COMMUNITY AND PROJECT DEVELOPMENT AND ANALYSIS
* Community Situational Analysis/Needs Assessment
* Formal and Non-Formal Communication Techniques
* Project Planning and Proposal Writing
COMMUNITY SITUATIONAL ANALYSIS/NEEDS ASSESSMENT
When involved in rural development, problems in poor areas can appear staggering and overwhelming. A development worker or a development committee may want to solve all problems, but villagers may only be able or willing to work on one or a few. With so many problems to solve but limited time and resources, a complete and accurate assessment of needs is essential. A needs assessment identifies and prioritizes a community's problems so they can be solved efficiently. It focuses general needs into specific obtainable goals.
Identifying a community's needs is only half the equation in development program planning. The community's resources, physical and social, must also be identified to determine the best methods and technologies required to solve a problem. A good appraisal can focus development work on important but solvable problems using technology that is locally available, understandable and transferable. Too often development projects designed by outside experts have scratched an itch that wasn't there and have used an exotic and expensive technology.
A project that addresses a pressing community need will generate genuine enthusiasm. Using appropriate technology to address a problem will ensure that villagers can afford it, repair it when it breaks down and adapt it to new problems and situations. Such a project can live on beyond the funding life. Community situational analysis and needs assessment is the first step in matching a technology to local conditions.
Most irrigation projects involve a number of people in a community. They involve the farmers who will use the water for irrigation, local and state officials who administer water rights, irrigation equipment suppliers, and a number of other individuals and organizations. Most irrigation projects can only be developed and operated successfully with community participation during all phases. From the beginning of the planning for an irrigation project, the community must be involved. The community must feel that irrigation is a priority need if it is to devote the time, energy, and other resources to the project. Thus a community needs assessment should be part of any project in it's early phases. If the project is shown to be a priority for improving agricultural production, for stabilizing food supplies or for other reasons, the idea will be well received.
Along with the needs assessment should come the evaluation of the resource base; physical, social, legal, and possibly even religious. If the right conditions are not present the project may have very limited success. For example, a project cannot be built if resources are not available or if other needs require the investment of scarce resources. Physical availability of water or limits on it's availability due to water rights considerations may be serious limitations. Rapid appraisal techniques are useful in developing the need and feasibility of irrigation. This section presents some basic concepts on community analysis and needs assessment as well as some rapid appraisal techniques. It also highlights the most important human and physical resources which must be evaluated when determining whether or not irrigation will be developed and what the benefits and limitations might be.
General Concepts
Rapid rural appraisal was developed to enable rapid decision making in rural development projects. Techniques have evolved from the need to get good quality data fast while avoiding the expensive and time consuming traditional survey methods used by researchers or total immersion methods used by ethnographic studies. There are various methods that can be used in RRA. The purpose of the appraisal will determine which method can be used.
An example to illustrate the general approach to RRA is a village where family income is too low to meet all expenses. Families have to seek temporary employment elsewhere. The Volunteer involved in rural development in this village identifies this very general need. He or she then conducts an appraisal with community leaders and indigenous agricultural experts using direct observation and guided interviews. This appraisal generates a list of more specific problems related to low income levels. A meeting with community members results in the analysis, prioritization and development of a specific program goal.
To accomplish this goal, a situational analysis is conducted to identify community and outside resources that can be applied to solving problems and constraints. The situational analysis will also identify potential problems that need to be considered in the project design. More meetings and data collection follow to adapt and verify the program using other appraisal methods. This example illustrates that community needs assessment\situational analysis is an iterative process continually evolving as programs grow.
Quick-and-simple investigations require some general principles to avoid incomplete data collection or inappropriate and misconstrued information. These are:
1. Take sufficient time. Rushing can result in incomplete or inaccurate results.
2. Use a participatory approach. Local people's knowledge of soils, seasons, plants, domestic and wild animals, farming practices, diet, cooking practices, child care, as well as social customs, relations and organizations is very important to consider. Ask rural people to identify the problems and resources.
3. Select community representatives carefully to avoid incomplete data or personal biases and hidden agendas. In many traditional cultures, there are hidden leaders who aren't obvious to an outsider but are instrumental in decision making in a community. A useful method for identifying community power actors and selecting a committee of local participants identifies the following four power roles (Ref. 49):
4. Use key indicators which integrate several variables. Investigating, calibrating and measuring these parameters can save time.
Some examples include:
5. Use an iterative and continuing approach to identify trends instead of making a snapshot assessment. With experience, participants in rapid rural appraisals will improve their accuracy and completeness in identifying community needs and resources.
Methods of Rapid Rural Appraisal
There are many methods for rapid rural appraisal. Any one method should not be relied on alone. A combinations of methods is recommended. Local conditions and the abilities of local participants should determine the direction of the appraisal. Local participation is essential in a rural appraisal.
1. Guided interview. There is no formal questionnaire, but a simple checklist of questions that the interviewer uses as a flexible guide. Not all questions are asked of all interviewees, but a composite is developed. Casual conversations result in more valuable information and encounter less distrust and resistance than formal questionnaires. Women, children and other development projects personnel should be interviewed along with village men.
The question guide should be reviewed before direct conversation is undertaken. Notes and answers are jotted down after the interview to avoid discomfort and suspicion. The questions asked will vary with the purpose of the appraisal. They can be as varied as for example, what disease problems occur in a certain crop; who makes and how family economic decisions are made; fertilizer sources; costs of production; questions on diet; etc.
2. Direct observation. This method will enable one to avoid being misled by myth. The importance of walking, seeing and asking is stressed. Biases are left behind. Even the less experienced eye can identify important facts such as the kinds crops and livestock raised, water resources, topography, availability of transportation and marketing possibilities. Those with more experience will collect a lot more information.
An example of this method is having village leaders walk though the village and observe how many villagers are planting a certain crop or pruning their fruit trees. A very effective, though time consuming method, is learning by doing. For example, by hiring oneself out as a laborer to farmers, one learns local farming practices.
3. Informal transects. This method involves walking away periodically from the road at right angles and observing soil, crop, or other conditions depending on the purpose of the appraisal. This method is best conducted after some experience has been gained as an observer or in the company of a village expert or leader. It is a useful method for gathering baseline data. Example topics for baseline information include the incidence of a crop disease or weed species, soil conditions and watershed conditions.
4. Local researchers. Making use of ad hoc research by local students or by national university students can be a quick source of excellent and practical information. Many agricultural schools require field study, but its not commonly available at the local level. A variant to this method is making use of local secondary students to conduct local studies or applied research. Their knowledge of local conditions and enthusiasm can result in excellent data. Collaboration with local instructors may even add this study to their curriculum.
5. Local Experts can be used to inventory local needs and resources as long as cross-checking guards against biases and hidden agendas. A local development committee would be able to identify these experts, or might even serve in this capacity. Again, it is important to include groups which might be excluded, such as women, the poorer families and indigenous or traditional experts.
6. Reading and collecting of local information provides baseline data. Maps, histories, census data, anthropological ethnographies, and records of local cooperatives, health posts, marketing organizations, stores, distributors, feed mills and governmental organizations are all valid sources. Aerial inspection for general appraisals and getting out beyond the roads is useful for a big view of the topography, soils and vegetation, if possible.
7. Meetings with good representation involve many people and allow people to bounce ideas off each other, discuss disagreements and limit the potential for biases. In some cultures, people may not be accustomed to participating freely in a meeting. Information may be limited because these individuals may not express opinions that are not in agreement with other villagers, village power actors or leaders. A good moderator is required to bring all opinions into the open.
8. Brainstorming techniques involve a panel of community leaders or group participants who meet to develop a list of community needs and resources and prioritize them from the point of view of the group members. The advantage of this method is that it not only gathers good information, but is a learning and empowering process.
The first step is a brainstorming period where ideas are presented without evaluation. Then the group eliminates items that do not belong in the list such as needs that are not true needs. The next step is to arrange the problems or resources (depending on the purpose of the brainstorming session) into similar groups and eliminate repetitions. Finally, priorities are developed by the group from the list.
9. The Sondeo or a multidisciplinary team rapid survey method is both systematic and open. It can draw out information that is not obvious but very important. The process is also participatory by design. It allows the problem to determine the direction of the process as opposed to the process determining the problem. The survey team can consist of engineers, agronomists, socioeconomists and local representatives. In its traditional form, it is a six-day procedure but variations should never take longer than 2 weeks. The following method is adapted from Ref. 23:
Day 1 - General reconnaissance of the area by the whole team as a unit. Interviews are general. After each interview the team meets to interpret results. In these discussions each discipline's interpretation of facts and view is critical.
Day 2 - Team members break up into pairs for reconnaissance interviews and discussions for a half day. Then the group meets to discuss findings and plan the direction of questions for the next day.
Day 3 - Repeat of Day 2, only pair members are switched. There should be a convergence of opinions and topics forming now. Interview/discussion cycles are important at this stage as opposed to just interviews. Interview topics and questions are more specific and are determined during the discussion periods. The interview guide is not a questionnaire but a checklist of topics (guided interviews). This checklist covers and divides topics into bite-size chunks that can easily be covered with a single individual or family. The results of the previous days will set the direction of the process.
Day 4 - Repeat of interview/discussion cycles, but before 5th day, team members are given a portion of the report to write. Members need to be close for these last days to share information. Many three-cornered discussions should be included between interviewee, social scientist and agricultural scientist to identify problems and resources and to propose ideas for appropriate technologies.
Day 5 - Report writing and return to the field to clarify points if necessary.
Day 6 - Report sections are read, conclusions and recommendations are drawn. A single report is compiled by the team.
What To Find Out About an Area or Group
Human Resources
Economic: Sources of income, distribution of income in the community or group, alternative sources of income, who are the poorest people, how do their income sources compare to richer members, how do people save, sources of possible loans and credit, interest rates, collateral and repayment of loans, who makes decisions and how are family economic decisions made, divisions of labor in families and among community members, problems with economic exploitation, opinions about economic future, etc. How important is irrigation to the economic well being of the community or how important could it be? Compare the economic condition of farmers who have irrigation available to those who don't.
Social: How are families structured, inter-familiar relationships, do the people work well in groups, what are the rights and responsibilities of group labor, forms of group labor, what are the barriers to cooperation, examples of successes, what is respected in the village, how are innovators looked upon, who are the community leaders, why, are there seasonal migrations, is there faith in development, what development organizations exist, problems with paternalism, literacy, etc. Are there existing water users organizations? Are they effective in distributing water equitably and efficiently? Are they capable of maintaining the irrigation systems, and collecting fees for the purpose? What can be done to improve existing organizations? If there are no existing water users organizations could one be formed with an existing organization as a basis?
Political: What government programs affect the village, governments policy towards private development, local government officials, political history, strength of local government and responsiveness to local needs, official regulations regarding water rights and land tillage, etc. Is irrigation a political priority? If irrigation is a priority then it is generally much easier to obtain support for new projects in terms of resources.
Legal - Water Rights: What are the water laws of the country or state? How is a water right established, transferred, or taken away? What is the water rights situation? Can new water rights be established, or is the water supply too limited to accommodate new rights? If a water right is established how secure is this? Can other, more powerful individuals deprive the user of this water in the future?
Health: diet, nutritional state of villagers both poor and rich, seasonal food problems, sources of food, common diseases, health care available on the local level, etc. Could nutrition and health be improved through the use of irrigation to grow vegetables or other crops needed to improve the food supply?
Physical Resources
Area: topography, water resources, local soils, climate, rainfall, ecological dangers, homogeneity of area, forestry resources, existing irrigation infrastructure and condition, etc.
Agriculture: Crops grown, cropping practices, alternative crops tried in the past, fertilizer used, pest and disease problems, irrigation present and potential, size of farms in the area and distribution, tenancy relationships, price of land and market, possible land expansion, source of seed and reliability of seed sources, crop rotations, storage methods, costs of production, cash crops and subsistence crops, potential new crops, local seed selection practices, poisonous plants in the area, draft animals used, livestock present and distribution in the community, feed and fodder for livestock, vaccinations, small animals raised, local breeding practices, limiting resources of crop and livestock production, etc.
Markets: Where are they and how do they operate, are they free, government regulation and promotion, black or informal market present, taxation, coops present and effect on markets, transportation used and reliability, local processing done, availability of price and marketing information, marketing bottlenecks, purchasing contracts available, monopolies present, seasonal problems in transportation, seasonal price trends, etc.
It is often useful to view and analyze needs in terms of one of the four need dimension categories listed below.
This will improve the focus of a needs assessment.
FORMAL AND NON-FORMAL COMMUNICATION TECHNIQUES
Introduction
An outside development practitioner needs to be able to communicate well to be an effective agent of change. Communication comes in many guises, from lectures to just an informal chat on the street. A Volunteer who comes from a culture with a high literacy rate and with a background of formal schooling needs to adapt communication techniques to the local site. Oral tradition is often very strong and literacy rates are very low. Formal communication techniques that the Volunteer may be accustomed to will not be effective in this environment. However, traditional communication methods can be adapted and used to transmit modern messages. An example of very successful adaptations includes the use of folk theater in Asia to spread new ideas. Asia has a centuries old tradition in folk theater. A Volunteer can use this tool to motivate villagers or introduce them to new concepts.
The old stand-by method for selecting a means of communication still works: Observe and listen to how ideas and opinions are exchanged before attempting to speak. Once the methods are understood, use them to exchange ideas. Often, the weakest link in communication is listening.
Review of Communication Techniques
The following section review the strengths, limitations and materials needed for a wide range of communication techniques.
| Material/Media | Strengths | Limitations |
| Local circulars pamphlets | Low cost, ease of proliferation, self-proliferating | Easy to ignore, little feedback, |
| Filmstrips | Portable, low-cost, adaptable, compatible | Requires darkness, electricity |
| Folk theater, local interaction | Entertains, motivates, encourages interaction | Requires talented facilitators |
| Epic narratives | Reliance with local culture, entertains | Only available in some areas, limited |
| Slide/tape presentations | Entertains, motivates, complementary with other materials | Cost and time in production, requires electricity |
| Radio | Low cost to reach wide audience | Problems in encouraging feedback |
| Radio forum | Encourages feedback, wide audience, interaction | Problems in feedback, interaction |
| Television | Wide audience, very persuasive media | Costly, little feedback, local availability problems |
| Audio tape | Permits review ,self-directedness | Cost, requires some training |
| Video tape | Adaptable for many uses, permits review can involve local interactive production | Cost and time in production, requires training in use, availability problems |
| Computer software | Interactive, permits self-pacing learning | Cost, computer phobia, requires skilled producer |
| Dramatic skits | Entertains, can use with large groups | Problems in reproduction |
| Role play | Interactive, encourages feedback, encourages empathy, relevancy of ideas | Requires good facilitator, willing trainees |
| Brainstorming | Interactive, spawns many ideas, self and group introspection | Requires respect among group members |
| Games | Interactive, action oriented, encourages feedback | Difficult to produce and adapt to local conditions |
| Simulations | Adaptable, action oriented, encourages feedback | Requires good facilitator, willing trainees |
| Group discussion | Encourages feedback, self-proliferating, active | Requires good facilitator |
| Lecturettes | Can present many complementary ideas, | Requires good instructor, formality |
| Debates | Different views, motivates analysis | Requires good moderator |
| Demonstrations | Action oriented, seeing is believing | Requires good timing and planning to be relevant |
| Posters, photos flip charts | Graphic impact, wide appeal, low cost, portable | static presentation |
| Field trips, Exhibits | First hand experience, seeing is believing | Requires good planning and timing |
| Circular response | Equal presentation of views, interactive | Requires willing participants and facilitator |
| Case studies | Permits later review, self-explanatory | Problems in relevancy |
| Photo storybooks | Entertaining, self-proliferating | Little feedback, requires skilled producer |
The method selected will depend on the situation it will be used for. Some questions to ask before selecting a method or medium include:
Problem Solving Method
This exercise is designed to help the Volunteer in analyzing a problem when people work or live together.
This exercise is programmed. That is, it is presented in a series of separate steps or "frames", each of which contains a complete and separate idea, question, or instruction.
Be sure to fully understand and have completed each frame before going on to the next.
For Example:
DRIVING FORCE A
Possible action steps to increase this force;
DRIVING FORCE B
Possible action steps to increase this force:
For example:
Action Steps Resources Available
PROJECT PLANNING AND PROPOSAL WRITING
Community or Group "Ownership" of a Project
It is very important for a group to feel ownership of a project. No matter how well a project is designed or built, if the people of a community do not feel they have a claim in the project, it may fail. A sense of project ownership will ensure that maintenance plans and project repairs are carried out in the future. A project that people have to sacrifice for is not so much a "handout", but more of a community goal.
Community Need and Interest
While it is essential to determine community need and interest, actual measurement maybe difficult. Some projects will be easy to start and a local committee will take the initiative. With others, only a few progressive people may recognize the potential for a project. In some cases there may be community interest in an idea, like for example, an undeveloped water source, but the community may be unfamiliar with the technology to improve it.
Factors that strongly encourage community interest include:
A) Project initiators represent recognized leaders in the community. A community power representative with important positional, reputational, decision making and/or social standing can make things happen and motivate people to organize and work together. The best situation would be a local committee comprised of several important community leaders.
1) It is important to learn from whoever approaches you if the project initiators can provide the necessary assistance and organization to complete the project tasks.
2) A progressive project is usually driven by progressive people. Project initiators should exhibit a history of "progressive characteristics". For example, initiators might have planted non-traditional crops or been the first to try fertilizers or agro-chemicals. These progressive leaders should also be well accepted and respected by the larger community. They should not be isolated innovators ready to try anything new an outsider suggests.
3) It is important to assess the personal interest of the leaders or drivers of a project. They may have a hidden agenda and use a unsuspecting outside development agent to get it. Projects which appear to be motivated largely for personal gains by specific individuals will incur many organizational and administrative problems.
4) The overriding support of community leaders is essential, even if they aren't personally involved. In many cultures, is very important to share some of the credit for the project's success.
B) Holding a community meeting is a very good way to identify and inspire community interest in a project. The number of people attending the meeting and their position in the community is a good indicator of a project's potential success, or of organizational changes that may be needed in order to achieve it.
1) Attendance at meetings is highly important, as people who are not interested enough to go to meetings will often not participate in the projects' implementation.
2) It is important to motivate participation by people that will be doing the work of implementing and managing a project.
C) Divisions in the community or group (political, ethnic, religious, social) are difficult to overcome. Sometimes these divisions are hidden to an outsider. Attending social functions is often a good way to identify potential or existing divisions. If opposing factions exist, plans must be made early to deal with this problem.
D) Willingness to spend their own money for any part of the project can be an essential indicator of community or group support for a project. This sacrifice will help increase their ownership and perceived value of a project.
Community Participation and Organization
If there isn't an organized committee to organize a project, it is important to form one early in a project's planning. Election of leaders to head meetings, organize work schedules, collect money for project expenses, help set the project direction, and set meeting agendas is important. This committee must be representative of the community. It is often useful to legalize the committee so they can solicit help from agencies and local government. A written record of meetings serves two purposes: 1) It provides a record of activities and 2) helps build a consensus. Remember to let the committee be the main movers behind the project. As a Volunteer, you can guide this committee and contribute to solving technical problems, but ultimately the project belongs to the community.
Outline Specific Objectives for Achieving the Goal
A clearly stated project goal is important to rally support, as long as it meets the community's need. Several specific objectives will clarify the steps to reaching the goal.
Specify:
Clear and measurable objectives are essential to proactive planning. It is also important to anticipate possible problems and their solution. A committee may, for example, have a general goal of increasing individual member income. A specific objective is to construct a ditch to irrigate specified lands with nearby river water for each member so they can have dry season crop production. From this take-off point, the group would make plans on how to design and construct this ditch. They might anticipate potential problems with water rights early, and start working on avoiding or resolving the problem with the corresponding government agency.
Initial Technical Assessment
The next step is to complete a brief technical assessment to see if the project is technically feasible and get an idea of the resources needed to complete the project. If the project is not feasible, the organizational steps completed up to this point can be used to develop other projects.
Identify Resources
To successfully complete the project, the development committee and the Volunteer will need to identify resources both locally and externally. These include:
Project Design
Determine technologies to be used, develop specific technical designs and plans, and form a materials list. Design a project to meet anticipated problems identified in earlier planning stages. In water or irrigation projects, it is important to plan for future fluctuating water supplies. Sabotage, group divisions, children and farm animals are of major importance in project design along with the technical factors. For example, the effects of future fishing in a surface irrigation project's canals may change their design.
Funding of the Project
Research is required to fund a project. The community or group members may fully or partially fund a project. A loan or grant for part of a project may be necessary. The local committee must be integrally involved in financial arrangements.
Proposal Writing
The most important thing to remember in proposal writing is you are writing it for the funding agency and you must address their needs. Find out what the funding agency wants and tailor the proposal for them. Lending agencies need to be assured the loan will be paid back. Some agencies want to see community participation. Other agencies want to fund projects that will address a great need. Finally, some fund only certain types of projects.
Often, the success of a project is integrally tied to the ability of the Volunteer or the committee to procure funding. Irrigation projects are often expensive, but their benefits are long-term. The willingness of funding agencies to donate or lend money for projects is often tied to the presentation of a clear and acceptable proposal. Many agencies have standard formats for proposals or application forms. The individual agency requirements must be thoroughly investigated prior to application. The following is a general outline of recommended material that should be included in a proposal.
INTRODUCTION:
1. Summary: Briefly describe the subject of the proposal, the applicant, and the community.
2. Statement of the Problem: This section should attract the reader's attention and make them interested in the problem. Make sure that you define the problem in reasonable terms; that there is a clear relationship between the problem and the proposed project (in other words, the problem can be made better or resolved by the project); and that you support your statements with evidence, including statistics.
3. Community Background: Concisely describe the community in relation to the type of work you plan to do. Include topographical information, social institutions, socioeconomic data and population information. Describe past development work in the area. This background should give the community and project credibility.
4. Personal Background: Describe yourself and your background, including your experience and intentions in the community.
5. Goals of the Project: The goals should state what the community wants to accomplish with the project. They should be somewhat general, long-term, and attainable by completion of the project.
6. Objectives of the Project: Objectives are the individual activities involved in accomplishing the goals of the project. They should be clear, specific, and measurable. They should state what and how much will be done, who will do it, and when it will be done.
PROJECT OUTLINE
1. Description of the Project: This section contains the nuts and bolts of the plan. It should clearly state specific activities, construction methods, administrative procedures, and community mobilization strategies. Also, it should include schedules, time lines, a simple design layout, and staffing needs. It is important to be realistic about the scope of your activities, the resources available and time needed to complete the project.
2. Total Cost of the Project: This should be a lump sum figure, including cash needs and in-kind contributions. Keep it feasible.
3. Budget Breakdown: This section should be a reasonably detailed listing of expense items. Break it into categories:
Add 10-15 percent to the total for inflation and contingency. Also, make sure that your prices are correct, the funding source may check them. Review your project and make sure that it contains all the budget information that the funding source requires. If the budget is extremely long, you may want to write a short budget summary after the detailed budget listing.
4. Funding Request: This is the amount of money that you want from the funding source. At this point in the proposal, the funding agency knows exactly what you plan to do, how much the project will cost, their expected contribution, and donations from other sources. Make sure you include all the community contributions including value of items like rocks and boards used in construction, donated land, labor, organizational and managerial time, etc.
Project Assessment
1. Evaluation and Documentation (Accountability): This section explains who will evaluate and document the project, and how and when it will be done. You should focus on both the outcome (results) of the project, and the process used for implementation. Define the criteria that will be used in the evaluation, list information gathering techniques, explain how the evaluation will be used to improve the project, and describe the reporting procedures.
2. Future of the Project: Describe the project after implementation, focusing on your program for operations and maintenance. If funds will be required, make sure that you explain how the community plans to meet their operating costs.
3. Environmental Effects of Project: Describe the projects impact on the local environment such as changes in cropping patterns, effect on watershed, effects on soil and effects on water erosion. Include environmental assessments.
4. Benefits of the Project: This section relates directly to the goals of the project. It is an important section which acts as a conclusion to the proposal. The long and short term benefits to the community should be stated, such as any health improvements, transfer of skills, benefits to the environment and community mobilization.
PROPOSAL REVIEW
Make sure that your proposal is reviewed and edited by a knowledgeable person before you submit it to any funding source. Here are some suggested review guidelines:
1. Are project activities well planned, and the approach to implementation clearly defined?
2. Are the costs reasonable and related to the work to be done?
3. Is there strong local support and participation by the community?
4. Will community members learn valuable new skills through their involvement with the project?
5. Are the goals and objectives clearly stated, reasonable and attainable?
6. Is the time allowed for implementation adequate?
7. Is there an evaluation process built into the project and is it ongoing?
8. Is the proposal clearly written and free of grammatical mistakes?
9. Does the proposal give the impression that the project is well organized and will be successful?
EVALUATION
An evaluation after proposal presentation is very important, but evaluations should occur during all stages of project development. Evaluations should be an ongoing participatory action. Evaluations are not only designed to test a project's success, but also to determine a project's future. Using a formative, instead of just a curative evaluation, can provide useful feedback to keep a project on track, meeting the objectives set by the group. All parties involved in the project, especially the recipients, will have to be included in the evaluation process.
PROJECT CONSTRUCTION
Some ideas that may help during this phase of the project may save time and headaches:
A) Procurement of outside materials and collection of local materials.
1) Shop around for the best price
2) Get cement and other perishable materials last.
3) Set up controls so local officials or the committee hierarchy don't steal the materials.
4) The local government may be able to get some supplies at a reduced or tax-free price.
B) Choose or elect a construction supervisor and equipment manager.
C) Form work crews and setup work schedules.
D) Plan for safe storage of materials and tools.
FORMATION OF MAINTENANCE AND OPERATIONAL PLANS
These plans should be discussed and finalized earlier, then put into writing before the project is inaugurated. This is a very important part of the project. Factors to include in the operational plans include:
Financial and economic analyses of a project are decision making and planning tools that are often a requirement for presenting information to a governmental agency, funding agency or the potential water users themselves. They can often determine the fate of a project. The information is important to determine the annual costs, total ownership costs, and operating and maintenance costs of a project. These analyses also will determine if a project is viable and profitable and are important for keeping costs in line. It is important to evaluate the with and without effects rather than conducting a before and after comparison (a common error).
An economic analysis evaluates the costs and benefits of a project in more than money terms. It attempts to quantify benefits such as health, education, cultural preservation, etc. It predicts whether an investment is wise and worth undertaking. It is a useful tool for project evaluation.
A financial analysis, on the other hand, concentrates on the money aspects of a project and determines if it is an affordable and creditworthy option. Can the project's cash flow allow the project to continue? It tends to play a more important role in the implementation of a project.
Economic Analysis
An economic analysis can be conducted in many ways. It is most commonly used to prove the economic feasibility of a project to a funding agency or governmental agency. Many funding agencies require this type of analysis to be presented as part of the project proposal. The method used to analyze a project is often determined by the agency involved. This summary only describes some of the more common methods of analysis. The agency in question can often help with the analysis.
Economic analysis weighs up the costs against the benefits of a project. It can also analyze a project's risk to its members. A lending institution will be interested in both, a grant funding agency may be interested only in the balance of costs and benefits. Subsistence farmers will be motivated by minimizing risk since almost any cost they incur will take food from their mouth or affect the well-being of their household.
The starting point for any analysis involves the gathering of the following information:
Some of this data is developed from projections, and can result in optimistic or pessimistic estimates. Care must be taken to stay as far away as possible from these extremes and present unbiased estimates. It may be a good idea to test both the optimistic and the pessimistic options (sometimes called "sensitivity analysis") as this will be a good measure of the riskiness of a project.
Remember an important fact: the timing of benefits and costs is critical to everyone involved in a project. The sooner benefits are seen, the better for everyone. Why? Because these benefits can be used productively sooner; most individuals prefer to spend now rather than tighten their belts for later; and at inflation rates existent worldwide, monetary benefits are more valuable now than later.
Risk Analysis
Some quick indicators of the riskiness of a project that can be tested early in planning are:
1) Cost/HA: Construction costs/number of hectares in the project. Can also read Cost/Unit of Land.
This relationship is useful for quantifying the amount of money per unit of land that will be needed above and beyond what is already being spent. It can be used to determine how much money will need to be borrowed as opposed to how much water users can put forward by comparing to the average farm size.
2) Cost per member = Construction costs / Number of members in project
Useful to estimate the financial risk each member will assume when land acreage is uniform.
3) Break even point = Fixed expenses / 1 - (variable expenses/expected earnings)
Calculates the minimum profit one needs to pay expenses.
4) Pay back period = Construction investment / Annual earnings-Annual expenses
Calculates the time required for the project to recover the initial system investment (cost).
Return Analysis
These analyses are a little more detailed. They are used to evaluate overall project economics. Some methods are:
1) Partial budgeting can be used to estimate net benefits of two alternatives, for example, a with or without irrigation project choice. The method is easier than complete budgeting because not all the costs and benefits need to be calculated or estimated, only those that vary or are different between the two options. Generally, budgets do not look at total costs and benefits but rather at per unit area (per hectare or acre) or per unit of production costs and benefits. They are quick decision making methods for rapid appraisals but often are not acceptable for funding and government agencies who look for greater detail.
Net Benefit = Total change field benefit - Total variable costs
| Example: | Present Practice | With Irrigation |
| Benefits:
Net yield Price to farmer Total gross field benefit |
20 Kg/HA $1.80/Kg * $36 |
60 Kg/HA $1.80/Kg $108 |
| Variable Costs
Cost of water Loan repayment Canal Maintenance labor (opportunity cost) |
$0 $0 $0 |
$5.00 $50.00 2 days x $2.00/day = 4.00 |
| Total variable costs | $0 | $59.00 |
| Net Benefit | $ 36.00 | $ 49.00 |
NOTE: $ = undefined money units.
In this example, irrigation increased the net per acre benefit by $13.00. Often quality rather than yield may improve because of irrigation, and the price of the product will may increase.
Partial budgeting often compares the do option against the do nothing option but can also be used to compare different practices, different levels of inputs (such as fertilizer) and so forth.
2) Rate of return = Estimated net income / Investment
Net income = earnings - expenses
This is a useful relationship to demonstrate profit and is used by World Bank and other lending institutions. Often, farmers on a subsistence level require a rate of return of over 50% because of their inability to carry risk. For a subsistence farmer to invest in an alternative technology, he has to take resources from a very limited pool. If choices are not fail-safe, the family or household doesn't have a reserve to draw upon and must cut down consumption of food, or expenses like clothing and schooling for their kids. Also, returns from innovative technologies which are not monitored closely are not visually and financially obvious unless increases of over 30% are achieved.
3) Net present value (worth) = present value of a string of benefits - present value of a string of costs. The net present value analysis includes the cash flow of an investment (benefits - costs), the time value of money and risk. The time value of money refers to the fact that money in your hand now is worth more than the same money promised at some time in the future. Money you can use now is more valuable than future money.
The same principle applies to risk. The higher the potential risk, the more the future money must be discounted to be equal to present money's value. Money now is more secure than future money. When someone lends you money, the interest rate charged is basically the same as discounting the future money you will pay. With risk, this interest rate is higher because of a potential disaster.
The basic technique used in net present value analysis is to discount costs and benefits that have been projected into the future to the present time (one point in time). Agencies use this method to compare and rank options or projects.
NPV = -P + F1(1+i)-1+F2(1+i)-2+F3(1+i)-3+...+FN(1+i)-N
NPV = Net present value.
P = Initial investment or starting point.
FN = Cash flow (Benefits - Costs), subscript is year of cash flow.
i = Interest rate for discounting future values or what the investment amount would earn each year
if put somewhere else.
(1+i)-N = The discount factor taking in account that each year the amount discounted is compounded by 1+i.
N = Year of the project.
An example of a four year project can illustrate this point.
| Year | 1 | 2 | 3 | 4 | 5 |
| Earnings | $0 | $600 | $700 | $800 | $900 |
| Operating Costs | $1000 | $100 | $200 | $300 | $400 |
| Cash flow | $-1000* | $500 | $500 | $500 | $600 |
* Original investment or expense. The discount rate is i=10% since that is what savings accounts are paying.
NPV = -P+F1(1+i)-1+F2(1+i)-2+F3(1+i)-3+F4(1+i)-4
= -1000 + 500(1.10)-1 + 500(1.10)-2 + 500(1.10)-3 + 600(1.10)-4
= -1000 + 500(0.909) + 500(0.826) + 500(0.751) + 600 (0.683)
= $653
A decision can be made of the worthiness of a project as follows: If NPV > 0, the project looks good or the investment will earn more than just putting it in the bank. If NPV = 0, a choice is difficult and needs further evaluation of intangible benefits. If NPV < 0, then reject the project because the do nothing option is preferable and the investment will earn more by being place elsewhere (for example, in the bank). If there are multiple projects, a funding agency may choose projects with the highest net present value.
One note is that while operating costs and cash benefits may be easy to determine, other costs and benefits may be hard to quantify or may not be evident in some projects. Better nutrition of farm families eating some of the added production and labor saving projects that free children from farm labor to go to school are examples of intangible benefits that are more difficult to value.
4) Benefit - Cost Ratio is used by the United States government for evaluating projects. To use this the benefits and costs must be distinguished rather than using cash flows as in the preceding example.
B/C = Net Present Value (earnings + salvage value) / Net Present Value (investment + operating costs)
B/C = Benefit cost ratio
S = Salvage value = Value of project at the end of project life.
Bn = Value of benefits in nth year.
Cn = Value of operating costs in nth year.
P = investment
i = discount rate
n = year of project
Using the same numbers as the previous example and assuming the salvage value after the 4th year is 100, the benefit cost ratio will be:
B/C = B1(1+i)-1+B2(1+i)-2+B3(1+i)-3+(B4+S)(1+i)-4
P+C1(1+i)-1+C2(1+i)-2+C3(1+i)-3+C4(1+i)-4
= 600(1.10)-1 + 700(1.10)-2 + 800(1.10)-3 +(900+100)(1.10)-4
1000 + 100(1.10)-1 + 200(1.10)-2 + 300(1.10)-3 + 400(1.10)-4
=$2408 / $1755
= 1.37
Note: costs in the denominator are expressed as positive values.
To analyze the project using benefit-cost analysis, if B/C > 1 the project is acceptable and if B/C < 1, the project is rejected. Again, multiple projects can be evaluated by selecting the project with the highest B/C ratio or best return. As in NPW, care must be taken to choose a valid discount rate (i) and to value all the benefits correctly.
Sensitivity Analysis
In many cases there is uncertainty about the future benefits and costs such as yields, price of future projects and future interest rates of money. For good project analysis, if one of these is expected to vary, it is best to run multiple analysis using different values of this one variable. An analysis of how this affects the outcome of the project can then be made. Using sensitivity analysis one can evaluate, for example, the net benefits over time of a project should interest rates go up. It can also be used to evaluate gloomy versus optimistic projections.
Just because in irrigation system is economically viable doesn't mean an irrigation group can afford to finance it. The preceding examples indicate how a governmental or financing agency would review a project. The following defines how a group of farmers would analyze a similar project. An irrigation system may last for 15 to 20 years, but a financing agency may require the investment to be paid off in 6 to 10 years. Even if the irrigation system increases returns, the extra profits from irrigation must cover the loan repayments plus the water users minimum profit during the first repayment years.
Example: $25,000 borrowed at 10% for 10 years
$25,000 x .16275* = $4070/year
* Amortization factor (See Amortization Table)
If the extra profits from irrigation are only $3500/year, the loan cannot be paid off unless production is subsidized the first years.
Using long term economic analysis, this example may have been an acceptable option, but from a farmer's more immediate point of view it may be difficult to obtain the cash to pay bills during the loan repayment years. Because of this, an irrigation group must accurately determine total costs and returns. To do this they must accurately estimate the annual cost of ownership and annual operating costs and compare these to the expected increase in production from using the system. Accurate annual costs determination is important since the initial cost is often only 1/3 of the total cost of irrigation.
Determining the Annual Ownership Cost
This is determined from (1) initial cost minus trade-in value, (2) interest, (3) taxes and insurance, (4) any fixed charges, (5) loss of land taken out of production for water development and (6) life expectancy of system. Table B.1 will assist in determining the annual ownership cost.
Procedure
1) Determine the initial cost of the irrigation system. This could come from the proposal materials list. Put these values in column 2.
2) To determine the annual ownership costs, you then multiply the initial cost by the amortization factor found in Table B.2. The amortization factor combines depreciation and interest in one number. To get this factor, you need to know the interest rate of the financing of a system. Then go to the intersection of expected years of life and the interest rate for the amortization factor value and enter in column 4 to multiply with the value in column 1 to get annual ownership costs. Example: for a $4000 pump with a 12 year expected life with borrowed money at 12% to finance, the annual ownership cost is: $4000 x 0.1614 = 645.6. The cost of the pump is $645.60 per year.
3) Add up all annual ownership costs of system components.
4) Estimate annual cost of taxes and insurance and enter. In some countries, this may be nothing.
5) Enter fixed charges of the irrigation system such as system water charges, and enter.
6) If any land was taken out of production to build the system, multiply the area by the value of production of this land in the past without the irrigation.
7) Total amounts in lines 6-9 for total annual ownership cost.
| Cost and Return Form * | ||||
| Item
(1) |
Initial
Cost (2) |
Expected Years
of Life (3) |
Amortization
Factor (4) |
Annual Ownership
Costs (5) |
| Well | 25 | |||
| Reservoir | 50 | |||
| Pump | ||||
| Turbine | 15 | |||
| Centrifugal | 12 | |||
| Power Unit | ||||
| Electric | 25 | |||
| Gasoline | 10 | |||
| Diesel | 15 | |||
| LP gas | 12 | |||
| Water Pipe | ||||
| Plastic(PVC) | 40 | |||
| Polyethylene | 5 - 8 | |||
| Steel, coated | 20 | |||
| Aluminum-sprinkler use | 15 | |||
| Water works class | 40 | |||
| Concrete structures | 20 | |||
| Concrete pipelines | 20 | |||
| Land grading | 20 | |||
| Ditches | 20 | |||
| Land drainage | 20 | |||
| Sprinkler heads | 8 | |||
| Sprinkler systems | ||||
| Hand moved | 15 | |||
| Solid set | 20 | |||
| Center pivot | 10 | |||
| (6) Subtotal average annual ownership cost: (total column 5) | ||||
| (7) Taxes and insurance: | ||||
| (8) Fixed costs: | ||||
| (9) Loss of income from land out of production: Price/HA x #HA: | ||||
| (10) Total Annual ownership cost: (6 + 7 + 8 + 9) | ||||
* Projects may have other materials not on this list. Estimate expected life.
Annual Operation and Maintenance Cost
The annual operation and maintenance expenses need to be determined. They include (1) power costs, (2) repair and maintenance of equipment, (3) reservoir and field maintenance, (4) additional seed, fertilizer, pesticides and harvesting costs for the expected increase in yield with irrigation, and (5) labor.
Procedure:
1) Power costs = the fuel and oil consumption to run a power unit if there is one, use the following formulas:
Fuel or oil costs = horse power required x no. of annual
hours of operation x cost/unit fuel / BHP hours/unit fuel.
This is done for fuel and oil. Use the following Tables for brake horse power - hours per unit of fuel or gallon of oil.
| Annual Fuel Consumption | ||
| Fuel or Power | Bhp-Hours per Unit of Fuel | |
| Metric | English | |
| Electric | 0.9 per KWH | 0.9 per KWH |
| Gasoline | 2.3 per KWH | 8.7 per gallon |
| Diesel | 2.9 per KWH | 11.0 per gallon |
| Propane | 1.8 per KWH | 6.9 per gallon |
| Natural Gas | 1.8 per KWH | 6.7 per 100cubicfeet |
| Annual Oil Consumption | ||
| Type of Engine and Drive | Bhp-Hours per Gallon of Oil | |
| Metric | English | |
| Electric | 2400 | 9000 |
| Gasoline | 800 | 3000 |
| Diesel | 800 | 3000 |
| Propane | 1100 | 4000 |
| Natural Gas | 1100 | 4000 |
| Right Angle Gear Drive | 1300 | 5000 |
Example: Fuel costs:
Diesel:
80 hp required x 900 hrs operation x $.30/liter diesel / 2.9 Bhp hours/liter diesel = $7448/year.
Oil:
80 hp x 900 hrs. x $50/liter oil / 3000 Bhp hours/liter oil
= $1200/year.
2) Annual repair and maintenance cost of power unit uses a similar formula as fuel and oil costs
Repair costs = hp required x annual hrs of operation x cost per Bhp/hour.
Horse power required and annual hours of operation are in the system design and cost/BHP/hour is determined from below.
| Annual Cost of Repair and Maintenance | |
| Type of Power Unit | Cost Per Bhp / Hour |
| Electric motor and controls | $0.0000 |
| Gasoline | $0.0030 |
| Diesel | $0.0027 |
| Propane | $0.0020 |
| Natural Gas | $0.0020 |
Example:
Repair costs of power unit:
80 hp x 900 hrs operation x $.0027/BHP = $194.40/year
3) Repair and maintenance costs of irrigation equipment. An estimate of this is: initial cost x 0.5%.
4) Cost of field, reservoir, canal maintenance. This can be determined by number of days labor x number laborers x value of a day of labor.
5) If you expect to spend more on agricultural inputs, estimate these additional costs and enter them.
6) To estimate labor:
Estimated labor hours/HA/irrigation x number irrigations x area of irrigated land in HA x cost of labor per hour.
7) Add up all these operational and maintenance costs on the following:
Annual Operation and Maintenance Costs
Item
Total operational and maintenance costs:
Return on Investment
To determine return on investment, one compares the costs of operation and maintenance and ownership costs to expected increase in production with irrigation. First the increase in production under irrigation must be estimated and multiplied by the expected price. In dry season cropping under irrigation this would be the whole production (if nothing was grown previously) x the usually higher price for dry season produce. In supplemental irrigation the return would be the increase in production under irrigation x the usual price. Then the total annual costs of irrigation (ownership cost + operational and maintenance costs). Use the following:
1) Expected increase in earnings with irrigation: (Increase in production x price/unit)
2) Total annual cost of irrigation: (ownership cost + operational + maintenance costs)
3) Expected additional profit from irrigation: (line 1 - line 2)
Since all the total irrigation costs are included if the profit is positive, the project is acceptable. Again including a risk management factor in this analysis if water users have very little cash asset reserves this additional profit will have to be large to offer a safeguard against problem years during loan repayment years.
In subsistence agriculture conditions, this additional profit must be over 15% of the value of the total annual irrigation costs.
| Amortization (Capital Recovery) Factors | |||||||||||||
| Life | Interest Rate | ||||||||||||
| Years | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 |
| 1 | 1.08 | 1.09 | 1.1 | 1.11 | 1.12 | 1.13 | 1.14 | 1.15 | 1.16 | 1.17 | 1.18 | 1.19 | 1.2 |
| 2 | 0.5608 | 0.5685 | 0.5762 | 0.5839 | 0.5917 | 0.5995 | 0.6073 | 0.6151 | 0.623 | 0.6308 | 0.6387 | 0.6466 | 0.6545 |
| 3 | 0.388 | 0.3951 | 0.4021 | 0.4092 | 0.4163 | 0.4235 | 0.4307 | 0.438 | 0.4453 | 0.4526 | 0.4599 | 0.4673 | 0.4747 |
| 4 | 0.3019 | 0.3687 | 0.3155 | 0.3223 | 0.3292 | 0.3362 | 0.3432 | 0.3503 | 0.3574 | 0.3645 | 0.3717 | 0.379 | 0.3868 |
| 5 | 0.2565 | 0.2571 | 0.2638 | 0.2706 | 0.2774 | 0.2843 | 0.2913 | 0.2983 | 0.3054 | 0.3126 | 0.3198 | 0.3271 | 0.3344 |
| 6 | 0.2163 | 0.2229 | 0.2296 | 0.2364 | 0.2432 | 0.2502 | 0.2572 | 0.2642 | 0.2714 | 0.2786 | 0.2859 | 0.2933 | 0.3007 |
| 7 | 0.1921 | 0.1987 | 0.2054 | 0.2122 | 0.2191 | 0.2261 | 0.2332 | 0.2404 | 0.2476 | 0.2549 | 0.2624 | 0.2699 | 0.2774 |
| 8 | 0.174 | 0.1807 | 0.1874 | 0.1943 | 0.2013 | 0.2034 | 0.2156 | 0.2229 | 0.2302 | 0.2377 | 0.2452 | 0.2529 | 0.2606 |
| 9 | 0.1601 | 0.1668 | 0.1756 | 0.1806 | 0.1877 | 0.1949 | 0.2022 | 0.2096 | 0.2171 | 0.2247 | 0.2324 | 0.2402 | 0.2481 |
| 10 | 0.149 | 0.1558 | 0.1627 | 0.1698 | 0.177 | 0.1843 | 0.1917 | 0.1993 | 0.2069 | 0.2147 | 0.2225 | 0.2305 | 0.2385 |
| 11 | 0.1401 | 0.1469 | 0.154 | 0.1611 | 0.1684 | 0.1758 | 0.1834 | 0.1911 | 0.1989 | 0.2068 | 0.2148 | 0.2229 | 0.2311 |
| 12 | 0.1327 | 0.1397 | 0.1468 | 0.154 | 0.1614 | 0.169 | 0.1767 | 0.1845 | 0.1924 | 0.2005 | 0.2086 | 0.2169 | 0.2253 |
| 13 | 0.1265 | 0.1336 | 0.1408 | 0.1482 | 0.1557 | 0.1634 | 0.1712 | 0.1791 | 0.1872 | 0.1954 | 0.2037 | 0.2121 | 0.2206 |
| 14 | 0.1213 | 0.1284 | 0.1357 | 0.1432 | 0.1509 | 0.1587 | 0.1666 | 0.1747 | 0.1829 | 0.1912 | 0.1997 | 0.2082 | 0.2169 |
| 15 | 0.1168 | 0.1241 | 0.1315 | 0.1391 | 0.1468 | 0.1547 | 0.1628 | 0.171 | 0.1794 | 0.1878 | 0.1964 | 0.2051 | 0.2189 |
| 16 | 0.113 | 0.1203 | 0.127 | 0.1355 | 0.1434 | 0.1514 | 0.1596 | 0.1679 | 0.1764 | 0.185 | 0.1937 | 0.2025 | 0.2114 |
| 17 | 0.1096 | 0.117 | 0.1247 | 0.1325 | 0.1405 | 0.1486 | 0.1569 | 0.1654 | 0.174 | 0.1827 | 0.1915 | 0.2004 | 0.2094 |
| 18 | 0.1067 | 0.1142 | 0.1219 | 0.1298 | 0.1379 | 0.1462 | 0.1546 | 0.1632 | 0.1719 | 0.1807 | 0.1896 | 0.1987 | 0.2078 |
| 19 | 0.1041 | 0.1117 | 0.1195 | 0.1276 | 0.1358 | 0.1441 | 0.1527 | 0.1613 | 0.1701 | 0.1791 | 0.1881 | 0.1972 | 0.2065 |
| 20 | 0.1019 | 0.1095 | 0.1175 | 0.1256 | 0.1339 | 0.1424 | 0.151 | 0.1598 | 0.1687 | 0.1777 | 0.1868 | 0.196 | 0.2054 |
| 25 | 0.0937 | 0.1018 | 0.1102 | 0.1187 | 0.1275 | 0.1364 | 0.1455 | 0.1547 | 0.164 | 0.1734 | 0.1829 | 0.1925 | 0.2021 |