4.Implications 116. The implications of these findings for the proposed Project are presented in the executive summary and need not be repeated in the main report. Additional and somewhat more detailed recommendations consist of the following. Privatization
(a) Expanding the scope of land registration services and continuing the support to a rapid completion of land titling is perhaps the easiest and most important follow-up to the existing Pilot Farm Privatization Project. Expanding the geographical coverage of this support is important. Doing so will have the additional impact of enhancing trust in rural reform. There is also need to review the legitimacy of municipal and State land allocations and share results with rural people; this too will enhance trust in the reform process.
(b) Distributing land by lottery has received relatively good feedback. At the same time, it is important for family members to pool their land resources; many say they would like to do so in order to buy farm machinery. Therefore, in areas where land plot assignments have not been made, family members may be given an option to enter the lottery as a group.
(c) Creating an enabling environment for private sector investments in agro- industries will yield large benefits. Farmers welcome private sector investments of both local and/or foreign companies. The development of the private sector will also help improve quality of farm inputs as well as encouraging use of pesticides and fertilizers29. There is need to pay particular attention to providing information for the creation of agro-businesses to support small livestock and poultry production. Especially important is to support small scale, household level entrepreneurial activities, which already have an important place in rural families’ livelihood. In this context, it is advisable to look into the feasibility of privatizing social services such as health facilities and kindergartens in rural communities to ensure better service and to lift the burden of operating these services from local administrations.
(d) A peasant economy has already emerged in rural Azerbaijan. It may be advisable to support this economy through income and employment generation with a focus on small-scale self-employment initiatives within and outside the agricultural sector.
Improving Farm Inputs
(a) As irrigation is a major input, there is need to expedite the preparation of support for the rehabilitation of the existing schemes. For the management of irrigation systems, the creation of functioning water user associations is important; however, expectations of cost recovery should be low and there should be readiness to make heavy investments in the rehabilitation of existing irrigation schemes before the associations can assume responsibility for their operations.
(b) The study of the feasibility of providing support to small-scale intensive agricultural initiatives such as greenhouses on garden plots is important. Financing of small-scale on-farm irrigation systems, such as hand pumps and artesian wells for garden agriculture, might also have high payoff for low-income households.
(c) The Bank may wish to support state farms (pedigree farms) and agro-services to produce and provide good quality seed and other inputs to independent farming families as short-term farm revival strategy. These may be provided as in-kind loans to be paid back in-kind after harvest.
(d) Simple and flexible procedures for credit delivery to farmers, voluntary production associations and small enterprises are needed. Alternative approaches experimented by the Bank to encourage “people’s banking” should be shared with a mixed group of stakeholders in Azerbaijan to allow a participatory decision making rather than prescribing a given credit system arrangement.
(e) It is important to increase the transparency in distribution of farm assets and machinery so that these do not concentrate in a few hands. As elsewhere, in Azerbaijan, there are serious equity issues involved in the distribution of farm equipment. Therefore the feasibility of having these managed by a private entity may be considered30.
(f) Of particular interest to the farmers is the availability for lease or sale of low cost, energy efficient farm machinery and training for their use. This can be achieved through “farm equipment fairs” in several regions. Long term concessional loans for farm equipment might also be important, although it is necessary to reconsider the current practice of making these available only to cooperative or collectives.
Marketing Improvements
(a) It is important to research current mechanisms and incidence of rural corruption and its effects on the poor and on independent farmers. Once adequate information is available, the Bank may fund, as appropriate, institutional development efforts to combat rural corruption.
(b) Currently, transport and lack of adequate markets are major problems affecting people’s abilities to sell their products. These problems are community specific. Therefore, it is advisable to form formal marketplaces in rayons and provide transportation from villages to the markets on specific days of the week where such services are lacking.
(c) There is high demand for agricultural extension services. These services can be integrated with the credit services for higher effectiveness. Farmers emphasize that demonstrations are necessary and that their land plots could be used to do so. Activities that can be demonstrated can include (but are not limited to) apple drying facilities, simple jam making facilities and greenhouses. Farmers also emphasize that they would need easy and regular access to advisory services; therefore the current extension program should be moved from Baku to the regions. Services in Baku tend to reach to a few people and are not effective as desired31. Availability of such services throughout rural areas, targeting both female and male farmers, is crucial to avoid spatial and gender inequities.
5.Preliminary Social Impact Monitoring and Evaluation Indicators 117. For the social development aspects of project monitoring, it is advisable to develop a number of indicators and track the developments with respect to these indicators. The following indicators emerged from the initial social assessment for the Farm Privatization Project.
Indicators focusing on the land registration process
Actual receipt of land title
The percent of women receiving land title
Obstacles to land trade
Land consolidation levels: is consolidation working or are already large holders getting a bigger share?
Perceptions of equity in the land distribution process
Access to adequate and timely information on land distribution
Perceptions on family land allocations
Indicators focusing on state farm asset distribution
Actual receipt of these assets by the people entitled to them
Perceptions of equity in the assets distribution process
Actual percent of entitled women receiving assets
Trust and corruption issues in asset distribution
Cooperation in using the distributed assets
Access to inputs and outputs markets
Existing barriers
Improvements in removing these barriers
Number and quality of input suppliers and access to them
Pricing constraints
Access to local markets
Number of agri-businesses in rural communities
Transportation issues: cooperation in transport, problems and potential solutions
Information on access to markets
Performance and usefulness of pedigree farms
Women’s access to local markets and information
Irrigation issues
Impact of the Bank-financed irrigation project on the small holders and potential problem areas
Current and existing problems with irrigation
Impact of electricity and other infrastructure on irrigation
Payments for irrigation
Advisory services
Number of people advised per rayon
Percent of women among those actually received advise
Usefulness of the advise as seen by the small holders
Establishment of appropriate institutional mechanisms for advisory services
Expected behavioral changes in production methodology and amounts
Credit
Access to credit through regular institutions and informal arrangements
Actual receipt of credit
Degree of cooperation to receive credit
Collateral usage for credit
Uses of credit
Women’s access to credit
Repayment: problems with repayment and perceptions
Adequacy of credit targeting and institutional arrangements for small holders
Number of associations receiving credit and their quality
Other monitorable issues
Unemployment among women who do not have pensions
Availability of social services and insurance systems (if exist)
Number of voluntary associations formed and found useful
Use of garden plots
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Putting in place participatory feedback mechanisms and institutions
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Participatory monitoring of the project objectives through the indicators identified above
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Putting in place consultation mechanisms for policy making at the central and local government levels
Sources
Focus Group Discussions, December 1997-January 1998.
Household Survey in Five Rayons, January - February 1998.
Survey with Rural Women, March 1998.
Interviews with local and central government officials
Interviews with local people
“Land Reform in Moldova,” Nora Dudwick, October 30, 1997
Azerbaijan Farm Privatization Pilot Project, Staff Appraisal Report, December 1996
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