Competitive Matching Grant Principles and Approaches and Achievement

Competitive Matching Grant: Principles and Approaches and Achievement Ganesh Kumar Shrestha Sr. Planning & Admin. Officer Project for Agriculture Commercialization and Trade Ministry of Agricultural Development A Lecture Note for a Training organized by Staff College, Jawalakhel, Lalitpur ) 2015

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Grant Instrument- an instrument to achieve project's objective. It is purposive from the side of the grant providers, rationale in-built (Agenda- visible), generally controversial. Competitive Matching Grant Selective (target group/beneficiaries), Support innovative ideas, Purposive, Agenda visible, Accountability from the side of the grant recipients in-built, monitoring and evaluation remain key issue

Grant Amount (PACT) Type of grant and maximum value Small size grant (not to exceed 35, 000 US$ equivalent) Medium size grant (not to exceed 100, 000 US$ equivalent) Micro-grant (not to exceed 10, 000 US$ equivalent) Minimum beneficiary contribution to sub project costs Farmers Groups Coop. Producer associations Private Microenterprises firms Not available 50% 50% 70% Not available Not-eligible 25% 50% Not available 70% Not available 25%

Basic Principles (PACT) 1. PACT has made a provision of grant to meet one of its key objectives of developing partnerships in well-performing or emerging agricultural commodity value chains. 2. Grants are available only to the eligible value chain participants from prioritized agricultural commodity value chains.

Basic Grant Principles (PACT)- contd. , . 3. PACT's grant scheme follows an integrated value chain development approach. 4. PACT grants are competitive matching grants 5. PACT matching grants intend to help filling some of the funding gap in the investment capital of the beneficiaries' sub project. 6. Only proposed proposals for sub projects with demonstrated financial sustainability for the joint applicants can be considered for support under PACT's grant scheme.

Basic Grant Principles (PACT)- contd. , . 7. Grant recipients' contribution should come in the form of cash only. 8. PACT follows an output based financing system 9. Compliance with environment and social safeguards is prerequisite to PACT's grant.

SELECTION OF GRANT RECIPEINTS Three Stage Assessment Process Competitive, Transparent and Objective First- Project Concept Note Stage (20 -30% selection) Second- Field Verification (90+ % Approval) Third- Full Proposal (75+ % Approval) Micro-grant- Two Stage Evaluation (Proposal + Field Appraisal) 8

SECOND STAGE: FIELD VERIFICATION Technical Appropriat eness 9

Third Stage: FPP Evaluation Technical evaluation Rejection Full Project Proposal (By Applicant) Financial evaluation Approved (Subproject) 10 10

Two types of Service Delivery Compared Aspect Service Delivery within Transfer of Technology (TOT) Competitive Matching approach Grant Scheme (CMGS) PACT Source of technology National Agriculture Research Multiple Sources System (NARS) Service delivery approach Piecemeal Holistic and integrative Value chain integration Strategic planning (Time frame) Undermined/almost left out High priority Long-term Short to medium (Maximum 2 -3 years) Nature of subprojects Supply driven Demand driven

Two types of Service Delivery Compared. contd. . Aspect Participation Technology (TOT) Participation (Conventional/informal/nontangible)) Fund channelization Multilayer, Use of government Agencies and direct transfer to the implementation rare and often partial (activity based) Selection of direct As to the wishes of the beneficiaries implementing agencies CMGS -PACT Partnership based on sharing in investment, risks, benefits (tangible) Output based financing system based on results, Direct to service/grant recipients and no intermediaries Sustainability of outputs/outcomes High Low to Medium Transparent competitive process

Key Achievements to Date 13

Project's Current Status (Jan 2015) 14

Project's Projected Status ( July 2015) Time Elapsed 67% Physical Progress 100% Value of contracts awarded (cumulative) 100% Cumulative Disbursements 57% 0% 20% 40% 60% 80% 100% 120% 15

Projected Status (December 2017) Time Elapsed 94% Physical Progress 100% Value of contracts awarded (cumulative) 100% Cumulative Disbursements 97% 93% 95% 97% 99% 101% 16

Weighted Progress 2009 -013) 17

Achievements by Components Component 1: Agriculture and Rural Business SN. Key Activities Current Status Remark 1 Achieved- 517 (74%) In process (two calls) 2 Target (2018) Matching Grants to 700 Eligible Value Chain Participants (Number) Establishment Agribusiness Incubation Centre of 1 By July 2015, this will be achieved (Likely to reach 950+ except micro -grant recipients)100% Draft contract Inception stage signed 18

Achievements by Components Component 1: Agriculture and Rural Business SN. Key Activities Current Status Remark 3 On-going 4 5 Target (2018) Rehabilitation of fire 1 damaged Kalimati Fruit and Vegetable Market, KTM Construction of central 2 wholesale markets (Fruit & Flower, Fish) Construction/rehabilita 4 tion of regional markets Likely to be completed before July 2016 DPR preparation underway Inception stage 19

Achievements by Components Component 2: SPS and Food Trade SN. Key Activities Current Status 1 Target (2018) Capacity Enhancement of Demand DFTQC, VSDAO and basis NPQP Laboratories through the provision of lab equipments Procured in On-going several lots (No procurement (Samples from next FY) analysed in 2013/14 by DFTQC 34, 747, VSDAO - 674 & NPQP: 15) Training to related staff of Demand aforementioned basis departments Construction of Fumigation 2 Chamber and Post Quarantine Facilities On-going 2 3 Remark On-going New procurement NOL from the WB process initiated received but yet no receipt of approval from the MOAD 20

Achievements by Components Component 3: Project Management and Monitoring and Evaluation SN. Key Activities 1 Preparation of Trimester On-going (11 reports) and Annual Project Implementation Reports Preparation for Reports On-going (11 Missions for WB Mission including 3 technical missions) Submission of unaudited On-going and audited reports Supervision and Operation of web. Monitoring of Subbased MIS projects Development of mobile APPs Disbursement of grant Regular based on field appraisals (Call 1 and Call 2 SPs) (Output field verification) 2 3 4 5 Current Status Remark Regular and timely Regular and intensified Already 88. 9% disbursed from call 1 and call 2 commitments

Achievements by Components Component 3: Project Management and Monitoring and Evaluation contd. . SN. Key Activities 6 7 8 9 10 11 Current Remark Status Establishment, operation and supervision of 5 offices Operationaland Project Implementation Support Team active (PRISTs) Offices PCN, FPP and field verification guidelines 15 + Almost preparation and orientation guidelines completed Short studies including value chain 12+ Regular development plan preparation and baseline studies Facilitating supervision of the sub-project Regular sites for Mo. AD and WB missions Orientation to PACT focal persons at Regular department, regional and district Capacity development related activities such Regular as training and observation tours for MOAD, PACT and department officials

Direct Beneficiaries Call 1, Call 2 and Call 3 (SPs) Grant Men Women Total % women Call 1 6444 3852 10296 37. 4 Call 2 17493 14011 31504 44. 5 Call 3 11481 9692 21173 45. 7 Total 35404 27553 62957 43. 8 23

Direct Beneficiaries contd. . 24

Sub-project Managers Call Sub-projects with men SP Managers Sub-projects with women SP Managers Proportion of Women SP Managers (%) 1 43 6 11. 8 2 186 15 7. 4 3 235 32 12. 0 Total 464 53 10. 3% 25

Key Infrastructures Developed by GRs through PACT's Matching Grant Region Collection Centre Storage house Processing Plant Market Shed Central 28 21 13 4 Pokhara 26 14 12 0 Surkhet 5 4 6 2 Doti 1 2 4 1 Total 60 41 35 7 26

Key Challenges 1. Sustaining the current achievements including infrastructures developed. 2. Increasingly high demands for the PACT's grant (Meeting people's expectations) 3. Delayed in meeting milestones and deadlines by many grant recipients- grant disbursement delay 4. Delayed in field appraisal of the activities and outputs achieved by GRs 5. Integration of value chain functions along specific value chain still problematic and challenging due to tendency of most of the persons to get involved in everything

Key Challenges 6. Lacking effective mechanisms for retaining Government Officials due to indirect and direct monetary incentive mechanisms 7. Effective and intensive utilization of Government Officials

Lessons Learned 1. Direct financing to grassroots organizations increases project reach and it could be one of the best options to enhance competitiveness of small agriculture holders and agribusinesses 2. Shifting from input based financing system to output based competitive grant system is a challenging task. This requires transparency, good governance and proactive service delivery from the side of the service provider. 3. Success of output based financing system depends on intensive and timely monitoring and supervision.

Lessons Learned 4. Active participation and involvement of Mo. AD line agencies (government) is crucial in the implementation of big projects like PACT for sustainability of the project activities, outputs, outcomes and impact. 5. Grant and Credit/Loan should be available simultaneously

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