Sustainable Agricultural Production Programme

Supervision report Main report and appendices Mission Dates: 29-Nov 10-Dec-2015 Document Date: 29-Jan 2016 Project No. 1534 Report No: 4007-MW East and Southern Africa Division Programme Management Department

Contents Abbreviations and acronyms iii A. Introduction 1 B. Overall assessment of programme implementation 1 C. Outputs and outcomes 2 D. SAPP s implementation progress 6 E. Fiduciary aspects 10 F. Sustainability 13 G. Other 14 H. Conclusion 15 i

Appendices Appendix 1: Summary of project status and ratings 17 Appendix 2: Updated logical framework: Progress against objectives, outcomes and outputs 21 Appendix 3: Summary of key actions to be taken within agreed timeframes 25 Appendix 4: Physical progress measured against AWP&B, including RIMS indicators 27 Appendix 5: Financial: Actual financial performance by financier; by component and disbursements by category 33 Appendix 6: Compliance with legal covenants: Status of implementation 35 Appendix 7: Knowledge management: Learning and Innovation 37 Appendix 8: Progress against previous mission recommendations May 2015 Aide Memoire 39 Appendix 9: Supervision mission schedule 43 Technical Annexes Technical Annex 1: Agriculture (Component 1 and 2) 45 Technical Annex 2: Poverty, targeting and gender 61 Technical Annex 3: Financial management report 67 Technical Annex 4: Monitoring, evaluation and knowledge management 77 ii

Abbreviations and acronyms ADD AEDC AEDO ASWAp AWPB CA CGIAR DAES DAPS DARS DCD EPA FAO FBS FFS GAPs GoM KAP LUANAR M&E MoAIWD MoFEPD MRA MTR PPF RIMS RLEEP SAPP TPCT TLC Agricultural Development Division Agricultural Extension Development Coordinator Agricultural Extension Development Officer Agricultural Sector Wide Approach (formerly ADP) Annual Work Plan and Budget Conservation Agriculture Consultative Group on International Agricultural Research Department of Agricultural Extension Services Department of Agricultural Planning Services Department of Agricultural Research Services Department of Crop Development Extension Planning Area Food and Agricultural Organisation Farmer Business Schools Farmer Field Schools Good Agricultural Practices Government of Malawi Knowledge, Attitude and Practice Lilongwe University of Agriculture and Natural Resources Monitoring and Evaluation Ministry of Agriculture, Irrigation and Water Development Ministry of Finance, Economic Planning and Development Malawi Revenue Authority Mid-term Review Programme Preparatory Facility Results Impact Management System Rural Livelihoods and Economic Enhancement Programme Transitional Programme Coordination Team Total LandCare iii

A. Introduction 1 1. The Government of Malawi and the International Fund for Agricultural Development (IFAD) carried out jointly the annual supervision of the (SAPP) in Malawi from 29 November 10 December 2015. The objective of the supervision mission was to assess the overall performance of SAPP against its goal and development objective, its implementation progress by component against the targets, the adherence to the Programme s strategy and institutional performance; to review the fiduciary aspects, compliance with financing covenants and prospects of sustainability beyond SAPP s closing. The mission visited project sites in Chitipa, Nkhotakota and Lilongwe districts, and Blantyre and Machinga Agricultural Development Divisions (ADDs), and consulted with beneficiaries and stakeholders at all levels. 2. The IFAD loan was approved on 13 December 2011 and was signed and entered into force on 24 January 2012. The process of fulfilling the conditions for withdrawal of IFAD funds was protracted and the first disbursement was only made in August 2013 for implementing the AWPB 2013/14. In order to accelerate implementation, the Government of Malawi and IFAD developed an Implementation Fast Track Action Plan and installed a Transitional Programme Coordination Team (TPCT). Technically, SAPP is in its fourth year of implementation with five years left until the completion and closing dates, set at 31 March 2021 and 30 September 2021 respectively. 3. SAPP s development goal is to contribute to poverty reduction and improved food security by achieving a viable and sustainable smallholder agricultural sector employing good agricultural practices (GAP). This shall be achieved by developing appropriate agricultural technologies/gaps (component 1) and widespread adoption of GAPs by farmers (component 2). Programme implementation is integrated within the Agricultural Sector Wide Approach (ASWAp) (component 3). 4. IFAD co-funds SAPP with approximately US$ 46 million equivalent, of which 50% will be provided as a loan at IFAD highly concessional conditions and terms and 50% as grant under IFAD s Debt Sustainability Framework. The Government of Malawi is committed to contribute US$ 4.2 million equivalent to SAPP and the Programme target group are expected to contribute in kind an amount of approximately US$ 1.2 million equivalent. 5. The IFAD team expresses its gratitude to the Ministry of Agriculture, Irrigation and Water Development (MoAIWD) and the Ministry of Finance, Economic Planning and Development (MoFEPD), their respective departments; the staff at the ADDs, districts and Extension Planning Areas (EPAs), and Total Land Care (TLC); and the TPCT for their support and guidance during this mission. B. Overall assessment of programme implementation 6. The overall cumulative implementation progress of SAPP since its start-up in 2012 has improved and is now rated at moderately unsatisfactory. The improvements noted since May 2014 with the instalment of the TPCT, commencement of the Implementation Fast Track Action Plan and joining of TLC has continued to accelerate implementation as reflected in the recent progress report. 7. Annual implementation progress. Rated at moderately satisfactory. As of 30 September 2015, the Programme had utilized $1,782,374 representing 19% of the total AWPB and 71% of the first quarter for 2015/16. Utilization rates varied from 10% for component 1 (adaptive research and knowledge management), 18% for component 2 (farmer adoption of GAP) and 36% for component 3 (programme coordination and management). The increase in the flow of funds to the ADDs, as a 1 Mission composition: Ms Clare Bishop-Sambrook (mission Leader and IFAD Lead Technical Specialist, Gender and Social Inclusion); Ms Wafaa El-Khoury (IFAD Lead technical Specialist, Agronomist), Mr Mohamed El-Ghazaly (IFAD Consultant, M&E Specialist); Mr Godfrey Wanjohi (IFAD Consultant, Financial Management and Procurement Specialist). Mr Thomas Rath (IFAD Country Programme Manager) briefed the mission and provided guidance remotely from HQ, Rome. 1

result of better organization at the TPCT and the recruitment of the Justification Assistants, has enabled more activities to take place in a timely manner. The implementation of the 2015/16 annual work plan is broadly on track for most of the subcomponents. The high implementation rates of sub-components 1.1.1 (research planning and management), 2.1.1 (farmer to farmer extension network) and 2.2.5 (small stock livestock development) are commendable. Rates of implementation have been slower in sub-components 1.2 (knowledge management) and 2.1.6 (training for Department of Agricultural Extension Services-DAES staff). 8. Likelihood of achieving development objectives. Rated as moderately satisfactory. The Programme has made good progress mainly in terms output level indicators which suggests that if the pace can be maintained, it will be able to reach at least partially its targets set at appraisal. In addition, GoM is providing the required attention to SAPP and the MTR will be commencing by the end of January 2015 to reassess and eventually adjust targets and programme design. 9. It is encouraging to note that the following outputs (and RIMS first level indicators) are on track: land under improved management practices; government staff trained; livestock groups formed or strengthened; people accessing advisory services; community groups formed/strengthened and community plans developed. 10. There is still a lot of ground to catch up in the following areas: people trained in crop production and technologies (although 2015/16 progress has been good); people trained in livestock production and technologies; people trained in post-harvest production, processing and marketing; training of service providers; and a range of activities related to savings and credit. 11. Implementation of agreed actions from the previous mission. Rated as moderately satisfactory. Around half of the agreed actions have been fully implemented, with several still incomplete, including the adaptive research strategy, lead farmer study, farmer field school (FFS) manual and incomplete M&E system. Moreover, procurements have exceeded expenditure under categories 1 and 2. C. Outputs and outcomes 12. The two SAPP components and sub-components are led by several departments, including Department of Agricultural Research Services (DARS), Department of Agriculture Extension Services (DAES) and Department of Crop Development (DCD). To strengthen the coherence between components 1 and 2, the mission encourages close interaction and detailed discussions between the various departments, regarding the planning of activities. This usually takes place after harvest and in preparation of the activities of the next season (June/July). This will ensure proper exchange of information and enhanced efficiency of SAPP. 13. Component 1: Adaptive Research and Knowledge Management. Rated as moderately satisfactory. The physical progress for the first quarter July-September 2015 has been variable for the different activities with an average achievement rate of about 33%. Component 1 aims to generate Good Agricultural Practices (GAP) that best suit the agro-ecological and socio-economic contexts in Malawi and are developed with and adopted by Malawian smallholder farmers. 14. Subcomponent 1.1: Adaptive Research is led by DARS in the areas of research planning and management, capacity building for adaptive research including on-farm trials, on-farm research trials and soil fertility enhancement. 15. Research planning and management: Through joint meetings with other stakeholders, workplans and budgets for research programmes for 2015/16 financial year were reviewed and approved. A total of 23 staff (target of 90) were trained as trainers in running conservation agriculture trials and guidelines. 16. Adaptive Research Strategy: DARS in close collaboration with various research stakeholders developed the draft Adaptive Research Strategy document that provides the framework and 2

guidelines for the implementation of adaptive research in GAPs within the maize-legume based systems in Malawi. The strategy highlights research gaps and focus areas for adaptive research, with reference to the roles and responsibilities of partner institutions. This strategy will be part of the ASWAp national research strategy that is still being developed. The strategy document was reviewed by IFAD and comments were provided to enhance its clarity and effectiveness. The mission is proposing some changes in the strategy, including: defining the objectives, the scope of the strategy, key GAP concepts, and revision of the main themes for action research to include geo-referenced characterization of agro-ecological zones, with special emphasis on climate change vulnerability, soil fertility and erosion that should be the basis for the biophysical research. It is also suggested to mainstream socio-economic research within all strategy activities and include postharvest and nutrition within the other agricultural production research themes. More details will be provided in the technical annex in the Supervision Mission report. 17. Suggested studies that would be of importance to address under the strategy include: (i) research to identify factors affecting adoption of Conservation Agriculture (CA), especially socioeconomic and gender-related aspects, where possible basing the study on lead farmers and group members of demonstration plots to be led by DARS in collaboration with DAES and the Department of Land Resources; and (ii) research to assess efficiency and cost of postharvest technologies (metal bins, hermetic bags, plastic bins, etc., and traditional methods) in reducing postharvest losses in: different agro-ecologies; under different socio-economic conditions of households; and at the household and group levels. This would be led by DARS in collaboration with DCD. 18. Capacity building for adaptive research: Several farmers field days were carried out mainly for participatory research and varietal selection, and a three-year capacity building plan for DARS staff was developed. Following the recommendation of the previous mission, no long-term training or studies have been pursued awaiting the core function needs analysis of the MoAIWD. 19. On-farm research trials: These were based on various research protocols as in the previous season. Lead farmers, with an emphasis on youth, were further identified to implement on-farm trials during the 2015/16 season. Seeds of maize and various legumes (2 MT against the target of 5 MT), fertilizers (7.5 MT) and chemicals (800 litres of pesticides and herbicides) were procured and distributed to the lead farmers for the trials. 20. The mission was pleased to note the increased efforts made to ensure better coordination and planning of the on-farm trials with other concerned stakeholders. It also commends the quality of the trial lay-outs and the good understanding by the lead farmers of the objectives of their specific trials. It is recommended to further include, and on a regular basis, a control treatment within the trials of the local practices used by farmer, whether as local varieties or local cultivation practices used. 21. Sub-component 1.2: Knowledge Management and Communication is led by the Department of Agricultural Planning Services (DAPS). A draft knowledge management and learning strategy (KM&L) has been developed but still needs to go through a validation workshop. The mission recommends the identification of a dedicated KM Officer for SAPP and the finalization of the KM&L strategy as soon as possible. In the meantime, ensure proper coordination and harmonisation of KM activities and messages undertaken under components 1.2 and 2.1.8 (extension material and mass media). Agreed action Responsibility Agreed date Prepare final draft Adaptive Research Strategy 2015/21 based on DARS with 31 January 2016 suggestions provided by the mission assistance of Crops desk in PTA/IFAD Identify and appoint a dedicated KM Officer for SAPP PS 31 January 2016 Finalize KM&L strategy DAPS 31 January 2016 22. Component 2: Farmer Adoption of Good Agricultural Practices. Rated as moderately satisfactory. The physical progress the period of July-September 2015 averaged 60%. 3

23. Sub-component 2.1 Improved Agricultural Extension, led by DAES, and implemented through district-based networks of lead farmers, farmer field schools (FFS) and farmer business schools (FBS). The component is supported by the Memorandum of Understanding with TLC that has been in action since August 2014 to support the promotion of CA and related GAPs in locations where DAES staffing for outreach is not sufficient. 24. Farmer-to-farmer extension network. During the reporting period (July-Sept 2015), a total of 2,983 (target of 3,158) lead farmers (1680 females) were identified by DAES and TLC. All were trained in the techniques of CA, manure making, facilitation and communication skills, and group formation. With the expansion of the livestock activities, lead farmers were also trained in goat and chicken management. In addition, 718 lead farmers (358 females) were also trained in gender mainstreaming and nutrition. A total of 1,681 harmonized demonstration plots (out of 2,100 planned) have been identified and prepared for the onset of the rains. 25. During the field visits, the mission observed demonstration plots and discussed with lead farmers and their follower groups, in both separate groups or organised in clusters. The mission commends DAES and TLC for the quality of the demonstration plots observed and the engagement, enthusiasm and commitment of the lead farmers and their groups in the application of CA principles, the use of manure (or more often compost) as well as the development of nurseries for agroforestry trees to be used within the CA system. As noted by farmers, CA has proven to be crucial for maintaining good yields during the past season that was characterised by long periods of droughts in many of the SAPP districts. Other issues that were raised in field discussions included the limited availability of crop residues (resulting from low biomass, theft or burning), and the difficulty of hand weeding where herbicides were not available, although farmers in other areas noted a reduction in the weed populations under CA. The mission recommends that factors affecting the adoption of CA, especially socio-economic and gender-related aspects, be studied under adaptive research (under component 1.1). 26. While lead farmers met during this mission seemed knowledgeable and quite dedicated to their groups, this was not the case during field visits of the previous mission where the interaction between the lead farmers and the groups was irregular and scarce and groups did not seem to be coherent. Building on the desk review of the lead farmer concept currently underway in DAES, the mission reiterates a previous recommendation to undertake an external assessment of a sample of lead farmers working with SAPP (DAES and TLC) regarding their qualifications, effectiveness and contribution to technology adoption by their followers, and draw conclusions on selection criteria for lead farmers, mechanisms for their motivation and for their evaluation. An additional assessment is recommended to analyse the coherence, governance and sustainability of groups and clubs formed/ strengthened in SAPP districts and prepare a capacity development plan to enhance their economic and social sustainability and growth. Terms of reference (TORs) will be provided in the technical annex. Based on findings, targeted capacity development plans and group facilitation activities can be developed to ensure that groups are coherent, have a common vision and a solid governance structure to be able to grow and become self-sustaining. 27. Goat kholas have been built by beneficiary households with technical support from extension frontline staff. Goats have been procured and should be distributed in December 2015. It is planned that each beneficiary will receive four females and one male goat for the coming season and will pass-on the same number of goats received to fellow households. During the field visits to Chitipa and Nkhotakota, the mission noted the high level of poverty and poor nutritional conditions of the beneficiaries. In these communities with almost no livestock ownership, children lack milk in their diets eat around three eggs per month and almost no meat year-round. The mission notes the benefits of distributing chicken to poorer households (if the prevalence of Newcastle disease permits) as they are quick sources of animal protein. The benefits of goat ownership will take longer to materialise, given the gestation period; they may need more feed and will need more time to make a nutritional impact in the community. The distribution of different types of livestock distribution requires clear targeting criteria. 4

28. Farmer field schools and farmer business schools. A total of 61 FFS (exceeding the target of 54) and 43 FBS (50 planned) have been established. From field visits, the mission observed high quality and wide scope of knowledge of the FFS/FBS members, their assertive capacity to organize, explain and analyse their joint field experimentation or business management, with a special note of the clear empowerment of women. The mission also noted the good solidarity and cohesion between members within the FFS. As per discussions with DAES, and based on a refresher five-day workshop on FFS undertaken for DAES staff in November 2015 with the support of FAO programme in Malawi, several activities are planned for the 2015/16 year on FFS. These include 21-day training of facilitators, season-long training of master trainers, and the development of curricula and FFS training manual for Malawi (currently under revision and to be completed by 31 January 2016). The mission recommends the expansion in the use of the FFS/FBS methodologies within the extension system for promoting the adoption of new technologies and empowering farmer communities. 29. Homestead gardens and nutrition. During July-Sept 2015, 86 integrated homestead gardens were established (out of the 178 planned). A total of 50 food demonstrations and displays (out of the 177 planned) were conducted during which 863 (589 females) were trained on dietary diversification. Training on nutrition-sensitive agriculture was provided to 22 (17 females) nutrition officers. 30. Surveys. Two Knowledge, Attitude and Practice (KAP) surveys were undertaken. The food survey was run by an external IFAD consultant and the GAPs survey was run by DAES. The latter will be used as the baseline for assessing adoption and sustainability of extension methods and the usefulness of the promoted GAP packages. The results could be important to guide the planning of interventions especially within component 2. For further details, see the M&E section below. 31. Staff development. Based on assessed knowledge gaps, DAES staff were trained in communication skills (53, with 38 females, out of the target of 275), message development (29, with 10 females), and Household Approaches (24 with 5 females). Other trainings included marketoriented farm planning and management (40, with 12 females), FBS methods (28, with 5 females out of a target of 358) and in gender-responsive Participatory Rural Appraisal (19, with 3 females out of 358 planned). TLC trained 50 staff in fuel-efficient stove promotion and nutrition. It is expected that staff development activities will be accelerated in the second part of the year. 32. Sub-component 2.2: Access to Key Agricultural Inputs is led by DCD to improve farmers access to seeds of improved legume varieties and the enhance the revenues of seed producers. SAPP is also aiming to engage with agro dealers and micro-finance institutions for improved access to farm inputs and finance. 33. Seed multiplication and distribution. During the reporting period, a total of 17 (5 female) out of a planned target of 25), from districts and ADD, were trained on seed multiplication principles. In turn, these staff will train Agricultural Extension Development Officers (AEDOs) and lead farmers in seed multiplication and provide technical backstopping when needed. 34. A total of 88 legume seed multiplication groups (target of 310 groups) each with membership of 15-20 farmers were identified during the reporting period. Seeds of improved maize varieties (10,786 kg) and both basal and top dressing fertilisers (53.425 MT) were procured and distributed for the demonstration of improved maize varieties under CA. A total of 22 MT (against a target of 131 MT) of basic seeds of different legume varieties were procured and provided to seed multiplication groups in districts. The seeds service unit of DARS has been cooperating for the joint inspection visits and certification of the seeds produced by the seed multiplication groups in the previous season. 35. Engagement with agro-dealers. In line with the recommendations of the previous mission to ensure a secure seed market, attempts were successful in linking seed multiplication groups to seed companies for 2015/16. Three companies - namely FUNWE Farm, TASU Seed Company and Mbewu Seed Investment Company - expressed interest in buying legume seeds indicating varieties and quantities. However, no formal contracts have been prepared or signed. The mission recommends that formal discussions are held as soon as possible with the three companies to prepare contracts with the farmer groups. These should take into consideration quantities to be purchased, quality, prices, methods and timing of payment, etc., and should be fair to both sides. Contract samples may 5

be provided from other seed companies but also the experience of RLEEP and IFAD HQ in this area should be sought. It is also important that seed multiplication groups are sensitized on the importance of adhering and respecting the contracts and building a long-term trust relationship with the seed companies. SAPP should act as broker to ensure that the contracts are ensuring the rights of the seed multiplication groups. 36. Post-harvest management. During the reporting period, DCD conducted a training of trainers in aflatoxin management for 12 (5 female) officers (target of 12). In close collaboration with DARS a methodology for assessing loss of legume seeds using visual scales was developed and will be applied in the coming season. 37. The mission recommends those concerned in postharvest losses to consult the Community of Practice on Food Losses 2 for information and exchange of experience regionally and globally. It is also suggested that SAPP and DCD concerned staff should attend the national validation workshop of the Centre for Agricultural Research and Development of Lilongwe University of Agricultural and Natural Resources (LUANAR) where the results of the IFAD/FAO-funded assessments of food losses along the maize and groundnut value chains in Malawi will be presented in early 2016. 38. The mission suggests a field visit is organized to neighbouring countries (e.g. Uganda, Tanzania or Zimbabwe) for senior officers in DCD (agribusiness, crop protection, extension, seed services) and DARS, etc., to observe various postharvest management loss technologies and solutions and business plans (including metal bins, hermetic bags, plastic bins, etc.). 39. It is recommended to support specifically seed multiplication groups and also grain groups producing jointly for the market, in postharvest loss reduction and traceability actions. They will be provided with aflatoxin measurement kits and moisture meters for testing seeds collected for common storage and sales. Seed producer groups could be encouraged to use storage metal bins or hermetic bags to allow them to store the seeds and sell when prices are most suitable for them. 40. The mission recommends research to assess efficiency and cost of postharvest technologies in reducing postharvest losses be studied under adaptive research (under component 1.1). 41. Engagement with microfinance institutions. In support to enhance the access of smallholder farmers to financial capital and services, SAPP is planning to introduce Village Savings and Loan Associations (VSLAs) on a pilot basis in the SAPP areas. A service provider will be recruited and, building on experience from similar projects, will propose how best to introduce VSLAs and implement those activities. TORs for the study have been developed and submitted to IFAD with the expectation that the activity will be implemented during 2015/16. Agreed action Responsibility Agreed date Undertake an external assessment of a sample of SAPP lead Independent external 15 February 2016 farmers and followers (as part of assessment of performance of lead farmers) evaluation under DAES Undertake an analysis of coherence, governance and sustainability of groups and clubs formed/strengthened in SAPP DAES 30 June 2016 districts and prepare a capacity development plan Prepare a FFS training and rolling plan to include: training of master trainers, extension facilitators, farmer facilitators, refresher courses, curricula development Finalize contract preparation between interested seed companies and farmer seed multiplication groups DAES 31 December 2015 DCD 15 January 2016 D. SAPP s implementation progress 42. Programme management performance. Rated as moderately satisfactory. On the basis of an evaluation of the performance of TPCT staff and the recommendations of an assessment committee, the contracts of the national Programme Coordinator and Financial Management 2 http://www.fao.org/food-loss-reduction/en/ 6

Specialist were extended for six months until 31 December 2015. The contracts of the M&E and Procurement Specialists were not renewed. In addition, SAPP has recruited seven Justification Assistants, based in each SAPP district and one in the Ministry. 43. The TPCT is supported by government officers comprising a Programme Officer, a M&E Officer, a Procurement Officer, Programme Accountant and Administrative Assistant. With the exception of the first two officers who work on SAPP full-time, it is noted that the MOIAWD team is still not dedicating their work fully to SAPP, which is a critical requirement in view of the programme s needs and current situation. IFAD should be informed about the proposed staff and provided with their CVs to obtain a no objection. The lack of a Knowledge Management Officer is delaying the implementation of KM activities (component 1.2). 44. The previous supervision mission in May 2015 had recommended that the contracts of TPCT staff with satisfactory performance to be extended by 12 months; however, they only received sixmonth extensions. The mid-term review (MTR), which will take place in January/February 2016, is a critical milestone in SAPP. In view of the MTR and the assimilation of the MTR findings and recommendations into the preparations of the 2016/17 AWPB by April, it is recommended that the contracts of the two TPCT staff are extended by a further six months until 30 June 2016 so as not to disrupt the flow of activities during this period. 45. The previous mission had noted that the full integration of the TPCT into MoAIWD s administration remains the main hindrance for a time bound and efficient day-to-day management of SAPP, especially in terms of financial management decisions, and planning and executing of daily programme work. Discussions with MoFEPD had concluded that the Programme Management Unit of SAPP should: (i) be staffed with highly qualified persons from within the ministerial cadre or the labour market; (ii) obtain full autonomy for the day to day work, while being closely related to the service delivery channels of MoAIWD; (iii) obtain a designated authority for the day to day to management of the programme; (iv) report directly to the Principal Secretary of MoAIWD; and (v) be supervised by a Programme Steering Committee composed of senior staff of the relevant Ministries under the chair of PS MoAIWD. It is recommended that the configuration of SAPP management is further examined during the MTR. 46. At the district level, SAPP works within the decentralized structure of district councils. There have been significant staffing gaps at the grassroots level: AEDOs vacancy rate of 29% and Agricultural Extension Development Coordinators (AEDCs) of 34%. Currently TLC Officers have manned vacant sections. However, it is expected that the position will be improved given the recent approval by IFAD for the recruitment of 227 field assistants. They will be recruited from the programme localities and based in the districts, and released for studies during quiet periods in the agricultural calendar. Their TORs are under preparation by DAES and Department of Human Resources. The purchase of motorcycles to enhance the mobility of frontline staff has been suspended because of budget overspend in category 1; this will be addressed in the MTR and budget reallocation. It is likely that activities supporting livestock will be more active following the MTR and their needs will be addressed in subsequent financial years. The Department of Animal Health and Livestock Development will prepare a concept note to support the recruitment of frontline staff and will share with the MTR. 47. Mid-term review. The MTR is planned to take place in January-February 2016. The TORs have been prepared by the TPCT and cleared by IFAD. The team leader will be appointed by IFAD and the four MTR members will be recruited by the TPCT. The main thrust of the MTR will be to review the likely achievement of the current targets within the timeframe given the delays in start-up. It will consider the reorientation of the programme design and the adjustments required to enhance the prospects of the attaining the objectives in particular strengthening the poverty and gender focus - and removing any constraints. It will also examine the financing arrangements and the distribution of programme resources. The performance of key stakeholders and implementing partners, including the Government and TLC will be assessed. It will also provide guidance on the SAPP management structure, with due attention to sustainability, scaling up and the exit strategy. 7

48. An internal review will be undertaken by MoAIWD staff prior to the MTR in order to provide the national perspective for the MTR. It is suggested that this includes discussions with smallholder farmers, lead farmers, members of farmer field/business schools, extension staff, TLC staff and other stakeholders at different levels from the community through the EPAs to districts and the ADDs. These discussions should identify a long-term vision for SAPP, what is working well and what is working less well, proposals for the way forward, and the means by which the coherence between the subcomponents may be strengthened. 49. In order to derive maximum benefit from the MTR, all ongoing studies should be finalised, namely: adaptive research strategy; knowledge management and learning strategy; evaluation of lead farmers and followers; KAP GAP survey and KAP food study. 50. Coherence between AWPB and implementation. Rated as moderately satisfactory. The preparation for the AWPB 2015/16 received IFAD s no-objection in November 2015 for a total budget of US$10,178,072. As of 30 September 2015, the Programme had utilized US$1,782,374 representing 19% of the total AWPB and 71% of the first quarter for 2015/16. 51. The majority of activities planned for the first quarter have been implemented, with the exception of the adaptive research and knowledge management component which had the lowest utilization rate of 10%. On the basis of current progress, it is expected that SAPP will implement most of the planned activities and thus achieved most of the planned targets for the current AWPB. 52. Monitoring and evaluation. Rated as moderately unsatisfactory. The new M&E Officer was appointed in the TPCT in mid-november. However, there was no proper handover by the outgoing Officer. This has resulted in the M&E data not being updated and the M&E system remaining under developed. The M&E system needs to be upgraded through developing an M&E matrix for all project indicators, finalization of reporting mechanisms and standard formats across the different levels, establishing a beneficiary database, and setting a clear plan for the activities/surveys needed for capturing outcome/impact level indicators. Further details will be discussed in the technical annex. The TPCT has requested support of a M&E specialist from IFAD to assist in developing the M&E system (see TORs in technical annex). 53. The annual progress report for 2014/15 and the progress report for the first quarter of 2015/16 have been prepared. Their quality has improved but there are some inconsistencies between the physical reporting and the narrative section. 54. The mechanism for supervision visits to include spot checks and meetings with beneficiaries has been revised. A plan has been drafted to capture programme outcomes and is awaiting endorsement by the SAPP Technical Committee. 55. Internal reporting in SAPP is done on monthly basis for AEDOs and AEDCs and on quarterly basis for ADDs, from where the information is sent to the different departments in Lilongwe. The reports need to be standardized at each level to allow for data aggregation by the SAPP secretariat. New progress reporting formats have been developed by IFAD and will be used for preparing the next report (half year). 56. The mission reiterates a previous recommendation to develop a database to track programme beneficiaries. This database is essential to avoid double counting beneficiaries. It can also be used to profile beneficiaries by wealth group, sex and status of household head. Further details about the process for developing the database will be presented in a technical annex. 57. The logframe was revised in July/August 2015 to include targets and is presented in the new AWPB format. Another review is expected based on the MTR findings, revisiting and reducing the targets for indicators as well as the outcome and output level indicators. 58. The project undertook two KAP surveys which were each administered to 1,000 households. The GAP data have not yet entered and analysed because the data entry templates have not been developed. The mission has recommended the use of SPSS and has assisted with developing the data entry forms. The data should be analysed from a gender and regional perspective. Guidance for 8

data entry and analysis will be included in the technical annex. It is expected that the final results and report will be available by the end of January 2016. 59. Gender focus. Rated as moderately satisfactory. The gender dimensions of SAPP may be examined from three perspectives: women s representation among project beneficiaries; women s representation among staff participants in SAPP training; and the content of materials delivered. Based on cumulative data until September 2015, women accounted for 49% of farmer beneficiaries, with their highest participation rates in dietary diversity training (68%), attending food demonstrations and open days (64%) and membership of goat groups (57%). They were least well represented among the lead farmers trained in research (27%) and lead farmers trained for on-farm trials (31%). Among staff training, female participation rates were 34% on average, with the highest rates in group dynamics (46%) and seed multiplication (36%). DAES is actively engaged in promoting gender equality and, under SAPP, has trained staff in the household approach which addresses key issues of gender inequality at the household level. Gender and HIV/AIDS mainstreaming, together with nutrition mainstreaming, are part of the training for group strengthening. The programme design report indicates that component 2.1 will target 200,000 farm households (of whom at least 50% will be female- or child-headed) and that women will account for at least 30% of membership of decisionmaking structures. To strengthen impact on women s empowerment, SAPP needs to ensure women are well represented among the mainstream activities rather than merely attending demonstrations. 60. Poverty focus. Rated as moderately satisfactory. The results for targeting are mixed. Based on the typology of farmers presented in the Programme Design Report, it is evident that some of the SAPP activities such as seed multiplication groups, lead farmers for on-farm trials and demonstrations, and FBS - are of more relevance and interest to small-scale commercial farmers. However, during the field visits, there was evidence of outreach into the heart of IFAD s target groups which were participating in goat pass-on activities and FFS. They specifically appreciated the laboursaving features of CA (e.g. no ridging, weed suppression). They were located in more remote communities and indicated levels of poverty that were below the thresholds identified during the baseline survey (for example, they owned less than 0.8 ha of land, had no livestock, and few owned mobile phones). Many activities are relevant to all, including CA, nutrition education, gender equality and HIV/AIDS sensitization. The mission recommends that the M&E beneficiary database tracks the wealth profile of beneficiaries to ensure outreach to poorer smallholder households. 61. Effectiveness of targeting approach. Rated as moderately satisfactory. SAPP uses a mixture of targeting approaches to identify beneficiary farmers and households which are summarised in a draft targeting strategy (2015). Geographical targeting has resulted in SAPP being located in the poorer districts in Malawi. A mixture of self and direct targeting results in the identification of key individuals suitable to take on the role of lead farmers, whereas group membership will largely be formed through self-identification. Direct targeting criteria will be necessary for activities which are suited to poorer households, such as chicken distribution. Staff training in cross-cutting issues such as gender, HIV/AIDS and nutrition help strengthen the enabling environment to support the delivery of these topics at the field level. The mission recommends that following the MTR, determine whether additional measures are required such as greater use of empowering activities - to strengthen outreach to the poor and women. 62. Climate and environment focus. Rated as moderately satisfactory. The focus of SAPP on developing and promoting GAP, including soil and water conservation practices and agro-forestry, is timely. The cropping season in 2014/15 in Malawi was plagued by both floods and drought, which reduced maize crop production by 28% and left as many as 2.8 million people short of food. During the field visits, farmers were keen to share of CA in terms of improved moisture retention and harvests. However, in some areas which experienced flooding, CA was prone to water logging and the crop was lost. Overall, SAPP has great potential to contribute practical lessons on climate resilience in the smallholder sector in Malawi. 63. Innovation and learning. Rated as moderately satisfactory. The Knowledge Management and Learning Strategy will be finalised during the current AWPB. In addition, good practices will also 9

be captured and documented. The KAP surveys on GAPs and food will provide useful information and insights that will be shared once the reports have been completed. 64. Partnerships. Rated moderately satisfactory. The established partnership with TLC has been very critical for SAPP, especially for reaching out to farmers in sections where DAES is short of frontline staff. DAES has also revived its partnership with FAO-Malawi in updating its FFS capacities and training curriculum and in promoting the exchange of experience from FFS networks in neighbouring countries. DARS has also been partnering with the CG-centres and other research and educational centres for the development of the Adaptive Research Strategy but most importantly the for the procurement of basic seeds of improved legume varieties for the seed multiplication groups from the CG-centres. Partnership with LUANAR for the development of the CA curriculum for continuous national capacity building activities is being established. The recent partnership with the seed private sector for the purchase and marketing of legume seeds from the SAPP multiplication groups is an important breakthrough for the sustainability of these groups. The mission recommends that further partnerships are developed with local NGOs to support SAPP in institutional development of farmer groups (community mobilization, savings and credit).this could draw on the findings from the studies of farmer groups and clubs under component 2.2. Agreed action Responsibility Agreed date Extend tenure of TPCT staff by further six months PS 15 December 2015 Recruit and deploy 227 field assistants DAES/Department of 29 February Prepare concept note for livestock field assistants Conduct internal review including participatory stakeholder meetings in ADDs to inform MTR of national perspective Conduct and complete MTR Human Resources Department of Animal Health and Livestock Development 2016 15 January 2016 TPCT 15 January 2016 External consultants/ TPCT 29 February 2016 SAPP management configuration finalised and implemented PS 30 April 2016 AWPB 2016/17 to reflect findings and recommendations of MTR TPCT 30 April 2016 Upgrade M&E system M&E Officer 31 March 2016 Develop a database for tracking programme beneficiaries, including by wealth group, sex and status of household head Complete data entry and analysis of KAP survey for GAP by sex and region Complete KAP food survey to further support mainstreaming of nutrition in SAPP Strengthen women s participation in economic empowerment activities Engage with local NGOs to support SAPP in institutional development of farmer groups M&E Officer 31 March 2016 M&E Officer 31 January 2016 IFAD Nutrition Adviser 15 January 2016 TPCT Ongoing DAES and TPCT 30 June 2016 E. Fiduciary aspects 65. Overall overview: Rated moderately satisfactory. On the positive side the implementation has progressed during the last 12 months. The combined IFAD Loan and Grant disbursement to 31 October, 2015 is SDR 8.16 million or US$ 11.73 million representing 28% of the combined Loan and Grant allocation of SDR 28.9 million, including the Initial Deposit of US$ 3 million. This is an improvement of 100% of disbursement compared to the end of the last mission. 66. The mission notes that some agreed actions of the May Supervision Mission have been implemented including substantial remittance of the unutilised PPF grant funds and installing and training staff in the use of TOMPRO accounting software. The finalisation of the accounting procedures and accounting manual - which is a key document for effective control and management of funds is still pending. 10

67. Financial systems and internal controls. The internal controls and checks have been put in place and are working as follows: a) At the TPCT: These are included in the Programme Implementation Manual. The systems are data capture and accounting, financial reporting, cash flow, auditing and procurement. For data capture and accounting and reporting the project has acquired the TOMPRO accounting software which is in the process of being put into full use. The financial procedures are still in the basic draft form and have not been updated since project inception. Reporting templates as well as the critical control and oversight guidelines for judicious use of funds and monitoring in the approved project activities are still pending. The guidelines should include the rationalisation of DSA disbursements by ensuring that only those who are required are included in the travel list. Other controls will ensure that those who do not attend the workshops refund the DSAs. It was agreed that the procedures will be updated no later than 31 January 2016, and subsequently annually, to reflect implementation changes and improved financial monitoring and reporting templates. b) At the district cost centres: The main system is the approved AWPB. Others are distinct bank accounts for the SAPP funds and manual cash book and ledgers using Excel spreadsheets. Given the low volume of financial transactions these systems are adequate. c) At the implementing partner-tlc: The main system is the approved AWPB. At the HQ they utilise the Sage Pastel Accounting Software. At the zones they maintain the manual records using Excel spreadsheets but do not maintain distinct bank accounts. It is recommended that TLC dedicates a distinct bank account for SAPP funds at the zones so to facilitate a clear cash book. 68. Financial management capacity and reporting. The capacity at TPCT and TLC appears adequate and reporting appears credible and accurate. The capacity of the financial controller under TPCT is enhanced with counterpart accountants at the Ministry s headquarters and in the programme districts. The TOMPRO accounting software been installed and expansion of its full use is continuing. Financial reporting requires improvement in terms of timely quarterly statements which should include financial budget performance against actual by activities, loan utilisation statements, cash flow performance and status, and statements of receipts and uses of funds. It was reiterated that quarterly financial statements should be prepared and submitted to GoM and IFAD as part of physical and financial progress report. 69. Review of the 2014/15 and 2015/16 AWPBs performance. The Mission reviewed actual performance for 12 months period to 30 June 2015, and that of 3 months to 30 September 2015, against the respective budgets. The overall performance for FY 2014/15 is 43% and that of 2015/16 is 19%. The actual expenditure under category 1 in FY 2015/16 relates to payments for the procurement budgeted in the last financial year. If this item is excluded the actual performance is 14%. This trend translates to an average annual execution rate of 56% which the mission considers very low. The mission recommends that during the remaining seven months of the current financial year, physical implementation should be scaled up with a view of significantly improving the current performance trend to 90%. 70. Review of the SoEs. The review of SoEs for eligibility for claimed expenditure was carried out in Blantyre and Machinga ADDs at two levels. The discrepancies indicate system, control and oversight weaknesses in ensuring judicious and value for money use of programme funds. This is a serious gap and in future it may lead to expenditures outside the budget and DSAs not supported by training/workshop attendance. a) At the ADD cost centres: The sample expenditure items were selected from WAs 20 and 22 and the expenditure included DSAs for review meetings, trainings and workshops, as well as field trips for validating implemented activities. The mission noted the critical gaps in the daily signed attendance lists in Zomba and, where reports were available, they were not signed by the key managers. Similar discrepancy was replicated in Blantyre where documentation of a number training activities did not include the signed daily attendance lists. Where an unsigned typed list was available there were cases of persons receiving allowances, but with no evidence of recipients attending the training/workshop as per the list provided. 11

b) At TLC Zomba zone: The items selected from WA 14 were validated with the available documents. While the expenditures were fully accounted for, the expenditure items were inconsistent with the AWPB provisions. The review noted that approximately 40% of the cost was for items that were not included in the approved budget. 71. Review of Designated Account (DA) and Operational Accounts: The DA allocation of US$ 3 million is accounted for as at 31 October 2015. As of this date, the combined cash position in the SPA and other programme accounts amounted to US$ 1.48 million. Included in the reconciliation are proceeds of WA 22 amounting to US$ 894,249 and also for WA 23 for US$ 352,783 pending payment from IFAD. Funds withdrawn from the DA of US$ 250,887 but not yet accounted for are also included. Another outstanding is an amount of US$ 18,367 being the VAT payments made from the special account and claimable from the Malawi Revenue Authority (MRA). The other item is bank charges amounting to US$ 6,792 claimable from the bankers of the District accounts. It was agreed that the TPCT will improve on the following aspects: (i) the funds withdrawn from the DA of US$ 250,887 but not yet accounted for require clear analysis in terms of actual cash in the districts and TLC, expenditures pending WA preparation at the districts, TLC and headquarters; (ii) the VAT claims require intensified follow-up with the Government of Malawi, given that the majority of the items have been outstanding for a long time; and (iii) the bank charges should be followed up monthly. 72. Disbursement of IFAD Loan and Grant. The disbursement of IFAD Loan and Grants stands at 28% and is rated as moderately unsatisfactory, given that in its fourth year since effectiveness when the disbursement would be expected to be at 51%. The combined IFAD Loan and Grant disbursement to 31 October, 2015 is SDR 8.16 million or US$ 11.73 million representing 21% of the combined Loan and Grant allocation of SDR 28.9 million, including the Initial Deposit of US$ 3 million. This status has been reconciled to the IFAD statements. However, the loan utilization, excluding the Initial Deposit is SDR 2.07 million, or US$ 3 million, and represents a utilization level of 21%. The mission has gone further to factor in WAs 21-23 totalling US$ 1.41 million or SDR 1 million equivalent at the current exchange rates. Consequently, the projected utilization is estimated at SDR 7.1 million or US$ 10.14 million and this represents 25% of the Loan and Grant, leaving a balance of SDR 21.80 million or approximately US$ 30.7 million at the current exchange rates. 73. Category expenditure re-allocation: The mission s review indicates that categories 1 and 2 would be overdrawn if the projected expenditure is settled by IFAD. IFAD is in the process of considering re-allocation of funds with the aim of addressing the overruns. Table 1 below presents the proposed revised allocations. It was agreed that TPCT to follow up with IFAD for finalisation of the reallocation. Table 1: IFAD Loan and Grant Disbursement as at 31 October 2015 and Proposed Reallocation Category Original Allocation Disbursement up to WA 20 Projected Projected Utilisation Balance A B C D=B+C E=A-D SDR'000 SDR'000 %age USD'000 SDR'000 SDR'000 SDR'000 1 Vehicles, Motorcycles and Equipment 865 1,091 126% 218 155 1,246 (381) 144% 1,400 89% 2 Technical Assistance, Trainings, Workshops and Studies 790 1,021 129% 154 109 1,131 (341) 143% 1,300 87% 3A Support for Adaptive Research 1,820 229 13% 165 117 346 1,474 19% 1,820 19% 3B Support for Knowledge Management and Communication 650 342 53% - - 342 308 53% 650 53% 4A Support for improved Agriculture Extension 17,510 1,775 10% 592 421 2,195 15,315 13% 17,510 13% 4B Support for Access to Key Agricultural Inputs 3,290 818 25% - 818 2,472 25% 3,290 25% 5A Salaries and Allowances 170 35 21% 26 18 54 116 32% 170 32% 5B Incremental Operating Costs 1,590 787 49% 278 197 984 606 62% 1,590 62% 99 Unallocated 2,215-0% - 2,215 0% 1,170 0% Sub-total 28,900 6,097 21% 1,432 1,018 7,115 21,785 25% 99Z Initial deposit - 2,066 Pending Expenditure-21-23 %age Projected Utilisation Proposed reallocation SDR'000 Total 28,900 8,163 28% 28,900 Disb % after reallocation 74. IFAD Project Preparatory Facility. The total disbursement for this facility was US$ 600,000, of which US$ 292,079.18 has been justified as intended Programme expenditure. Cash balances amounting to US$ 272,287.41 equivalent have been remitted to IFAD. This leaves a balance of US$ 35,633.18 remaining for accountability, which is obviously related to exchange fluctuation. This deficit 12

is expected to be made good by GoM, but was not budgeted for in the 2015/16 AWPB as would have been logical. It was agreed that the payment for this amount will be negotiated with MoFEPD and a time bound repayment plan agreed and communicated to IFAD on or before 30 September 2016. 75. Counterpart funds. Rated as satisfactory. The Financing Agreement requires the GoM to provide counterpart financial support of up to US$ 4.2 million to cover taxes, duties, salaries and other supporting services as may be required from time to time during the implementation life of the programme. As at 31 October, 2015 the total contribution US$ 1.7 million or 40.5% of the allocation of US$ 4.2 million had been made including payment of salaries, taxes and rent. The mission commends the Government of Malawi for this support. However, as of the date of the mission US$ 18,367 in form of VAT is outstanding for collection from MRA which has been paid out of the proceeds of the Designated Account. It was agreed that GoM will assist in speedy collection of the VAT by 31 January 2016. 76. Compliance with loan covenants. This aspect has been rated as moderately satisfactory. The review by the mission has not noted any widespread contravention of covenants except the use loan and grant funds in the payment of taxes and failure to refund promptly. 77. Procurement. Procurement plan. Rated as moderately satisfactory. The procurement plan document for 2015/16 with a total estimate of US$ 945,000 is fairly prepared with the requisite milestones spelt out. The key items included in the plan are works for electrification of EPA offices at US$ 227,500, consultancy with microfinance institutions for US$ 140,000 and goods for US$ 577,500. The goods include fertilizers and source stocks estimated at US$ 238,000. It is essential to ensure consistency between the procurement plan and the AWPB. 78. Procurement progress and contract management. Apart from seeds and fertilizers valued at US$ 191,000, the processes for the other items are pending. In order to advance the procurement function, TPCT has formed procurement committee that meets when needed. 79. Audit. Rated as satisfactory. The statutory audit is up-to-date with the audit of 2013/14 having been carried out by the Auditor General of the Republic of Malawi. The auditor returned unqualified opinions on the three areas of SPA, financial statements and SoEs. The audit for 2014/15 is under way. The auditors and SAPP management will conclude on all issues relative to the Draft Audited Accounts and reports, as well as the Draft Management Letter, on or before 18 December 2015. The TPCT and the auditors are confident of meeting the 31 December 2015 submission deadline. In future years, it is recommended that SAPP accounts are submitted to the Auditor by 31 August annually to ensure timely audit and submission to GoM and IFAD. Agreed action Responsibility Agreed date Complete installation of TOMPRO Accounting Software to its full FC/Accountant 31 March 2016 use Adhere to GoM financial procedures in expenditure payments as FC/ Accountant Ongoing per audit recommendations for 2013/14 Update and finalise accounting procedures and guidelines manual FC/Accountant 31 January 2016 Circulate control and oversight procedures for ensuring judicious FC/PC 31 March 2016 application and value for money in use of programme funds including DSAs Prepare and submit to IFAD quarterly financial statements regularly FC/Accountant Continuous at the end of each quarter Follow up recovery of VAT and bank charges FC/Accountant 31 January 2016 Remit to IFAD US$ 35,633.18 as residue of Project Preparatory TPCT/MoFEPD/ 30 September 2016 Facility Grant arising from exchange rate differences MoAIWD Accounts for audit to be submitted in a timely manner 31 August annually F. Sustainability 80. Institution building. Rated moderately satisfactory. SAPP is supporting several types of farmer clubs/groups, FFS/FBS and other institutions, which may be newly established or already 13

existing. They are receiving training in group formation and strengthening techniques. It is too early to assess their coherence to ensure sustainability, but SAPP support enhancing their governance, strengthening their linkages to markets and the private sector, and developing their vision for economic sustainability will be beneficial. During the field visit, members of farmer groups observed that the continuous presence of resident technical support, such as lead farmers or FFS facilitators, supports the sustainability of their groups. 81. Empowerment and social sustainability. Rated as moderately satisfactory. The lead farmer network and FFS/FBS are good entry points for farmers empowerment and social sustainability. It is critical that these approaches address: (i) the technical aspects of current farming practices and compare with new ones; (ii) their financial and economic costs and benefits, including market potential; and (iii) the socio-economic dimensions including impacts on labour requirements and their potential relevance for poorer households. The curricula of groups and FFS also look at the broader aspects of rural livelihoods, such as gender inequality, nutrition and HIV/AIDS. The DAES household approach has the potential to both deepen and strengthen the social dimensions of SAPP development initiatives; opportunities to incorporate it within the FFS approach should be explored. 82. Quality of beneficiary participation. Rated as satisfactory. The quality of beneficiary participation during the field visits to a total of 17 SAPP sites (covering six EPAs in three districts) was uniformly good. Lead farmers, followers, committee members and members of FFS/FBS and clubs, men and women were all able to speak competently and explain the specific farming practices under discussion. Activities at the community level are built around the annual participatory extension planning process. Farmers identify their priorities and challenges, and present them through the village agricultural committees to the area and district stakeholder panels. Some of these will be identified as eligible for SAPP support. Participation of stakeholders in District Agricultural Extension Coordination Committee meetings has improved stakeholder collaboration and joint implementation of SAPP activities. 83. Responsiveness of service providers. Rated as satisfactory. TLC has been very effective in coordinating and streamlining its activities and reporting with the requirements of both MoAIWD and IFAD. At the ADD level, joint planning between government staff and TLC has encouraged information sharing and harmonization of programme approaches. TLC is working closely with the farmer communities and its services will be evaluated by the MoAIWD. Participatory evaluations by the communities would also be important. 84. Exit strategy. Not yet applicable. It is too early to develop an exit strategy for SAPP. This consideration should be reflected in the recommendations of the MTR. The full incorporation of SAPP within the ASWAp and the involvement of relevant departments and their echelon down to EPA levels, and the private seed sector should ensure a robust exit strategy and handover. 85. Potential for scaling-up. Rated as moderately satisfactory. There are two aspects of scaling up under SAPP. First, the Programme is embedded within ASWAp which ensures ownership and the opportunity to both learn from, and replicate, good practices throughout the regular work of the participating departments. Second, the approach of lead farmer networks and FFS/FBS has the potential to be scaled up to reach remote areas where extension services have a limited presence. G. Other 86. Impact on food security. Rated as moderately satisfactory. There is an urgent need to improve diets in Malawi. A recent study shows that the country loses significant sums of money each year as a result of child under-nutrition through increased healthcare costs, additional burdens to the education system and lower productivity of its workforce. Particularly detrimental are the lifelong consequences of stunting. While SAPP is still waiting for the findings from KAP food survey, evidence from the field confirms that, in communities and households with limited ownership of livestock, children have an extremely limited intake of animal proteins. Hence, SAPP s support for food displays and dietary diversification training, establishing backyard gardens and planting of fruit trees, coupled 14

with the widespread inclusion of legumes in the cropping system, will be highly beneficial. Household nutrition and food security is more than just an issue for women and engagement with men in these activities is essential (currently at around 33% of participants). 87. Impact on incomes. Rated as moderately satisfactory. The promotion of GAP has a good potential to increase yields in a sustainable way and thereby lead to higher incomes. A new emphasis will be placed on linking FFS/FBS farmers to markets and seed multiplication groups to seed companies. 88. Impact on physical and financial assets. Moderately unsatisfactory. The Programme is still at an early stage of implementation to be able to assess its impact on physical and financial assets. Moreover, the current M&E system does not include data that allows for an assessment of impact. 89. Policy impact. Not yet applicable. The programme is still at an early stage of implementation to be able to assess its impact on poverty. H. Conclusion 90. SAPP has continued to make significant progress in its implementation in the past six months. Based on experience from the field and discussions with government staff there is now greater confidence that the programme will substantially achieve the development outcomes and impacts envisaged at design. 91. The most critical issues are to: (i) extend the contracts of TPCT staff until 30 June 2016; (ii) ensure preparedness for the MTR, in terms of completing the outstanding studies and conducting the internal review; (iii) follow-up of the MTR recommendations in the preparation of the 2016/17 AWPB; (iv) finalise and implement the SAPP management configuration; (v) continue to take the necessary measures to accelerate programme disbursement rate; (vi) upgrade the M&E system and develop a beneficiary database; and (vii) strengthen the synergies between components 1 and 2. 92. The next supervision mission shall take place by May 2016. 15

Appendix 1: Summary of project status and ratings Appendix 1: Summary of project status and ratings Basic Facts Country Malawi Project ID Project Date of Update Supervising Inst. No. of Supervisions 5 Last Supervision 09-Jun-2015 IFAD No. of Implementation 3 Support/Followup missions Last 12 Implementation December- 07-Sep-2013 Support/Followup 2015 mission 1534 Loan/DSF/Grant/ASAP 1000004178, [1100001534] FI No. 1000004179 Top-up Loan/DSF/Grant/ASAP FI No. Approval 13-Dec-2011 Total financing 51.71 Agreement 24-Jan-2012 Effectiveness lag 1.4 IFAD Total 46.26 USD million Disb. rate % Entry into force 24-Jan-2012 PAR value -------- IFAD loan 23.13 31 First disbursement 08-Aug-2013 DSF grant 23.13 32 MTR Last amendment IFAD grant Original completion 31-Mar-2021 Last audit 14-Jan-2015 ASAP grant Current completion 31-Mar-2021 Domestic Total 5.46 Current closing 30-Sep-2021 National Govern 4.23 38 No. of extensions 30-Sep-2021 Beneficiaries 1.22 0 0 External Cofinancing Total Project Performance Ratings B.1 Fiduciary Aspects Last Current B.2 Project implementation progress Last Current 1. Quality of financial management 3 4 1. Quality of project management 4 4 2. Acceptable disbursement rate 2 3 2. Performance of M&E 3 3 3. Counterpart funds 5 5 3. Coherence between AWPB & implementation 4 4 4. Compliance with financing covenants 4 4 4. Gender focus 5 4 5. Compliance with procurement 4 4 5. Poverty focus 4 4 6. Quality and timeliness of audits 5 5 6. Effectiveness of targeting approach 3 4 7. Innovation and learning 4 4 8. Climate and environment focus 4 4 B.3 Outputs and outcomes Last Current B.4 Sustainability Last Current 1. Component 1: Adaptive Research and Knowledge Management 4 4 1. Institution building (organizations, etc.) 4 4 2. Component 2: Farmer Adoption of GAPs 4 4 2. Empowerment 4 4 3. Component 3: Programme Management and Coordination 4 4 3. Quality of beneficiary participation 4 5 4. Responsiveness of service providers 4 5 5. Exit strategy (readiness and quality) na na 6. Potential for scaling up and replication 4 4 17

Supervision report - Mission dates: 13-26-May 2015 Appendix 1: Summary of project status and ratings B.5 Justification of ratings SAPP has made significant progress in implementation during the last six months. The improvements noted since May 2014 - with the instalment of the TPCT, commencement of the Implementation Fast Track Plan (IFAP) and joining of Total Land Care (TLC) - have continued to accelerate implementation. The increase in the flow of funds to the ADDs, as a result of better organization at the TPCT and the recruitment of the Justification Assistants, has enabled more activities to take place in a timely manner. Field visits found high quality demonstration plots, engaged and enthusiastic lead farmers and their groups, well-informed and cohesive members of FFS/FBS and the clear empowerment of women. SAPP uses a mixture of targeting approaches to identify beneficiary farmers and households which are summarised in a draft targeting strategy (2015). Following the MTR, SAPP should determine whether additional measures are required such as greater use of empowering activities - to strengthen outreach to the poor and women. The contracts of the national Programme Coordinator and Financial Management Specialist were extended for six months until 31 December 2015. The TPCT is supported by government officers comprising a Programme Officer, a M&E Officer, a Procurement Officer, Programme Accountant and Administrative Assistant. With the exception of the first two officers who work on SAPP full-time, it is noted that the MOIAWD team is still not dedicating their work fully to SAPP, which is a critical requirement in view of the programme s needs. Overall Assessment and Risk Profile C.1 Physical/financial assets 3 3 C.2 Food security 4 4 C.3 Quality of natural asset improvement and climate resilience 4 4 C.4 Overall <b>implementation progress</b> (Sections B1 and B2) 4 4 Last Current The Programme has started to pick up pace since the installation of the TPCT, recruitment of TLC and implementation of results based AWPB and focused procurement plans including the IFAP. These measures are showing results as evidenced by the implementation of the 2015/16 annual work plan, which is broadly on track. As of 30 September 2015, the Programme had utilized $1,782,374 representing 19% of the total AWPB and 71% of the first quarter for 2015/16. The majority of activities planned for the first quarter have been implemented and it is expected that SAPP will implement most of the planned activities for the current AWPB. Physical progress for the first quarter 2015 has been variable for the different activities under component 1 with an average achievement rate of about 33%, while component 2 averaged 60%. The high implementation rates of subcomponents 1.1.1 (research planning and management), 2.1.1 (farmer to farmer extension network) and 2.2.5 (small stock livestock development) are commendable. Rates of implementation have been slower in sub-components 1.2 (knowledge management) and 2.1.6 (training for Department of Agricultural Extension Services-DAES staff). C.5 Likelihood of achieving the development objectives (section B3 and B4) 3 4 The Programme has made good progress mainly in terms output level indicators which suggests that if the pace can be maintained, it will be able to reach at least partially its targets set at appraisal. Besides, GoM is paying the required attention to SAPP and the MTR will be commencing by the end of January 2015 to reassess and eventually adjust targets and Programme design. With recent irregular weather patterns, the focus of SAPP on developing and promoting good agricultural practices (GAP), including soil and water conservation practices and agro-forestry, is timely. The promotion of GAP has a good potential to increase yields in a sustainable way and thereby lead to higher incomes. A new emphasis will be placed on linking FFS/FBS farmers to markets and seed multiplication groups to seed companies. C.6 Risks Short description of major risks for each section and their impact on achievement of development objectives and sustainability Fiduciary aspects Project implementation progress Outputs and outcomes On the positive side the implementation has progressed during the last 12 months. The capacity at TPCT and TLC appears adequate and reporting appears credible and accurate. The capacity of the financial controller under TPCT is enhanced with counterpart accountants at the Ministry s headquarters and in the programme districts. The TOMPRO accounting software been installed and expansion of its full use is continuing. However, the finalisation of the accounting procedures and accounting manual is still pending. The financial procedures need to be updated no later than 31 January 2016, and subsequently annually, to reflect implementation changes and improved financial monitoring and reporting templates. The previous mission had noted that the full integration of the TPCT into MOAIWD s administration procedures represents the main handicap for efficient day-to-day management and subsequently implementation progress of SAPP, especially in terms of financial management decisions, and planning and executing of daily programme work. The latter could be rectified during the last year and the physical move to a separate office will help to improve the situation further. An important milestone will be the mid-term review (MTR), which will take place in January/February 2016. Based on cumulative data until September 2015, women accounted for 49% of farmer beneficiaries, with their highest participation rates in dietary diversity training, attending food demonstrations and open days, and membership of goat groups; they were least well represented among the lead farmers trained in research and for on-farm trials. To strengthen impact on women s empowerment, SAPP needs to ensure women are well represented among the mainstream activities rather than merely attending demonstrations. Some activities are of more relevance and interest to small-scale commercial farmers, such as seed multiplication groups, lead farmers for on-farm trials and demonstrations, and FBS. During the field visits, there was evidence of outreach into the heart of 18

Appendix 1: Summary of project status and ratings Sustainability IFAD s target groups which were participating in goat pass-on activities and FFS. To ensure outreach to poorer smallholder households the M&E beneficiary database should track the wealth profile of beneficiaries (as well as sex and status of household head). SAPP is supporting several types of farmer clubs/groups, FFS/FBS and other institutions, which may be newly established or already existing. They are receiving training in group formation and strengthening techniques. It is too early to assess their coherence to ensure sustainability, but SAPP support enhancing their governance, strengthening their linkages to markets and the private sector, and developing their vision for economic sustainability will be beneficial. The lead farmer network and FFS/FBS are good entry points for farmers empowerment and social sustainability. The curricula of groups and FFS also look at the broader aspects of rural livelihoods, such as gender inequality, nutrition and HIV/AIDS. The DAES household approach has the potential to both deepen and strengthen the social dimensions of SAPP development initiatives. The full incorporation of SAPP within the ASWAp and the involvement of relevant departments and their echelon down to EPA levels, and the private seed sector should ensure a robust exit strategy and handover. Proposed Follow-up Issue / Problem Recommended Action Timing Status Implementation Programme coordination Programme coordination Programme coordination Programme coordination Prepare final draft Adaptive Research Strategy 2015/21 based on suggestions provided by the mission Extend tenure of TPCT staff by further six months Recruit and deploy 227 field assistants Conduct and complete MTR 31 January 2016 15 December 2015 29 February 2016 29 February 2016 SAPP management configuration finalised and implemented 30 April 2016 Partially completed M&E Upgrade M&E system 31 March 2016 Partially completed M&E Develop a database for tracking programme beneficiaries, including by wealth group, sex and status of household head 31 March 2016 Fiduciary Complete installation of TOMPRO Accounting Software to its full use 31 March 2016 Partially completed Additional observations 19

Appendix 2: Updated logical framework: Progress against objectives, outcomes and outputs Appendix 2: Updated logical framework: Progress against objectives, outcomes and outputs Narrative Summary Key Performance Indicators Means of Verification Assumptions (A) / Risks (R) Goal: Contribute to reduction of poverty and improved food security among the rural population. Development Objective: A viable and sustainable smallholder agricultural sector employing good agricultural practices (GAPs). Outcome 1: Appropriate agricultural technologies/gaps developed and understood by potential beneficiaries. Output 1.1: Action research programmes which develop/refine GAP packages adapted to various agro-ecological and socio-economic contexts, and improved methods of disseminating such packages to rural communities. Prevalence rates for rural poverty in project districts decline by 20% Prevalence rates for food insecurity in project districts decline by 30% RIMS level 3 indicators:15% decrease in prevalence of child malnutrition (wasting) 50% households with increase in Dietary Diversification (HDD) RIMS level 3 indicators: 20% increase in household asset ownership Average maize yields in target group households increase from 1.3t/ha to 3.0 t/ha Legume yield increase from 1mt/ha to 1.5 mt/ha At least 33% of target group farmers accessing crop inputs through commercial channels. 30% of appropriate agricultural technologies/gaps screened and adapted for each agro-ecological 60% farmers practicing at least one of the improved technologies [50% F] 60% of farmers successfully practicing soil and water conservation (CA) techniques [30% F] 2,000 farmers implementing on farm trials and demonstrations to disseminate the improved technologies. [ 30% F] 20 % increase in hectares of land area under improved technologies or management practices [RIMS level 1 indicator 1.1.14] 310kg of breeder seed of improved varieties produced 15 agronomic practices that reduces biotic and abiotic stresses developed Household income and expenditure surveys RIMS impact survey questionnaire (baseline and final). Baseline and follow-up crop production and yield surveys in Programme areas. Records of FISP and independent monitoring reports on Programme. Agricultural production and trade statistics. Reports describing key elements of agronomic packages tested and demonstrated. Awareness surveys (baseline and follow-up). Reports on trials and demonstrations. Measurements of crop productivity and profitability. Measurements of crop productivity and profitability. Socio-economic and adoption studies conducted that will establish factors affecting uptake of GAPs. Surveys on awareness and acceptance of GAPs amongst farmers, extension workers and researchers. Evaluation Report on Food Composition Analysis. Absence of external economic shocks. GoM will be prepared to phase out subsidies once farmers are able to finance procurement of inputs themselves. GAP packages suitable for adoption by target groups will be identified and accepted by potential beneficiaries. Suitable partners to undertake action research programmes will be engaged. Regional agricultural knowledge sharing networks will be effectively engaged. Other partners will cooperate in the development of effective knowledge management systems. 21

Appendix 2: Updated logical framework: Progress against objectives, outcomes and outputs Narrative Summary Key Performance Indicators Means of Verification Assumptions (A) / Risks (R) Output 1.2: Knowledge about GAPs effectively gathered, managed and communicated to smallholders. Outcome 2: Widespread farmer adoption of crops and livestock GAPs leading to improved agricultural productivity and nutrition. Output 2.1: Increased accessibility to improved extension services on GAPs by targeted households. 80% of members of staff and farmers trained in knowledge management and communication concept [30% F] 6 knowledge centres on GAPs established and networked 4 Quarterly newsletter/publication documenting best farmers practices/lessons and technologies 1 dissemination workshop on knowledge sharing hosted by knowledge centres annually 40% of households continue to apply GAPs after Programme support ended. 80% of extension staff able to impart knowledge and skills on GAPs [30% F] 3,252 Lead farmers have improved knowledge and skills in GAPs of their speciality and operating farmer field schools [50% F] 80% of farmers have improved knowledge and skills in GAPs [50% F] Improved agriculture and livestock production (RIMS level 2) Legume storage losses reduced from 30% to 10%. 95% of targeted farmers satisfied with extension services. 200,000 households receiving extension services on GAPs 80% of the targeted households accessing animal health services, [RIMS level 1 Indicator] 3,252 Lead farmers trained [50% F] An average of 30kgs/annum of nutrient rich legumes set aside for home consumption per person/household in programme areas Reports of national and regional knowledge networking activities. Information dissemination materials produced and distributed. Reports on other knowledge management activities (e.g. workshops). Baseline survey, adoption surveys, Knowledge Attitude and Practice Surveys (KAPs) and completion survey on agricultural practices in programme areas. Reports on dissemination workshops. Publications. Baseline survey, adoption surveys, Knowledge Attitude and Practice surveys (KAPs) and completion survey on agricultural practices in Programme areas. Beneficiary and staff training back to office reports on trainings attended. Records (progress reports, inventories) of extension service providers (Govt, NGO, private). Baseline survey, adoption surveys, Knowledge Attitude and Practice surveys (KAPs), Nutrition Surveys and completion survey on agricultural practices in Programme areas. Agriculture extension documentaries and publications. Extensions materials and training curricula. National and regional agricultural knowledge sharing networks will be effectively engaged. Stakeholders and other partners will cooperate in the development of effective knowledge management systems. Farmers will be willing and able to procure the necessary inputs to sustain use of GAPs after support ends. An adequate number of suitably qualified extension service providers will be available. Adequate research-extension-farmer linkages will be established and maintained. 22

Appendix 2: Updated logical framework: Progress against objectives, outcomes and outputs Narrative Summary Key Performance Indicators Means of Verification Assumptions (A) / Risks (R) Output 2.2: Target group has access to necessary inputs for sustained adoption of GAPs. Outcome 3: Programme efficiently and effectively integrated within the ASWAp framework. Output 3.1: Programme management systems fully integrated within the ASWAp management system. 1,800 Mt of improved legumes seed produced and distributed to target group households for production of 250,000 MT 630 agro-dealers in programme area stocking key agricultural inputs (type, quantity) needed for GAPs 35,154 farmers with knowledge in use and management of improved storage facilities [30% F] 80% of staff with knowledge in use and management of improved storage facilities [30% F] 13,720 of targeted households receiving goats for restocking, [RIMS level 1 Indicator] 23,810 targeted households receiving chickens for restocking, [RIMS level 1 Indicator] 1 Annual work plan and budget and reports conforming to ASWAp formats 4 Internal Audits and Financial reports 1 work plan, procurement plan and budget aligned to ASWAp every year 2 Executive Management Committee (EMC) meetings conducted 4 quarterly joint review meetings conducted annually 4 SAPP quarterly, 1 semi-annual and 1 annual reports produced 4 quarterly monitoring visits conducted Records maintained by partners engaged to undertake seed multiplication and distribution. Baseline and follow-up surveys of agrodealers. Records maintained by partners engaged to provide financial services to target group farmers. Surveys on crop storage losses reduction. Quarterly and annual ASWAp progress reports. IFAD supervision reports. ASWAp consolidated AWPBs. SAPP quarterly progress reports presented to ASWAp. Mid-term review and programme completion report. It will be possible to engage suitable partners for seed multiplication and distribution, agro-dealer support and rural financial services. Programme will be implemented within the emerging ASWAp framework. MOAFS will provide adequate resources for efficient and effective management. Improved financial transaction arrangements that necessitates timely provision of resources. Adequate resources allocated to Programme management, monitoring and evaluation in a timely fashion. 23

Appendix 3: Summary of key actions to be taken within agreed timeframes Appendix 3: Summary of key actions to be taken within agreed timeframes SECTION Action Agreed Whom Agreed Date Outputs and Prepare final draft Adaptive Research Strategy 2015/21 based on suggestions provided by the DARS with Crops desk in 31 January 2016 outcomes mission PTA/IFAD Identify and appoint a dedicated KM Officer for SAPP PS 31 January 2016 Finalize KM&L strategy DAPS 31 January 2016 Undertake an external assessment of sample of SAPP lead farmers and followers (as part of External evaluation under 15 February 2016 assessment of performance of lead farmers) DAES Undertake an analysis of coherence, governance and sustainability of groups and clubs DAES 30 June 2016 formed/strengthened in SAPP districts and prepare a capacity development plan Prepare a FFS training and rolling plan to include: training of master trainers, extension facilitators, DAES 31 December 2015 farmer facilitators, refresher courses, curricula development Finalize contract preparation between interested seed companies and farmer seed multiplication DCD 15 January 2016 groups Implementation Extend tenure of TPCT staff by further six months PS 15 December 2015 progress Recruit and deploy 227 field assistants DAES/Dept of Human 29 February 2016 Resources Prepare concept note for livestock field assistants Dept of Animal Health and 15 January 2016 Livestock Development Conduct internal review including participatory stakeholder meetings in ADDs to inform MTR of TPCT 15 January 2016 national perspective Conduct and complete MTR External consultants/tpct 29 February 2016 SAPP management configuration finalised and implemented PS 30 April 2016 AWPB 2016/17 to reflect findings and recommendations of MTR TPCT 30 April 2016 Upgrade M&E system M&E Officer 31 March 2016 Develop a database for tracking programme beneficiaries, including by wealth group, sex and status M&E Officer 31 March 2016 of household head Complete data entry and analysis of KAP survey for GAP by sex and region M&E Officer 31 January 2016 Complete KAP food survey to further support mainstreaming of nutrition in SAPP IFAD Nutrition Adviser 15 January 2016 Strengthen women s participation in economic empowerment activities TPCT Ongoing Engage with local NGOs to support SAPP in institutional development of farmer groups DAES and TPCT 30 June 2016 Fiduciary Complete installation of TOMPRO Accounting Software to its full use FC/Accountant 31 March 2016 aspects Adhere to GoM financial procedures in expenditure payments as per audit recommendations for FC/ Accountant Ongoing 2013/14 Update and finalise accounting procedures and guidelines manual FC/ Accountant 31 January 2016 Circulate control and oversight procedures for ensuring judicious application and value for money in FC/PC 31 March 2016 25

Appendix 3: Summary of key actions to be taken within agreed timeframes SECTION Action Agreed Whom Agreed Date use of programme funds including DSAs Prepare and submit to IFAD quarterly financial statements regularly at the end of each quarter FC/ Accountant Continuous Follow up recovery of VAT and bank charges FC/ Accountant 31 January 2016 Remit to IFAD US$ 35,633.18 as residue of Project Preparatory Facility Grant arising from exchange TPCT/MoFEPD/MoAIWD 30 September 2016 rate differences Accounts for audit to be submitted in a timely manner TPCT 31 August annually 26

Appendix 4: Physical progress measured against AWP&B, including RIMS indicators Appendix 4: Physical progress measured against AWP&B, including RIMS indicators (as of 30 September 2015) PHYSICAL # UNIT CURRENT FINANCIAL YEAR (2015-2016) CUMULATIVE ACTIVITY COMPONENT 1. Adaptive Research and Knowledge Management Sub component 1.1 Adaptive research INDICATOR AWPB TARGET ACTUAL % of AWPB APPRAISAL TARGET ACTUAL % OF APPRAISAL Output 1.1.1: Research Planning and Management Procure basic seeds Quantity of Seed Mt 5 2 40% 10 3.5 35% Preparation and review of trial protocol Reports Number 1 1 100% 7 3 29% Facilitate identification of desk officers in all Number of desk officers 7 7 100% 30 23 76% Number organisations Facilitate identification of desk officers in all Number of desk officers Male 5 5 100% 19 16 84% organisations Facilitate identification of desk officers in all Number of desk officers Female 2 2 100% 11 7 64% organisations Train lead farmers on specific technologies Number of lead farmers Number 375 162 43% 2000 614 31% Train lead farmers on specific technologies Number of lead farmers Male 240 129 54% 1400 446 32% Train lead farmers on specific technologies Number of lead farmers Female 135 33 24% 600 168 28% Train staff in CA guidelines Number of staff Number 90 23 26% 600 74 12% Train staff in CA guidelines Number of staff Male 70 18 26% 500 60 12% Train staff in CA guidelines Number of staff Female 20 5 25% 100 14 14% Output 1.1.2:Capacity Building for Adaptive Research Prepare Capacity Building Plans Reports Number 0 0 0% 3 1 33% Support Technical staff to pursue long term studies No of staff trained Number 0 0 0% 3 1 33% Conduct study tours No of Study tour Number 0 0 0% 20 1 5% Output 1.1.3: On farm trial programme Plan and implement Conservation agriculture on farm No. of farm trials 23 0 0% 125 20 16% Total trials 27

Appendix 4: Physical progress measured against AWP&B, including RIMS indicators PHYSICAL # UNIT CURRENT FINANCIAL YEAR (2015-2016) CUMULATIVE AWPB TARGET ACTUAL % of AWPB APPRAISAL TARGET ACTUAL % OF APPRAISAL ACTIVITY INDICATOR Identify farmers to participate on farm trials and No of farmers 420 109 25% 1400 426 30% Male orient on management of demonstration plots Identify farmers to participate on farm trials and No of farmers 280 53 19% 600 188 31% Female orient on management of demonstration plots Sub-Component 1.2.: Knowledge Management Output 1.2.1 Knowledge Harvesting, storage and Processing Develop Knowledge Management and No of reports 1 1 100% 1 1 100% Number Communication Strategy Disseminate the Knowledge Management and No of workshops 1 0 0% 7 0 0% Number Communication Strategy Output 1.2.2 Knowledge Sharing and Learning partnerships Conduct review meetings on KMCS No of workshops Number 4 0 0% 12 0 0% Develop website No of websites Number 1 0 0% 1 0 0% Conduct community of practices for the identified Number of participants 1 2 200% 7 2 29% Number best practices COMPONENT 2: Farmer Adoption of Good Agriculture Practices Sub-component 2.1: Improved Agriculture Extension Output 2.1.1: Farmer to Farmer Extension Network Identify lead farmers Number of farmers Total 3158 2983 94% 3252 7158 220% Identify lead farmers Number of farmers Male 1,908 1303 68% 2602 4489 172% Identify lead farmers Number of farmers Female 1,251 1680 134% 650 2669 411% Training lead farmers in gender mainstreaming Number of farmers Total 1155 718 62% 3252 2877 88% Training lead farmers in gender mainstreaming Number of farmers Male 693 360 52% 9151 1530 78% Training lead farmers in gender mainstreaming Number of farmers Female 462 385 77% 1301 1347 135% Mount harmonised demonstration Plots Number of demonstration 2100 1681 80% 3600 6823 190% Number plots Conduct Field days Number of field days Number 1105 56 5% 3600 3339 92% 28

Appendix 4: Physical progress measured against AWP&B, including RIMS indicators PHYSICAL # UNIT CURRENT FINANCIAL YEAR (2015-2016) CUMULATIVE AWPB % of APPRAISAL % OF ACTUAL ACTUAL ACTIVITY INDICATOR TARGET AWPB TARGET APPRAISAL Establish Farmer Field School (FFS) Number of FFS Number 54 61 113% 608 173 28% Farmer Business Schools (FBS) Number Number 50 43 86% 520 94 18% Facilitate establishment of model villages Number of villages Number 66 83 126% 300 143 48% Facilitate establishment of integrated homestead Number of gardens 178 86 48% 500 186 37% Number gardens Conduct food demonstration on new recipes and Number of displays 177 50 28% 960 50 5% Number open days Facilitate establishment of clusters Number of clusters Number 235 341 145% 1880 341 18% Facilitate establishment of mindandandas No of mindandandas Number 235 252 107% 1880 252 4% Conduct KAP surveys on GAPs Number of surveys Number 2 2 100% 10 2 20% Output 2.1.2 Extension Coordination Conduct planning and review meetings for DAESS Number of meetings Number 166 15 9% 400 95 24% Output 2.1.3 Provide DAES support at Headquarters Level Develop AEDO handbook Number of handbooks Number 0 0 0% 1 1 100% Output 2.1.4 DAES Support at District Level Establish Resource Centres Number of resource Number 32 2 6% 75 19 25% centres Output 2.1.6 Training for DAES staff Conduct in service Degree course Number of Staff Total 1 1 100% 15 4 26% Conduct in service Degree course Number of Staff Male 1 1 100% 9 3 33% Conduct in service Degree course Number of Staff Female 0 0 0% 6 1 17% Train staff in various identified knowledge gaps Number of Staff Total 275 53 19% 658 430 65% Train staff in various identified knowledge gaps Number of Staff Male 193 38 20% 421 274 65% Train staff in various identified knowledge gaps Number of Staff Female 82 15 18% 237 156 65% Output 2.1.7 Farmer Group Development Train staff in FBS Number of Staff Total 358 28 8% 658 28 4% Train staff in FBS Number of Staff Male 250 23 9% 421 23 5% 29

Appendix 4: Physical progress measured against AWP&B, including RIMS indicators PHYSICAL # UNIT CURRENT FINANCIAL YEAR (2015-2016) CUMULATIVE AWPB TARGET ACTUAL % of AWPB APPRAISAL TARGET ACTUAL % OF APPRAISAL ACTIVITY INDICATOR Train staff in FBS Number of Staff Female 108 5 5% 237 5 2% Train staff in gender responsive PRAs Number of Staff Total 358 19 5% 658 19 2% Train staff in gender responsive PRAs Number of Staff Male 250 16 6% 421 16 4% Train staff in gender responsive PRAs Number of Staff Female 108 3 3% 237 3 1% Form Associations and Cooperatives Number formed Number 8 0 0% 259 15 6% Output 2.1.8 Extension Material and Mass media Produce and air radio and TV programmes Number of messages Number 56 19 34% 468 55 12% Sub Component 2.2 Seed Multiplication and Distribution Output 2.2.1 Seed Multiplication and Distribution Source and distribute legume seed for multiplication Quantity of seed Mt 133 22 17% 583 31 3% Identify legume seed multiplication groups Number of groups Number 310 88 28% 2790 213 8% Link seed multiplication group to seed companies Number of groups linked Number 310 88 28% 2790 151 5% In collaboration with seed companies and agrodealers, Number of staff trained Total 658 74 11% 6048 701 12% train staff in seed multiplication principles In collaboration with seed companies and agrodealers, Number of staff trained Male 421 55 13% 3381 494 15% train staff in seed multiplication principles In collaboration with seed companies and agrodealers, Number of staff trained Female 237 19 8% 2667 207 8% train staff in seed multiplication principles Output 2.2.5 Small Stock Livestock Development Identify farmers and form groups to be engaged in Number of goat farmers Number 420 240 57% 16590 240 1% small stock programme Identify farmers and form groups to be engaged in Number of goat farmers Male 210 104 50% 8295 104 1% small stock programme Identify farmers and form groups to be engaged in Number of goat farmers Female 210 136 65% 8295 136 2% small stock programme Identify farmers and form groups to be engaged in small stock programme Number of chicken farmers Number 525 265 56% 16590 295 2% 30

Appendix 4: Physical progress measured against AWP&B, including RIMS indicators PHYSICAL # UNIT CURRENT FINANCIAL YEAR (2015-2016) CUMULATIVE ACTIVITY Identify farmers and form groups to be engaged in small stock programme Identify farmers and form groups to be engaged in small stock programme Mount demonstrations on small stock technologies INDICATOR Number of chicken farmers Number of chicken farmers Number of demonstrations AWPB TARGET ACTUAL % of AWPB APPRAISAL TARGET ACTUAL % OF APPRAISAL Male 260 153 59% 8295 153 2% Female 265 142 54% 8295 142 2% Number 126 6 5% 840 6 0.7% 31

Appendix 5: Financial: Actual financial performance by financier; by component and disbursements by category Appendix 5: Financial: Actual financial performance by financier; by component and disbursements by category Table 5A: Financial performance by financier Financier At Appraisal (USD 000) Disbursements (USD 000 )/a Per cent disbursed IFAD Loan 22 500 5 916 26% IFAD grant- 22 500 5 816 26% PPF 600 600 100% GoM Counterpart funds 3 230 1 584 49% Beneficiaries 1 200 965 80% Total 50 030 14 881 30% Table 5B: Financial performance by financier by component (USD 000) IFAD LOAN IFAD GRANT PPF Government Beneficiaries Total Component Allocated Actual % Allocated Actual % Allocated Actual % Allocated Actual % Allocated Actual % Allocated Actual % 1.Adaptive Research & Knowledge Management 2 350 964 41% 2 350 315 13% 0 0 0 700 141 0.2 0 0 0 5 400 1 421 75 2.Farmer Adoption of Good Agricultural Practices 18 800 7 712 41% 18 800 2 170 12% 600 292 49% 1600 655 0 1200 965 80% 41 000 11 794 25 3.Programme Coordination 1 350 1 304 97% 1 350 1 640 121% 0 0 0 1900 788 41% 4 600 3 732 25 Total 22 500 9 979 44% 22 500 4 125 18% 600 292 49% 4 200 1 584 38% 1 200 965 80% 51 000 16 946 38 33

Appendix 5: Financial: Actual financial performance by financier; by component and disbursements by category Table 5C: IFAD loan and grant disbursements and projected utilisation Category Original Allocation Disbursement up to WA 20 Expenditures under WA21, 22 and 23 + Commitments Projected Utilisation Projected Balance A B C D=B+C E=A-D SDR'000 SDR'000 %age USD'000 SDR'000 SDR'000 SDR'000 Projected Utilisation %age 1 Vehicles, Motorcycles and Equipment 865 1 091 126% 218 155 1 246 (381) 144% Technical Assistance, Trainings, Workshops and 2 Studies 790 1 021 129% 154 109 1 131 (341) 143% 3A Support for Adaptive Research 1 820 229 13% 165 117 346 1 474 19% Support for Knowledge Management and 3B Communication 650 342 53% - - 342 308 53% 4A Support for improved Agriculture Extension 17 510 1 775 10% 592 421 2 195 15 315 13% 4B Support for Access to Key Agricultural Inputs 3 290 818 25% - 818 2 472 25% 5A Salaries and Allowances 170 35 21% 26 18 54 116 32% 5B Incremental Operating Costs 1 590 787 49% 278 197 984 606 62% 99 Unallocated 2 215-0% - 2 215 0% Sub-total 28 900 6 097 21% 1 432 1 018 7 115 21 785 25% 99Z Initial deposit - 2 066 Total 28 900 8 163 28% Say USD 30 659 34

Appendix 6: Compliance with legal covenants: Status of implementation Appendix 6: Compliance with legal covenants: Status of implementation Section Covenant Target/Action Due Date Compliance Remarks Status/Date Section 4.02 PCU to open and maintain Project Account (in the Pre- Disbursement Complied Reserve Bank of Malawi) Section 7.05 Procurement of goods, works and services carried Continuous Complied out in accordance with the procedures laid down in Schedule 3 Section 4.04 Insurance of vehicles, equipment and civil works Continuous Complied financed from the loan proceeds to be consistent with sound commercial practice. Section 4.05, section 9.03(b) Audit report submitted to IFAD. 31 December each year N/A Report for 2013/14 submitted on time. Section 4.06 Progress reports to be submitted to IFAD on a Continuous Complied quarterly basis. Schedule 4, para 7 AWPB to be submitted to the Fund, for its review 60 days before commencement Complied and comments of subsequent fiscal year Schedule 3, par 3(2) MoAIWD will ensure that an adequate number of staff is assigned to the Programme Partially complied The TPCT arrangements are yet to work efficiently. implementation. Key staff shall consist of: an M&E Officer, a Knowledge Management and Communications Officer, a Procurement Officer(s) and two Accountants who would be assigned to the Programme immediately upon entry into effect of this Agreement. Schedule 4, para 8.03 (a) A Mid-Term Review (MTR) to be carried out jointly Midpoint of Project Will be carried out in the year 2016. Schedule 4, para 16 by the Borrower and IFAD. Project to be exempted from all import duties, excise taxes and value added tax (VAT) on investment expenditures implementation period Continuous Complied Project was exempted but prefinanced taxes have not been refunded by GoM 35

Appendix 7: Knowledge management: Learning and Innovation Appendix 7: Knowledge management: Learning and Innovation The draft knowledge management and communication strategy was developed and is currently awaiting the validation workshop. The strategy is expected to be the pillar for knowledge management activities for the programme. However, meetings held during the mission revealed that there is almost no knowledge management activities conduct by the programme at the current stage as a result of the weak status of the M&E system and the absence of a Knowledge Management Officer. Once the M&E system is upgraded, the programme will work on capturing and documenting the lessons learned and best practices, and disseminating them with different stakeholders. The KAP surveys on nutrition and GAP are expected to be finalized by the end of January 2016. Both survey will provide a lot of information on different aspects that will serve as a source of knowledge for guiding programme implementation. The KAP survey is expected to be conducted on an annual basis and the report from the survey as well as the data sets should be provided to different stakeholders as part of knowledge sharing. Based on the mission s recommendation, a dedicated Knowledge Management Officer will be appointed by SAPP. 37

Appendix 8: Progress against previous mission recommendations January/February 2015 Aide Memoire Appendix 8: Progress against previous mission recommendations May 2015 Aide Memoire Overall assessment Outputs and Outcomes Agreed action Responsibility Agreed date Status as of October 2015 Complete the remaining procurement as per IFAP and TPCT 30-Jun-15 All procurements were done as per IFAP. However, capital procurements were in line with AWPB pended until MTR after Category 1 was overdrawn. Develop the next AWPB along agreed milestones TPCT 30-Jun-15 Done. AWPB was submitted for final approval and was approved on 6th November 2015. Revise the modality of implementation and DARS 31-Aug-15 DARS conducted a meeting to harmonize technologies/messages that will be demonstration protocols of the adaptive research trials promoted under SAPP to ensure: 1) that trials are carefully designed to deliver the right message in the right way; 2) that sufficient training is provided to the officers implementing the trials on the various GAPs 3) that messages of the trials are not conflicting with other messages or activities of SAPP, especially to what relates to CA and ridging 4) that the learning process and adoption by farmers is enhanced through the trial 5) that the trials contribute to the enhancement of the M&E system Carry out a core functional analysis of all MOAIWD departments, prior to further capacity building programs Align the proposed capacity building activities for adaptive research with the existing institutional training plan of DARS Revise the draft Adaptive Research Strategy 2015-2021 to ensure better coherence in presentation and highlight the integration of various research themes (especially nutrition, postharvest, socio-economics and GAP). Integrate the M&E framework of the strategy within the SAPP M&E system MOAIWD DARS DARS, SAPP A DARS strategy was drafted to guide research and collaboration/coordination in all SAPP sites. The department received comments from IFAD and noted that there is inadequate capacity to address some of the comments that were made. The programme therefore needs Technical Assistance from IFAD. This is an on-going process; however training for staff (AEDOs, SMSs) who will be implementing trials was conducted in Salima to kick start the process. Harmonizing meeting for demonstrations and trials was conducted and trial and demonstrations protocols were developed to avoid advocating contradictory messages for the programme. Additionally the department of Land Resources trained all members of staff in the EPAs, districts and ADDs on CA to ensure that there is uniformity in implementation of activities relating to CA and ridging. The programme has developed data collecting sheets as part of the trial protocols to assist farmers and all stakeholders to manage data and draw lessons out of it. Done 31-Dec-2015 Being facilitated by ASWAp secretariat through ASWAp SP programme. A consultant has been engaged, and it is expected that the consultant will submit his recommendations by March 2016 31-Aug-15 Done 31-Aug-15 The draft strategy has been developed, awaiting incorporation of final comments. However, there is need for IFAD to provide technical support in the finalization phase to address issues of inadequate capacity to properly incorporate comments that were made by IFAD on the draft strategy. 39

Supervision report - Mission dates: 13-26-May 2015 Appendix 7: Knowledge management: Learning and Innovation Implementation progress Agreed action Responsibility Agreed date Status as of October 2015 Ensure coherence in the data provided in the text with TPCT 31-Jul-15 Done and on-going the M&E data in the progress reports. Mainstream MOAIWD and TLC activities within these reports (TLC to continue presenting separate reports to the MOAIWD for compilation and evaluation) Enhance the design and management of on-farm demonstrations (refer to the same recommendations in Component 1 for the Adaptive research DAES and TLC Immediately Harmonizing meeting for demonstrations and trials was conducted and trial and demonstrations protocols were developed to avoid advocating contradictory messages for the programme. demonstrations) Conduct training on nutrition-sensitive agriculture for TPCT/IFAD July/August Done. extension workers, AEDOs, nutrition officers Prepare a FFS training and rolling plan to include: training of Master trainers, extension facilitators, farmer facilitators, refresher courses, curricula development. Technical support could be sought from FAO Malawi. Carry out an internal evaluation of lead farmers identified by the SAPP Develop a strategy to ensure that seed production activities are linked to the seed private sector Nutrition adviser DAES MOAIWD and TPCT DCD, SAPP 2015 31-Aug-15 The training curriculum for FFS facilitators was developed with a focus on soya, pigeon peas, groundnuts, maize and conservation agriculture technologies. The training schedules for the Master trainers have also been developed focusing on the same technologies. Draft copies for the curriculum and training schedules are available. A draft manual has also been developed. However it requires some additions in line with the evolving approach. 30-Sep-15 A separate study was done on the same by a consultant, hence DAES is currently doing desk reviews/evaluation to draw lessons from the previous studies 31-Aug-15 DCD has conducted meetings to consolidate issues to be drafted in the Legume Seed Strategy. Currently three seed companies (TASU seed company, Mbewu seed investment company and Fumwe seed company) have been engaged to adopt seed multiplication groups in SAPP operational districts depending on their comparative advantage. In addition the Ministry has developed a contract farming strategy which is being finalized to ensure that there is proper linkage between the seed producers and the seed companies. Revise the mechanism for supervision visits to include TPCT M&E 30-Jun-15 Done and on-going spot checks and meetings with beneficiaries officer Upgrade the M&E system TPCT M&E officer 30-Sep-15 Not done. The programme is suggesting to have an M&E specialist from IFAD to assist with upgrading the M&E system. Implement the KAP survey on GAP TPCT M&E officer 31-Jul-15 Data collection was done but data entry and analysis have not yet started as the templates which were to be designed by TLC M&E Specialist have not yet been developed. Devise a plan to capture programme outcomes TPCT M&E 30-Jun-15 The plan was drafted, it is awaiting technical review officer Revise the logframe TPCT M&E officer 30-Jun-15 Done. However there will be need to reduce the number of indicators during MTR. Extend partnerships in support of the SAPP DARS, DAES, 31-Dec-2015 Awaiting finalization of the DARS Strategy Plan. 40

Appendix 8: Progress against previous mission recommendations January/February 2015 Aide Memoire Fiduciary experts Sustainability Agreed action Responsibility Agreed date Status as of October 2015 implementation to include CGIAR-centres and NGOs TPCT Extend the tenure of the TPCT by one year, extend PS 15-Jun-15 The contracts of NPC and FMS have been extended for six months to December the contracts of the staff on the basis of performance 2015. The contracts of M&E and Procurement Specialists were not extended as evaluation per recommendations of the Assessment Committee. Resolve the financing gap of USD 71,000 PS 31-Jul-15 Done Complete migration of financial transactions data into FC/Accountant 31-Aug-15 Done TOMPRO and reconcile accordingly Adhere to GoM financial procedures in the FC/ Accountant Ongoing On going expenditure payments as per audit recommendation Update the financial and Accounting procedures FC/Accountant 30-Sep-15 Awaiting finalization of the accounting manual by a consultant Prepare and submit to IFAD quarterly financial FC/Accountant 30-Jun-15 On-going statements Follow up for payment of the VAT and bank charges FC/Accountant 31-Jul-15 The process is still under way. All VAT expenses have been compiled for refund Remit to IFAD approximately USD 60,000 as the exchange loss arising out of the current balance of the Project Preparatory facility Grant Engage with local NGOs to support SAPP in institutional development of farmer groups TPCT/MOF/MO AIR to the programme through MRA 30-Sep-15 Done DAES and TPCT 30-Sep-15 Not done. The programme is however currently using decentralized structures such as Village Development Committees and stakeholder panels that would ensure continuity of programme activities once the programme phases out. Additionally, the use of lead farmers and farmer groups in implementation of activities would ensure sustainability of programme activities. Furthermore, there is institutionalization of programme activities since they are being implemented by government staff right from the grassroots. Others Conduct Food KAP survey TPCT/IFAD Nutrition Advisor 30-Sep-15 The survey was conducted but the report has not yet been submitted by the consultant Plan and budget for income/asset and thematic surveys to assess programme impacts TPCT 30-Jun-15 Included in the 2015-16 AWPB 41

Appendix 9: Supervision mission schedule Appendix 9: Supervision mission schedule Date Activity Sunday 29 November Arrival of Mission in Lilongwe Monday 30 November Courtesy call at Ministry of Finance, Economic Planning and Development Meeting with TPCT and other Government Officials (Report presentation and Progress on last mission s recommendations) Individual meetings Tuesday 1 December Field visit to Lilongwe West Ukwe EPA Demera EPA Chilaza EPA Wednesday 2 December Travel to Chitipa District for a field visit Thursday 3 December Field visit to Karonga ADD Lufita EPA Misuku EPA Lufita EPA Friday 4 December Travel back to Lilongwe via Salima ADD Mponde EPA Saturday 5 December Drafting Aide Memoire Sunday 6 December Drafting Aide Memoire Monday 7 December Discussing Aide Memoire with SAPP team for review Tuesday 8 December Submission of Aide Memoire to MoAIWD and MoFEPD Wednesday 9 December Wrap-up meeting Thursday 10 December One-on-one meetings including UN agencies Friday 11 December One-on-one meetings Saturday 12 December Departure of the Mission 43

Technical Annex 1: Agriculture (Component 1 and 2) Technical Annex 1: Agriculture (Component 1 and 2) The mission reviewed the progress in the implementation of activities planned and noted commendable progress in various activities. This technical annex focuses on three main areas of activity which required further support for SAPP to achieve its objectives. A. Component 1: Adaptive Research and Knowledge Management This component is led by the Department of Agricultural Research Services (DARS) of the Ministry of Agriculture Irrigation and Water Development (MoAIWD). Agricultural Research Strategy. DARS, in close collaboration with various research stakeholders had developed the draft Adaptive Research Strategy 2015-2021. This will assist with the development of a research agenda related to site- and crop-specific identification of GAPs, with the appropriate implementation modalities, and the establishment of proper baselines, management and monitoring systems for GAPs dissemination. The draft strategy document was reviewed by IFAD and comments were provided for its revision to enhance its clarity and effectiveness. During the mission, the draft strategy was further discussed with DARS and other stakeholders within the MoAIWD to clarify its scope and enhance its contribution SAPP objectives and to the ASWAp national research strategy that is still being developed. The mission proposed changes in the outline of strategy and some changes in the content to include definitions of the GAP concepts used and to revise the earlier proposed four main themes for action research. This included: (i) mainstreaming the cross-cutting theme of socio-economics, including postharvest loss management, within the GAP production aspects; and (ii) establishing a new theme on geo-referenced characterization of agro-ecological zones with special emphasis on soil fertility and erosion and vegetation dynamics combined with climate change vulnerability maps. The latter should guide the future adaptive research interventions (as well as planning extension demonstrations) and serve in the monitoring and evaluation of the adoption and expansion of GAP-promoted in SAPP and nationally. The proposed changes on the Adaptive Research Strategy including the potential partners are detailed in Attachment 1 (1a and 1b). The proposal in Attachment 1 keeps nutrition as a separate theme as suggested in the DARS revised strategy document. However, the mission recommends to remove it and incorporate the agriculture-related actions within the other three action research themes. On-farm research trials. The on-farm adaptive research trials were based on various harmonized research protocols that were developed in the previous season. Meetings and discussions were held with staff from SAPP districts and ADDs to orient them on the implementation of adaptive trials on legume breeding, agronomy, maize-legume systems and postharvest handling. Lead farmers (LF), identified by DAES and TLC (see Component 2), had been selected to implement the on-farm trials during the 2015/16 season. Attention had been given to the selection of young dynamic LF. The LF were trained in the guidelines for implementing trials, especially conservation agriculture. Seeds of maize and various legumes, fertilizers and chemicals (pesticides and herbicides) were procured and distributed to LF for the trials. The mission was pleased to note the increased efforts made to ensure better coordination and planning of the on-farm trials with other concerned stakeholders. It also commends the quality of the trial layouts and the good understanding of LF about the objectives of their specific trials. It was also pleased to note that soil fertility enhancement trials had been conducted in the previous season. The various treatments of trials that were completed during the previous season had been evaluated jointly by farmers and the concerned frontline staff (AEDOs). Farmers expressed clear preferences for certain varieties but for these varieties to realise their maximum potential there is a need to enhance farmers capacity for good and integrated crop management practices. 45

Technical Annex 1: Agriculture (Component 1 and 2) Recommendations: The mission has the following recommendations: As per the recommendation of the May 2015 mission, there is still scope to further improve the evaluation of the trials by farmers with the AEDOs and researchers in a way that further enhances their adoption of new technologies. It is recommended that a small group (20-30) of farmer followers of the LF, together with the AEDO and research staff, would evaluate and discuss the trial treatments on a regular basis during the growing season starting from planting to harvesting. This could be done every two weeks using a standard evaluation form to be filled by each farmer regarding key issues of the trial (prepared jointly by all concerned stakeholders including the LF). During each visit to the field, farmers would evaluate the respective characteristics at that stage of crop development and together discuss their scoring. This way farmers would better understand the reasons behind their preferences or disagreements, as would researchers and extension agents. Participatory selection trials should also include assessments beyond harvesting to test the cooking quality and postharvest storage and nutritional quality of the varieties tested as perceived by farmers. The records of scores taken by farmers could be fed into the M&E system of SAPP. It is also recommended that all on-farm trials would regularly include a control treatment within the trials of the local practices used by farmers (either local varieties or local cultivation practices used). As per the Adaptive Research Strategy, the mission recommends that all on-farm trials should include some element of socio-economic assessment of the community where they are being implemented including such factors as sex of household head, wealth status of household. This should cover both the justification of the design (considerations of the cropping/farming systems, farm size, access to inputs, etc.) as well as in the analysis of their results (access to inputs, farmer groups, cooking quality of varieties, role of women, markets, etc.). B. Component 2: Farmer Adoption of Good Agricultural Practices Subcomponent 2.1: Improved Agricultural Extension. This subcomponent is led by Department of Agriculture Extension (DAES) of MoAIWD and is presently supported by with the TLC. Farmer to Farmer Extension Network. SAPP implementation is firmly based on the lead farmers based extension approach including through lead farmer trainings, field days, review meetings and support in the establishment of model villages, the latter serving as learning centres. Through SAPP, LF have been identified by DAES and TLC and were trained in the techniques of conservation agriculture, manure making, facilitation and communication skills, and group formation. With the expansion of the livestock programme, LF were also trained in goat and chicken management and some were also trained in gender mainstreaming and nutrition. Harmonized demonstration plots are being conducted on various technologies including CA, intercropping and crop rotation with different varieties of legumes, spacing of ridges and planting stations, and seed density. During field visits, the mission was able to observe the demonstration plots and discuss with LF and their follower groups. The mission commends DAES for the high quality of the demonstration plots and the fact that the theme of the demonstration plots originated from discussions by AEDOs with the farmers in response to their most pressing problems. The mission also appreciated the positive engagement, enthusiasm and commitment of the LF and their groups in the application of CA principles, the use and application of manure (or more often compost) and the development of nurseries for agroforestry trees to be used within the CA system. As per discussion with farmers, CA has proved to be crucial for maintaining good yields during the previous season that was characterised by long periods of droughts in some districts; this will certainly translate into higher adoption rates. However, some farmers raised issues that they considered to be constraints (though not preventing them from accepting CA) and these included the limited availability, theft or burning of crop residues, and the difficult task of hand weeding when herbicides were not available. In contrast, some farmers noted a reduction in the weed populations under CA. Recommendations: The mission recommends that the factors positively and negatively affecting adoption of CA, especially socio-economic and gender-related aspects, be studied under the adaptive research where possible using beneficiaries and the demonstration plots (refer to the adaptive research strategy in Attachment 1). As per the recommendations provided for the adaptive research 46

Technical Annex 1: Agriculture (Component 1 and 2) component, it is important that all harmonized demonstrations should be underpinned by some socioeconomic assessment of the community where they are being implemented. This should cover both the justification of the design (considerations of the cropping/farming systems, farm size, access to inputs, socio-economic factors including income, sex of the household head, and wealth ranking of household, etc.) as well as in the analysis of their results (access to seeds and inputs, membership in farmer groups, role of women, markets, etc.). As per the recommendation of the previous mission, there is still scope to improve the understanding of farmers of the GAPs demonstrated to enhance adoption. It is critical that farmers understand why some technologies recommended/demonstrated are considered better than others, especially under their own agro-ecological and socio-economic conditions. The same recommendations and comments detailed above in Component 1 for the design of on-farm research trials and their evaluation could be adopted for the on-farm demonstrations undertaken by DAES and TLC. The participatory assessments of the demonstrations by farmers during the season (see section above) allows them to better understand their needs and limitations and hence their adoption would be more sustainable. This will also provide means to improve the design of demonstrations and on the M&E reporting system of SAPP. While the LF met during this mission seemed knowledgeable and quite dedicated to their groups, this was not the case during previous field visits where the interaction between the LF and their groups was irregular and scarce, and groups did not seem to be coherent. Accordingly, the mission reiterates the recommendation of the previous mission to undertake an assessment of the LF working with SAPP (DAES and TLC). This assessment should be followed by an additional assessment of the groups/followers of these lead farmers. Based on findings, targeted capacity development plans and group facilitation activities can be developed to ensure that groups are coherent, have a common vision and a solid governance structure to be able to grow and become self-sustaining. Attachment 2 provides the draft ToR for the suggested study on the lead farmers and their followers. Sub Component 2.2: Access to Key Agricultural Inputs is led by the Department of Crop Development (DCD) to improve farmers access to seeds of improved legume varieties and the enhance the revenues of seed producers. SAPP is also aiming to engage with agro dealers and micro-finance institutions for improved access to farm inputs and finance. Seed multiplication and distribution. Staff from the seed services of each ADD and district, were trained on seed multiplication principles in order to train the AEDOs and lead farmers in seed multiplication and provide them with technical backstopping whenever needed. SAPP continued to identify new legume seed multiplication groups, with a total of 88 new groups established since May 2105, each with 15-20 farmers. These groups were provided with basic seeds of different legume varieties. As per previous season, the seeds service units in each of DCD and DARS cooperate for ensuing that the seeds produced by these groups are certified. The main problem remained in ensuring a market for these certified seeds. A meeting was organized to develop a strategy for the production and marketing of certified legume seeds. Participants at this meeting included DAES, DARS, DAPS, ICRISAT, AGRA, AICC, District Agribusiness and Legume Crops Officers, SAPP Desk Officers from ADDS, STAM secretariat and some private seed companies (Seed-Co, Demeter seed and TASU seed). Three companies, namely FUNWE Farm, TASU Seed Company, and Mbewe Seed Investment Company expressed interest in buying legume seeds indicating varieties and quantities needed. However, to date, no formal contracts have been prepared or signed. The development of appropriate contracts is a critical milestone in defining the future relationship between seed companies and the seed producer groups. Several issues have to be clearly stated in the contract to make it fair for both sides, including, among others: What the company will be providing in terms of seeds, inputs (fertilizers, pest control, harvesting and postharvest treatment) and technical support, if any. The related costs of this input and mode of cost-recovery from the farmer should be clarified. The quantities of certified seeds that the company will be buying (at least the minimum amount that the contract obliges them to buy) and of which variety. This should be in addition to the amount of seeds that the company has provided initially to the farmers, where applicable. 47

Technical Annex 1: Agriculture (Component 1 and 2) The quality of the seeds that is required (moisture content, % germination, etc.). The basis for the price at which seeds will be bought should be clarified by the company and understood by the farmers, including whether it is after cleaning, shelling, processing, etc. Who bears the cost for processing the seeds (cleaning, shelling, etc.) and their transport from the field to the company. The timing and mode of payment to the farmers (upon delivery, instalments or at the beginning of the following season, etc.) has to be clearly stated and should take into farmers needs for cash, while taking into consideration the cash-flow capacities of the seed companies. Who bears the cost of inspection and certification. Though SAPP is presently taking charge of the inspection fees, it is important to include them in the contract so that farmers understand that there is a cost for certification. A section on special provisions in case of deviation from the contract should be provided and would include the applicable law under which the contract is governed, the methodology for the settlement of disputes and contract deviations, and the penalties incurred in each case and on each party, and the conditions for breaking the contract. The contract should be clear about whether it is dealing with individual farmers, or a group of farmers treated as an entity for which the responsibility is as an entity (Attachment 3 provides a sample contract between seed company and the seed producers). Since these contracts are dealing with poor and emerging seed producer groups, growing seeds under rainfed conditions, it may be necessary for SAPP to provide them with risk mitigation measures including intensive training and technical backstopping, weather insurance or other insurance schemes that protect them from climate-related risks that may prevent them from adhering to their contract. Other loss mitigation measures to support farmer groups include the provision of postharvest storage equipment including hermetic metal bins and hermetic bags. These become important for maintaining the quality of certified seeds over prolonged periods of storage in case the seed company fails to buy the seeds or there are unforeseen delays in handing over of seeds to the buyer, or in case more seeds are produced than anticipated. In proper storage facilities, certified seeds will maintain their value for longer periods, thus allowing the farmer groups to sell their seeds at a later stage when buyers are available or when market prices are higher. Alternatively, seed prices may fluctuate in such a way that real market prices become higher than the contract price. It is very common that in this case, farmers are tempted to sell outside their contract at higher prices. This could create a problem for the group of not having sufficient amounts of seeds available to fulfil the contract requirements, especially if more than one farmer in the group is not adhering to the agreed contract conditions. One of the measures that could be taken to mitigate such acts include raising the awareness of the group on the consequences of such acts not only in the short-term, but also on the longer term, in terms of building trust for a longer term relationship with the seed company as a reliable secure market for the multiplication group. In addition, the group could impose penalties on members not adhering to their contracts. There could also provision in the contract to give farmers some leeway to sell some of their seeds outside the contract to provide them with the possibility to profit from higher market prices, while keeping a secure market. The issue of traceability is very important in farmer groups selling their products jointly. One farmer not adhering to the quality standard set by the buyers could cause the total supply to be rejected, thus negatively impacting the whole group. In the case of legume seeds, especially groundnuts, aflatoxin management and control is among the most important quality factors to be considered. The level of aflatoxins in seeds is a reflection of various pre-harvest (soil and pod contamination in the field, soil humidity, groundnut variety, etc.) and postharvest (drying, storage) factors. Group members have to be assisted to ensure that all good management practices are implemented, with special emphasis on the drying methods (mainly using the Mandela cork method) and storage structures. SAPP could support farmers further by providing groups with an aflatoxin measurement kit and a moisture meter that could be used to test the level of aflatoxins as well as moisture level in the seed lot of each farmer before they are pooled together. This would enable seeds lacking the requested quality to be eliminated early on in the process. 48

Technical Annex 1: Agriculture (Component 1 and 2) Attachment 1a: Suggested Outline for Adaptive Research Strategy, 2015-2021 1. BACKGROUND TO MALAWI S AGRICULTURE SECTOR 1.1 Agricultural production in Malawi Importance of agriculture in Malawi Farming systems in Malawi; rainfed/irrigated Agro-ecologies in Malawi Constraints of agriculture: land size and tenure, soil fertility, access to inputs, quality seeds, new varieties, extension (appropriate technologies and knowledge), financial services and markets, etc. Expected impact of climate change 1.2 (SAPP) Description of SAPP Description of Component 1 Linkages between Components 1 and 2 1.3 The Department of Agricultural Research Services (DARS) DARS vision, mission and activities (sections, areas of activities, research centres, etc.) Collaboration, partnerships and funding On-going collaboration programmes with DARS (WB, USAID, GIZ, EU, etc. listed in a table and areas of activities indicated) Added value of SAPP to the on-going activities of DARS 2. ADAPTIVE RESEARCH STRATEGY IN MALAWI 2.1 Rationale for adaptive research strategy in Malawi Importance of development of research strategies (reference to the IFPRI study in Malawi) ASWAp Research strategy purpose and status and its four focus areas (see SWOT analysis) Purpose of SAPP adaptive research strategy, its scope (rainfed systems, cereal/legume/livestock systems, nationwide, agro-ecosystems, etc.) How does SAPP strategy fit into the national ASWAp research strategy being developed and which mechanism is foreseen to incorporate the strategy into the ASWAp strategy Definitions of terminologies within the strategy: GAP, CA, IPM, etc. 2.2 Development Process of the SAPP research strategy 2.3 Guiding Principles for the SAPP research strategy (new section) Use of GAP process 3 Socio-economic basis of all adaptive research as a cross-cutting theme for all research strategic objectives; adaptive research trials evaluated not only physically (improved yield, resistance, improved soil fertility, etc.), but also in terms of cultural and social acceptance and economic benefits for the farmer, household (with gender and age considerations) and the community Interrelationship between all components of the research strategy and hence inter-disciplinary research planned and implemented Close linkages with extension and DAES for (should be highlighted in the section on the collaboration with DAES): o selection of the site of research demonstration o selection of the communities and farmers to be involved in adaptive research trials o delivery and evaluation of the results of the adaptive research trials o scaling up of the results of adaptive research with the farmers 3 Principles for good agricultural practices (2003) These principles were presented to FAO s Committee on Agriculture (COAG) in Annex to the paper Development of a Framework for Good Agricultural Practices available at http://www.fao.org/docrep/meeting/006/y8704e.htm. 49

Technical Annex 1: Agriculture (Component 1 and 2) o provision of inputs on the farmers needs for new adaptive research trials o monitoring and evaluation of the adoption of GAP and new technologies Monitoring and evaluation system established for the adoption of new technologies and for the improvement of the selection of GAP technologies in the various agro-ecological zones and socio-economic conditions establishment of adaptive research trials Establishment of geo-referenced basis (GIS maps) based on satellite imagery/earth observation data, soil testing data and the M&E system for the adaptive research, which is to be used as a decision tool in support of GAPs to be tested and recommended for various agro-ecological and socio-economic conditions as well as to be used in support of the assessment of the adoption and impact of GAPs (soil fertility enhancement, erosion reduction, water retention, green coverage, increased area covered with legumes, etc.). 3. STRATEGIC OBJECTIVES OF ADAPTIVE RESEARCH (revised) 3.1 Strategic objective 1: Germplasm enhancement (Improved varieties, Production, productivity, tolerant to biotic and abiotic stresses) 3.2 Strategic objective 2: Geo-referenced characterization of agro-ecological zones, with special emphasis on climate change vulnerability, soil fertility and erosion and socio-economic conditions for enhanced targeting of GAPs and impact 3.3 Strategic objective 3: Sustainable intensification of cereal-legume cropping systems for food and nutritional security and income generation 3.4 Strategic objective 4: Improved nutrition 4. INSTITUTIONAL ROLES AND COLLABORATION IN ADAPTIVE RESEARCH 4.1 Collaboration between DARS and other research partners (a) Lilongwe University of Agriculture and Natural (b) Consultative Group on International Agricultural Research (CGIAR) i. The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) ii. The World Agroforestry Centre (ICRAF) iii. International Institute of Tropical Agriculture (IITA)/Southern Africa Research on Roots and Tubers Networks (SARRNET) iv. The International Centre for Tropical Agriculture (CIAT) v. The International Maize and Wheat Improvement Centre (CIMMYT) (c) The Agricultural Research and Extension Trust (ARET) (role in the adaptive research should be clearly indicated as for the CGIAR and LUANAR) (d) Malawi Bureau of Standards (MBS) and Department of Agricultural Planning Services (DAPS) (role in the adaptive research should be clearly indicated as for the CGIAR and LUANAR) 4.2 Collaboration between DARS and Technology dissemination institutions 5. STRATEGIES AND ACTIONS FOR SAPP ADAPTIVE RESEARCH (see details in Attachment 1b) 6. MONITORING AND EVALUATION 6.1 Key Assumptions 7. PERFORMANCE RESULTS FRAMEWORK (to include a budget for the outputs and collaborating partners) 7.1 Workplan 8. ANNEXES 1.0 GAP explained (see Attachment 1c) 2.0 SWOT analysis (for ASWAp) 50

Technical Annex 1: Agriculture (Component 1 and 2) Attachment 1b: Strategies and Actions for SAPP Adaptive Research 4 A. Theme One: Germplasm development Strategic outcomes by 2021 Increased productivity of legumes in Malawi (increased productivity does not only depend on varieties but also on GAP adoption). Increased production of groundnut varieties that are resistant to aflatoxin contamination. Increased total legume production (increased productivity and area under production). Increased access to farmers of quality seeds of new and local varieties. Increased availability and exports of legumes seed (is there any comparative advantage for the export market?). Outputs: High yielding legume varieties with preferred consumer and market traits and with higher nutritive value that are suitable for specific agro-ecological zones released and up-scaled. Legume seed system developed. Varieties that are resistant to aflatoxin contamination developed and up-scaled. Varieties that are tolerant to drought and heat stresses developed. Understanding of the socio-economic factors affecting the selection and preference of varieties by farmers and households. Objective: To introduce and promote legume varieties in Malawi with higher productivity, preferred consumer and market traits and enhanced nutritional and cooking qualities that are suitable for specific agro-ecological zones. Strategies Test, release and promote legume varieties which are high yielding and tolerant to biotic and abiotic stresses suitable for different agro-ecological zones (Note: developing a variety is beyond the scope of SAPP (that is why we are using only screen and test); even the process of testing varieties through PVS, then releasing them, then multiplying seeds in sufficient quantities will take several years, especially if there is limited capacity for release and multiplication. It is also recommended that PVS should be on either released varieties or varieties almost being released). Promote the adoption of legume varieties with preferred consumer and market traits and with higher nutritional values in the most adapted agro-ecologies. Enhance Capacity building. Understanding of socio-economic factors affecting the selection and preference of varieties by farmers and households. Actions 1. Screen and test through PVS drought tolerant bean varieties; 2. Screen and test through PVS heat tolerant bean varieties; 3. Screen and test through PVS more varieties that meet the market demand, taking into account issues of seed colour, size, yield, pest and disease tolerance; 4. Upscale the production of already available bio-fortified beans through PVS and enhanced adoption and enhanced availability of seeds; 5. Screen and test through PVS promiscuous soybean varieties; 6. Screen and test through PVS legume varieties tolerance to field and storage pests; 7. Screening legumes for compatibility under CA; 8. Screen and test aflatoxin resistant varieties as part of the aflatoxin management strategies; 9. Screen elite lines of legumes for resistance to A. vogelli; 10. Train frontline extension staff in proper implementation of the trials; 11. Train farmers, lead farmers, AEDOs and AEDCs around the projects sites; 12. Develop trial protocols in one package for the trials; 13. Train farmer groups in legume seed multiplication protocols; 4 Please note that all text in italics is either introduced (new) or revised. 51

Technical Annex 1: Agriculture (Component 1 and 2) 14. Test and promote new models for quick multiplication and dissemination of legume seeds (community seed multiplication groups, private seed sector, agrovets, farmers field schools, etc.); 15. Multiplication of breeder seed; 16. Assess farmers and household criteria for selection of varieties based on their socio-economic and cultural characteristics: cooking quality and time, nutritional quality, seed color, maturity and earliness, plant height, straw quality for various usage (building material, feed, compost, making baskets and sheets, etc.), harvesting characteristics (shattering, ease of harvest, labour, etc.), processing characteristics seed storage characteristics of grain, aflatoxin resistance, ease of shelling and processing, labour requirements and technical knowledge requirements, etc. B. Theme Two: Geo-referenced characterization of agro-ecological zones, with special emphasis on climate change vulnerability, soil fertility and erosion and socioeconomic vulnerability (this has been added as a separate theme, using partly input from the GIS and soil fertility sections of the revised strategy prepared by DARS). Strategic outcomes by 2021 (needs to be added by DARS). Outputs (needs to be added by DARS). Objective: To develop a GIS/earth observation data-assisted knowledge system based on soil erosion, fertility, vegetation dynamics as well as potential for adoption to be used as a decision support system for the recommendation of GAP implementation in selected agro-ecologies as well as an M&E support system Strategy: Geo-referenced zoning of agro-ecologies based on biophysical characteristics (soil erosion, fertility, vegetation dynamics) as well as socio-economic characteristics. Vulnerability mapping of zoning based on climate change risks, soil fertility loss and erosion, vegetation coverage and socio-economic conditions. Zoning of areas to which various varieties are recommended, based on disease, pest and abiotic stress prevalence (temperature, heat intensity, drought, etc.) and rainfall patterns in relation to farmer preferences. Develop simple tools for soil testing. Mapping of increased areas of adoption of GAP including ISFM, CA, cereal-legume cropping systems, etc. Improved targeting of interventions. Improved understanding of the effect of biophysical and socio-economic factors on the adoption of GAPs. Actions: 1. Expansion of work of AGRA and Africa Soils Information Service (AfSIS) for soil mapping in the target areas; 2. Analysis and collection of available documentation and data on the socio-economic conditions and climate change projections; 3. Conduct household typology studies to guide research interventions; 4. Overlaying of socio-economic and climate change vulnerability data in the GIS system; 5. Analysis of relevant past work and map out suitability of various technologies and recommended GAPs; 6. GIS maps (and database) showing spatial adoption of various GAP recommendations; 7. Conduct adoption studies on GAPs and incorporate it within the GIS system; 8. Conduct impact assessment of adaptive research; and 9. Conduct monitoring and evaluation of adaptive research and incorporate it within the GIS system. C. Theme Three: Sustainable intensification of cereal-legume cropping systems (While strategic outcomes and outputs of this theme have been summarised into one, objectives, strategies and actions for each sub-theme are discussed separately). 52

Technical Annex 1: Agriculture (Component 1 and 2) Strategic outcomes by 2021 30% cumulative increase in maize yield by the year 2021. Increased food security. Increased maize and legume yields. Increased legume production for food and nutrition security. Reduced cost of production. Improved soil fertility. Reduced soil erosion. Precision application of fertility inputs by farmers. Increased availability of fodder. Reduced postharvest losses in quantity and quality. Improved targeting of interventions. Widespread adoption of GAPs in agricultural production. Increased agro-based income among smallholder farmers. Enhanced institutional capacities for better implementation of adaptive research. Enhanced approaches and methodologies for technology dissemination. Enhanced understanding of adoption of technologies. Outputs: Economically viable Conservation Agriculture cropping systems developed for specific agroecological zones of Malawi. Area specific fertilizer recommendations for cropping systems developed (for Conservation Agriculture or conventional tillage systems). Correct spatial arrangement of intercropping maize and legumes developed. Appropriate green manure cover crops and mulch types and quantities identified and recommended for each of CA and conventional tillage systems. Appropriate pit sizes and plant population per pit identified for CA systems. Appropriate seeding rate and density developed for different cereal-legume cropping systems developed. Suitable tree species for each agro-ecological zones that are compatible in different maizelegume cropping systems developed. Recommendation domains for agronomic practices for agroforestry cropping systems developed. Fertilizer (organic/inorganic) recommendations in the framework for integrated soil fertility management recommendations developed. Simple tools for soil testing developed. Precision application of fertility inputs by farmers. Agronomic recommendations for legume production developed. Area specific fertilizer/inoculant recommendations for legumes developed. Storage facilities for agricultural produces evaluated and recommended. Chemical residues in harvested grains determined and quantified. Aflatoxin contamination in harvested and stored seeds reduced. Capacity to determine active ingredients for synthetic and botanical pesticides improved. Losses at different postharvest stages quantified. Appropriate post harvest management practices identified. Increased understanding of the value chains of legume commodities. Farmer and household socio-economic conditions favouring adoption studied and understood (farmers and household profiles, education and income levels. Constraints faced by farmers for adoption of GAP analysed and understood: ecological/ environmental, physical constraints, access to land, extension and knowledge, quality inputs including seeds, fertilisers, phytosanitary products, equipment and machinery, access to postharvest storage and processing equipment, access to markets. Incentives for enhanced farmers adoption of GAP analysed and addressed: availability of markets or new specialised markets, enhanced knowledge, enhanced resilience, enhanced 53

Technical Annex 1: Agriculture (Component 1 and 2) yield, enhanced quality and hence higher prices, certificates, enhanced solidarity of the community through building community / farmer institutions and groups, etc. Institutional capacities for better implementation of adaptive research enhanced. Appropriate approaches and methodologies for technology dissemination identified. Sub-theme: Soil fertility Objectives: To enhance soil productivity through integrated soil fertility management. Strategies: Identify organic and inorganic soil fertility management practices. Develop fertilizer (organic/inorganic) recommendations in the framework of integrated soil fertility management. Actions: 1. Establish experiments to evaluate the performance of integrated (organic and inorganic) fertilizer management; 2. Recommend appropriate green manure cover crops, mulch type and quantity and compost types for the various cropping systems; 3. Assess the impact of livestock integration with the cereal-legume system on soil fertility and structure enhancement; 4. Conduct training of extension staff and farmers; 5. Conduct dissemination activities; 6. Build capacity of extension partners and farmers in ISFM practices; 7. Preplanting soil sampling; 8. Conduct plant and soil laboratory analyses; 9. Soil characterization in all the sites; 10. Postharvest soil sampling, annually to monitor soil changes (texture, structure, fertility and microbial activities) for all GAP interventions; 11. Conduct plant and soil laboratory analyses; 12. Conduct monitoring and evaluation. Sub-theme: Conservation Agriculture (CA) Objective: To develop integrated crop and nutrient management practices in maize-legume based CA cropping systems that are profitable and adaptable in different agro-ecological zones. Strategies: Identify, analyse and document challenges that lead to poor adoption of Conservation Agriculture (CA) cropping systems. Develop area specific fertilizer recommendations for Conservation Agriculture cropping systems. Recommend appropriate green manure cover crops, mulch type and quantity in Conservation Agriculture cropping systems. Develop the right spatial arrangement in maize legume intercropping in conservation agriculture. Develop recommendation on the economically viable conservation agriculture cropping systems in different agro-ecological zones of Malawi. Actions: 1. Conduct socio economic surveys and biophysical studies on CA; 2. Derive area specific fertilizer recommendation in the framework of CA; 3. Produce maps on area specific fertilizer recommendations that delineate to other areas of similar ecologies; 4. Conduct dissemination activities; 5. Build capacity of extension partners and farmers in CA management practices; 6. Conduct plant and soil laboratory analyses; 7. Conduct economic analysis; 54

Technical Annex 1: Agriculture (Component 1 and 2) 8. Conduct monitoring and evaluation; 9. Conduct adoption studies on CA. Sub-theme: Agro-forestry Objective: To integrate agro-forestry trees in cropping systems for enhanced soil fertility and increased crop production. Strategies: Identify suitable tree species for each agro-ecological zones that are compatible in different maize-legume cropping systems. Derive a recommendation domain for agronomic practices for agroforestry cropping systems. Actions: 1. Sourcing germplasm. 2. Identify farmers and conduct sensitization meeting with farmers and traditional leaders; 3. Conduct training of extension officers and farmers; 4. Conducting field experiments and inventory of tree species; 5. Conduct monitoring and evaluation; 6. Conduct dissemination activities; 7. Build capacity of extension partners and farmers in agroforestry tree management practices; 8. Conduct economic analysis of agro-forestry system promoted. Sub-theme: Integrated crop production and protection practices Objective: To develop appropriate crop production and protection practices within the cereal-legume production systems. Strategies: Develop agronomic recommendations for legumes grown as sole or in combinations that maximise productivity of legumes and subsequent maize in rotation. Develop area specific fertilizer/inoculant recommendations for legumes. Develop integrated pest and disease management practices (IPM) for cereal-legume cropping systems in various agro-ecologies. Develop appropriate seeding rate and density. Develop appropriate and economically viable intercropping systems (crops/varieties, spacing, density, etc.) for the selected agro-ecologies. Develop appropriate and economically viable crop rotation systems for the selected agroecologies. Develop appropriate harvesting methodologies and postharvest processing technologies adapted to the agro-ecologies, cropping systems and socio-economic conditions. Develop appropriate technologies for post-harvest loss reduction at the household and production group levels. Test various postharvest loss assessment methods. Actions: 1. Conduct on-farm trials on appropriate seeding rates and density under various cropping systems; 2. Conduct on-farm trials on appropriate intercropping systems (crops/varieties, spacing, density, etc.) for the selected agro-ecologies; 3. Conduct on-farm trials on appropriate crop rotation systems for the selected agro-ecologies; 4. Conduct on-farm trials on integrated pest management practices (cultural, mechanical, biological and when needed chemical control); 5. Conduct on-farm trials on harvesting technologies (timing, equipment, etc.); 6. Conduct on-farm trials on postharvest processing technologies (drying, shelling, cleaning, equipment); 7. Conduct on-farm trials on postharvest storage technologies at the household and group levels (assessment of various types of local and new technologies); 8. Conduct assess postharvest losses at the household level and along the value chain; 55

Technical Annex 1: Agriculture (Component 1 and 2) 9. Conduct dissemination activities; 10. Conduct plant and soil laboratory analyses; 11. Training of farmers; 12. Conduct value chains studies on legume commodities; 13. Conduct adoption studies on GAPs promoted; 14. Conduct socio-economic analysis on adoption of the various GAPs tested and promoted; 15. Conduct monitoring and evaluation. D. Theme Four: Nutrition (NB. Mission recommends to remove this theme and incorporate nutrition sensitive agriculture-related activities within themes 1, and 3 mainly). Strategic outcomes by 2021 Increased adoption of safe and nutritious food products. Increased utilization of indigenous foods. Post-harvest losses reduced. Outputs A variety of nutritious and safe products developed. Feasible interventions to reduce food contaminants developed and promoted. Factors that lead to stigma on the usage of indigenous foods documented. Most effective ways of increasing utilization of indigenous foods identified. Objective: To promote use of safe and nutritious products from legumes, indigenous foods and orphan crops. Strategies Develop and promote a variety of nutritious and safe products. Develop and promote feasible interventions to reduce food contaminants. Document factors that lead to stigma on the usage of indigenous foods. Identify most effective ways of increasing utilization of indigenous foods. Actions Perform a knowledge attitude and practice (KAP) survey on utilization of legume fruits and vegetables; Analyse and document nutrition composition of indigenous fruits and vegetables; Conduct participatory food product development; Promote use of bio-fortified food crops (e.g. Zn, Se, Fe, protein and vitamins) and other nutritious food crops; Analyse the causes of stigma; Study the channels that will be most effective in increasing utilization of indigenous foods; Promote utilization of orphan and emerging crops; Investigate the persistence, survival and transmission mechanisms of food contaminants; To assess the knowledge, attitudes, and practices of the farmers community regarding the safe use of pesticides; To evaluate the food contaminant concentrations in selected food crops; Perform food contaminant risk assessments; Develop and promote feasible interventions for the reduction of food borne pathogens, biological and chemical contaminants. 56

Technical Annex 1: Agriculture (Component 1 and 2) Attachment 2: Terms of reference for Assessment of Lead Farmers and their Followers in SAPP 1. Background: Description of SAPP, the use of Lead Famers in Malawi, the results of the evaluation of the Lead Farmer (LF) approach by various agencies and consultants including the Malawi Forum for Agricultural Advisory Services (MAFAAS). 2. Justification: LF are valuable resources to enhance the outreach of the extension system in Malawi where there is insufficient staff as well to reach remote areas not easily accessible, as they are resident in their regions and are also famers. The quality of LF is the very important to enhance the adoption rate of GAP by the target group. The quality of LF and the delivery of their tasks affect the quality of follower farmers and their groups. The quality of the groups in terms of cohesion, interest, governance, sustainability, etc. is affected at least at its initiation by the quality of interaction of the LF with the group. Observations of the joint IFAD/MoAIWD mission in the field during two missions in 2015, and discussions with LF and follower groups, resulted in mixed conclusion about the quality of the LF in terms of their technical knowledge, analytical skills, their capacity to interact with their follower farmers and provide them with the needed knowledge and hands-on support to allow them to adopt the new technologies and enhance their functions as a group. Solid, effective and economically sustainable farmer groups are the foundation for the capacity of smallholder farmers to enter the market and generate an income from agriculture, hence the importance of building them as strong organizations. 3. Objective of the assessment: To evaluate a sample of the lead farmers identified and promoted by SAPP (DAES/TLC) as to their capacities to deliver in support of the DAES demonstrations, enhance adoption of GAP, and support the establishment of solid farmer groups. This quick assessment will be done on a representative sample of LF out of the total number identified to date within SAPP. The sample should represent around 10-15% of all LF of SAPP (approximate sample size of 200-250 LF), distributed across all districts, representing LF selected by DAES and ones selected by TLC, with gender representation, some working also for on-farm trials others only demonstrations, etc. The assessment should not only cover the LF but will necessarily also cover their follower farmers and their groups. This assessment will be coupled with the already completed evaluation of MAFAAS on the concept of the LF. It will be the basis for a follow-up more detailed assessment at a later date of the farmer groups within SAPP (to include also FFS and FBS). Both assessments of LF and farmer groups will lead to the development of a capacity building plan for the LF and groups in order to enhance the delivery of SAPP to achieve its goals. The results and analysis of this assessment will be provided to the SAPP mid-term review team (by the end of January). 4. Detailed tasks of the evaluation: a) General information on the LF: number of LF sampled, disaggregated by sex, age and household wealth. Educational level. Training of LF received through SAPP and/or other organizations (training in technical issues, facilitation skills or other related issues). Years since becoming LF. Sources of income of LF. Acting as LF for which projects/programmes/other donors, etc. Are they also FFS/FBS facilitators? 57

Technical Annex 1: Agriculture (Component 1 and 2) b) Lead Farmer assessment: undertaken with the LF without the presence of the responsible extension agent or members of the follower group. Assess the criteria used for the selection of the LF from the perspective of the LF. Assess the understanding of the LF of their responsibilities and obligations towards the follower farmers and SAPP/MAIWD/TLC from the perspective of the LF. Assess the reasons/motivation of the LF to take on that task. Assess the technical knowledge on the LF. Assess the analytical capacity of the LF (understanding the reasoning of the technical demonstrations: why are practices proposed? whether the LF has questioned their viability and potential benefit to famers based on the local conditions, whether he/she had proposed modifications of the demonstrations to SAPP staff, whether the LF has already adopted these practices. Assess the facilitation and communication capacities of the LF. Assess the activities undertaken by the LF to transmit the technology and messages demonstrated (harmonized demonstration or on-farm trials) to the follower group (regular group meetings, one-on-one follow-up, invitations to the demonstration plots, others). Assess whether these activities had been indicated to him/her by SAPP (as condition for becoming a LF), or through training, or his/her own initiative. Assess whether the LF has undertaken any activities to enhance the relationship between the follower farmers (whether organized in groups or separate) in terms of group facilitation activities to enhance cohesion, vision, objectives, common activities, governance, etc. Number of followers who have adopted the technology demonstrated and the reasons for full, partial or no adoption from the from the perspective of the LF. c) Farmer groups/followers assessment: assessment done with the farmer groups without the presence of the LF or the responsible extension agent. Are the followers organized as a group (or club or cooperative ). Number of farmers/group by sex, age, wealth of household. When was the group established (before or with SAPP). Is the group part of a cluster. Joint activities of the group. Assess the criteria used for the selection of the LF from the perspective of the follower farmers. Is the LF part of the group? Role of the LF in the group (even if he/she is not a member of the group). Number of followers within the group who have already adopted the technology demonstrated and the reasons for full, partial or no adoption from the perspective of the follower farmers. 5. Deliverables: a. Report covering: i. methodology used: sample size, method of interviewing, method of analysis, etc. ii. results of the analysis: strengths, weaknesses, potentials, constraints, etc. iii. recommendations for SAPP for improving the quality of LF, for the future assessments of the groups, and for capacity building activities of the LF. iv. Names of all those assessed and any other data available as annexes. 6. Duration: one month. 7. Requirements: two national consultants (working in parallel; one interviewing the LF and one working with the farmer groups). Other support from SAPP may be needed. 58

Technical Annex 1: Agriculture (Component 1 and 2) Attachment 3: Example of a seed contract (Seed company, Uganda) Outgrowers Agreement (Hybrid) Farmer: ------------------------ Season 2012A Location: ------------------------ Farm size: -----acres Variety: Maize Hybrid (Variety: ---------) Farmer Number:. This agreement is between Seed Company and the supplier referred to as an out grower (farmer). This agreement refers to the Hybrid Seed Production handbook and Ugandan Seed Law. Seed Company Agrees to do the following: To supply the grower with parent Seed at UGX 1800/kg on credit. To buy back the crop as certified seed crop at a guaranteed price of 1300 UGX/kg. The purchase will be based on net and dry weight (13% Moisture) and a minimum of 92.5 % germination. The seed must be pre cleaned over 7mm screen. Delivery of wet crop is accepted, recalculated to 13%. Support with inputs (chemicals/fertiliser/ cash) if available on credit. To provide advise where possible on the agronomic practises. To carry out field inspection in co-operation with National Seed Certification Services (NSCS), inspections paid by company. To shell and load the seed from farmers. To collect and transport the seed from the growers premises. To ensure prompt payment <60 days after delivery, after which 1% interest per month interest implies on outstanding. The Grower agrees to do the following: To grow the crop in a good agronomic way and according to the seed rules and advice given by the Seed Company team. To harvest, with clean equipment within the stipulated time, separating different crops/varieties to avoid contamination. To rogue out all off-types and diseased plants during the growing season. To construct a crib and have maize on the cob stored until agreed time of shelling. To set machines properly to avoid crop mixtures, grain damages and spillage. Shell, bag and load on the trucks. To provide all weather access roads to the field and store at all times. Allow Seed Company staff/agents to inspect the seed crop and cribs any time during the growing season. To produce a crop fit to be certified, rejection based on farmers failure to comply results into annulations of the contract. Clause Seed remains property of the Seed Company. For agreement signed in 2 copies on ---/---/2012 For and on behalf of Seed Company Name:.. Sign:.. Witness: Outgrower Name: Sign:.. 59

Technical Annex 2: Poverty, targeting and gender Technical Annex 2: Poverty, targeting and gender This technical annex provides an update on the status of poverty in Malawi, the SAPP target group profile and beneficiary outreach, and a gender perspective on SAPP outreach. There are observations based on field work and recommendations for strengthening the poverty and gender focus of SAPP interventions. Two case studies from the field visits are attached. A. Update on poverty status in Malawi Relevance of strong poverty focus. The conditions of poverty in Malawi have changed little since the original design of SAPP in 2011. A recent report by Oxfam International 5 highlights the growing divide between the rich and poor within the country, with the Gini coefficient measuring income distribution increasing from 0.39 in 2004 to 0.45 in 2011. Recent high rates of economic growth rates have not been pro-poor or inclusive, and have widened within both rural and urban areas. Currently there are around 8 million poor people in the country, representing half of the total population. Their vulnerability was further exacerbated by the impact of adverse weather in 2014-15. The cropping season was plagued by both floods and drought, which reduced maize crop production by 28% and left as many as 2.8 million short of food. Malawi s Human Development Index value for 2013 was 0.414 positioning the country at 174 out of 187 countries and territories 6. While there have been steady gains in life expectancy (to 55 years) and education (expected years in schooling at 10 years), growth in per capita income has lagged behind. When account is taken of the inequality in the distribution of human development across the population, the HDI falls by over 30%. B. Beneficiary outreach The characteristics of rural poverty are associated with the following types of households: those headed by women, with large families, with household heads with no formal education, and households caring for people with chronic illnesses such as AIDS and disability. The land holdings of the poor are less than 0.5 ha, and they are often located in remote areas with limited access to services and markets. Target group profile. In order to understand the outreach of SAPP activities by the wealth group of the beneficiaries, it is first necessary to define the different wealth groups found in the smallholder sector. The Programme Design Report (Annex 2 and Working Paper 3) linked SAPP activities to the three categories of smallholder farmers identified by MoAIWD. The majority of smallholder famers (80%) are those seeking food security (SSFS); with approximately 15% 7 smallholders representing smallscale commercial farmers and the final 5% fully commercial farmers. Their key characteristics are noted in Table 1. Drawing on data presented in the SAPP baseline survey (Box 1), it would be possible to further subdivide the SSFS category into three, comprising the ultra-poor, middle poor and less poor. These distinctions would provide the framework for examining the outreach of SAPP from a poverty perspective. 5 Oxfam International (2015) A Dangerous Divide, The State of Inequality in Malawi https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/rr-inequality-in-malawi-261115-en.pdf. 6 UNDP (2014) Human Development Report 2014, Sustaining Human Progress: Reducing Vulnerabilities and Building Resilience http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/mwi.pdf. 7 Estimated figures (15% and 5%) for indicative purposes only. 61

Technical Annex 1: Agriculture (Component 1 and 2) Key characteristics of poverty from baseline survey Most households are male-headed, which are more literate than FHHs. Housing conditions are poor, most walls made of burnt bricks but roofs made of mostly grass and floor made of smoothed mud. Access to safe water is over 90% and about 70% have access to improved sanitation facilities. Most households own simple agricultural tools with very few owning a plough, treadle pump, ox-cart or wheelbarrow. Household ownership of livestock is also low, with chickens being the mostly owned livestock (around 55%) and with major gender biases in ownership of livestock. Around half of the households own a radio, cell phone or bicycle; fewer than 7% own a TV or motorcycle. Underscoring the extent of poverty, most of the expenditures are on food (48%), followed by those on farm inputs including hired labour (14%) and on clothing (7%). The incidence of hunger is high, with 23% of households experiencing a hunger season, and 5% of households experiencing two hunger seasons. Source: MoAIWD (2015) Baseline survey for SAPP Table 1: SAPP target groups Target Commercial farmers: smallest group, maledominated, estates Small-scale commercial farmers: dominated by youth and male farmers Smallholder food security farmers: 80% of smallholder population; includes women and men in male-headed households and women heads of household; Characteristics from PDR - economically active - self- sustaining - hire labour - farm as a business, market-oriented - members of associations and cooperatives - use medium term loans - few farmers follow their example - usually attain food security - skilled, market-oriented but have limited assets - active in farmers clubs/groups - volunteer to host demos, trials and be lead farmers - demand extension services from government, private sector - interested in off-farm activities - potential to achieve food Less poor * security and responsive to poverty alleviation interventions Middle poor * - often depend on government Ultra poor: and NGOs for purchased inputs - extremely limited resources - once achieve food security, join - extended periods of food insecurity other extension activities, - livelihoods usually supported by safety nets become lead farmers, engage in such as food and cash transfers. off-farm activities * To be further characterised based on information from the baseline survey Female-headed households. About one quarter of households in Malawi are headed by women. In the baseline survey of 1800 households this figure varies in the project districts from 21-24% of households in the northern and central districts, to 36-42% in the project districts in the south. Two thirds of the FHHs surveyed were below the asset poverty line of 40 th percentile, compared to 37% of MHHs. FHHs tend to have fewer household members (4 rather than 5 in MHHs) and higher rates of illiteracy of the household head (45% compared to 75% in MHHs). A higher proportion of FHHs rely on farming as their main occupation (81%) (MHHs 66%) and were less likely to have non-farm work (10% compared to 19%) or salaried employment. Target group pyramid. Figure 1 represents the composition of the smallholder community from a poverty perspective, ranging from the commercial farmers at the top of the wealth pyramid, through to the three categories of the smallholder food security farmers (SSFS) and the ultra-poor at the bottom. The upward and downward arrows indicate fluidity within the smallholder sector: while some farming households develop their livelihoods and move up the wealth pyramid, others are at risk of becoming poorer. 62

Technical Annex 2: Poverty, targeting and gender SAPP beneficiary outreach. A number of the SAPP activities are of relevance to both the middle poor and less poor SSFS farmers (see left-hand side of diagram), whereas others are of more relevance to specific groups within the SSFS farmers (see right-hand side of the diagram). The needs of the ultra-poor are beyond the scope of SAPP and are usually met through safety net programmes and cash transfers. Activities that are of broad interest (left-hand side of the diagram) include farmer field schools (FFS), pass-on goats, silos for postharvest storage, backyard gardens, nutrition education, gender equality and HIV/AIDS sensitization. It is often the role of the community to decide which households participate in the pass-on livestock activities and the backyard gardens. Staff training in cross-cutting issues such as gender, HIV/AIDS and nutrition help strengthen the enabling environment to support the delivery of these topics at the field level. Figure 1: Relationship between SAPP activities and wealth group of beneficiaries SAPP activities with broad outreach SAPP activities with targeted outreach C F FFS Follower farmers Goats pass on Silos Backyard gardens Nutrition education SSC F SSFS: less poor SSFS: middle poor Seed multiplication Lead farmer - on-farm trials Lead farmer - demos MFIs FBS Follower of lead farmer Chickens pass on Low cost CA SSFS: ultra poor Targeting. SAPP uses a mixture of targeting approaches to identify beneficiary farmers and households which are summarised in the SAPP draft targeting strategy (2015). Geographical targeting has resulted in SAPP being located in the poorer districts in Malawi. A mixture of self and direct targeting results in the identification of key individuals suitable to take on the role of lead farmers, whereas group membership will largely be formed through self-identification. Direct targeting criteria are necessary for activities which are suited to poorer households, such as chicken distribution. Lead farmers typically come from the less poor SSFS smallholders. They tend to be early adopters of new technologies and practices; they need to be literate, have the skills and respect to lead fellow farmers, be a good communicator and be willing to work voluntarily to share their experiences with other farmers. If they are selected to run demonstration plots, they to have 0.2 0,4 ha of land which they can reserve for the demonstration. In contrast, the followers may come from both the SSFS less poor and middle poor. They need to be willing to learn from the lead farmers and have sufficient resources to practice the new technologies and practices. Members of seed multiplication groups will also come from the less poor SSFS group. They should have at least 0.4 ha for multiplication of basic seeds into certified categories; they also need to pay a registration fee and group membership fee, as well as pay for resources required by the group for management. 63

Technical Annex 1: Agriculture (Component 1 and 2) FFS target low producers and seek to achieve food self-sufficiency at the household level. They require support in terms of inputs and technical advice. Members of FFS face common production problems and are willing to commit to the activities of the school for a whole season. They need a minimum of 0.2 ha of their own land where they can practice what they have learnt. They need to be able to contribute resources (cash or in-kind) to support the school activities. This group can include illiterate members. The community will allocate a minimum of 0.2 ha which is accessible for school production activities. Farmer business schools (FBS) are of interest to the less poor who are looking to strengthen the business side of their farm operations for income generation. Members learn about farming as a business, marketing and financial matters; they need to be literate and have at least 0.2 ha. Mission observations. During the field visits in Chitipa and Salima, there was evidence of outreach into the heart of IFAD s target groups which were participating in goat pass-on activities and FFS. They specifically appreciated the labour-saving features of CA (e.g. no ridging, weed suppression). They were located in more remote communities and indicated levels of poverty that were below the thresholds identified during the baseline survey (for example, they owned less than 0.8 ha of land, had no livestock and few owned mobile phones). (See case studies in Attachment 1). However, lead farmers of demonstration plots in Lilongwe West owned more land than average and there was a broader ownership of livestock among their follower group members many owned chicken and a few also owned goats, pigs and cattle. Recommendations. There is a risk that poorer smallholder farmers have less opportunity to participate in, and benefit from, SAPP activities. The following actions may help strengthen the outreach from a poverty perspective: - Complete the profile of SSFS smallholders, drawing on baseline survey data to distinguish between the less poor and middle poor (Table 1); - Identify and track the wealth profile of the beneficiaries in the M&E database; - On the basis of understanding the profile of the current beneficiaries, determine whether additional targeting mechanisms are required to deepen the beneficiary outreach. C. Gender analysis of SAPP outreach The gender dimensions of SAPP may be examined from three perspectives: women s representation among project beneficiaries; women s representation among staff participants in SAPP training; and the content of materials delivered. Women smallholder beneficiaries. Based on cumulative data until September 2015, women accounted for 49% of farmer beneficiaries, with their highest participation rates in dietary diversity training (68%), attending food demonstrations and open days (64%) and membership of goat groups (57%) (Table 2). They were least well represented among the lead farmers trained in research (27%) and lead farmers trained for on-farm trials (31%). Table 2: Women s representation among project beneficiaries SAPP activities Male Female Female %age Train lead farmers - research 446 168 27 Train lead farmers - extension 3872 3286 46 Train lead farmers - gender mainstreaming 1530 1347 47 Farmers - on-farm trials 426 188 31 Farmers - goat groups 104 136 57 Farmers - chicken groups 153 142 48 Farmers - food demos and open days (only 2016 data) 688 1233 64 Train farmers - dietary diversification 274 589 68 Farmers - clusters and mindandandas 2213 2109 49 Total farmer beneficiaries 9706 9198 49 64

Technical Annex 2: Poverty, targeting and gender Staff participants. Among staff training, female participation rates were 34% on average, with the highest rates in group dynamics (46%), aflatoxin training (42%) and seed multiplication (36%) (Table 3). Table 3: Women s representation among staff participants in training SAPP activities Male Female Female %age Desk officers 5 2 29 Train staff - CA guidelines 60 14 19 In-service degree 1 0 0 Train staff - knowledge gaps 274 156 36 Train staff - group dynamics 128 110 46 Train staff - mkt-oriented farm planning 132 28 18 Train staff - FBS 23 5 18 Train staff - gender PRAs 16 3 16 Train staff - seed multiplication 450 251 36 Train staff - metallic silos * 23 10 30 Train staff - aflatoxin trainers * 7 5 42 Total staff beneficiaries 1119 584 34 Not cumulative data Gender content in training. DAES is actively engaged in promoting gender equality and, under SAPP, has trained staff in the DAES household approach which addresses key issues of gender inequality at the household level. Gender and HIV/AIDS mainstreaming, together with nutrition mainstreaming, are part of the training for group strengthening. Mission observations. The Programme Design Report indicates that component 2.1 will target 200,000 farm households (of whom at least 50% will be female- or child-headed) and that women will account for at least 30% of membership of decision-making structures. These should be taken as minimum targets, rather than the final target. The low levels of literacy among rural women is a barrier to becoming lead farmers (with the requirement to be literate to keep records, read leaflets, etc.) and joining FBS. Low literacy rates can contribute to low self-esteem and foster dependency on men to make decisions. However, evidence from lead farmers and followers encountered during the field visits demonstrated that women are gaining voice and respect in community; they are confident to speak in public and share their knowledge. Recommendations. Women s participation rates would be expected to be higher in districts where they are over-represented as female heads of households in addition to married women. Thus the targets should be taken as minimum targets, rather than the final target. Greater engagement with women particularly in mainstream SAPP activities rather than merely attending demonstrations - would also strengthen the poverty outreach because households headed by women are overrepresented among the poor. Discussions with FFS members (case study 2) demonstrate the importance of looking at all aspects of people s lives such as their quality of life, voice in decision making, freedom from domestic violence - as well as their livelihoods. Hence it is important to be aware of enabling communities to identify and address other factors that may inhibit women s participation in SAPP development initiatives. The curricula of groups and FFS also look at the broader aspects of rural livelihoods, such as gender inequality, nutrition and HIV/AIDS. The DAES household approach has the potential to both deepen and strengthen the social dimensions of; opportunities to incorporate it within the FFS approach should be explored. It may also be useful to link up NASFAM s experiences with the Gender Action Learning System (GALS) - another household methodology - which is achieving significant outreach through a modest network of champions trained from the community. 65

Technical Annex 1: Agriculture (Component 1 and 2) Attachment 1: Case studies Case study 1: Twighukeghe goat group, Kapoka 3, Chitipa District This community lies inland from an earth road. Water for household use and irrigating vegetable crops such as onions is collected from a local stream. The majority of the group members owned 0.4 ha; two women had 0.2 ha, and three men and one woman had 0.6 ha. They cultivated a variety of crops (maize, millet, soya, sweet potatoes, groundnuts, beans, onions and cassava). They owned no livestock, not even chicken (there had been an outbreak of Newcastle s disease recently). Their children ate eggs purchased from the market about three times per month. The group of 20 members (11 women, 9 men) came together specifically because of SAPP. The extension officer had informed them about the possibility of receiving goats and they were motivated to form the group. They had chosen two households to receive the goats (two females and one male). One was chosen because his child was unable to breastfeed well and they thought he would benefit from goat s milk. The group had prepared its own constitution, including the imposition of fines for missing the weekly meetings, and had three committees (executive, livestock and crops). They operated an informal savings scheme and lent money to each other. They had constructed the goat shed and were awaiting the arrival of the animals. They had a thorough understanding of their management and care, and understood about the pass-on mechanism. Observation. The impact on poverty reduction and improved diets at the community level will take time to bear fruit. The benefits of introducing an improved ram in a community without goats means the opportunity to enhance the local stock will be zero. Case study 2: Kapoka 3 Farmers field school, Chitipa District This FFS was located along an earth road. The members (comprising 20 women and nine men) came from the middle poor group. The majority owned 0.4 0.8 ha, and only a few more than 0.8 ha; noone owned livestock other than two members with some chicken. Only one young man owned a mobile phone. The FFS was three months old. It had formed in response to the extension officer informing the village chief of this opportunity. The FFS identified several trials to conduct with hybrid and local seeds, varying the number of seeds per planting station, the width of the ridges and planting distance. They were experimenting with maize, soya and millet. This is the first time they have analysed their cropping practices and were excited by what they are observing and learning. They have already changed their ridge spacing on their own land. They meet once per week for an hour or longer if there are jobs to be done. They usually meet with the extension officer. They keep records for each trial. For illiterate members, the methods are repeated several times out aloud to help them recall the information. The group also discusses other topics, such as gender and HIV/AIDS. The topic of gender was described as learning how to keep their husbands at home - by cooking nice food and being supportive of the husband in order to stop him going to drink. Group members were already aware of HIV/AIDS the messages today focus on the importance of knowing one s status. ARVs are usually available in Chitipa but transport to town is a challenge. There was consensus that the incidence of HIV/AIDS in the community had fallen during the last decade. The discussion also touched on the most common types of domestic violence/abuse which were often related to excessive drinking, fighting, extramarital affairs, forced sex and child labour. 66

Technical Annex 3: Financial management report Technical Annex 3: Financial management report A. Financial Management 1. Overall overview: Rated moderately satisfactory. On the positive side the implementation has progressed during the last 12 months. The combined IFAD Loan and Grant disbursement to 31 October, 2015 is SDR 8.16 million or US$ 11.73 million representing 28% of the combined Loan and Grant allocation of SDR 28.9 million, including the Initial Deposit of US$ 3 million. This is an improvement of 100% of disbursement compared with as of the end of the last mission. The mission notes that some agreed actions of the May Supervision Mission have been implemented including substantial remittance of the unutilised PPF grant funds. Progress has also been made in installation of the TOMPRO accounting software as well as training staff in the use of this accounting software. The finalisation of the accounting procedures and accounting manual - which is a key document for effective control and management of funds and financial reporting is still pending. The lack of it is adversely affecting the efficiency in the oversight and management of funds across the whole of the implementation chain. 2. While no acrimony has been noticed, the working relationship between the counterpart accountants and the FM specialist does not appear to be as result oriented as expected. The working arrangement appears loose and uncoordinated with a weak internal check in the data capture and reporting, and this may have contributed to delayed draft accounts for audit, and errors in WA preparation. As we move forward the key areas of focus for improving the efficiency and effectiveness of financial management will be: a) Speed up the formulation of the financial procedures and guidelines manual b) Address all the teething problems of the accounting software c) Rationalise and improve the working relationship between the Financial Management Specialist and the counterpart Accountants with the aim of having the team result oriented in their outputs. d) Improve the FM oversight and control arrangements in all cost centres including Headquarters, TLC and their zones as well as ADDs. 3. Financial systems and internal controls. The internal controls and checks have been put in place and are working as follows: a) At the TPCT: These are included in the Programme Implementation Manual. The systems are data capture and accounting, financial reporting, cash flow, auditing and procurement. For data capture and accounting and reporting the project has acquired and installed the TOMPRO accounting software which is in the process of being put into full use. The financial procedures and guidelines are still in the basic draft form and have not been updated since project inception. Reporting templates as well as the critical control and oversight guidelines for judicious and prudent use of funds and the required monitoring in the approved project activities are still pending. The guidelines should include the rationalisation of DSA disbursements by ensuring that only those who are required are included in the travel list. Other controls will ensure that those who do not attend the workshops refund the DSAs. It was agreed that the procedures will be updated no later than 31 January 2016, and subsequently annually, to reflect implementation changes and improved financial monitoring and reporting templates. b) At the district cost centres: The main system is the approved AWPB. Others are distinct bank accounts for the SAPP funds and manual cash book and ledgers using Excel spreadsheets. Given the low volume of financial transactions these systems are adequate. c) At the implementing partner-tlc: The main system is the approved AWPB. At the HQ they utilise the Sage Pastel Accounting Software. At the zones they maintain the manual records using Excel spreadsheets but do not maintain distinct bank accounts. It is recommended that TLC dedicates a distinct bank account for SAPP funds at the zones so to facilitate a clear cash book. 4. Financial management capacity and reporting. The capacity at TPCT and TLC appears adequate and reporting appears credible and accurate. The capacity of the financial controller under TPCT is enhanced with counterpart accountants at the Ministry s headquarters and in the programme districts. The TOMPRO accounting software has been installed and expansion of its full use is 67

Technical Annex 3: Financial management report continuing. All the data capture and reporting teething problems will be urgently addressed. Financial reporting requires improvement in terms of timely quarterly statements which should include financial budget performance against actual by activities, loan utilisation statements, cash flow performance and status, and statements of receipts and uses of funds. It was reiterated that quarterly financial statements should be prepared and submitted to GoM and IFAD as part of physical and financial progress report. 5. Review of the 2014/15 and 2015/16 AWPBs performance. The Mission reviewed actual performance for 12 months period to 30 June 2015, and that of 3 months period to 30 September 2015, against the respective budgets. The overall performance for FY 2014/15 is 43% and that of 2015/16 is 19%. The actual expenditure under category 1 in FY 2015/16 relates to payments for the procurement budgeted in the last financial year. If this item is excluded the actual performance is 14%. This trend translates to an average annual execution rate of 56% which the mission considers very low. The mission recommends that during the remaining seven months of the current financial year, physical implementation should be scaled up with a view of significantly improving the current performance trend to 90% s. Table 1: 2014/15 and 2015/16 AWPBs performance analysis against Actuals Categories Revised Actual 2014/15 12 months AWPB 30 0615 Revised 2015/16 AWPB Actual 3 months 30 09 15 Performance MK'000 MK'000 %age MK'000 MK'000 Performance %age 1. Motor Vehicles, Motor cycles & equipment 1,105,020 380,219 34% 249,224 249,224 100% 2. Technical Assistance, Trainings, Workshops and Studies 2,237,353 1,127,496 50% 194,854 49,914 26% 3. Support for Adaptive Research and Knowledge Management 334,971 141,623 42% 455,387 45,603 10% 4. Improved Agriculture Extension 1,124,423 427,046 38% 3,306,511 418,791 13% 5. Recurrent Costs 987,852 418,951 42% 540,189 118,383 22% Total 5,789,620 2,495,336 43% 4,746,166 881,915 19% 6. Review of the SoEs. The review of SoEs for eligibility for claimed expenditure was carried out at all levels at the TPCT, ADDS of Blantyre and Machinga, as well as at the level of the implementing partner, the TLC including one of its zones of Zomba. The mission selected 33 items from WAs 14 (solely for TLC), 20 and 22, at a value of USD 906,607 or 33% of the total value of the 3 WAs of USD 2.7 million. While the monetary expenditure of the selected items were confirmed with the payment documents, there were significant discrepancies and weaknesses which the mission analyses and reports as follows: a) Cross Cutting: Across the board there are control and oversight weaknesses in ensuring judicious, prudent, rational, and value for money in the use of programme funds. Other gaps include lack of supporting documents such workshop/training Daily attendance lists, and back to office reports which would confirm the intended purpose of the expenditure, in terms of outreach, outputs and outcomes. The other weakness is the apparent lack of documented evidential rational assessment of the teams making up the mission supervising the field activities. The entire office team appear to form the mission with no justification in the available documentation why everybody qualifies for DSA for the underlying activity. These are serious gaps and in future the repetition may lead to expenditures falling under these circumstances being declared not having been spent prudently and not representing value for money. Consequently, these could be declared ineligible for refund by GoM. b) At the TPCT: The expenditures for items selected were confirmed with payment documents. There was an indication to the effect that, the accounting team did not always apply the historical exchange rate for the SoEs supporting WAs for replenishment. Out of 33 sample items 7 items had a total assessed over claim of USD 7,214.77 as a result of use of non-historical exchange rate. The 7 items emanated from WA 22. Another item had a computation error of USD 7,833.91 making the total over claim of the 8 items to USD 15,048.68. These errors and over claims are reported to have arisen as a result of the WA being put together by the FMS without counterchecks by another person, who ideally should be the Counterpart accountant. The mission recommends that this over claim be deducted from a future WA. c) At the ADD cost centres: The sample expenditure items were selected from WAs 20 and 22 and the expenditure included DSAs for review meetings, trainings and workshops, as well as field trips for validating implemented activities. The mission noted the critical gaps of lack of the daily signed attendance lists in Machinga and, where reports were available; they were not 68

Technical Annex 3: Financial management report signed by the key managers. Similar discrepancy was replicated in Blantyre where documentation of a number training activities did not include the signed daily attendance lists. Where an unsigned typed list was available there were cases of persons receiving allowances, but with no evidence of the recipients having attended the relevant training/workshop as per the list provided. d) At TLC Headquarters: The specific discrepancies included lack of reconciled and collated distribution lists for the seeds procured for the beneficiary farmers. Other key deficits included lack of reports of the harvest yields, outputs and outcomes as well as lessons learnt. Therefore, beyond validation of the expenditure with the payment documents, the mission could not assess the value for money for the USD 477,873, spent in procurement for seeds for, cowpeas, groundnuts, and soya beans during the last quarter of 2014. The other issue was single sourcing procurement, but this was explained that the rain season was near and only a few sources were available. Another issue was the salaries payment. The budget was in USD but the payment was in MK. It was not clear whether the MK payments were consistent with the USD budget. The TLC director of Finance promised to look into the issue and provide a justification. A future mission will review this aspect. e) At TLC Zomba zone: The items selected from WA 14 (this was for the sole accountability of TLC advances) were validated with the available documents. While the expenditures were fully accounted for, the expenditure items were inconsistent with the AWPB provisions approved by the headquarters. The review noted that approximately 40% of the cost was for items that were not included in the approved budget. 7. The above issues and problem areas constitute a high financial risk for the IFAD funds. This is a result of lack of financial procedures and guidelines. If these were there, circulated and sensitised, and used regularly, consistently and firmly, by those responsible for oversight and management, the situation would be an improvement. It was agreed that TPCT will address the pending Financial procedures and Guidelines as a matter of urgency. 8. Review of Designated Account and Operational Accounts: The DA allocation of US$ 3 million is accounted for as at 31 October 2015. As of this date, the combined cash position in the SPA and other programme accounts amounted to US$ 1.48 million. Included in the reconciliation are proceeds of WA 22 amounting to US$ 894,249 and also for WA 23 for US$ 352,783 pending payment from IFAD. Funds withdrawn from the DA of US$ 250,887 but not yet claimed for are also included in the reconciliation. Another outstanding is an amount of US$ 18,367 being the VAT payments made from the special account and claimable from the MRA. The other item is bank charges amounting to US$ 6,792 claimable from the bankers of the District accounts. It was agreed that the TPCT will improve on the following aspects: (i) the funds withdrawn from the DA of US$ 250,887 but not yet accounted for require clear analysis in terms of actual cash in the districts and TLC, expenditures pending WA preparation at the districts, TLC and headquarters; (ii) the VAT claims require intensified follow-up with GoM, given that the majority of the items have been outstanding for a long time; and (iii) the bank charges should be followed up monthly. Table 2: Reconciliation of the DA and other Accounts Item Description Value (USD) 1 Authorised Allocation 3,000,000 2 Balance in the Special Account 1,288,268 3 Balance in the Programme Account 188,655 4 Expenditure Pending WA 23 claim submission to IFAD 352,783 Proceeds of WA 22 pending settlement by IFAD 894,249 5 Expenditures Pending WA(s) preparation and submission 250,887 6 VAT recoverable from the GoM 18,367 7 Bank charges reversable by the banks 6,792 8 Total 3,000,000 B. Disbursement of IFAD Loan and Grant Disbursement 9. The disbursement of IFAD Loan and Grants stands at 28% and is rated as moderately unsatisfactory, given that in its fourth year since effectiveness when the disbursement would be 69

Technical Annex 3: Financial management report expected to be at 51%. The combined IFAD Loan and Grant disbursement to 31 October, 2015 is SDR 8.16 million or US$ 11.73 million representing 21% of the combined Loan and Grant allocation of SDR 28.9 million, including the Initial Deposit of USD 3 million. This status has been reconciled to the IFAD statements. However, the loan utilization, excluding the Initial Deposit is SDR 2.07 million, or USD 3 million, and represents a utilization level of 21%. The mission has gone further to factor in WAs 21-23 totalling USD 1.41 million or SDR 1 million equivalents at the current exchange rates. Consequently, the projected utilization is estimated at SDR 7.1 million or US$D10.14 million and this represents 25% of the Loan and Grant, leaving a balance of SDR 21.80 million or approximately US$ 30.7 million at the current exchange rates. Table 3: IFAD Loan and Grant Disbursement and, utilisation projections as at 31 October 2015 Category Original Allocation Disbursement up to WA 20 Projected Projected Utilisation Balance A B C D=B+C E=A-D SDR'000 SDR'000 %age USD'000 SDR'000 SDR'000 SDR'000 1 Vehicles, Motorcycles and Equipment 865 1,091 126% 218 155 1,246 (381) 144% 2 Technical Assistance, Trainings, Workshops and Studies 790 1,021 129% 154 109 1,131 (341) 143% 3A Support for Adaptive Research 1,820 229 13% 165 117 346 1,474 19% 3B Support for Knowledge Management and Communication 650 342 53% - - 342 308 53% 4A Support for improved Agriculture Extension 17,510 1,775 10% 592 421 2,195 15,315 13% 4B Support for Access to Key Agricultural Inputs 3,290 818 25% - 818 2,472 25% 5A Salaries and Allowances 170 35 21% 26 18 54 116 32% 5B Incremental Operating Costs 1,590 787 49% 278 197 984 606 62% 99 Unallocated 2,215-0% - 2,215 0% Sub-total 28,900 6,097 21% 1,432 1,018 7,115 21,785 25% 99Z Initial deposit - 2,066 Expenditures under WA21, 22 and 23 + Commitments Total 28,900 8,163 28% Say USD 30,659 Projected Utilisation %age 10. Category expenditure re-allocation: The mission s review indicates that categories 1 and 2 would be overdrawn if the projected expenditure is settled by IFAD. The mission notes that IFAD is in the process of considering re-allocation of funds with the aim of addressing the overruns. Table 4 below presents the proposed revised allocations. It was agreed that TPCT to follow up with IFAD for finalisation of the reallocation. Table 4: IFAD Loan and Grant Disbursement as at 31 October 2015 and Proposed Reallocation Category Original Allocation Disbursement up to WA 20 Pending Expenditure- 21-23 Projected Utilisation Projected Balance A B C D=B+C E=A-D SDR'000 SDR'000 %age USD'000 SDR'000 SDR'000 SDR'000 1 Vehicles, Motorcycles and Equipment 865 1,091 126% 218 155 1,246 (381) 144% 1,400 89% 2 Technical Assistance, Trainings, Workshops and Studies 790 1,021 129% 154 109 1,131 (341) 143% 1,300 87% 3A Support for Adaptive Research 1,820 229 13% 165 117 346 1,474 19% 1,820 19% 3B Support for Knowledge Management and Communication 650 342 53% - - 342 308 53% 650 53% 4A Support for improved Agriculture Extension 17,510 1,775 10% 592 421 2,195 15,315 13% 17,510 13% 4B Support for Access to Key Agricultural Inputs 3,290 818 25% - 818 2,472 25% 3,290 25% 5A Salaries and Allowances 170 35 21% 26 18 54 116 32% 170 32% 5B Incremental Operating Costs 1,590 787 49% 278 197 984 606 62% 1,590 62% 99 Unallocated 2,215-0% - 2,215 0% 1,170 0% Sub-total 28,900 6,097 21% 1,432 1,018 7,115 21,785 25% 28,900 25% 99Z Initial deposit - 2,066 Total 28,900 8,163 28% USD 30,659 %age Projected Utilisation Proposed reallocation SDR'000 Disb % after reallocation 11. IFAD Project Preparatory Facility. The total disbursement for this facility was US$ 600,000, of which US$ 292,079.18 has been justified as intended Programme expenditure. Cash balances amounting to US$ 272,287.41 equivalents have been remitted to IFAD. This leaves a balance of US$ 35,633.18 remaining for accountability, which is reported to emanate from exchange 70

Technical Annex 3: Financial management report fluctuation. This deficit is expected to be made good by GoM, but was not budgeted for in the 2015/16 AWPB as would have been logical. It was agreed that the payment for this amount will be negotiated with MoFEPD repayment made to IFAD on or before 30 September 2016. C. Counterpart funds 12. This is rated as satisfactory. The Financing Agreement requires that GoM to provide counterpart financial support of up to US$ 4.2 million to cover taxes, duties, salaries and other supporting services as may be required from time to time during the implementation life of the programme. As at 31 October, 2015 the total contribution US$ 1.7 million or 40.5% of the allocation of US$ 4.2 million had been made including payment of salaries, taxes and rent. The mission commends the GoM for this support. However, as of the date of the mission US$ 18,367 in form of VAT is outstanding for collection from MRA which has been paid out of the proceeds of the Designated Account. It was agreed that GoM will assist in speedy collection of the VAT by 31 January 2016. D. Compliance with loan covenants 13. This is rated as satisfactory. The Financing Agreement requires that GoM to provide counterpart financial support of up to US$ 4.2 million to cover taxes, duties, salaries and other supporting services as may be required from time to time during the implementation life of the programme. As at 31 October, 2015 the total contribution US$ 1.7 million or 40.5% of the allocation of US$ 4.2 million had been made including payment of salaries, taxes and rent. The mission commends the GoM for this support. However, as of the date of the mission US$ 18,367 in form of VAT is outstanding for collection from MRA which has been paid out of the proceeds of the Designated Account. It was agreed that GoM will assist in speedy collection of the VAT by 31 January 2016. E. Procurement 14. Procurement plan This function is rated as moderately satisfactory. The procurement plan document for 2015/16 with a total estimate of US$ 945,000 is fairly prepared with the requisite milestones spelt out. The key items included in the plan are works for electrification of EPA offices at US$ 227,500, consultancy with microfinance institutions for US$ 140,000 and goods for US$ 577,500. The goods include fertilizers and source stocks estimated at US$ 238,000. However, not all figures are consistent with the underlying AWPB and it is essential to ensure consistency between the procurement plan and the AWPB. 15. Procurement progress and contract management. Apart from seeds and fertilizers valued at US$ 191,000, the processes for the other items are pending. In order to advance the procurement function, TPCT has formed procurement committee that meets when needed and this committee should ensure that procurement is fast tracked consistently with the budget. F. Audit 16. This is rated as satisfactory. The statutory audit is up-to-date with the audit of 2013/14 having been carried out by the Auditor General of the Republic of Malawi. The auditor returned unqualified opinions on the three areas of SPA, financial statements and SoEs. The audit for 2014/15 is under way. The timelines have been tight and are too close to the submission deadline of 31 December 2015. The auditors and SAPP management will conclude on all issues relative to the Draft Audited Accounts and reports, as well as the Draft Management Letter, on or before 18 December 2015. The TPCT and the auditors are confident of meeting the 31 December 2015 submission deadline. In future years, it is recommended that SAPP accounts are submitted to the Auditor by 31 August annually to ensure timely audit and submission to GoM and IFAD. 71

Technical Annex 3: Financial management report Attachment A1: Summary of Project Fiduciary Risk Assessment at Supervision Project #1100001534 (SAPP) Implementing Agency - Ministry of Agriculture, Irrigation and Water Development Risk Assessment H/M/L Inherent Risk M N/A Control Risks Proposed Mitigation 1. Organization and Staffing H Not fully dedicated to the project. 2. Budgeting M 3. Funds flow & Disbursement Arrangements H Too many delays in the disbursement to the districts 4. Internal Controls H There are no procedures and guidelines manual to guide implementers in best controls and practices. 5. Accounting H Using TOMPRO for accounting yet effectively. 6. Reporting and Monitoring H Quarterly Accounts are not prepared in a complete informative format. 7. Internal Audit M 8. External Audit M Overall Project Fiduciary Risk H=High, M=Medium, L= Low H Comments: a) SAPP is still is still struggling in the use of TOMPRO accounting software. They are using Excel for financial accounting. This is a system that cannot guarantee accuracy and integrity of the bookkeeping. The other deficiency is lack of adequate experience on the part of the FM team that includes the FC, Counterpart Accountant and the Procurement Officer. The procurement plan for 2015/16 is not consistent with 2015/16 AWPB. The WA 22 had an over claim of USD 15,048 as a result of use of inappropriate lower exchange rate instead of the historical one. The use of DSAs is not always prudent, judicious and in full consideration for the value for money relative to the outputs and outcomes expected from the underlying activity. The other issue is value for money for the funds used to procure seeds under TLC. There is lack of distribution lists and records of farmers, and reports for the subsequent harvest yields, other outputs and outcomes. There are also questions of use of DSAs for the intended purpose. b) The working relationship and arrangements of the FM team that includes the Financial Management Specialist and the Counterpart Accountants is not working in a result oriented manner, effectiveness and efficiency. There is a major gap in financial planning, monitoring and reporting. The above example of poor quality WA 22 is a sad case in point. Re-orientation for better results is desperately required. The FM internal controls and checks of the main implementing partner are weak. Until there are improvements in these aspects the risk to the FM must continue to be rated high. Completed by: G.M. WANJOHI Date:10 December 2015 72

Technical Annex 3: Financial management report Attachment A2: Financial Management Assessment at Supervision: Guidance Questionnaire Country: Republic of Malawi Project Name: Executing Agency Loan /Grant ID: L-I-854 MW (SAPP) CPM: Thomas Rath Reviewing Finance Officer/FMS: G.M. WANJOHI Date of this review: 10 December 2015 Topic Risk Rating (H/M/L) Issues / Comments / Recommendations A. Inherent Risks The country of Malawi for 2014 TI CPI was rated at 33/100, and placed in the high risk countries. On the basis of this therefore, the inherent risk should be considered and assumed at High Risk under which this level of index is placed. B. Control Risks 1. Organization and Staffing a. Adequacy of organizational structure to meet functional needs of the project. The structure is weak.the FM team does not have a normal command structure. The FMS and her counterpart appear to be equals each person doing different functions. The internal check function chain is not facilitated. The FS for audit for 2014/15 were unduly delayed, and this may affect timely submission of the Audited Accounts. This is there on paper but not followed. H b. Availability of clear job description for key project positions, including fiduciary positions. H c. Adequacy of project financial management staff (numbers and skill) matching functional needs of project. H Numbers- Yes, skills no. d. Availability and adequacy of operating manuals and guidelines for staff. The formulation of the procedures and guidelines has been pending. H e. Existence of a performance based evaluation system in place and timely completion of performance evaluation for all staff. M f. Adequacy of health insurance coverage for all staff (where applicable). H None g. Timely payment of social security fees (where applicable). N/A h. Staff adequately informed about Ifad s national and anti-corruption policy and relevant contact details. M 2. Budgeting a. Timely preparation and approval of AWPB. b. AWPB in line with expenditure categories in Financing Agreement Schedule 2. c. Financing sources and implementing agencies for each category in the AWPB are identified. d. Linkage between AWPB and Procurement plan are identified (for cost estimate and activities). Check assumptions to support cost H H H H 2015/16 submitted after the 30 June 2015, more than 2 months late. Some key items were not thought out clearly, for they are not in line with the AWPBs The plan had cost estimates that were higher and different with the 73

Technical Annex 3: Financial management report Topic estimates. Test check high value items. 3. Fund flows and Disbursements / Withdrawals a. Timeliness of funds disbursed by different sources (and co-financiers funding if applicable). b. Timeliness of counterpart funds disbursed. c. Efficiency of the funding channels. Timeliness and traceability of funds flows. d. Efficiency of the funding channels for credit lines. Timeliness and traceability of funds flows, if applicable. e. Special Account(s)/Dedicated Account(s) Management, Disbursements. Risk Rating (H/M/L) M H M N/A Issues / Comments / Recommendations AWPB provisions. IFAD is Ok but there are delays with GoM. VAT refunds are taking long to be received. i) Adequacy of the authorized allocation to ensure a smooth flow Inadequate Increase Requested of funds H ii) Appropriateness of disbursement methods used L iii) Adequacy of documentary support for SOE disbursements, reimbursements, directs payments and Special Commitments. The bulk of the documents are in (refer to Appendix IV and complete, reflecting finding in rating). the districts and the service H provider. iv) Timely preparation and accuracy of Withdrawal Applications. H Accuracy is a major issue. v) Authorization of WA preparation. L vi) Status on expenditures withdrawn from Special Account but not yet claimed for replenishment (old cases to be noted). H Not fully reconciled. Currently, under WA 23 and for expenditures of up to 31 October 2015, there is an amount of USD 250,000 which cannot be accounted for. vii) Regularity of Special Account(s) monitoring and monthly reconciliations signed by the project manager. Review and assess the reconciliations. viii) Disbursement rate compared to the AWPB and whether satisfactory given the remaining implementation time. Provide comments as appropriate. ix) Recovery of SA balances by loan closure. N/A Not yet 4. Internal Controls H Reconciliation carried out only when a WA is being submitted. H For the 3 months period to 30 September 2015, for the 2015/2016 Financial the effective execution rate is 14%. This would project an annual average of 56%. This compares with the actual rate of 43% for 2014/2015 financial year. a. Segregation of duties - are the following functional responsibilities performed by different units or persons: (i) authorization of a transaction (ii) execution of a transaction (iii) recording of the transaction; and (iv) custody of assets involved in the transaction. b. Clarity and adequacy of decision processes and sequence of events for control functions in project implementation reflected in the Financial Manual (or equivalent there-of). c. Adherence to Financial Manual. d. Effectiveness and efficiency of internal controls over inflows of funding sources other than IFAD. L H M M Using GoM systems which are rigorous. Require update. No review since project inception A few cases of non-adherence as detailed in the 2013/14 Auditors Management letter. (This position will be reviewed once the 2014/2015 Audit is submitted). 74

Technical Annex 3: Financial management report Topic e. Adequacy of contract management (use of contracts register and monitoring form) and filing there-of. Risk Rating (H/M/L) Issues / Comments / Recommendations The Contract monitoring forms were not available on the SoE sample H f. Effectiveness and efficiency of internal controls over expenditures (full cycle from commitment, payment, receipt of good and services, approval of payments, classification, etc.). L Using GoM systems. g. Documentary evidence to confirm delivery and acceptance of contracted goods, works or services. h. Physical controls over cash, documents and records. Adequacy of filing systems. Is the petty cash subject to monthly reconciliation as well as surprise checks; custody of cash box and control of keys. M i. Adequacy of physical management of cash. N/A j. Timely payment to suppliers and consultants. L k. Eligibility of expenditures with respect to Financing Agreements. H l. Legality/eligibility of advances from project funds and timely justification for use there-of. H m. Compliance with financial management covenants in the Financing Agreements and LTB. M n. Adequacy of up-to-date record keeping for fixed assets and inventories. M o. Adequacy of controls concerning project assets including: i) Vehicle and other assets management (are assets property tagged, is a physical inventory count done on a regular basis?) ii) Fuel management (do drivers maintain a log book?) iii) Travel authorisations (incl. DSA paid to staff. M p. Adequacy of vehicles and assets insurance. L q. Workshops: i) Availability of list of participants ii) DSA paid to participants iii) Receipts for workshop expenditure M r. Adequacy of controls and authorization process for use of funds (payments, transfers, Cash/Bank balance management) / and other operational accounts non-special account. M s. Banking arrangement and controls (reconciliation of bank statements with financial accounts). M t. Existence of a proper IT support unit in place. M 5. Accounting a. Basis of accounting (cash, accrual) and whether accounting standards are in line with IFAD s requirements (e.g. IFRS/IPSAS/IPSAS cash). L IPSAS b. Adequacy and reliability of accounting system, (is double entry accounting used, specify software used, is budget data entered into the accounting system, can the accounting system produce regular automated financial reports?). H b. Recordkeeping (including documentation and filing/archiving). L c. Fixed assets register maintained and reconciled (Sample and physical check). M d. Adequate documentation and controls for Information Systems, including documented accounting procedures, backup of financial records, integration of all sub-systems. H e. Adequacy of chart of accounts for project accounting purposes. M f. Timeliness of recording transactions, regularity of performance and H L There is a key issue relative to the use of correct exchange rate. Test for value for money is an issue for the funds used to procure seeds under TLC. There is lack of distribution lists to farmers and reports for the subsequent harvest yields, other outputs and outcomes. TOMPRO yet to be put to full use. Excel still being used. To be validated upon completion of the data migration to TOMPRO accounting software. 75

Technical Annex 3: Financial management report Topic approval of reconciliations, controls on erroneous recordings. g. Appropriate/ adequate accounting and reporting of counterpart funds contributions (incl. tax and tax exemptions) as well as beneficiary contributions. Risk Rating (H/M/L) 6. Financial Reporting & Monitoring a. Completeness, accuracy, usefulness, and timeliness of financial reports. H b. Interim FM reports and linkage to progress reports - timely preparation, submission to IFAD. H c. Preparation of reports showing actual vs budget income/expenditure and AWPB execution rate. M d. Follow up of previous aide-memoirs fiduciary recommendations. M e. Reasonable alignment between disbursement rate of recurrent versus investment cost categories. M 7. Internal Audit a. Existence of Internal Audit arrangements. M b. Adequacy of internal audit arrangements (organization - staff capacity). M c. Adequacy of internal audit scope of work and quality of reports. M d. Assessment of matters raised in audit reports. M 8. External Audit 8 a. Adequacy of scope and ToR. L b. Adherence to ToR. L c. Timeliness of audit report. M d. Quality of audit. M Implementation of audit recommendations/agreed action plan in e. place to address these. M M Issues / Comments / Recommendations Will be dependent on the full utilisation of the Accounting software. Using the GoM accounting systems and procedures. 8 Refer to IFAD audit review. 76

Technical Annex 4: Monitoring, evaluation and knowledge management Technical Annex 4: Monitoring, evaluation and knowledge management Introduction The M&E system for SAPP is still underdeveloped. A new M&E officer was appointed in November 2015 to replace the old M&E officer. There was no proper handover for the new M&E which has had a negative impact on the performance of the M&E. A. Upgrading the M&E system Upgrading the M&E system will require undertaking several tasks as follows: Developing the M&E matrix The M&E matrix will be a planning tool for the M&E activities including: the list of indicators for the programme by component/sub-component, appraisal targets, and source of information/data, data collection mechanisms and frequency, frequency of reporting and the responsible person/department, and RIMS indicators. The matrix will be the main planning tool for setting the targets for each AWPB in addition to following up on the financial estimates. Developing the beneficiary database As noted during the last supervision mission there is a clear need to develop a database for the project beneficiaries. A template for the data collection at the AEDO level was developed after meeting with the M&E officer and other M&E officers from the different departments and TLC. The form includes: name, ADD, district, EPA, phone number, age, sex, literacy level, poverty category (as per design), and name of lead farmer, date identified by the programme, and activities received by the programme. In addition, the database will include which department or TLC reached the beneficiary for each activity. The database will be updated on a monthly basis based on data received from the AEDOs. The M&E officer at SAPP will take the responsibility for aggregating the data from the ADDs. To avoid any chance of errors or double counting, each beneficiary will have a unique ID which will be known by the beneficiary, the lead farmer and the AEDO. In addition, when following up with the beneficiary, the unique ID will be used to track the beneficiary and the different activities s/he received from the programme. Planning for data collection This will be done after the finalization of the M&E matrix and the database. Different data collection tools will be required for different indicators. For output indicators, data collection will be done on a monthly basis through AEDOs. For tracking the outcome indicators, surveys could be conducted on annual basis along with the KAP survey. Quarterly supervision visits by the M&E officers will be an opportunity to follow up on the data collection conducted by the AEDOs. At the ADD level, monthly visits to the field will be required to verify the data collection and follow on the implementation progress in the field. Hierarchy for the aggregation of data SAPP Secretariat Departments and TLC ADDs At SAPP Secretariat, data will be aggregated from each department and TLC. At each department and TLC data will be aggregated from the ADDs. At each ADD the data received from each district will be aggregated. Each district will aggregate the data received from the AEDOs and AEDC. Districts 77

Technical Annex 5: Nutrition mainstreaming Data documentation The data will be organized and aggregated at SAPP secretariat by the M&E officer. An excel-based system will be used with several workbooks/sheets. Each year, based on the AWPB approved by IFAD. one sheet will be used for monitoring the progress of implementation versus the AWPB including targets by quarter. At each ADD, the same sheet will be used for the targets for the ADD and disaggregated by EPA. A consolidated sheet will be used for the tracking of all indicators and achievement per year and cumulative achievements. Thus, the M&E system will be able to provide the necessary information in a timely manner. Reporting mechanism A set of different reports need to be standardized at each reporting level. At SAPP Secretariat the report formats developed by IFAD will be used for the progress reports. Since those formats were introduced as well for the M&E officers from the different departments and TLC it can be utilized as well for their quarterly progress reports that is to be submitted to SAPP. The reporting at the ADD level is done on a quarterly basis. However, as noticed by the mission, the reporting formats are not uniform. Thus, the mission recommends that the programme uses the same IFAD formats for the ADD reports. At the AEDO/ADEC level the reporting will be conducted on a monthly basis focusing on the implementation of the programme activities and tracking the output indicators and the beneficiary participation. Documentation and data storage The flow of information will require documentation and storage of data at different levels. At the EPA level, the data collected from the field will be stored on the laptops (procured by SAPP) disaggregated by AEDO/ADEC. At the ADD level the data received from each AEDO/ADEC will be stored before sending the files to the SAPP Secretariat. The consolidated aggregation of data will be at the SAPP Secretariat. The data will be organized in a hierarchical order that will allow for tracking indicators at different levels starting from the EPA. Other issues KAP surveys: The results from both KAP surveys need to be available for the MTR. For the KAP survey on nutrition it is expected that the results will be finalized by mid-january. For the KAP survey on GAP, the programme should place priority on the finalization of data entry and analysis and follow up on a weekly basis on the progress of work. The M&E officer should prepare the tabulation plan as well for analysis of the survey data. AWPB: A new format for the AWPB was introduced by IFAD to the programme which was used for preparing the AWPB 2015/16. For the internal coordination of the programme implementation, the AWPB needs to be broken down by ADD. Each department as well as TLC should have their AWPB with targets set clearly for monitoring the implementation of programme activities. B. Knowledge management The draft knowledge management and communication strategy was developed and is currently awaiting the validation workshop. The strategy is expected to be the pillar for knowledge management activities for the programme. However, meetings held during the mission revealed that there is almost no knowledge management activities conduct by the programme at the current stage as a result of the weak status of the M&E system. Once the M&E system is upgraded, the programme will work on capturing and documenting the lessons learned and best practices, and disseminating them with different stakeholders. The annual KAP survey will provide a lot of information that can be used as a tool to develop knowledge products which can be shared with the stakeholders and the government. As part of creating a learning environment, the M&E officer from SAPP will hold meetings on quarterly basis with the M&E officers from the different departments, as well as TLC, to discuss issues related to M&E and KM. 78

Technical Annex 4: Monitoring, evaluation and knowledge management Attachment A1: Terms of Reference for consultant to setup the M&E system for SAPP A. Background The is a nine year programme being implemented in the six districts of Blantyre, Chiradzulu and Balaka in the southern region, Lilongwe and Nkhotakota in the central region and Chitipa in the northern region. The project is financed by the International Fund for Agricultural Development, Malawi Government, and the programme beneficiaries. The total cost is US$51.1 million of which US$45.6 million is from IFAD while Malawi Government contribution is US$4.2 million, and US$1.2 million is contribution from beneficiaries. SAPP s development goal is to contribute to poverty reduction and improved food security by achieving a viable and sustainable smallholder agricultural sector employing good agricultural practices (GAP). This shall be achieved by developing appropriate agricultural technologies/gaps (component 1) and widespread adoption of GAPs by farmers (component 2). Programme implementation is integrated within the Agricultural Sector Wide Approach (ASWAp) (component 3). The programme is designed to benefit about 200,000 smallholder households. The logframe was revised in 2015. B. The Assignment SAPP is seeking to hire a M&E consultant to setup the M&E system for the programme. The consultant will undertake the following tasks: i. Review and verify the logframe with the stakeholders and ensure its horizontal and vertical logic. ii. Assess the suitability of indicators identified in the logframe and modify/propose new indicators as deemed appropriate. Ensure targets are well defined and agreed by all stakeholders. iii. Design the M&E system including: data collection templates and mechanisms that will ensure data availability in an accurate and timely manner; data processing tools; and reporting templates. iv. Outline the management information system, defining reporting requirements from managers responsible for implementing activities/components and formats for standard reports (e.g. quarterly and annual reports). v. Review the IFAD RIMS reporting and ensure it is following IFAD guidelines. vi. Train the M&E staff associated with SAPP in the operation of the M&E system and reporting requirements to IFAD including reporting on RIMS indicators. vii. Ensure that the M&E system is based on a learning orientation and is focused around the needs of the programme. viii. Reach an agreement with the SAPP team on when reflections and information analysis will take place and with whom. This will require the revisions needed in the system, data analysis for the surveys and data collection and the responsibilities of the staff and implementing partners with regards to the M&E activities. C. Deliverables The consultant will submit to IFAD a Mission Report that will include: i. Reviewed Logframe agreed by all concerned parties. ii. M&E indicators and data requirements. iii. Data collection templates and mechanisms. iv. Operational M&E system that incorporates all the above-mentioned elements. v. Training materials and assessment of the staff capacity who received the training. The duration of the assignment will be 15 days. The proposed timing will be: D. Duration and Timing of Assignment 79