of the WDF for CSSP-related activities.
Task 7.1.2: Bắc Kạn Province
98. Task Description. The operations of the WU-managed WSCGs are more developed and better
capitalised in Bắc Kạn than in Cao Bằng. The operations of WU’s Social Fund, called the WDF,
started on 10 June 2014 (see description of the Bắc Kạn WDF in Appendix I). The WDF is a well-
capitalised operation, controlling on-lending funds of around USD 3 million, which mostly originate
from 3PAD sources. In addition to its provincial Head Office, the Bắc Kạn WDF has, since January
2015, operated branches in Ba Bể and Na Rì districts. In addition, it manages groups in Ngân Sơn
and Pác Nặm districts from its Ba Bể branch, and in Bạch Thông district and Bắc Kạn city from the
provincial office. At the end of October 2015, the WDF operated in total with 134 groups and 1,755
members. Its total outstanding portfolio was VND 14.5 billion (USD 660,000), with the total savings at
a much lower VND 311 million (USD 14,800). The Bắc Kạn WDF has ambitious plans for expansion
and greater impact, with a target of reaching some 7,500 women/households by the end of 2017.
99. While the operations of the Bắc Kạn WDF have progressed well, especially in 2015, it is still at
an early developmental stage as a financial institution. Although it has the core staff and basic
operational systems to conduct its financing operations at their current level, considerable institutional
development work is still required to reach an adequate level of professionalism and efficiency in its
operations. To effectively implement its demanding tasks in the promotion of WSCGs in the province,
including the planned CSSP-related tasks, the Bắc Kạn WDF requires significant capacity building
support covering its staff and its physical facilities and systems, both at provincial and district levels.
100. The proposed CSSP will include a major capacity building programme for the Bắc Kạn WDF,
especially during the first two years of CSSP, with the objective of making the Fund capable to
independently and professionally implement its tasks in WSCG promotion and eventually transform
the WSCG-based financing network in Bắc Kạn into a registered microfinance institution. The key
CSSP investments in this capacity building process under Activity 7.1.2 include:
international TA to support the design of a Strategic Plan for the WDF for 2017-2021 (See TOR in Appendix 4, Annex 7);
training for the senior operational management, Management Council and Supervisory Board of the WDF in microfinance and in the management of social funds, to be organised by the Vietnam Microfinance Working Group;
initial training courses and refresher courses for WDF staff at all levels in WDF/WSCG methodologies;
support to a staff exchange programme between the Bắc Kạn WDF and selected more mature WDFs in Viet Nam;
training of relevant WU staff at all levels on the WDF/WSCG methodology, especially in the related communication and mobilisation skills;
a package of equipment, including computers, for the Head Office of the WDF;
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a package of equipment, including computers, for district level WDF branches, required for the management and effective implementation of the field operations;
a 4WD vehicle for the WDF Head Office to effectively coordinate and supervise the WDF operations in the province;
101. Implementation Arrangements. To ensure that all activities under Output 5 are properly planned
and executed, the Bắc Kạn CSSP PCO in will recruit a Rural Finance Officer (RFO) to advise and
oversee this sub-component during the six-year Project period. The TOR for the RFO is provided in
Appendix 5, Annex 2.
102. The responsibility for the implementation of Activities 7.1, 7.2 and 7.3 of CSSP in Bắc Kạn will
be with the WDF. At Project start-up, an “Implementation Agreement” will be signed between the Bắc
Kạn PCC and its WU/WDF, which will define the responsibilities of each of these two parties in CSSP
implementation. Models for this type of Agreement are available from the IFAD-supported SRDP and
AMD projects. The Implementation Agreement defines the resources that CSSP will provide to the
WDF during the Project period, conditional on the WDF meeting the performance criteria agreed for
each activity. This Agreement will also define the WDF CSSP monitoring and reporting
responsibilities.
Activity 7.2: Establishment of new Savings and Credit Groups
Task 7.2.1: Cao Bằng Province
103. Task Description. To contribute to increased financial inclusion in Cao Bằng, CSSP will support
the establishment of new WSCGs in the Project area. With WSCG operations, while the principle is to
let the groups decide on their own membership, the targeting approach under CSSP operations will
emphasise the importance of focusing on:
poorer villages in the 30 CSSP communes
the inclusion of the poor household and minority people in the WSCGs, with special emphasis on inclusion of women-headed households.
104. Following the above targeting approach during the 6-year Project period, the implementation
target is for a total of 472 new WSCGs with an average of seven members to be established in the
30 target communes. In total, around 3,300 new rural households will be included into the WDF-
managed savings and credit operations with the support from CSSP.
105. With the Cao Bằng WDF as the responsible institution for implementing this activity, CSSP will
provide a comprehensive support package to ensure the smooth establishment of WSCGs and
appropriate follow-up support for their operation. The CSSP support under Activity 7.2.1 will include:
funding and information material for mobilisation and initial training meetings in the villages;
substantial initial training and follow-up courses for WSCG group leaders and members in savings and credit methods;
focused farm management and production diversification training for group members, covering around 3,300 women, with special emphasis on new and diversified earning opportunities in the focal VCs (VC) supported by CSSP;
injection of capital for each trained and savings-mobilised WSCG for on-lending to the group members.
106. Two issues in the agreed CSSP WSCG method require attention. Firstly, globally, the injection
of Project capital for on-lending to group members is not generally considered an appropriate or
necessary intervention when aiming to create sustainable community-based groups. In the previous
WSCG operations in Viet Nam, capital for on-lending has, however, always been a part of the IFAD
investment and has been consistently evaluated as a successful initiative, with nearly 100% recovery
rates and high group cohesion and sustainability. This approach will continue under the CSSP
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operations. The Cao Bằng WDF will be allocated VND 100 million (USD 4,700) as seed lending
capital per each established WSCG (average seven members), which the WDF will on-lend through
the WSCGs to their women members. Each group’s savings mobilisation and loan management
performance will be assessed on a continuous basis by the WDF, and recovered funds from poorly
performing groups will be re-allocated to successful groups.
107. Secondly, increased attention will be paid by the WDF to the active promotion of savings in the
groups and to the related target of increasing the self-financing capacity of the WDF, with less
dependence of externally injected capital. The savings targets for groups and individual members and
the target ratios between savings and loans will be defined in an up-dated WDF operations manual,
based on the principles to be agreed on in the new WDF Strategic Plan. The increased savings
emphasis will become even more important when, towards the end of the CSSP period, the Cao Bằng
WSCG network will be transformed into a registered and supervised MFI.
108. Implementation Arrangements. The Cao Bằng WDF will be fully responsible for the
establishment of new WSCGs in the Project communes. As indicated above, at Project start-up, the
rules and conditions for cooperation between CSSP and the WU/WDF will be documented in a
detailed Implementation Agreement. The WDF will establish branches in rural districts with permanent
professional staff, from which it can reach the targeted CSSP communes and villages. Under Activity
7.1.1, CSSP will assist the Cao Bằng WDF in: (i) the establishment of the new branches; (ii) building
of the capacity of the WDF management and staff; and (iii) the establishment of the appropriate
procedures and systems for WDF financing operations.
109. For the seed capital for on-lending, the Cao Bằng PCC will, at the Project start-up, sign a
Subsidiary Loan Agreement with the Ministry of Finance (MoF). Models for an Agreement of this type
are available from the SRDP and AMD provinces. The MoF is expected to lend the funds to the PCC
at a similar highly subsidised interest rate as used in the cases of the SRDP and AMD provinces. The
other terms of the subsidiary loan will follow the terms of the IFAD loan to support CSSP. The Cao
Bằng PPC is expected to on-lend the funds to the WDF at these same terms.
Task 7.2.2: Bắc Kạn Province
110. Task Description. To contribute to increased financial inclusion in Bắc Kạn, CSSP will support
the establishment of new WSCGs in the Project area. With WSCG operations, while the principle is to
let the groups decide on their own membership, the targeting approach under CPRP operations will
focus on:
poorer villages in the 32 CSSP communes
the inclusion of the poor household and minority people in the savings and credit groups with special emphasis on the inclusion of women-headed households.
111. Following the above targeting approach, the target over the 6-year Project period is for 147 new
WSCGs with an average of 15 members to be established in the 32 target communes in Bắc Kạn. In
total, around 2,200 new rural households will be included through CSSP support to the WDF-
managed savings and credit operations. In addition, the Bắc Kạn WDF plans to establish some
250 new WSCGs with around 3,500 new members and finance the new loans to these groups with
the incoming reflows from the 3PAD/ADF loans. By 2020, with these activities, the total borrowing
membership of the WDF in Bắc Kạn will exceed 8,000 low-income households, making it an important
provider of rural finance services in the province.
112. With the Bắc Kạn WDF as the responsible institution for implementing this CSSP activity, the
Project will provide a comprehensive support package to ensure the smooth establishment of WSCGs
and appropriate follow-up support for their operations. The CSSP support under Activity 7.2.2 will
include:
funding and information material for mobilisation and initial training meetings in the villages;
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substantial initial training and follow-up courses for WSCG group leaders and members in savings and credit methods;
focused farm management and production diversification training for group members, covering around 2,200 women, with special emphasis on new and diversified earning opportunities in the focal VCs supported by CSSP;
injection of capital for each trained and savings-mobilised WSCG for on-lending to the group members.
113. Two issues in the agreed CSSP WSCG method require attention. Firstly, globally, the injection
of Project capital for on-lending to group members is not generally considered an appropriate or
necessary intervention when aiming to create sustainable community-based groups. In previous
WSCG operations in Viet Nam, capital for on-lending has, however, always been a part of the IFAD
investment and has been consistently evaluated as a successful initiative, with nearly 100% recovery
rates and high group cohesion and sustainability. This approach will continue during the CSSP
operations. The Bắc Kạn WDF will be allocated VND 215 million (USD 10,200) in two tranches of
USD 5,100 each, as seed lending capital per each established group (average 15 members), which
the Fund will on-lend through the WSCGs to their members. Each group’s savings mobilisation and
loan management performance will be assessed on a continuous basis by the WDF, and recovered
funds from poorly performing groups will be re-allocated to successful groups.
114. Secondly, increased attention will be paid by the Bắc Kạn WDF to the active promotion of
savings in the groups and to the related target of increasing the self-financing capacity of the WDF,
with less dependence of externally injected capital. The savings targets for groups and individual
members and the target ratios between savings and loans will be defined in the WDF’s up-dated
operations manual, based on the principles to be agreed on in the new Bắc Kạn WDF Strategic Plan.
The increased savings emphasis will become even more important when, towards the end of the
CSSP period, the WSCG network in Bắc Kạn will be transformed into a registered and supervised
MFI.
115. Implementation Arrangements. Responsibility for the establishment of new WSCGs in the Bắc
Kạn Project communes will be with the provincial WDF. As indicated above, at Project start-up, the
rules and conditions for cooperation between CSSP and the WU/WDF will be documented in a
detailed Implementation Agreement. The WDF will establish, as required, additional branches in rural
districts with permanent professional staff, from which it can effectively reach the targeted CSSP
communes and villages. Under Activity 7.1.2, CSSP will assist the Bắc Kạn WDF with: (i) the
establishment of the new branches; (ii) building of the capacity of the WDF management and staff;
and (iii) the establishment of the appropriate procedures and systems for WDF financing operations.
116. For the seed capital for on-lending, the PCC in Bắc Kạn will at the Project start-up sign a Subsidiary Loan Agreement with the Ministry of Finance (MoF). Models for an Agreement of this type are available from the SRDP and AMD provinces. The MoF is expected to lend the funds to the PCC in Bắc Kạn at a similar highly subsidised interest rate as used in the cases of SRDP and AMD provinces. The other terms of the subsidiary loan will follow the terms of the IFAD loan to support CSSP. The PPC is expected to on-lend the funds to the WDF at these same terms.
Activity 7.3 Transformation of SCG Networks into MFIs Bắc Kạn and Cao Bằng Provinces
117. Activity Description. This innovative activity aims to convert the WDFs and the provincial WSCG
networks into registered, sustainable microfinance institutions. The target will be to bring the
numerous WSCGs under an institutional arrangement that will ensure an appropriate supervision of
these small financial operators and create a sound and safe network for their institutional growth. At
the same time, the transformation will open opportunities for linking mature WSCGs with financial
institutions that have potential for financial intermediation with groups and their members on a larger
scale.
118. Vietnamese regulations require that the WSCG networks of this type be initially registered as
Social Funds (Women’s Development Funds) to be supervised by the provincial SBV. Later, when
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adequate capabilities have been developed and operational and financial sustainability has been
reached, these WDFs can be converted into MFIs, registered and fully supervised by the SBV. The
procedure is still new in the country. IFAD, in co-operation with other donors, is currently financing
international technical support for this transformation process, initially targeting Ha Tinh, Quang Binh,
Ben Tre and Tra Vinh provinces. The result of this support will directly benefit the planning and
implementation of the transformation processes in Bắc Kạn and Cao Bằng.
119. In both Bắc Kạn and Cao Bằng, the first step of this transformation process has already been
taken, with the establishment of the Women’s Development Funds as social funds. Their eventual
conversion into a registered MFIs is planned to take place towards the end of the CSSP
implementation period. Following this plan, one of the aims of the CSSP rural finance interventions is
to ensure that both Funds will, in six years’ time, meet all the MFI registration requirements of the
SBV. These requirements include:
operate with a clientele that needs small-scale financial services;
have a decision by the provincial PPC in which its Head Office operates, supporting the establishment of the financial institution;
have a minimum equity capital as defined in Section 2, Article 1 of the Decree No. 165/2007/ND-CP, which currently defines it at VND 5 billion (around USD 233,000)
have appropriate offices and equipment to operate the MFI;
have appropriate IT systems to safely conduct small financing operations;
have appropriately qualified people in the governance and managerial positions of the institution to operate it professionally and safely;
have an appropriate Business Plan for the three first years when operating as a registered MFI.
120. The above-described significant CSSP investments in capacity building and direct financial
support to the WDF activities under activities 5.1 and 5.2 aim to ensure that both WDFs will be able
meet these MFI registration requirements by 2021-2022. To improve the chances of successful
transformation for both WDFs, two additional investments are included in the CSSP budgets in both
provinces for the last two years of Project implementation:
one month of international TA to support the WDF to design the 3-year Business Plans for 2021-2023, which is the key attachment required by the SBV for an MFI registration application
a lumpsum allocation of unspecified transformation support during the last two Project years that can be used both for capacity building purposes and for physical improvements in the branch offices to upgrade them to meet the then required MFI standards.
121. Implementation Arrangements. The ultimate implementation responsibility for the
transformation of the WDFs into MFIs will be with the respective WDF and WU management. For
these processes to be successful, it is critically important that Bắc Kạn and Cao Bằng WUs/WDFs
work the close cooperation with the WUs and WDFs in provinces which are more advanced in the MFI
transformation process and which currently receive substantial transformation support from IFAD and
other donors.
Benefits and Impact
122. Significant benefits to the group members can be expected from participation in the new
WSCGs. Around 5,500 new low-income households are expected to join the WSCGs as a direct
result of the CSSP investments, covering a significant share of the poor and near-poor households in
the focal CSSP communes. The capacity building efforts by CSSP, furthermore, are expected to
make it possible for the Bắc Kạn WDF to mobilise an additional 3,500 women to SCGs. Their initial
loans will be funded largely through revolving funds from the closed IFAD-supported projects. With
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stronger, better capacitated WDFs, a wider outreach and impact can be clearly achieved than is the
case today.
123. All impact evaluations, including those conducted by IFAD, confirm the beneficial impact that
these SCG operations have on member household incomes and livelihoods. Similarly, the farm
models of this design document confirm the potential of the WDF-financed investments to improve the
incomes and the CC adaption capacity of the beneficiary households. In addition, while more difficult
to measure, the impact of these groups on the self-confidence of the group members can be
substantial, which, in the longer term, can support the members’ participation in larger scale income
generating activities.
124. CSSP support to progressively transform WDFs and their networks into registered, sustainable
provincial microfinance institutions is expected to result in major long-term benefits to their
members/clients. The registration status can open doors for larger scale financing operations,
enabling current and future members of WSCGs to engage in larger income generating projects than
is currently possible. Linkages to formal financial sector operators through the new MFI can secure
such funding that the current mode of WSCG operations does not allow.
Exit Strategy and Scaling Up
125. Most of the CSSP rural finance enhancement activities have an in-built exit strategy. New
WSCGs are expected to operate independently after the training they receive from the WDFs and the
local WU staff. The WDFs in both provinces are projected to reach full operational sustainability
during the CSSP period. After that, they will aim at registration as independent MFIs, which will give
them wider operational options as members of the regulated financial market.
Risks and their mitigation
126. Specific risk to the successful implementation of the rural finance enhancement activities of
CSSP are listed below in Table 1, together with mitigating issues and mechanisms:
Table 1: Output 5: Potential Risks and Mitigating Issues
Potential Risks Likelihood Severity Mitigating Issues
The Women’s Union may not
have the resources and
capacities required for the
gradual transformation of the
SCG network into a Social
Fund and later into an MFI.
M M The design of activities 2.2.1,
2.2.2 and 2.2.3 is aimed to
mitigate this concern, with
large amounts of financial and
capacity building support and
significant allocations of
national and international TA
to the WU.
Financial institutions may not
be ready to finance the
investments required in
various VC activities.
M M The support operations of
Outcomes 1 and 2 and the
pro-active method proposed
for supporting rural financial
services are planned to
mitigate just this potential risk.
The WDFs may not be able
to professionally handle the
significantly larger member
numbers and increased
business volumes assumed
in the CSSP plan.
M M The CSSP is designed to
mitigate this risk, through
increased emphasis on
savings, large injections of
financial and capacity building
support and significant
allocations of national and
international TA as well as
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strategic planning support to
the WDFs.
Follow-up Actions
127. To ensure a smooth take-off of CSSP rural finance enhancement activities, the following follow-
up actions can be foreseen during 2016:
complete the selection process for the villages for the establishment of new WSCGs in the CSSP communes and start preparations for sub-component activities in these areas;
in the latter part of 2016, start the recruitment and training processes for the staff for the new WDF branches to be opened in 2017;
in Cao Bằng, explore the possibility to pre-finance an international support mission to design a Strategic Plan for the WDF for 2017-2021 and carry out the design work before CSSP effectiveness.
Output 8. Agribusiness Promotion Investment Fund.
128. Vietnam’s agricultural sector has enjoyed almost 2 decades of strong growth, contributing to
significant poverty reduction, national food security, social stability, and increased regional and
international economic integration. There are, however, concerns about both the quality and
sustainability of the country’s agricultural growth and its impact on the welfare of producers and
consumers. Viet Nam’s agriculture growth is frequently characterised by mixed or uncertain product
quality and food safety, low value addition and limited technological and institutional innovation.
Agriculture growth has, in some cases, also incurred a high environmental cost.
129. In keeping with the current SEDP, the Resolution No. 26 on Agriculture - Farmer – Rural Area,
the Proposal on Agriculture Restructuring and the recently completed Green Growth Strategy,
Vietnam’s strategy for agricultural and rural development is evolving to adopt and apply the concept of
‘sustainable development’, organizing key objectives under the ‘Triple Bottom Line’ of economic
development, social development and environmental protection. In applying this strategy, the GoV
sees the opportunity and need to pursue various forms of public-private collaboration in order to
realize these objectives.
130. The complexity of a modernizing agriculture extends beyond what the State can readily
provide—in terms of investment, expertise, and clear direction in the face of many uncertain variables.
As elsewhere, the role of the State in the sector must evolve to focus on ensuring the provision of
core public goods and regulatory services, while acting to facilitate farmer and private sector
investment and initiative. In some areas, the State may be able to delegate or contract others to
provide certain services; in other areas, systems of ‘co-management’ or ‘co-regulation’ may be
possible as observed from local and international experience. In essence, GoV seeks to pursue
various forms of public-private partnership/collaboration in order to more quickly or effectively realize
key sectoral (economic, social, and environmental) goals. Specifically, GoV expects APIF initiatives to
contribute to:
increasing the volume of rural and agricultural investment, even in the face of fiscal
constraints;
increasing the quality of sectoral investments and the quality of technical services;
fostering innovation, both of a technical and institutional nature;
improving management—of natural resources, supply chains, and of various production
and commercial risks; and
contributing to more rapid structural change at the primary production level and within
supply chains, to bring about improved efficiencies.
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131. The Project will use APIF co-financing to generate investments and job opportunities among
the rural households, with particular attention to poor and women-headed households in the Project
area, who will form at least 50% of the total number of households benefiting from APIF-supported VC
investments. To achieve the objective CSSP will entice private sector agro-enterprise investments in
Bắc Kạn and Cao Bằng by co-financing up to 49% of investments that will generate incremental
markets for raw material leading to incremental production of agriculture primary produce resulting in
increased income and job opportunities among the rural households. Applications with higher levels of
own contribution will be assessed as more competitive. This approach to promoting agri-business
investment in rural areas is consistent with prevailing GoV policies (see page no. 7, para. 22), but
uses a simplified, single grant approach to supporting agri-business investment in public and private
goods and staff and supplier capacity building, with the allocation of grants resources set, within
defined limits, by the investor. This approach, which incorporates the key elements of Decree 210
and MARD Decision 62, simplifies grant management and has proven successful in other IFAD
investment projects in Viet Nam. The Project will work closely with the Bắc Kạn and Cao Bằng
provinces to draw GoV grant financing into the APIF programme. The Project will identify commodities
having investment potential and which are in compliance with the Bắc Kạn and Cao Bằng SEDPs.
The selected commodities will be chosen based on having: (i) significant potential for involving rural
households, particularly disadvantaged households, in incremental production and job creation;
(ii) available technologies for improved productivity and CCA; (iii) reasonably assured national or
regional markets; and (iv) potential for export and/or import substitution. At least 50% of the total
number of households benefiting from APIF supported investments should be represented by poor,
near poor or women-headed households.
132. For each selected commodity, a VC Strategic Investment Plan (SIP) (Output 1) will be
prepared, including all envisaged activities within the VC. The SIP will list the potential types of
investments eligible for APIF support and each type of investment will be accompanied with a realistic
business model/financial analysis. Investments/upgrading not directly supported by the APIF output,
e.g. training of farmers, organizing farmers into groups, etc., will also be listed together with known co-
financiers and each type of investment will be accompanied with a business/model financial analysis.
The SIP will be used as the framework for calling entrepreneurs to express their interest for investing
in Bắc Kạn and Cao Bằng. Examples of potential VC development opportunities in Bắc Kạn and Cao
Bằng are detailed in Appendix 4, Annex 8. Experience from successful 3PAD investments in value
chains in Bắc Kạn is detailed in Appendix 3, Annex 2.
133. Only legally registered cooperative societies and companies of at least 24 months standing will
be eligible to apply. Entities that are the subject of bankruptcy, criminal investigation, fraud, corruption
or are in default of contractual agreements will be ineligible. APIF investments will be awarded on a
competitive basis for capital investments in civil works, equipment (processing, packaging, energy
generation or environment protection), transportation and marketing, related directly to the core
activity of the investor. The PPSCs will be responsible for adopting recommendations for APIF
investments, which will be subsequently approved by the Bắc Kạn and Cao Bằng PPCs. Poor people
income and jobs, value added products, and productivity and market access and gender equality will
be important criteria in investment proposal evaluation, together with commercial viability,
environment impact and cost effectiveness assessments. The APIF programme will be underpinned
by a technical, business management, accounting and Information Communication Technology (ICT)
capacity building program for District and Commune level businesses with a view to improving their
farmer service capacity, profitability and enterprise linkages, both at local level and to upstream quality
suppliers and markets. It is recommended that the provincial Enterprise Association mentors this
programme.
134. The CSSP will provide approximately USD 6.4 million (including co-financing) for APIF facility
financing, including USD 2.6 million in Bắc Kạn and USD 3.8 million in Cao Bằng. The APIF facility will
be established with IFAD co-financing up to 49% of total investment cost, with the remaining
investment being contributed by the benefitting business. Applications with higher levels of own
contribution will be assessed as more competitive. Up to 30% of APIF grants will be available for the
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purchase of supporting services (business development services (BDS), legal, technical, marketing,
standards, farmer extension, etc.) for the planned commodity chain investment. Co-financing will start
at USD 15,000 as a minimum and reach up to USD 75,000 as the maximum. In cases where the
potential export/import substitution and social impact of the proposed Project is extremely high and/ or
the investment is pivotal for developing the respective commodity in Bắc Kạn and Cao Bằng, the
maximum APIF grant could, with IFAD approval, be up to USD 150,000. In case of production of new
raw material, the PPCO could recommend to the PPSC that trial production can be financed at a
smaller amount than USD 15 000, but otherwise follow the same requirement as the main stream
APIF. The in-kind contribution should not exceed 50% of total enterprise contribution (i.e. 50% of 51%
minimum enterprise contribution). The in-kind contribution must be supported by appropriated
documentation stating its value based on market evaluation undertaken by an independent authorized
entirety. The minimum 26% (of total investment) enterprise cash contribution for APIF investments
must be deposited into a designated APIF co-financing Account, held by the lead enterprise and
accounted for separately in their books of accounts. The cash contribution cannot be reduced over the
duration of the APIF grant period, however, the enterprise can expand this level using own resources
or other (equity and debt) funding. The CSSP will provide approximately USD 5 million (including co-
financing) for APIF facility financing. APIF supported investments in prioritized commodities must be
within Bắc Kạn and Cao Bằng, but could fall outside of the five nominated Project districts.
135. VC Selection. The two main criteria for selecting a VC for CSSP support are market demand
(within province, across provinces, regional and international) and a strong return to farmers with
minimal price volatility. This activity will also include identification of Lead Enterprises (LE) interested
to participate and under what conditions and identify level of interest among the target group including
the preparation of rapid partial budgets for the selected commodity/product. Promising investments
will, thereafter, undergo VC analysis including: (i) situation analysis; (ii) opportunities to upgrade;
(iii) constraints to upgrading; and (iv) recommendations on what can be done practically and what
instruments to use.
136. For each intervention supported by the CSSP, an impact analysis will be conducted including.:
(i) cost benefit analysis at both farm enterprise and household levels using with and without
investment scenarios; (ii) for medium term capital investments, the estimation of capital NPV and IRR;
(iii) full financial and economic analysis of investments by intermediary enterprises, including monthly
cash-flow/working capital analysis during the first years to avoid liquidity problems and development
of a small business plan; (iv) investments by LEs will be supported by a well-articulated business plan,
, which can also be used by the LE for implementation of the investment. The business plan will
including detailed financial and economic assessments and social and environmental impact
assessments and monthly cash flow/working capital analysis; (v) investment in business derived
social infrastructure –bridge, piece of strategic road, water supply, electricity, gas, water treatment etc.
should all be supported by a feasibility study and undergo financial and economic analysis; and (vi) an
economic multiplier impact assessment should be conducted for the selected VC.
137. Approved investments will develop an Action Facilitation Plan: this will include preparation of a
Gantt chart providing the time line for all activities to be supported by the respective Project e.g.
grants, credit guarantee, CDF etc. The chart will also identify responsible the party, place and time
and how it is measured.
138. APIF Implementation Arrangements. Legal entities eligible to apply for APIF include: (i) sole
Proprietor/individuals; (ii) cooperative societies/associations; (iii) partnership; and (iv) companies. As
part to the eligibility criteria, the aforementioned entities should be able to provide the documents
mention below.
Business License
Certificate of registration and extract from Registrar
Annual tax Return Report (2 years)
Capacity Document of Board of Coordinator, CEO, CFO, CTO
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Memorandum and Article of Association
Permission for the AMD to collect information from trade partners.
139. None of the above entities shall be eligible for support under the following circumstances:
Having gone bankrupt or being liquidated; having its operations managed by courts; signing agreements with creditors, having its operational activities suspended; being subject to procedures concerning these matters or being in a condition due to a similar situation as per national laws or arrangements;
Being sentenced for offences related to their own business which cannot be appealed;
Being convicted of gross abuse related to business matter which can be confirmed by the AIU;
Non performing obligations related to the payment of social security contributions or tax payments in accordance with the legal provisions in Vietnam;
Being subject to an adjudication due to being involved in fraud, corruption, a criminal organization or other illegal activity which cannot be appealed;
140. The Lead Firm (LF) and/ or its implementing partner(s) contribution to the investment can be
made in cash and/ or in kind. However, the in-kind contribution should not exceed 50% of total LF
counterpart’s contribution. The in-kind contribution may include e.g.:
labour;
land use rights;
equipment, vehicles, building and other capital goods and/ or raw materials contributed to build up/ acquire such goods during the agreed Project timeframe
purchase and rent of land or existing buildings;
working capital.
141. The in-kind contribution must be supported by appropriated documentation stating its value.
The documentation must be based on market evaluation undertaken by an independent authorized
entirety who will be hired by PC to undertake the evaluation. In-kind assets directly related to the
investment with APIF support can be accepted if procured/user-rights has been obtained within 24
months from the time of submitting the concept note. In-Kind contribution cannot excide 70% of total
contribution by the LF.
142. The APIF will not accept the following assets neither as the LF’s contribution nor as
expenditures eligible for reimbursement:
leasing of equipment, land and facilities;
bank charges, cost of guarantees and similar charges;
value of intellectual property rights;
value of previously existing inventory used for the production of the Project goods and/ or services;
general costs involved of an investment Project proposal development/design (architects’, engineers’, consultants’ and general legal fees, costs of feasibility studies for preparing the Detailed Investment Proposal and costs for acquisition of patents and licenses, etc.).
143. The minimum 26% cash contribution has to be deposited into the designated LF/APIF co-
financing Accounts held by the LF and accounted for separately in the books of accounts of the LF.
The cash contribution cannot be reduced over the duration of the APIF agreement.
144. The APIF is separating investment items into Public Orientation (PO) and Company orientation
(CO). The APIF beneficiary can contribute maximum 30% of its total co-financing towards Public
Orientation investments. There is no limitation for the LF funding of PO activities. The PO investments
are those directly related to the suppliers of raw material and capacity building of rural households
and LF’s employees including:
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documented Technical Advisory Service to rural households and training of rural households;
documented training of LF personnel
documented Provision of production credit in cash or in kind;
documented joint (LF and rural households) investment in intermediary produce collection and processing centres.
145. A total of 70% of APIF co-financing should be for CO investments. CO investments are capital
tied up in plant, equipment, rolling stock related directly to the core activity of the LF including:
civil works related to storage and processing of raw material;
processing and packaging equipment;
transportation related to collection of raw material from RHH and shipment of finished product;
equipment for energy generation for processing plant;
equipment related to environmental mitigation.
146. The investment supported by the APIF shall assist a minimum of 1 rural household per
USD 500 of co-financing e.g. total APIF co-financing of USD 50,000 should provide direct tangible
benefits to a minimum of 100 rural households including 40 poor, women headed or minority
households. The direct tangible benefit should be in the form of:
rural household sale of raw material to LF;
rural household receiving training and advisory service;
rural household receiving production credit;
rural household formed into cooperatives/associations jointly own intermediary processing/assembly facility for raw material.
Potential Risks and Mitigating Issue
Table 2: Activity 6.2: Potential Risks and Mitigating Issues
Potential Risks Likelihood Severity Mitigating Issues
Financial institutions may not
be ready to finance the
investments required in
various VC activities.
M M The support operations of CSSP
to reduce the investment risks
and the pro-active method
proposed for the implementation
of Activity 2.1.x are planned to
mitigate just this potential risk.
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Annex 1. Template for Preparation of VC Strategic Investment Plan
Step One: Data Collection
1. The VC analysis team first conducts background research on the chosen commodity/crop by
reviewing websites and other secondary sources of information. During this phase, the team looks or
information such as:
Importance of commodity/crop to Bắc Kạn and Cao Bằng’s economy (percentage of GDP, employment in the sector, etc.)
Global end markets for commodity/crop (demand, trends, potential expansion)
Bắc Kạn and Cao Bằng’s position within the Vietnam and global commodity/crop market
Average size (Ha) of commodity/crop per HH in Bắc Kạn and Cao Bằng
Climatic conditions in Bắc Kạn and Cao Bằng for commodity/crop production
Trade data of import and exports on the commodity/crop in Bắc Kạn, Cao Bằng and Vie Nam at large.
2. After a thorough review of relevant secondary sources, the team conducts primary research in
Bắc Kạn and Cao Bằng through a combination of one or more of the following methods: interviews,
focus groups, surveys and observation. Through this process which takes approximately 1 weeks in
the field, the team gather more information on the VC including the actors (HH-farms, SMEs –
processors, input suppliers, advisors etc.), relationships between the actors of the chain and factors
affecting the competitiveness of the chain.
Step Two: VC Mapping
3. By using the information gathered during interviews as well as secondary research, the VC
analysis team develops the map of the commodity/crop sector in Bắc Kạn and Cao Bằng. VC
mapping enables the analysis team to visualize the flow of the product from conception to end
consumer through various actors, as well as the supporting markets and enabling environment
affecting the VC. The first step is to list all the functions and actors in the VC.
4. Who are the actors in the commodity/crop VC?
Input suppliers (companies who sell to, farmers' associations and to household- farmers)
Producers (households- smallholder farmers and Poor household-farmers)
Small-scale traders
Small-scale processors –local sale
Medium/large-scale processors-exporter sale
5. Functions may be performed by more than one actor, and each actor may perform more than
one function. What are the functions in the commodity/crop VC?
Input supply
Production
Trading
Processing
Exporting
Importing
6. Once they are identified, the functions and actors are placed in a matrix to show who does
what. List the functions along the side and the actors across the top and mark the boxes to indicate
which actors perform which functions. Once this table is complete, a map can be drawn showing how
the product moves from one actor to another and when it passes through the different functions.
Based on the map it is possible to establish the cost and margin make-up for each level the produce
passes through used as the base line for present distribution of cost and benefits among actors.
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Step Three: Analysis of Opportunities and Constraints
7. The next step is to prepare a table like shown below, list the structural and dynamic factors in
the VC, and then briefly describe the current situation, opportunities, constraints and
recommendations for addressing the constraints including tangible How, Who and Financing.
Framework Situational
analysis
Opportunities
for Upgrading
Constraints to
Upgrading
Recommendation
for Upgrading
Constraints (How,
who and
financing)
Structural Elements of the VC
End market
Business
enabling
environment
(both soft and
hardware)
Vertical linkages
Horizontal
linkage
Supporting
markets
Dynamic of the VC
VC Governance
Inter-firm
Relationship
Step Four: Prepare Brief Sample Business Models for Each Recommended Upgrading
showing the expected Results of the Upgrading
8. This step included technical description of the upgrading, financial analysis, economic analysis
listing all the incremental estimated forecasts e.g. increased HH income, number of HH benefiting; job
creation; increased export; import substitution, etc.
9. This step should also include the preparation of a matrix showing the current cost and benefit
make-up and profit distribution along the VC and an evaluation of change in governance after
upgrading.
Step Five: Stakeholders Workshop
10. The stakeholder workshop brings together key actors from various levels in the VC to vet the
findings of the analysis and discuss if the chosen strategy for increasing VC competitiveness is valid.
NOTE: The SIP should be as precise and concise as possible max 15 pages
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Annex 2. Terms of Reference for the Public sector market economy skills
training programme
INTRODUCTION
1. This activity will assist Bắc Kạn government officials to effectively support the provincial
government’s market oriented development strategy. The capacity building programme will
demystify market mechanisms and provide public servants with the skills and tools to
implement results-based planning, management, monitoring, reporting and learning within the
framework of a market-based economy. The primary target will be village leaders, elected
officials of People's Committees and People's Councils, Supervision Boards and technical
cadres and members of the mass organisations at commune and district levels;
CONTRACT OBJECTIVES & EXPECTED RESULTS
Overall objectives
2. To make provincial socio-economic development planning and service provision holistic,
participatory, climate adapted and market oriented.
Specific objective
3. The specific objective of the assignment is to establish a comprehensive cadre of commune
and district level public servants who are familiar with the core principles of market economics
and profitable business management.
Results to be achieved by the Consultant
4. The Consultant(s) will be required to design a concise, competency-based training program in
market economics and farm and business management, prepare relevant training material and
deliver a training programme for Bắc Kạn and Cao Bằng commune and district staff in multiple
locations in Bắc Kạn and Cao Bằng over multiple years
5. The Consultants will:
Provide a detailed workplan identifying all major deliverables and associated tasks and
their phasing. The plan should be produced using proprietary Project management
software and be in sufficient detail to clearly convey the scope of work that will be
performed.
Identify and specify the consultant resources required to implement the consultancy
including detailed descriptions of their competencies and functions;
Specify the Costs of implementing these terms of reference.
Other tasks
6. During the period of the contract, the Consultant shall carry out periodical trainee competency
assessments, participate in progress meetings with the client and prepare and meeting minutes
to be signed by both parties.
ASSUMPTION & RISKS
7. The following assumption are made:
That the Bắc Kạn government can identify and make available DPI staff who will be
trained as Trainers by the Consultant and will support the Consultant-led training
programme;
that the Bắc Kạn government is able to make available, on time, groups of commune and
district staff for participation in training courses.
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Risks
8. The following risks are identified:
The Bắc Kạn government is unable to release staff in sufficient numbers or in a timely
manner for an efficient training programme;
The Project team does not have the appropriate skills and roles;
The proposed Project design is not functional;
The Project is not completed within the expected timeframe.
SCOPE OF THE WORK
9. The economic training program will transfer the following competencies:
An understanding the market economy and associated roles of government and the
private sector;
the economics of supply and demand and impact of market competitiveness;
the nature of public and private goods,
privatization,
the roles of capital, labour and international trade, and
the transition from a planned to a market economy.
The principles of business and farm management including risk management
10. Gender equality and environment management will be cross-cutting training targets. Staff will
also be trained in group organization and leadership, participatory planning, and results based
management including effective monitoring and evaluation (M&E) and reporting and feedback
to management decision making. Trainees will be introduced to the VC SIPs developed under
sub-component 1.1.
11. Training will focus initially on government staff within the Project communes and, thereafter, be
rolled out to all Bắc Kạn and Cao Bằng government staff at commune and district level.
Outcomes will be assessed through the measurement of trainee capacities during and post
training.
REQUIREMENTS
12. The Consultant is required to provide an experienced team of economic and business/farm
management experts, including:
A team leader with a post-graduate qualification in economics or business management
and extensive in introducing the principles of economics and/or business management to
students;
A number (to be specified by the Consultant) of graduate level economics and business
management trainers with teaching and tutoring experience;
Graduate specialists in gender and development, environment and development and
participatory M&E with teaching and tutoring experience.
An IT specialist to develop training material including its presentation on the web.
13. It is essential for the success of the consultancy that experts co-operate and consult with each
other and the client on a continuous basis in order to achieve the best possible outcome. The
technical proposal should include an explanation of how the consultant proposes to establish
and maintain teamwork.
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REPORTS
Reporting requirements
14. All reports should follow the general reporting requirements to be agreed with the Client at
contract negotiations.
15. A Detailed workplan shall be submitted to the Client within 15 days from the date The Contract
is signed.
16. The Consultant shall submit the following technical reports:
No. Activity Output (Report Delivery)
1 Training needs assessment Needs Assessment Report
2 Preparation of training programme Detailed training manuals
3 Training implementation Periodic staff competency
assessments
17. A Final Report shall be prepared at the end of the contract. The settlement of the Final Invoice
is subject to acceptance of the Final Report. The Final Report should include:
A complete overview of all the activities implemented during the contract;
A summary of outputs, and the identification of any major problems, which may have
arisen during the performance of the contract; and
An assessment of the impact of the Project measured against the stated Project
objectives and the indicators of achievement.
All approval technical reports.
18. An electronic format of all reports shall be submitted to the Client written in Vietnamese.
MONITORING AND EVALUATION
19. Project monitoring and evaluation will be based upon periodic assessment of the progress of
the delivery of specified Project results against their targets, and the achievements of the
Project objectives. The nominated performance monitors are:
1. CSSP Project Coordinator
2. CSSP M&E Officer
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Annex 3. An approach to Medium-term MOP-SEDP development at commune
level
MOP-SEDP Planning Process.
1. Following the principle of grassroots democracy, the commune planning is organized in a
participatory way. Especially in initial years, this requires a higher number of stake holder meetings
including:
a) First commune meeting for introduction of MOP-SEDP planning
b) First village meeting for introduction of MOP-SEDP planning
c) Village sub-groups for elaboration of market opportunity ideas (MOI), informed by the SIP
d) Second village meeting for agreement on village plan and priorities
e) Second commune meeting for preparation of a draft commune plan
f) working group for refinement of draft MOP-SEDP plan
g) Third village meeting for consultation on the draft commune plan
h) Third commune planning meeting for finalizing and ratifying the commune plan
Step 1: First commune meeting: Introduction to MOP-SEDP process
Time: ½ day
2. Organization: A one-day commune introduction meeting is held, chaired by CPC. The
workshop is facilitated by members of PPCO
3. The content of the meeting includes:
Introduction to the CSSP Project (if applicable)
Introduction to the concept of and tools for market oriented planning including MOI
Presentation of the participatory planning process
Agreement on the work agenda for planning exercises at village and commune level
4. Participants: From each village, one man and one woman (head of the village and of the
women union); from commune level: representatives from mass organizations, people’s council,
cooperatives, and other stake holder groups; and a representative from the PPCO.
Step 2: First village meeting: Introduction to MOP-SEDP planning
Time: 2 or 3 hours
5. Organization: A village introduction meeting is held, chaired by the village head, and
supported by the commune. At the end of the meeting, sub-groups are formed for elaborating MOIs.
The sub-groups will work individually in the time until the next village meeting.
6. Participants: All households are to be invited to the village meeting; at least 40% of
participants should be women, and a number of poor households proportional to the total poor
households in the village or higher. Participation in sub-groups is open to all households. Poor are
particularly encouraged to participate.
7. Content
Introduction to the CSSP Project (if applicable)
Introduction to the concept of and tools for market oriented planning including MOI; explaining the working agenda and steps for participatory MOP-SEDP planning
Brainstorming on business and market opportunities in the village
and how to elaborate MOI in sub-groups; splitting off into sub-groups
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Step 3: Village sub-groups: Elaboration of MOIs
8. Time: individual time arrangement by sub-groups between the first and second village meeting
(time span of one week in between).
9. Organization: The sub-groups which have formed at the end of the last village meeting will
individually elaborate MOIs. The DVCMDO will provide facilitation services on demand to help sub-
groups in elaborating their MOIs.
10. Participants: Flexible number of sub-groups with flexible number of participants. This can
include existing groups like associations, clubs, saving and credit groups etc., or spontaneously
formed groups with common interests.
11. Content
Formation of sub-groups: Villagers are encouraged to form sub-groups according to common interests: cattle raising farmers, coconut growers, SCGs, CIGs, poor households, carpenters, etc. Groups might already exist like SCG, clubs etc. or be formed spontaneously at the end of the first village meeting. The number of sub-groups is not limited. Participation in the sub-groups is open to all households. Poor are especially encouraged to participate and to form their own sub-group.
Situation analysis and planning: each sub-group will analyse the current situation of their business and develop market opportunity ideas (MOI) on how to improve their existing business or how to develop new businesses. It follows five development areas: Planned results (long term objectives; vision); infrastructure; business and marketing; work force; and finance.
Focus on business development. While areas like infrastructure or labour force development (training) are usually included in most local plans, special attention is to be paid to the area of business development. The facilitator will specifically help the sub-groups to discuss guiding questions like follows:
Expanding existing business
o What products or services are you selling?
o Where do you sell your products?
o Are there other markets, may be in other provinces or export, where the commodity is traded?
o Who are your clients? How do the clients know about your business?
o Do you know what the customers’ demands and preferences are?
o How could you reach new customers?
Identifying new business opportunities (conduct a brainstorming exercise)
o What natural resources do you have in the village which could potentially be marketed (fruit trees, local vegetable, construction material, medical herbs etc.)
o What new ideas are there potentially for new businesses?
o What activities can promote existing and new businesses?
Examples:
o Formation of collaborative groups to gain stronger marketing position in input purchase or selling of products
o Establishing contacts with buyers; engaging in contract farming
o Attracting private investment or public private partnerships into the commune
o Study tour to other market places like super markets in bigger cities
o Study on market potential for new products or unused resources in the commune (like fruits and local vegetables)
o Road improvement for better transport
Village plan: the village management board and members of the sub-groups prepare one list of all the different MOIs.
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Step 4: Second village meeting: Agreement on village plan and priorities
Time: 2 or 3 hours
12. Organization: A village meeting is organized (2…3 hours in the evening) chaired by the village
headman with assistance from CPC/VCMDO
13. Participants: All households are to be invited to the village meeting; at least 40% of
participants should be women, and a number of poor households proportional to the total poor
households in the village or higher.
14. Content:
Presentation of MOIs: the speaker of the sub-groups presents their MOIs
Discussion and amendment: the MOIs will be discussed by the whole village meeting and are subject to changes accordingly. All participants are encouraged to raise comments and also new additional ideas to be included.
Infrastructure:
Priority setting: Finally, the updated list of MOIs will be ranked according to the priorities of all participants. For each MOI, the participants vote (by raising hands or by secret polling) and the number of votes are recorded (total, man/women, poor/non-poor). There should be a clear focus on pro-poor and market orientation.
Ratification of the village plan: the ranked list of MOI presents the village plan. It will be ratified by the village meeting and signed by the head of the village.
Step 5: Second commune meeting: Preparation of draft MOP-SEDP plan
Time: 1 day
15. Organization: Chaired by the CPC, a one-day commune workshop is organized to collate all
MOIs and infrastructure requirements form the villages and to integrate them into a first draft
commune plan. 2 Pinboards, A0 paper and small paper cards are needed to properly facilitate the
collection and sorting of the different ideas.
16. Participants: From each village, one man and one woman (head of the village and of the
women union); from commune level: representatives from mass organizations, people’s council,
cooperatives, and other stake holder groups; and a representative from the PPCO.
17. Content
Compilation of marketing ideas: MOIs of all villages are exposed on A0 paper in the commune centre and participants are encouraged to study and discuss the proposals.
The facilitator helps the plenary to prepare a list of the MOIs of all villages on pin board. MOIs which are mentioned by several villages will be merged; overlapping ideas will be clustered and sorted.
The facilitator encourages the villagers to jointly think about new ideas, i.e. potential opportunities which are not yet pursued in the village.
The collection of MOIs are cleared up and transcribed to a clean list. MOIs are then discussed one after another in more detail. For this, the villagers rank the order in which to discuss the MOIs.
Joint elaboration of MOIs: On pin board ideas are then collected on how to improve the respective business in the commune. This includes activities for development of organization, infrastructure, business, work force, and finance. In an open discussion, all participants are encouraged to contribute their ideas, e.g. in writing on small paper cards.
Search for new business ideas: The facilitator conducts a brain storming exercise to encourage as well new and unusual business ideas (products of small quantities; local
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specialities not yet marketed; products for niche markets – for smaller market segments but with potentially high gross margins etc.).
Infrastructure: MOIs often include as well infrastructure schemes, which then appear in the planning tables under Production and Business Plan.
Priorities: finally, the meeting again gives a voting which MOIs they consider more important. Criteria for the priority ranking are: pro-poor orientation; market orientation; the priority ranking is not necessarily the final one but should serve as orientation in case the requested IMPP support exceeds the ceiling.
Note: all MOIs are kept in a long list, even if they cannot be supported through the MOP-SEDP budget.
Step 6: Commune working group: Refinement of draft MOP-SEDP plan
Time: 1 to 2 weeks
18. Organization: For around 7 days, commune officials under the lead of the CPC will refine the
draft commune plan with support from VCMDO. In this time, the team also consults with enterprises
and other relevant organizations and VBARD etc.
19. Participants: CPC, PPCO, representatives for the poor.
20. Elaboration of Production and Business Plans by the commune working group
After the commune workshop, a commune working group will further elaborate on the MOIs proposed and ranked during the commune meeting.
Production and Business Plans: A range of activities is required to upgrade the MOIs to Production and Business Plans; this might include drawing conclusions from high-profile market studies, analysis of VCs, consultation with enterprises and organizations, estimation of cost and benefit of the planned interventions, and a closer analysis of the expected benefit for the poor, especially with regard to income from improved marketing, reduced production cost, improved employment situation etc. As these activities are time consuming, up to 6 working days are required for their careful completion.
The format for Production and Business Plans builds on a framework for local economic development with five development areas: Planned results (long term objectives; vision); infrastructure; business; work force; and finance. Situation analysis and planned activities for each Production and Business Plan will be analysed along the guiding questions in the five areas.
Focus on marketing. Among the five areas, the most important one to focus on is business development. Guiding questions to answer include:
o Where do you sell your products now? To whom? How much? To which price?
o What are the trading conditions? What might be the alternatives? How could the business be improved?
o Are there any ideas on new business and marketing opportunities?
o What advantages will there be in forming collaborative groups in terms of stronger market position?
o How could the proposed activities and business ideas be financed? What other options are there than the IFAD funded MOP-SEDP Budget; e.g. own contributions, private investment, linking with enterprises, public private partnership, credit, other funding agencies like NGOs, etc.?
The draft commune plan is then finalized following the format given in Annex 1.
21. Output: The draft MOP-SEDP plan contains 1) a narrative with situation analysis, plans, and
description of Production and Business Plans; 2) corresponding planning tables, and 3) an Annex with
all MOIs, including those which are not included in the MOP-SEDP plan.
22. Activities to be financed by CSSP need to meet the Project eligibility criteria.
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Submission of draft commune plan to the villages
23. The draft MOP-SEDP plan will be submitted in copy to the villages for comments at least 10
days prior to the subsequent commune planning meeting. This time is required for village
representatives to consult with villagers and prepare comments, to clarify issues with higher levels or
bank and loan issues before going into the official commune planning workshop.
Step 7: Third village meeting for consultation on the draft MOP-SEDP plan
24. Organization and participants: the head of the village calls for a meeting either with all
households or only with a core group existing of the speaker of sub-groups of the first village meeting.
25. Content: reviewing the draft commune plan whether village priorities are properly reflected;
checking appropriateness of the draft plan for poverty reduction; agreeing on issues to be raised and
priorities and village interests to be defended by the village representatives during the forthcoming
official planning meeting in the commune.
Step 8: Third commune planning meeting for finalizing and ratifying MOP-SEDP plan
26. Organization: A one-day workshop is organized in the commune, chaired by the CPC and with
participation of all relevant stake holders for finalizing the MOP-SEDP plan. Invitations are to be sent
to all stake holders 10 days before the meeting at the latest.
27. Participants: Democratic representation from all relevant stake holder groups. From village
level: each one man and one woman (usually the head of the village and of the women union); from
commune level: representatives from mass organizations, people’s council, cooperatives, and other
stake holder groups; representatives for the poor.
28. The purpose of the meeting is to discuss and revise again the draft MOP-SEDP and to
democratically decide about the final version.
29. This participatory meeting is important to establish democratic legitimacy of the plan. The final
version of the MOP-SEDP plan will form the basis for subsequent allocation of funds for plan
implementation. The final version will be signed by: CPC, Commune Women Union, and the PPCO.
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Annex 4. Terms of Reference for an International Forage Specialist.
Job Title: Forage and Seed Production Advisor
No. of positions: 1
Duration: 5 person months over 4 years
Recruitment: International
Reports to: Project Coordinator on operational matters and Coordinators DARD on
technical matters
Purpose
1. To strengthen the capacities of the PPCO and DARD/DoNRE/DoST to implement and oversee
a climate smart forage development programme, it is proposed to hire a Forage and Seed
Production Advisor for a period of 5 person months over 4 years. The location will be Bắc Kạn
and Cao Bằng, with at least 50% field travel. In collaboration with the CSSP TAG, the Forage
and Seed Advisor will:
Key Responsibilities and Duties of the International Technical Advisor
2. Maintaining a good understanding of the technological, operational, institutional and other
innovations and good international practices on forage and forage seed development in the
region and globally, the responsibilities include (but are not limited to) the following:
(a) Advise the PPCO on the logical and effective implementation of activities under
Sub-component 1.3. ─ Climate adapted technology tested and developed;
(b) Identify, nationally and internationally, available forage varieties with potential for
integration into smallholder farm cropping and livestock systems in Bắc Kạn and
Cao Bằng, including varieties suitable for forest land reinforcement;
(c) identify and support implementation of opportunities for improved pasture
management by smallholder farmers, both individually and through group action,
and propose investments for their realization;
(d) propose and support implementation of strategies for smallholder farmer and
farmer group conservation and storage of planted fodder;
(e) identify and support implementation of strategies for smallholder farmer-based
forage seed and vegetative material production to jump-start Project forage
interventions, including a view to the future commercialization of such strategies;
(f) assist the DARD to prepare a forage manual for use by technical support staff and
farmers;
(g) Identify the capacity building needs of different implementers and advise on how
these needs can be addressed to ensure their effectiveness in terms of Project
outcomes;
(h) Support the PPCO in developing appropriate strategies to inform potential partners
of available Project support under Sub-component 1.3;
(i) Advise the Project on the best learning options for study tours and exchange visits;
(j) Coach, mentor and train the DARD staff in all aspects of sustainable forage and
forage seed production in general and sub-component 1.3 implementation in
particular;
(k) Support DARD staff in a timely manner in the preparation of their contribution to
the Project APWB and annual procurement plan;
(l) Advise the CSSP on training opportunities and exposure opportunities;
(m) Support the PPCO and DARD to build collaboration with the private sector;
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(n) Attend meetings/workshops under the Project and offer advice/technical opinion
with special focus on those that may affect Sub-component 1.3 performance;
(o) Advise the DARD on new developments about innovations in sustainable forage
and forage seed production and forage-based animal nutrition and best practices.
Qualifications for the International Technical Advisor
3. Formal academic qualification in agriculture or natural resource management with at least 10
years at a senior level in sustainable forage and forage seed production in a developing
country, including in S.E Asia. S/he should have extensive exposure to participatory processes
at smallholder level and in the regulation of forage genetic material. Experience with
institutional strengthening and/or innovation in agriculture and livestock agencies will be an
added advantage.
4. The person should be mature, team oriented professional with good analytical and good
communication – able to make easily understandable technical inputs on sustainable forage
and forage seed production and distribution. He/She should be able to strike rapport with
personnel at different levels, including policy makers, international organizations and other
stakeholders. A strong self-motivated individual working with no or minimal supervision and
able to travel to the rural areas and meet tight deadlines. The person should have excellent
skills in written and spoken English and be fully conversant with computer use.
Minimum Qualifications
MSc in agriculture or natural resource management or similar discipline;
At least 10 years of practical experience in sustainable forage and forage seed development, of
which at least 5 years working and living in developing countries;
Good understanding of livestock and forage production systems in developing countries and S.E.
Asia and Viet Nam in particular as well as extensive exposure to innovations;
Excellent knowledge of innovations (in forage species and production systems, including
sustainable seed production) worldwide.
Proposed Selection Criteria and Maximum Scores
No. Criterion Maximum score
1 MSc or higher qualification 10
2 Length and variety of practical experience in sustainable forage and forage
seed production at smallholder and commercial levels
20
3 Depth of familiarity with the respective core knowledge with respect to:
Sustainable forage production by smallholder farmers;
Sustainable production and distribution of forage seed and
vegetative planting material;
Practical experience in animal husbandry and nutrition;
Participatory development of forage and seed production
programmes in developing countries
20
20
10
10
4 Experience with Project management, in particular those funded by
International Finance Institutions 10
TOTAL 100
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Annex 5. Terms of Reference for an International Senior Rural Finance Expert.
Job Title: Senior Rural Finance Expert
No. of
positions:
1
Duration: 5 person months over 5 years
Recruitment: International
Reports to: Project Coordinator on operational matters and Women’s Union on
technical matters
Purpose
1. The Project will internationally recruit a short-term Senior Rural Finance Expert to support the
effective implementation of the rural finance, competitive co-financing and business linkage
activities of CSSP.
Key Responsibilities and Duties of the International Technical Advisor:
2. The overall task of the Senior Rural Finance Expert is to support the implementation of the rural
finance, competitive co-financing and business linkage activities of CSSP so that the
development objectives of these activities are achieved. Within this overall objective, the
specific tasks of the Senior Rural Finance Expert include:
a) Review the Annual Work Plan & Budget of the WU for the SCG activities and support the
WU to ensure that all plans are properly designed, implemented and monitored
according to specified deadlines and within the allocated budgets.
b) Conduct a detailed review of the WU’s progress in the management of the SCG activities
and make practical recommendations on how to improve implementation performance.
c) Review the WU’s plans and progress in the transformation of the SCG network into
Social Fund and later to an MFI and recommend actions to be taken to ensure that
transformation progresses as envisioned in the CSSP design documents.
d) Assist with connecting the WU to appropriate institutions to ensure that its senior staff are
well informed about the SCG transformation process and the related regulations in Viet
Nam.
e) Review the progress of CSSP in its objective to leverage capital from the financial market
to focal agricultural community chains and directly negotiate with financial institutions, the
provincial guarantee fund, agro-companies and farmers’ organisation to promote
increased agro-financing operations in Bắc Kạn and Cao Bằng.
f) Assist the CSSP management in the planning and implementation for the Provincial
Agro-financing Workshops.
g) Review the progress in CSSP’s business linkage operations in general, and the
competitive co-financing support activities in particular, and make practical
recommendations on how to make the business linkage building more effective.
h) Assess the performance of the Rural Finance Specialist, the Rural Finance Officer and
the district-based VC and Market Development Officers and make recommendations on
how to further develop their working methods to achieve higher levels of agro-financing
and more effective business linkages in the CSSP supported commodity chains.
i) Assess the overall performance of the CIG competitive c0-financing scheme and make
recommendations for more appropriate working methods and scheme procedures.
j) Assist the CSSP management in establishing and operating of appropriate monitoring,
evaluation and reporting systems for rural finance and business linkage promotion
activities.
k) Carry out any other task determined by the Project Coordinator in support of the CSSP’s
rural finance and business linkage promotion operations.
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Qualifications for the International Technical Advisor
3. The Senior Rural Finance Expert will hold a university in Business Management, Finance,
Economics or a related field. S/he will have a minimum of 15 years of work experience at
senior level of banking and rural finance operations and business promotion, with at least 10
years of senior level experience in commercial banks and registered MFIs in developing
country environments. Wide global exposure to modern ways of organising rural finance and
business promotion support is a critically important requirement for the successful candidate,
also including experience from similar types of development initiatives elsewhere in Viet Nam.
Sensitivity to gender issues and previous experience of working with women’s programmes in
Viet Nam will be additional merits for the position, as well as excellent oral and written
communication skills in English.
Minimum Qualifications
MSc in Business Management, Finance, Economics or a related field;
At least 15 years of work experience at senior level of banking and rural finance
operations and business promotion, with at least 10 years of senior level experience in
commercial banks and registered MFIs in developing country environments.;
Good understanding of microfinance systems in developing countries and S.E. Asia and
Viet Nam in particular;
Excellent knowledge of innovations (in banking and microfinance) worldwide.
Proposed Selection Criteria and Maximum Scores
No. Criterion Maximum score
1 MSc or higher qualification 10
2 Length and variety of practical experience in rural micro finance scheme
development
20
3 Depth of familiarity with the respective core knowledge with respect to:
The development of rural financial institutions, particularly
microfinance institutions;
Sustainable microfinance service delivery to smallholder farmers;
Experience is small and medium business development
Experience in working with women-led groups
20
20
10
10
4 Experience with Project management, in particular those funded by
International Finance Institutions 10
TOTAL 100
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Annex 6: Suitability of forages for different uses
1. Information taken from: P.M. Horne & W.W. Stur. Developing forage technologies with smallholder farmers: how to select the best varieties to offer farmers in southeast Asia. Publication Code: MN062, ISBN: 1 86320 271 4, (1999). To be retrieved from: http://aciar.gov.au/publication/mn062 Table 1: Suitability of forages for different uses
WAYS OF GROWING AND USING FORAGES
Cu
t &
carr
y p
lots
Gra
zed
plo
ts
Liv
ing
fen
ce
s
Hed
gero
ws
Imp
roved
fa
llo
ws
Co
ver
cro
ps i
n a
nn
ual
cro
ps
Co
ver
cro
ps u
nd
er
trees
Gro
un
d c
overs
fo
r
ero
sio
n c
on
tro
l
Leg
um
e s
up
ple
men
tati
on
for
lon
g d
ry s
ea
so
n
Leg
um
e le
af
meal
(dri
ed
)
Grasses
Andropogon gayanus
Brachiaria brizantha
Brachiaria decumbens
Brachiaria humidicola
Brachiaria ruziziensis
Panicum maximum
Paspalum atratum
Pennisetum purpureum and hybrids
Setaria sphacelata
Legumes
Arachis pintoi
Calliandra calothyrsus
Centrosema macrocarpum
Centrosema pubescens
Desmanthus virgatus
Desmodium cinerea
Gliricidia sepium
Leucaena leucocephala
Stylosanthes guianensis
Warning - see notes in the section ‘Special considerations’
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Table 2: Recommended forages for different climates and soils
CLIMATE SOIL FERTILITY AND ACIDITY
Wet
tro
pic
s w
ith
no
or
sh
ort
dry
seaso
n
Wet/
dry
tro
pic
s
wit
h lo
ng
dry
seaso
n
Co
ole
r tr
op
ics
(e.g
. h
igh
ele
vati
on
)
Fert
ile (
neu
tral to
mo
d. acid
so
ils)
Mo
dera
tely
fe
rtile
(neu
tral to
mo
d.
acid
so
ils)
Infe
rtile (
mo
de
rate
to e
xtr
em
e a
cid
so
ils)
Grasses
Andropogon gayanus
Brachiaria brizantha
Brachiaria decumbens
Brachiaria humidicola
Brachiaria ruziziensis
Panicum maximum
Paspalum atratum
Pennisetum purpureum and hybrids
Setaria sphacelata
Legumes
Arachis pintoi
Calliandra calothyrsus
Centrosema macrocarpum
Centrosema pubescens
Desmanthus virgatus
Desmodium cinerea
Gliricidia sepium
Leucaena leucocephala
Stylosanthes guianensis
= recommended = possible no stars = not recommended
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Special considerations
1. In addition to the information presented in Tables 1 and 2, there are particular situations which require special consideration when selecting forages to offer farmers:
2. Forages for sheep, goats and young cattle: Warning -- do not feed Brachiaria brizantha, Brachiaria decumbens, Brachiaria mutica or Brachiaria ruziziensis to sheep, goats and young cattle. If fed large amounts, these animals can suffer from photosensitization which often results in death. Brachiaria humidicola can be fed to sheep, goats and young cattle but only in small quantities.
3. Forages for monogastric animals Warning -- Some species can be toxic to monogastric animals when fed in large amounts. Setaria sphacelata can be toxic for horses, since it contains oxalates. Leucaena leucocephala can be toxic to monogastric animals, since it contains the chemical compound mimosine. It is generally recommended that the diet of monogastric animals should contain no more than 10% of L. leucocephala. However, it can be fed in large amounts to ruminants (e.g. cattle and goats) since they are able to break down mimosine in the rumen.
4. Forages for shaded areas Most forage species will grow as well in lightly shaded areas (such as under old coconuts) as they do in open areas. Species which are often used for grazed plots in light to moderate shade are Brachiaria humidicola, Stenotaphrum secundatum and Arachis pintoi.
5. Farmers occasionally ask for forages to grow in heavily shaded areas. There are no species that will grow well in such situations, but some species are better adapted to surviving in moderate shade. Arachis pintoi, for example, can be used to cover the ground and suppress weeds in shaded areas, but they will not produce high yields. Other species that can survive in moderate shade are Centrosema pubescens, Centrosema macrocarpum, Paspalum atratum, Panicum maximum, Setaria sphacelata, Brachiaria brizantha, B. decumbens, B. humidicola and Stenotaphrum secundatum.
6. Forages for areas with a long dry season Forages need water to grow, keep cool, and to take up nutrients from the soil. While there are no miracle forages that are productive throughout a long dry season, some species are better adapted to dry environments than others (see Table 2). Some tree and shrub legumes, such as Leucaena leucocephala, have root systems that can reach moisture deep in the soil. This allows them to grow and retain their leaves longer into the dry season than other forages. Some grasses and herbaceous legumes, such as Andropogon gayanus and Stylosanthes hamata, are also able to maintain green leaf long into the dry season.
7. Forages for acid, infertile soils. All forages grow well on fertile or moderately fertile soils. Some forages, such as Pennisetum purpureum and hybrids, will only grow well on fertile soils.
8. Many of the forages recommended in this booklet will grow on infertile soils and some (such as Brachiaria humidicola and Stylosanthes guianensis) will grow even on very acid, infertile soils (see Table 2). However, no species will produce high yields on infertile soils unless manure or fertiliser is applied. On extremely infertile soils, forages may not contain enough nutrients for good animal growth.
9. Forages for very alkaline soils. Most forage species can grow in alkaline soils. Some are particularly suited to high-pH soils. These are Leucaena leucocephala, Desmanthus virgatus and Brachiaria humidicola. One species which does not grow well on very alkaline soils is Stylosanthes guianensis.
10. Forages for waterlogged soils Most forages will tolerate a few days of waterlogging but few can grow well in soils which are waterlogged for extended periods. Some forage species that can tolerate waterlogging better than others are Brachiaria mutica, Paspalum atratum, Setaria sphacelata, Brachiaria humidicola, Macroptilium gracile and Codariocalyx gyroides.
11. Forages for areas that are burnt regularly. Most forage grasses will tolerate burning as their growing points are close to the ground (eg. Brachiaria species). Most forage legumes have all their growing points high above ground and are easily killed by fire (eg. Stylosanthes guianensis, Centrosema pubescens). However, these legumes often regenerate from seed after fire. One legume which can survive even severe fires is Leucaena leucocephala.
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Annex 7 Short-Term International Technical Assistance to Support the Design
of Strategic Plan for 2017-2021 for WDF in Bắc Kạn and Cao Bằng Provinces
Terms of Reference
A. Background for Assignment
WDF in Cao Bằng Province
1. The Women’s Development Fund (WDF) of the Women’s Union (WU) in Cao Bằng province
was established with support of the recently closed IFAD-supported DBRB project. This DBRP did not
originally include savings and credit group activities or activities with the WU. During its later years,
however, it issued small loans from Project funds to the members of CIGs. In 2013, this loan portfolio
(some USD 68,000) was transferred to WU management. Similarly, an additional USD 136,000 was
transferred as a grant to support the WU savings and credit operations. These formed the principal
capital base for the WU Social Fund, the establishment of which was authorised by the Cao Bằng
PPC in May 2014. The new fund, into which the CIG portfolio was merged, was called “Fund to
Overcome Poverty Together”, below referred to with the generic name WDF.
2. Today, the Cao Bằng WDF is still an infant institution. It operates with women’s savings and
credit groups (WSCG) in five districts and 13 communes. It has a total of 56 groups with 336
members. The total portfolio is around USD 218,000, with total savings at a low level of USD 17,000.
The average loan size is VND 14.4 million (USD 654), with the average savings at USD 52 per
member. As a positive development, the WDF has, with DBRP support: (i) designed an operations
manual and systems that include an Excel-based MIS system as well as basic but appropriate
governance and management structures; (ii) a 100% loan recovery record; and (iii) five full-time and
one part-time staff members. At the same time, as its operational income is still low, the WDF has no
branches in the districts, and all the field operations of the WDF are still conducted from its head office
in Cao Bằng City.
3. The newly established Cao Bằng WDF provides an institutional framework, based on which a
pro-poor financing network can be built to support the economic and social development of low-
income women. The WDF will, between 2017-2022, receive substantial operational and financial
support from the new IFAD-supported CSSP.
WDF in Bắc Kạn Province
4. The operations of the Women Union-managed women’s savings and credit groups are
relatively well developed in Bắc Kạn province. The operations of WU’s Social Fund, called the Women
Development Fund or the WDF, started on 10 June 2014. The WDF is a well-capitalised operation,
controlling on-lending funds of around USD 3 million, which almost totally originate from the closed
3PAD project sources. In addition to its provincial Head Office, the Fund has since January 2015
operated branches in Na Ri and Ba Be districts. In addition, it manages groups in Pac Nam and Ngan
Son districts from its Ba Be branch, and in Bach Thong district and Bắc Kạn city from the provincial
office. At the end of October 2015, the WDF operated in total with 134 groups and 1,755 members. Its
total outstanding portfolio was VND 14.5 billion (USD 660,000), with the total savings at a much lower
USD 14,800 level. The Fund has ambitious plans for expansion and greater impact, with a target of
reaching some 7,500 women/households by 2018.
5. The WDF in Bắc Kạn provides an institutional framework, based on which a pro-poor financing
network to support the economic and social development of low-income women can be built. The
WDF will receive in 2017-2022 substantial operational and financial support from the new IFAD-
supported CSSP.
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From Social Funds to Registered MFIs
6. Vietnamese regulations require that savings and credit group networks must be initially
registered as Social Funds to be supervised by the provincial SBV. Later, when adequate capabilities
have been developed and operational and financial sustainability has been reached, these Social
Funds can be converted into MFIs, registered and fully supervised by the SBV. In both Bắc Kạn and
Cao Bằng, the first step of this transformation process has already been taken, with the establishment
of the WDFs as social funds. Their eventual conversion into a registered MFIs is planned to take
place towards the end of the CSSP implementation period. The significant CSSP investments in
capacity building and direct financial support to the WDF activities aim to ensure that the WDFs will be
able meet the MFI registration requirements by 2021-2022.
B. The Assignment
7. To guide its operations during the next five years, the WDFs in both provinces require a
comprehensive, practical and implementable Strategic Plan. Using the IFAD loan funds, CSSP will
recruit, for one month for each province, an international Senior Rural Finance Specialist to support
the WDF and WU management to develop this strategic plan for the WDF for the period 2017-2021.
The Strategic Plan will provide a roadmap for the WDF’s development, leading to its transformation
into a registered MFI towards the end of the planning period. As a process, the strategic planning
exercise in both provinces will need to include the following main phases:
mapping the overall potential for the WDF to develop in the operational environment of the province;
deciding on realistic targets for the WDF based on its key strengths and weaknesses;
deciding on business strategies in each key area of the operations that will help the WDF to achieve its potential, establish its competitive advantages and meet the needs of its clients
incorporating strategic decisions into financial projections to determine the impact of their implementation on the future financial position of the WDF.
8. Working in a participatory manner with the WDF, the specific tasks of the Senior Rural Finance
Specialist during this strategic planning process in each province will include:
review the regulatory framework for social funds and microfinance institutions in Viet Nam, with particular focus on MFI registration requirements;
review the microfinance market environment in the province;
conduct a detailed institutional review of the current operations of the WDF and its WSCG network, covering both the Head Office and the branches;
based on the above, conduct a strengths and weaknesses-assessment of the WDF;
working closely with the management of the WDF, define the core approaches and strategies of the WDF for 2017-2021, as well as the detailed sub-strategies for each area of the WDF operations;
convert each of the sub-strategies into implementable action plans, including the related incomes and costs;
incorporate strategic decisions into financial projections for 2017-2021
based on the financial projections, calculate all the relevant MFI indicators for the WDF for 2017-2021.
C. Output of Assignment
9. The output of the assignment in each province will be a comprehensive Strategic Plan for the
WDF for 2017-2021, including the financial projections, MFI indicators and detailed action plans
covering the operations of the WDF and its network of WSCGs.
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D. Duration and Timing of Assignment
10. The contract of the Senior Rural Finance Specialist will be for 30 days. The mission is
scheduled preferably for November-December 2016 for Cao Bằng and for the first quarter of 2017 for
Bắc Kạn.
E. Qualification and Experience
11. The Senior Rural Finance Expert will hold a university degree in Business Management,
Finance, Economics or a related field, and preferably a post-graduate degree. S/he will have a
minimum of 15 years of work experience at senior level of banking and rural finance operations and
business promotion, with at least 10 years of senior level experience in commercial banks and
registered MFIs in developing country environments. Wide global exposure to modern ways of
organising rural finance operations is a critically important requirement for the successful candidate,
including experience from similar types of strategic planning tasks for microfinance operators
elsewhere in Viet Nam. Sensitivity to gender issues and previous experience of working with women’s
programmes in Viet Nam will be additional merits for the position, as well as excellent oral and written
communication skills in English.
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Annex 8: Potential CSSP APIF investments
Agribusiness Profiles in Bac Kan and Cao Bang
Two initial agribusiness profiles are included here. Further profile documents are available in a
separate package produced by the PPB.
Khanh Ha Company
Commodity: Cassava powder
Location: Cao Bang province
Established: 22/6/2010
1. Short description of business. The Khanh Ha enterprise produces cassava starch,
processed from cassava root. The raw material is procured from smallholder farmers in Cao Bang,
Bac Kan, Lang Son, Tuyen Quang, and Bac Giang provinces. The processing facility is located in Cao
Bang province. Processed powder is sold to an enterprise in Lang Son province, for export to China.
Business model graph:
2. Markets. The cassava starch is sold to the Chinese markets. Market demand is very high and
price is stable and profitable both for the raw cassava and processed powder. Khanh Ha needs more
input materials from the farmers, and it can easily sell all of the processed starch. Khanh Ha sells to
an enterprise in Lang Son province (Quang Phat), which exports to China in high volumes. In the
future, Khanh Ha strategy is to connect directly with China buyers.
3. Current volume. In 2013 the Khanh Ha procured 20000 tons of raw cassava and produced
5000 tons of cassava starch. About 12000 tons is procured from Cao Bang, the rest from neighboring
provinces. In Cao Bang, estimated 8000 farmer households are engaged in the production.
4. Business facilities and potential growth. Khan Ha's processing capacity is to produce about
150 tons of starch per day. The harvest period among Khanh Ha suppliers is currently about three
months in October-December. The raw cassava needs to be processed within 72 hours after harvest,
causing a limitation to only 100 operational days for the processing facility. During the 100 days,
maximum production of the facility is 15000 tons of starch, but Khanh Ha only can use 30% of this
capacity due to limited volume and coordination of raw material supply. During the processing
months, the company employs 80 staff, out of which 20 are fully employed throughout the year.
5. In the coming time, the priority of Khanh Ha will be to improve its supply chain management to
fully utilize the existing processing capacity during the 100 days, and later also to increase the amount
of operational days. For the part of capital investment to the processing facility, this only includes
construction of a storage for the raw cassava to avoid losses in the starch content.
6. Supply growth opportunity. As mentioned, improvement of raw material supply is the key
success factor for Khanh Ha. Current issues include: (i) The amount of engaged farmers is significant,
however these usually only cultivate a small area of cassava, average 0.1 ha/household; (ii) Cassava
productivity in Cao Bang is very low, with current yields of about 10-15 tons /ha, while the potential of
optimized intensive farming is up to 40-50 tons/ha; and (iii) The farmers harvest timing is not yet
sufficiently coordinated for extended processing period.
Cassava
CIGs
Khanh Ha
Company
Coordination and support Cassava powder
Supply of raw cassava
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7. Khanh Ha is already working with current and potential new suppliers to address the above
issues to improve its raw material supply. Currently Khanh Ha only has procurement arrangement to
1000 ha of farming land in Cao Bang, although processing capacity could cover 5000 ha with the
current productivity levels. The focus areas of Khanh Ha supply management include 55 communes
in the Cao Bang districts Hoa An, Thang An, Nguyen Binh and Trung Khanh, and potential for further
expansion is in districts Phuc Hoa and Quang Uyen. However, the enterprise lacks the capacity to
provide technical assistance to the required large amount of farmers. A public private collaboration to
engage and support cassava farmers has been initiated by the Cao Bang province, extension of
which will be very interesting for the enterprise.
8. Financial arrangements. The capital investment for the processing facility is about 5 million
USD, roughly half of which is financed by a bank loan and the rest by accumulated savings of the
business owners and their investment partners. Facility operating expenses for the 100 days active
period is about 300 000 USD, and maintenance and preparatory expenses during remaining 9 months
is about 150 000 USD. For the purchase of the raw material supply, Khanh Ha has not enough
working capital, but receives advance payments from the Lang Son trading company against a
discounted sales price. The financing of smallholder cassava investments is in by public subsidy (40%
of seed cost), by in-kind loans (fertilizer trader) and by informal capital flows. Khanh Ha has no
resources to support farmer investments.
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Minh Be Agricultural Product
Exporting and Processing Company
Commodity: Ginger
Location: Bac Kan province
Established: Since year 1992
1. Description of business model. The Minh Be enterprise is specialized in collection and
trading of raw ginger, and support and coordination of farmer producer groups. The enterprise has a
dry storage and sorting facility in the Bac Kan province. Enterprise invests regularly in smallholder
ginger farms, supporting their production, with the economic interest of higher trading volumes. The
business model in graph:
2. Markets. Minh Be has two main market channels: majority sold to Hai Duong export company
in Hai Phong port city; and smaller part sold through four small traders Hanoi and HCMC. Market
demand is far beyond what Minh Be can satisfy, and the enterprise has plans of increasing its trading
volumes to 5000 tons in the coming year. The market demand is stable, however price is fluctuating
significantly, between 0.2 USD/kg and 1.5 USD/kg. According to the enterprise, the farmers are
making profit and want to do business also at the lowest prices.
3. Current volume. In 2013 the Minh Be purchased, sorted, packaged and sold 3000 tons of
ginger, out of which 2000 tons is produced by Bac Kan farmers, and 1000 tons in neighboring
provinces. The enterprise has long term business establishment and contracts with about 1500 Bac
Kan households, with total area of 150 ha in Na Ri and Ba Be districts. This business includes
continuous technical support, input provision, microcredit and savings service, and purchase of the
farmers’ output.
4. Business facilities and potential growth. The Minh Be has recently invested in an expanded
warehouse, drying facility and logistical infrastructure, allowing significantly increased volumes and
the potential for initiation of pre-processing activities. Total investment value including all in kind
contributions is about 500 000 USD, funding for which is by enterprise accumulated savings, by loans
from business partners, and by a APIF co-investment. Five staff are employed for the collection,
sorting and packaging of the ginger, for average 5-6 months of work in one year, each receiving
salary of 150.000 VND/day. Currently, the company will need to focus in maximizing the use of these
facilities, and has no plans of further capital investment.
5. Supply growth opportunity. Due to the high market demands and recent capital investment of
the Minh Be, the enterprise is working hard to promote for further farmer groups to engage in ginger
production, and provides the groups with required technical and input support. Also, those farmer
groups that are already engaged in ginger production are in need of support to improve their
productivity. Current yields in Bac Kan are about 7-10 kg of output by planting 1 kg of ginger seed.
The optimized production gives up to 17-20 kg output per 1 seed kg in Vietnam and reportedly even
30 kg in some high productivity fields in China. This signals the opportunity and also urgent need of
increased productivity for Bac Kan farmers. For both, extending the amount of farmers and increasing
the productivity, Minh Be is committed and interested in public private partnership. Required support
from public sector, to expand opportunities for the rural poor, includes investment in transport
Ginger
CIGs
Minh Be Company Seedlings and training Fresh ginger
Supply of fresh ginger
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infrastructure, technical training and coordination of farmer groups, and support to farmers in their
requirement of initial investment capital.
6. Financial arrangements. Both the farmers and the enterprise are unable to access bank
lending due to lack of required collateral. The working capital financing of farmer and trading
operations is based on informal agreements between the value chain stakeholders. Minh Be
enterprise has long term commitment with the local farmers, and has developed relationship of trust
with farming communities and also with its trading partners outside the province. From cumulated
capital, Minh Be regularly advances seedlings and fertilizer to the farmers, with interest rate of 1% per
month. These loans are deducted from sales price at the time of harvest (after about 9 months
growing period). Also, at harvest time, many farmers leave their profit to the holding of Minh Be,
similarly receiving monthly interest rate of 1%. Minh Be sometimes also agrees to advanced good
deliveries with its small trading partners in Hanoi and HCMC, receiving payments 2-3 months after
trading, again with 1% interest rate. Total requirement of working capital for these operations by Minh
Be is about 100 000 USD. Risks are relatively high, due to lacking written contracts, however these
arrangements are beneficial for Minh Be because they enable increased engagement of farmer
households and trading in higher volumes.
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Annex 9: ToR: Technical Assistance for Mainstreaming Climate Change Into
Public Sector Agricultural and Rural Development Planning and Investment.
1. Objective. Obtain high quality, multi-disciplinary, technical assistance from a technical
institution in Viet Nam with a demonstrated track record and success in supporting provincial
governments, to assist Bac Kan and Cao Bang provinces to:
update or strengthen their CAPs (2015-2020) as per MoNRE’s Decision
No. CV990/BTNMT-KTTVBDKH (24 March 2014);
implement MPI’s Decision No. 1485/KHDT (17 October 2013), requiring the integration of
climate change considerations into Socio-Economic Development Plans (SEDPs) at all
levels;
to mainstream climate change adaptation into public sector agricultural and rural
development planning and investment to ensure that local governments may take
appropriate action to implement climate adaptation and mitigation measures within their
jurisdictions; and
enhance their knowledge and understanding of the CAP, and how to use it to meet
national policy requirements through measures to integrate climate change into local
planning through improved capacity, updated provincial Climate Action Plans and,
mainstreaming into SEDP’s at all levels.
2. Specific Activities. Technical assistance will be provided:
in the conceptualization, design, implementation, assessment and validation and, finalization of
the following priority activities:
o assessment of current status of Provincial CAP implementation;
o development of maps of Provincial climate change risks & vulnerability;
o development of Provincial-level indicators for CC impact monitoring;
o down-scaling of provincial-level CAP to District-levels;
o district-level studies and mapping of climate change impact, vulnerability, risks and
CCAP priorities;
o district-level participatory diagnostics of commune-level CC impacts scale and
ongoing adaptation;
o integration of inputs from district and commune-level into the MOP-SEDP process;
o piloting and updating of a commune- level climate change planning instrument;
and
o development of a Climate-Adapted, Provincial MOP-SEDP (2021-2025)
in reviewing and making recommendations on technical terms-of-reference, consultant
outputs, technical reports and proposed strategies, especially:
o the review of existing methodologies for commune-level climate change planning;
o the proposed program for climate change awareness building for key institutional
actors;
o Value chain Strategic Investment Plans (SIPs) and value chain action plans
(VCAPs);
o the development of a district-level zoning methodology, based on commune-level
climate change adapted planning; and
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o the content and focus of capacity building and technical workshops for addressing
climate change adapted planning integration into the MOP-SEDP processes at
commune and district-levels.
3. Institutional arrangements. The consultant will be responsible to the CSSP’s PPSCs for their
work program in each Province, and work under the direction of the relevant PPCO. The PPCOs will
be responsible to coordinate and harmonize the consultant’s work program in order to avoid conflicts
and maximize synergies. In each Province, the consultant will work directly with and advise the TAG.
4. Profile of successful candidate institution. The minimum requirements for selection will
include:
Capacity to provide multi-disciplinary technical assistance in areas of climate change
policy and planning at macro, meso and micro-scales; assessment of climate change
vulnerability and risk (biophysical and social) at sectoral, value-chain and production-
levels; community-based disaster risk management; and participatory assessments with
communities and ethnic minorities.
Demonstrated knowledge, successful experience and recognized expertise in supporting
CAP development and implementation at the Provincial-level in Viet Nam.
Extensive knowledge of best practices and experiences in Viet Nam with the
development and implementation of CAPs and of mainstreaming of climate change
adaptation in local level planning and SEDP processes.
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Annex 10: Review of decentralised planning in Viet Nam
1. An Oxfam-led review60
of the reform of commune level socioeconomic planning using
participatory approaches has made a series of key recommendations, to which the SCCP will attempt
to respond, as detailed in the following table.
Oxfam Review Comment SCCP Proposed Intervention
A legal framework for annual socioeconomic
development planning and mid-term socio-
economic development planning (five year
plans) should be issued to the commune
level.
Legislation for annual and medium-term
MOP-SEDP will be approved in PY1.
At commune level, regulate the principles,
criteria, content and basic steps for reform
using a participatory approach, in a simple
and feasible manner
A specialist-led detailed assessment of
existing and Viet Nam best practice
commune level participatory planning will be
conducted with Provincial DPIs at Project
final design and integrated in the final design
report
Regulating the responsibilities of
stakeholders to promote the reform of
commune level planning, including: the
responsibilities of the commune level to
ensure people’s participation in commune
level planning; responsibilities of the district
level in supporting the commune, and
integration of commune level plan in the
district plan
The MOP-SEDP process already has
detailed procedures for people’s
participation in commune level planning,
including representation of women and poor
households, and will expand the MOP-SEDP
process to include the district level SEDP.
Instructions should be provided to aid the
development of a mid-term financial
framework at the commune level (5 years)
based on the mid-term commune level plan.
The 5-year mid-term MOP-SEDP will be a
feature of the SCCP supported intervention,
which will be underpinned by provincial level
legislation and supporting regulations.
Integrated instructions for all poverty
reduction projects and programs at the
central level (and more detailed instructions
at the provincial level) should be issued to
regulate the special mechanism for simple
and small scale infrastructure construction
projects.
IFAD already has a proven track-record for
community-driven small scale infrastructure
planning, implementation, operation and
management and will apply that experience
in developing supporting legislation,
regulations and instructions at provincial
level that could inform central level decisions
Regulate the minimum ratio (for example 30-
40%) of the total investment budget of
poverty reduction projects and programs that
should be delegated to the commune level
for simple and small scale infrastructure
construction.
Bắc Kạn and Cao Bằng already have
policies for devolving budget and planning
responsibility to commune level. The Project
will seek to include the recommended
percentage allocation in the MOP-SEDP
legislation.
Budget support: The maximum level of Under the MOP-SEDP approach, IFAD, in
60
Reforming commune level planning, decentralising investment decision making to the commune level and
empowering community towards sustainable poverty reduction: Synthesis report of pro-poor policy monitoring research
In Lao Cai, Hoa Binh, Nghe An, Quang Tri, Dak Nong, Ninh Thuan, Tra Vinh. Oxfam January 2015
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budget support for each type of infrastructure
construction in each type of location
(disadvantaged communes and others)
should be regulated. The people in the
different localities should agree on their
contributions, either by labour or local
materials.
partnership with provincial governments,
already sets minimum levels community in-
kind contribution for infrastructure
development and is pursuing mechanisms to
make the allocation of this resource more
competitive, rewarding communities that
disburse efficiently and effectively and put in
place reliable operation and maintenance
systems.
Construction filing: The requirement for
economic – technical reports for simple and
small scale infrastructure construction
projects should be revoked, and replaced by
simple drawings description and cost
estimates.
The Project will work with provincial, district
and commune officials to achieve this
outcome.
Construction work should be done by the
village and community
Provinces implementing IFAD projects
already apply force account community
construction procedures. The Project will
strive to include this requirement in the
supporting legislation.
Regulations need to be issued on the
supervision, information transparency and
feedback mechanism for the Community
supervisory board/ people’s inspection, and
on the enhanced supervisory role of the
people at beneficiary locations.
The MOP-SEDP already empowers the
Community Supervision Board to take
responsibility for supervision of community-
based infrastructure
There needs to be guidance on the
regulation and evaluation of communes who
have been delegated investment decisions,
attached to a punishment/reward
mechanism. A post-investment evaluation
mechanism for infrastructure construction
under commune implementation should be
created.
This already occurs as a project based
activity under IFAD investment projects in
Viet Nam and will be institutionalised under
the SCCP.
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Appendix 5: Institutional aspects and implementation arrangements
A Introduction
1. Bắc Kạn and Cao Bằng provinces will start implementation of CSSP with a distinct advantage, having implemented an earlier IFAD project, namely DBRP and 3PAD. These projects have left a strong positive assessment of its impact on the decentralization of project investment to commune and village levels, increasing the participation of beneficiaries and enhancing the ownership of local authorities, as well as promoting grass-root democracy in poverty reduction. These projects have also promoted market linkages and enhanced collaboration between farmers through savings and production groups.
2. The results from the DBRP and 3PAD demonstrated that the participatory approach and decentralization to commune and village level, as well as the pro-poor market-based approach, including socio-economic development planning at commune and district level was feasible and should be expanded. MOP_SEDP facilitates beneficiary, community and private sector service providers’ participation in the whole planning process, from needs identification, prioritization, planning, and implementation to monitoring and evaluation. The PPBs established by the Bắc Kạn and Cao Bằng PPCs have placed considerable emphasis on the success of the decentralized, market-based approach and expressed their strong support for the replication of this model for the strategic management of CSSP. At the same time, it was agreed during CSSP detailed design that the government staff in Bắc Kạn will require additional training in market economics and private sector development to move from participatory to the MOP-SEDP application in support of CSSP implementation.
3. The organizational and management structure proposed for CSSP is based on the lessons learnt under the previous project, which can be summarized as follows:
a) TORs specifying positions, roles and functions of the Project Steering Committees and Project Coordination Units at all levels and their reporting system are critically important to ensure the project implementation performance in its early stage;
b) Lack of participation of the private sectors in decision making processes, such as in meetings of the PPSCs and the PPCOs and planning workshops, led to poor effectiveness of the project’s efforts in development of VCs and private sector partnership;
c) Financial management mechanism and flow of funds for all outputs and activities should be clearly specified in the project design and project implementation manual (PIM);
d) Prescribed positions for project management units at all levels left little room for flexibility of decisions based on actual demand vs. human resource availability;
e) IFAD project management should not create different systems, parallel with the existing local institutional setup. This led to higher recurrent/overhead cost due to the establishment of many additional management boards with substantive numbers of full time and part-time staff requiring monthly salaries and allowances;
f) The complicated structure of outcomes, lead agencies and co-implementing agencies at the province level has slowed early project implementation due to unclear roles and responsibilities among provincial agencies;
g) The project capacity building interventions should focus on improving public services at the district and commune levels to ensure effective decentralization;
h) The project lacked sufficient tools to ensure performance accountability and competition amongst the project districts and communes;
i) Coordination and information sharing between IFAD projects and other donor-funded and NGO projects was not adequately managed and should be identified during the project formulation and negotiation;
j) Project M&E systems were quite robust in terms of generation of timely and sufficient data but remained weak as a management tool for planning, strategizing and implementation;
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k) Poor cooperation/coordination among IFAD projects in the same region in terms of market linkages, VCs and private sector partnership should be addressed.
4. This annex outlines a Project management system that will meet the objectives of the Project through replication of the successful approaches generated by the DBRP and 3PAD, while incorporating the lessons learnt from this and other IFAD projects in Viet Nam.
B Project Strategic Management
5. In general, the Project will adopt similar implementation arrangements to those used for the previous IFAD project, incorporating the operational and managerial experience and lessons learned as detailed above., Outcome 3 – Project Management is designed to maximizing Project effectiveness and efficiency through the implementation of the following principles:
a) The Project management structure will adhere to the current structure of local institutions, building capacity to address poverty through market-based approaches, but these will now also incorporate climate-smart criteria to enable an effective response to the need for CC adaptation;
b) The Project will decentralize its resources to the commune and village levels while mobilising private participation and strengthening public market and VC development service providers;
c) The Project will focus its support in the identified 70 priority communes using the agreed criteria for selection;
d) Application of the “learning by doing” approach to introduce innovations to communes and promoting replication on increasingly larger scales when concepts are effectively proven;
e) Mainstreaming the participation of the private sector throughout the planning, implementation, monitoring and evaluation of the Project activities; and
f) Strict implementation of IFAD policies and guidelines in result-based Project management.
6. The proposed CSSP management and oversight is consistent with the Government regulatory framework for ODA management as specified in the Government’s Decree Number 131 issued in 2006 and the MPI Circular Number 03/2007. The PPCs, DPCs and CPCs will have overall responsibility for program management and coordination of all departments and other agencies at their respective levels for implementation of the Project.
7. Provincial Peoples Committee. According to Decree 131, at the province level, the Bắc Kạn and Cao Bằng PPCs will be the Project Coordination Agency (Co quan chu quan). The PPCs will establish a PPSC, which will assist the PPC in leading government agencies, mass organization, private sectors and communities at all levels to ensure achievement of the Project objectives.
8. In line with government regulations, the PPC is also the Project Owner (Chu dau tu). Oversight to ensure adherence to Government of Vietnam’s policies and norms and the IFAD Loan and Grant Agreements will be provided by the PPC. In accordance with the Circular 03/2007 of MPI on ODA Project management, the PPC will issue a Decision on the establishment of the PPCO, referred as Ban Quan Ly Du An under Decree 131. The PPCO reports to the PPC and acts on its behalf to ensure coordination among all the involved stakeholders, including the provincial agencies, districts, communes, the private sector and the NGOs. The PPCO, operationally and financially, manages the day-to-day implementation of the Project.
9. Provincial Project Steering Committee (PPSC). Bắc Kạn and Cao Bằng will each establish a PPSC. The PPSC is established by the PPC to inform the PPC on overall execution of Project implementation and ensure effective coordination/integration/cooperation among all government and donor-funded Projects. The PPSC will be led by the PPC Chairman (or a Vice-Chairman), comprised of Coordinators or Vice-Coordinators of concerned line-departments and Chairpersons of mass organizations and representatives from the private sector. The PPSC will inform the PPC on matters concerning the strategic management of the Project, including the decisions such as appointment of the PC and Deputy PC, approval of the PIM, annual work program and budget (AWPB), and other decisions related to the Project coordination, orientation and mobilization of resources. The PPSC will invite the Chairman of the Provincial Enterprise’s Association and two Coordinators of private companies that have significant cooperation with farmers in the Project area to join the PPSC. The
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PPSC will need to ensure that CSSP experience be replicated under the national and provincial programmes and projects. The PPSC will meet on a quarterly basis to coordinate Project implementation, guide planning, review progress based on the information from the M&E system, make recommendations for any modifications of AWPB as needed, and ensure cooperation among agencies and levels for the coming quarter. (Detailed ToRs for the PPSC can be found in the Appendix 5, Annex 1)
10. Provincial Project Coordination Office (PPCO): Bắc Kạn and Cao Bằng will each establish a PPCO to assist the respective PPSC in coordination of the provincial agencies and in actual management of government’s and IFAD resources. The PPCOs will report directly to their respective PPSCs and act as an advisory body of the PPC and secretariat of the PPSC. The PPCO is established at the administrative level equal to a provincial department. The PPC Decision on the establishment of the PPCO and ToRs of the PPCO should ensure that the PPCO function on behalf of the Project Owner, the PPC. Furthermore, the PPC will ensure that the PPCO is to assist the PPSC in coordination of all line agencies, relevant donor funded initiatives and other stakeholders to implement the multi-sector integrated rural development Project.
11. The mandate of the PPCO will be to ensure: (i) coherence of the Project approaches and strategies, and integration among Project activities in order to produce the Project outcomes, outputs and impact; (ii) coordination and synergy of the co-implementing agencies (DARD, DoNRE, DPI, etc.) and technical service providers, and the district and commune level agencies, and grassroots communities; (iii) mobilization of resources from the private sector, mass organizations, professional associations, research institutes, technical units and non-government organizations; (iv) contracting of suitable service providers to undertake various forms of research, studies, technical assistance and training (co-implementing agencies will mostly manage these providers); (v) accountable management of IFAD and Government’s resources, including preparation of PIM, AWPB, procurement plan, selection of technical assistance and audit service providers, establishment and operation of M&E system, and other functions of the operational and financial management of the Project; and (vi) knowledge sharing and policy development, in collaboration with co-implementing agencies. ToRs for the PPCO are detailed in Appendix 5, Annex 2.
12. Each PPCO will include 25 staff as detailed in Table below.
Table 1. Key positions of Provincial Project Coordination Office
Position No.
Project Coordinator 1
Strategic Management Section
MOP-SEDP coordinator (Project Deputy Coordinator) 1
Gender specialist
Rural Finance Project Coordinator 1
Rural Finance Officer 1
Commodity and VC Project Coordinator 1
Community-based CCA and DRM Officer 1
Community Infrastructure Development Engineer 1
M&E and Knowledge Management Section
M&E/KM Coordinator 1
Financial and Administration Management Section
Chief Financial Officer/Chief Accountant – Head of Section 1
Accountant 2
Cashier 1
Chief Procurement Officer 1
Procurement Specialist 1
Administration Section
Administrative support officer 1
Interpreter 1
Security Officer/office support 1
Driver 3
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Position No.
Total 20
(TORs of the major positions at the PPCO can be found in Appendix 4, Annex 3)
13. At each Project district and commune, the CSSP will employ the staff detailed in Table 6 below.
Table 2. Project support team at district and commune levels
District Level
MOP-SEDP Support Officer 1
Business Development Officer 1
M&E and KM Officer 1
Commune Level
Allowance for Chairperson 1
Allowance for Accountant 1
14. Project Coordinators (PC), who should have solid experience in working for a previous IFAD-supported Project/Project, will lead the PPCOs. It is recommended that the PCs be confirmed prior to Project final design, planned for April 2016. The PCs shall be fully involved in the Project design and negotiation to master the Project’s new approaches and receive proper training from IFAD on new policies and management skills. The PCs, as the Head of their respective PPCOs, will work full-time for the Project, and will have no additional responsibilities within any other provincial department. The major responsibilities of the PCs will be to ensure that the involved provincial agencies, districts, communes and villages carry out the Project activities in line with the Project approach, operating schedules and procedures. The PCs will be provided with adequate executive authorities and accountabilities through a Decision of their respective PPCs. The PCs will also act as Secretary of their PPSCs and will execute the PPSC decisions on its behalf. ToRs for key Project staff are detailed in Appendix 5, Annex 3.
Project Management at District Level
15. District Peoples’ Committee (DPC). At the district level, the DPC will be responsible for coordination of the Project activities and integration with the organizational structures and mandates of the line agencies and mass organizations at the district level. The DPC Chairperson (or Vice-Chairperson) will be appointed to be responsible for the coordination of Project activities with support of a District Support Team established by the Project. Under guidance of the DPC, and with technical support from DARD and other province departments, the District Planning and Finance Section (DPFS), District Agriculture and Rural Development Section, the District Agriculture Extension Station, the District Trade and Commerce Section, the District Plant Protection Station, the District Veterinary Station and the other concerned district sections will implement the Project with their institutional mandates. The CSSP will employ district technical advisors in numbers proportional to the number of underlying communes and level of Project support at commune level.
16. District Support Team (DST). To assist the DPC in coordinating Project activities the DST will be established directly under the DPC. The DST will not have Project management or implementation responsibilities since these will be assigned to the relevant district technical sections. The role of the DST will be to assist DPC in: (i) overall coordination of activities; (ii) M&E and supporting the DPC on compilation of reports; (iii) ensuring effective integration of capacity building activities; (iv) coordination of market and VC activities and management of the technical assistance activities; and (v) assisting the CPCs with Project implementation. The DST will be directed by the appointed DPC Chairperson or Vice-chairperson and consist of a fulltime District Coordination Assistant.
17. Project Management at Commune Level. The CPC will be accountable for the Project implementation at the commune level. The commune’s chairpersons, accountant and cashier will receive a Project management allowance in line with government policy. The Project will commence in the 30 selected communes in the first Project year. To the extent possible, Project implementation will be decentralized to the CPCs, which will receive substantial training to develop their capacities. The
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MOP-SEDP process will guide Project implementation at Commune (and district) level, including incorporation of climate-adapted agriculture principles within VC development. At the village level the Project will utilize the VDB established under the NTP-NRD, building on the experience of similar structures under the 3PAD. The VDB is assigned to mobilize communities of the village in MOP-SEDP planning and implementation including an integrated approach to the selection of pro-poor VCs and livelihood support activities, infrastructure schemes implementation and maintenance, development of SCGs and CIGs and the other community initiatives. VDBs should have at least: 30% female membership and 30% membership from DoLISA registered poor households.
18. Village Development Boards: VDBs are the managers of CSSP infrastructure and service delivery sub-projects at village level. VDB establishment will follow NTP-NRD procedures, however, in Project communes, VDBs will include a minimum of 30% women and 30% DoLISA registered poor household representatives.
C. Project Contracting
19. As a general principle, CSSP will use output-based contracts as a basic tool for service delivery. An 'output based' contract is an agreement between the Project and a service provider which will be managed by the PPCO, CPC, or, for community level service delivery, the VDB, creating a relationship for the delivery of services or products. The driving force behind the contract is that it focuses deliverables in measurable terms, rather than checking that the activities have been undertaken, or assessing the service delivery methodologies. This signals a move from payments for inputs or activities (e.g. completing a training workshop) to payments for a tangible measurement of the results from such activity. For example, a tangible measure of a training program will be farmers applying some of the knowledge and skills attained on their farms to provide some measureable benefits.
20. The main advantages of output-based contracts are:
Simplicity in administration as payment is based on delivery of specific milestones and
milestone deliverables based on an agreed price, rather than on acquittal and
reconciliation of all expenditure receipts.
Risks of non-performance are reduced as if milestones are not delivered, no payment is
made.
Definition of milestones based on Project objectives and outputs makes measurement of
impact much easier.
21. The main difficulty of output based contracts is the increased effort required to define and agree the milestones, deliverables and price. Milestones have two parts (i) milestone definition and (ii) milestone deliverables. It is easier to define milestones and deliverables for infrastructure contracts than for service delivery contracts (especially “soft services” such as extension where impacts are dependent on the recipients of the service making a decision to change or adopt.
22. Output-based contracts are lump sum. There is agreement on price for service delivery and the contract specifies that price and payment schedules. For the contract owner the key task is to ensure value for money. Once this has been achieved almost all the risks are borne by the service provider. If the service provider can provide specified services at a lower price, then there is additional profit to be made. The reverse applies, however. if the service provider costs are higher than the agreed price (budget). An example of an output-based service delivery contract is detailed in of Appendix 5 Annex 4.
23. Service Providers will be required to self-monitor the implementation of their contracts. In general, this will require delivery of Milestone Reports by the service provider to trigger milestone payments and VDBs to inspect and provide assurance to the CPC that Project milestones and deliverables have been completed to an acceptable level. In doing this the VDB will sign a Statutory Declaration to the CPC that the VDB as Project manager is satisfied that the service provider has delivered the milestone deliverables to the standard required. The Statutory Declaration, signed by the VDB Chairperson and witnessed by 2 VDB members (at least one from a DoLISA registered poor household) provides the trigger for milestone payments.
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24. Statutory Declarations for Milestone payments will be delivered to the CPC within two weeks of Milestone completion. Where delivery dates are delayed the VDB will advise the CPC of delays, reasons for delay, possible implications of delays and actions taken to ensure Milestones delivery.
25. Service Providers are responsible for evaluation of the benefits the investment (infrastructure and service delivery). The process is to establish baselines prior to the commencement of the Project and at the end of the Project the changes in relation to the baselines will be documented. Project Baselines and Project Validation Reports (comparing socio-economic baselines to end of Project status) will be payment milestones. Simple formats for baseline surveys of all Project beneficiaries will be developed as a template for infrastructure and service provider projects and trained District Agro-forestry Extension Station staff will assist Service Providers to tailor the standard template to their project. Service Providers may appoint (sub-contract) expertise (e.g. key farmers) to undertake baseline and Project completion socio-economic surveys.
26. Trained evaluators will conduct an impact evaluation of at least 15% of all service delivery sub-projects. Methodologies for impact evaluation will be developed by national extension specialists, but must include key evaluation criteria (relevance, effectiveness, efficiency, impact and sustainability). For service delivery contracts where financial information is available from baseline and end of Project surveys estimates of benefit ─ cost ratios should be attempted.
D Development and Training
Orientation Workshops and Training Sessions for Project Management Staff at all Levels:
27. Appendix 4 details key training workshops that will be held for management staff at all levels on Project management topics, including, AWPB preparation, M&E system and RIMS, and financial management and procurement. Orientation training sessions will also be held on the Project approach, outcomes and implementation methodology, community participation/social mobilization, targeting, selection criteria, socio-economic survey, market oriented development and the MOP-SEDP, resource and constraint analysis, livelihood analysis, participatory impact assessment, participatory development, financial and administrative decentralization, communication skills, gender, business and farm management, etc.
28. Staff Development and Training for the PPCO. The Project management faces three main challenges:
(i). Insufficient understanding of pro-poor market led development;
(ii). Limited capacity for developing and strengthening a pro-poor climate- and disaster risk-adapted management approach; and,
(iii). Limited awareness of SMEs and farmers and farmer’s groups in business planning and development.
29. The Project management therefore should, therefore:
(i). Invest in capacity building in the first year to build a solid foundation for effective market led development, especially for the district and commune levels;
(ii). Engage NGOs and private service providers to build up demonstration models in pilot communes and replicate them through a “learning-by-doing” process; and,
(iii). Draft user-friendly manual/guidelines at the initial stage to enable and promote wide use of Training of Trainers (TOT) methodology, including using key farmers, during implementation.
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Annex 1 - Terms of Reference: Project Steering Committee
Project Steering Committee
1. Mandate: The PPSC is established by the PPC to ensure overall execution of the Project and effective coordination/cooperation among and coherent inclusion of the government agencies, mass organizations and the private sector. The PPC will serve as the decision maker for strategic management of the Project, such as appointment of the Project Coordinator and Deputy Project Coordinator and approval of the Project Implementation Manual (PIM), Annual Work Plan and Budget (AWPB), VC Strategic and Development Action Plans and other decisions related to the Project coordination, orientation and mobilization of resources.
2. Composition: The PPSC members shall include
Chairman of PPSC: Chairperson or Vice-Chairperson of the PPC
Member/Secretary: Project Coordinator,
Members:
Coordinator, Department of Planning & Investment
Coordinator, Department of Agriculture and Rural Development
Coordinator, Department of Finance
Coordinator, Department of Trade and Industry
Coordinator, Department of Labour, Invalid and Social Affairs
Chairwoman, Provincial Women’s Union
Chairperson, Provincial Farmers’ Union
Chairperson, Provincial Enterprise’s Association
Chairperson, District People’s Committees of the Project districts
Two representative Coordinators of agriculture business enterprises working in Project districts
3. Functions: The main responsibilities of the PPSC, to be duly notified through a Decision of the PPC, will be:
(i). Ensuring complementarity between the Project and other externally/internally financed Projects/programs and efficient use of Project funded financial and manpower resources;
(ii). Providing a supporting policy framework and guidelines for efficient Project implementation;
(iii). Soliciting/proposing new regulations and policies for PPC approval, where needed, to ensure implementation of the Project, especially in regard to the institutionalization of market-oriented decentralized participatory local socio-economic development planning and improvement of the enabling business environment for private sector engagement in agriculture and rural development;
(iv). Reviewing and approving annual work plans/budgets for the Project;
(v). Recruitment/appointment of the Project Coordinator and the Deputy Project Coordinator in accordance to their specified terms of reference;
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(vi). Interfacing between PPCO and PPC on matters of policy formulation, revision and implementation, with a view to ensure effective implementation of the Project;
(vii). Ensuring effective cooperation and coordination among the provincial agencies, the PPCO, the DPCs and the CPCs and instilling a system of accountability for performance and proper use of resources at all levels;
(viii). Ensuring effective coordination and information sharing between CSSP and other Government’s and donor-funded programmes and Projects through annual review workshops and drawing upon and sharing of policy forums and communication facilities;
(ix). Conducting a results-based quarterly review meeting of the Project progress of the past quarter and approving the work plan and budget for the coming quarter, ensuring timely corrective action on management and implementation issues towards the Project objectives;
(x). Ensuring timely provision of counterpart funds, in line with Project needs as defined by annual work plans.
4. PPSC meetings: The PPSC will meet on a semester basis to coordinate Project implementation, guide planning, review progress based on the information from the M&E, make recommendations for any modifications of AWPB as needed, and ensure cooperation among agencies and levels for the coming semester.
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Annex 2 - Terms of Reference: Project Coordination Office
Project Coordination Office
1. The Project Coordination Office (PPCO) is established to assist the PPSC in ensuring timely and effective coordination of Project implementing agencies and stakeholders. The mandate of the PPCO will be to ensure: (i) coherence of the Project approaches and strategies, and integration among Project outcomes and activities in order to produce the Project impacts, outcomes and outputs; (ii) coordination and synergy of the relevant government departments and other co-implementing agencies and technical service providers, and the district and commune level agencies, and grassroots communities; (iii) mobilization of resources from the private sector, mass organizations, professional associations, research institutes, technical centres and non-government organizations; (iv) accountable management of IFAD and Government’s resources, including preparation of a PIM, AWPB, procurement plan, selection of technical assistance and audit service providers, establishment and operation of M&E system, and other functions of the operational and financial management of the Project and (v) knowledge sharing and policy development interventions.
2. The main tasks of the PPCO include:
a) Annual planning and coordination. Together with the main implementing agencies, the PPCO will draw up an AWPB that reflects both the previous year’s achievements and performance and anticipated Project progress. It will consolidate the AWPB for submission to the PPSC and obtain prior IFAD comments. The PPCO will ensure coordination between other government agencies and externally financed Projects in the Project area
b) Targeting and Gender. In the planning and implementation of Project activities, the PPCO will ensure that the provincial agencies, DPCs and CPCs will maintain the focus on poor and near poor households and ethnic minorities and ensure that women have ample opportunities to participate in Project activities. PPCO will ensure gender is mainstreamed in all Project activities as detailed in the PIM, to be developed by the PPCO in the Project activation period
c) Capacity building. A series of provincial and district-level training workshops will be held on the following topics: market-led development, CBA and CBDRM, strategic planning and processes; using information and data; inclusive planning; and gender and ethnicity issues in planning. Bi-annual workshops will be held in each district with participation of commune representatives
d) Monitoring and Evaluation. The monitoring and evaluation unit in the PPCO will establish an appropriate M&E and MIS system and ensure implementation of IFAD RIMS procedures. Staff in the implementing agencies will be trained in the requirements for M&E.
e) Financial management. Designated Accounts will be opened and maintained in USD for IFAD payments at a commercial bank61 at provincial level and held by the PPCO on terms and conditions acceptable to the IFAD. The celling of Designated Account will be USD1 million. Withdrawal application procedure will be used to initiate a withdrawal and to replenish the designated account. Project accounts will be opened and maintained in local currency for IFAD payments at the same provincial commercial bank for disbursement and direct payment of goods and services during implementation phase.
f) Procurement. The PPCO will carry out all procurement according to the Government and IFAD Procurement Guidelines. It may delegate procurement to implementing agencies and, for community infrastructure, to communes that follow the local regulations on decentralization of investment ownership
g) Recruitment. In collaboration with the relevant implementing agencies, the PPCO will develop appropriate Terms of References for staff positions to be assigned to the PPCO
61
The bank will be chosen by the MoF based on the agreement between MoF and the State Bank
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or the respective agencies and to be funded by the Project. It will organize a fair and transparent selection process and ensure IFAD concurrence for the candidates for the key positions
3. Apart from day-to-day Project management and coordination, the PPCO will organize: (i) baseline and corresponding impact surveys; (ii) regular monitoring activities and Project progress reporting; (iii) bi-annual workshops to involve all Project stakeholders in learning from the constant flow of management information, annual reporting exercise and recommending improvements; (iv) Project midterm review after two years of implementation; and (v) Project completion evaluation.
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Annex 3 - Terms of Reference for Key Staff at PPCO
Project Coordinator
General scope of the position
1. The PC will coordinate Project management and ensure that implementation is realised according to the conditions of the loan agreement and based on the Project appraisal report. S/he needs to ensure effective and timely implementation of the Project, with special attention to providing overall inter-agency coordination and facilitation at various levels. Under the direction and supervision of the PPSC, the Project Coordinator coordinates the PPCO, provincial agencies, DPCs and the CPCs to ensure that the strategic outcomes of the Project are achieved. Particularly, the PC leads the PPCO to ensure the M&E requirements described are developed and implemented in a timely manner that represents the views of key stakeholders. S/he is also responsible for making sure there are sufficient and appropriate personnel with the right level of resources and other support needed to implement the Project.
2. In particular, the PC will serve as leader of the Project management team in order to achieve the following responsibilities: (i) Project Implementation Coordination; (ii) Financial/Asset Management; (iii) Contract Management; (iv) Personnel Management (v) Government Liaison/External Relations; and (vi) Knowledge Management and Policy Development.
Organizational relationships
3. The PC will be responsible for Project progress and will be accountable to the PPSC, the government ministries and relevant staff of IFAD. S/he will also be accountable to the Project stakeholders for Project progress, problems and improvements.
Responsibilities and tasks
Early implementation tasks:
a) Lead formulation of Project Implementation Manual (PIM) and other guidelines;
b) Assist the PPC in establishment of the Project Steering Committee;
c) Appoint key PPCO staff and supervise their activities;
d) Guide the establishment of administrative, accounting and Project-outcome M&E systems;
e) Coordinate training workshops on the Project strategy and approaches, AWPB and procurement for the first year with key stakeholders to ensure an updated and shared understanding of the Project strategy and information needs;
f) Ensure that an effective and participatory M&E system is established and effective.
Ongoing operational management tasks
a) Prepare the AWPB and revise the M&E plan and system by seeking stakeholder inputs in order to produce these plans with the full commitment of all the organizations involved in the Project. Present the AWPB and M&E plan to the relevant approval bodies in a timely manner for review and approval;
b) For each service provider contract, ensure that detailed specifications are prepared in a timely, objective, fair and transparent manner, including the M&E responsibilities and administration of terms and awards;
c) Ensure the holistic implementation of the Project, ensuring the Project outcomes and levels are seamlessly joined in the pursuit of market-led poverty alleviation amongst poor and minority households;
d) Make sure the business of the Project is conducted in an efficient manner by supervising and monitoring Project implementation. Ensure that timely decisions on corrective actions are made and implemented;
e) Direct and supervise the day-to-day operations of the Project, guided by the Project document and the AWPB, providing any necessary amendments to ensure smooth performance;
f) Mobilize relevant technical assistance in a timely manner, with clearly demarcated responsibilities that are based on the participatory and equity principles of the Project;
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g) Assure that all contractual obligations are adhered to and make the necessary contacts and efforts to ensure implementation meets Project targets;
h) Regularly appraise staff and provide feedback and support to enable them to do their jobs.
Ongoing financial management tasks
a) Ensure that Project expenses are kept, consistent with Government and IFAD administrative and financial procedures and practices;
b) Ensure that Project suppliers and locally paid staff are paid promptly and adequately through liaison with Ministry of Finance and the IFAD Country Office finance staff;
c) Ensure that Project expenditure is being coded correctly and consistently (that is allocated to correct category and budget line) and that Project funds are used solely for the purposes for which they were granted and in accordance with relevant IFAD guidelines;
d) Establish an asset register for all assets purchased by or provided to the Project in line with standard IFAD policies;
e) Check the monthly Project financial report for accuracy and appropriateness. Regularly meet with the Finance Manager concerning financial reporting issues, errors, trends, payment delays and related matters;
f) Monitor expenditure on a monthly basis against the approved AWPB in order to prepare and send timely fund withdrawal applications to IFAD. Review expenditure projections to ensure that expenditure stays within budget. Significant actual or anticipated expenditure variances against the budget should be included in the monthly report to line management together with any recommendations for changes to the budget.
Communication
a) Develop close working relationships with all Project participants and stakeholders – including the primary stakeholders, line departments, private sector and NGOs – all parties required to establish a shared vision of the Project to achieve objectives;
b) Establish and maintain good working relations with the relevant government ministries, as well as other higher-level stakeholder groups;
c) Ensure easy public access to M&E reports and data and make sure they are widely distributed;
d) Submit required analytical reports on progress – including indications of planned actions and financial statements – on time and to the relevant bodies, with assistance from M&E staff;
e) Encourage staff to report frankly on fieldwork, highlighting problems and possible solutions plus lessons learned. Reward innovation in critical reflection and learning;
f) Ensure the planning of and participate in key reflection moments – in particular, the annual Project reviews;
g) Sign implementation agreements with the implementing partners, defining the modalities for implementation and M&E. Ensure that participatory M&E and learning initiatives are specified in terms consistent with the direction of the Project;
h) Control the budget and safeguard against Project funds and assets misuse;
i) Make all efforts to engage key stakeholders in important external evaluations to ensure an understanding of locally perceived impacts and problems;
j) See that all ad hoc evaluation studies needed to gain timely and relevant insights into emerging areas of concern are undertaken. Make sure the resulting data is shared with all those involved in decision making and follow up on the implementation of any decisions;
k) Support external missions in ways that foster a joint learning process that identifies how the Project could be improved further to achieve impact.
Knowledge sharing and Policy interventions
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a) Consolidate a culture of lessons learning involving all Project staff and allocate specific responsibilities of knowledge management to Project staff, implementing agencies and Project stakeholders;
b) Ensure that the Project captures and share lessons learned through the M&E system, supervision and evaluation missions and periodic visits to sites;
c) Document, package and disseminate lessons frequently and not less than once every three months;
d) Facilitate exchange of experiences by supporting and coordinating participation in knowledge sharing workshops, teleconferences, development of IFAD Vietnam website and any other existing knowledge sharing network of IFAD at the regional and country level;
e) Identify and participate in additional networks, for example scientific or policy-based networks that may also yield lessons that can benefit Project implementation.
Selection Criteria
Core Competencies
a) People Skills: Ability to work independently and as a team player who demonstrates leadership and is able to support and train local and international staff and is able to work with ethnic minority communities in a sensitive and participatory manner;
b) Communication Skills: Well developed written and oral communication skills. Able to communicate clearly and sensitively with internal and external stakeholders as a representative of an IFAD Project. This includes effective negotiation and representation skills;
c) Integrity: Works with trustworthiness and integrity and has a clear commitment to poverty reduction of local communities;
d) Resilience/Adaptability and flexibility: Ability to operate effectively under extreme circumstances including stress, high security risks and harsh living conditions. Works and lives with a flexible, adaptable and resilient manner;
e) Awareness and sensitivity of self and others: Demonstrates awareness and sensitivity to gender and diversity. Has experience and the ability to live and work in diverse cultural contexts in a culturally appropriate manner;
f) Work style: Is well organized even within a fluid working environment and has a capacity for initiative and decision making with competent analytical and problem solving skills;
g) Readiness to work with people of all backgrounds without bias;
h) Ability to coach and mentor staff in a cross cultural environment.
Technical Competencies
a) Sound experience in working for IFAD Projects;
b) Ability to develop and foster external organizational relationships and applied representation skills;
c) Knowledge and skills: knowledge of Government and IFAD policies and procedures on gender, environment, corruption and general Project finance and administration management;
d) Have telecommunication skills and proficiency in information technology/ computer skills;
e) Written and spoken English language skills preferred.
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Project Monitoring and Evaluation and Knowledge Management Officer
1. The Monitoring and Evaluation (M&E) system at the Project level has four objectives: (i) to monitor and evaluate results and impacts; (ii) to provide a basis for decision making on necessary amendments and improvements; (iii) to promote accountability for resource use; and (iv) to document, provide feedback on, and disseminate lessons learned.
2. Project monitoring and evaluation is conducted in accordance with established IFAD procedures and is undertaken by the Project management team at all levels. The Logical Framework matrix provides performance and impact indicators for Project implementation along with their corresponding means of verification. These, along with the objectives, procedures and tools described in the M&E plan presented in the Project appraisal report will form the basis on which the Project's M&E system will be built at the starting phase of the Project.
General scope of the job
3. The M&E officer is responsible for guiding the overall M&E strategy and implementation of related activities within the Project and Vis a Vis partners, plus providing timely and relevant information to the Project Coordinator, PPCO and Project stakeholders. This requires close coordination and communication with the Province Line Agencies, DPCs, CPCs, Project stakeholder groups, and field staff as well as consultants of external M&E-related missions.
4. Critical tasks for the M&E officer(s) include setting up the M&E system and ensuring it is implemented efficiently and effectively. The M&E system will be based on the Project log-frame and the Project M&E plan and will build as much as possible upon existing M&E mechanisms and systems among the Project stakeholders. The M&E officer will report directly to the Project Coordinator
Main tasks and responsibilities
5. Setting up the M&E system.
a) Develop the overall framework for Project M&E in accordance to the Project M&E plan;
b) Conduct a readiness assessment regarding M&E on what are the incentives at the system level, who are the beneficiaries;
c) Guide and coordinate the review of the Project log-frame including:
i. Provide technical advice for the revision of performance indicators;
ii. Ensure realistic intermediate and end-of-Project targets are defined;
iii. Conduct a baseline study (situation at Project start);
iv. Identify sources of data, collection methods, who collects data, how often, cost of collection and who analyses it;
v. Ensure all critical risks are identified.
d) Identify the core information needs of PPCO, the Project Steering Committee, IFAD and the Ministry of Planning and Investment;
e) Identify the requirements for collecting baseline data, prepare terms-of-reference for and arrange the conduct of a baseline survey, as required;
f) Clarify M&E responsibilities of different Project personnel;
g) Contribute to the development of the Annual Work Plan and Budget (AWPB), ensuring alignment with Project strategy, agreement on annual targets and inclusion of M&E activities in the work plan;
h) Prepare detailed M&E budget;
i) Prepare calendar of M&E activities;
j) Identify M&E technical assistance that the Project needs to contract and guide its recruitment.
6. Implementation of the M&E system
a) Oversee and execute M&E activities included in the AWPB, with particular focus on results and impacts as well as in lesson learning;
b) Based on the AWPB design the framework for the physical and process monitoring of Project activities;
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c) Promote a results-based approach to monitoring and evaluation, emphasizing results and impacts;
d) Coordinate the preparation of all Project reports. Guide staff and executing partners in preparing their progress reports in accordance with approved reporting formats and ensure their timely submission. This includes quarterly progress reports, annual Project report, inception report, and ad-hoc technical reports;
e) Prepare consolidated progress reports for Project management including identification of problems, causes of potential bottlenecks in Project implementation, and providing specific recommendations;
f) Check that monitoring data are discussed in the appropriate forum (such as the review meetings of PPCO, the quarterly meeting of the Project Steering Committee) and in a timely fashion in terms of implications for future action. If necessary, create such discussion forums to fill any gaps;
g) Undertake regular visits to the field to support implementation of M&E and to identify where consolidations might be needed;
h) Foster participatory planning and monitoring by training and involving primary stakeholder groups in the M&E of activities;
i) Prepare M&E reports for annual supervision missions, mid-term review and final evaluation in accordance to IFAD guidance;
j) Facilitate, act as resource person, and join if required any external supervision and evaluation missions;
k) Monitor the follow up of evaluation recommendations;
l) Identify the need and draw up the TORs for specific Project studies. Recruit, guide and supervise consultants or organizations that are contracted to implement special surveys and studies required for evaluating Project outcomes and impacts;
m) Organize (and provide) refresher training in M&E for Project and implementing partner staff, local organizations and primary stakeholders with view of developing local M&E capacity;
7. Acting as Knowledge Management Officer
a) Design and implement a system to identify, analyse, document and disseminate lessons learned;
b) Consolidate a culture of lessons learning involving all Project staff and allocate specific responsibilities;
c) Ensure that TORs for consultants recruited by the Project also incorporate mechanisms to capture and share lessons learned through their inputs to the Project, and to ensure that the results are reflected in the reporting system described above;
d) Document, package and disseminate lessons frequently and not less than once every three months;
e) Facilitate exchange of experiences by supporting and coordinating Project participation in workshops and development of IFAD Vietnam website and any other existing network of local government and IFAD programme and Projects;
f) Identify and participate in additional networks, for example scientific or policy-based networks that may also yield lessons that can benefit Project implementation.
Qualifications and experience required
8. Suitable candidates should have a degree in a field related to development and/or management, experience in field research and statistics and at least several years of proven experience with:
a) The logical framework approach and other strategic planning approaches;
b) M&E methods and approaches (including quantitative, qualitative and participatory);
c) Planning, design and implementation of M&E systems;
d) Training in M&E development and implementation and/or facilitating learning-oriented analysis sessions of M&E data with multiple stakeholders;
e) Data and information analysis;
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f) Report writing.
S/He should also have:
a) A solid understanding of public policies, development approaches with a focus on participatory processes, market economy management, and gender issues;
b) Familiarity with and a supportive attitude towards processes of strengthening local organizations and building local capacities for self-management;
c) Willingness to undertake regular field visits and interact with different stakeholders, especially primary stakeholders;
d) Experience in data processing and with computers;
e) Leadership qualities, personnel and team management (including mediation and conflict resolution);
f) English language skills preferred.
Desirable:
a) Knowledge of the focal area in which the Project operates;
b) Understanding of IFAD procedures/
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Community-based Adaptation and Disaster Risk Management Officer
General
1. The Project will employ or second a staff member to be the Community-based Adaptation and Disaster Risk Management officer within the PPCO. He/she will be responsible for managing activities related to the coordination of climate based adaptation and disaster risk management planning and investment and in assisting drafting the CBA/DRM aspects of the Project AWPB.
Reporting
2. The officer will report to the Project Coordinator of the PPCO.
Responsibilities
3. The incumbent will be responsible to act as a crucial link within each PPCO (between the different specialists), as well as with implementing agencies and with the PPCO and PPSC for the other province. This will enable a more holistic understanding for Project staff and stakeholders on environmental and climatic and disaster risks in agricultural systems (e.g. CC adaptation, participatory action research, participatory scenario development, vulnerability mapping; disaster risk mitigation planning, etc.). Specifically, he/she will:
a) Be responsible for leading initiatives to develop effective engagement with other relevant agencies and projects providing CBA and DRM in the region;
b) Assist the DPI to ensure that there is a consistent and effective process for planning and implementation of CBA & DRM, and that there is actually a sustainable benefit accruing to implementing communities and individuals.
c) Provide and/or organise training and mentoring for the support staff at the district and commune levels on CBA & DRM within the MOP-SEDP planning process in the Project target communes and districts.
d) In collaboration with district and commune staff, assist communities to apply CBA and DRM analysis and planning activities including participatory action research, participatory scenario development, vulnerability mapping; disaster risk mitigation planning, etc.
e) Assist to incorporate the CBA & DRM MOP-SEDPs of the Project communes and districts into the Project AWPB.
f) Coordinate all CBA/DRM technical assistance inputs for the formulation of the planning and investment mechanisms and their replication and institutionalization in the provinces and the region.
g) Prepare and circulate various promotional material concerned with CBA/DRM activities.
h) Ensure that participation of women and members of ethnic minorities in the commune/district CBA & DRM planning process and that the gender equalities are mainstreamed in the implementation of the planning process.
i) Maintain a close planning and implementation link to the other officers in charge of the other Project outcomes, and ensure that CBA & DRM considerations are at the forefront of all Project activities.
j) Monitor implementation of the CBA and DRM activities of the Project communes; analyse the M&E data and prepare regular progress reports to the Project Coordinator, including proposals that aim at improving the implementation and impact of the activities.
k) Prepare regular and ad hoc reports on the progress of CBA and DRM, and the challenges and successes being achieved
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MOP-SEDP Planning Officer
General
1. The Government will employ or second a staff member to be the Market-oriented Participatory SEDP Planning Officer (POs) within the PPCO. They will be responsible for managing activities related to the MOP-SEDP and drafting the Project AWPB.
Reporting
2. The PO will report to the Project Coordinator of the PPCO.
Responsibilities
3. The incumbents will be responsible for all planning activities under the Project including the Project AWPB. They will be guiding the commune MOP-SEDP process in the Project communes and ensuring that the bottom-up MOP-SEDPs are synthesized and consolidated at the district and province levels. Specifically, they will:
a) Be responsible for assisting the DPI in coordination of all concerned line agencies and the districts and communes to implement the activities of the Outcome 3
b) Supervise the support staff at the district and commune levels and coordinate with the staff of General Planning Section under DPI to organize the SEDP planning process in the Project target communes and districts.
c) Incorporate the MOP-SEDPs of the Project communes and districts into the Project AWPB; Assist the Project Coordinator in drafting the AWPB and its revisions for the PPSC and IFAD comments and endorsement.
d) Coordinate all technical assistance inputs for the formulation of the MOP-SEDP mechanism and its replication and institutionalization in the provinces and the region.
e) Ensure that participation of women and members of ethnic minorities in the commune/district MOP-SEDP planning process and that the gender equalities are mainstreamed in the implementation of the planning process.
f) Maintain a close planning and implementation link to the other officers in charge of the other Project outcomes.
g) Monitor implementation of the MOP-SEDPs of the Project communes; analyse the M&E data and prepare regular progress reports to the Project Coordinator, including proposals that aim at improving the implementation and impact of the MOP-SEDP activities. and
h) Coordinate with the PPCO Finance Manager to provide the technical support to the financial management and annual audits of the Project commune accounts.
Qualification
4. The incumbent will require 10 years’ experience in coordinating rural development planning activities, including the experience in promotion of market-based participatory SEDPs at the local level. A staff person seconded from the DPI or the finance/planning section at the DPC will be preferred.
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Gender Specialist
Job Title: Gender specialist
Duration: Aligned to the Project duration
Recruitment: National
Contract: Two-year contract, with six months’ probation period, renewable based on agreed performance targets and deliverables
Reports to: Project Coordinator on administrative and technical matters
Purpose
2. The effective inclusion of village women in CSSP community-based participatory planning and programme implementation, in the effective and sustainable implementation of an improved climate adapted agriculture production, rural finance and agribusiness value chain development programme, and as entrepreneurs, is essential to Project success. This would require a significant shift in prevailing attitudes to women and development across a broad range of project stakeholders, from government to village level. To that end, the Project would support a robust gender development learning and action programme, requiring skilled specialist support.
General scope of the job
3. The Gender specialist is responsible for ensuring the Project implements a process of women’s empowerment including targeting poor women and woman headed households. This requires close coordination and communication with Project implementation agencies and other stakeholder groups, and field staff as well as consultants. The Gender specialist would report directly to the Project Coordinator
Main Responsibilities and Duties
(a) Building on background analysis and strategies outlined in the Project design report, detail the characteristics of target groups and gender issues in target areas to select appropriate climate change-adapted gender development approaches to implement under the Project;
(b) Based on the detailing of poverty and gender issues as mentioned above, identify challenges and propose solutions that may hinder the Project in meeting its gender and inclusion objectives and targets;
(c) Set up and initiate gender and inclusion strategies, mainly in preparing gender action plans and conducting gender awareness training during the initial implementation phase
(d) Together with the Project M&E officer, develop appropriate M&E indicators for climate change-adapted gender-sensitive results;
(e) Develop learning materials and tools- or adapt existing ones- in order to be able to run gender development learning events;
(f) Organize and deliver training of trainers events in Project areas on gender development;
Minimum Qualifications
(a) Ability to work in other languages used in the region would be an advantage
(b) A degree in social sciences or gender development
(c) At least 5 years of experience in working on poverty and gender issues and gender equality in development projects and programmes;
(d) proven ability and experience in working with ethnic minorities
(e) Sound experience in working for IFAD Projects;
(f) Sound knowledge of food and nutrition security at smallholder level in Viet Nam;
(g) Knowledge of ethnic people language and culture;
(h) Ability to develop and foster external organizational relationships and applied representation skills;
(i) Written and spoken English language skills would be useful
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Commodity and VC Project Coordinator
1. The Project will employ a Commodity and VC Project Coordinator who will be directly responsible for managing Project activities under the Outcome 1 – Province-based participatory planning institutionalised. S/he could be seconded from the regular government service. In the likely absence of suitable candidates among government officers, however, the position will be filled by contracting a suitable candidate (recruitment through open advertisements).
Duration
2. The position will be for the full 5-year Project period. The contracted incumbents will be recruited for 2 years’ renewable for another 3 years.
Reporting
3. The Commodity and VC Project Coordinator Officers will report to the Project Coordinator.
Responsibilities
4. The Commodity and VC Project Coordinator will be responsible for facilitating the implementation of the second outcome – Increased public and private investment in sustainable commodity production and value addition. In particular, s/he will:
a) Coordinate all implementation activities of the Project outcome, including their timely inclusion in the Annual Work Plan and Budget (AWPB).
b) Coordinate the overall approach, work plan and all technical assistance inputs for the outcome with the international and national technical advisers.
c) Identify technical assistance institutions or consultants for development of commodity and VC tools and training materials.
d) Identify technical assistance institutions or consultants for conduct of pro-poor market and VC studies.
e) Organize the VC validation workshops and support for private sector implementation of the pro-poor market and VC development plans.
f) Ensure that all Project outcomes – MOP-SEDPs, VC development, climate adapted agriculture, credit and public and APIF infrastructure are holistically integrated to support VC development.
g) Identify private sector investors and facilitate approval of the associated commodity or VC development plans by the PPC.
h) Assist the private sector investors in implementation of the pro-poor market and VC development including coordination with concerned line agencies and technical service providers and other private sector actors.
i) Support and facilitate the provision of direct financial and business development service for all Project-supported commodity and VC development activities.
j) Maintain the Project M&E system with regards to the outcomes and impacts of commodity and VC development to the poor.
k) Facilitate case studies and documentation of good practices in the pro-poor commodity and VCs.
Qualification
5. The incumbent will have sound knowledge of private sector and pro-poor market development, in particular of the agriculture commodity markets and VC approach. S/he will have good knowledge of regional private sector companies and financial institutions, especially in the agro-business industry. S/he should also have a sound background and experience in business development, financial analysis and vocational training. Good command of the English language will be an additional asset.
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District Business Development Officer
1. The Project will employ a District Business Development Officer (BDO) in each of the districts of Bắc Kạn and Cao Bằng provinces covered by CSSP.
Duration and Location:
2. The BDO will be recruited for an initial period of two years, renewable for three years. Each selected BDO will be based in one of the districts covered by CSSP.
Reporting:
3. The BDO will report in the district to the Head of the Agricultural Section and in the province to the Coordinator of CSSP.
Responsibilities:
a) Carry the overall responsibility for achieving the objectives, outcomes and targets identified for the VC development, business linkage promotion and the competitive grants activities of CSSP at the district level.
b) Familiarise herself/himself in the CSSP approach and in the activities to be undertaken as part of business linkage promotion and the competitive grants schemes.
c) Assist in preparing the Annual Work Plan & Budget for the VC development and the competitive grant activity in the district and ensure that all plans are designed, implemented and monitored according to specified procedures and deadlines and within the allocated budgets.
d) Support commodity chain studies in the districts to be conducted during PY 1 by CSSP.
e) Familiarise farmers and their groups with business opportunities in the focal commodity chains of CSSP.
f) Assist other CSSP-related staff to assess the business relevance of the planned CSSP-supported infrastructure investments in beneficiary communes.
g) Liaise with the companies to identify their input requirements from the farming community.
h) Pro-actively build linkages between companies and farmers and their CIGs and cooperatives.
i) Assist CIGs and cooperatives in the preparation of applications for CSSP competitive co-financing.
j) Assist the Agricultural Section in the district to assess the applications for CSSP competitive co-financing applications.
k) Actively follow up the implementation of the CSSP-co-financed sub-projects in the villages.
l) Ensure gender mainstreaming in the outcome activities and track on a continuous basis the inclusion of women in the operations of the CIG co-financing and other business linkage operations.
m) Work closely with the RFS and the M&E Specialist in establishing and operating of a monitoring, evaluation and knowledge management system for the CIG operations.
n) Support the Supervision and Implementation Support Missions and the MTR and ensure compliance with their recommendations for the CIG co-financing and other business linkage operations of the Project
o) Carry out any other task determined by the Project Coordinator.
Qualification and Experience:
4. The BDO will hold a university or collage degree in Business Management, Economics, Agriculture, Social Sciences or other related fields. S/he will have a minimum of 5 years of work
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experience in business development, company management, the financial sector development or a related field. The position will also entail demonstrated capacity in the planning and follow-up of Project activities, good analytical ability and writing skills, and capacity to interact with a wide range of private sector partners, especially private agro-companies, public sector representatives and most significantly smallholder farmers in rural Viet Nam. Sensitivity to gender issues and previous experience of working with women’s Projects will be additional merits for the position. At the start-up of CSSP operations, DVCMDOs will receive training by the Project on the planned business linkage promotion activities and the related competitive grants.
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Rural Finance Officer
1. The Project will employ a Rural Finance Officer (RFO) for each CSSP provincial PCO who will be directly responsible for coordinating and supervising Project activities under Output 5 – Rural Finance Services Enhanced. S/he could be seconded from the finance service institutions. In the likely absence of suitable candidates among the local bank and mass organization officers, however, the position will be filled by recruitment through open advertisements.
Duration:
2. The RFP will be recruited for an initial period of two years, renewable for another three years.
Reporting:
3. The RFP will report to the Project Coordinator of CSSP.
Key Responsibilities:
a) Carry the overall responsibility for achieving the objectives, outcomes and targets identified for the CSSP Rural Finance Services Enhanced-activities.
b) Familiarise herself/himself with the CSSP approach and in the activities to be undertaken as part of the outcome and ensure that the outcome is implemented as envisaged.
c) Prepare, together with the Women’s Development Funds (WDF), the relevant implementation and subsidiary loan agreements required for the CSSP-supported activities instigated by the WDFs.
d) Prepare the Annual Work Plan & Budgets for Output 5 and ensure that all plans are properly designed, implemented and monitored according to specified deadlines and within the allocated budget.
e) Develop Project management guidelines, procedures and operating practices for Project execution, proactively manage changes in Project scope, identify potential constraints and devise contingency plans.
f) Prepare contracts and bidding documents in accordance with IFAD and Government requirements for the competitive procurement of services under the outcome activities.
g) Ensure gender mainstreaming in the outcome activities and track, on a continuous basis, the inclusion of women in the operations of the Rural Finance Services outcome.
h) Establish together with the M&E Officer a system of monitoring and data management for the Rural Finance Services outcome.
i) Identify how best to use the Technical Assistance budgeted for this output and to develop, with the WU, the TOR and most appropriate time schedules for the use of this assistance.
j) Provide support to IFAD Supervision and Implementation Support Missions and the MTR and ensure compliance with their recommendations for the Rural Finance Services outcome.
k) Carry out any other task
Qualification and Experience:
4. The Rural Finance Officer will hold a university degree in Business Management, Economics, Social Sciences or other related field. S/he will have a minimum of 5 years of work experience in the financial sector, preferably including experience with community-based financial services. The position will also entail demonstrated capacity to take on a leadership position with strong managerial skills, good analytical ability, good writing skills and capacity to manage people and interact with a wide range of private sector partners, public sector representatives and, most significantly, smallholder farmers in rural Viet Nam. Sensitivity to gender issues and previous experience of working with women’s Projects will be additional merits for the position, as well as oral and written communication skills in English.
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Head of Finance and Administration
General
1. The Project will employ a Head of Finance and Administration Officer. S/he could be seconded from the regular government service.
Reporting
2. The Head of Finance and Administration will report to the Coordinator of the PPCO.
Responsibilities
3. S/he will be responsible for day-to-day administrative and financial management of the Project. In particular, s/he will:
a) Manage the PPCO office, including ensuring that office and communications equipment is in place and functioning.
b) Oversee the establishment of an acceptable computerized bookkeeping and accounting system and supervise the accounts/book keeping staff.
c) Provide monthly financial reports to the Project Coordinator, indicating financial performance of the Project compared with the annual work plan and budget;
d) Organize and oversee tendering and procurement.
e) Undertake financial management of contracts entered into by the Project.
f) Be responsible for the preparation of disbursement requests from IFAD, including the submission of all required documentation.
g) Be responsible for compiling the consolidated AWPB, incorporating the inputs of other PPCO officers.
h) Arrange for annual audits to be commissioned in a timely manner.
Qualification
4. S/he will be a qualified accountant or an administrator having strong public accountancy experience. S/he should have sound experience in financial management, preferably with internationally-funded development Projects. Good organisational skills and an understanding of office technology will also be necessary. A good command of the English language will be an important asset.
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Annex 4. Example Service Delivery Sub-project
Objective: To successfully implement Community Re-afforestation for Disaster Risk
management in Commune Protected Forest Area
Project Timeframe: January 2015 – December 2016
Agreed Budget: Total Budget is VND 21 m (
Service Provider: Vinh Quang Commune, Hoang Su Phi District Re-afforestation CIG Group (Farmer
to Farmer Extension)
Potential Milestones, Deliverables and Payment Schedules:
Milestone Deliverable Payment62
Expected
Delivery
Contract Agreement Contract between CIG and Service Provider signed 2,000,000 15/1/2015
Project Baseline Participatory description by beneficiaries (village) of:
Existing physical and socio-economic status of community managed protection forest, including number and poverty levels of households, ethnic status existing land use practices and income generated from community forestry activities.
2,000,000 01/3/2015
Re-afforestation
Plans and Land
Allocation
Statutory Declaration from CIG Leader that:
Community Forest Plans and Guidelines are agreed by all CIG members
CIG members have Forest red Books with names of husband and wife
4,000,000 30/08/2015
Nursery Operational Nurseries* are established and selling planting material to CIG members and local communities
9,000,000 30/10/2015
Agro-forestry
Demonstrations
Statutory Declaration from CIG Leader that:
10ha of intensive agro-forestry+ with forage production for household livestock and acacia hybrids for large timber production established
2,000,000 30/08/2016
Project Validation Participatory description of benefits following project
completion (compared with baseline)
2,000,000 30/12/2016
TOTAL Contract Fee Paid to Service Provider 21,000,000
Notes: * costs for establishment of Nursery are from the CIG infrastructure funding stream
This contract demonstrates some key points about output based contracts for service delivery
projects:
The Owner is the CPC
The above contract includes contributions from project beneficiaries. CIGs are not required to contribute to the costs of improving knowledge and skills, but will be required to contribute if production inputs or small scale infrastructure (processing, value adding etc.) are approved. Where inputs are required the contract will specify the inputs and detail the milestone and deliverables required to ensure that the input costs are used for their intended purpose.
The contract is between the CIG and the Service Provider who is undertaking the training and skills attainment and is responsible for assisting the CIG with implementation of small scale infrastructure (nursery).
The contract manager is the Village/Community Development Board who will oversee project implementation
62
The cost of undertaking each milestone are examples only and the total contract and payment for each milestone
should be based on the cost/prices quoted by the preferred service provider
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The implementer is the Service Provider who has responsibilities for self-monitoring the implementation with the CIG verifying and signing off those services have met expectations.
Evaluation is through a comparison between the baseline and Project validation. In service contracts the Service Provider is responsible for simple baseline surveys and Project validation. Assistance to do this will be provided by evaluators from the CPC or the District Agro-Forestry Extension Station.
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Appendix 6: Planning, M&E and learning and knowledge management
Background
1. Beyond its role in data management and the monitoring and measuring of Project indicators,
results and impacts, the system for planning and M&E (P/M&E) of the proposed Project will be
developed as an integral part of the process of Project implementation. Among others, its purpose
will be to support dialogue and interaction between the various levels of government and actors who
are responsible for the governance of public investment and to facilitate participatory learning and
ownership of the Project at the local level. More specifically, the P/M&E system will be designed to:
(i) provide updated information on the goals, results, effects and impacts of the Project, (ii) support the
Project Steering Committees (PPSC) and Project management in making decisions about the
strategies, actions, and investments expenses that lead to achievement of the objectives,
(iii) strengthen the interrelationship of PPCO with the various strategic partners who will be involved in
implementation, (iv) be an instrument for strengthening the capacity of the participating communes,
communities, producer groups and enterprises for participating in and administering and managing
local development processes and investments in accordance with current policies and directives, and
(v) allow the development of spaces for learning, exchange of experiences, good practices and
dissemination of results. Thus, the system will also be closely linked to the Project’s broader agenda
for the management of knowledge.
2. The Project M&E system will track and verify the levels of achievement of Project outputs, the
associated outcomes, and the success in achieving the Project objective and its development goal.
These levels are all causally connected as set out in the Project Logical Framework, which provides
the framework that thus constitutes the structure for the Project M&E system. To a large extent, the
M&E system will be participatory and thus involve the supported communes in data collection and
management. The PPCO M&E/Knowledge Management Officer will assist the PPCO in the data
management in a standardised system, keep a central system to compile overall monitoring and
evaluation information, and conduct studies to measure overall impacts.
3. Beneficiary participation in Project monitoring will be ensured by involving the target groups,
with special effort made to include women and ethnic minorities by organizing the interviews at
suitable times and venue and applying appropriate interview techniques. Monitoring will include data
collection in forms of individual interviews, focus group discussion or case studies.
4. The proposed Project has a distinct advantage as regards the development of the P/M&E
systems as Bắc Kạn and Cao Bằng already have developed systems, a strong experiential base, and
significant institutional capital for its operation at all levels from the communes to the provincial and
within the PPCO. The DBRP and 3PAD were evaluated by IFAD as “satisfactory” in their project
management and P/M&E systems. At the same time, experience from these and other IFAD
projects/programmes has also indicated some areas where adjustments and/or strengthening under
the new Project will be desirable. These include:
a) a strong focus on training in planning skills and tools, especially for collection of information from participatory processes at local-levels, is desirable;
b) for full integration of market-orientation into the SEDP process and for integration of CBA and CBDRM, both for climate proofing of VCs and the commune/district SEDP, the planning cycles must be compatible with the SEDP planning processes that finalize at the end of June at the District-levels and mid-July at the commune-levels.
c) decentralized and participatory M&E processes that require tracking of a significant number of indicators does not function well or efficiently with part-time commune M&E staff. From this perspective, the reduced number of indicators in the IFAD logframe should increase monitoring accuracy.
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d) PPCO M&E staff require advanced training on alternative methodologies (e.g., case studies, intensive interviews, others) and basic training on the livelihoods of rural households and the business operations of SMEs in the target areas in order to improve the accuracy of surveys and monitoring.
e) The Annual Outcome Survey (AOS) should be conducted on mid-year basis (from May to July) so that the results can be used in the development of the subsequent annual work plan.
f) The AOS cannot capture impacts in a detailed and comprehensive way. If resources allow, it is advisable to complement the AOS with qualitative instruments, targeted to priority themes/issues. For example, case studies to assess the impact of vocational training or Most Significant Changes and photo book tools to measure impact of newly constructed rural infrastructure.
Planning and Monitoring & Evaluation
5. The Planning and Monitoring & Evaluation system (P/M&E) will consist of the following
subsystems:
a) The linked Annual Work Program & Budget (AWPB) and annual MOP-SEDP planning subsystem, which uses as inputs the logical framework, operational plans, participatory assessments and socioeconomic development plans for the development of participating communities and organizations, and the Project’s exit strategy/plans for sustaining advances and outcomes after closing; Project
b) The monitoring subsystem, which will manage periodic reports, reports of field visits, progress reports, monthly meetings of the different Project implementation units, specific reports and information generated during supervision missions, and joint reviews of IFAD and the Government;
c) The evaluation subsystem, which is based on the baseline study and impact indicators (RIMS), internal and/or external evaluation reports and studies on Project outcomes and impacts, and the Project completion report and;
d) The learning subsystem, consisting of a systematic process oriented toward collective reflection by the Project actors on the experiences during the implementation of the Project in order to refine Project methodologies and approaches, exchange learning and knowledge, and generate new knowledge.
6. Table 1 below provides a brief summary of the system.
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Table 1. Principal elements of Project planning, M&E, and learning system
Outcome/Output/
Principal Activities Planning M&E Learning
Outcome 1: Province-based participatory planning institutionalised
Output 1: Strategic Investment Plan
Identified Strategic Investment Plans guide the MOP-SEDP process and inform CIF, CIG , SCG and APIF investment processes
1) Identification of
commodity chains
offering economic
opportunity for Bắc Kạn
and Cao Bằng
1) Monitoring of integration of SIP
results in CSSP planning and
investment programmes
2) Annual Outcome Surveys
1) Systematization of VC analysis
software
2) Systematization of enterprise
financial and economic analysis
skills;
3) Dissemination: learning series,
technical guideline manuals, ToT,
technical training, learning events,
knowledge platforms/networks.
Output 2: Provincial climate change action plan
improved knowledge base and capacity among key institutional actors to integrate evidence-based, CC adaptation considerations into policy, strategy and public and private (VC) investments.
1) Updating provincial CC
adaptation strategies and
action plans
2) Provincial MOP-SEDP
2021-2025 is climate
adapted
1) Establish a Thematic Ad-hoc Group
(TAG) to conceptualize, orient and
monitor the technical content and focus
of the Project’s support.
2) National study tours to benchmark
provincial CC policy and strategies;
3) participatory diagnostics of
commune-level CC impacts, scale and
ongoing adaptation
1) district-level zoning methodology
developed;
2) commune-level CC planning
instruments piloted;
3) roll out of the climate adapted
MOP-SEDP planning process;
4) studies, analysis, training and
technical assistance inputs in
support of CC adaptation
5) forage technology for sustainable
hillside farming
Output 3: Climate-adapted, market-oriented socio-economic development plan
SEDP process is upgraded to be participatory climate adapted and market oriented, building off SIP analysis.
1) Annual and medium term
commune and district
MOP-SEDPs
2) AWPB process
3) Integration of CBA and
CBDRM plans into MOP-
SEDP at commune,
district and provincial
levels.
1) Monitor change in capacities at
government office and community
levels;
2) Commune/District-level participatory
M&E system
3) Baseline, Midterm Review,
Completion evaluations
4) Annual Outcome Surveys
5) Logframe & progress reporting
(quarterly/ annual/ final)
1) Development of a market-based
economics learning programme
2) Systematization of results
3) Dissemination: learning series,
technical guideline manuals, ToT,
technical training, learning events,
web-based publications, knowledge
platforms/networks.
4) Development of district MOP-
SEDP
5) Cross-visits (within/between
Provinces)
6) Institutionalization of competency-
based training
7) Test & validate annual and
medium-term MOP-SEDP;
systematization of results;
dissemination; legislation of
process.
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Outcome/Output/
Principal Activities Planning M&E Learning
Outcome 2: A greener agriculture future
Output 4 Forest land and forest allocation
Forest land and forest use rights for 17,000 hectares of forest transferred to private households in Bắc Kạn
1) Development of
participatory forest land and
forest use allocation
procedures
1) Beneficiary surveys
2) Bắc Kạn DoNRE and DARD records
3) Bắc Kạn Annual SEDP
4) Baseline, Midterm Review,
Completion evaluations`
5) Annual Outcome Surveys
6) Logframe & progress reporting
(semester/ annual/ final)
1) Development of efficient
participatory forest land and forest
use planning and allocation
procedures including beneficiary co-
financing
2) Development of effective district
and commune-based systems for
monitoring soil erosion and forest
land and forest condition
Output 5: Common Interest Groups for climate adaptation
Members of up to 900 Bắc Kạn and 1,000 Cao Bằng climate-adapted commodity-based CIGs trained in climate adapted technologies and practices.
1) Development of CIG
outcome-based LF2F
service contracts
1) Establishment of LF2F
registration scheme
2) Beneficiary surveys
2) Annual SEDP
3) Baseline, Midterm Review,
Completion evaluations
4) Annual Outcome Surveys
6) Logframe & progress reporting
(semester/ annual/ final)
1) Development of certified,
sustainable LF2F services;
2) Aggregation of CIGs producing
common commodities into lager
associations and cooperatives;
3) Integration of CC adaptation into
infrastructure planning;
Outcome 3: Profitable farms linked to finance and markets
Output 6: Community infrastructure
Co-investment in climate adapted and market oriented infrastructure
1) Commune infrastructure
Project supervision boards
establishment;
3) Beneficiary surveys
4) Annual SEDP
5) Baseline, Midterm Review,
Completion evaluations
6) Annual Outcome Surveys
7) Logframe & progress reporting
(semester/ annual/ final)
1) Market-oriented investment
prioritisation
2) Community force account
infrastructure development and
operation and maintenance
Output 7: Rural financial services
Rural financial services developed for the rural poor
1) Development of credit
products for rural poor
2) Establishment of
registered MFI
3) Development of MFI
credit products
1) WSCG and WDF credit records;
2) Beneficiary surveys
3) Annual SEDP
4) Baseline, Midterm Review,
Completion evaluations
5) Annual Outcome Surveys
6) Logframe & progress reporting
(semester/ annual/ final)
1) Efficient progression toward MFI
registration;
2) WU governance of
independently managed MFI
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Outcome/Output/
Principal Activities Planning M&E Learning
Output 8: Agribusiness Promotion Investment Fund
APIF co-financing for value adding enterprises and cooperatives
1) Financial and economic
analysis of APIF bid
proposals;
2) Development of
enterprise-supplier
relationships
1) Annual SEDP
2) AWPB process
3) Beneficiary surveys
4) Baseline, Midterm Review,
Completion evaluations
5) Annual Outcome Surveys
6) Business environment surveys
7) Logframe & progress reporting
(semester/ annual/ final)
1) Development of investor –
smallholder market relationships;
2) Building associations of input
suppliers;
3) Linking investors to commodity
and financial markets.
7. Logical framework. A principal guide for the implementation and monitoring of the programme
will be the logical framework. This will serve both to better ground the logical framework within the
local context as well as to promote ownership by the PPBs. The logical framework, targets and
indicators will be reviewed thoroughly during the midterm evaluation of the Project and, if necessary,
updated annually as part of the adaptive learning process based in the monitoring of the Project’s
implementation. The objective of having an ongoing review of the logical framework is to encourage
its use as a tool for Project management. Also the use of the logical framework should assist the
Project team to work more coherently towards the same goals and structure of results and impacts,
while providing Project management with a tool for ensuring the Project’s alignment with the strategic
priorities for CC adaptation and poverty reduction embodied in design and in accordance with national
and provincial policies, strategies and programs.
8. Alignment with national priorities. To ensure alignment and harmonization of the Project with
national priorities as per the agreements between the Government of Viet Nam (GoV) and IFAD
embodied in the Country strategic opportunities programme (COSOP) for 2012-2017, the Project
incorporates into design and the logical framework some of the targets for:
a) The NTP-NRD, specifically by (i) supporting the development of market options to help realize the new rural areas, (ii) creating the needed mindset change at the household level, and (iii) building capacity to carry out the envisaged commune planning activities; and
b) The NTP-RCC for 2009-2015, specifically by supporting (i) CC awareness enhancement and human resources training including PAR to strengthen CBA processes; and (ii) development and implementation of action plans to respond to CC (including mainstreaming community-based adaptation into the SEDP development and implementation processes at the Commune, District and Provincial-levels);
9. Planning. Project implementation will require the articulation of various public institutions
(government and line agencies), private entities, people’s and communities’ organizations and groups.
The annual planning processes is the means by which this articulation must be achieved and as such
requires building consensus around common objectives, constant communication and a flexible
decision-making structure. The two principal planning processes are the annual socioeconomic
development planning (SEDP) and the annual work program and budget planning.
10. SEDP. The SEDP is the principal planning process and instrument that government utilizes to
orient all public financing of relevance for the ARD sector. Through mainstreaming into the SEDP, the
potential exists to institutionalize pro-poor, market oriented and climate adapted development
approaches and see them replicated across the country. The integration of concerns for CC and
disaster risk management into the SEDP process are goals of the National CC Strategy and the NTP-
RCC. As yet, however, no official directives or guidelines from either MPI or MoNRE have been
promulgated to guide the provincial DPIs in doing so. This is not a limitation. Rather, it is an
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opportunity for proactive engagement by the Project to assist both national and provincial government
to learn and develop an appropriate approach.
11. As discussed above, IFAD-supported programmes have developed significant experience with
the MOP-SEDP process and the institutionalization of improved participatory approaches, introduction
of a market-orientation into local development planning and for climate proofing of VCs important to
the rural poor. The challenge for this Project will be to build upon and continue to strengthen the
market-orientation and VC climate proofing developed under prior projects while developing new tools
and methodologies
12. The preliminary framework for integration of CC concerns into SEDP planning development,
testing, validation and piloting of methodologies and instruments includes:
a) Commune-level: (i) participatory community vulnerability mapping (natural disaster, salinization, CC, etc.); (ii) application of mapping in production and investment (SEDP) planning, including identification of BMPs; (iii) joint NTP-NRD planning in communes where Project and NTP-NRD overlap; (iv) linkage of village level planning with commune-level zoning for vulnerability, risk, current and projected CC impacts to 2030; and (iv) SEDP planning and prioritization
b) VCs: adaptation and including use of the VC climate proofing tool;
c) District-level: aggregation of commune-level vulnerability zoning into district-level zoning tool for MOP-SEDP (incl. NTP-NRD & NTP-RCC) planning & prioritization;
d) Province-level: (i) DARD, DoNRE, and DPI collaboration on development and testing of commune and district methodologies for vulnerability mapping, zoning, and integration into the annual SEDP (incl. NTP-NRD & NTP-RCC); (ii) DARD/DoNRE update provincial-level CC Action Plans updated and incorporate priorities into Bắc Kạn and Cao Bằng’s MOP-SEDPs 2016-2020
13. Annual Work Program and Budget (AWPB). The AWPB details, on an annual basis, the
expected results of the Project at the level of output indicators (e.g., the number of people expected to
participate in Project-sponsored training initiatives, number of farmers adopting new saline tolerant
crop varieties, etc.). It is both the main information source for Project results and a principal tool for
orienting and coordinating the actions of the diverse institutions and actors responsible to deliver
products and services to the target beneficiaries. Its annual content is informed by the outputs from
the CC-adapted MOP-SEDP planning processes, the results from the evaluation of the prior year’s
implementation, and the Project’s overall goals and expected outcomes and impacts.
14. The basis for investment planning at the community level will be derived directly from the
existing SEDP process, which will initiate the preparation of investment plans for the public sector.
Communes will inform/channel potential private investor’s opportunities for investment support under
the Project, and prepare estimates for private sector activity financed by the Project. The specialist
PPCO staff will ensure that this commune-based planning process is genuinely representative and
inclusive. These PPCO officers will provide supervision to the support staff at the district and
commune levels and coordinate with the staff of the General Planning Section under the DPI to
organize the MOP-SEDP planning process in the Project target communes and districts.
15. The commune plans will be integrated into the district MOP-SEDP, with the support of staff of
the relevant District line agencies as determined in the MOP-SEDP legislation.
16. In the first year, the PPCO will also provide and coordinate training workshops on the Project
strategy and approaches, AWPB and procurement for key stakeholders. Specifically included in this
will be the strategy and approach for co-financing climate adapted and market oriented development.
This will ensure an accurate and shared understanding of the Project strategy and information needs.
17. The PO, working with the PPCO Coordinator and other PPCO staff, will incorporate the SEDPs
of the Project communes and districts into the Project AWPB. They will then assist the Project
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Coordinator in drafting the AWPB and its revisions for the PPSC consideration and IFAD comments
and endorsement.
18. The PPCO will be responsible for the generation of plans not directly derived from the MOP-
SEDP process. This will include provision of specialist support and other specialist training, including
for climate adapted, market-led agriculture development, under Outcome 1, various forms of
Technical Assistance under Outcome 2, and the requirements for Project Management. The AWPB
will reflect both the previous year’s achievements and performance and anticipated Project progress.
The PPCO will be able to obtain guidance from the IFAD country office during the process of AWPB
formulation as required. They will also ensure coordination between other government agencies and
externally financed Projects in the Project area.
19. The draft AWPB will include a procurement plan (an initial eighteen-month plan and then
twelve-month plans for subsequent years), a detailed description of planned CSSP activities, and the
sources and use of funds. The Project will be ultimately responsible for preparing the draft AWPB in
an accurate and timely manner.
20. The draft AWPB will be submitted to the PPSC for its review and approval. The approved draft
AWPB will then be transmitted to IFAD for comments and no objection no later than sixty days before
the beginning of the relevant Project year. An Annual Stakeholder Review and Planning Workshops at
which Annual Performance Report findings and management implications will be discussed will
support the AWPB preparation process.
Monitoring and evaluation.
21. The objective for Project Monitoring and Evaluation (M&E) will be the on-going real-time
assessment of the processes employed in Project activities as well as their outcomes, outputs and
impact with respect to development goals and objectives. The M&E system will monitor performance
and assess the impact of the activities. Monitoring will focus on activities/inputs, outputs, outcomes,
performance and risks while evaluation will assess the relevance, efficiency, effectiveness and impact
on poverty reduction, business growth and environment, empowerment and partnership,
sustainability, replicability, lessons learned, and knowledge up-take, all within the context of the
requirements for successful climate-smart market-led development. The M&E system will cover both
the operational and financial aspects of the Project.
22. The M&E system will be (i) consistent with IFAD requirements (RIMS); (ii) facilitate near-real
time learning in support of evolutionary design, and (iii) apply participatory approaches to collect,
manage and analyse M&E data and report on outcomes and impacts. No significant issues with
development of the system are foreseen as the prior project has already substantially developed a
successful M&E system and it is expected that the M&E staff from the prior project will carry over to
the new Project.
23. The Project M&E system will be
designed to track and verify the levels of
achievement of Project outputs, the
associated outcomes, and the success in
achieving the Project objective and its
development goal. These levels are all
causally connected as set out in the
Project Logical Framework. To a large
extent, the M&E system will be
participatory, involving the supported
communes in data collection and
management. The M&E and Knowledge
Management Officers will assist the
PPCO in the data management in a
standardised system, keep a central
Monitoring the agri-business environment
The Project will apply independent surveys to
monitor change in the agri-business
environment in Bắc Kạn and Cao Bằng. Factors
to be monitored would include inter alia:
changes to the provincial legal and regulatory
framework; agri-business access to investment
capital; provincial and national support
measures and their application; the
administrative burden of business registration
and closure and obtaining land purchase and
construction permits; access to skilled labour;
and ease of inter-provincial trade.
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system to compile overall monitoring and evaluation information, and conduct studies to measure
overall impacts.
24. The Strategic Management Section under the PPCO will be in charge of setting up and
operating a unified management information system (MIS) (building off the earlier 3PAD system),
establishing and ensuring the M&E function, reporting and Knowledge Management. To that end,
DEPOCEN (a local partner) in collaboration with IFPRI and IFAD HQ, have completed the “Manual
Guide for IFAD Funded Projects in Vietnam”. The manual provides the IFAD partners in Vietnam with
a knowledge guide and practices for M&E.
Management Information System (MIS):
25. A unified Project MIS will be built off historic 3PAD MIS efforts to provide a comprehensive
system of data collection, analysis and exchange. It will bring together physical and financial records
with the main purpose of informing management decisions on Project matters. Quantitative measures
of progress will be supplemented with qualitative information related to the acquisition of personal and
shared skills, group behaviour changes, target groups’ perception, awareness and attitudes. The MIS
will be the sole channel of Project monitoring material and form the basis of quarterly six-monthly and
annual reports.
26. In order to ensure a single and compatible system is implemented, the MIS will be set up
centrally at Project start-up and refinements will be introduced in the light of experience during the first
year. It will be based on the Logical Framework, which will be modified together with the MIS during
implementation to adjust the Project to changing circumstances. The preparation of reporting formats
for use by implementing agencies, particularly the participating communes, districts, and other
partners will be part of the overall design of the MIS.
Monitoring:
27. Monitoring will be an integral part of the Project coordination role. All staff will be involved in
strengthening Project progress and performance monitoring in their particular areas of responsibility.
A large part of the monitoring data will be collected and communicated by the participating
communes.
28. The monitoring will provide semi-annual and annual feedback on the extent to which the Project
is achieving its outputs, implementing the activities, identifying potential problems at an early stage
and proposing possible solutions. The accessibility of the Project to all sectors of the target
population, as well as the technical and financial efficiency will be monitored and possible
improvements suggested.
29. Monitoring indicators have been selected for each of the Project’s outcomes as detailed in the
second column of Logical Framework. Wherever relevant and possible, gender-specific data, ethnic
minority status and poverty data as classified by MOLIS) will be collected. Monitoring will be directed
to inform the indicators of Project outputs and outcomes set out in the Logical Framework. The
indicators listed in the second column of the Logical Framework have been selected bearing these
requirements in mind.
30. Involving the target groups will ensure beneficiary participation in Project monitoring and, when
possible, women, in data collection in forms of individual interviews, focus group discussion or case
studies.
31. Project training will be competency based. The performance of training activities will be monitored through pre and post training knowledge tests with a further test 6-12 months’ post training to determine knowledge retention and adoption. It will not be possible to monitor all training events at this level, however, random competency monitoring will be applied to all typologies of training events across the Project life.
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Evaluation:
32. Project evaluation will be initiated and managed by the Strategic Management Section in two
major forms (i) impact evaluation and (ii) thematic evaluation. At the same time, the full reviews at
mid-term and at the conclusion of the Project will be conducted by IFAD and GoV. These two official
reviews are the Mid-term Review (MTR) and Project Completion Review (PCR).
33. Impact evaluation: The impact will be measured from the baseline data at mid-term and at
Project end. The Baseline Survey will be undertaken shortly after Project start-up to provide a platform
of information from which the follow-on surveys could reveal changes in the households' livelihoods.
Similarly, the Mid-term Review and the Project Completion Report surveys will be carried out just
before the MTR and towards the end of the Project, timed so that that their results will be available for
the MTR and PCR. These follow-on surveys will be carried out in the same manner as the Baseline
Survey. Ideally they will visit the same households so that developments in the course of Project
participation can be measured, and household members who have left the Project area as a result of
finding employment elsewhere will be captured as well. These three surveys will be carried out in
conformity with IFAD's RIMS reporting requirements (see below). They will use the standard RIMS
questionnaire form to collect key beneficiary data including household assets and base data used to
establish the prevalence of child malnutrition in participating households, with a few added questions
to reflect Project-specific impact data. The data will be processed by a simple custom software
package to be provided by IFAD.
34. As the Project will be establishing investments using business principles and business plans,
there is the opportunity to use data generated during the planning and operation of such investments
to provide for impact assessment. The intention is that the pre-programme baseline, the operational
data (profit and loss, return on investment, returns to labour etc.) will provide the impact assessment
at the micro-economic level. (See Monitoring Framework for detailed indicators).
35. The RIMS methodology will be modified to ensure capture of:
a) Changes in resilience at the household level;
b) the flow-on effects (jobs, knowledge, and transfer of technology) of Project activities to households not directly impacted by the Project; and,
c) the impact of changes in the external environment (macro-economic changes) that will impact on all households.
36. Thematic studies: The PPCO Strategic Management Section will contract or carry out
thematic impact studies that will look at the impact of activities under Project Outcomes. Such impact
assessment could include, inter alia, an analysis of the effectiveness of:
a) Community based adaptation and disaster risk management investments in producing stable, improved incomes for affected poor communities;
b) VC development models,
c) the Public and Private Partnership in poverty reduction,
d) the impact of micro credits to women,
e) the effectiveness of collective economic models,
f) the effect of SME development on the availability of jobs for the poor, and,
g) the poverty impact of commodity-specific market support activities.
37. The topics for these thematic studies will be identified in consultation with the PPCO during
Project implementation taking into account the NTP-NRD policies. The Monitoring Framework
provides the indicators, collection methods and the usage of the processed data.
38. Mid-term Review and Completion Review: IFAD and Government of Viet Nam will be
responsible for carrying out two full reviews of the Project achievements: the MTR during Project Year
3 and the completion review after Project completion. Key Questions to be answered during the
reviews on the basis of the indicators contained in the Logical Framework will include:
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a) Have Project investments enabled coherent planning for climate-smart, market-led development?
b) Has Project targeting been successful?
c) Has the Project assisted the underemployed in getting jobs and have rural marketing links been forged effectively and sustainably?
d) Does the Project have the expected financial service outreach?
e) Has decentralised climate-smart, market-based planning been operated as an effective development tool?
f) Has the Project contributed good examples to the national policies related to climate-smart, market-led development within a rural development project?
g) How have changes in the external environment impacted on Project beneficiaries?
39. Progress Reporting: The PPCOs will be in charge of preparing six monthly and annual Project
progress reports. The implementing agencies will be required to provide their progress reports as an
input for PPCO to prepare the provincial reports that will be submitted to IFAD and Government in a
timely and accurate manner. These reports will include the narrative report as a harmonised source of
key data and ensure the trends are highlighted. The reports will record the financial and physical
progress against AWPB targets. The M&E and KM Officer will prepare a report on KM survey and
analytical work, with a tabular appendix showing the progress in each Province against the Project
indicators. The Strategic Management Section will be responsible only for the availability of data as
indicated in the Logical Framework. The availability of all other data in the appendix will be the
responsibility of the institutions, assisted by the PPCOs in the preparation of the standardised
reporting formats.
40. The PPCO Coordinator will be responsible for the preparation of six-monthly and annual
provincial progress reports for submission to the PPC, PPSC, and IFAD within a month from the end
of the reporting period.
41. The implementing agencies will - within 2 weeks from the end of the reporting period - submit
six-monthly progress reports to the PPCO as a condition for release of funds for the ensuing period.
CPCs and DPCs, will report on Project supported SEDP initiatives. The Women's Unions and others
will report directly to the PPCO.
42. Annual Results and Impact Reporting: The PPCO will report separately to IFAD on the
Project indicators that overlap with IFAD's RIMS. The information contained in these Annual Results
and Impact Reports will be drawn from the Project MIS, and set in relation to the targets contained in
this Report and those in the AWPBs.
43. Mid-Term Reports: The report will be prepared by the PPCO and comprise the assessment of
the efficiency as well as the Project achievements to-date, an analysis of the Project approach and
activities, and detailed proposals for the implementation of the second part of the Project.
44. Project Completion Report: At the end of the implementation period, a single comprehensive
Project Completion Report will be compiled by the PPCO. The Completion Report will follow the IFAD
guidelines and format for Project completion reports. The assessment criteria will include:
Participation of the target groups, the Project’s strategies and approaches, relevance, finance
management, efficiency, outputs delivery, effectiveness, impacts, sustainability, Innovation, up-
scalability and replicability.
Knowledge management. The Project’s knowledge management program will be an essential element for delivery of Project objectives, especially for CC related-learning. Two approaches will be taken: (i) a knowledge management program within the Project for purposes of supporting within and between Project learning and (ii) support for a broader program of knowledge management aimed at informing government decision-makers and influencing policy.
45. The “within Project” knowledge management activities will build upon the experience with the
prior project and support the PPCO to continue to carry out a program of (i) exchange visits to other
IFAD-funded provinces (ii) integration of Project learning into capacity building activities for the target
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Appendix 6. Planning, M&E and learning and knowledge management
196
groups and into community meetings, training courses and workshops in the communes; (iii) sharing
of success stories through newspapers, television and with IFAD; (iv) “information corners” in Project
communes; (v) training of Project staff in communication skills and; (vi) maintenance of online
information services.
46. The data management system will ensure that all reporting is completed and that information,
reports and data are available in suitably accessible formats. Evidence based learning is an important
output and the knowledge management system, combined with the evaluations must generate these
evidence backed lessons. Lessons may be about approaches that both do and don’t work. In order to
manage the knowledge and information of the Project, the following activities will be conducted:
47. Documenting lessons learnt, best practices and cases of success: The Strategic Management
Service will collect all available relevant information to document lessons learnt, best practices and
cases of success. It could be based on information collected from: progress reports, meetings and
interviews, monitoring and evaluation reports, outputs evidence provided by targeted groups, market
and VC entities and other involved parties.
48. Developing and delivering a lessons learnt study: Based on the information collected along
Project implementation, the KM Officer will develop an end of Project Lessons Learnt Report,
analysing the documented lessons learnt, best practices and cases. It will be first submitted to IFAD,
and once feedback has been incorporated, if any, the report will be shared widely.
49. Development of material for dissemination: The Strategic Management Service will produce
communication materials summarizing some of the success stories to be distributed through
networks, and through policy dialogue. Based on analysis of the documented information, and the
reports, material for dissemination will be produced at the end of the Project; a mid-term Lessons
Learnt Report might also be developed. A short film about the Project combining before and after
footage will be shared with target groups, policy makers and other stakeholders. Recommendations
and actions for market and VC development will be developed.
50. For the broader knowledge management objectives, the Project’s community presence, experience and knowledge will be the basis for a systematic and structured learning and knowledge dissemination process for “pro-poor, climate adapted” agriculture and rural development. Among others, the goal will be to inform both Provincial-led implementation efforts and to bring “learning-from-the-field” into national policy discussions. For the former, supporting Provincial governments through learning is extremely important given the decentralization of fiscal resources and management responsibilities to them and their needs to learn in near-real time in order to improve practices, methodologies, efficiencies and outcomes. For the latter, at the national level there is significant unmet stakeholder demand for consultation on policy implementation and “learning-from-the-field” in support of leveraging of investment resources.
51. It will be challenging for individual provinces to significantly influence the national policy debate in areas concerning MOP-SEDP or APIF development, however, the collective knowledge of IFAD project experience in these fields in Viet Nam is substantial and will continue to grow. As such, the IFAD country office must play a role in bringing key Project staff at provincial level together to collate and evaluate Project outcomes and shape policy recommendations that can be carried forward to the national level. IFAD Viet Nam has been requested by the Minister MARD to assist with the development of governments APIF/APIF policy. It is also a member of a donor group that was recently formed to support DPI with the development of the MOP-SEDP approach. As such, IFAD Viet Nam is well placed to bring the collective experience of IFAD financed investments in Viet Nam into national policy and strategic planning discussion.
52. Finally, during implementation, the Project will support efforts to broaden the extension system through systematic development of farmer networks (to share knowledge on successful adaptation); LF2F extension approaches (to facilitate technology transfer); promotion and utilization of private service delivery including the use of outcome-based contracts, and; strengthening functional linkages between researchers and service centres and farmer networks to ensure the relevance of the research agendas.
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Appendix 7: Financial management and disbursement arrangements
1. Financial management. The PPCOs will be responsible and accountable to Government and
IFAD for the proper use of funds apportioned to it, in line with the respective legal agreements and
contractual arrangements for service providers. The PPCOs will provide detailed financial statements
of the operations, resources and expenditures related to the Project for each fiscal year, prepared in
accordance with standards and procedures acceptable to IFAD. The system of financial management
and the financial regulations of DBRP and 3PAD were reviewed. Financial Management Risk
Assessments of both DBRP 3PAD were conducted, and both were rated as having a "medium risk”.
Both Bắc Kạn and Cao Bằng provinces have substantial experience in managing externally financed
projects including those financed by IFAD, with generally good outcomes and accountability
frameworks. The trained and competent staff dealing with financial management from the DBRP and
3PAD are expected to assume the responsibility for CSSP, thus minimizing the risk of inappropriate
use of funds. The CSSP financial management assessment is detailed in Appendix 7, Annex 1.
2. The Government shall ensure that counterpart funds are provided in a timely manner,
particularly regarding instances where parallel financing arrangements are used. Failure to do so may
impede the efficiency and effectiveness of Project implementation.
3. Designated Account (DA): In accordance with the Financing Agreement and Section 4.04(d)
of the General Conditions, immediately after entry into force of the Financing Agreement, the GoV
shall open and thereafter maintain in a commercial bank accepted by IFAD, an accounts denominated
in US dollars for the purpose of financing the Project. The Designated Account will be operated by the
MoF and will be protected against set-off, seizure or attachment on terms and conditions proposed by
the Borrower and accepted by IFAD. The Borrower shall inform the Fund of the officials authorized to
operate the DA.
4. Project Accounts: The PPCOs shall open and maintain in their provincial treasuries an
account denominated in VND for Project operations, the “Project Account”. The Project Account shall
be funded and replenished as necessary from the resources held in the Designated Account, upon
request of the PPCO and in accordance with expenditures incurred under approved AWPBs. The
Project Coordinator shall be fully authorized to operate the relevant Project Account.
5. Initial Deposit into the Designated Account (Authorized Allocation): Upon the entry into force of
the IFAD loan and the Borrower’s request, IFAD will make a withdrawal of USD 3 million in the
aggregate, from the Loan Account on behalf of the Borrower and deposit such amount into the
Designated Account to carry out the Project.
6. The request for such deposit needs to submit related documents to IFAD, which include the
following:
a) Signature Specimen: Signature specimen of the authorized officials who are managing
the Designated Account must be confirmed by MoF with signature and submitted through
MoF to IFAD in the form acceptable to IFAD prior to requesting for the deposit.
b) Letter of Evidence: A “Letter of Evidence” issued by the Bank holding the Designated
Account must be submitted to IFAD before requesting for the deposit. The “Letter of
Evidence” should confirm the opening of the Designated Account, provide the account
number and address, and state the agreement for the operation of the account. The
“Letter of Evidence” should also indicate the “SWIFT” code for the bank in question.
c) Form 100: A “Form 100” needs to be filled in and properly signed and submitted to IFAD
for the request of initial deposit.
7. Replenishment to the Designated Account: IFAD will replenish the Designated Account upon
request. Withdrawal applications for replenishment to the Designated Account should be denominated
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in US Dollars and should be submitted on a frequent basis, provided that the expenditure made during
the previous months is more than or equivalent to the Minimum Withdrawal Amounts, about 20% of
the initial advance.
8. The amounts withdrawn from the Designated Account in local currency should be converted
into USD using the prevailing exchange rate at the date of disbursing to the Project Accounts.
9. Each claim to IFAD for the replenishment of the Designated Account needs to include the
following documents and statements:
a) Form 100: A duly filled and signed “Form 100”;
b) Form 101 or 102;
c) Designated Account Reconciliation Statement: A properly filled “Designated Account
Reconciliation Statement;
d) Supporting documentation relevant for the eligible expenditures.
10. The SOE threshold for all expenditures pertaining to all categories is recommend to a ceiling
of USD 50 000.
11. Eligible Expenditure: The Financing shall be used exclusively to finance expenditures meeting
each of the following eligibility requirements:
a) The expenditure shall meet the reasonable cost of goods, works and services required
for the Project and covered by the relevant AWPBs and procured in conformity with the
Fund’s Procurement Guidelines;
b) The expenditure shall be incurred during the Project Implementation Period, except that
expenditures to meet the costs of winding up the Project may be incurred after the
Project Completion Date and before the Financing Closing Date;
c) The expenditure shall be incurred by a Project Party;
d) If the Agreement allocates the amount of the Financing to categories of Eligible
Expenditures and specifies the percentages of such Eligible Expenditures to be financed
by the Financing, the expenditure must relate to a category whose allocation has not
been depleted, and shall be eligible only up to the percentage applicable to such
category.
e) The expenditure shall be otherwise eligible in accordance with the terms of the Financing
Agreement.
12. Any payments to a person or an entity, or for any goods, works or services, if making or
receiving such payment constitutes a coercive, collusive, corrupt or fraudulent practice by any
representative of the Borrower/Recipient or any Project Party, shall not be eligible for financing by
IFAD.
13. Taxation: The proceeds of the financing may not be used to pay taxes. All taxes are to be
borne by the Government.
14. IFAD Policy on Anti-Corruption and Fraud: IFAD‘s policy to require that the staff of IFAD,
and (including beneficiaries of IFAD loans) as well as all bidders, suppliers, contractors and
consultants under IFAD-financed contracts observe the highest standard of ethics and integrity during
the procurement and execution of such contracts. Mechanisms for the whistle-blowers to access IFAD
systems are provided at the following link: http://www.ifad.org/governance/anticorruption/how.htm
15. Disbursement Procedures: There are four standard procedures that can be used to request
withdrawals from the Loan Account, which are as follows:
a) Procedure I: Advance withdrawal (replenishment of the designated account, using
imprest accounts or revolving funds with replenishment to a bank account(s) designated
to receive financing resources in advance). This modality is used to advance and/or
replenish funds to a bank account as designated by the borrower. IFAD may place a limit
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on the amount to be advanced and/or replenished. Relevant details on the modality –
which is Project specific – are agreed between the borrower and IFAD, and detailed in
the Letter to the Borrower/recipient (LTB).
b) Procedure II: Reimbursement. This is applicable when eligible Project expenditures,
reimbursable under the financing, have been pre-financed by the borrower. Such
reimbursements are expected to be claimed no later than 90 calendar days from the date
of payment by the borrower.
c) Procedure III: Direct Payment. This modality is used for eligible Project expenditures to
be paid directly by IFAD, generally for large contracts, to suppliers, contractors,
consultants or third parties, as authorized by the borrower
d) Procedure IV: Special Commitment. This modality is used for eligible Project
expenditures related to items imported by Project implementing agencies under a letter
of credit requiring the issuance of guarantees for reimbursement to negotiating banks by
IFAD.
16. Specific disbursement procedure should be referred to The Loan Disbursement Handbook for
IFAD Directly Supervised Projects – Version 1.01
17. Budgeting. As noted the PPCO will be responsible for compilation of the consolidated annual
work plan and budget for the Project. Counterpart funds will be incorporated in the annual budget and
will be released annually. Previous experience indicates that government contributions are provided
as planned and in a timely manner.
18. Counterpart government contributions payments will be made from a Provincial Budget by
arrangement of provincial Department of Finance, and be used specifically for the Vietnamese
contributions to the Project. These contributions will be received annually/quarterly in accordance with
normal budget procedures.
19. Beneficiary Contribution: The PPCOs shall evolve a system to collect information in respect of
beneficiary contribution to the Project on a regular and on-going basis.
20. External audit. In line with section 9.03 of the General Conditions for Agricultural Development
Financing of IFAD, the consolidated financial statements of the Project including the use of the
counterpart funds relating to the Project will be audited by Independent Auditors who shall be
appointed based on a transparent and competitive selection process with an agreed TOR for the
Project audit assignment, which should be subject to a no-objection by IFAD. The auditors will audit
the Project consolidated financial statements annually and audit reports shall be submitted to IFAD
within six months of the end of the relevant financial reporting period. Following IFAD Guidelines on
Project Audits, the auditors shall provide separate opinions on the financial statements, SOEs and
DA. In particular, the Auditors shall review withdrawals from the Project Accounts at various levels on
the basis of SOEs, and provide an independent opinion on whether such expenditures fully comply
with expenditures eligible for IFAD disbursements. They shall also review the efficiency of the flow of
the funds and the delivery of counterpart financing. IFAD, as part of its supervision functions, will also
inspect Project Accounts to ensure their adherence to acceptable standards. The auditor shall provide
three separate opinions:
a) an opinion on the Project financial statements (PFSs);
b) an opinion on the use of the Designated Account (DA), including the initial advance,
replenishments, interest that may accrue on the outstanding balances, and the year-end
balances. In this, the audit shall examine: the eligibility of withdrawals from the DA
during the period under review; the operation of the DA in accordance with the financing
agreement and other instructions provided by IFAD; the adequacy of internal controls
within the Project appropriate for this disbursement mechanism; and the use of correct
exchange rates to convert local currency expenditures to the denominated currency of
the DA; and
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c) an opinion on withdrawal applications, statements of expenditure (SOEs), and their
summary, used as the basis for submitting withdrawal applications. SOEs will be
carefully compared for eligibility with relevant financial agreements and the disbursement
letter, with reference to the Project design report for guidance when necessary. The
auditor’s opinion should deal with the adequacy of the procedures used by the Project for
preparing SOEs and should include a statement that amounts withdrawn from the Project
account on the basis of such SOEs were used for the purposes intended under the
agreement.
21. In addition, auditors shall provide a separate management letter addressing the adequacy of
the accounting and internal control systems of the Project, including compliance with the IFAD
Procurement Guidelines and such other matters as IFAD may request.
22. Procurement. Project procurement will follow the national procedures to the extent that they
are consistent with the IFAD Project Procurement Guidelines. To the extent possible, the procurement
of goods, civil works and consulting services shall be bulked into sizeable bids so as to permit optimal
use of competitive bidding. Procurements shall be documented for ex-post review by IFAD and for
audit purposes. Consolidated procurement plans covering a period of 18 months will be prepared as
part of the AWPBs and submitted to IFAD for “no objection” review, before commencement of
procurement. It should provide information of goods, works and services disaggregated into different
components, including: (i) description of goods, works or services to be procured; (ii) procurement
method; (iii) estimated unit cost for each item; (iv) estimated cost for each procurement; and (v)
review procedure (post or prior review by IFAD). A procurement plan for the first 18 months has been
prepared during the design completion mission, and is available in the Project Life File (Appendix 13).
23. In line with IFAD’s Project Procurement Guidelines, the following threshold recommended for
the Projects are subject to prior review by IFAD:
a) Award of any contract for goods and work estimated to cost USD 60 000 or more;
b) Award of any contract for consulting services estimated to cost USD 30 000 or more.
c) All contracts, with or without prior IFAD approval, shall be listed in the Register of
Contracts with the dates of approval. The Register shall be updated and submitted to the
IFAD on a six-monthly basis.
24. Contract Management is very critical to smooth and successful implementation of the Project.
CSSP should introduce the system to ensure the rights & duties of each party to contract are provided
to ensure delivery on time, with right quality and as per/ within budget. For an effective contract
administration, each contract should contain all pertinent deliverables, timing, deadlines, results-
oriented reporting and expected outcomes, with measurable indicators. The template of the Contract
Monitoring Form is available in the Procurement Handbook as well as IFAD‘s Loan Disbursement
Handbook. The contract monitoring form should be submitted to IFAD after each ―prior review
contract‖ has been signed and along with each Withdrawal Application for all contracts with ongoing
payments.
25. Financial Statements. The financial statements of the Project for each fiscal year should
consist of (i) yearly and cumulative statements of sources and application of funds, which should
disclose separately IFAD funds, GoV funds and beneficiary’s funds and (ii) the Balance Sheet which
should disclose bank and cash balances that agree with the statement of sources and application of
funds, fixed assets and liabilities; and (iii) yearly and cumulative SOEs by withdrawal application and
category of expenditures. CSSP shall prepare and deliver to IFAD such financial statements within
three months of the end of each Fiscal Year. The aforesaid statements duly audited should be
delivered to IFAD within six months of the end of each Fiscal Year.
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Annex 1. CSSP Financial Management Assessment
Project # The Commercial Smallholder Support Project in Bắc
Kan and Cao Bằng provinces (CSSP)
Implementing Entity: Bac Kan and Cao Bang Provincial People's
Committee
Review completed by Nguyen Thu Hoai Date : 18 April 2016
I. SUMMARY
Risk Risk Risk Mitigating Measures incorporated
into Project Design
Residual
FM Risk
Inherent Risk
Country Level
National and EA environment M
Recent IFAD assessment based on the TI
corruption index and RSP score M
Project Level
The ability of PPCO to effectively coordinate
implementation.
M
Adequate staffing arrangements at PPCO
level.
Training/on the job training to be provided to
District/commune level to strengthen
accountability; fiduciary capacity.
Fiduciary capacity assessments to be
performed at district and commune level
before commencement of fund-flows.
Training to be provided by
PPCO/consultants; Needs-based support
from PPCO offices with budget preparation
and reporting.
L
Budgeting
PPCO is responsible for synthesis and
preparation of the AWPB. Weak coordination in
planning between the planning officer and
finance staff leads to difficulty in
implementation.
M
Expected to be addressed by PPCO
L
Accounting
Accounting staff recruited by the previous
project have sufficient skills and capacity to
perform the tasks.
The 3PAD and DBRP have an effective
computerized Financial Accounting System.
M
Chief accountants and accounting staff of the
previous project to be recruited for the
current one as they have experience and
good
Commune accounts to be recruited by the
Project and report to the PC, with one
account covering 3 communes.
capacity.
Use the same software of the 3PAD as it is
good and reliable.
L
Internal Controls
M
The project’s internal controls will be
designed to ensure effectiveness and
efficiency of operations, reliability of reporting
and compliance through dynamic processes.
Roles and responsibilities will be aligned to
project objectives. This will include elements
such as the control environment, risk
L
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assessment, communication and monitoring
to ensure coherence with good governance
and the mutual accountability framework.
The project implementation manual (PIM)
including also FMM will detail the control
framework based on best practises. These
manuals should be endorsed by IFAD prior
to the first disbursement.
Regular IFAD supervision missions will help
ascertain level of compliance for internal
controls and procurement
Review of internal controls and procurement
will also be covered by annual audits
Funds Flow
Staff have experience with IFAD policies and
procedures and experience in handling IFAD
funded projects.
Delay may happens at district/commune level in
relation with the payment/withdrawal
applications
L
Flow of funds and disbursement
arrangements. Immediately after entry into
force of the Financing Agreement, there shall
be one Designated Account denominated in
US dollars to be opened for the IFAD loan.
The Designated Accounts will be maintained
by Ministry of Finance.
There shall be Project Accounts
denominated in VND opened in Bac Kan,
Cao Bang and maintained and operated by
the PPCO. The directors of the Project shall
be fully authorized to operate the relevant
Project Accounts. The PPCO and the
District/Commune/Implementing Agency
shall maintain separate Implementation
“Project Accounts” in local currency to
receive proceeds of the financing from the
counterpart funding. The PPCO will ensure
that funds received at each level are
transferred without delay.
L
Financial Reporting
PPCO has the capacity to supervise
District/Commune level and Implementing
Agency to submit timely and acceptable reports
for consolidation into quarterly/annually reports
for submission to IFAD.
M
Training to be provided to accounts staff on
GOV and IFAD procedures
Capacity building for District/Commune staff
Close monitoring of district progress &
financial reporting by PPCO offices
Template of reporting to be added in the
FMM
L
Auditing
L
Audit TOR will include all Project activities
and subjected to approve by IFAD L
Overall FM Risk M L
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II. DETAIL
Topic Response
1. Organization and Staffing
1.1 Which entity is the LPA?
What is the entity’s legal status?
Provincial People's Committees
1.2 Will financial management of the project be the
responsibility of the LPA or be undertaken within the-
PIU/PPCO?
PPCO (Provincial Project Coordination
Office)
1.3 Has the entity implemented a donor financed project in the
past - if so, please provide details?
No
Staffing
1.4 What is the (proposed) organizational structure of the
accounting department?
At PPCO level: 5 full time staff inclusive
of 4 accountants and a procurement &
infrastructure officer. At commune level,
one part-time accountant to be
seconded to the project.
1.5 Identify the (proposed) accounts staff, including job title,
responsibilities, educational background and professional
experience.
The chief accountant has sufficient
finance management capacity and
experience working with IFAD funded
projects, preferably transferred from the
previous project. Four other offices will
have relevant experience and
qualifications, to be recruited upon
signing of the FA. Priority should be
given to those who worked on the
previous project.
1.6 Are written position descriptions that clearly define duties,
responsibilities, lines of supervision, and limits of authority
for all of the officers, managers, and staff?
Written position descriptions from CSSP
clearly defined duties and
responsibilities
1.7 Is the finance and accounts staff adequately qualified and
experienced?
Finance staff are qualified and
experienced
1.8 Are the project accounts and finance staff trained in IFAD
procedures?
Yes, these trainings are usually
conducted locally to continuously
update staff on IFAD and GOV
procedures at the CSSP.
1.9 Are any Finance Staff appointed on contract?
What is the duration of the contracts?
Indicate key positions not contracted yet, and the
estimated date of appointment
The chief accountant of Bac Kan is a
Government officer and has a contract
with the Government. The new staff
maybe from the Government or be
recruited from the market with contracts
for 2 years, renewable based on
performance.
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Topic Response
1.10 What is training policy for the finance and accounting
staff?
An FM training on IFAD and GOV
procedures to be carried out ASAP
since the FA is signed.
During implementation, training is based
on needed and in consultation with
IFAD.
2. Budgeting
2.1 Who is responsible for preparation and approval of project
budgets?
The project budget procedures follow a
bottom up approach as decentralization
regulations:
- Commune level (CPC) - District level (DPC) - Provincial level (PPCO)
The PPCO will be responsible for the
consolidation and preparation of the
project budget. Project budget to be
submitted to IFAD for clearance and
then to PPC for approval.
2.2 Are project budgets prepared for all significant project
activities in sufficient detail to provide a meaningful tool
with which to monitor subsequent performance?
The existing government budgeting
process request for all the significant
activities to be presented in the AWPB.
Any additional activities are subjected to
approval. By using the GOV system, the
project AWPB is very details and can be
used as a meaningful tool for monitoring
and planning. Currently, there was lack
of coordination between planning office
with accounting office. As such the WP
usually are not doable
2.3 Are procedures in place to plan project activities, collect
information from the units in charge of the different
components, and prepare the budgets?
For the Project: AWPBs and activities
will form the basis for project planning.
The AWPB will consolidate plans and
budgets elaborated through a
participatory approach by partners,
stakeholders and beneficiaries. During
budget preparation each year for the
duration of the Project, the PPCO shall
ensure that the IFAD share of the
financing and the Government
contribution of the project is reflected in
budgets.
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Topic Response
3 Funds Flow/Disbursement Arrangements
3.1 Does the Implementing Entity have previous experience of
using imprest fund and donor funding SOE procedures?
Were there any problems or issues encountered by project
staff in the operation of the imprest fund or SoE
procedures in the past?
YES
None reported by donors
3.2 Does the Implementing Entity have experience in the
management of disbursements from IFAD or other
donors?
Have there been the major problems in the past in receipt
of funds by the entity?
YES
NO
3.3 Does the entity have/need to develop capacity to manage
foreign exchange risks?
The design of the computerised system
is customised to record both local and
foreign currencies. The PPCO staff
need to improve the capacity to enable
to manage the foreign exchange risk
3.4 Are the beneficiaries required to contribute to project
costs?
How are payments made for the counterpart funds?
If counterpart funds are to be contributed in kind (in the
form of labour), are proper guidelines formulated to record
and value the labour contribution?
Yes, the beneficiaries are required to
contribute to the project cost and can be
in cash or in kind.
Counterpart funds will be transferred to the
project accounts in State Treasury system
based on the AWBP
3.5 Is part of the project implemented by communities or
NGOs?
Does the PIU have the necessary reporting and
monitoring features built into its systems to track the use
of project proceeds by such agencies?
NO
3.6 Describe (proposed) project funds flow arrangements;
(attach flow chart and explanation of the flow of funds from
IFAD, government and other financiers.
Attached
3.7 In which bank will the Imprest Account be opened? Will be determined by the MOF with
approval from IFAD
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Topic Response
Internal Controls
4.1 Segregation of duties - are the following functional
responsibilities performed by different units or persons: (i)
authorization to execute a transaction; (ii) recording of the
transaction; and (iii) custody of assets involved in the
transaction?
The proposed organization chart of the
accounting department and
accountant’s job descriptions are
identified and include the segregation of
duties.
However, the internal control
environment of the 3 PAD was good but
DBRP was weak. The emphasis is on
the controlled processing of transactions
and the avoidance of overspending of
budget provision rather than broader
accountability for the effective use of
resources. The lack of linkage between
plans and budgets means that expected
results are not clearly defined
4.2 Are the functions of ordering, receiving, accounting for,
and paying for goods and services appropriately
segregated?
Yes, to be covered in FMM
4.3 Are bank reconciliations prepared by someone other than
those who make or approve payments?
Yes, to be covered in FMM
5. Accounting Systems, Policies and Procedures
5.1 Does the entity have an integrated accounting system that
allows for the proper recording of project financial
transactions, including the allocation of expenditures in
accordance with the respective components,
disbursement categories, and sources of funds? Will the
project use the entity accounting system?
CSSP will apply a double entries system
and uses accrual accounting. It is
requested that the CSSP needs to
develop an integrated accounting
system that allows for the proper
recording of project financial
transactions, including the allocation of
expenditures in accordance with the
respective components, disbursement
categories, and sources of funds
Recommended to use the ANA software
which all IFAD projects are using
5.2 Are controls in place concerning the preparation and
approval of transactions, ensuring that all transactions are
correctly made and adequately explained?
To be covered in FMM to ensure that
the control procedures of preparation and
approval of transactions are correctly made
and adequately explained.
5.3 Is the chart of accounts adequate to properly account for
and report on project activities and disbursement
categories?
The project will use the chart of accounts
regulated by the Government (decision
19/2006/QĐ-BTC), which is adequate to
properly account for and report on project
activities and disbursement categories
5.4 Can cost allocations to the various funding sources be
made accurately?
Software to be developed
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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Appendix 7. Financial management and disbursement arrangements
208
Topic Response
5.5 Are the General Ledger and subsidiary ledgers reconciled
and in balance?
Yes
5.6 Are all accounting and supporting documents retained on
a permanent basis in a defined system that allows
authorized users easy access?
All original documentation to be
maintained at PPCO, District and
Commune level.
5.7 What is the basis of accounting (e.g., cash, accrual)? Accrual
5.8 What accounting standards are followed? Vietnamese Accounting Standards
5.9 Does the project have an adequate policies and
procedures manual to guide activities and ensure staff
accountability?
To be covered in FMM
5.10 Do procedures exist to ensure that only authorized
persons can alter or establish a new accounting principle,
policy or procedure to be used by the entity?
To be covered in FMM
5.11 Is there a written policies and procedures manual covering
all routine project financial management activities?
Are manuals distributed to appropriate personnel?
To be covered in FMM
Payments
5.12 Are all invoices stamped PAID, dated, reviewed and
approved, and clearly marked for account code
assignment?
To be covered in FMM
Cash and Bank
5.13 Does the organization maintain an adequate, up-to-date
cashbook, recording receipts and payments?
Yes
5.14 Are bank and cash reconciled on a monthly basis? Yes
5.15 Indicate names and positions of authorized signatories of
project bank accounts.
Designated account: MOF, Deputy
Director General, Department of Debt
management and external Finance
Project Account: Project Director and
Chief Accountant
Safeguard over Assets
5.16 Is there a Fixed Asset accounting system, with a Fixed
Asset Register, fully implemented - as part of an
integrated accounting system?
Is the system maintained up to date?
Fixed asset module of accounting
software
5.17 Are there periodic physical reconciliation of fixed assets
and stocks?
Will be included in FMM
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209
Topic Response
Other
5.18 Has the project advised employees, beneficiaries and
other recipients to whom to report if they suspect fraud,
waste or misuse of project resources or property?
To be covered at start up/FMM
5.19 Do policies and procedures clearly define conflict of
interest and related party transactions (real and apparent)
and provide safeguards to protect the organization from
them?
To be covered in FMM
5.20 Do controls exist for the preparation of the project payroll
and are changes to the payroll properly authorized?
To be covered in FMM
6. Reporting and Monitoring
6.1 Does the reporting system need to be adapted to report on
the project components?
The reporting system needs to be
adapted to report both project
components and categories. This
requirement will be covered in the FMM
and ToR to develop the accounting
software. Currently, the software which
all other IFAD funded projects using can
provide report on both components and
categories.
6.2 Does the project have established financial management
reporting responsibilities that specify what reports are to
be prepared, what they are to contain, and the frequency
of production.?
To be covered FMM but the PPB
agreed on the list of PFS to be prepared
will be in accordance with Vietnamese
regulations and IFAD requirements.
6.3 What is the frequency of preparation of financial
statements? Are the reports prepared in a timely fashion
so as to useful to management for decision making?
Annual Timeliness to be included in the
FMM
6.4 Do the financial reports compare actual expenditures with
budgeted and programmed allocations?
To be covered in the FMM and ToR to
develop the software
6.5 Are financial reports prepared directly by the automated
accounting system or are they prepared by spreadsheets
or some other means?
To be covered in the FMM and ToR to
develop the software
6.6 (In case of need of consolidated financial statements) Is
the accounting system sufficiently equipped to ensure
proper consolidation of entities’ financial data?
To be covered in the FMM and ToR to
develop the software
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Appendix 7. Financial management and disbursement arrangements
210
Topic Response
Information Systems
6.7 Is the financial management system computerized? Accounting software will be used
6.8 Can the system produce the necessary project financial
reports?
YES
6.9 Is the staff adequately trained to maintain the system? YES at central level; training to be
provided at Districts/Communes level
6.10 Are adequate systems in place to “back up” financial
records
To be covered in FMM
7. Internal Audit
7.1 Is there an internal audit department in the LPA? No
7.2 What are the qualifications and experience of internal
audit department staff?
N/A
7.3 To whom does the internal auditor report? N/A
7.4 Will the internal audit department include the project in its
work program?
N/A
7.5 Are actions taken on the internal audit findings? N/A
8. External Audit
8.1 Who is the external auditor of the entity? Independent audit company
8.2 Are there any delays in audit of the entity? When are the
audit reports issued?
No
8.3 Is the audit of the entity conducted according to the
International Standards on Auditing?
The audit of the entity is conducted in
accordance with the Vietnamese Standards
on Auditing and acceptable International
Standards on Auditing
8.4 Were there any major accountability issues brought out in the audit report of the past three years?
Were there any issues noted in prior audit reports related
to the operation of project imprest accounts or use of SOE
procedures?
No
8.5 Will the entity auditor audit the project accounts or will
another auditor be appointed to audit the project financial
statements?
Previous and ongoing IFAD funded projects
have shown that an independent auditing
firm was appointed to audit the project
financial statements
8.6 Has the project prepared acceptable terms of reference for
an annual project audit?
Will be prepared before negotiations
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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Appendix 8. Procurement
212
Appendix 8: Procurement
1. Project communes are now preparing for disbursement under the National Target Project for
New Rural Development (NTP-NRD). Direct contracting, however, is the dominant method for
procurement of works under the national programs for poverty reduction and rural development since
direct contracting could be applied for a work package with the estimated cost below VND 5 billion
according to the Vietnamese Procurement Law.
2. Procurement of goods, works and consulting services financed by IFAD under the CSSP will be
carried out in compliance with the IFAD’s Project Procurement Guidelines (as approved by IFAD in
September 2010 and which may be amended from time to time). The national procurement
procedures, processes and regulations under the Procurement Law could be applied to the extent that
are consistent with IFAD Project Procurement Guidelines.
3. The PPCOs shall submit to IFAD the Draft AWPB and the Procurement Plan covering the initial
eighteen (18) month period of Project implementation. This shall be updated to cover each
succeeding twelve (12) month period for review and no objection. Each procurement plan shall
include the proposed contracts, estimated costs and financings sources, methods of procurement,
related IFAD review procedures, time schedules, etc. as specified in the IFAD procurement format.
4. Procurement methods for work packages under the CSSP include (i) National Competitive
Bidding applied for work packages with estimated cost equivalent or exceeding USD 60,000; (ii) Local
Competitive Bidding applied for work packages with estimated cost less than USD 60,000;
(iii) Procurement with Community Participation or Force Account applied for infrastructure schemes
that can use intensive un-skilled labour and simple techniques such as cement concrete roads, lined
cannels, storages, etc. with the estimated cost less than USD 30,000; (iv) Direct Contracting could be
applied for very small work packages with estimated cost less than USD 5,000.
5. Procurement methods for goods packages under the CSSP include (i) National Competitive
Bidding applied for goods packages with estimated cost equivalent or exceeding USD 60,000;
(ii) National/ Local Shopping applied for goods packages with estimated cost less than USD 60,000;
(iii) Direct Contracting could be applied for very small goods packages with estimated cost less than
USD 5,000.
6. Methods for selecting consultants under the CSSP include (i) Quality and Cost Based Selection
applied for service packages with estimated cost equivalent or exceeding USD 30,000; (ii) Select
Based on Consultants’ Qualifications applied for service packages with estimated cost less than
USD 30,000; (iii) Single Source Selection could be applied only in exceptional circumstances and to
be approved by IFAD in the procurement plan.
7. Prior review thresholds. In accordance with IFAD Project Procurement Guidelines the following
shall be subject to prior review by IFAD: (i) any goods contract estimated to cost USD 60,000 or more;
(ii) any work contract estimated to cost USD 60,000 or more; and (iii) any consulting service contracts
estimated to cost USD 30,000 or more.
Socialist Republic of Viet Nam
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Appendix 8. Procurement
214
An indicative 18 months Procurement Plan (January 2017 to June 2018)63
63
See Excel file for details
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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Socialist Republic of Viet Nam
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Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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Appendix 9. Project cost and financing
223
Appendix 9: Project cost and financing
Project costs
1 The main assumptions underlying the derivation of Project costs, estimated Project costs and
financing plan are:
a. The Project costs are based on April 2016 prices.
b. The proposed Project will be financed over a six-year period (2017-2022).
c. Inflation. Domestic inflation will be about 1.5% in 2016, with moderate inflation expected
to return by 2020. Rates of 3.2% and 4.8% domestic inflation have been applied to
Project years 1 and 2 respectively and 4.4% thereafter. Foreign inflation was set at 2%
p.a. over the Project period, based on the MUV (15) Index.
d. Exchange Rate. The Base Exchange rate for this analysis has been set at VND 22,400
to USD 1 as an official exchange rate prevailing in April 2016 (rounded).
e. The Project costs are presented in both VND and USD. Conversions from current
USD values into Dong use constant purchasing power exchange rates:
f. Taxes and Duties. There is value added tax (VAT) of 10% levied on all imported and
locally procured goods and services, except for agricultural outputs/inputs that are levied
at 5%. Vehicles have a tax of up to 50% depending on an engine power. International
technical assistance does not carry any taxes. For directly recruited local staff the Project
will cover the social insurance charges of 33.5%.
g. The Government will finance the cost of all taxes on goods and services procured under
the Project.
2 The total investment and incremental recurrent Project costs, including physical and price
contingencies, are estimated at about USD 73.6 million (VND 1,670 billion). Physical and price
contingencies make up about 2.0% of the total Project costs due to the fact that investments
associated with the infrastructure, credit financing and grants make up around 56% of the total Project
costs (expressed as a lump sum without physical or price contingencies) while training, technical
assistance and funding of Red Book allocation account for another 32% of total costs (no physical
contingencies are applied to these items). The foreign exchange component is estimated at
USD 8.4 million or about 11.5% of the total Project costs. Taxes and duties make up approximately
USD 1.5 million (2.0%). Project Management costs amount to USD 9.2 million (about 12.5% of the
total Project costs).
Project financing
3 An IFAD Loan of USD 42.5 million will finance 57.7% of total Project cost, including: 50.4% of
Outcome 1: Province-based participatory planning institutionalised outcome (USD 8.1 million); 62.5%
of Outcome 2: A greener agriculture future (USD 13.7 million); 66% of Outcome 3: Profitable farms
linked to finance and markets outcome (USD 42.1 million); and 22.3% of the Project Coordination
Component (USD 9.2 million). An IFAD grant of USD 0.5 million will support the NTP NRD National
Coordination Office.
4 Beneficiaries will contribute approximately USD 9.6 million (13.0%) as co-financing of the
community infrastructure (10%), CIG grant contracts (at least 50%), forest land and forest allocation
(up to 15%) as well as in the form of 51% of the APIF investments to be contributed by the benefitting
businesses.
5 The Government contribution will cover all taxes and duties on all Project inputs that involve
funding from the IFAD Loan/Grant and any other external source of funding associated with the IFAD
Loan/Grant (USD 1.5 million). In addition, the Government is expected to contribute from its budget
about USD 19.5 million (26.5% of total project costs) to cover staff salary costs, aspects of MOP-
SEDP implementation, its contribution to the issuance of forest land red books and the NTP-NRD
contribution to CIGs.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
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Appendix 9. Project cost and financing
224
Annex 1: Summary Cost and Financing Tables
1. Components Project Cost Summary
2. Expenditure Accounts Project Cost Summary
3. Expenditure Accounts by Components – Totals including Contingencies (USD’000)
4. Expenditure Accounts by Components – Totals including Contingencies (VND Million)
5. Project Components by Year -- Totals Including Contingencies
6. Project Components by Year -- Investment/Recurrent Costs (USD’000)
7. Expenditure Accounts by Year -- Totals Including Contingencies
8. Expenditure Accounts Breakdown (USD’000)
9. Components by Financiers (USD’000)
10. Disbursement Accounts by Financiers (USD’000)
11. Expenditure Accounts by Financiers (USD’000)
12. Local/Foreign/Taxes by Financiers (USD’000)
13. Inflation and Exchange Rates
14. Project components by financier for Bắc Kạn Province
15. Project components by financier for Cao Bằng province
Annex 2: Detailed Cost Tables
Output 1: Strategic investment plan - Bắc Kạn and Cao Bằng provinces
Output 2.1: Climate change adaptation plan - Bắc Kạn province
Output 2.2: Climate change adaptation plan - Cao Bằng province
Output 3.1 Climate-informed, market-oriented participatory SEDP - Bắc Kạn province
Output 3.2 Climate-informed, market-oriented participatory SEDP - Cao Bằng province
Output 4 Forest land allocation and use - Bắc Kạn
Output 5.1 CIGs for climate adaptation - Bắc Kạn province
Output 5.2 CIGs for climate adaptation - Cao Bằng province
Output 6.1 Community infrastructure - Bắc Kạn province
Output 6.2 Community infrastructure - Cao Bằng province
Output 7.1: Rural financial services - Bắc Kạn province
Output 7.2: Rural financial services - Cao Bằng province
Output 8.1: Agribusiness Promotion Investment Fund - Bắc Kạn province
Output 8.2: Agribusiness Promotion Investment Fund - Cao Bằng province
Project Coordination Bắc Kạn province
Project Coordination Cao Bằng province
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Appendix 9. Project cost and financing
226
Annex 1: Summary Cost and Financing Tables
Table 1: Components Project Cost Summary
% % Total
(VND Million) (US$ '000) Foreign Base
Local Foreign Total Local Foreign Total Exchange Costs
A. Province-based participatory planning institutionalised
1. Strategic Investment plan 3,136.0 - 3,136.0 140.0 - 140.0 - -
2. Climate change adaptation plan 27,325.8 - 27,325.8 1,219.9 - 1,219.9 - 2
3. Climate-informed, market oriented socio-economic plans 148,333.9 772.8 149,106.7 6,622.1 34.5 6,656.6 1 9
Subtotal Province-based participatory planning institutionalised 178,795.7 772.8 179,568.5 7,981.9 34.5 8,016.4 - 11
B. A greener agricultural future
1. Forest land and forest allocation 56,872.3 - 56,872.3 2,538.9 - 2,538.9 - 4
2. CIGs for climate adaptation 204,485.7 39,977.5 244,463.3 9,128.8 1,784.7 10,913.5 16 15
Subtotal A greener agricultural future 261,358.0 39,977.5 301,335.6 11,667.8 1,784.7 13,452.5 13 19
C. Profitable farms linked to finance and markets
1. Community infrastructure 548,799.8 124,306.8 673,106.6 24,500.0 5,549.4 30,049.4 18 41
2. Rural financial services 98,749.5 7,537.6 106,287.1 4,408.5 336.5 4,745.0 7 7
3. Agriculture Promotion Investment Fund 159,837.4 2,240.0 162,077.4 7,135.6 100.0 7,235.6 1 10
Subtotal Profitable farms linked to finance and markets 807,386.8 134,084.4 941,471.2 36,044.1 5,985.9 42,030.0 14 58
D. Programme Management 178,606.0 11,529.7 190,135.7 7,973.5 514.7 8,488.2 6 12
E. NTP NRD National Coordination Office Grant 11,200.0 - 11,200.0 500.0 - 500.0 - 1
Total BASELINE COSTS 1,437,346.5 186,364.5 1,623,710.9 64,167.3 8,319.8 72,487.1 11 100
Physical Contingencies 5,030.9 764.9 5,795.8 224.6 34.1 258.7 13 -
Price Contingencies 36,765.3 3,789.1 40,554.4 780.1 79.7 859.9 9 1
Total PROJECT COSTS 1,479,142.7 190,918.5 1,670,061.2 65,172.0 8,433.7 73,605.7 11 102
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Appendix 9. Project cost and financing
227
Table 2: Expenditure Accounts Project Cost Summary
% % Total
(VND Million) (US$ '000) Foreign Base
Local Foreign Total Local Foreign Total Exchange Costs
I. Investment Costs
A. Civil Works
Civil Works 286.7 71.7 358.4 12.8 3.2 16.0 20 -
B. Equipment and materials 32,301.4 13,843.5 46,144.9 1,442.0 618.0 2,060.0 30 3
C. Vehicles 2,916.5 1,249.9 4,166.4 130.2 55.8 186.0 30 -
D. Consultancies
1. Technical Assistance
International Technical Assistance - 13,406.4 13,406.4 - 598.5 598.5 100 1
National Technical Assistance 40,673.9 - 40,673.9 1,815.8 - 1,815.8 - 3
Subtotal Technical Assistance 40,673.9 13,406.4 54,080.3 1,815.8 598.5 2,414.3 25 3
2. Research, Studies and Surveys 197,660.7 - 197,660.7 8,824.1 - 8,824.1 - 12
Subtotal Consultancies 238,334.6 13,406.4 251,741.0 10,639.9 598.5 11,238.4 5 16
E. Training 143,530.2 - 143,530.2 6,407.6 - 6,407.6 - 9
F. Grants
1. Community Infrastructure Investment Grants
Community Infrastructure Investment Grants 497,227.1 124,306.8 621,533.9 22,197.6 5,549.4 27,747.1 20 38
Comunity Infrastructure Design and Supervision 30,292.7 - 30,292.7 1,352.4 - 1,352.4 - 2
Subtotal Community Infrastructure Investment Grants 527,519.8 124,306.8 651,826.6 23,550.0 5,549.4 29,099.4 19 40
3. CIG Investment Grants 119,168.0 29,792.0 148,960.0 5,320.0 1,330.0 6,650.0 20 9
4. APIF Investment Grant 140,533.1 - 140,533.1 6,273.8 - 6,273.8 - 9
Subtotal Grants 787,221.0 154,098.8 941,319.7 35,143.8 6,879.4 42,023.2 16 58
G. Credit
1. WDF financing fro on-lending 84,000.3 - 84,000.3 3,750.0 - 3,750.0 - 5
Total Investment Costs 1,288,590.7 182,670.3 1,471,261.0 57,526.4 8,154.9 65,681.3 12 91
II. Recurrent Costs
A. Salaries and allowances /a 80,438.4 - 80,438.4 3,591.0 - 3,591.0 - 5
B. Operating costs
1. Operation and Maintenance 5,816.8 1,454.2 7,271.0 259.7 64.9 324.6 20 -
2. Other Operating Costs 62,500.5 2,240.0 64,740.5 2,790.2 100.0 2,890.2 3 4
Subtotal Operating costs 68,317.3 3,694.2 72,011.5 3,049.9 164.9 3,214.8 5 4
Total Recurrent Costs 148,755.7 3,694.2 152,449.9 6,640.9 164.9 6,805.8 2 9
Total BASELINE COSTS 1,437,346.5 186,364.5 1,623,710.9 64,167.3 8,319.8 72,487.1 11 100
Physical Contingencies 5,030.9 764.9 5,795.8 224.6 34.1 258.7 13 -
Price Contingencies 36,765.3 3,789.1 40,554.4 780.1 79.7 859.9 9 1
Total PROJECT COSTS 1,479,142.7 190,918.5 1,670,061.2 65,172.0 8,433.7 73,605.7 11 102
_________________________________
\a Includes social charges (33.5%). Income tax is considered as a personal responsibility but would be arranged centrally from the PCU.
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Table 3: Expenditure Accounts by Components – Totals including Contingencies (VND million)
Province-based participatory planning Profitable farms linked to finance and
institutionalised A greener agricultural markets
Climate Climate-informed, future Agriculture NTP NRD
Strategic change market oriented Forest land CIGs for Rural Promotion National
Investment adaptation socio-economic and forest climate Community financial Investment Programme Coordination
plan plan plans allocation adaptation infrastructure services Fund Management Office Grant Total
I. Investment Costs
A. Civil Works
Civil Works - - - - - - 364.1 - - - 364.1
B. Equipment and materials - - - - 21,536.7 - 1,583.9 - 30,738.3 - 53,859.0
C. Vehicles - - - - - - 4,255.0 - - - 4,255.0
D. Consultancies
1. Technical Assistance
International Technical Assistance - - 795.7 - 4,961.9 - 6,862.9 2,395.9 - - 15,016.5
National Technical Assistance - 5,488.0 784.0 - 9,161.6 - 201.6 17,153.9 7,884.8 - 40,673.9
Subtotal Technical Assistance - 5,488.0 1,579.7 - 14,123.5 - 7,064.5 19,549.9 7,884.8 - 55,690.4
2. Research, Studies and Surveys 2,688.0 10,440.6 114,074.2 50,745.9 8,512.0 - - - - 11,200.0 197,660.7
Subtotal Consultancies 2,688.0 15,928.6 115,653.9 50,745.9 22,635.5 - 7,064.5 19,549.9 7,884.8 11,200.0 253,351.1
E. Training 455.2 12,603.0 36,637.8 6,609.6 59,456.6 23,121.5 9,980.9 2,396.6 5,143.4 - 156,404.6
F. Grants
1. Community Infrastructure Investment Grants
Community Infrastructure Investment Grants - - - - - 621,533.9 - - - - 621,533.9
Comunity Infrastructure Design and Supervision - - - - - 30,292.7 - - - - 30,292.7
Subtotal Community Infrastructure Investment Grants - - - - - 651,826.6 - - - - 651,826.6
3. CIG Investment Grants - - - - 148,960.0 - - - - - 148,960.0
4. APIF Investment Grant - - - - - - - 140,533.1 - - 140,533.1
Subtotal Grants - - - - 148,960.0 651,826.6 - 140,533.1 - - 941,319.7
G. Credit
1. WDF financing fro on-lending - - - - - - 84,000.3 - - - 84,000.3
Total Investment Costs 3,143.2 28,531.6 152,291.7 57,355.4 252,588.9 674,948.2 107,248.8 162,479.5 43,766.6 11,200.0 1,493,553.8
II. Recurrent Costs
A. Salaries and allowances /a - - - - - - - - 90,753.3 - 90,753.3
B. Operating costs
1. Operation and Maintenance - - - - - - - - 8,537.2 - 8,537.2
2. Other Operating Costs - - - - - - 1,233.2 - 75,983.7 - 77,216.9
Subtotal Operating costs - - - - - - 1,233.2 - 84,520.9 - 85,754.1
Total Recurrent Costs - - - - - - 1,233.2 - 175,274.2 - 176,507.3
Total PROJECT COSTS 3,143.2 28,531.6 152,291.7 57,355.4 252,588.9 674,948.2 108,482.0 162,479.5 219,040.7 11,200.0 1,670,061.2
Taxes 268.8 1,044.1 11,407.4 5,074.6 3,004.9 - 2,445.6 - 11,267.0 - 34,512.4
Foreign Exchange - - 795.7 - 41,214.9 124,306.8 8,687.4 2,395.9 13,517.7 - 190,918.5
_________________________________
\a Includes social charges (33.5%). Income tax is considered as a personal responsibility but would be arranged centrally from the PCU.
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Table 4: Expenditure Accounts by Components – Totals including Contingencies (USD’000)
Province-based participatory planning A greener agricultural Profitable farms linked to finance
institutionalised future and markets
Climate Climate-informed, Agriculture NTP NRD
Strategic change market oriented Forest land CIGs for Rural Promotion National
Investment adaptation socio-economic and forest climate Community financial Investment Programme Coordination
plan plan plans allocation adaptation infrastructure services Fund Management Office Grant Total
I. Investment Costs
A. Civil Works
Civil Works - - - - - - 16.2 - - - 16.2
B. Equipment and materials - - - - 914.1 - 69.6 - 1,293.7 - 2,277.4
C. Vehicles - - - - - - 188.3 - - - 188.3
D. Consultancies
1. Technical Assistance
International Technical Assistance - - 35.1 - 213.7 - 280.0 103.5 - - 632.2
National Technical Assistance - 245.0 35.0 - 409.0 - 9.0 765.8 352.0 - 1,815.8
Subtotal Technical Assistance - 245.0 70.1 - 622.7 - 289.0 869.3 352.0 - 2,448.0
2. Research, Studies and Surveys 120.0 466.1 5,092.6 2,265.4 380.0 - - - - 500.0 8,824.1
Subtotal Consultancies 120.0 711.1 5,162.7 2,265.4 1,002.7 - 289.0 869.3 352.0 500.0 11,272.1
E. Training 20.2 534.5 1,562.9 284.3 2,544.3 990.2 427.9 101.2 221.9 - 6,687.4
F. Grants
1. Community Infrastructure Investment Grants
Community Infrastructure Investment Grants - - - - - 27,747.1 - - - - 27,747.1
Comunity Infrastructure Design and Supervision - - - - - 1,352.4 - - - - 1,352.4
Subtotal Community Infrastructure Investment Grants - - - - - 29,099.4 - - - - 29,099.4
3. CIG Investment Grants - - - - 6,650.0 - - - - - 6,650.0
4. APIF Investment Grant - - - - - - - 6,273.8 - - 6,273.8
Subtotal Grants - - - - 6,650.0 29,099.4 - 6,273.8 - - 42,023.2
G. Credit
1. WDF financing fro on-lending - - - - - - 3,750.0 - - - 3,750.0
Total Investment Costs 140.2 1,245.6 6,725.6 2,549.7 11,111.1 30,089.6 4,741.0 7,244.3 1,867.6 500.0 66,214.7
II. Recurrent Costs
A. Salaries and allowances /a - - - - - - - - 3,806.8 - 3,806.8
B. Operating costs
1. Operation and Maintenance - - - - - - - - 359.8 - 359.8
2. Other Operating Costs - - - - - - 53.9 - 3,170.6 - 3,224.5
Subtotal Operating costs - - - - - - 53.9 - 3,530.4 - 3,584.2
Total Recurrent Costs - - - - - - 53.9 - 7,337.1 - 7,391.0
Total PROJECT COSTS 140.2 1,245.6 6,725.6 2,549.7 11,111.1 30,089.6 4,794.9 7,244.3 9,204.8 500.0 73,605.7
Taxes 12.0 46.6 509.3 226.5 129.4 - 108.1 - 471.7 - 1,503.6
Foreign Exchange - - 35.1 - 1,817.9 5,549.4 360.6 103.5 567.3 - 8,433.7
_________________________________
\a Includes social charges (33.5%). Income tax is considered as a personal responsibility but would be arranged centrally from the PCU.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
230
Table 5: Project Components by Year -- Totals Including Contingencies
Totals Including Contingencies (VND Million) Totals Including Contingencies (US$ '000)
2017 2018 2019 2020 2021 2022 Total 2017 2018 2019 2020 2021 2022 Total
A. Province-based participatory planning institutionalised
1. Strategic Investment plan 3,143.2 - - - - - 3,143.2 140.2 - - - - - 140.2
2. Climate change adaptation plan 6,914.5 6,652.9 2,944.8 2,335.4 8,941.3 742.7 28,531.6 308.0 294.0 126.3 97.4 389.6 30.3 1,245.6
3. Climate-informed, market oriented socio-economic plans 15,010.1 19,606.3 42,629.7 45,329.8 14,857.9 14,857.9 152,291.7 668.4 867.4 1,874.7 1,988.4 663.3 663.3 6,725.6
Subtotal Province-based participatory planning institutionalised 25,067.8 26,259.2 45,574.6 47,665.2 23,799.3 15,600.6 183,966.5 1,116.6 1,161.5 2,001.0 2,085.8 1,052.9 693.6 8,111.3
B. A greener agricultural future
1. Forest land and forest allocation 7,589.0 17,058.2 12,426.3 4,838.4 10,035.2 5,408.3 57,355.4 338.7 758.5 547.1 216.0 448.0 241.4 2,549.7
2. CIGs for climate adaptation 48,929.0 91,210.4 77,656.3 23,939.8 6,356.7 4,496.6 252,588.9 2,180.2 4,044.1 3,423.9 1,004.3 270.8 187.7 11,111.1
Subtotal A greener agricultural future 56,518.0 108,268.6 90,082.6 28,778.2 16,391.9 9,904.9 309,944.3 2,518.9 4,802.6 3,971.0 1,220.3 718.8 429.2 13,660.8
C. Profitable farms linked to finance and markets
1. Community infrastructure 98,631.7 206,894.3 211,945.8 150,756.4 3,360.0 3,360.0 674,948.2 4,402.0 9,231.0 9,442.8 6,713.8 150.0 150.0 30,089.6
2. Rural financial services 21,668.9 39,253.7 24,113.3 10,481.1 10,711.1 2,253.9 108,482.0 965.2 1,745.9 1,072.5 461.7 460.4 89.2 4,794.9
3. Agriculture Promotion Investment Fund 16,906.8 30,968.0 41,543.8 46,519.7 26,541.2 - 162,479.5 754.5 1,381.3 1,852.2 2,073.2 1,183.1 - 7,244.3
Subtotal Profitable farms linked to finance and markets 137,207.3 277,115.9 277,602.9 207,757.2 40,612.4 5,613.9 945,909.7 6,121.7 12,358.3 12,367.5 9,248.7 1,793.5 239.2 42,128.8
D. Programme Management 36,143.3 34,707.6 36,175.2 36,799.9 38,387.6 36,827.1 219,040.7 1,604.8 1,511.3 1,538.8 1,528.2 1,558.1 1,463.5 9,204.8
E. NTP NRD National Coordination Office Grant 5,600.0 5,600.0 - - - - 11,200.0 250.0 250.0 - - - - 500.0
Total PROJECT COSTS 260,536.5 451,951.3 449,435.3 321,000.5 119,191.1 67,946.5 1,670,061.2 11,611.9 20,083.6 19,878.3 14,083.0 5,123.3 2,825.5 73,605.7
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
231
Table 6: Project Components by Year -- Investment/Recurrent Costs (USD’000)
Totals Including Contingencies
2017 2018 2019 2020 2021 2022 Total
A. Province-based participatory planning institutionalised
1. Strategic Investment plan
Investment Costs 140.2 - - - - - 140.2
2. Climate change adaptation plan
Investment Costs 308.0 294.0 126.3 97.4 389.6 30.3 1,245.6
3. Climate-informed, market oriented socio-economic plans
Investment Costs 668.4 867.4 1,874.7 1,988.4 663.3 663.3 6,725.6
Subtotal Province-based participatory planning institutionalised 1,116.6 1,161.5 2,001.0 2,085.8 1,052.9 693.6 8,111.3
B. A greener agricultural future
1. Forest land and forest allocation
Investment Costs 338.7 758.5 547.1 216.0 448.0 241.4 2,549.7
2. CIGs for climate adaptation
Investment Costs 2,180.2 4,044.1 3,423.9 1,004.3 270.8 187.7 11,111.1
Subtotal A greener agricultural future 2,518.9 4,802.6 3,971.0 1,220.3 718.8 429.2 13,660.8
C. Profitable farms linked to finance and markets
1. Community infrastructure
Investment Costs 4,402.0 9,231.0 9,442.8 6,713.8 150.0 150.0 30,089.6
2. Rural financial services
Investment Costs 954.6 1,702.6 1,072.5 461.7 460.4 89.2 4,741.0
Recurrent Costs 10.6 43.3 - - - - 53.9
Subtotal Rural financial services 965.2 1,745.9 1,072.5 461.7 460.4 89.2 4,794.9
3. Agriculture Promotion Investment Fund
Investment Costs 754.5 1,381.3 1,852.2 2,073.2 1,183.1 - 7,244.3
Subtotal Profitable farms linked to finance and markets 6,121.7 12,358.3 12,367.5 9,248.7 1,793.5 239.2 42,128.8
D. Programme Management
Investment Costs 535.9 281.1 284.0 248.2 252.6 265.8 1,867.6
Recurrent Costs 1,068.8 1,230.2 1,254.8 1,279.9 1,305.5 1,197.7 7,337.1
Subtotal Programme Management 1,604.8 1,511.3 1,538.8 1,528.2 1,558.1 1,463.5 9,204.8
E. NTP NRD National Coordination Office Grant
Investment Costs 250.0 250.0 - - - - 500.0
Subtotal NTP NRD National Coordination Office Grant 250.0 250.0 - - - - 500.0
Total PROJECT COSTS 11,611.9 20,083.6 19,878.3 14,083.0 5,123.3 2,825.5 73,605.7
Total Investment Costs 10,532.5 18,810.1 18,623.5 12,803.1 3,817.8 1,627.8 66,214.7
Total Recurrent Costs 1,079.4 1,273.5 1,254.8 1,279.9 1,305.5 1,197.7 7,391.0
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
232
Table 7: Expenditure Accounts by Year -- Totals Including Contingencies
Totals Including Contingencies (VND Million) Totals Including Contingencies (US$ '000)
2017 2018 2019 2020 2021 2022 Total 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Civil Works
Civil Works 364.1 - - - - - 364.1 16.2 - - - - - 16.2
B. Equipment and materials 10,540.7 12,039.1 9,813.7 6,849.4 7,150.7 7,465.4 53,859.0 467.8 523.9 416.5 284.0 289.7 295.5 2,277.4
C. Vehicles 3,686.9 568.1 - - - - 4,255.0 163.6 24.7 - - - - 188.3
D. Consultancies
1. Technical Assistance
International Technical Assistance 3,914.4 1,964.7 1,770.3 1,550.9 3,562.2 2,253.9 15,016.5 173.7 85.5 75.1 64.3 144.3 89.2 632.2
National Technical Assistance 9,072.0 7,324.8 8,601.6 7,929.6 5,953.9 1,792.0 40,673.9 405.0 327.0 384.0 354.0 265.8 80.0 1,815.8
Subtotal Technical Assistance 12,986.4 9,289.5 10,371.9 9,480.5 9,516.1 4,045.9 55,690.4 578.7 412.5 459.1 418.3 410.1 169.2 2,448.0
2. Research, Studies and Surveys 26,642.6 36,733.8 40,205.8 40,781.4 31,552.6 21,744.6 197,660.7 1,189.4 1,639.9 1,794.9 1,820.6 1,408.6 970.7 8,824.1
Subtotal Consultancies 39,629.0 46,023.3 50,577.7 50,262.0 41,068.7 25,790.5 253,351.1 1,768.1 2,052.4 2,254.0 2,238.9 1,818.7 1,139.9 11,272.1
E. Training 29,805.3 38,840.7 43,190.6 38,572.0 4,925.4 1,070.6 156,404.6 1,322.7 1,690.4 1,833.0 1,599.4 199.5 42.4 6,687.4
F. Grants
1. Community Infrastructure Investment Grants
Community Infrastructure Investment Grants 89,600.0 192,640.0 193,760.0 138,813.9 3,360.0 3,360.0 621,533.9 4,000.0 8,600.0 8,650.0 6,197.1 150.0 150.0 27,747.1
Comunity Infrastructure Design and Supervision 4,480.0 9,520.0 9,520.0 6,772.7 - - 30,292.7 200.0 425.0 425.0 302.4 - - 1,352.4
Subtotal Community Infrastructure Investment Grants 94,080.0 202,160.0 203,280.0 145,586.6 3,360.0 3,360.0 651,826.6 4,200.0 9,025.0 9,075.0 6,499.4 150.0 150.0 29,099.4
3. CIG Investment Grants 31,360.0 62,720.0 54,880.0 - - - 148,960.0 1,400.0 2,800.0 2,450.0 - - - 6,650.0
4. APIF Investment Grant 13,440.0 26,880.0 35,840.0 40,320.0 24,053.1 - 140,533.1 600.0 1,200.0 1,600.0 1,800.0 1,073.8 - 6,273.8
Subtotal Grants 138,880.0 291,760.0 294,000.0 185,906.6 27,413.1 3,360.0 941,319.7 6,200.0 13,025.0 13,125.0 8,299.4 1,223.8 150.0 42,023.2
G. Credit
1. WDF financing fro on-lending 13,307.2 33,457.7 22,286.1 8,542.5 6,406.8 - 84,000.3 594.1 1,493.6 994.9 381.4 286.0 - 3,750.0
Total Investment Costs 236,213.2 422,688.9 419,868.1 290,132.4 86,964.8 37,686.4 1,493,553.8 10,532.5 18,810.1 18,623.5 12,803.1 3,817.8 1,627.8 66,214.7
II. Recurrent Costs
A. Salaries and allowances /a 14,076.5 14,641.4 15,314.2 15,988.0 16,691.5 14,041.7 90,753.3 624.7 637.2 649.9 662.9 676.2 555.8 3,806.8
B. Operating costs
1. Operation and Maintenance 2,081.4 1,180.6 1,234.9 1,289.2 1,345.9 1,405.2 8,537.2 92.4 51.4 52.4 53.5 54.5 55.6 359.8
2. Other Operating Costs 8,165.4 13,440.4 13,018.1 13,590.9 14,188.9 14,813.2 77,216.9 362.4 584.9 552.5 563.5 574.8 586.3 3,224.5
Subtotal Operating costs 10,246.7 14,621.0 14,253.0 14,880.1 15,534.8 16,218.4 85,754.1 454.7 636.3 604.9 617.0 629.3 641.9 3,584.2
Total Recurrent Costs 24,323.3 29,262.4 29,567.2 30,868.1 32,226.3 30,260.1 176,507.3 1,079.4 1,273.5 1,254.8 1,279.9 1,305.5 1,197.7 7,391.0
Total PROJECT COSTS 260,536.5 451,951.3 449,435.3 321,000.5 119,191.1 67,946.5 1,670,061.2 11,611.9 20,083.6 19,878.3 14,083.0 5,123.3 2,825.5 73,605.7
_________________________________
\a Includes social charges (33.5%). Income tax is considered as a personal responsibility but would be arranged centrally from the PCU.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
233
Table 8: Expenditure Accounts Breakdown (USD ‘000)
Physical
Cont.
Plus
Base Cost Physical Contingencies Price Contingencies Total Incl. Cont. Base Costs Price
Local Local Local Local + Price Cont. on
(Excl. Duties & For. (Excl. Duties & For. (Excl. Duties & (Excl. Duties & Cont. on Physical
For. Exch. Taxes) Taxes Total Exch. Taxes) Taxes Total Exch. Taxes) Taxes Total For. Exch. Taxes) Taxes Total Base Costs Cont.
I. Investment Costs
A. Civil Works
Civil Works 3.2 11.2 1.6 16.0 - - - - 0.0 0.1 0.0 0.2 3.2 11.3 1.6 16.2 16.2 -
B. Equipment and materials 618.0 1,236.0 206.0 2,060.0 30.9 61.8 10.3 103.0 34.3 68.6 11.4 114.4 683.2 1,366.4 227.7 2,277.4 2,169.0 108.4
C. Vehicles 55.8 37.2 93.0 186.0 - - - - 0.7 0.5 1.2 2.3 56.5 37.7 94.2 188.3 188.3 -
D. Consultancies
1. Technical Assistance
International Technical Assistance 598.5 - - 598.5 - - - - 33.7 - - 33.7 632.2 - - 632.2 632.2 -
National Technical Assistance - 1,815.8 - 1,815.8 - - - - - - - - - 1,815.8 - 1,815.8 1,815.8 -
Subtotal Technical Assistance 598.5 1,815.8 - 2,414.3 - - - - 33.7 - - 33.7 632.2 1,815.8 - 2,448.0 2,448.0 -
2. Research, Studies and Surveys - 7,991.7 832.4 8,824.1 - - - - - - - - - 7,991.7 832.4 8,824.1 8,824.1 -
Subtotal Consultancies 598.5 9,807.5 832.4 11,238.4 - - - - 33.7 - - 33.7 632.2 9,807.5 832.4 11,272.1 11,272.1 -
E. Training - 6,407.6 - 6,407.6 - - - - - 279.8 - 279.8 - 6,687.4 - 6,687.4 6,687.4 -
F. Grants
1. Community Infrastructure Investment Grants
Community Infrastructure Investment Grants 5,549.4 22,197.6 - 27,747.1 - - - - - - - - 5,549.4 22,197.6 - 27,747.1 27,747.1 -
Comunity Infrastructure Design and Supervision - 1,352.4 - 1,352.4 - - - - - - - - - 1,352.4 - 1,352.4 1,352.4 -
Subtotal Community Infrastructure Investment Grants 5,549.4 23,550.0 - 29,099.4 - - - - - - - - 5,549.4 23,550.0 - 29,099.4 29,099.4 -
3. CIG Investment Grants 1,330.0 5,320.0 - 6,650.0 - - - - - - - - 1,330.0 5,320.0 - 6,650.0 6,650.0 -
4. APIF Investment Grant - 6,273.8 - 6,273.8 - - - - - - - - - 6,273.8 - 6,273.8 6,273.8 -
Subtotal Grants 6,879.4 35,143.8 - 42,023.2 - - - - - - - - 6,879.4 35,143.8 - 42,023.2 42,023.2 -
G. Credit
1. WDF financing fro on-lending - 3,750.0 - 3,750.0 - - - - - - - - - 3,750.0 - 3,750.0 3,750.0 -
Total Investment Costs 8,154.9 56,393.4 1,133.0 65,681.3 30.9 61.8 10.3 103.0 68.7 349.0 12.6 430.4 8,254.6 56,804.2 1,155.9 66,214.7 66,106.3 108.4
II. Recurrent Costs
A. Salaries and allowances /a - 3,591.0 - 3,591.0 - - - - - 215.8 - 215.8 - 3,806.8 - 3,806.8 3,806.8 -
B. Operating costs
1. Operation and Maintenance 64.9 227.2 32.5 324.6 3.2 11.4 1.6 16.2 3.8 13.3 1.9 18.9 72.0 251.8 36.0 359.8 342.6 17.1
2. Other Operating Costs 100.0 2,511.2 279.0 2,890.2 - 125.6 14.0 139.5 7.2 168.8 18.8 194.8 107.2 2,805.5 311.7 3,224.5 3,076.0 148.4
Subtotal Operating costs 164.9 2,738.4 311.5 3,214.8 3.2 136.9 15.6 155.7 11.0 182.0 20.6 213.7 179.2 3,057.4 347.7 3,584.2 3,418.7 165.6
Total Recurrent Costs 164.9 6,329.4 311.5 6,805.8 3.2 136.9 15.6 155.7 11.0 397.8 20.6 429.5 179.2 6,864.1 347.7 7,391.0 7,225.4 165.6
Total 8,319.8 62,722.8 1,444.5 72,487.1 34.1 198.7 25.9 258.7 79.7 746.9 33.3 859.9 8,433.7 63,668.3 1,503.6 73,605.7 73,331.7 274.0
_________________________________
\a Includes social charges (33.5%). Income tax is considered as a personal responsibility but would be arranged centrally from the PCU.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
234
Table 9: Components by Financiers (USD’000)
Local
IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total (Excl. Duties &
Amount % Amount % Amount % Amount % Amount % Amount % For. Exch. Taxes) Taxes
A. Province-based participatory planning institutionalised
1. Strategic Investment plan 128.2 91.4 - - 12.0 8.6 - - - - 140.2 0.2 - 128.2 12.0
2. Climate change adaptation plan 954.6 76.6 - - 46.6 3.7 244.4 19.6 - - 1,245.6 1.7 - 1,199.0 46.6
3. Climate-informed, market oriented socio-economic plans 3,006.4 44.7 - - 509.3 7.6 3,210.0 47.7 - - 6,725.6 9.1 35.1 6,181.2 509.3
Subtotal Province-based participatory planning institutionalised 4,089.1 50.4 - - 567.9 7.0 3,454.3 42.6 - - 8,111.3 11.0 35.1 7,508.4 567.9
B. A greener agricultural future
1. Forest land and forest allocation 1,626.2 63.8 - - 226.5 8.9 464.6 18.2 232.3 9.1 2,549.7 3.5 - 2,323.2 226.5
2. CIGs for climate adaptation 6,916.7 62.3 - - 129.4 1.2 740.0 6.7 3,325.0 29.9 11,111.1 15.1 1,817.9 9,163.8 129.4
Subtotal A greener agricultural future 8,542.9 62.5 - - 356.0 2.6 1,204.6 8.8 3,557.3 26.0 13,660.8 18.6 1,817.9 11,487.0 356.0
C. Profitable farms linked to finance and markets
1. Community infrastructure 19,130.8 63.6 - - - - 8,114.1 27.0 2,844.7 9.5 30,089.6 40.9 5,549.4 24,540.2 -
2. Rural financial services 4,638.3 96.7 - - 108.1 2.3 48.5 1.0 - - 4,794.9 6.5 360.6 4,326.2 108.1
3. Agriculture Promotion Investment Fund 4,044.7 55.8 - - - - - - 3,199.6 44.2 7,244.3 9.8 103.5 7,140.8 -
Subtotal Profitable farms linked to finance and markets 27,813.7 66.0 - - 108.1 0.3 8,162.6 19.4 6,044.3 14.3 42,128.8 57.2 6,013.5 36,007.2 108.1
D. Programme Management 2,054.3 22.3 - - 471.7 5.1 6,678.8 72.6 - - 9,204.8 12.5 567.3 8,165.8 471.7
E. NTP NRD National Coordination Office Grant - - 500.0 100.0 - - - - - - 500.0 0.7 - 500.0 -
Total PROJECT COSTS 42,500.0 57.7 500.0 0.7 1,503.6 2.0 19,500.4 26.5 9,601.7 13.0 73,605.7 100.0 8,433.7 63,668.3 1,503.6
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
235
Table 10: Disbursement Accounts by Financiers (USD‘000)
Local
IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total (Excl. Duties &
Amount % Amount % Amount % Amount % Amount % Amount % For. Exch. Taxes) Taxes
A. Civil Works
Civil Works 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6
Subtotal Civil Works 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6
B. Equipment and materials 1,227.0 90.0 - - 136.3 10.0 - - - - 1,363.3 1.9 409.0 818.0 136.3
C. Vehicles 94.2 50.0 - - 94.2 50.0 - - - - 188.3 0.3 56.5 37.7 94.2
D. Consultancies
1. Technical Assistance 1,775.3 97.3 - - - - 50.0 2.7 - - 1,825.3 2.5 418.5 1,406.8 -
2. Research and Studies 2,342.8 37.3 500.0 8.0 577.9 9.2 2,858.0 45.5 - - 6,278.7 8.5 - 5,700.8 577.9
Subtotal Consultancies 4,118.1 50.8 500.0 6.2 577.9 7.1 2,908.0 35.9 - - 8,104.0 11.0 418.5 7,107.6 577.9
E. Training 3,312.5 85.8 - - - - 546.3 14.2 - - 3,858.8 5.2 - 3,858.8 -
F. Grants
1. Community Infrastructure Investment Grant
Community Infrastructure Investment Grants 16,788.2 60.5 - - - - 8,114.1 29.2 2,844.7 10.3 27,747.1 37.7 5,549.4 22,197.6 -
Community Infrastructure Design and Supervision 1,352.4 100.0 - - - - - - - - 1,352.4 1.8 - 1,352.4 -
Subtotal Community Infrastructure Investment Grant 18,140.6 62.3 - - - - 8,114.1 27.9 2,844.7 9.8 29,099.4 39.5 5,549.4 23,550.0 -
2. CIG Investment Grants 6,826.7 62.0 - - 119.4 1.1 740.0 6.7 3,325.0 30.2 11,011.1 15.0 1,817.9 9,073.8 119.4
3. Forest land allocation 1,626.2 63.8 - - 226.5 8.9 464.6 18.2 232.3 9.1 2,549.7 3.5 - 2,323.2 226.5
4. APIF Grants 3,074.2 49.0 - - - - - - 3,199.6 51.0 6,273.8 8.5 - 6,273.8 -
Subtotal Grants 29,667.7 60.6 - - 346.0 0.7 9,318.7 19.0 9,601.7 19.6 48,934.0 66.5 7,367.3 41,220.8 346.0
G. Credit
1. WDF Financing for on-lending 3,750.0 100.0 - - - - - - - - 3,750.0 5.1 - 3,750.0 -
Subtotal Credit 3,750.0 100.0 - - - - - - - - 3,750.0 5.1 - 3,750.0 -
H. Operating costs - - - - 347.7 9.7 3,236.5 90.3 - - 3,584.2 4.9 179.2 3,057.4 347.7
I. Salaries and alowances 316.0 8.3 - - - - 3,490.8 91.7 - - 3,806.8 5.2 - 3,806.8 -
Total PROJECT COSTS 42,500.0 57.7 500.0 0.7 1,503.6 2.0 19,500.4 26.5 9,601.7 13.0 73,605.7 100.0 8,433.7 63,668.3 1,503.6
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
236
Table 11: Expenditure Accounts by Financiers (USD’000)
(VND Billion) (US$ '000)
Local Local
IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total For. (Excl. Duties & IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total (Excl. Duties &
Amount % Amount % Amount % Amount % Amount % Amount % Exch. Taxes) Taxes Amount % Amount % Amount % Amount % Amount % Amount % For. Exch. Taxes) Taxes
I. Investment Costs
A. Civil Works
Civil Works 0.3 90.0 - - 0.0 10.0 - - - - 0.4 - 0.1 0.3 0.0 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6
B. Equipment and materials 48.5 90.0 - - 5.4 10.0 - - - - 53.9 3.2 16.2 32.3 5.4 2,049.7 90.0 - - 227.7 10.0 - - - - 2,277.4 3.1 683.2 1,366.4 227.7
C. Vehicles 2.1 50.0 - - 2.1 50.0 - - - - 4.3 0.3 1.3 0.9 2.1 94.2 50.0 - - 94.2 50.0 - - - - 188.3 0.3 56.5 37.7 94.2
D. Consultancies
1. Technical Assistance
International Technical Assistance 15.0 100.0 - - - - - - - - 15.0 0.9 15.0 - - 632.2 100.0 - - - - - - - - 632.2 0.9 632.2 - -
National Technical Assistance 37.9 93.1 - - -0.0 - 2.8 6.9 - - 40.7 2.4 - 40.7 - 1,690.8 93.1 - - - - 125.0 6.9 - - 1,815.8 2.5 - 1,815.8 -
Subtotal Technical Assistance 52.9 95.0 - - -0.0 - 2.8 5.0 - - 55.7 3.3 15.0 40.7 - 2,323.0 94.9 - - - - 125.0 5.1 - - 2,448.0 3.3 632.2 1,815.8 -
2. Research, Studies and Surveys 90.1 45.6 11.2 5.7 18.6 9.4 73.2 37.0 4.6 2.3 197.7 11.8 - 179.0 18.6 4,022.1 45.6 500.0 5.7 832.4 9.4 3,265.8 37.0 203.9 2.3 8,824.1 12.0 - 7,991.7 832.4
Subtotal Consultancies 143.0 56.4 11.2 4.4 18.6 7.4 76.0 30.0 4.6 1.8 253.4 15.2 15.0 219.7 18.6 6,345.0 56.3 500.0 4.4 832.4 7.4 3,390.8 30.1 203.9 1.8 11,272.1 15.3 632.2 9,807.5 832.4
E. Training 141.6 90.5 - - 0.0 - 14.1 9.0 0.7 0.4 156.4 9.4 - 156.4 - 6,055.8 90.6 - - - - 603.2 9.0 28.4 0.4 6,687.4 9.1 - 6,687.4 -
F. Grants
1. Community Infrastructure Investment Grants
Community Infrastructure Investment Grants 376.1 60.5 - - - - 181.8 29.2 63.7 10.3 621.5 37.2 124.3 497.2 - 16,788.2 60.5 - - - - 8,114.1 29.2 2,844.7 10.3 27,747.1 37.7 5,549.4 22,197.6 -
Comunity Infrastructure Design and Supervision 30.3 100.0 - - - - - - - - 30.3 1.8 - 30.3 - 1,352.4 100.0 - - - - - - - - 1,352.4 1.8 - 1,352.4 -
Subtotal Community Infrastructure Investment Grants 406.3 62.3 - - - - 181.8 27.9 63.7 9.8 651.8 39.0 124.3 527.5 - 18,140.6 62.3 - - - - 8,114.1 27.9 2,844.7 9.8 29,099.4 39.5 5,549.4 23,550.0 -
3. CIG Investment Grants 59.6 40.0 - - - - 14.9 10.0 74.5 50.0 149.0 8.9 29.8 119.2 - 2,660.0 40.0 - - - - 665.0 10.0 3,325.0 50.0 6,650.0 9.0 1,330.0 5,320.0 -
4. APIF Investment Grant 68.9 49.0 - - - - - - 71.7 51.0 140.5 8.4 - 140.5 - 3,074.2 49.0 - - - - - - 3,199.6 51.0 6,273.8 8.5 - 6,273.8 -
Subtotal Grants 534.8 56.8 - - - - 196.7 20.9 209.9 22.3 941.3 56.4 154.1 787.2 - 23,874.7 56.8 - - - - 8,779.1 20.9 9,369.3 22.3 42,023.2 57.1 6,879.4 35,143.8 -
G. Credit
1. WDF financing fro on-lending 84.0 100.0 - - - - - - - - 84.0 5.0 - 84.0 - 3,750.0 100.0 - - - - - - - - 3,750.0 5.1 - 3,750.0 -
Total Investment Costs 954.3 63.9 11.2 0.7 26.2 1.8 286.7 19.2 215.1 14.4 1,493.6 89.4 186.6 1,280.7 26.2 42,184.0 63.7 500.0 0.8 1,155.9 1.7 12,773.1 19.3 9,601.7 14.5 66,214.7 90.0 8,254.6 56,804.2 1,155.9
II. Recurrent Costs
A. Salaries and allowances /a 7.5 8.2 - - - - 83.3 91.8 - - 90.8 5.4 - 90.8 - 316.0 8.3 - - - - 3,490.8 91.7 - - 3,806.8 5.2 - 3,806.8 -
B. Operating costs
1. Operation and Maintenance - - - - 0.9 10.0 7.7 90.0 - - 8.5 0.5 1.7 6.0 0.9 - - - - 36.0 10.0 323.8 90.0 - - 359.8 0.5 72.0 251.8 36.0
2. Other Operating Costs - - - - 7.5 9.7 69.8 90.3 - - 77.2 4.6 2.6 67.2 7.5 - - - - 311.7 9.7 2,912.8 90.3 - - 3,224.5 4.4 107.2 2,805.5 311.7
Subtotal Operating costs - - - - 8.3 9.7 77.4 90.3 - - 85.8 5.1 4.3 73.1 8.3 - - - - 347.7 9.7 3,236.5 90.3 - - 3,584.2 4.9 179.2 3,057.4 347.7
Total Recurrent Costs 7.5 4.2 - - 8.3 4.7 160.7 91.1 - - 176.5 10.6 4.3 163.9 8.3 316.0 4.3 - - 347.7 4.7 6,727.3 91.0 - - 7,391.0 10.0 179.2 6,864.1 347.7
Total PROJECT COSTS 961.8 57.6 11.2 0.7 34.5 2.1 447.5 26.8 215.1 12.9 1,670.1 100.0 190.9 1,444.6 34.5 42,500.0 57.7 500.0 0.7 1,503.6 2.0 19,500.4 26.5 9,601.7 13.0 73,605.7 100.0 8,433.7 63,668.3 1,503.6
_________________________________
\a Includes social charges (33.5%). Income tax is considered as a personal responsibility but would be arranged centrally from the PCU.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
237
Table 12: Local/Foreign/Taxes by Financiers (USD’000)
IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total
Amount % Amount % Amount % Amount % Amount % Amount %
I. Foreign 5,264.8 62.4 - - 0.0 - 1,935.0 22.9 1,233.9 14.6 8,433.7 11.5
II. Local (Excl. Taxes) 37,235.2 58.5 500.0 0.8 -0.0 - 17,565.4 27.6 8,367.7 13.1 63,668.3 86.5
III. Taxes - - - - 1,503.6 100.0 - - - - 1,503.6 2.0
Total Project 42,500.0 57.7 500.0 0.7 1,503.6 2.0 19,500.4 26.5 9,601.7 13.0 73,605.7 100.0
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
238
Table 13: Inflation and Exchange Rates
Up to
Up to Project
Negotiation Start 2017 2018 2019 2020 2021 2022
Inflation (in %'s) /a
ALL
Annual rates
Local 0.0 0.0 3.2 4.8 4.4 4.4 4.4 4.4
Foreign 0.0 0.0 2.0 2.0 2.0 2.0 2.0 2.0
Compounded rates
Local 0.0 0.0 1.6 5.7 10.5 15.4 20.5 25.8
Foreign 0.0 0.0 1.0 3.0 5.1 7.2 9.3 11.5
ZERO
Annual rates
Local 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Foreign 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Compounded rates
Local 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Foreign 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Exchange rates (Local/Foreign) /b
ALL
Rates actually used 22,400.0 22,400.0 22,533.1 22,977.7 23,562.3 24,116.7 24,684.2 25,265.0
Constant purchasing parity rates 22,400.0 22,400.0 22,533.1 22,977.7 23,562.3 24,116.7 24,684.2 25,265.0
% deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
ZERO
Rates actually used 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0
Constant purchasing parity rates 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0 22,400.0
% deviation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
_________________________________
\a Yearly values are within Each Project Year
\b Yearly values are at Project Year Midpoints
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
239
Table 14: CSSP components by financiers – Bac Kan province
Local
IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total (Excl. Duties &
Amount % Amount % Amount % Amount % Amount % Amount % For. Exch. Taxes) Taxes
A. Civil Works
Civil Works 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6
Subtotal Civil Works 14.5 90.0 - - 1.6 10.0 - - - - 16.2 - 3.2 11.3 1.6
B. Equipment and materials 595.5 90.0 - - 66.2 10.0 - - - - 661.7 1.8 198.5 397.0 66.2
C. Vehicles 44.9 50.0 - - 44.9 50.0 - - - - 89.9 0.2 27.0 18.0 44.9
D. Consultancies
1. Technical Assistance 880.2 96.9 - - - - 28.0 3.1 - - 908.2 2.5 209.3 698.9 -
2. Research and Studies 1,032.1 41.2 - - 250.2 10.0 1,220.0 48.8 - - 2,502.3 7.0 - 2,252.0 250.2
Subtotal Consultancies 1,912.2 56.1 - - 250.2 7.3 1,248.0 36.6 - - 3,410.4 9.5 209.3 2,950.9 250.2
E. Training 1,731.2 87.4 - - - - 249.6 12.6 - - 1,980.8 5.5 - 1,980.8 -
F. Grants
1. Community Infrastructure Investment Grant
Community Infrastructure Investment Grants 8,215.9 61.0 - - - - 3,827.9 28.4 1,416.0 10.5 13,459.8 37.4 2,692.0 10,767.8 -
Community Infrastructure Design and Supervision 638.0 100.0 - - - - - - - - 638.0 1.8 - 638.0 -
Subtotal Community Infrastructure Investment Grant 8,853.9 62.8 - - - - 3,827.9 27.2 1,416.0 10.0 14,097.8 39.2 2,692.0 11,405.8 -
2. CIG Investment Grants 3,343.5 62.7 - - 59.7 1.1 352.5 6.6 1,575.0 29.5 5,330.7 14.8 874.0 4,397.0 59.7
3. Forest land allocation 1,626.2 63.8 - - 226.5 8.9 464.6 18.2 232.3 9.1 2,549.7 7.1 - 2,323.2 226.5
4. APIF Grants 1,470.0 49.0 - - - - - - 1,530.0 51.0 3,000.0 8.3 - 3,000.0 -
Subtotal Grants 15,293.6 61.2 - - 286.3 1.1 4,645.1 18.6 4,753.3 19.0 24,978.2 69.4 3,565.9 21,126.0 286.3
G. Credit
1. WDF Financing for on-lending 1,500.0 100.0 - - - - - - - - 1,500.0 4.2 - 1,500.0 -
Subtotal Credit 1,500.0 100.0 - - - - - - - - 1,500.0 4.2 - 1,500.0 -
H. Operating costs - - - - 137.2 9.6 1,288.2 90.4 - - 1,425.4 4.0 89.6 1,198.7 137.2
I. Salaries and alowances 158.0 8.3 - - - - 1,745.4 91.7 - - 1,903.4 5.3 - 1,903.4 -
Total PROJECT COSTS 21,250.0 59.1 - - 786.4 2.2 9,176.3 25.5 4,753.3 13.2 35,966.0 100.0 4,093.5 31,086.1 786.4
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
240
Table 15: CSSP components by financiers – Cao Bang province
Local
IFAD Loan IFAD Grant GOV Taxes GOV Beneficiaries Total (Excl. Duties &
Amount % Amount % Amount % Amount % Amount % Amount % For. Exch. Taxes) Taxes
A. Civil Works
B. Equipment and materials 631.5 90.0 - - 70.2 10.0 - - - - 701.6 1.9 210.5 421.0 70.2
C. Vehicles 49.2 50.0 - - 49.2 50.0 - - - - 98.5 0.3 29.5 19.7 49.2
D. Consultancies
1. Technical Assistance 895.2 97.6 - - - - 22.0 2.4 - - 917.2 2.5 209.3 707.9 -
2. Research and Studies 1,310.8 40.0 - - 327.6 10.0 1,638.0 50.0 - - 3,276.5 8.8 - 2,948.8 327.6
Subtotal Consultancies 2,205.9 52.6 - - 327.6 7.8 1,660.0 39.6 - - 4,193.6 11.3 209.3 3,656.7 327.6
E. Training 1,581.3 84.2 - - - - 296.7 15.8 - - 1,878.0 5.1 - 1,878.0 -
F. Grants
1. Community Infrastructure Investment Grant
Community Infrastructure Investment Grants 8,572.4 60.0 - - - - 4,286.2 30.0 1,428.7 10.0 14,287.3 38.5 2,857.5 11,429.8 -
Community Infrastructure Design and Supervision 714.4 100.0 - - - - - - - - 714.4 1.9 - 714.4 -
Subtotal Community Infrastructure Investment Grant 9,286.7 61.9 - - - - 4,286.2 28.6 1,428.7 9.5 15,001.6 40.4 2,857.5 12,144.2 -
2. CIG Investment Grants 3,483.2 61.3 - - 59.7 1.1 387.5 6.8 1,750.0 30.8 5,680.4 15.3 943.9 4,676.8 59.7
4. APIF Grants 1,604.2 49.0 - - - - - - 1,669.6 51.0 3,273.8 8.8 - 3,273.8 -
Subtotal Grants 14,374.1 60.0 - - 59.7 0.2 4,673.7 19.5 4,848.4 20.2 23,955.8 64.5 3,801.4 20,094.8 59.7
G. Credit
1. WDF Financing for on-lending 2,250.0 100.0 - - - - - - - - 2,250.0 6.1 - 2,250.0 -
Subtotal Credit 2,250.0 100.0 - - - - - - - - 2,250.0 6.1 - 2,250.0 -
H. Operating costs - - - - 210.5 9.8 1,948.3 90.2 - - 2,158.8 5.8 89.6 1,858.7 210.5
I. Salaries and alowances 158.0 8.3 - - - - 1,745.4 91.7 - - 1,903.4 5.1 - 1,903.4 -
Total PROJECT COSTS 21,250.0 57.2 - - 717.2 1.9 10,324.1 27.8 4,848.4 13.1 37,139.7 100.0 4,340.2 32,082.3 717.2
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
241
Annex 2: Detailed Cost Tables
Table 1. Output 1: Strategic investment plan - Bac Kan and Cao Bang Unit
Detailed Costs Quantities Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Bac Kan
SIP preparation /a lumpsum 60.0 - - - - - 60.0
Training in use of SIP analysis lumpsum 10.1 - - - - - 10.1
Subtotal Bac Kan 70.1 - - - - - 70.1
B. Cao Bang
SIP preparation /b lumpsum 60.0 - - - - - 60.0
Training in use of SIP analysis lumpsum 10.1 - - - - - 10.1
Subtotal Cao Bang 70.1 - - - - - 70.1
Total 140.2 - - - - - 140.2
_________________________________
\a SIP should be reviewed in PY4
\b SIP should be reviewed in PY4
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
242
Table 2. Output 2: Climate change adaptation plan - Bac Kan
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Assessment of Climate Change impact and development of CCA approaches
Study tour of advanced CAP Provinces & lead CCA technical institutions lumpsum 1 - - - - - 1 6.000 6.1 - - - - - 6.1
Assessment of Provincial CCAP implementation and monitoring indicator development each 1 - - - - - 1 10.000 10.0 - - - - - 10.0
Project District studies/mapping of CC impact, vulnerability, risks, CAP priorities each 2 - - - 2 - 4 14.450 28.9 - - - 28.9 - 57.8
Support for non-project District studies/mapping of CC impact, vulnerability, risks, CAP priorities lumpsum - 1 - - 1 - 2 30.000 - 30.0 - - 30.0 - 60.0
Project District-level participatory diagnostic of commune-level CC impacts scale & ongoing adaptation lumpsum 4 - - - 4 - 8 5.000 20.0 - - - 20.0 - 40.0
Support to non-project District-level participatory diagnostic of commune-level CC impacts scale & ongoing adaptation lumpsum - 1 - - 1 - 2 30.000 - 30.0 - - 30.0 - 60.0
Commune-level identification of vulnerable areas, production systems, and populations pers-month 1.5 - - - 1 - 2.5 3.000 4.5 - - - 3.0 - 7.5
Formation of CC Integration Thematic Ad-hoc Group (TAG) lumpsum 1 - - - 0.5 - 1.5 3.500 3.5 - - - 1.8 - 5.3
Review, existing methodologies for commune-level CC planning pers-month 1 - - - 1 - 2 3.000 3.0 - - - 3.0 - 6.0
Technical workshops for CC integration into SEDP at commune and district-levels each 1 - - - 1 - 2 1.500 1.5 - - - 1.6 - 3.2
District-level diagnostic of ongoing adaptation /a pers-month 3 - - - 3 - 6 3.000 9.0 - - - 9.0 - 18.0
Development District-level zoning methodology, based on commune CC planning pers-month 1.5 - - - 0.5 - 2 3.000 4.5 - - - 1.5 - 6.0
Piloting & updating of commune-level, CBDRM-based methodology pers-month 1.5 - - - 1.5 - 3 3.000 4.5 - - - 4.5 - 9.0
CC Integration TAG progress reviews (meetings/field visits) pers-month 1 - - - 0.5 - 1.5 1.000 1.0 - - - 0.5 - 1.6
Development Provincial-level methodology for integration into sectoral SEDPs of commune & district vulnerability mapping & zoning pers-month - 2 - - - - 2 3.000 - 6.0 - - - - 6.0
Key stakeholder progress review & evaluation workshop pers-month 1 1 1 1 1 1 6 3.000 3.0 3.1 3.2 3.2 3.3 3.3 19.1
Update of Provincial Climate Change Action Plan pers-month 1.6666 - - - - - 1.6666 3.000 5.0 - - - - - 5.0
Development Provincial Climate Change Action Plan 2021-2025 pers-month - - - - 4 - 4 3.000 - - - - 12.0 - 12.0
Dissemination Provincial CAP - publications, brochures, newspaper, radio programmes, etc. per-annum 1 1 1 1 - - 4 3.000 3.0 3.1 3.2 3.2 - - 12.5
Climate change risks, vulnerabilities and adaption needs awareness building for decision makers per-annum 1 1 1 1 1 0.5 5.5 6.000 6.1 6.2 6.3 6.4 6.6 3.3 34.9
Cross-visits, District & Commune staff each 1 1.5 1 1 1 - 5.5 2.500 2.5 3.9 2.6 2.7 2.7 - 14.4
Technical assistance contract with national, lead CCA technical institution to support process lumpsum 3 2 3 1 2 0.5 11.5 3.000 9.1 6.2 9.5 3.2 6.6 1.7 36.2
Development of training materials and methodological guides for CCA in key value chains and WSCG lending pers-month - 2 1 - - - 3 3.000 - 6.0 3.0 - - - 9.0
Training of trainers for CCA in key value chains and WSCG lending pers-month - 2 2 - - - 4 3.000 - 6.0 6.0 - - - 12.0
Subtotal Assessment of Climate Change impact and development of CCA approaches 125.2 100.4 33.7 18.8 165.0 8.4 451.4
B. Dissemination of results and integration of climate change into SEDP planning process
Development District-level zoning methodology, based on commune CC planning pers-month 0.5 0.5 - - - - 1 3.000 1.5 1.5 - - - - 3.0
Development of training materials & methodological guides pers-month 1 2 - - - - 3 3.000 3.0 6.0 - - - - 9.0
Training of trainers pers-month 1 2 - - - - 3 7.475 7.5 15.4 - - - - 23.0
Dissemination - publications, brochures, newspaper, radio programs, etc. per-annum 1 1 1 1 1 - 5 3.000 3.0 3.1 3.2 3.2 3.3 - 15.8
Cross-visits, District, Commune and VDB staff/members each 1 1.5 2.5 2.5 2.5 - 10 5.000 5.1 7.7 13.1 13.4 13.7 - 53.0
Field visits/study tours for DPI planning staff each 1 1 1 1 1 - 5 2.000 2.0 2.1 2.1 2.1 2.2 - 10.5
Training courses for commune and district staff and key provincial-level technical staff per-annum 1 1 1 1 1 0.5 5.5 5.000 5.1 5.2 5.3 5.4 5.5 2.8 29.1
Publication of results (web-based publication, journals) each 1.2 1.2 1.2 1.2 - - 4.8 500 0.6 0.6 0.6 0.6 - - 2.5
Support to community PES agreements lumpsum - 4.0 4.0 4.0 4.0 4.0 20.0
Subtotal Dissemination of results and integration of climate change into SEDP planning process 27.8 45.5 28.3 28.8 28.6 6.8 165.8
Total 153.0 146.0 62.0 47.5 193.6 15.2 617.2
_________________________________
\a Incl. down-scaling of Provincial-level medium-term climate change impact scenarios & identification of vulnerable areas, production systems, and populations
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
243
Table 3. Output 2: Climate change adaptation plan - Cao Bang
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Assessment of Climate Change impact and development of CCA approaches
Study tour of advanced CAP Provinces & lead CCA technical institutions lumpsum 1 - - - - - 1 6.000 6.1 - - - - - 6.1
Assessment of Provincial CCAP implementation and monitoring indicator development each 1 - - - - - 1 10.000 10.0 - - - - - 10.0
Project District studies/mapping of CC impact, vulnerability, risks, CAP priorities each 2 - - - 2 - 4 14.450 28.9 - - - 28.9 - 57.8
Support for non-project District studies/mapping of CC impact, vulnerability, risks, CAP priorities lumpsum - 1 - - 1 - 2 30.000 - 30.0 - - 30.0 - 60.0
Project District-level participatory diagnostic of commune-level CC impacts scale & ongoing adaptation lumpsum 4 - - - 4 - 8 5.000 20.0 - - - 20.0 - 40.0
Support to non-project District-level participatory diagnostic of commune-level CC impacts scale & ongoing adaptation lumpsum - 1 - - 1 - 2 30.000 - 30.0 - - 30.0 - 60.0
Commune-level identification of vulnerable areas, production systems, and populations pers-month 1.5 - - - 1 - 2.5 3.000 4.5 - - - 3.0 - 7.5
Formation of CC Integration Thematic Ad-hoc Group (TAG) lumpsum 1 - - - 0.5 - 1.5 3.500 3.5 - - - 1.8 - 5.3
Review, existing methodologies for commune-level CC planning pers-month 1 - - - 1 - 2 3.000 3.0 - - - 3.0 - 6.0
Technical workshops for CC integration into SEDP at commune and district-levels each 1 - - - 1 - 2 1.500 1.5 - - - 1.6 - 3.2
District-level diagnostic of ongoing adaptation /a pers-month 3 - - - 3 - 6 3.000 9.0 - - - 9.0 - 18.0
Development District-level zoning methodology, based on commune CC planning pers-month 1.5 - - - 0.5 - 2 3.000 4.5 - - - 1.5 - 6.0
Piloting & updating of commune-level, CBDRM-based methodology pers-month 1.5 - - - 1.5 - 3 3.000 4.5 - - - 4.5 - 9.0
CC Integration TAG progress reviews (meetings/field visits) pers-month 1 - - - 0.5 - 1.5 1.000 1.0 - - - 0.5 - 1.6
Development Provincial-level methodology for integration into sectoral SEDPs of commune & district vulnerability mapping & zoning pers-month - 2 - - - - 2 3.000 - 6.0 - - - - 6.0
Key stakeholder progress review & evaluation workshop pers-month 1 1 1 1 1 1 6 3.000 3.0 3.1 3.2 3.2 3.3 3.3 19.1
Update of Provincial Climate Change Action Plan pers-month 1.6666 - - - - - 1.6666 3.000 5.0 - - - - - 5.0
Development Provincial Climate Change Action Plan 2021-2025 pers-month - - - - 4 - 4 3.000 - - - - 12.0 - 12.0
Dissemination Provincial CAP - publications, brochures, newspaper, radio programmes, etc. per-annum 1 1 1 1 - - 4 3.000 3.0 3.1 3.2 3.2 - - 12.5
Climate change risks, vulnerabilities and adaption needs awareness building for decision makers per-annum 1 1 1 1 1 0.5 5.5 6.000 6.1 6.2 6.3 6.4 6.6 3.3 34.9
Cross-visits, District & Commune staff each 1 1.5 1 1 1 - 5.5 2.500 2.5 3.9 2.6 2.7 2.7 - 14.4
Technical assistance contract with national, lead CCA technical institution to support process lumpsum 3 2 3 1 2 0.5 11.5 3.000 9.1 6.2 9.5 3.2 6.6 1.7 36.2
Development of training materials and methodological guides for CCA in key value chains and WSCG lending pers-month - 2 1 - - - 3 3.000 - 6.0 3.0 - - - 9.0
Training of trainers for CCA in key value chains and WSCG lending pers-month - 2 2 - - - 4 3.000 - 6.0 6.0 - - - 12.0
Subtotal Assessment of Climate Change impact and development of CCA approaches 125.2 100.4 33.7 18.8 165.0 8.4 451.4
B. Dissemination of results and integration of climate change into SEDP planning process
Development District-level zoning methodology, based on commune CC planning pers-month 0.5 0.5 - - - - 1 3.000 1.5 1.5 - - - - 3.0
Development of training materials & methodological guides pers-month 1 2 - - - - 3 3.000 3.0 6.0 - - - - 9.0
Training of trainers pers-month 1 2 - - - - 3 7.500 7.6 15.5 - - - - 23.0
Cross-visits, District, Commune and VDB staff/members each 1 1.5 2.5 2.5 2.5 - 10 5.200 5.3 8.0 13.7 13.9 14.2 - 55.1
Dissemination - publications, brochures, newspaper, radio programs, etc. per-annum 1 1 1 1 1 - 5 3.715 3.8 3.8 3.9 4.0 4.1 - 19.5
Field visits/study tours for DPI planning staff each 1 1 1 1 1 - 5 3.000 3.0 3.1 3.2 3.2 3.3 - 15.8
Training courses for commune and district staff and key provincial-level technical staff per-annum 1 1 1 1 1 0.5 5.5 5.000 5.1 5.2 5.3 5.4 5.5 2.8 29.1
Publication of results (web-based publication, journals) each 1.2 1.2 1.2 1.2 - - 4.8 500 0.6 0.6 0.6 0.6 - - 2.5
Support to community PES agreements lumpsum - 4.0 4.0 4.0 4.0 4.0 20.0
Subtotal Dissemination of results and integration of climate change into SEDP planning process 29.8 47.7 30.6 31.1 31.0 6.8 177.0
Total 155.0 148.1 64.3 49.9 196.0 15.2 628.4
_________________________________
\a Incl. down-scaling of Provincial-level medium-term climate change impact scenarios & identification of vulnerable areas, production systems, and populations
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
244
Table 4. Output 3: Climate-informed, market-oriented socio-economic development plans - Bac Kan
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. MOP-SEDP capacity established provincial level
National MoSEDP study tour for key provincial planners and political school staff lumpsum 14.7 - - - - - 14.7
Drafting of provincial MoSEDP decree lumpsum 4.0 - - - - - 4.0
Training of trainers for district and commune MoSEDP implementatoion course 1 1 - - - - 2 14.000 14.1 14.4 - - - - 28.6
Commune level market economy training (Bac Kan) /a course 15 20 40 37 - - 112 5.000 75.8 103.0 210.2 198.3 - - 587.2
Subtotal MOP-SEDP capacity established provincial level 108.6 117.4 210.2 198.3 - - 634.5
B. Core Project Commune & Village Participatory SEDP w/climate change integration
Promotional campaign/awareness raising for local officials & groups /b per-annum 2 2 3 - - - 7 4.300 8.7 8.9 13.6 - - - 31.1
Twinning of non-project communes in the MoSEDP planning process session - 10 40 32 - - 82 1.000 - 10.3 42.0 34.3 - - 86.6
Training of commune & village staff/facilitators /c course 15 20 40 37 - - 112 800 12.1 16.5 33.6 31.7 - - 94.0
Training of District staff course 2 2 3 - - - 7 2.000 4.0 4.1 6.3 - - - 14.5
Village/Commune rapid rural appraisal /d w/shop 60 60 120 96 - - 336 400 24.2 24.7 50.4 41.2 - - 140.6
Subtotal Core Project Commune & Village Participatory SEDP w/climate change integration 49.1 64.5 146.0 107.2 - - 366.7
C. Training of Trainers in MOP-SEDP Planning
International TA pers-month 0.5 0.25 - - - - 0.75 23.000 11.6 5.9 - - - - 17.5
National TA pers-month 3 3 3 - - - 9 1.500 4.5 4.5 4.5 - - - 13.5
Training sessions course 1 1 1 - - - 3 8.000 8.1 8.2 8.4 - - - 24.7
Subtotal Training of Trainers in MOP-SEDP Planning 24.2 18.7 12.9 - - - 55.8
D. MOP-SEDP Implementation
1. Village level PRA /e meeting 225 300 600 555 - - 1,680 400 90.0 120.0 240.0 222.0 - - 672.0
2. Medium-term MOP-SEDP development
District level /f meeting 2 2 3 - - - 7 700 1.4 1.4 2.1 - - - 4.9
Commune level /g meeting 15 20 40 37 - - 112 450 6.8 9.0 18.0 16.7 - - 50.4
Village level /h meeting 225 300 600 555 - - 1,680 220 49.5 66.0 132.0 122.1 - - 369.6
Subtotal Medium-term MOP-SEDP development 57.7 76.4 152.1 138.8 - - 424.9
3. Annual MOP-SEDP review
District level meeting 2 4 7 7 7 7 34 450 0.9 1.8 3.2 3.2 3.2 3.2 15.3
Commune level meeting 15 35 75 112 112 112 461 300 4.5 10.5 22.5 33.6 33.6 33.6 138.3
Village level meeting 225 525 1,200 1,680 1,680 1,680 6,990 130 29.3 68.3 156.0 218.4 218.4 218.4 908.7
Subtotal Annual MOP-SEDP review 34.7 80.6 181.7 255.2 255.2 255.2 1,062.3
Subtotal MOP-SEDP Implementation 182.3 277.0 573.8 615.9 255.2 255.2 2,159.2
Total 364.2 477.5 942.8 921.4 255.2 255.2 3,216.2
_________________________________
\a Implemented at district level and including key district staff
\b Each course covers one district
\c Includes 10 non-Programme communes in PY2
\d Assumes 15 villages per commune with RRA at micro-catchment level covering 5 villages
\e One off planning session on year of project entry
\f Assumes 3-year medium-term MOP-SEDPs
\g Assumes 3-year medium-term MOP-SEDPs
\h Assumes 15 villages per commune and 5-year medium-term MOP-SEDPs
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
245
Table 5. Output 3: Climate-informed, market-oriented socio-economic development plans - Cao Bang
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. MOP-SEDP capacity established provincial level
National MOP-SEDP study tour for key provincial planners and political school staff lumpsum 7.6 - - - - - 7.6
Drafting of provincial MOP-SEDP decree lumpsum 4.0 - - - - - 4.0
Training of trainers for district and commune MoSEDP implementatoion course 1 1 - - - - 2 7.500 7.6 7.7 - - - - 15.3
Subtotal MOP-SEDP capacity established provincial level 19.2 7.7 - - - - 26.9
B. Core Project Commune & Village Participatory SEDP w/climate change integration
Promotional campaign/awareness raising for local officials & groups /a per-annum 2 2 4 4 - - 12 5.000 10.1 10.3 21.0 21.4 - - 62.9
Twinning of non-project communes in the MOP-SEDP planning process session - 10 60 78 - - 148 500 - 5.2 31.5 41.8 - - 78.5
Training of commune & village staff/facilitators course 15 20 70 74 - - 179 250 3.8 5.2 18.4 19.8 - - 47.2
Training of District staff course 2 2 4 4 - - 12 2.000 4.0 4.1 8.4 8.6 - - 25.1
Village/Commune rapid rural appraisal /b w/shop 120 120 180 117 - - 537 500 60.6 61.8 94.6 62.7 - - 279.7
Subtotal Core Project Commune & Village Participatory SEDP w/climate change integration 78.5 86.5 173.9 154.3 - - 493.3
C. Training of Trainers in MOP-SEDP Planning
International TA pers-month 0.5 0.25 - - - - 0.75 23.000 11.6 5.9 - - - - 17.5
National TA pers-month 3 3 3 - - - 9 1.500 4.5 4.5 4.5 - - - 13.5
Training sessions course 1 1 1 - - - 3 8.000 8.1 8.2 8.4 - - - 24.7
Subtotal Training of Trainers in MOP-SEDP Planning 24.2 18.7 12.9 - - - 55.8
D. MOP-SEDP Implementation
1. Village level PRA /c meeting 225 300 600 555 - - 1,680 400 90.0 120.0 240.0 222.0 - - 672.0
2. Medium-term MOO-SEDP development
District level /d meeting 2 2 4 4 - - 12 700 1.4 1.4 2.8 2.8 - - 8.4
Commune level /e meeting 15 20 70 79 - - 184 450 6.8 9.0 31.5 35.6 - - 82.8
Village level /f meeting 225 300 1,050 1,110 - - 2,685 220 49.5 66.0 231.0 244.2 - - 590.7
Subtotal Medium-term MOO-SEDP development 57.7 76.4 265.3 282.6 - - 681.9
3. Annual MOP-SEDP review
District level meeting 2 4 8 12 12 12 50 450 0.9 1.8 3.6 5.4 5.4 5.4 22.5
Commune level meeting 15 35 105 179 179 179 692 300 4.5 10.5 31.5 53.7 53.7 53.7 207.6
Village level meeting 225 525 1,575 2,685 2,685 2,685 10,380 130 29.3 68.3 204.8 349.1 349.1 349.1 1,349.4
Subtotal Annual MOP-SEDP review 34.7 80.6 239.9 408.2 408.2 408.2 1,579.5
Subtotal MOP-SEDP Implementation 182.3 277.0 745.2 912.7 408.2 408.2 2,933.4
Total 304.2 389.9 932.0 1,067.0 408.2 408.2 3,509.4
_________________________________
\a One course per district
\b Assumes average of 15 villages per commune. RRA done with village micro-watershed clusters. Assumes 5 villages per cluster
\c One off planning session on year of project entry
\d Assumes medium-term MOP-SEDP every 5 years
\e Assumes medium-term MOP-SEDP completed every 5 years
\f Assumes 15 villages per commune and 5-year medium-term MOP-SEDP
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
246
Table 6. Output 4: Forest land allocation and use - Bac Kan /a Unit
Detailed Costs Quantities Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Forest land and forest use allocation
1. Community-based participatory forest land and use allocation
Community-based PFLAU training at district and commune level /b course 2.2 - - - - - 2.2 6.000 13.3 - - - - - 13.3
Build DoNRE capacity to map and allocate forest resorce. /c lumpsum 5.4 10.3 - - - - 15.7
Participatory forest land and forest and use allocation /d commune - 15 20 - - - 35 7.000 - 108.2 147.1 - - - 255.3
Subtotal Community-based participatory forest land and use allocation 18.7 118.5 147.1 - - - 284.3
2. Issuance of forest land use certificates /e hectare 4,000 8,000 5,000 - - - 17,000 80 320.0 640.0 400.0 - - - 1,360.0
3. Issuance of forest use certificates /f hectare - - - 2,700 5,600 3,018 11,318 80 - - - 216.0 448.0 241.4 905.4
Total 338.7 758.5 547.1 216.0 448.0 241.4 2,549.7
_________________________________
\a 10% community contribution in kind
\b Participatory forest land allocation and use (PFLAU)
\c Strenthen DoNRE GIS-based forest resource mapping and survey capacity.
\d Series of community decision meetings on forest land allocation at Programme commune/village levels
\e Includes USD10/ha for DARD and DoNRE assessment of the site for management plan
\f USD80/ha for the issuance of forest use certificates. Assume 10% beneficiary contribution and 30% of forest land use rights owners will not seek forest use rights certificates To be implemented following mid-term review when the benefit of forest use
certi
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
247
Table 7. Output 5:CIGs for climate adaptation - Bac Kan
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Farmer Interest Groups (CIG) established
Farmer group/Mass Organization awareness training on commodity production & CC adaptation /a each 15 20 15 20 - - 70 15.000 227.3 309.1 236.4 321.5 - - 1,094.3
Farmer common interest group contracts /b per-annum 200 400 300 - - - 900 3.500 700.0 1,400.0 1,050.0 - - - 3,150.0
Subtotal Farmer Interest Groups (CIG) established 927.3 1,709.1 1,286.4 321.5 - - 4,244.3
B. Vocational training delivered
1. Farm household technology and farming as a business training
a. Farm and business management TOT
International TA pers-month 0.5 0.25 0.25 - - - 1 23.000 11.6 5.9 6.0 - - - 23.6
National TA pers-month 1 1 1 - - - 3 1.500 1.5 1.5 1.5 - - - 4.5
Training of master trainers cours /c course 1 1 1 - - - 3 10.000 10.1 10.3 10.5 - - - 30.9
Training of trainers course /d course - 1 - 1 - - 2 10.000 - 10.3 - 10.7 - - 21.0
Training of F2F specialists /e course - 1 1 1 1 - 4 10.000 - 10.3 10.5 10.7 10.9 - 42.5
Preparation of a farm business manual /f lumpsum - 10.0 - 10.0 - 10.0 30.0
Subtotal Farm and business management TOT 23.2 48.3 28.6 31.4 10.9 10.0 152.5
b. FU training and certification of F2F trainers /g per-annum 1 1 1 1 1 - 5 25.000 25.0 25.0 25.0 25.0 25.0 - 125.0
Subtotal Farm household technology and farming as a business training 48.2 73.3 53.6 56.4 35.9 10.0 277.5
C. Monitoring of forest land /h
1. DARD and DoNRE monitoring of forest land per-annum - 35 35 35 35 35 175 800 - 28.0 28.0 28.0 28.0 28.0 140.0
D. Forage development
1. Forage systems technical assistance
International TA pers-month 1 1 1 1 - - 4 20.000 20.2 20.6 21.0 21.4 - - 83.3
National forage systems specialist pers-month 3 3 3 3 3 - 15 3.000 9.0 9.0 9.0 9.0 9.0 - 45.0
Subtotal Forage systems technical assistance 29.2 29.6 30.0 30.4 9.0 - 128.3
2. Development of forage production extension information lumpsum 5.1 5.2 5.3 - - - 15.5
3. Seed importation and local procurement
Initial forage seed procurement lumpsum 2 5 3 - - - 10 25.000 53.0 135.2 82.8 - - - 271.0
Seed procurement from participating farmers tons - 5 10 15 15 15 60 2.000 - 10.8 22.1 33.8 34.4 35.1 136.2
Subtotal Seed importation and local procurement 53.0 146.0 104.8 33.8 34.4 35.1 407.2
4. Seed VCU/DUS testing
National Centre for Plant Testing Services /i lumpsum 2.5 5.0 5.0 5.0 5.0 2.5 25.0
VCU testing of new varieties by provincial institutions /j lumpsum 2.5 5.0 5.0 5.0 5.0 2.5 25.0
Subtotal Seed VCU/DUS testing 5.0 10.0 10.0 10.0 10.0 5.0 50.0
5. Vegetative reproduction
Contract production thousands 10 25 25 25 25 25 135 50 0.5 1.4 1.4 1.4 1.4 1.5 7.6
Distribution thousands 0.1 0.1 0.1 0.1 0.1 0.1 0.8
Subtotal Vegetative reproduction 0.6 1.5 1.5 1.5 1.6 1.6 8.3
6. Forage seed production training
Regional study tours tours 1 1 - - - - 2 5.000 5.1 5.2 - - - - 10.2
National stakeholder workshop for start-up & review w/shop 1 1 1 1 1 1 6 2.500 2.5 2.6 2.6 2.7 2.7 2.8 15.9
Prov/district workshops for local start-up/review w/shop 1 2 2 2 - - 7 2.000 2.0 4.1 4.2 4.3 - - 14.6
Exchange visits field technicians visits 4 4 4 4 4 - 20 600 2.4 2.5 2.5 2.6 2.6 - 12.6
Exchange visits farmer reps visits 5 10 10 10 10 10 55 250 1.3 2.6 2.6 2.7 2.7 2.8 14.7
Subtotal Forage seed production training 13.3 16.9 12.0 12.2 8.1 5.6 68.0
7. Forage programme field equipment
Miscellaneous field equipment for District staff set 4 - - - - - 4 2.000 8.5 - - - - - 8.5
8. Management of planting materials
Seed scarification and fumigation Ton - 0.4 0.9 1.4 1.4 1.4 5.4
Seed storage Ton - 0.5 1.1 1.7 1.7 1.8 6.8
Seed packaging and labelling Ton - 0.6 1.3 2.0 2.1 2.1 8.2
Seed distribution Ton - 1.0 2.1 3.2 3.2 3.3 12.7
Subtotal anagement of planting materials - 2.6 5.4 8.2 8.4 8.6 33.2
Subtotal Forage development 114.6 211.8 169.0 96.2 71.5 55.9 718.9
Total 1,090.1 2,022.2 1,536.9 502.2 135.4 93.9 5,380.7
_________________________________
\a Biennial CCA training and extension programme per Programme commune.
\b Up to USD 3,500 each and about two per village. Government contribution through Programme 147
\c Three week training course
\d Three Training of Trainers (ToT) specialist in each provincial Farmers Union (FU)
\e 30 F2F farm business management specialist in each province. Fifteen per course with refresher training after one year
\f The farm business manual will detail livestock and crop budgets and good husbandry practices and be updated biennially
\g FU managed F2F trainer technical and pedagogical skill upgrading leading to certification as F@F advisers.
\h District DoNRE/DARD jont monitoring of forest land condition on annual basis
\i NCPT will support SCCP seed testing and registration process.
\j New forage varieties approved for importation subject to successful testing value for cultivation ans use (VCU) testing.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
248
Table 8. Output 5:CIGs for climate adaptation - Cao Bang
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Farmer Interest Groups (CIG) established
Farmer group/Mass Organization awareness training on commodity production & CC adaptation /a each 15 20 15 20 - - 70 15.000 227.3 309.1 236.4 321.5 - - 1,094.3
Farmer common interest group contracts /b per-annum 200 400 400 - - - 1,000 3.500 700.0 1,400.0 1,400.0 - - - 3,500.0
Subtotal Farmer Interest Groups (CIG) established 927.3 1,709.1 1,636.4 321.5 - - 4,594.3
B. Vocational training delivered
1. Farm household technology and farming as a business training
a. Farm and business management TOT
International TA pers-month 0.5 0.25 0.25 - - - 1 23.000 11.6 5.9 6.0 - - - 23.6
National TA pers-month 1 1 1 - - - 3 1.500 1.5 1.5 1.5 - - - 4.5
Training of master trainers cours /c course 1 1 1 - - - 3 10.000 10.1 10.3 10.5 - - - 30.9
Training of trainers course /d course - 1 - 1 - - 2 10.000 - 10.3 - 10.7 - - 21.0
Training of F2F specialists /e course - 1 1 1 1 - 4 10.000 - 10.3 10.5 10.7 10.9 - 42.5
Preparation of a farm business manual /f lumpsum - 10.0 - 10.0 - 10.0 30.0
Subtotal Farm and business management TOT 23.2 48.3 28.6 31.4 10.9 10.0 152.5
b. FU training and certification of F2F trainers /g per-annum 1 1 1 1 1 - 5 25.000 25.0 25.0 25.0 25.0 25.0 - 125.0
Subtotal Farm household technology and farming as a business training 48.2 73.3 53.6 56.4 35.9 10.0 277.5
C. Monitoring of forest land /h
1. DARD and DoNRE monitoring of forest land per-annum - 35 35 35 35 35 175 800 - 28.0 28.0 28.0 28.0 28.0 140.0
D. Forage development
1. Forage systems technical assistance
International TA pers-month 1 1 1 1 - - 4 20.000 20.2 20.6 21.0 21.4 - - 83.3
National forage systems specialist pers-month 3 3 3 3 3 - 15 3.000 9.0 9.0 9.0 9.0 9.0 - 45.0
Subtotal Forage systems technical assistance 29.2 29.6 30.0 30.4 9.0 - 128.3
2. Development of forage production extension information lumpsum 5.1 5.2 5.3 - - - 15.5
3. Seed importation and local procurement
Initial forage seed procurement lumpsum 2 4.99 3 - - - 9.99 25.000 53.0 134.9 82.8 - - - 270.7
Seed procurement from participating farmers tons - 5 10 15 15 15 60 2.000 - 10.8 22.1 33.8 34.4 35.1 136.2
Subtotal Seed importation and local procurement 53.0 145.8 104.8 33.8 34.4 35.1 406.9
4. Seed VCU/DUS testing
National Centre for Plant Testing Services /i lumpsum 2.5 5.0 5.0 5.0 5.0 2.5 25.0
VCU testing of new varieties by provincial institutions /j lumpsum 2.5 5.0 5.0 5.0 5.0 2.5 25.0
Subtotal Seed VCU/DUS testing 5.0 10.0 10.0 10.0 10.0 5.0 50.0
5. Vegetative reproduction
Contract production thousands 10 25 25 25 25 25 135 50 0.5 1.4 1.4 1.4 1.4 1.5 7.6
Distribution thousands 0.1 0.1 0.1 0.1 0.1 0.1 0.8
Subtotal Vegetative reproduction 0.6 1.5 1.5 1.5 1.6 1.6 8.3
6. Forage seed production training
Regional study tours tours 1 1 - - - - 2 5.000 5.1 5.2 - - - - 10.2
National stakeholder workshop for start-up & review w/shop 1 1 1 1 1 1 6 2.500 2.5 2.6 2.6 2.7 2.7 2.8 15.9
Prov/district workshops for local start-up/review w/shop 1 2 2 2 - - 7 2.000 2.0 4.1 4.2 4.3 - - 14.6
Exchange visits field technicians visits 4 4 4 4 4 - 20 600 2.4 2.5 2.5 2.6 2.6 - 12.6
Exchange visits farmer reps visits 5 10 10 10 10 10 55 250 1.3 2.6 2.6 2.7 2.7 2.8 14.7
Subtotal Forage seed production training 13.3 16.9 12.0 12.2 8.1 5.6 68.0
7. Forage programme field equipment
Miscellaneous field equipment for District staff set 4 - - - - - 4 2.000 8.5 - - - - - 8.5
8. Management of planting materials
Seed scarification and fumigation Ton - 0.4 0.9 1.4 1.4 1.4 5.4
Seed storage Ton - 0.5 1.1 1.7 1.7 1.8 6.8
Seed packaging and labelling Ton - 0.6 1.3 2.0 2.1 2.1 8.2
Seed distribution Ton - 1.0 2.1 3.2 3.2 3.3 12.7
Subtotal anagement of planting materials - 2.6 5.4 8.2 8.4 8.6 33.2
Subtotal Forage development 114.6 211.5 169.0 96.2 71.5 55.9 718.7
Total 1,090.1 2,021.9 1,886.9 502.2 135.4 93.9 5,730.4
_________________________________
\a Biennial CCA training and extension programme per Programme commune.
\b Up to USD 3,500 each and about two per village. Government contribution through Programme 147
\c Three week training course
\d Three Training of Trainers (ToT) specialist in each provincial Farmers Union (FU)
\e 30 F2F farm business management specialist in each province. Fifteen per course with refresher training after one year
\f The farm business manual will detail livestock and crop budgets and good husbandry practices and be updated biennially
\g FU managed F2F trainer technical and pedagogical skill upgrading leading to certification as F@F advisers.
\h District DoNRE/DARD jont monitoring of forest land condition on annual basis
\i NCPT will support SCCP seed testing and registration process.
\j New forage varieties approved for importation subject to successful testing value for cultivation ans use (VCU) testing.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
249
Table 9. Output 6: Community infrastructure - Bac Kan
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs /a
A. Community infrastructure developed
Community infrastructure grants /b lump sum 2,000.0 4,100.0 4,100.0 2,559.8 - - 12,759.8
Payment for Environment Services PES) grants /c lumpsum - 100.0 150.0 150.0 150.0 150.0 700.0
Design and supervision (5%) lumpsum 100.0 205.0 205.0 128.0 - - 638.0
Youth-targeted vocational training programmes /d per-annum 2 2 3 - - - 7 50.000 101.0 103.0 157.6 - - - 361.6
Total 2,201.0 4,508.0 4,612.6 2,837.8 150.0 150.0 14,459.4
_________________________________
\a Operational costs linked to this component are budgeted under the Programme Management component.
\b Up to USD 400,000 per commune, phased over three years. Financing: IFAD 60%; Beneficiaries 10%; GOV 30%.
\c 20% in kind beneficiary contribution
\d One training package per district
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
250
Table 10. Output 6: Community infrastructure - Cao Bang
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs /a
A. Community infrastructure developed
Community infrastructure grants /b lump sum 2,000.0 4,400.0 4,400.0 3,487.3 - - 14,287.3
Design and supervision (5%) lumpsum 100.0 220.0 220.0 174.4 - - 714.4
Youth-targeted vocational training programmes /c per-annum 2 2 4 4 - - 12 50.000 101.0 103.0 210.2 214.4 - - 628.5
Total 2,201.0 4,723.0 4,830.2 3,876.0 - - 15,630.2
_________________________________
\a Operational costs linked to this component are budgeted under the Programme Management component.
\b Up to USD 400,000 per commune, phased over three years. Financing: IFAD 60%; Beneficiaries 10%; GOV 30%.
\c One training package per district
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
251
Table 11. Output 7: Rural financial services - Bac Kan
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. WDF Capacity Development
International TA for WDF /a pers-month 1.15 - - - - - 1.15 20.000 23.2 - - - - - 23.2
Microfinance Management Course /b person 8 8 8 - - - 24 350 2.8 2.9 2.9 - - - 8.7
Training courses for WDF staff in WDF/SCG methodology /c w/shop 1 1 - - - - 2 5.400 5.5 5.6 - - - - 11.0
Staff exchange programme with other WDFs /d lumpsum 1 1 - - - - 2 3.000 3.0 3.1 - - - - 6.1
Training for WU provincial and district staff /e w/shop 1 1 - - - - 2 2.500 2.5 2.6 - - - - 5.1
Training for commune and village WU staff /f w/shop 6 - - - - - 6 1.600 9.7 - - - - - 9.7
Equipment for provincial WDF /g set 1 - - - - - 1 5.000 5.3 - - - - - 5.3
Equipment for WDF district offices /h set 1 - - - - - 1 9.000 9.5 - - - - - 9.5
4-WD vehicle for WDF /i unit 1 - - - - - 1 65.000 65.7 - - - - - 65.7
Motorbikes for district branches of WDF /j unit 6 - - - - - 6 4.000 24.2 - - - - - 24.2
Social Fund offices at district level lumpsum 0.4 - - - - - 0.4 40.000 16.2 - - - - - 16.2
Subtotal WDF Capacity Development 167.7 14.1 2.9 - - - 184.7
B. Establishment of new SCGs
Village mobilisation meetings /k meeting 80 67 - - - - 147 100 8.1 6.9 - - - - 15.0
Printing of information leaflets /l lumpsum 1 - - - - - 1 5.000 5.1 - - - - - 5.1
Training of group leaders /m w/shop 4 4 - - - - 8 2.000 8.1 8.2 - - - - 16.3
Follow-up courses for group leaders /n w/shop - 4 4 - - - 8 1.000 - 4.1 4.2 - - - 8.3
Training of CSCG members /o w/shop 80 67 - - - - 147 50 4.0 3.5 - - - - 7.5
BDS course for CSCG members /p w/shop - 30 30 30 - - 90 750 - 23.2 23.6 24.1 - - 70.9
Seed on-lending capital for WDF /q lumpsum/group 80 147 67 - - - 294 5.102 408.2 750.0 341.8 - - - 1,500.0
Subtotal Establishment of new SCGs 433.4 795.9 369.7 24.1 - - 1,623.1
C. Pre-Transformation Support to WU
International TA for Business Plan 2021-2023 /r lumpsum - - - - 1.3 - 1.3 20.000 - - - - 28.4 - 28.4
Transformation support /s lumpsum - - - - 1 1 2 40.000 - - - - 43.7 44.6 88.3
Subtotal Pre-Transformation Support to WU - - - - 72.2 44.6 116.8
Total 601.1 810.0 372.6 24.1 72.2 44.6 1,924.6
_________________________________
\a One-month international TA to support the design of Strategic Plan 2017-2022 for the WDF, lumpsum covering all costs.
\b Training courses on microfinance for WDF management at Vietnam Misrofinance Working Group, Ha Noi, consisting of various types of microfinance modules.
\c One week course at provincial level for WDF management and operational staff in province and districts, based on new Strategy and Manuals; second course in 2018 a refresher course and a start-up course
\d Allocation for costs of staff exchange operations with other, more mature WDFs; costs cover mainly travel and DSAs.
\e 4-day training course at province for WU provincial and district staff on WDF approach and procedures.
\f Training at district for commune and village WU staff on WDF approach and procedures, 4-day course
\g For the WDF provincial office, a set covering A/C, 2 photocopiers/printers, 1 computer, calculators, furniture and minor office equipment.
\h For WDF district offices, a set covering equipment for 1 full new branch, and 1 photocopier and 2 laptops for Na Ri and Ba Be branch each.
\i One standard 4-W-D vehicle for the WDF Provincial Office, to support the management and follow-up of the Fund operations in the province.
\j 2 motorbikes for each WDF district offices for implementation of the CSCG activities.
\k 1-day mobilisation meeting in each village, in which a CSCG will be established, total 147 villages/groups. Costs cover the travel expenses of the WDF/WU district and commune staff.
\l 5,000 information leaflets on the WDF method and products, to be printed at USD 5,000, to be distributed in village mobilisation meetings.
\m 3-day courses at district level for all group leaders, around 25 per course, before group member training. Budget covers travel, lunches, teas, venues etc. Trainers from the WDF/WU.
\n 1.5-day re-fresher courses at district level for all group leaders, around 25 per course. Budget covers travel, lunches, teas, venues etc. Trainers from the WDF/WU.
\o Basic course for members at group level on WDF/CSCG methodology and small business management. As provided by the WU staff, the only programme costs related to DSAs of the travelling WDF/WU staff, based on government rates.
\p 2-day business development courses, with value chain/climate change adaptation focus, at commune level, one per commune per year, each covering 25 trainees, total coverage 2,200 members, budget covering travel, accommodation, meals, trainers fees and
venue
\q Seed on-lending capital for each established group based on average allocation of USD 10,204 per group of average 15 members (allowing an average loan of VND 15 million per member). Disbursements from the MoF subsidiary credit to WDF: 50% during the
establ
\r One month international TA to support the design of the 3-year Business Plan for the new MFI for 2021-2023. This document is the key Attachment required by the State Bank of Vietnam for an MFI registration application.
\s Lumpsum allocation to support the transformation of the WDF into a registered microfinance institution. Actual support activities to be defined later as the transformation process progresses. Can include both TA and especially improvements in the
branches
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
252
Table 12. Output 7: Rural financial services - Cao Bang
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. WDF Capacity Development
International TA for WDF /a pers-month 1.15 - - - - - 1.15 20.000 23.2 - - - - - 23.2
National TA for WDF /b pers-month 3 - - - - - 3 3.000 9.0 - - - - - 9.0
Microfinance Management Course /c lumpsum 1 - - - - - 1 10.000 10.1 - - - - - 10.1
Training courses for WDF staff in WDF/SCG methodology /d w/shop 1 1 - - - - 2 5.400 5.5 5.6 - - - - 11.0
Staff exchange programme with other WDFs /e lumpsum 1 1 1 - - - 3 3.000 3.0 3.1 3.2 - - - 9.3
Loan management software /f set - 1 - - - - 1 20.000 - 21.6 - - - - 21.6
Equipment for provincial WDF /g set 1 3 - - - - 4 4.000 4.2 13.0 - - - - 17.2
Equipment for WDF district offices /h set 5 - - - - - 5 3.000 15.9 - - - - - 15.9
4-WD vehicle for WDF /i unit 1 - - - - - 1 65.000 65.7 - - - - - 65.7
Motorbikes for district branches of WDF /j unit 2 6 - - - - 8 4.000 8.1 24.7 - - - - 32.8
Subtotal WDF Capacity Development 144.7 68.0 3.2 - - - 215.8
B. Establishment of new SCGs
Village mobilisation meetings /k meeting 78 234 40 120 - - 472 100 7.9 24.1 4.2 12.9 - - 49.0
Printing of information leaflets /l lumpsum 1 - - - - - 1 5.000 5.1 - - - - - 5.1
Training of group leaders /m w/shop 3 9 2 5 - - 19 2.000 6.1 18.5 4.2 10.7 - - 39.5
Follow-up courses for group leaders /n w/shop - 3 9 2 5 - 19 1.000 - 3.1 9.5 2.1 5.5 - 20.2
Training of CSCG members /o w/shop 78 234 40 120 - - 472 50 3.9 12.1 2.1 6.4 - - 24.5
BDS course for CSCG members /p w/shop - 30 30 30 30 - 120 750 - 23.2 23.6 24.1 24.6 - 95.5
Seed on-lending capital for WDF /q lumpsum/group 39 156 137 80 60 - 472 4.767 185.9 743.7 653.1 381.4 286.0 - 2,250.0
Subtotal Establishment of new SCGs 208.8 824.6 696.7 437.6 316.1 - 2,483.9
C. Pre-Transformation Support to WU
International TA for Business Plan 2021-2023 /r lumpsum - - - - 1.3 - 1.3 20.000 - - - - 28.4 - 28.4
Transformation support /s lumpsum - - - - 1 1 2 40.000 - - - - 43.7 44.6 88.3
Subtotal Pre-Transformation Support to WU - - - - 72.2 44.6 116.8
Total Investment Costs 353.5 892.6 699.8 437.6 388.2 44.6 2,816.5
II. Recurrent Costs
A. WDF Capacity Development
Operational support to WDF /t lumpsum 1 4 - - - - 5 10.000 10.6 43.3 - - - - 53.9
Total Recurrent Costs 10.6 43.3 - - - - 53.9
Total 364.1 935.9 699.8 437.6 388.2 44.6 2,870.3
_________________________________
\a One-month international TA to support the design of Strategic Plan 2017-2022 for the WDF, lumpsum covering all costs.
\b Local TA to update the WDF operations and related manuals to be in line with the new Strategic Plan; budget includes the fee, travel and DSAs.
\c One-week course on best practices and microfinance management by Vietnam Microfinance Working Group, for Management Council, Control Board and senior management of WDF.
\d One week course at provincial level for WDF management and operational staff in province and districts, based on new Strategy and Manuals; second course in 2018 a refresher course and a start-up course
\e Allocation for costs of staff exchange operations with other, more mature WDFs; costs cover mainly travel and DSAs.
\f Procurement of accounting and loan management software; based on specifications, experiences and budgets from more mature WDFs.
\g For the WDF provincial office, a set covering A/C, 2 photocopiers/printers, 1 computer, calculators, furniture and minor office equipment.
\h For WDF district offices, a set covering 3 computers, a printer, furniture, cabinets, calculators, and minor office equipment.
\i One standard 4-W-D vehicle for the WDF Provincial Office, to support the management and follow-up of the Fund operations in the province.
\j 2 motorbikes for each WDF district offices for implementation of the CSCG activities.
\k 1-day mobilisation meeting in each village, in which a CSCG will be established, total 472 villages/groups. Costs cover the travel expenses of the WDF/WU district and commune staff.
\l 5,000 information leaflets on the WDF method and products, to be printed at USD 5,000, to be distributed in village mobilisation meetings.
\m 3-day courses at district level for all group leaders, around 25 per course, before group member training. Budget covers travel, lunches, teas, venues etc. Trainers from the WDF/WU.
\n 1,5-day re-fresher courses at district level for all group leaders, around 25 per course. Budget covers travel, lunches, teas, venues etc. Trainers from the WDF/WU.
\o Basic course for members at group level on WDF/CSCG methodology and small business management. As provided by the WU staff, the only programme costs related to DSAs of the travelling WDF/WU staff, based on government rates.
\p 2-day business development courses, with value chain/climate change adaptation focus, at commune level, one per commune per year, each covering 25 trainees, total coverage 3,000 members, budget covering travel, accommodation, meals, trainers fees and
venue
\q Seed lending capital for each established group based on average allocation of USD 4,767 per group (allowing an average loan of VND 15 million per member). Disbursements from the MoF subsidiary credit to WDF: 50% during the establishment year of each
group
\r One month international TA to support the design of the 3-year Business Plan for the new MFI for 2021-2023. This document is the key Attachment required by the State Bank of Vietnam for an MFI registration application.
\s Lumpsum allocation to support the transformation of the WDF into a registered microfinance institution. Actual support activities to be defined later as the transformation process progresses. Can include both TA and especially improvements in the
branches
\t Initial operational support to cover salaries of the WDF district branches (Branch Manager, Credit Officer, Accountant) for 2 years for the first branch and for one year for the next 3 branches.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
253
Table 13. Output 8: Agribusiness competitiveness fund - Bac Kan
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs /a
A. Value Chain business development
International TA pers-month 1 0.5 0.5 0.5 - - 2.5 20.000 20.2 10.3 10.5 10.7 - - 51.7
National TA pers-month 6 6 6 6 - - 24 3.000 18.0 18.0 18.0 18.0 - - 72.0
TA in support of APIF grant beneficiary business development planning lumpsum 5.0 10.0 20.0 20.0 - - 55.0
Business management training /b course - 1 1 1 1 - 4 8.000 - 8.2 8.4 8.6 8.7 - 34.0
Subtotal Value Chain business development 43.2 46.5 56.9 57.3 8.7 - 212.7
B. Co-financing value chain investments
Entrepreneur briefings on co-financed value chain investment each 2 2 2 2 - - 8 2.000 4.0 4.1 4.2 4.3 - - 16.7
APIF Investments /c lumpsum 300.0 600.0 800.0 800.0 500.0 - 3,000.0
Design and Supervision lumpsum 30.0 40.0 65.0 75.0 45.9 - 255.9
Subtotal Co-financing value chain investments 334.0 644.1 869.2 879.3 545.9 - 3,272.6
Total 377.2 690.7 926.1 936.6 554.6 - 3,485.2
_________________________________
\a Operational costs linked to this component are budgeted under the Programme Management component.
\b Structured annual two week courses for PPP business managers
\c Grants up to USD 75,000 per enterprise.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
254
Table 14. Output 8: Agribusiness competitiveness fund - Cao Bang
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs /a
A. Value Chain business development
International TA pers-month 1 0.5 0.5 0.5 - - 2.5 20.000 20.2 10.3 10.5 10.7 - - 51.7
National TA pers-month 6 6 6 6 - - 24 3.000 18.0 18.0 18.0 18.0 - - 72.0
TA in support of APIF grant beneficiary business development planning lumpsum 5.0 10.0 20.0 20.0 - - 55.0
Business management training /b course - 1 1 1 1 - 4 8.000 - 8.2 8.4 8.6 8.7 - 34.0
Subtotal Value Chain business development 43.2 46.5 56.9 57.3 8.7 - 212.7
B. Co-financing value chain investments
Entrepreneur briefings on co-financed value chain investment each 2 2 2 2 - - 8 2.000 4.0 4.1 4.2 4.3 - - 16.7
APIF Investments /c lumpsum 300.0 600.0 800.0 1,000.0 573.8 - 3,273.8
Design and Supervision lumpsum 30.0 40.0 65.0 75.0 45.9 - 255.9
Subtotal Co-financing value chain investments 334.0 644.1 869.2 1,079.3 619.7 - 3,546.4
Total 377.2 690.7 926.1 1,136.6 628.4 - 3,759.0
_________________________________
\a Operational costs linked to this component are budgeted under the Programme Management component.
\b Structured annual two week courses for PPP business managers
\c Grants up to USD 75,000 per enterprise.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
255
Table 15. Project Coordination - Bac Kan
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Office equipment /a
Province level set 1 - - - - - 1 70.000 74.2 - - - - - 74.2
District level set 4 - - - - - 4 7.000 29.7 - - - - - 29.7
Commune level set 15 35 35 35 35 35 190 2.500 39.8 94.6 96.5 98.5 100.4 102.5 532.3
Subtotal Office equipment 143.7 94.6 96.5 98.5 100.4 102.5 636.3
B. Upgrading accounting/MIS
Installation of upgraded accounting system lumpsum 10.6 - - - - - 10.6
Development of Programme MIS /b lumpsum 10.0 - - - - - 10.0
Subtotal Upgrading accounting/MIS 20.6 - - - - - 20.6
C. Technical Assistance, Studies and Workshops
PIM preparation lumpsum 10.0 - - - - - 10.0
Environment and Social Management Plan lumpsum 10.0 - - - - - 10.0
Start-up workshop w/shop 1 - - - - - 1 7.400 7.5 - - - - - 7.5
Annual review and planning workshop w/shop - 1 1 1 1 1 5 4.000 - 4.1 4.2 4.3 4.4 4.5 21.4
Knowledge Management-Publications per-annum - 5.2 5.3 5.4 5.5 - 21.2
PCU staff training /c lumpsum 40.4 20.6 - - - - 61.0
Baseline Survey /d lumpsum 1 - - - - - 1 30.000 30.0 - - - - - 30.0
Technical Advisory Group /e per-annum 2 2 2 2 2 2 12 3.000 6.0 6.0 6.0 6.0 6.0 6.0 36.0
Ad-hoc Studies and Assistances lumpsum - 1 1 1 1 - 4 10.000 - 10.0 10.0 10.0 10.0 - 40.0
Mid-term Review lumpsum - - 1 - - - 1 20.000 - - 20.0 - - - 20.0
Final Impact Survey lumpsum - - - - - 1 1 20.000 - - - - - 20.0 20.0
Subtotal Technical Assistance, Studies and Workshops 103.9 45.9 45.5 25.6 25.8 30.5 277.2
Total Investment Costs 268.2 140.5 142.0 124.1 126.3 132.9 934.0
II. Recurrent Costs
A. Salaries
1. Province level
Project Coordinator pers-month 12 12 12 12 12 12 72 700 8.5 8.7 8.8 9.0 9.2 9.4 53.5
Deputy Project Coordinator pers-month 12 12 12 12 12 12 72 650 7.9 8.0 8.2 8.4 8.5 8.7 49.7
Procurement Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Financial Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Procurement Specialist pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0
Accountant pers-month 24 24 24 24 24 24 144 600 14.5 14.8 15.1 15.4 15.7 16.1 91.7
MOP-SEDP Coordinator pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Value Chain Coordinator pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0
Community-based CCA and DRM Officer pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0
Rural Finance Programme Coordinator pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Rural Finance Officer pers-month 12 12 12 12 12 12 72 500 6.1 6.2 6.3 6.4 6.6 6.7 38.2
Engineer pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Monitoring and Evaluation/KM Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Cashier pers-month 12 12 12 12 12 12 72 450 5.5 5.6 5.7 5.8 5.9 6.0 34.4
Translator pers-month 24 24 24 24 24 24 144 550 13.3 13.6 13.9 14.1 14.4 14.7 84.1
Admin Support Staff pers-month 12 12 12 12 12 12 72 300 3.6 3.7 3.8 3.9 3.9 4.0 22.9
Driver pers-month 36 36 36 36 36 36 216 350 12.7 13.0 13.2 13.5 13.8 14.1 80.3
Subtotal Province level 135.7 138.5 141.2 144.1 146.9 149.9 856.3
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
256
Table 15 (continued)
2. District level
MOP-SEDP Support Officer pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6
Business Development Officer pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6
Monitoring and Evaluation Officer/KM pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6
Commune accountant /f pers-month 60.12 60.12 60.12 60.12 60.12 - 300.6 500 30.4 31.0 31.6 32.2 32.9 - 158.0
Subtotal District level 95.8 97.7 99.7 101.7 103.7 72.3 570.9
3. Commune level
Commune management budget /g lumpsum 30.3 30.9 31.5 32.2 32.8 - 157.7
Subtotal Salaries 261.9 267.1 272.4 277.9 283.4 222.1 1,584.8
B. DSA (local travel) lumpsum 1 1 1 1 1 1 6 50.000 50.5 51.5 52.5 53.6 54.7 55.8 318.6
C. Operation and Maintenance
1. Province level
Vehicle O&M /h per-annum 31.8 16.2 16.6 16.9 17.2 17.6 116.3
Office equipment O&M per-annum 14.4 9.5 9.7 9.8 10.0 10.2 63.6
Subtotal Province level 46.2 25.7 26.2 26.7 27.3 27.8 179.9
D. Other Operating Costs
1. Province level
Office Utilities per-annum 1 1 1 1 1 1 6 6.000 6.4 6.5 6.6 6.8 6.9 7.0 40.1
International travel per-annum - 1 1 1 1 1 5 10.000 - 10.3 10.5 10.7 10.9 11.2 53.6
Banking Services per-annum 1 1 1 1 1 1 6 3.600 3.8 3.9 4.0 4.1 4.1 4.2 24.1
Audit per-annum 1 1 1 1 1 1 6 15.000 15.9 16.2 16.6 16.9 17.2 17.6 100.3
Telecommunication per-annum 1 1 1 1 1 1 6 18.000 19.1 19.5 19.9 20.3 20.7 21.1 120.4
Stationery per-annum 1 1 1 1 1 1 6 6.000 6.4 6.5 6.6 6.8 6.9 7.0 40.1
PSC meetings per-annum 1 1 1 1 1 1 6 2.000 2.1 2.2 2.2 2.3 2.3 2.3 13.4
Programme M&E /i per-annum 5.3 5.4 5.5 5.6 5.7 5.9 33.4
Other /j per-annum 1 1 1 1 1 1 6 23.000 24.4 24.9 25.4 25.9 26.4 26.9 153.9
Subtotal Province level 83.4 95.3 97.2 99.2 101.2 103.2 579.4
2. District level per-annum 4 4 4 4 4 4 24 5.000 21.2 21.6 22.1 22.5 23.0 23.4 133.8
3. Commune level per-annum 15 35 35 35 35 35 190 2.500 39.8 94.6 96.5 98.5 100.4 102.5 532.3
Subtotal Other Operating Costs 144.3 211.6 215.8 220.2 224.6 229.1 1,245.6
Total Recurrent Costs 502.9 555.9 567.0 578.4 589.9 534.7 3,328.8
Total 771.0 696.4 709.0 702.5 716.2 667.7 4,262.8
_________________________________
\a For computers, printers, copy machines and furniture.
\b To be based on 3PAD MIS work and developed jointly by both provinces.
\c Including intensive English courses.
\d Including RIMS (IFAD monitoring system).
\e To cover cost of twice yearly 2 day joint provincial TAG meeting of up to 12 specialists to review project reports and technical progress and advise project management
\f Ten Programme employed commune accountants will be based at district or commune level and each will cover 3 communes.
\g Commune allocated, based on level of participation of commune staff
\h The unit cost covers the annual O&M costs of the vehicle including petrol, insurance, spare parts, servicing, repairing and parking.
\i For M&E data collection and management at province, district, commune and village level, supported by specific impact and technical studies that are separately financed.
\j Includes copying service, media, web, representation, etc.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 9. Project cost and financing
257
Table 16. Project Coordination - Cao Bang
Detailed Costs Quantities Unit Cost Totals Including Contingencies (US$ '000)
Unit 2017 2018 2019 2020 2021 2022 Total (US$) 2017 2018 2019 2020 2021 2022 Total
I. Investment Costs
A. Office equipment /a
Province level set 1 - - - - - 1 70.000 74.2 - - - - - 74.2
District level set 4 - - - - - 4 7.000 29.7 - - - - - 29.7
Commune level set 15 35 35 35 35 35 190 2.500 39.8 94.6 96.5 98.5 100.4 102.5 532.3
Subtotal Office equipment 143.7 94.6 96.5 98.5 100.4 102.5 636.3
B. Upgrading accounting/MIS
Installation of upgraded accounting system lumpsum 10.6 - - - - - 10.6
Development of Programme MIS /b lumpsum 10.0 - - - - - 10.0
Subtotal Upgrading accounting/MIS 20.6 - - - - - 20.6
C. Technical Assistance, Studies and Workshops
PIM preparation lumpsum 10.0 - - - - - 10.0
Environment and Social management Plan lumpsum 10.0 - - - - - 10.0
Start-up workshop w/shop 1 - - - - - 1 7.000 7.1 - - - - - 7.1
Annual review and planning workshop w/shop - 1 1 1 1 1 5 4.000 - 4.1 4.2 4.3 4.4 4.5 21.4
Knowledge Management-Publications per-annum - 5.2 5.3 5.4 5.5 - 21.2
PCU staff training /c lumpsum 40.4 20.6 - - - - 61.0
Baseline Survey /d lumpsum 1 - - - - - 1 30.000 30.0 - - - - - 30.0
Technical Advisory Group /e per-annum 2 2 2 2 2 2 12 3.000 6.0 6.0 6.0 6.0 6.0 6.0 36.0
Ad-hoc Studies and Assistances lumpsum - 1 1 1 1 - 4 10.000 - 10.0 10.0 10.0 10.0 - 40.0
Mid-term Review lumpsum - - 1 - - - 1 20.000 - - 20.0 - - - 20.0
Final Impact Survey lumpsum - - - - - 1 1 20.000 - - - - - 20.0 20.0
Subtotal Technical Assistance, Studies and Workshops 103.5 45.9 45.5 25.6 25.8 30.5 276.7
Total Investment Costs 267.8 140.5 142.0 124.1 126.3 132.9 933.6
II. Recurrent Costs
A. Salaries
1. Province level
Project Coordinator pers-month 12 12 12 12 12 12 72 700 8.5 8.7 8.8 9.0 9.2 9.4 53.5
Advisor to Project Coordinator pers-month 12 12 12 12 12 12 72 650 7.9 8.0 8.2 8.4 8.5 8.7 49.7
Procurement Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Financial Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Procurement Specialist pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0
Accountant pers-month 24 24 24 24 24 24 144 600 14.5 14.8 15.1 15.4 15.7 16.1 91.7
MOP-SEDP Coordinator pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Value Chain Coordinator pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0
Community-based CCA and DRM Officer pers-month 12 12 12 12 12 12 72 550 6.7 6.8 6.9 7.1 7.2 7.4 42.0
Rural Finance Programme Coordinator pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Rural Finance Officer pers-month 12 12 12 12 12 12 72 500 6.1 6.2 6.3 6.4 6.6 6.7 38.2
Engineer pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Monitoring and Evaluation/KM Manager pers-month 12 12 12 12 12 12 72 600 7.3 7.4 7.6 7.7 7.9 8.0 45.9
Cashier pers-month 12 12 12 12 12 12 72 450 5.5 5.6 5.7 5.8 5.9 6.0 34.4
Translator pers-month 24 24 24 24 24 24 144 550 13.3 13.6 13.9 14.1 14.4 14.7 84.1
Admin Support Staff pers-month 12 12 12 12 12 12 72 300 3.6 3.7 3.8 3.9 3.9 4.0 22.9
Driver pers-month 36 36 36 36 36 36 216 350 12.7 13.0 13.2 13.5 13.8 14.1 80.3
Subtotal Province level 135.7 138.5 141.2 144.1 146.9 149.9 856.3
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(Table 16 continued)
2. District level
MOP-SEDP Support Officer pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6
Business Development Officer pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6
Monitoring and Evaluation Officer/KM pers-month 48 48 48 48 48 48 288 450 21.8 22.3 22.7 23.2 23.6 24.1 137.6
Commune accountant /f pers-month 60.12 60.12 60.12 60.12 60.12 - 300.6 500 30.4 31.0 31.6 32.2 32.9 - 158.0
Subtotal District level 95.8 97.7 99.7 101.7 103.7 72.3 570.9
3. Commune level
Commune management budget /g lumpsum 30.3 30.9 31.5 32.2 32.8 - 157.7
Subtotal Salaries 261.9 267.1 272.4 277.9 283.4 222.1 1,584.8
B. DSA (local travel) lumpsum 1 1 1 1 1 1 6 50.000 50.5 51.5 52.5 53.6 54.7 55.8 318.6
C. Operation and Maintenance
1. Province level
Vehicle O&M /h per-annum 31.8 16.2 16.6 16.9 17.2 17.6 116.3
Office equipment O&M per-annum 14.4 9.5 9.7 9.8 10.0 10.2 63.6
Subtotal Province level 46.2 25.7 26.2 26.7 27.3 27.8 179.9
D. Other Operating Costs
1. Province level
Office Utilities per-annum 1 1 1 1 1 1 6 6.000 6.4 6.5 6.6 6.8 6.9 7.0 40.1
International travel per-annum - 1 1 1 1 1 5 10.000 - 10.3 10.5 10.7 10.9 11.2 53.6
Banking Services per-annum 1 1 1 1 1 1 6 3.600 3.8 3.9 4.0 4.1 4.1 4.2 24.1
Audit per-annum 1 1 1 1 1 1 6 15.000 15.9 16.2 16.6 16.9 17.2 17.6 100.3
Telecommunication per-annum 1 1 1 1 1 1 6 18.000 19.1 19.5 19.9 20.3 20.7 21.1 120.4
Stationery per-annum 1 1 1 1 1 1 6 6.000 6.4 6.5 6.6 6.8 6.9 7.0 40.1
PPSC meetings per-annum 2 2 2 2 2 2 12 2.000 4.2 4.3 4.4 4.5 4.6 4.7 26.8
Programme M&E /i per-annum 5.3 5.4 5.5 5.6 5.7 5.9 33.4
Other /j per-annum 1 1 1 1 1 1 6 23.000 24.4 24.9 25.4 25.9 26.4 26.9 153.9
Subtotal Province level 85.5 97.5 99.4 101.4 103.5 105.5 592.8
2. District level per-annum 4 4 4 4 4 4 24 10.000 42.4 43.3 44.1 45.0 45.9 46.8 267.6
3. Commune level per-annum 15 35 35 35 35 35 190 5.000 79.5 189.3 193.1 196.9 200.9 204.9 1,064.7
Subtotal Other Operating Costs 207.4 330.1 336.7 343.4 350.3 357.3 1,925.1
Total Recurrent Costs 566.0 674.3 687.8 701.6 715.6 663.0 4,008.3
Total 833.7 814.9 829.8 825.7 841.9 795.9 4,941.9
_________________________________
\a For computers, printers, copy machines and furniture.
\b To be based on 3PAD MIS work and developed jointly by both provinces.
\c Including intensive English courses.
\d Including RIMS (IFAD monitoring system).
\e To cover cost of twice yearly 2 day joint provincial TAG meeting of up to 12 specialists to review project reports and technical progress and advise project management
\f Ten Programme employed commune accountants will be based at district or commune level and each will cover 3 communes.
\g Commune allocated, based on level of participation of commune staff
\h The unit cost covers the annual O&M costs of the vehicle including petrol, insurance, spare parts, servicing, repairing and parking.
\i For M&E data collection and management at province, district, commune and village level, supported by specific impact and technical studies that are separately financed.
\j Includes copying service, media, web, representation, etc.
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Appendix 10: Economic and Financial Analysis
EFA Summary Pages
Table A: Overview of Financial Analysis of Crop, Livestock, Forestry Production and Processing Models
Models used in Analysis Province Unit Production period Net profit per production period
(VND '000) Return to total labour per person day
(VND'000)
FWOP WP Increment FWOP WP Increment
Livestock Production Cow fattening
BK 2 cow 6 months 6,492 16,142 149% 144 359 149%
H'mong Cow fattening /a CB 2 cow 3 months 6,117 22,737 272% 204 253 24%
Black Pig (fattening)
BK 5 porker 8 months 1,609 6,457 301% 32 129 301%
CB 5 porker 10 months 3,454 4,487 30% 55 72 30%
Crossbred Pig (fattening) BK 5 porker 4 months 1,091 4,139 279% 36 138 279% Crossbred Pig (breeding) BK 1 sow 1 year 7,501 11,785 57% 150 236 57%
Chicken BK 200 head 6 months 12,554 15,775 26% 126 158 26%
Crop Production
Annual
Rice - lowland su /b local BK 1 ha 4 months 42,310 51,048 21% 230 473 106%
hybrid CB 1 ha 4 months 20,545 32,087 56% 139 221 59%
wi /c local BK 1 ha 4 months 29,710 41,823 41% 161 387 140%
hybrid CB 1 ha 4 months 19,258 29,200 52% 125 197 58%
Rice – upland su /b local BK 1 ha 4 months 40,585 45,421 12% 221 421 91%
CB 1 ha 4 months 12,929 20,829 61% 82 140 70%
wi /c local BK 1 ha 4 months 30,565 38,498 26% 166 356 115% hybrid BK 1 ha 4 months 19,621 26,788 37% 109 165 52%
Maize – upland
CB 1 ha 4 months 14,775 21,643 46% 95 180 89% Maize - lowland BK 1 ha 4 months 10,271 19,226 87% 68 141 106%
Canna
BK 1,000 m2 10 months 5,142 7,480 45% 147 241 64%
CB 1,000 m2 10 months 4,952 8,774 77% 141 283 100%
Peanut
CB 1,000 m2 3.5 months 1,291 2,316 79% 92 154 67% Ginger
BK 1,000 m2 10 months 15,012 28,301 89% 500 943 89%
CB 1,000 m2 10 months 14,983 21,950 46% 456 616 35% Black Agar
CB 1,000 m2 10 months 9,383 11,883 27% 200 253 27%
Sugarcane
CB 1,000 m2 9 months 1,650 2,318 40% 122 143 17% Potato
BK 1,000 m2 3 months 1,947 3,447 77% 93 164 77%
Cassava
CB 1 ha 10 months 7,669 14,503 89% 111 160 44% Soybean CB 1,000 m2 3 months 652 1,703 161% 72 170 135%
Fodder VA06
CB 1,000 m2 9 months 2,168 3,583 65% 108 138 27% Fodder Mulato 2 BK 1,000 m2 1 year /d 6,680 9,394 41% 84 104 25%
Investment costs (VND million) Financial Internal Rate of Return
FWOP WP Increment FWOP WP Increment
Perennial Crop Production Green Tea (Shan) BK 1 ha 20 years 24.7 36.1 11.4 17.2% 24.9% 7.7% Tangerine CB 1 ha 20 years 82.6 106.7 24.1 19.1% 37.3% 18.2% Plum BK 1 ha 10 years 47.8 45.5 -2.3 26.8% 45.3% 18.5% Banana BK 1 ha 8 years 31.9 36.2 4.3 22.3% 36.6% 14.3%
Forest Production Magnolia conifer BK 1 ha 10 years 23.9 23.9 0 3.6% 12.0% 8.4% Acacia BK 1 ha 10 years /e 17.0 13.3 -4 1.7% 27.1% 25.4% CB 1 ha 9 years /e 41.1 58.1 17 13.7% 22.0% 8.3%
Processing
Glass noodle
CB HH enterprise 1 year 38 72.2 33 23.7% 47.0% 23.3%
Tea BK Cooperative 1 year 62.3 182.1 120 23.5% 38.1% 14.6% Peanut CB HH enterprise 1 year 1,050 1,300 250 18.9% 37.0% 18.1% Cassava CB Med. enterprise 1 year 92,000 112,000 20,000 12.3% 15.8% 3.5% Wood processing (peel) BK Small enterpr. 1 year 395 955 560 15.6% 33.5% 17.9% BK Med. enterprise 1 year 1,500 1,700 200 21.3% 39.5% 18.2%
FWOP = future without Project; WP = with Project \a WP increased to 4 cows. \b Summer-autumn; \c Winter-spring. \d Production period 6 years; \e WP reduced to 8 years.
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Table B: Project Cost and Indicators in Logical Framework
Total Project Costs (USD m): 77.75 IFAD (USD m): 43.00 GOV (USD m): 21.08 Beneficiaries (USD m): 13.67
Beneficiaries /a People: 147,000 Households: 33,000 Districts: 8 (19) /b
Cost per beneficiary 529 USD / person 2,356 USD / household Communes: 70 (179+112) /b
Outcomes/Components and Cost in USD m (% of total)
Outcome indicators Output indicators
Outcome 1: Province-based participatory planning institutionalised
8.11 (10.4%)
At least 80% of provincial communes and districts prepare medium-term climate-adapted MOP-SEDPs.
At least 10 new commodity-based VC SIPs prepared.
National peer reviewed CC adaptation communication and dissemination Project for CCA and MOP-SEDP prepared.
Project provinces have the legislative base, guidelines, tools and staff capacity for district and commune MOP-SEDP implementation.
Outcome 2: A greener agriculture future
17.64 (22.7%)
At least 20,000 farm households (66% of Project beneficiaries) sustainably adopting two or more climate change adaptation technology or practices.
Forest land and forest use rights for 17,000 hectares of forest transferred to private households in Bắc Kạn.
Members of up to 900 Bắc Kạn and 1,000 Cao Bằng climate-adapted commodity-based CIGs trained in climate adapted technologies and practices.
Outcome 3: Profitable farms linked to finance and markets
42.30 (54.4%)
SCGs maintain a minimum annual saving rate growth of at least 15% over base-year savings and < 5% non-performing loans in their portfolios.
Of USD 40 million invested in commodity-targeted, climate- adapted infrastructure, commodity production and enterprises development in Project communes, at least 70% of investments show an IRR > 10%.
Seventy Project communes have Commune Infrastructure Supervision Boards capable of supervising, inspecting and maintaining infrastructure activities in their communes by end-PY2.
6,200 new households in Bắc Kạn and 3,300 new households Cao Bằng become members of WSCGs.
At least 12 CIG-linked enterprise applications for APIF funding approved in each province.
Project Management 9.20 (11.8%)
NTP NRD National Coordination Office Grant
0.5 (0.6%)
\a See calculation in Appendix 2, Table 1. \b Districts/communes directly supported under Outcome 2 (Total number of districts/communes benefiting from Outcome 1 – all districts/communes in Bắc Kạn and Cao Bằng). In addition, in two communes in Bạch Thông district in Bắc Kạn province the Project will support the development of tangerine value chains.
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Table C1: Financial Analysis Main Assumptions (see Table A for financial outcomes and production period)
Models used in Analysis Province Unit Unit of output
Units of output per production period (number)
Price per unit of output (VND'000)
FWOP WP Increment FWOP WP Increment
Livestock Production Cow fattening
BK 2 cow head 2 2 0% 25,000 30,000 20%
H'mong Cow fattening CB 2 cow head 2 4 100% 25,000 30,000 20%
Black Pig (fattening)
BK 5 porker kg 240 294 23% 55 55 0%
CB 5 porker kg 259 270 4% 50 55 10%
Crossbred Pig (fattening) BK 5 porker kg 365 441 21% 40 40 0% Crossbred Pig (breeding) BK 1 sow kg 259 342 32% 55 55 0%
Chicken BK 200 head kg 342 392 15% 80 80 0%
Crop Production
Annual
Rice - lowland su /a local BK 1 ha kg 4,200 4,550 8% 16.0 16.0 0%
hybrid CB 1 ha kg 5,600 7,200 29% 6.5 7.5 15%
wi /b local BK 1 ha kg 4,200 4,900 17% 13.0 13.0 0%
hybrid CB 1 ha kg 5,200 6,400 23% 6.5 7.5 15%
Rice – upland su /a local BK 1 ha kg 3,500 3,850 10% 16.0 16.0 0%
CB 1 ha kg 4,000 5,000 25% 6.5 7.5 15%
wi /b local BK 1 ha kg 3,500 4,200 20% 13.0 13.0 0% hybrid BK 1 ha kg 3,640 4,550 25% 10.0 10.0 0%
Maize – upland
CB 1 ha kg 4,200 5,500 31% 7.0 7.5 7% Maize - lowland BK 1 ha kg 4,200 6,000 43% 6.0 6.0 0%
Canna
BK 1,000 m2 kg 6,000 7,500 25% 1.2 1.3 8%
CB 1,000 m2 kg 5,300 7,700 45% 1.9 1.9 0%
Peanut
CB 1,000 m2 kg 140 205 46% 20.0 20.5 2% Ginger
BK 1,000 m2 kg 1,150 1,850 61% 20.0 20.0 0%
CB 1,000 m2 kg 1,700 2,200 29% 15.0 15.0 0% Black Agar
CB 1,000 m2 kg 500 600 20% 25.0 25.0 0%
Sugarcane
CB 1,000 m2 kg 6,500 7,000 8% 0.9 1.0 11% Potato
BK 1,000 m2 kg 1,100 1,400 27% 5.0 5.0 0%
Cassava
CB 1 Ha kg 9,500 17,640 86% 1.4 1.4 0% Soybean CB 1,000 m2 kg 110 170 55% 16.0 17.5 9%
Fodder VA06
CB 1,000 m2 kg 6,000 8,000 33% 0.8 0.8 0% Fodder Mulato 2 BK 1,000 m2 kg 11,000 15,000 36% 0.9 0.9 0%
Perennial Crop Production Green Tea (Shan) BK 1 ha kg 2,500 4,000 60% 15.0 18.0 20% Tangerine CB 1 ha kg 27,500 32,500 18% 10.0 14.0 40% Plum BK 1 ha kg 13,000 20,000 54% 15.0 15.0 0% Banana BK 1 ha kg 28,000 32,000 14% 2.5 3.0 20%
Forest Production Magnolia conifer /c BK 1 ha m3 90 25 -72% 600 400 -33% Acacia /c BK 1 ha m3 80 95 19% 400 500 25% Acacia CB 1 ha m3 178 235 32% 1,300 1,500 15%
Processing
Glass noodle
CB kg 1,814 125% 62 65 5% 23.3% Tea BK Cooperative kg 2,100 3,150 50% 160 200 25% Peanut CB HH enterprise kg 30,000 80,000 167% 32 32 0% Cassava CB Med. enterprise kg 7,000,000 9,800,000 40% 8 8 0% Wood processing (peel) BK Small enterpr. m3 1,814 2,592 43% 2,200 2,310 5% BK Med. enterprise m3 4,480 5,760 29% 2,200 5,760 162%
FWOP = future without Project; WP = with Project. \a Summer-autumn; \b Winter-spring. \c WP output excludes additional thinning. Table C2: Economic Analysis Main Assumptions
Parameter Value Remarks Official Exchange Rate 22,400 USD1=VND (May 2016)
Shadow Exchange Rate 22,400
Standard Conversion Factor
1.0 As commonly applied in recent project designs in Vietnam. As appropriate, financial costs are converted into economic costs by removing taxes and subsidies.
Value Added Tax 10% Included in Project costs as applicable but deducted from Project costs in Economic Analysis.
Labour Conversion Factor (Opportunity Cost of Family Labour)
70%-80% As percentage of cost of hired labour. Given the large variations depending on the season, location and alternative income opportunities, a standard labour conversion factor is not feasible. For the Economic Analysis all family labour is valued at its estimated opportunity costs.
Discount Rate /c 9% Equals assumed 6% annual long-term average GDP growth rate in Vietnam + 3% for elasticity of marginal utility of consumption (World Bank Viet Nam).
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Table D: Beneficiaries and Phasing
Output PY1 PY2 PY3 PY4 PY5 PY6
5. CIGs for climate CIGs new 400 800 700 0 0 0
Adaptation cumulative 400 1,200 1,900 1,900 1,900 1,900
members new 4,800 9,600 8,400 0 0 0
cumulative 4,800 14,400 22,800 22,800 22,800 22,800
7. Rural financial services WSCGs /a new 79 230 171 80 60 0
cumulative 79 309 479 559 619 619
members new 873 2,195 1,462 560 420 0
cumulative 873 3,068 4,529 5,089 5,509 5,509
8. Agribusiness USD'000 new 300 1,100 2,100 1,908 1,000 0
Promotion Investment cumulative 300 1,400 3,500 5,408 6,408 6,408
Fund (APIF) enterprises /b new 2 7 14 13 7 0
cumulative 2 9 23 36 43 43
VC supply New 600 2,200 4,200 3,816 2,000 0
households /c cumulative 600 2,800 7,000 10,816 12,816 12,816
6. Community
infrastructure - Roads km New 67 135 141 103 0 0
cumulative 67 202 343 446 446 446
villages new 67 135 141 103 0 0
cumulative 67 202 343 446 446 446
HH new 3,365 6,730 7,066 5,148 0 0
cumulative 3,365 10,095 17,161 22,310 22,310 22,310
people new 15,142 30,285 31,799 23,168 0 0
cumulative 15,142 45,427 77,226 100,394 100,394 100,394
- Irrigation schemes schemes new 76 152 160 117 0 0
cumulative 76 229 389 505 505 505
ha new 457 915 961 700 0 0
cumulative 457 1,372 2,333 3,033 3,033 3,033
HH new 4,920 9,839 10,331 7,527 0 0
cumulative 4,920 14,759 25,091 32,618 32,618 32,618
4. Forest land allocation ha new 4,000 8,000 5,000 0 0 0
and use (FLA) cumulative 4,000 12,000 17,000 17,000 17,000 17,000
(pink books) - Bac Kan HH new 2,667 5,333 3,333 0 0 0
cumulative 2,667 8,000 11,333 11,333 11,333 11,333
\a An additional 4,000 women will be mobilised into around 260 WSCGs in Bắc Kạn, financed through residual revolving
funds from the former 3PAD. \b Min. number of enterprises (rounded), based on max. USD 150,000 total investment per enterprise. \c Min. number of households, based on max. USD 500 co-financing per VC supply household.
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Table E: Project Economic Cash Flow (USD ’000)
Year Project costs
/a
Incremental Net Benefits by Outputs /b
Total net incremental
benefits Forest Land Allocation
Community development
Rural Financial Services
Agribusiness Promotion Investment
Fund (APIF)
Community Infrastructure
Community Interest
Groups /c
1 -4,368 -295 -4,200 -1,625 -642 -420 -11,550 2 -5,432 -590 -8,158 -2,980 -1,472 -1,201 -19,834 3 -5,871 -369 -6,545 -2,255 -556 -2,086 -17,681 4 -5,546 -194 -1,297 510 293 -1,499 -7,734 5 -4,151 -403 7,426 1,035 528 964 5,400 6 -2,265 -217 8,512 1,140 911 1,257 9,337 7
0 8,964 1,140 911 1,352 12,367
8
0 8,964 1,140 911 1,352 12,367 9
502 8,964 1,140 911 1,352 12,869
10
1,505 8,964 1,140 911 1,352 13,872 11
2,132 8,964 1,140 911 1,352 14,499
12
2,132 8,964 1,140 911 1,352 14,499 13
2,132 8,964 1,140 911 1,352 14,499
14
2,132 8,964 1,140 911 1,352 14,499 15
2,132 8,964 1,140 911 1,352 14,499
16
2,132 8,964 1,140 911 1,352 14,499 17
2,132 8,964 1,140 911 1,352 14,499
18
2,132 8,964 1,140 911 1,352 14,499 19
2,132 8,964 1,140 911 1,352 14,499
20
2,132 8,964 1,140 911 1,352 14,499
NPV at 9% USD million 5.06 34.83 1.27 3.07 3.58 26.72
EIRR USD million 24.7% 26.8% 11.7% 21.6% 18.7% 14.8%
\a Only costs not included in Incremental Net Benefits by Output: Mainly Outcome 1 and Project Management costs. \b Outputs for which economic benefits have been quantified. Including related economic output costs. \c 50% of total costs of farmer group/Mass Organization awareness training on commodity production & CC adaptation deducted
Table F: Project Economic Outcome and Sensitivity Analysis
Scenario Link to Risk Matrix /a EIRR
ENPV (USD‘000)
Base Case 14.8% 26,718
% Changes to Base Case
Project Costs
Incremental Benefits
Benefits delayed by
+ 10% (i) Increased cost of inputs; (ii) external shocks to macro economy.
13.2% 20,817 + 20% 11.8% 14,917
Base Case
- 20% - 40%
(i) Reduced producer prices/demand; (ii) lack of integration of NTP funding into the MOP-SEDP process; (iii) Community infrastructure investments are not directed to areas of highest financial/economic benefit; (iv) Technical coordination is not responsive to the grassroots level needs; (v) Climate change and disaster impacts.
11.2% 9,573 7.1% -7,572
+ 10% - 10% Combination of the above. 11.5% 12,245 + 20% - 20% 8.6% -2,228
Base Case Base Case 1 year 2 years 3 years
(i) Ineffective inter-institutional cooperation & dialogue on development issues resulting in financing is not disbursed in a timely manner; (ii) Inadequate skills base amongst local service providers; (iii) Financial service providers unwilling to support Project investments.
12.5% 17,266
10.7% 8,595
9.1% 640
Base Case - 10% 1 year
Combination of the above.
11.0% 9,639
+ 10% - 10% 2 years 8.2% -4,066
1 year 9.4% 2,012 Base Case - 20% 2 years 8.0% -4,925
3 years 6.7% -11,289
+ 20% - 20% 3 years 4.8% -23,091
Switching Values /b
Costs + 45% 9.0% 0 Benefits - 31% 9.0% 0
EIRR = Economic Internal Rate of Return. ENPV = Economic Net Present Value. \a See Table 5 in Appendix 10 and Table 1 in Main Report for details. \b Percent change in cost and/or benefit streams to obtain an EIRR of nine percent, i.e., economic viability threshold.
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INTRODUCTION
1. This Appendix describes the assumptions and results of the Economic and Financial Analyses (EFA) of the Project. The main objective of the Economic Analysis (EA) was to establish whether the Project is justified from the point of view of the national economy. However, it should be noted that the CSSP does not lend itself to the traditional EA of development projects, as it is demand- and market-driven and it is not possible to determine ex-ante for which types of eligible commodities and economic activities farmers and enterprises will request Project support, which technologies and business practices they will actually choose, and what types of community infrastructures will be funded. It should be emphasized that numerous potential Project benefits have been identified that have not been quantified in monetary terms (see Annex 1 Tables A-1–A-3). A sensitivity analysis has been conducted to assess the impact of changes in main parameters affecting the economic outcome of the Project as a result of the risks that have been identified in the Project’s risk analysis. The Financial Analysis (FA) was undertaken on the basis of representative models for crop, livestock and forestry production and related processing enterprises to assess the impact of Project interventions on net farm/enterprise income, as well as on the financial sustainability of the farms and enterprises that are likely to be supported by the Project. The findings of the analyses are summarized below. More details are provided in the EFA Annex A Tables in the Project Life File.
2. The EFA is linked to the Project’s Logical Framework and its outcome indicators. It is therefore expected that the EFA will be periodically updated as an integral part of the Project’s M&E system and as an input into the Project evaluation at mid-term and completion stage. Decisions on Project support to investments in farming systems, enterprises and community infrastructures will be based on sound EFA, specifically as part of the preparation of SIPs as well as on the investment proposals that are required for the application for competitive business grants (CBGs). In that regard, under Output 1 the PPCO Commodity and VC Development teams, supported by international technical assistance, will build capacity in DPI and DARD to conduct EFA of commodity and associated VCs. This EFA will be key to preparing commodity-based VC Strategic Investment Plans (SIP) in each province which will be integrated into commune and district MOP-SEDPs. Details for incorporating EFA in Project implementation will be provided in the PIM. Consequently, adequate financial and human resources for EFA during implementation have been included in the Project design.
B. Project Area and Beneficiaries
3. The Project will primarily support development in 35 communes in Ba Bể, Na Rì, Ngân Sơn and Pác Nặm districts in Bắc Kạn province and 35 communes in Hà Quảng, Nguyên Bình, Thạch An and Thông Nông districts in Cao Bằng province. In two communes in Bạch Thông district in Bắc Kạn province the Project will support the development of tangerine value chains. The selection of participating communes at final Project design will be based on, inter alia, (i) poverty rate; (ii) vulnerability to natural disaster; (iii) commitment of leadership; and (iv) potential for development of pro-poor VCs. The selected communes will include better market-linked communes as well as communes that are more remote, but that can be joined-up through VC development. Ethnic minorities form a large proportion of the population in all Project districts and about 95% of the total population in the Project area.
4. The Project target groups are: (i) rural poor households with land and labour, including household enterprises; (ii) unskilled employed rural people; (iii) rural people lacking production land but having business acumen and desire; and, (iv) key farmers who have the skills to promote commercial agricultural production. Women and female-headed and ethnic minority households will be prioritised among the aforementioned target groups. The Project proposes specific measures to ensure women’s participation in relevant activities, including minimum participation rates.
5. Other key Project beneficiaries include: (i) government officials empowered to support market-led growth; and, (ii) private market and VC agri-businesses that find common interest in promoting viable pro-poor products and services. The Project will also generate flow-on benefits to the entire rural population of the provinces through: (i) the institutionalization of a climate-adapted MOP-SEDP process; (ii) an updated and devolved CC strategy and action plan; (iii) better access to climate adapted agriculture technology and credit; and (iv) institutional strengthening leading to more climate informed and market-oriented planning.
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C. Project Benefits
6. The Project is expected to generate substantial net incremental benefits for poor farmers and rural entrepreneurs engaged in the supported commodity chains throughout the provinces and result in improved poverty reduction in the Project communes
64. The primary benefits from the Project will
come from: (i) increased crop, forest and livestock productivity and production that is more resilient to climate change impacts, resulting from adoption of climate-smart agriculture technologies, as well as improved access to better and more affordable inputs and their application; (ii) increased proportion of marketed farm produce, resulting from improved market linkages and outlets; (iii) reduced losses during production, processing and transportation of produce through innovative technology and improved rural infrastructure; (iv) enhanced value addition along the value chain and improved quality of products resulting in higher producer prices; (v) enhanced access to longer-term credit and to co-financing for productive investments; (vi) increased employment either for hired or family labour for both on-farm and off-farm activities; and (vii) increased government tax revenues.
7. It is expected that by the end of the Project at least 72,000 people in 16,000 poor and near-poor households will be lifted out of poverty, while 30,000 poor, near-poor and non-poor households supported by the Project will have at least a 20% increase in household assets. This will be achieved through a combination of capacity building, technology transfer and credit access, supported by upgraded community infrastructure and co-financing of innovative investment in their farming operations. These include about 23,000 CIG members, 5,500 WSCG
65 members as well as
households that will benefit from APIF investments, enterprise-based vocational training and farm-based extension provided by the Project. Furthermore, up to 35,000 households in the 70 Project communes will benefit from at least one community infrastructure investment, particularly market access roads and irrigation development, including at least 17,600 poor and near poor households (see Table D and Appendix 2, Annex 4, Tables 1 and 2 for details).
8. The increased income and employment will result in increased demand for goods and services in the rural areas in Bắc Kạn and Cao Bằng, which is expected to generate additional income and employment effects, and further increase government tax revenues. The increased agricultural output will increase national production, and thereby contribute to growth in overall GDP and national food security. In addition, foreign exchange earnings/savings are expected from increases in exports (mainly timber, medicinal plants, ginger and spices) and a reduction in imports (mainly timber).
9. Major institutional benefits expected from the Project are: (i) at least 1,900 CIGs and 1,000 newly established WSCGs as well as farmers’ cooperatives supported by the Project are effectively serving their members; (ii) staff capacity at provincial and district level is built for preparation of SIPs and market economy management; and (iii) all Bắc Kạn and Cao Bằng districts and communes are implementing an institutionalised climate adapted MOP-SEDP processes.
10. The main social and environmental benefits expected from the Project are: (i) reduced vulnerability and increased resilience to climate change and disaster impacts, resulting from the implementation of climate-adapted MOP-SEDP at district and commune level; (ii) increased participation of women and the poor in decision making at local level; (iii) reduced environmental degradation and conserved natural resource base for sustainable livelihoods of present and future generations; and (iv) environmentally friendly agronomic practices, energy-efficient processing and safe disposal of agro-industrial waste products. An overview of the potential Project benefits is provided in Annex Tables A-1–A-3.
D. Financial analysis
11. The FA is based on illustrative models for annual crops (21), tree crops and forestry (9), animal production (7) and processing enterprises (6) which have been identified for the main commodity chains that are likely to be supported by the Project. The commodity chains have been selected on the basis of a preliminary analysis of the market demand, constraints, opportunities and their potential
64
It is expected that poverty reduction in Project communes at the end of the Project will be at least 20% above the
average non-Project provincial commune rate. 65
Including 4,000 women that are mobilised into around 260 WSCGs in Bắc Kạn, financed through residual revolving
funds from the former 3PAD.
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to contribute to poverty reduction in Bắc Kạn and Cao Bằng66
. Data have been compiled by the Bắc Kạn and Cao Bằng PPBs from two main sources: (i) value chain analyses prepared in 2014/15 for the identified priority commodity chains; and (ii) additional data collection by the detailed and final design mission and the two PPBs between October 2015 and April 2016. For each model, three scenarios were analysed as appropriate: (i) the “present-without Project” (WOP) scenario; (ii) the “future-without Project” (FWOP) scenario; and (iii) the “future-with Project” (FWP) scenario. The templates used for livestock and annual crops present – for one production cycle - a standard gross margin analysis as well as calculation of net profit (depreciation and cost of capital deducted) and return to labour (total and family). Furthermore, the investment costs including required working capital (if applicable) are presented. A simplified version of this template is already used by other IFAD- funded projects in Viet Nam. (see Annex 1, Table A-4).
12. Discounted Cash Flow (DCF) analyses have been prepared for perennial crops, forestry and processing enterprises which exclude depreciation, comparing the FWP with the FWOP scenario and calculating net incremental benefits. Summary Tables A and C present the main financial parameters. Detailed enterprise budgets are presented in the Economic and Financial Analysis Annex A in the Project Life File.
13. The FA shows the potential for significant increases in net profits, return to labour and return on investment resulting from the Project. Decisions on Project support to investments in farming systems and enterprises will be based on sound FA, specifically for (i) investment proposals for Agribusiness Promotion Investment Fund (APIF) co-financing; and (ii) business plans for investments by CIGs and, as appropriate, by WSCG members. The financial enterprise budgets prepared together with the PPB and DARD staff in the two provinces provide the basis for the assumptions made for the Economic Analysis of the Project.
14. It should be noted that, in the FA, family labour has been quantified but not valued. However, the calculation of return to family labour (net profit per family labour day) provides an indication of the ability of a household to pay for hired labour instead of using family labour (in case family labour is not available, e.g. because of household size or health reasons)
67. Specifically, the one-page enterprise
budget templates developed provide the main elements for the planning and assessment of the financial viability of enterprises (production and processing), as they: (i) compare the WOP, FWOP and FWP scenarios; (ii) provide a brief overview of the production system including the key production parameters, farmer organization, investments and marketing channel; (iii) calculate main financial performance measures; and (iv) calculate the investment costs including required working capital (if applicable) and annual depreciation.
15. It is envisaged that the methodology applied during Project design will provide the building blocks for a thorough VC analysis for the main VCs to be supported by the Project, as well as for the above mentioned FA that will be carried out during implementation (after some modification as required)
68. In that regard, the Project will develop capacity of PPCO and relevant staff from DARD,
DPI and DOF under Output 1 for EFA of commodity and associated VCs as an input into the preparation of commodity-based VC SIPs for integration into commune and district MOP-SEDPs.
E. Economic Analysis
16. As stated above, given the demand- and market-driven nature of the Project it is not possible to determine ex-ante the types of investments that will be made by farmers and entrepreneurs within the eligible commodity chains and which community infrastructures will be implemented. Therefore, it was felt that developing comprehensive household models would not be feasible, given the large diversity of households and activities these households are engaged in. In this context, the common approach to EA as a “natural continuum of the FA”, simply by using shadow prices and aggregating household models would not be very meaningful and the basis of such aggregation would be difficult to justify.
66
Priority commodity chains identified and analysed during Project design include: timber, ginger, tangerine, canna,
peanut, black agar, banana, h’mong cow and black pig production. 67
If the return to family labour is above the cost of hired labour, households could pay for hired labour instead of using
family labour and still make a profit. 68
The templates build on the templates prepared during the design of the IFAD-supported Ha Giang Commodity-
oriented Poverty Reduction Project which are presently used during implementation.
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17. First, the diversity of the agro-ecological and farming systems in the Project area combined with the variety of Project interventions and impacts means that any analysis based on aggregation of illustrative household/farming system models would be a highly generalised approximation.
18. Second, the estimation of economic values for outputs and inputs in situations where traded items’ border prices and domestic handling costs can vary considerably is difficult. Considering the above points and the many assumptions made regarding performance/success/ adoption of the models analysed, the effects of any adjustments of financial prices will be negligible in comparison.
19. Nevertheless, the FA models provide the basis for estimating what returns on investment would be realistic under the various interventions supported under Outcomes 2 and 3. The EA includes representative models for rural road and irrigation scheme construction/rehabilitation supported under Output 6 and is based on conservative assumptions regarding outreach, adoption and success rate . It should be noted that potential benefits from Outcome 1: Province-based participatory planning institutionalised have not been quantified separately as (i) this component will contribute to realizing the benefits expected from Outcomes 2 and 3 ; and (ii) it is difficult to quantify in economic terms additional benefits resulting from the activities supported, specifically (i) provincial CCA plan and investment Project preparation; and (ii) climate-informed, market-oriented socio-economic development planning. No economic benefits have been calculated for the Project coordination component which is a precondition for Project implementation and achieving Outcomes 1, 2 and 3. However, the economic costs of all Project components have been included in the overall Project EA.
20. Economic costs and assumptions made. The financial Project costs have been converted to economic costs, which exclude taxes and duties and price contingencies, using the COSTAB software (see EFA Annex D). The analysis was carried out for a 20-year period, including the six-year Project implementation period. The economic analysis was undertaken in 2015 constant prices, and a discount rate of nine per cent was used (see Table C2). The Vietnamese Dong (VND) was used as the unit of account and the official exchange rate of VND 22,400 to USD 1.0 (May 2016) was applied when converting to USD.
21. Economic benefits. The estimated economic benefits from the farm, enterprise and infrastructure investments were derived from the FA presented above by valuing the physical input and output quantities in terms of their respective economic prices. The EFA Annex C provides details of Project outreach assumptions and parameters for the economic analysis which are summarized below.
22. Development of community infrastructure (CIF). Based on experience from 3PAD and DBRP
project implementation, the following distribution of community infrastructure investments has been assumed: (i) roads 60: per cent; (ii) irrigation schemes: 30 per cent; (iii) water and sanitation: 5 per cent; and (iv) others (e.g. markets, public warehouses, yards, electrification): 5 per cent (see Annex Table A-5). An overview of the expected benefits from road development is provided in Table A-3 while Table A-8 summarizes the cost-benefit analysis of the four road models in each province. Specific assumptions with regard to (i) increases in cropped area, productivity, producer prices, marketed output, and (ii) reductions in losses are presented in Annex B in the Project Life File. On the basis of actual costs of road construction under 3PAD and DBRP projects for each of the road types identified the economic internal rate of return (EIRR) over a useful life of 10 years (or 20 years – see figures in brackets) ranges from 10 per cent (17 per cent) for upland concrete road construction (Cao Bằng) to 32 per cent (35 per cent) for lowland soil road construction (Bắc Kạn).
23. Table A-9 summarizes the cost-benefit analysis for typical 6-ha upland and lowland irrigation schemes in both provinces. The EIRR over a period of 20 years, ranges from 30 percent for upland schemes (Cao Bằng) to 46 percent for lowland scheme (Bắc Kạn). The remaining 10 percent of the CIF budget are expected to be used for other community investments, including water and sanitation, markets and storage facilities. While such investments will all have significant economic benefits, given the uncertainty with regard to the type of investment requested and a lack of data, no attempt has been made to quantify the benefits from these investments in monetary terms. It should be noted that EA will be a key element in the feasibility study required for each community infrastructure financed by the Project. Overall, the estimated EIRR of investments in community infrastructure under the Project amounts to 26.8 percent.
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24. Support to Common Interest Groups (CIGs). It is not possible to predict which types of CIGs will request Project support and which ones will actually receive funding. For the expected CIG investment of USD 6.65 million (including 50 percent grant) by 1,900 CIGs, based on the available farm and enterprise budgets and conservative assumptions regarding returns on investment, taking into account a phased Project support and other costs directly related to the establishment of CIGs, the EIRR of support to CIGs under Output 5 amounts to 11.7 per cent. (See Annex C for details).
25. Support to Women Savings and Credit Groups (WSCGs). The economic benefits from this activity have been calculated on the basis of the following assumptions: (i) the Project will provide on-lending capital to a total number of 620 WSCG groups as follows: Bắc Kạn – 294 groups, average 15 members per group, USD 5,102 per group; Cao Bằng – 472 groups, average 7 members per group, USD 4,767 per group); (ii) the average loans size is USD 680 and the average loan period 12 months; (iii) interest rate is 0.9% per month without grace period; (iv) loan recovery rate is 98%. In many provinces in Viet Nam, 100 percent in-time recovery by WSCGs is reached, including Bắc Kạn and Cao Bằng in the past. It is assumed that the total volume of loans disbursed per cycle will remain constant, even if the loan recovery rate of previous cycles is below 100 per cent. This is a conservative assumption as SCGs will be expected to maintain a minimum annual saving rate growth of 10 per cent; (v) 70 percent of the loans will be used for small stock (pigs, chicken) while 20 per cent will be for crop production and 10 percent for trading activities; (vi) Return on investment per annum has been estimated at 25 per cent for small stock, 30 per cent for crops and 35 per cent for trading activities, which is a rather conservative assumption given the representative enterprise budgets and experience from other projects in Viet Nam (interest payment already included in budgets); (vii) all interest earned is used for, and fully covers, group and WDF operational costs. Therefore, no additional costs for operation of the WSCG on-lending programme have been added; (viii) A loan disbursement efficiency rate of 90 per cent has been assumed, i.e. the rate of the available funds that are actually disbursed at any given time. Taking into account the cost of establishment of new WSCGs, the EIRR of the SCG support amounts to 21.6 per cent over 20 years.
26. Issuance of forest land Pink Books. To support the equitable (across wealth and gender groups) ownership and efficient use of production forest in Bắc Kạn and Cao Bằng, as well as to facilitate poor household access to credit from financial institutions, the Project will, on a cost-sharing basis with GoV (IFAD 50 per cent/Government 50 per cent), finance the issuance of forest land Red Books. It is expected that about 8,500 poor and near poor households in Bắc Kạn and 2,500 poor and near poor households in Cao Bằng will each receive, on average, 1.5 ha of production land. Beneficiary households will be able to use the Pink Books as collateral for bank loans and it is assumed that farmers will invest in improved forest production, resulting in an average increase of annual Gross Margin (GM) per ha of 50 per cent of the increase that has been estimated possible under improved forest production (see Timber Production Enterprise Models). Based on a phasing of Pink Book issuance over four years and assuming that the incremental GM will only be realized after the first production cycle, the EIRR of this activity for a 20-year period has been calculated at 24.7 per cent.
27. Co-financing of Public-Private Partnership (APIF). The APIF investments actually co-financed by the Project within the framework of the VC SIPs and MOP-SEDPs will depend on the selection of lead agri-business enterprises and household enterprises on the basis of investment proposals required to access Project co-financing. A number of successful enterprises already operate in Bắc Kạn and Cao Bằng that generate investment and job opportunities for poor rural households which have been analysed (e.g. ginger production, processing and trading, cannas starch and vermicelli production, timber, peanut and cassava processing; see Summary Tables A and C, EFA Annexes A and C). The enterprises analysed show high potential for increased profitability with additional investment and technical support under the Project. Based on this analysis, it has been assumed that the average ERR of investments in APIF is 21.5 per cent over a 20-year period. Taking into account a phased Project implementation and related value chain development support costs, the overall EIRR of support to APIF under the Project amounts to 18.7 per cent.
28. Economic viability and sensitivity analysis. Taking into account the total economic Project costs, the economic internal rate of return (EIRR) of the Project for the base case is 14.8 per cent. The net present value (NPV), discounted at nine percent is VND 598.5 billion (USD 26.72 million) and the Benefit/Cost Ratio 1.5. Table 1 presents the main risks that have been identified in the Project’s risk analysis and may affect the economic outcome of the Project. A sensitivity analysis has been
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conducted to assess the potential impact of these risks resulting in (i) reduced benefits; (ii) increased costs; and/or (iii) delayed benefits. Table 2 provides an overview of the various scenarios of the sensitivity analysis. An increase in Project costs by 10 per cent will reduce the EIRR to 13.2 per cent, while a decrease in overall Project benefits by 20 per cent will result in an EIRR of 11.2 per cent. Considering the possibility of a combination of 20 per cent reduction in incremental benefits with a two-year delay in benefits, the EIRR is reduced to 8.0 per cent. The switching values show that the Project will remain economically viable if benefits decreased by 31 per cent or Project costs increased by 45 per cent.
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Table 1: Overview of Main Project Risks affecting Project Economic Outcome
Risk category Risk Likelihood/
severity
Potential impact reflected in sensitivity analysis
Reduced benefits
Increased costs
Delayed benefits
Economy and Market Risks
External shocks to macro economy. M/H X X X
Increase cost of inputs. L/H X X
Reduced producer prices. L/H X
Reduced demand. L/H X
Institutional Risks
Provincial government cannot integrate commune level NTP funding into the MOP-SEDP process (due to lack of MPI direction).
M/M X X
Community infrastructure investments are not directed to areas of highest financial and economic benefit.
M/M X
Technical coordination is not responsive to the grassroots level needs.
L/H X
Ineffective inter-institutional cooperation & dialogue on development issues means financing is not disbursed in a timely manner to support field implementation.
M/M X
Inadequate skills base amongst local service providers. H/H X X
Financial service providers unwilling to support Project investments.
L/H X X
Climate Risks
Climate-change and disaster impacts. M/H X X
L = low; M = medium; H = high.
See Main Report Table 1 for additional risks identified and risk mitigation measures included in Project design.
Table 2: Project Economic Outcome and Sensitivity Analysis
Scenario Link to Risk Matrix /a EIRR
ENPV (USD‘000)
Base Case 14.8% 26,718
% Changes to Base Case
Project Costs
Incremental Benefits
Benefits delayed by
+ 10% (i) Increased cost of inputs; (ii) external shocks to macro economy.
13.2% 20,817 + 20% 11.8% 14,917
Base Case
- 20% - 40%
(i) Reduced producer prices/demand; (ii) lack of integration of NTP funding into the MOP-SEDP process; (iii) Community infrastructure investments are not directed to areas of highest financial/economic benefit; (iv) Technical coordination is not responsive to the grassroots level needs; (v) Climate change and disaster impacts.
11.2% 9,573 7.1% -7,572
+ 10% - 10% Combination of the above. 11.5% 12,245 + 20% - 20% 8.6% -2,228
Base Case Base Case 1 year 2 years 3 years
(i) Ineffective inter-institutional cooperation & dialogue on development issues resulting in financing is not disbursed in a timely manner; (ii) Inadequate skills base amongst local service providers; (iii) Financial service providers unwilling to support Project investments.
12.5% 17,266
10.7% 8,595
9.1% 640
Base Case - 10% 1 year
Combination of the above.
11.0% 9,639
+ 10% - 10% 2 years 8.2% -4,066
1 year 9.4% 2,012 Base Case - 20% 2 years 8.0% -4,925
3 years 6.7% -11,289
+ 20% - 20% 3 years 4.8% -23,091
Switching Values /b
Costs + 45% 9.0% 0 Benefits - 31% 9.0% 0
EIRR = Economic Internal Rate of Return. ENPV = Economic Net Present Value. \a See Table 5 in Appendix 10 and Table 1 in Main Report for details. \b Percent change in cost and/or benefit streams to obtain an EIRR of nine percent, i.e., economic viability threshold.
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F. Conclusions
29. On the basis of conservative assumptions, and given the fact that many potential benefits that are expected from the Project have not been quantified in economic terms, the Project can be justified on economic grounds. It should be kept in mind that not all potential economic benefits (for example, environmental benefits; other direct and indirect benefits of community infrastructure; and additional direct benefits from Outcome 1 have been included in the analysis. Furthermore, the likely multiplier effects mentioned above have not been quantified. Therefore, it is safe to assume that the estimated economic benefits are on the low side of the potential economic returns that can be expected when the Project is implemented.
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Annex 1: Financial analysis tables
Table A-1: Overview of Potential Project Impacts on Communities, Economy, Government Budget,
Institutions, Labour Market and the Environment
Table A-2: Overview of Potential Project Benefits by Value Chain Actor
Table A-3: Overview of Potential Project Benefits from Rehabilitation/Construction of Rural Roads
Table A-4: Structure of Enterprise Budgets - Crop, Livestock, Forestry Production and Processing
Table A-5: Estimated share of total infrastructure by type
Table A-6: Indicative distribution of road investments
Table A-7: Indicative distribution of irrigation investments
Table A-8: Community Infrastructure - Summary of Cost-Benefit Analysis of Rural Roads
Table A-9: Community Infrastructure - Summary of Cost Benefit Analysis of Irrigation Schemes
Economic and Financial Analysis: Annexes in the Project Life File
Annex A: Financial Crop, Forest and Livestock Budgets (Production and Processing)
Annex B: Community Infrastructure Models
Annex C: Project Outreach Assumptions and Parameters for Economic Analysis
Annex D: Economic Project Costs
Annex E: Project Economic Analysis and Sensitivity Analysis
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Table A-1: Overview of Potential Project Impacts on Communities, Economy, Government
Budget, Institutions, Labour Market and the Environment
Impact Area Main Potential Impacts
Rural Communities
Reduced poverty;
Reduced vulnerability and increased resilience to climate change and disaster impacts;
Improved access to markets and services;
Increased participation of women and the poor in decision making at local level.
Rural/National
Economy
Increased output, income and employment, resulting in increased demand for goods and services and generating additional income and employment effects;
Foreign exchange earnings/savings. /a
Government
Budget Incremental tax revenues from increased economic activities;
Increased Provincial recurrent budget for staff and O&M (Project life only).
Institutions Improved capacity, efficiency and effectiveness.
Labour Market Increased and “fair work” on and off-farm employment opportunities;
Improved skills of workforce;
Increased workplace safety (through various certification schemes).
Environment
Reduced environmental degradation and conserved natural resource base for sustainable livelihoods of present and future generations.
Environmentally friendly agronomic practices, energy-efficient processing and safe disposal of agro-industrial waste products.
\a Resulting from an increase in exports and/or a reduction in imports.
Table A-2: Overview of Potential Project Benefits by Value Chain Actor
Value Chain Actor Main Potential Benefits
Input Suppliers /a
Increased market/demand for goods;
Reduced transaction costs.
Increased value addition and income.
Service Providers/b
Increased market/demand for services /c;
Reduced transaction costs.
Increased income.
Producers (incl. individuals,
CIGs, SCGs, cooperatives)
Improved access to inputs, services, markets and information;
Reduced climate risks due to climate-smart agricultural technologies and practices;
Increased production and/or productivity - reduced cost per unit of output;
Reduced losses;
Improved product quality/increased producer prices;
Enhanced market opportunities and increased proportion of marketed farm output;
Economies of scale and strengthened position in market (e.g. cooperatives, contracts);
Enhanced access to longer-term credit and co-financing;
Reduced transaction costs.
Increased productivity, value addition and income.
Processors (incl. individuals,
CIGs, cooperatives, enterprises)
Improved access to inputs, services, markets and information;
Increased output and/or productivity/reduced cost per unit of output;
Reduced losses;
Improved product quality/increased output prices;
Enhanced market opportunities and increased volumes processed and marketed;
Enhanced access to longer-term credit and co-financing;
Reduced transaction costs.
Increased productivity, value addition and income.
Traders (incl. collectors, transporters) /d
Increased supply of products;
Enhanced market opportunities and increased volumes traded;
Reduced transaction costs.
Increased income.
Marketers (wholesalers,
retailers, exporters)
Increased supply of products;
Enhanced market opportunities and increased volumes marketed;
Reduced transaction costs.
Increased income.
Consumers Reduced consumer prices;
Increased availability of commodities of better quality;
Improved food safety.
\a E.g. equipment, seeds, fertilizer and agro-chemicals (not directly targeted by project). \b E.g. technical/advisory, business development, financial and veterinary services. Not strictly value chain actors but part of
enabling environment. \c Including increased demand as a result of improved quality of the services. \d May also act higher up in the value chain.
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Table A-3: Overview of Potential Project Benefits from Rehabilitation/Construction of Rural
Roads
Benefits Resulting from Included in
CSSP EFA
Increased marketed output and
volumes of transported
produce
Improved access to markets due to improved accessibility throughout the year.
Improved access of (larger) vehicles. YES
Changed patterns of
production/increased area
Introduction/expansion of higher value crops (e.g. fruits, vegetables, organic tea)
which become financially viable due to improved market access and reduced
losses. Increased cultivated area of existing crops.
YES
Increased agricultural
productivity
Increased availability and reduced cost of inputs. YES
Increased access to support services, including extension. YES
Increase of livestock
production
Better access to inputs and markets. YES
Increased producer prices (i) Reduced transport costs; (ii) higher quality of produce due to timely
transportation and reduced quality losses during transport; (iii) better access to
markets.
YES
Reduced losses /a Accessibility throughout the year and reduced transport time; faster access to
markets. YES
Reduced transport costs Use of vehicles and motorbikes instead of transport on foot or by horse/buffalo.
Reduced fuel and O&M cost of vehicles and motorbikes. NO
Reduced travel time Reduced time by vehicles on the road. Travel by vehicles and motorbikes
instead of travel on foot. NO
Increased profits for vehicle
operators
Reduction in vehicle operation and maintenance costs. NO
Time savings. NO
Opportunities for increased business (volumes transported). NO
Reduced market distortions Improved position of farmers in markets due to (i) better access to market/price
information; (ii) opportunities to link with different traders, reduced risk of
monopsony.
NO
Employment opportunities (i) Jobs created in road construction/maintenance; (ii) better access to job
opportunities close to/along road; (iii) increased petty trade along road. NO
Social benefits Improved access to potable water, sanitation (/b), health-care centres, schools,
and information. NO
\a On-farm before transport and during transport. Community infrastructure/CIG investments in improved storage would also contribute to this benefit. \b May be included in community infrastructure development.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 10. Economic and Financial Analysis
275
Table A-4: Structure of Enterprise Budgets - Crop, Livestock, Forestry Production and Processing (see different templates for each type of enterprise)
The One-Page Enterprise Budget Template provides main elements for the planning and assessment of the financial viability of enterprises (production and processing). Specifically, it:
=> provides an overview of the production system including the key production parameters, farmer organization, investments and marketing channel.
=> compares the Present (P), Future Without Project (FWOP) and Future With Project (FWP) scenarios;
=> calculates main financial performance measures, including Gross Margin and Net Profit;
=> calculates the investment costs including required working capital (if applicable) and annual depreciation.
The enterprise budget will be part of the investment proposal required for the application for competitive business grants under the Project. It will be complemented by (i) a financing plan; (ii) cash flow analysis; and (iii) multi-periodic cost-benefit analysis (as appropriate).
Furthermore, the enterprise budgets will provide an input into the value chain analyses carried out during Project implementation for each the main value chains to be supported by the Project.
Calculation of Financial Performance Measures - Per Production Period and Unit specified
Output Output
minus Intermediate Inputs
= Value Added minus Total Variable Costs (incl. Hired Labour)
minus Wages and Salaries (incl. Hired Labour)
= Gross Margin = Gross Margin
minus Interest Charges minus Interest Charges
minus Taxes
minus Taxes
= Gross Profit = Gross Profit
minus Depreciation minus Depreciation
= Net Profit = Net Profit
Return to family labour (per person day) = Net Profit / number of family labour days
Return to total labour (per person day) = (Net Profit + cost of hired labour) /
total number of labour days (hired and family)
Return on Investment = Revenue - Total Cost [incl. Depreciation]) / Total Cost
= Net Profit / Total Cost
Calculation of Investment Costs and Annual Depreciation
Investment costs include the following main categories (as appropriate):
Buildings/structures;
Equipment/machinery;
Establishment of plantation;
Livestock;
Working capital for first production cycle (e.g. inputs, hired labour).
The annual depreciation of a fixed assets is calculated by the "straight line depreciation method". => Depreciation = (Investment Cost - Residual Value*) / Useful Life
* Assumed to be zero for the purpose of this analysis.
Use of Enterprise Budgets for Economic Analysis
1 Change financial prices to economic prices. => Use of import/export parity prices, shadow wage rate, standard conversion factor (as appropriate); removal of
taxes/subsidies.
2 Use of incremental Gross Margin [With Project (WP) - Without Project (WOP)]. => Taxes excluded (taxes are transfer payments and therefore no economic costs).
=> Depreciation excluded (economic analysis includes cost of replacement of fixed assets in the year incurred).
3 Deduct cost of family labour valued at opportunity cost.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 10. Economic and Financial Analysis
276
Table A-5: Estimated share of total infrastructure by type
(% of total community infrastructure investments)
Bac Kan
Cao Bang
For analysis
Road 60% 60% 60%
Irrigation scheme 30% 25% 30%
Water/sanitation 5% 5% 5%
Others /a 5% 10% 5%
Total 100% 100% 100%
Table A-6: Indicative distribution of road investments (% of total road investments)
Road
Bac Kan Cao Bang For
analysis
Lowland New concrete 2m 30% 30% 30%
New Soil 2.5-3m 20% 20% 20%
Upland new concrete 2m 20% 20% 20%
new Soil 2.5-3m 30% 30% 30%
Total 100% 100% 100%
Table A-7: Indicative distribution of irrigation investments (% of total irrigation investments)
Scheme
Bac Kan Cao Bang For
analysis
Lowland - 6 ha new 30% 65% 50%
Upland - 6 ha new 70% 35% 50%
Total 100% 100% 100%
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 10. Economic and Financial Analysis
277
Table A-8: Community Infrastructure - Summary of Cost-Benefit Analysis of Rural Roads
Bac Kan
Lowland Upland
Concrete Soil Concrete Soil
Road length (km) 1 1 1 1
Number of villages reached 1 1 1 1
Village population reached
(households) 55 55 45 45
(people) 248 248 203 203
Construction cost per km
(VND'000) 956,168 776,289 886,411 826,765
(USD) 42,686 34,656 39,572 36,909
Construction cost per road (VND'000) 956,168 776,289 886,411 826,765
(USD) 42,686 34,656 39,572 36,909
Construction cost per household reached (VND'000) 8,692 17,385 14,114 19,698
(USD) 776 630 879 820
Cost-benefit analysis (economic costs) Period of analysis
Economic Internal Rate of Return (EIRR)
10 years 21.8% 32.0% 17.9% 30.5%
15 years 25.2% 34.4% 21.8% 33.1%
20 years 26.1% 34.9% 22.8% 33.6%
Cao Bang
Lowland Upland
Concrete Soil Concrete Soil
Road length (km) 1 1 1 1
Number of villages reached 1 1 1 1
Village population reached
(households) 50 50 50 50
(people) 225 225 225 225
Construction cost per km
(VND'000) 1,000,000 773,100 1,250,000 766,400
(USD) 44,643 34,513 55,804 34,214
Construction cost per road (VND'000) 1,000,000 773,100 1,250,000 766,400
(USD) 44,643 34,513 55,804 34,214
Construction cost per household reached (VND'000) 8,692 20,000 15,462 25,000
(USD) 893 690 1,116 684
Cost-benefit analysis (economic costs) Period of analysis
Economic Internal Rate of Return (EIRR)
10 years 16.9% 25.1% 10.6% 25.4%
15 years 21.0% 28.2% 15.5% 28.5%
20 years 22.1% 28.9% 17.0% 29.2%
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Final Project Design Report
Appendix 10. Economic and Financial Analysis
278
Table A-9: Community Infrastructure - Summary of Cost Benefit Analysis of Irrigation
Schemes
Bac Kan Cao Bang
Lowland Upland Lowland Upland
Scheme area (ha) 6 6 6 6
Number of farmers cultivating land 100 100 150 19 Average area per farmer (m2) 600 400 3,158 2,857
Investment cost per ha (VND'000) 64,160 77,170 54,000 62,000 (USD) 2,864 3,445 2,411 2,768
Investment cost per scheme (VND'000) 384,960 463,020 324,000 372,000 (USD) 17,186 20,671 14,464 16,607
Cropping intensity before 183% 167% 100% 100% after 200% 200% 200% 200%
Gross margin (GM) per ha /a before (VND'000) 51,950 46,975 17,230 12,810 after
93,825 84,815 64,940 53,610
increment
41,875 37,840 47,710 40,800 81% 81% 277% 319%
Gross margin per scheme /a before (VND'000) 311,700 281,850 103,380 76,860 after
562,950 508,890 389,640 321,660
increment 251,250 227,040 286,260 244,800
Increm. GM per ha minus cost of O&M and depreciation /b 35,459 30,123 42,310 34,600
Production per scheme /a before (MT) 40.0 29.4 30.0 23.4 after
56.7 48.3 81.6 68.4
increment
16.7 18.9 51.6 45.0 42% 64% 172% 192%
Production per farmer /a before (kg) 400 196 1,579 1,114 after
567 322 4,295 3,257
increment 167 126 2,716 2,143
Economic Internal Rate of Return (EIRR) /c 46.7% 33.5% 43.0% 30.4%
\a Both crops.
\b O&M: 5% of investment cost p.a.; depreciation based on useful life of 20 years (5% p.a.).
\c Economic costs and family labour valued at opportunity cost.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Detailed Design Report
Appendix 11. Draft Project implementation manual
280
Appendix 11: Draft Project implementation manual
1. Based on the existing DBRP and 3PAD PIMs, and the IFAD Country manuals 0n Competitive
Small Grants and on Public-Private Partnerships, the PPCOs will, collectively, prepare a new PIM and
submit it to IFAD for review prior to Project start up. The revised PIM will have the following main
chapters.
2. PIM Table of Contents:
Province-based Participatory Planning Institutionalised
o Terms of Reference, manuals and training programs for key technical areas including
strategic investment planning, climate adapted participatory planning, and CC
adaptation strategy and plan.
A greener agriculture future
o Participatory forest land and forest allocation
A supporting manual based on 3PAD experience
o Farmer CIG
An IFAD Country office manual on Competitive Small Grants co-financing, will
form the basis of the CSSP CIG manual;
Procedures manual for district-managed forage seed and forage procurement
and distribution system
Profitable farms linked to finance and markets
o Community infrastructure co-financing;
o Terms of reference for the delivery of vocational skills training at village and
enterprise level;
o Public – Private Collaboration (APIF) implemented
An IFAD Country office manual on APIF co-financing, will form the basis of
the CSSP APIF manual;
o Savings and Credit Groups established and transformed into a MFI (building off PIM
notes prepared for other IFAD projects);
Project Management
o Financial Management and Disbursement Manual
o Procurement Manual and Procurement Plan
o Monitoring and Evaluation Manual
o Terms of Reference for Key Staff and Consultant Positions
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Detailed Design Report
Appendix 12. Compliance with IFAD policies
282
Appendix 12: Compliance with IFAD policies
Policy Strategic Objectives
IFAD
Strategic
Framework
2011-2015
The CSSP is strongly aligned with the overall objectives of IFAD to "work
for the rural poor to improve their food security, increase their incomes and
strengthen their resilience." The program takes into account key IFAD
policies and strategies relating to targeting, gender, land, ethnic peoples
and CC contributing to the overall objectives of the Strategic Framework
2011-2015 and in particular to: (i) a natural resource and economic asset
base for poor rural women and men that is more resilient to CC,
environmental degradation and market transformation; (ii) access for poor
rural women and men to services to reduce poverty, improve nutrition,
raise incomes and build resilience in a changing environment. The
program also contributes to objectives (iii) poor rural women and men and
their organizations able to influence policies and institutions that affect
their livelihoods and; (iv) enabling institutional and policy environments to
support agricultural production and the full range of enterprise
development and related non-farm activities. Key policy orientation
includes natural resources – land, water, energy and biodiversity; CC
adaptation; improved agricultural technologies and effective production
services; integration of poor rural people within VCs; and technical skills
development.
Viet Nam
COSOP 2011
-2017
The Country Strategic Opportunities Project (COSOP), which is aligned
with the policies and strategies of GoV, has three main strategic
objectives, to which the CSSP is closely aligned: (i) Enable poor rural
provinces to carry out market-led, pro-poor rural Development. This
objective is satisfied through the provincial approach using the market-
oriented SEDP and the VC Approach; (ii) Improve access of poor rural
people – particularly women – to commodity and labour markets. This
objective is satisfied through the targeting methodology, ensuring
representation of the poor in planning forums and a range of pro-poor
engagement products, particularly those involving provision of rural
financial services; and(iii) Enhance the capacity of poor rural households
to adapt to CC. This objective is satisfied through the outcome employed
to finance CC adaptation. All of these target group characteristics are
consistent with IFAD policy. Additional, CSSP builds on the new GoV NTP-
NRD, NTP-SPR and NTP-RCC.
Environmental
Natural
Resource
Management
(ENRM)
Policy
CSSP supports the primary and secondary objective of this policy by
promoting sustainable upland agriculture and forestry production systems
resilient to CC. The program adheres to the following policy principles:
(i) increased investment in approaches providing multiple benefits for
sustainable intensification of agriculture: improved watershed / resilient
infrastructure; (ii) strengthening the governance of natural assets to the
rural poor through land ownership and community empowerment;
(iii) equality and empowerment of women and ethnic peoples in the
context of natural resource management and family nutrition; and
(iv) Improving access of poor rural communities in financing environmental
protection and the fight against CC.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Detailed Design Report
Appendix 12. Compliance with IFAD policies
283
IFAD’s CC
Strategy
Consistent with the goals, purpose and core principles of
IFAD’s Environmental Natural Resource Management (ENRM)
Policy the proposed program’s targets groups are largely poor,
ethnic minority households and communities in the uplands of
northeastern Viet Nam and sets out to address CC adaptation,
sustainable land management and poverty reduction in an
integrated fashion. The target group is disproportionately
poor and highly dependent on staple crops, traditional
agriculture and the natural resource base (e.g.,
NTFPs). Living in more remote areas, they have reduced
access to markets and supporting services and so have low
rates of agricultural investment and, in consequence, lower
productivity. They are also identified as being highly sensitive
to both CC and natural disaster impacts for all these same
reasons. In response, the Project supports actions for long-
term adaptation that address the drivers of vulnerability —
such as adaptation options that reduce poverty and increase
household resilience — and that integrate CC into
development planning and public and private (VC and
enterprise) investment.
IFAD’s Policy for
Gender equality
and Women's
empowerment
CSSP will systematically address issues of gender equality and
women's empowerment. It will help women and their organizations in
their advocacy for access to resources and knowledge. It will
strengthen the capacity of Project partners (national, local and
decentralized institutions, training centers, private sector providers and
national and international NGOs) to take into account issues of gender
equality and community empowerment. This is particularly considered
a difficult group to reach and therefore will be subject to special
attention.
IFAD’s Policy for
indigenous
people
The approach to the non Kinh ethnic groups is consistent with IFAD’s
policy on ethnic minorities. The target populations in the uplands
consist mainly of diverse ethnic groups, not from the Kinh ethnic
majority. Cultural differences will dictate the approach adopted, as well
as different poverty levels. Local languages will be used in all village
meeting, planning and extension sessions. District teams responsible
for implementation will reflect gender balance, and their members will
have command of ethnic languages. Capacity building tools will be
developed in the languages of the main ethnic groups and take into
consideration cultural differences. Special efforts will be made to recruit
facilitators and LF2F extension agents speaking ethnic groups
languages and in mobilizing and mentoring students from the ethnic
schools.
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Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Detailed Design Report
Appendix 12. Compliance with IFAD policies
284
IFAD’s Policy to
improve access
to Land and
security of
Tenure
Tenure insecurity is a major risk for the implementation of adaptation
measures to CC. CSSP will support the Participatory Forest Land
Allocation and Use (PFLAU) through co-finance for the issuance of
forest use right certificates. There is a close link between the way in
which natural resources are accessed and retained, and the way in
which they are managed. The better defined and more secure the
tenure or use rights, the more sustainably those resources are
managed. Yet, tackling land degradation, or sustainably exploiting
rangeland or fisheries resources, are also about improving
management and conservation technologies and practices. Two policy
objectives of IFAD are identified: (i) align with national priorities and
supporting strategies to reduce poverty and (ii) focus on empowerment
of action of the rural poor and their representative organizations.
IFAD’s
Knowledge
Management
Strategy
The CSSP is aligned with the Knowledge Management strategy,
especially in the following areas (i) strengthening the process of
knowledge sharing and learning; (ii) development of partnerships to
provide a broader base of knowledge sharing and learning and;
(iii) promotion of a dynamic platform for knowledge sharing and
learning. The Project will use (human and financial) resources to
enhance its impact by sharing knowledge and learning.
Socialist Republic of Viet Nam
Commercial Smallholder Support Project in Bắc Kạn and Cao Bằng
Detailed Design Report
Appendix 13. Contents of the Project Life File
286
Appendix 13: Contents of the Project Life File
1. Completion report for the Bắc Kạn Public-private partnership for Agroforestry Development
2. Completion report for the Cao Bằng Doing Business with the Rural Poor Project
3. Aide memoire from Detailed Design Mission
4. Thematic reports from Bắc Kạn and Cao Bằng, including:
Thematic report on Agriculture and Rural Development
Thematic report on Forestry
Thematic report Poverty
Thematic report on Rural Credit and Finance
Thematic report on Industry and Trade
Thematic report on the Cooperative Alliance
Thematic report on the Farmer’s Union
Thematic report on Science and Technology
Thematic report on Ethnic People
District status reports
5. Bắc Kạn Initial Project Design Report
6. CSSP Pre-design Report
7. CSSP Social, Environmental and Climate Assessment Procedures Review Note
8. COSTAB file containing all detailed and summary Project cost tables