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Yields increased from 1.8 to 5.5 M T k a (see figure 1) while the ex-post ERR was 30%, compared to 16% at appraisal;

G o M was able to push through difficult institutional reforms involving divestiture and staff layoffs (70% o f staff was laid off);

Participation was strengthened through farmer membership o n management committees, ON Board, and overseeing performance contracts;

The project transferred credit responsibility from ON to the State Agricultural Bank and s t i m u l a t e d p r i v a t e i n v e s t m e n t i n f a r m i n f r a s t r u c t u r e . C r e d i t w a s i n i t i a l l y u s e d f o r e q u i p m e n t , o x e n

and fertilizer, with repayment rates o f over 95% ; and Water fees are retained in the areas where they are collected;

at least 50% are used for

maintenance while only 10-12% are transmitted to Head Office for general use.

6 a Q - 7,000 6,000 5,000 4 , 0 0 0 Y 3,000 2,000 1,000 0

Evolution of Paddy Yield

Zi%%3%6%%%S~$?S%86%%86 ~~~~~~Cn~~~~~~Cn~~~OO

N

N

Year

Fig 1: evolution o f paddy yields in ON

Lessons Learned

For greater impact, sector reforms and investments require a conducive macro framework such as the proper valuation o f the national currency, a low inflationary environment and a liberal trade

policy. In addition

, sectoral reforms should be accompanied by adequate complementary sectoral

investments in order to have a major impact.

A well-coordinated multi-donor effort i s essential for high impact investments which utilize potential synergy and complementarity within and between sectors.

Farmer empowerment and transparency i s essential for greater water fee recovery and sustainability in irrigation schemes, and the fee setting mechanism should be an independent and transparent process, based o n clear needs and free from G o M interference.

Greater transparency in land management increases farmers' land security, even in the absence o f land titles.

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