Afghanistan Vouchers forIncreased Production in Agriculture-Plus(AVIPA Plus):
Commodity Value Chain Analyses and
Program Benefit-Cost Analysis
September 2008 – November 2011
US Agency for International Development (USAID)
Cooperative Agreement Award DFD-A-00-08-0034-00
Implemented by International Relief and Development, Inc. (IRD)
Kandahar, Afghanistan
Written by Kenneth Swanberg
Unpublished, not for citation
The views expressed in this publication do not necessarily reflect those of the US Agency for International Development or the United States Government.
Contents
Figures
Tables
Executive Summary
1Introduction and Background
1.1AVIPA Program History
1.2AVIPA Plus Program Goals
1.3Technology Transfer in Agricultural Extension Programs
2METHODS
2.1Value Chain Analysis
2.1.1Rapid Value Chain Analysis
2.1.2Expanded Value Chain Analysis
3Value Chain Analysis Results
3.1Rapid Value Chain Analysis Results
3.2Cross-Cutting Issues
3.2.1Irrigation
3.3Expanded Value Chain Analysis Outcomes
3.4Value Chain Analyses Recommendations for AVIPA Plus
4AVIPA Program Outcomes and Benefit-Cost Analysis
4.1Overview of Strategic Objectives and Performance Indicators
4.2AVIPA North Program Outcomes
4.3AVIPA Plus South Program Outcomes
4.3.1AVIPA Plus South Voucher Package Outcomes
4.3.2AVIPA Plus South Cash-for-Work Program Outcomes
4.3.3AVIPA Plus Grants Program Outcomes
4.3.4AVIPA Plus Training Outcomes
4.4Overall AVIPA Program Outcomes
5Summary and Conclusions
6REFERENCES
Figures
Figure 1. Typical technology adoption patterns for various types of agricultural extension and development programs
Figure 2. Comparison of net income for agricultural crops and poppy in Kandahar and Helmand Provinces, Afghanistan
Tables
Table 1. Commodities included in value chain analyses for the AVIPA Plus program
Table 2. Specific recommendations for commodities in the Rapid Value Chain Analysis
Table 3. Crop budget profiles for Helmand and Kandahar Provinces, Afghanistan
Table 4. Fruit tree performance in Helmand and Kandahar Provinces, Afghanistan
Table 5. Economic outcomes for the AVIPA North wheat voucher and two-wheel tractor programs, Afghanistan, 2008-2011
Table 6. Summary of economic outcomes for AVIPA Plus crop voucher packages in Helmand and Kandahar Provinces, Afghanistan, 2009-2010
Table 7. Outcomes of AVIPA Plus South voucher packages for specific crops, Afghanistan, 2009-2010
Table 8. AVIPA Plus South crop voucher program impacts, including indirect adoption for second and third years, Afghanistan
Table 9. Economic outcomes of AVIPA Plus South cash-for-work infrastructure projects in Helmand and Kandahar Provinces, Afghanistan
Table 10. Economic outcomes of AVIPA Plus South cash-for-work orchard rehabilitation projects in Kandahar Province, Afghanistan
Table 11. Overall economic outcomes of AVIPA Plus South cash-for-work projects, Afghanistan, 2008-2011
Table 12. Economic outcomes of AVIPA Plus South grants program for Helmand and Kandahar Provinces, Afghanistan
Table 13. Overall economic outcomes of AVIPA Plus, Afghanistan, 2008-2011
Executive Summary
Afghanistan Vouchers for Increased Production in Agriculture (AVIPA) was a 2008 – 2011 comprehensive program for international assistance, emergency relief, country stabilization, and agricultural development sponsored by the USAgency for International Development (USAID) and implemented under contract by International Relief Development(IRD). The primary goals of the program were to increase agricultural productivity and rural family farm income, and diversify the agricultural sector to provide greater employment opportunities for the Afghan people to dissuade them from participation in armed insurgency and as an alternative to illicit poppy cultivation.
AVIPA interventionsincluded emergency distribution of wheat seed and fertilizer; subsidized vouchers for seed, fertilizer and inputs for horticultural crops;temporary (cash-for-work) employment forimprovement of roads, canals, water reservoirs, and fruit orchards; community grants for agricultural mechanization;grants to agribusinesses for post-harvest handling and training for all program participants especially farmers. The emergency wheat seed distribution took place in northern Afghanistan, while the other interventions were part of an agricultural stabilization and development effort concentrated in the restive southern Helmand and Kandaharprovinces, in conjunction with international security efforts. To determine which agricultural commodities had the greatest potential in Kandahar and Helmand, IRD developed production budgets and market channel analyses (value chains) for a variety of fruits, vegetables, legumes, forages,grains, spices, and animal products. The analyses concluded that fruits and vegetables would provide the greatest income and employment, with many producing farm income and labor incomes in excess of $2,000/ha, favorably competing with poppy cultivation (which stood at roughly $1,500/ha in 2010) andsignificantly outproducing traditional cereal crops (which were less than $500/ha even in good years). The analyses also identified cross-cutting needsfor irrigation, cold storage, nursery production, and intercropping technologiesto fully realize the benefits of increased commodity production.
The various program elements of AVIPA achieved or exceeded the targets established for number of participants and value of benefits. Direct assistance was provided to 1.07 million farmers with wheat seeds in the North and eventually over most of the country, creating over 130,000 full time jobs over the impact period of three years, the effective time period for the adoption of the intended seed and fertilizer technologies.Cash-for-work and specialty crop voucher programs in Helmand and Kandahar created employment for over 169,000 full-time workers over the same period, covering the three to five years after the interventions were delivered. Future value-added processing activities for fruit and vegetables are expected to generate 33,000 full-time jobs. A total of 658 small grants for agricultural machinery and equipment were disbursed to 422 agricultural cooperatives and associations. Over 200,000 individuals received training. The overall project generated an estimated $1.253 billion in gross farm operator and labor income for participants during the project impact period, which extendsfor up to five years from the adoption of improved technologies. The area impacted or affected by the project interventions and their respective adoption rates, reached almost 1 million hectares for the three major programs of vouchers – wheat in the North and non-wheat crops in the South, a cash-for-work program in the South and also a grants program in the South.
Total US Government funding for the AVIPA project with its many modifications (2008–2011) was $474 million, including overhead charges for administration and security services. Based on direct investment of $356 million (excluding overhead and some programs not evaluated),the benefit-cost ratio for the project was 3.1 and the internal rate of return on investment for cash flows over multiple years was 107 percent. These returns are very high by conventional standards for international agricultural development projects. As a result of AVIPA, it is expected that Afghan farmers will be encouraged to shift from relatively low-value grain and forage crops to higher-value fruits and vegetables, and that further development of post-harvest handling, processing, and exporting businesses will ensue. AVIPAeffectively contributed to the strategic objectives ofimproved physical and food security, increased rural family incomes and employment, a certain degree of agricultural sustainability and enhanced trust in government, while economically supporting communities and providing alternatives to poppy cultivation and insurgency involvement for Afghan farmers and workers.
1Introduction and Background
Nearly a third of the people in Afghanistan, 7.4 million, are unable to get enough food to live active, healthy lives. Instability, low household income, and declining agricultural productivity are contributing factors that lead Afghans to grow illicit opium poppy or join the insurgency so they can afford food for their families.
Afghanistan Vouchers for Increased Production in Agriculture (AVIPA) and its program extension, AVIPA Plus, were funded by theUS Agency for International Development (USAID) and implemented by International Relief Development (IRD) during the period September 2008 through November 2011, with the long‐term goals to increase agricultural productivity and rural family farm income and to strengthen links between the Government of the Islamic Republic of Afghanistan (GIRoA) and its people.A key partner for AVIPA was the Afghanistan Ministry of Agriculture, Irrigation and Livestock (MAIL) at the central government, provincial, and district levels. In its southern stabilization efforts in Helmand and Kandahar provinces, the program partnered with regional, provincial, and district‐level representatives of the joint civilian‐military stabilization effort undertaken by United States Government (USG) agencies and the coalition International Security Assistance Force (ISAF).
1.1AVIPA Program History
The original AVIPA project, budgeted at $33.2 million, began September 1, 2008, as a one‐year food security program created by USAID’s Office ofUS Foreign Disaster Assistance (OFDA) in cooperation with MAIL. It was envisioned as an emergency response program to mitigate the impact of a growing food crisis in Afghanistan brought on by severe droughts and the unprecedented increase in wheat seed prices in 2008 of over 400%. AVIPA was tasked with providing seed and fertilizer to 176,000 drought‐affected subsistence farmers to improve wheat yields and food availability during the 2008–2009 agricultural period in nine critical provinces of Afghanistan. Between November 2008 and May 2009, USAID gradually expanded the program to 18 drought‐affected provinces, targeting 297,000 beneficiaries with a total budget of $60 million.
In August 2009, USAID approved a one‐year extension of the program through August 2010, and added a $300 million stabilization effort focused on the southern provinces of Helmand and Kandahar. This component, known as AVIPA PlusSouth, became a key civilian counterpart to the US military troop surge in southern Afghanistan, by providing stabilization efforts in key districts targeted by ISAF and the Afghan National Security Forces (ANSF). Most of the budget, $250 million, was allocated to this component, while $50 million was budgeted to continuing the large-scale distribution of wheat seed and fertilizers in the same 18 provinces as the previous year forAVIPA North and for the expansion into 14 more districts in the East and West.The AVIPA Plus South projectcomprised four programs:cash-for-work projects,small grants, agricultural vouchers, and agricultural training and capacity building.In 2010, the geographic scope of AVIPA Plus North increased to 32 of the country’s 34 provinces, and eventually included support for agricultural mechanization, in addition to the National [Wheat] Seed Distribution Program (NSDP) implemented in 31 provinces. The original cooperative agreement was modified 23 times with various degrees of change in scope and focus. Total project funding ultimately increased to $474.4 million through November 2011.
In August 2011, AVIPA Plus received direction from USAID to transition appropriate capacity and assets to USAID’s follow‐on agriculture project, the Southern Regional Agriculture Development program (S-RAD)[1], which is also being implemented by IRD. AVIPA Plus ended November 15, 2011.For a complete summary of the AVIPA and AVIPA Plus programs, please see the program Final Report (IRD, 2012).
1.2AVIPA Plus Program Goals
The goals of the AVIPA Plus programwere to increase rural family farm production, productivity and income, and strengthen links between the Afghan government and its people.To achieve these goalsthe program hadfive definedstrategic objectives:
- Increase farmer’s use of high quality agricultural inputs
- Support profitable farm family participation in agricultural value chains
- Implement cash-for-work projects that enhance rural family farm production and productivity
- Implement a small grants program that contributes to rural family farm production and productivity
- Include Afghan authorities, civilian and military counterparts in program implementation
The AVIPA Plus program in Helmand and Kandahar Provinceswas directed primarily atincreasing the production of fruit and vegetable crops. To determine which crops should be the focus of AVIPA Plus, analyseswere conducted to evaluate potential crops for their performance under existing conditions.The analyses concluded that vegetables, fruitsand somelegumes, could favorably compete with poppy cultivation in southern Afghanistan in terms of income and labor generated. Moreover, many of these crops could be grown more than once each year to providea steadier income. At the same time, manysouthern Afghan farmers were looking for an alternative to poppy cultivation, since a severe blight had reduced production volumes and values, and crop eradication and trafficking interdictions continued to threaten the farmer’s ability to realize the expected benefits from opium production. In addition, the farmers expressed interest in corn and some forage crops, so these were added to the voucher packages as a ‘safety net’ for home and livestock consumption.
The expanded AVIPA Plusprogram was introduced with the following interventions:
- Distribution of partially subsidized vouchers (20% co-pay) for seeds and fertilizer for selected vegetables, legumes, forages, and corn
- A cash-for-work program providing daily jobs for agriculture infrastructure rehabilitation such as farm-to-market roads, irrigation canals and small reservoir maintenance, for orchard and vineyard improvements, and building of processing facilities such as raisin-drying sheds.
- Grants for tractors and farm implements, and assistance to local agribusinesses and livestock associations.
- Extension training to accompany all project componentslinked to the Afghan Directorate of Agriculture, Irrigation and Livestock (DAIL).
1.3Technology Transfer in Agricultural Extension Programs
The impacts of agricultural development and technology transfer efforts such as AVIPAmay be understood in the context of the theory of technology adoption, developed during the era of the Green Revolution in the 1960s to explainthe pattern of adoption of improved wheat and rice varieties introduced to poor and hungry countries.The “diffusion of innovations” theory recognizes that farmers adopt technologies more quickly or more slowly depending upon their ability to absorb the risks inherent in the technologies and their perception of that risk(see Rogers, 2003). The first farmers to adopt a new technology are risk-taking “innovators,” followed by “early adopters”who may have a margin of wealth to absorb the risk, thenfinally the “mass followers,”who adopt a technology only when it is proven reliable and costeffective. The rate of technology adoption typically follows a logistic,S-shaped growth curve, with adoption initially slow while interventions are designed and pilot tested, then gradually increasing as they move into broader demonstration and implementation, then eventually slowing again as the technology becomes widely accepted. The theory alsorecognizes a group known as “indirect adopters” who do not receive any direct instruction or incentives, but may decide to adopt a new technology simply by observing its use by others.Indirect adoption rates also follow the S-shaped growth curve, but at a delayed or reduced rate. The indirect adoption rate is sometimes added to the direct adoption rate in calculating program benefits. In addition, it is acknowledged that some technologies may be adopted by people independently, even in the absence ofextension interventions. This so-called“autonomous adoption” may be subtracted when calculating the overall benefits of technology transfer programs.
In Afghanistan, the traditional system for technology transfer has been MAIL’s agricultural extension program, supported by ICARDA, FAO, USAID, and other donors.This extension approach has been prominent throughout the 18 provinces originally targeted by AVIPA.The principal interventions of these extension programs have been:
- Adaptive research of improved wheat seed and other grains
- Demonstrations of wheat production practices thru field days
- The development of aseed enterprises program to propagate improved wheat seed for sale by private seed dealers
- Creation of field stores where farmers can buy seeds and fertilizers
- Marketing programs that support the purchase of farmer’s produce
- Development of agro-processing industries to expand the demand of the crops produced, e.g., dried vegetable processing plants andjuice factories
The adoption rate of technology introduced by traditional agricultural extension approaches has been relatively low, in the range of 15to 20 percent because of a lack of monetary incentives andinadequate transport or processing infrastructure.Under these circumstances, farmers tend to adopt lower cost components of the recommended practices first, such as adjusted time of planting, land preparation, and weeding techniques. Farmers may later plant seedssaved from a harvestof improved seeds because their cost is relatively low.Later still, more costly practices may be adopted, such as use of manures, fertilizers, and pesticides. With this pattern of adoption, increases in crop yields and farmer incomes may be low and slow, with minimal program impacts.
Donor-funded agricultural development efforts may incorporate a more comprehensive approach to address some of the limiting factors, such as high-yielding varieties, organic and inorganic fertilizer, integrated pest management, drip irrigation, intercropping, crop-insurance, price supports, credit with low interest, protected intensive horticulture,water harvesting, and engaging women in agriculturalproduction. Projects such as these may result in increased technology adoption rates ofbetween 20 to 60 percent after several years, with productivitygains in proportion to the level of donor support provided.
AVIPA introduced yet another category of program characterized by accentuating the voucher with 20%-30% co-pay. In SRAD the voucher was renamed a “conditional asset transfers” but is virtually the same as the voucher.A voucher is distributed to qualified and eligible farmers for a minimal co-pay which is redeemed for one to two acres of seeds with accompanying fertilizers. In addition, the traditional interventions mentioned above are incorporated into the program, along with cash-for-work programs, grants, and marketing of value-added products through farmer cooperatives. AVIPA has demonstrated, for the first time, that such a program can generate significantly higher adoption rates of 60 to 90 percent, beginning in the first and second years, and in the case of the AVIPA vouchers in the North and AVIPA Plus vouchers in the South, adoption was observed in the first yearas illustrated in Figure 2 and 2 below. (Note: The diagram shows adoption taking off in year two because the AVIPA Plus modification began in year two of the AVIPA program Cooperative Agreement.) Farmerincomesassociated with the more rapid adoption of new crops and technologies are significantly higher thanthosein typical development projects.AVIPA Plus follows the model of the “conditional asset transfer” donor funded program, with seed vouchers, cash-for-work projects, grants, infrastructure development, farmer training, and marketing assistance.