Agricultural Project

Planning and Analysis

(AgEc 4012)
 Course Content
Chapter 1: Fundamentals of Project Planning &
Analysis
Chapter 2: Aspects of Project Preparation
Chapter 3: Project Cycle
Chapter 4: Identifying Project Costs and Benefits
Chapter 5: Financial Analysis
Chapter 6: Determining Economic Values
Chapter 7: Measures of Project Worth
 Chapter 1

Fundamentals of Project
Planning and Analysis
 Chapter Objectives
 Define agricultural projects & describe the
difference b/n agricultural projects & programs;

 Understand key factors that determine the long

term sustainability of projects;

 Explain the advantages and limitations of project

analysis; and

 Understand the reasons for the failure of

projects.
 1.1. Introduction
The project concept
 Project: is an investment activity in which
financial resources are expended to create
capital assets that produce benefits over time.

 Project contains:
Activities, objectives, purpose, expected
benefits and costs which can be pre-
determined before project undertaking.
 Project planning and analysis has a long history in
financial and business analysis.

◦ It has been used as a means of checking profitability

of a particular investment by private firms.

 PPA is essentially a process of:

◦ Seeking alternative choices to reach an agreed
upon set of objectives in the most efficient manner.
 to avoid potential disaster.
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Steps in PPA
◦ Assessment of the proposed project in view of agreed upon
project objectives
◦ Clear specification of objectives – considering government’s
overall policy and strategy
◦ Description of the project in terms of relevant economic,
social, institutional, technical and financial features
◦ Analysis of alternative project proposals
◦ Comparison of these various alternatives
◦ Selection of the most beneficial project proposal
◦ Final decision by all major parties
◦ Project implementation
◦ Monitoring and evaluation

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Figure 1: The Project Concept

Present Project (investment time)

situation Future
situation
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Features of projects
o A common feature of all projects is that they
can be:

o planned,
o financed and
o implemented

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 Project has to be SMART

◦ Specific: objective, activities, benefits & beneficiaries.

◦ Measurable: activities & benefits be valued in
financial, economic and social terms.
◦ Area bounded: its area of operation must be clearly
identified and delineated.
◦ Real: planning & analysis must be made on real
information of social, economic, political, technical,…
situations.
◦ Time bounded: has clear starting and ending point.
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Linkages Between Program and Project

 The major difference b/n a project & a program lies
more in the scope, details and accuracy.

A project is:
 A specific component of a broad program.
 Designed with a high degree of precision & details
with regard to its;
- objectives,
- activities,
- calculation of return and
- implementation plan.
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A program is:
 Composed of a number of specific projects

 General

 Lacks details

 Lacks precision

 Aims at a broader goal related to a sectorial policy of

a country or departmental policy of an organization.
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Advantages of project analysis

 It coordinates efforts of various responsible
organization b/c it provides costs & benefits year by year.

 It shows possible problems that may be encountered in

the implementation.

 It encourages conscious and systematic assessment of

various alternatives.

 It sets better criteria for monitoring and evaluation.

 It serves as source of data.

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Limitations of project analysis

1. It depends on the quality of data used & forecast made.

2. There are always risk and uncertainty - no method that

can forecast it 100%.
◦ Risk - we can predict certain degree of precision
◦ Uncertainty - we can’t attach any probability

3. Project analysis is a ‘partial analysis’,

 does not take in to account relationship with
other sectors as opposed to other planning models.
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4. It is difficult to fully address externalities or

secondary effects.

5. It is difficult to address all objectives of the country.

6. The greater difference b/n alternative projects, the

more difficult to compare them.

 It requires further analysis.

 E.g. Health project and irrigation project

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Project Quality Factors

ACTIVITY

What are the key factors that

determine the long term
sustainability of projects?
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Project Quality Factors

Quality Description
Factor
Ownership  Involvement of target groups & beneficiaries in
by project design and execution
beneficiaries  E.g. involving farmers in irrigation projects
 Quality of the relevant sector policy within a country
Policy
 Commitment of the gov’t to continuation of project
support
services after external/donor finance
Appropriate  Whether technologies applied in the project can be
technology maintained in the long run
 Does the project take account of local cultural
Socio- norms and attitudes?
cultural  Do project beneficiary groups have appropriate
issues access to project services and benefits?
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Project Quality …. Cont’d

Quality Description
Factor
 How does the project take into account the
Gender specific needs and interests of women and men?
equality  Is there sustained and equitable access by women
and men to services and infrastructure?

 The extent to which the project will preserve or

Environmental
damage the environment and therefore support
protection
or threaten longer term benefits

Institutional  The ability and commitment of the project

and implementation agencies to deliver the project
management and to continue to provide products and services
capacity beyond external finance/donor support
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Why do developmental projects fail?

 The reasons for the failure of projects could be
different.
A lack of local ownership and responsibility, i.e.
participative planning and development.
Problems of project design and implementation
The use of inappropriate approach and technology
Inadequate or inappropriate infrastructure

A weak support system… (e.g. gov’t, donors)

Failure to appreciate the social and political env’t

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Why do developmental projects

fail?....Cont’d

Administrative problems
Changing economic situations and market
conditions….. (e.g. inflation)
Externally driven project initiatives
Problems related to poor project analysis
Unrealistic expectations
Unsupportive policy environment
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