WHY DO PROJECTS FAIL (AGRIC PROJECTS)

the most common reasons agricultural projects run into problems of implementation may be

grouped into five major categories: (1) inappropriate technology; (2) inadequate support systems

and infrastructure; (3) failure to appreciate the social environment; (4) administrative problems,

including those of the project itself and of the overall administration within the country; and (5)

the policy environment, of which the most important aspect is producer price policy.

Inappropriate technology

Given the use and availability of land in most developing countries, increased crop production

generally must depend on greater crop yields rather than on area extension. Thus, improved

technology is a key element in most agricultural projects. Among the thirty-two projects in the

1981 review, as many as twenty-two depended on technological packages substantially new to

the farmers in the project area. The introduction of new technology was concentrated in

irrigation, tree-crop, rural development, and fisheries projects.

New technologies included a range of innovations. For irrigation projects, a farm input package

with water as the main input was followed by improved seeds and further complemented by

fertilizers and sometimes other inputs and improved cultural practices. For tree-crop projects,

innovations took the form of improved cultural practices and equipment, early-maturing and

high-yielding hybrids, and chemical instead of manual weed control. Rural development projects

introduced farm input packages similar to those for irrigation; livestock projects emphasized

pasture improvement; fisheries projects introduced improved fishing techniques and boats and

equipment; and the storage project provided for modernized grain storage, pest control, and

transport.
Infrastructure and Support Systems

As may be expected, the content and detail of the support systems and infrastructure vary widely

from project to project. In the projects reviewed, marketing systems received the most frequent

attention research support was given significant, and credit and extension support received equal

treatment .Input supply systems received the least attention.

A major problem in agricultural and rural development projects is organizing farmers efficiently

to provide them services, especially in their adapting new technology. The appropriate

organization of farmers into self-help schemes is especially difficult, and the record of

cooperatives has not been good. There are no easy solutions to these problems. A critical factor

is to recognize at the project design stage that the small farmer will not take risks that could

involve losing his livelihood and that some form of organizing farmers into self-help groups is

essential to economical provision of government service.

Policy Environment

Every project must be implemented within a framework of policies set by the government. If

these are such that farmers' incentives are destroyed or other serious impediments are put in the

way of project implementation, then the project cannot be expected to achieve satisfactory

results.

For instance, the overriding importance of producer prices in affecting producer income,

production levels, and economic efficiency was confirmed in the 1981 agricultural project

reviews. Prices contributed to expansion of production by encouraging farmers to participate in

the project, to expand areas devoted to the project crops, and to use more inputs and thereby
increase yields. The 1981 review analyzed project performance in relation to prices in eighteen

projects. Eleven out of thirteen projects implemented under favorable prices achieved or

surpassed their production objectives; all five under unfavorable prices failed to do so. Projects

implemented under favorable prices offered an average rate of return at re-estimate of 22

percent, whereas those under unfavorable prices averaged 10 percent.

Problems of poor project analysis

When a project analysis has failed to anticipate the outcome of a project investment, a common

reason appears to have been simply poor preparation of the analysis. A number of such cases

were analyzed in a review prepared by Olivares (1978), from which this section draws heavily.

Underestimated costs were common, either as a result of the analyst's being systematically

optimistic about cost or making an especially poor estimate about the cost of particular

components. Sometimes a component necessary for proper functioning of the project or an

activity critical to the project was omitted from the cost estimates, even though in the same

analysis it was noted that it would be essential to proper execution of the project. In the projects

reviewed, components commonly omitted from the cost estimates (although not necessarily from

the project and closely associated activities planned by the technicians) included agricultural

extension to help farmers adopt new practices, training programs for project technicians,

agronomic and livestock trials, complementary infrastructure such as roads or market facilities,

and the expansion of the credit availability critical to the farmers' ability to adopt new techniques

based on purchased inputs.

Excessively optimistic projections frequently were made during project preparation. In the

projects reviewed, overestimates were common in projecting areas to be brought under

cultivation, yields, rates of increase in livestock herds, and total production in the project area.

The most common of these overestimates proved to be in cultivation intensity in irrigation

projects and in the calving rate in cattle production projects. Project analyses frequently were too

optimistic about the rate at which new cultivation practices would be adopted with irrigation,

about the rate at which new areas would be brought under methods of improved cultivation, and

about the rate at which the new technology could be applied under farm conditions.