Cameroon - Semry Rice Project

Document of The World Bank FOR OFFICIAL USE ONLY Reporl No. 2054 FILE COPY Project Performance Audit Report CAMEROON - SEMRY RICE PROJECT (Credit 302-CM) May 12, 1978 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY Project Performance Audit Report CAMEROON - SEMRY RICE PROJECT (Credit 302-CM) TABLE OF CONTENTS Page Preface Basic Data Sheet Highlights PROJECT PERFORMANCE AUDIT MEMORANDUM I. Project Summary 1 Physical Implementation 1 Agricultural Development 2 Project Cost and Financing 3 Economic and Financial Aspects 3 The Weaker Points 4 Government, SEMRY, Bank and Co-Lender Performance 6 Changes in a Second Project 6 II. Main Issues 8 Bank's Knowledge of On-Farm Conditions 8 Government Policies on Prices and Water Charges 11 Institution Building 12 Project Impact 14 III. Conclusions 15 PROJECT COMPLETION REPORT I. Summary and Conclusions-/ II. Background A 1 III. Identification, Preparation and Appraisal A 1 IV. Project Design and Physical Implementation A 3 V. Agricultural Development A 7 VI. Project Cost and Financing A10 VII. Economic and Financial Aspects A16 VIII. Organization and Management A24 IX. Ecology and Health A29 X. Government, SEMRY, Bank and Co-Lender Performance A31 XI. Changes in a Second Project A33 1/ Transferred to the Audit Report as the Project Summary. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Table of Contents (continued) Annex 1. Project Description from the Credit Agreement 2. SEMRY Extension 3. Agricultural Development 4. Original Cost and Financing 5. Credit 302-CM 6. Farm Budgets 7. Financial Data 8. Economic Analysis 9. SEMRY Personnel Map  Project Performance Audit Report CAMEROON - SEMRY RICE PROJECT (Credit 302-CM) PREFACE This report presents the results of an audit of the SEMRY Rice Project in Cameroon for which the World Bank Group granted a credit of US$3.7 million (Credit 302-CM), signed in April 1972 and fully disbursed on June 24, 1976, i.e., a few days before the original closing date. A second project for rice development in the SEMRY region was approved by the Board on February 1, 1978. The audit was based on interviews with Bank staff and on a reading of the appraisal report, supervision reports, project files and of the Project Completion Report (PCR) prepared by the Western Africa Regional Office in May 1977. An OED mission visited Cameroon in August 1977. A field trip to the project area was made and discussions held with SEMRY staff, Ministries concerned with the project and participating farmers. The Borrower did not offer any comments on the draft PPAR. The points discussed by the audit mission have been selected not only because of their particular significance in the SEMRY Rice Project but also because they are relevant to three other similar projects in West Africa evaluated simultaneously by OED: The Casamance Rice Project in Senegal (Credit 252-SE), the Hinvi Agricultural Project in Benin (Credit 144-BEN) and the Sierra Leone Integrated Agricultural Development Project (Credit 323-SL). The writers of the report wish to express their appreciation to the Government of Cameroon and the Societe d'Expansion et de Modernisation de la Riziculture de Yagoua (SEMRY) the project executing agency, for their cooperation and assistance.  Basic Data Sheet CAMEROON - SEMRY RICE PROJECT (CREDIT 302-CM) A. Amount (US$ mln) As of September 30, 1977 Original Disbursed Cancelled Repaid Outstanding Credit 302-CM 3.7 3.7 3.7 B. Project Data Actual or Original Plan Revisions Current Estimate First Mention in Bank files Aug. 1966 Identification Oct. 1966 Feasibility Studies Dec. 1968 Sept. 1970 Appraisal Mission Jan. 1971 Negotiations Nov. 1971 Board Approval 01/25/72 Credit Agreement 04/26/72 Credit Effectiveness 07/28/72 07/28/72 Physical Completion June 1975 July 1975 % of Original Project 100% Actually Completed Credit Closing 06/30/76 06/24/76 Total Costs (US$ mln) 8.0 9.8 (Estimate) 9.3 (Final) Economic Rate of Return 11% 2372 C. Mission Data Month/ No. of No. of Man- Date of Year Days Persons Weeks Report FAO/IBRD Identification 11/66 11/23/66 Appraisal 01/71 12/29/71 Supervision I 04/72 10 2 3-1/3 06/06/72 Supervision II 05/73 10 1 3-1/3 05/01/73 Supervision III 10/73 10 2 3-1/3 11/07/73 Supervision IV 05/74 10 2 3-1/3 05/07/74 Supervision V 12/74 10 2 3-1/3 01/31/75 Supervision VI 11/75 8 5 6-2/344 01/09/76 Supervision VII (PCR) 02/77 13 4 5 i 05/05/77 Subtotal 28-1/3 D. Follow-on Project SEMRY II, Loan 1512-CM for US$14.5 million and Credit 763-CM for US$14.5 million of February 1, 1978. E. Exchange Rates Appraisal CFAF 278 = US$1 May 1972 256 March 1973 230 April 1973 227 October 1973 212 May 1974 240 November 1975 225 /1 See para. 2.21. /2 Also includes man-weeks used in preparation of the SEMRY II Project. 73 Part of the mission time was allocated to the pre-appraisal of the SEMRY II Project.  Project Performance Audit Report CAMEROON - SEMRY RICE PROJECT (Credit 302-CM) HIGHLIGHTS The SEMRY I Rice Project provided funds for improved rice culti- vation on about 4,300 ha through the introduction of pump irrigation. The project,receiving strong support from Government and good management as well as from responsive farmers,succeeded in achieving better results than expected at appraisal. SEMRY is one of the few irrigation schemes in West Africa where double cropping has been successfully intro- duced. The project was implemented with only minor delays and cost overruns (10%). The project was less successful in establishing an institution which could dispense with expatriate assistance. However, with more intensive training efforts during the follow-on project (SEMRY II, Loan 1512-CM/Credit 763-CM) the situation is likely to improve. The recalculated rate of return is 23% compared with the appraisal estimate of 11%. The following points may be of special interest: - the Bank's limited knowledge of on-farm conditions leading to pessimistic appraisal assumptions (PPAR, paras. 1.8, 1.10, 1.15, 1.17, 2.01-2.05; PCR, paras. 5.1, 5.2, 5.5, 5.7-5.10, 7.6); - government policies on prices and water charges safeguard producer incentives and sound financial basis of SEMRY (PPAR, paras. 2.13, 2.14; PCR, paras. 7.3, 7.5, 7.7); - delays in finding local counterpart staff to replace expatriates (PPAR, paras. 2.18, 2.19; PCR,paras. 8.1-8.6); - inadequate staff training during early stages of project implementation (PPAR, paras. 2.17-2.19; PCR, para. 1.2, 8.1); - no attention was given to the establishment of producer organi- zations (PPAR, para. 2.20).  Project Performance Audit Memorandum CAMEROON - SEMRY RICE PROJECT (Credit 302-CM) 1. PROJECT SUMMARY- 1.1 As appraised in 1971, the SEMRY 2/ Rice Project (Credit 302-CM) was to improve rice cultivation on about 4,300 ha in northern Cameroon through the introduction of pump irrigation permitting yield increases and double cropping, with the twin aim of raising the incomes of some 2,800 farm families and reducing the country's dependence on rice imports. An expansion program, which IDA's co-lenders agreed to finance in 1976, is now being implemented. It will increase the project's irrigable area to about 5,300 ha and the number of benefiting families to about 3,400. In the re- calculation of the project's financial and economic benefits at full develop- ment, the extension has been taken into account. 1.2 Because of good management, strong Government support at the national and the local level, and responsive farmers, the project has achieved much better results so far than expected at appraisal, and results at full development are expected to be correspondingly better. Not surprisingly, in view of the single-minded dedication of management to reach its main target promoting rice production other aspects received less attention. Accounting was not satisfactory until quite recently, and the hiring and training of Cameroonian counterparts lagged behind schedule. Also, the widening of the project's scope from the heavy emphasis on rice to a more integrated approach -- desirable, but not foreseen at appraisal -- had to await the launching of the expansion program. 1.3 Two important questions regarding the project's future cannot be answered at this stage, but it has been assumed in the revised projections that a satisfactory answer will be found for both. First, although the Cameroonian counterparts in place now perform well, their number is small and it remains to be seen whether a sufficiently strong team can be formed in time to ensure continuity after the present team has moved to the pro- posed SEMRY II Project, some 70 km to the north. The Government support SEMRY enjoys should prove especially valuable in this respect. The second question is whether it is technically possible to maintain the high average yields achieved over the past few seasons during the entire project life. Physical Implementation 1.4 The project was implemented with only minor delays and no serious problems have arisen. Within the original contract price for the main civil works it was possible to construct not only the primary and secondary networks serving about 4,500 ha (against 4,300 ha estimated at appraisal), but also part of the networks serving an additional polder of about 800 ha (Gabareye polder, No. 8). Remaining works were done by SEMRY on force account. _/ Adapted from the PCR. 2/ Societe d'Expansion et de Modernisation de la Riziculture de Yagoua.  - 2 - 1.5 On-farm development works, covering the entire project area instead of only 3,000 ha as foreseen at appraisal, were carried out by SEMRY on force account. The amount of work completed each dry season was consistently larger than appraisal estimates. By April 1976, 4,527 ha were fully developed, and with the completion -- under the extension program -- of on-farm works on Polder 8, irrigable area will reach about 5,300 ha by mid-1977. 1.6 As the national power company offered to provide electric power, electric pumps were purchased instead of the diesel pumps originally planned, a possibility not foreseen at appraisal. This brought benefits in the form of greater simplicity of installation and reduced operating and maintenance cost. Agricultural Development 1.7 Actual paddy production has substantially exceeded appraisal esti- mates, and production at full development is now expected to reach 35,000 tons with the expansion under way, twice the amount foreseen at appraisal. The chief reasons for this are: (1) the larger area that will be available; (2) the extension of on-farm works to the entire project area; (3) the higher yields made possible by the general acceptance of transplanting instead of broadcasting; and (4) the much larger area that is now expected to be double cropped. 1.8 In the early phase of the project, the possibility of increasing yield by transplanting was repeatedly discussed, but the outlook did not seem very promising. Through the 1973/74 dry season, broadcasting was the rule. In January 1974, exceptionally low temperatures put the crop into jeopardy, but SEMRY management succeeded in convincing farmers that they could still get a good crop: it immediately prepared seedbeds and received farmers' assurances that they would do the transplanting. The action was a success. The contrast between fields of farmers who had transplanted and of those who had not was so striking that SEMRY organized a series of visits for farmers expected to cultivate the polders next to be developed. As a result, broad- casting was abandoned in the project area. 1.9 In view of their extremely poor harvest due to the Sahelian drought, farmers, in 1972/73, went eagerly for dry season cultivation under the proj- ect, and by 1975/76 dry season area reached 1,073 ha compared with 450 ha projected at appraisal. The 1976/77 area is estimated to be 1,350 ha. With- in the limits of the Logone Water Agreement between Cameroon and Chad, a maximum of 3,000 ha (net) will be available for double cropping, twice the area foreseen at appraisal. 1.10 Up to 1974, it was feared that the polders could not be cultivated as quickly as they were developed. But once it had been shown that trans- planting guaranteed consistently high yields, demand for land increased strongly: in June 1976, it exceeded land availability by 30%, and 2,700 applicants have been registered for Polder 8, while there is land for only 1,450. This permits management to be selective in accepting new applicants and to expel farmers who do not perform as expected. Project Cost and Financing 1.11 At CFAF 2,274 million, actual project cost (excluding the extension) is only about 10% higher than estimated at appraisal -- 16% in current dollar terms. This small cost overrun is mainly due to three factors: (1) the main civil works contract was completed at a cost that was low by 1972 standards and could only be obtained then because the contractor had just finished work on the new Yaounde-Ngaoundere railroad and wanted to keep his personnel and equipment in Cameroon; (2) some of the 36% increase in construction cost, part of which resulted from the upgrading and expansion of the project, was compen- sated by savings on equipment and personnel; and (3) a large part of project cost was incurred early in its life when the impact of world inflation and rising oil prices was not yet fully felt. 1.12 Currency realignments between appraisal and Board presentation re- duced the CFAF value of the proposed IDA credit, and the additional US$200,000 which IDA allocated were insufficient to maintain its original share in proj- ect financing. Although the Government repeatedly requested supplementary financing because exchange rate changes continued to erode the CFAF value of the credit, IDA did not provide any more funds, and at the 1975 Annual Meeting the Cameroonian representative agreed that his Government would no longer seek additional financing for SEMRY. The cost overrun was covered by the Government and FAC. As a result of the changes in project cost and financing, IDA's contribution was reduced from 46% at credit signing of less than 38%. The US$3.7 million credit, which was fully disbursed on June 24, 1976, represents the equivalent of CFAF 857 million against CFAF 947 million estimated in early 1972. Economic and Financial Aspects 1.13 In 1976, estimated rice consumption in Cameroon was 31,400 tons or about 5 kg per capita. About 70% of this total was consumed in towns, mainly in the south, where per capita consumption averaged 10 kg. Based on past development and expected population and income growth, rice consumption would be close to 70,000 tons in 1985, with per capita consumption reaching 8 kg overall and 13 kg in urban areas. SEMRY's marketed rice production of about 21,000 tons would cover 30% of total demand. 1.14 Although its great distance (1,500 km) from the main consuming centers puts SEMRY at a disadvantage compared with imports, it experienced no marketing problems except in 1976, when low-priced imports forced the sus- pension of sales for several months. This problem should not return, however, since the Government later in 1976 introduced the system of "jumelage" under which traders can only obtain import licences if they agree to buy certain quantities of SEIRY rice. A number of other rice projects are now in various stages of preparation. Most of them are situated nearer the main consuming  - 4 - areas than SEMRY. Even if they develop more slowly than planned, SEMRY will face growing competition from domestic producers in the future. But SEMRY is well located to export rice to northern Nigeria or Chad and should be able to expand these markets as its domestic sales decline. Unofficial exports have in fact grown recently (mainly to Nigeria). Moreover, the Government has decided to adopt a policy favoring rice exports. It can thus be assumed that all SEMRY rice will find a market. Based on present forecasts of world market prices for rice, SEMRY's economic ex-mill price for 1980 and later years (weighted average for all destinations) would be nearly CFAF 94,000 per ton, about 2.5 times the price expected at appraisal. 1.15 With a larger paddy area (because of the larger share of double cropping), substantially higher yield (because of on-farm works and trans- planting) and paddy prices than expected at appraisal, the average farm family income is now estimated to reach CFAF 218,000 at full development (US$890 at CFAF 245 per US$), almost three times the appraisal estimate and almost six times the amount "without the project". The project will also substantially increase the security of farm income. 1.16 SEMRY's actual operating results compare favorably with appraisal estimates. Because of the rice price increases authorized by the Government and considerable improvement in the collection rate of farmers' charges (to over 96% in 1975/76), proceeds from rice sales were higher and the cumulative deficit of the operating account was substantially lower than estimated at appraisal, and no subsidies have been needed since 1974/75. The cash surplus did not develop as favorably, mostly because of the involuntary stock build- up resulting from the cheap rice imports mentioned above (para. 1.14). Ten- tative estimates for the coming years, based on present price levels and farmers' charges, show that SEMRY should be able to generate an operating sur- plus from 1976/77 onward that is large enough to cover its debt service obligations -- CFAF 1.13 billion, including the extension program, at 3.5% interest -- and to finance the replacement of equipment. 1.17 Although incremental production at full development is now projected to reach about 20,000 tons of rice (double the appraisal estimate), Cameroon would remain a net rice importer. Based on the expected ex-mill price of about CFAF 94,000 per ton (appraisal estimate: CFAF 37,600) and including the estimated cost of the expansion program, except items not directly related to SEMRY, the project's rate of return is 23% against the appraisal estimate of 11%. If benefits are reduced by 10% and 20%, the rate would be 19% and 15% respectively. The Weaker Points 1.18 At appraisal, it was agreed that (1) in addition to the foreign personnel employed at the time SEMRY would hire three more expatriates (four, including the agricultural engineer to replace the outgoing project director); (2) within three years, Cameroonians would be appointed to work with and be trained by the expatriates; (3) the expatriates would be replaced when this was justified by their counterparts' performance; and a schedule of projected  - 5 - personnel development was drawn up. Following recommendations of supervision missions, additional foreign experts were hired, and as early as May 1973, supervision staff also drew the Government's attention to the need for addi- tional counterparts; but despite repeated reminders and no disagreement in principle, recruitment of counterparts was still unsatisfactory by the end of 1975, in part due to unattractive salary levels. The November 1975 supervision mission was assured that a considerable number of Cameroonians would be appointed within six months, and SEMRY's Board of Directors approved a new competitive salary scale. Even so, it was clear that expatriate staff would have to be maintained beyond the mid-1976 project completion date to ensure continuity, and FAC agreed to provide financing, under the expansion program, for five management positions for an additional year. 1.19 At the end of 1976, 13 of the 34 management and middle level staff ("cadres") were expatriates, including three middle level employees. Of the ten management staff, four had counterparts in place; no counterpart was foreseen for one of the remaining six (director of extension). The arrival of a physician in January 1977 raised the number of management level foreign staff to eleven. 1.20 Quite likely, an earlier revision of SEMRY's salary structure would have produced a larger number of counterparts in time, although it could not be expected to overcome the sociological obstacles to attracting qualified candidates to the north. But the Government's insistence on quality perfor- mance deserves support, not only because it contributed to the success of the project, but also because it showed that this was of prime importance to it. 1.21 The rising volume of work soon made it clear that SEMRY needed a chief accountant besides the administrative and financial director. But, as often in other African countries, none could be found in Cameroon. As an intermediate solution, French national service volunteers were employed, supported by short-term missions of a CCCE financial expert; but in 1973/74 SEMRY had no accountant for eleven months. Routine work suffered and the envisaged improvement of the accounting system could not be realized. Since June 1975, SEMRY has employed an expatriate chief accountant financed by FAC. His 1975/76 work program focused on establishing an analytical accounting system which is now operational. It breaks up the general accounts into five cost centers which greatly improves the flow of base cost information to man- agement and promises to ensure tighter cost control. 1.22 Applied research under the project had been entrusted to IRAT until February 1975, when its contract expired and a Cameroonian agronomist took over at the head of the Vounaloun research station. The program IRAT had established included varietal research and fertilizer trials. The 1975 super- vision mission recommended to improve varietal research, expand fertilizer trials and introduce phytosanitary research. The mission also recommended to obtain technical assistance through regular visits of the specialist respon- sible for the national rice program. In this way, it was hoped that the Cameroonian agronomist could also be put in charge of seed multiplication  - 6 - and seedbed preparation without endangering the research program. Unfortu- nately, the 1977 supervision mission found that he had taken the place of the departed assistant technical director and research had come to a stand-still. The mission strongly recommended to restart the research program focusing on the areas suggested in November 1975. 1.23 The appraisal team included an environmental consultant to review the problem of bilharzia (schistosomiasis), the most damaging disease along the Logone river, and it was agreed during negotiations that the Government's health services would study closely the development of the disease in the project area and adjacent areas and make periodic checks on the snail popula- tion. This obligation could not be kept and none of the supervision missions that visited the project through 1976 discussed the matter. But this must be seen in the context of the general health situation in the area. Until 1975, over long periods of time there was no physician at all in the depart- ment of Yagoua. The situation has improved since, but is still inadequate considering the needs of the department's 180,000 inhabitants. Moreover, there is still no economically feasible way to eradicate bilharzia. Based on the few observations that could be made in the Yagoua hospital and dis- pensaries in the area, the incidence of the disease is estimated at around 90%, as at appraisal. The project thus does not seem to have adversely affected the situation. SEMRY's newly arrived physician will try to verify the estimated incidence of the disease, establish its geographical distri- bution, and also check on the geographical and seasonal distribution of the snail population. Government, SEMRY, Bank and Co-Lender Performance 1.24 The shortcomings mentioned above do not negate the overall conclu- sion that the Government, SEMRY, the Bank and the two co-lenders worked harmoniously and well together to achieve the generally successful project outcome. In project financing, the Bank acted strictly as a lender of last resort: the Government and French aid provided a total of US$9 million, including the expansion program, against IDA's US$3.7 million. The Govern- ment's strong interest in the project also showed in its regular participa- tion in the joint supervision missions of the co-lenders. Project supervi- sion was adequate and, regarding the Bank's share, executed with more than usual continuity in staffing. Follow-up action was taken with reasonable promptness. SEMRY's supervisory ministry on various occasions thanked the supervision teams for their work. Changes in a Second Project 1.25 The Government has asked the co-lenders to help finance a follow- up project -- SEMRY II -- and the Bank/IDA approved a Loan/Credit on February 1, 1978. The project includes the construction of dikes protecting about 15,000 ha against flooding and permitting the storage of water to irri- gate two rice crops per year by gravity on about 7,000 ha. The project will also provide benefits from additional production of mouskouari (dry season sorghum) and sorghum in the area protected from flooding. The storage lake would be fished and, as it would shrink in the dry season, its fringes would provide grazing land for cattle. 1.26 From the outset, SEHRY II should avoid the problems SEMRY I faced and is in part still facing. Its accounting system should be sufficiently strong to serve the needs of the project and the financing agencies. Hiring and training of Cameroonian counterparts should receive more attention than in the 2 past. In view of the large expanse of water that would be created -- 360 km to 120 km -- a health unit should be included to monitor the numerous endemic diseases and protect, to the extent possible, participating farmers and their families. Finally, applied research should be strengthened to help decide the crucial question whether yields can be maintained over an extended period of time at the high level achieved in the past.  - 8 - II. MAIN ISSUES Bank's Knowledge of On-Farm Conditions 2.01 The review of the project draws attention to the complexities of African rural societies, and the importance of family size and composition in determining the acreage which can be cultivated as well as the number of persons likely to be reached by the project. It points to the need of exploring farmers' motivations, and the level of technical know-how already available to them to define more exactly the scope of required extension activities. Finally, in the intricate African farming systems, the role of women, having responsibilities and interests completely different from the male family members, would require more attention. With the benefit of hindsight it can be said that a more thorough analysis of the inter- actions between the project and farmers, particularly the role to be played by individual family members in developing the farm would have contributed to a smoother and cheaper project implementation. By recognizing the importance of an active participation of women in the project, the develop- ment momentum could be better sustained. In the follow-up projects it will be necessary to involve socio-economists to permit the eventual project to cater to individual - as opposed to farm family - development needs. 2.02 Family and Farm Sizes. The audit's findings do not support the appraisal or PCR estimates of family compositions and farm sizes. Both the appraisal report and the PCR farm models assume each family to cultivate 1.6 ha of rice during the rainy season. The appraisal report anticipated average farms to be owned by a family of seven members, with four actively involved in farm work; the PCR assumes that the same area of rice (Annex 6, Table 1) is cultivated by an extended family (footnote 1 of Annex 6, Table 1) without specifying its composition. The PCR uses the 1.6 ha norm to conclude that the 5,300 ha developed under the project are cultivated by 3,400 families instead of the appraisal goal of 2,800, and that the project has raised income per family by US$735, or considerably better than the appraisal goal of US$176. 2.03 In the absence of soci-economic studies, figures on family size must remain tentative. Project staff and farmers interviewed by the audit mission suggest that the region's extended family is composed of three to four smaller families (each with 2 to 4 members and 1 to 3 actives), and comprises on average 10 to 15 members with five to seven active persons. Hence, Bank figures on family size and number of families benefitting from the project are unreliable. 2.04 Bank reports also fail to provide a satisfactory answer to the question of the average farm size. Putting together information given in two supervision reportsl/, one can conclude that a "planter", as the farmer 1/ of November/December 1974 and November 1975.  - 9 - who registers with SEMRY is called, cultivates an average of 0.65 ha of rice during the rainy season. Since it remains unclear how the planter relates to the different family sizes, one cannot determine the farm model from this data alone. 2.05 To arrive at a more representative model, information not found in Bank reports has to be used. Considering, that (i) most project bene- ficiaries do not use hired labor during the rainy season because of its high cost (para. 2.06), and (ii) an average area of between 0.1 and 0.2 ha of transplanted riceV is cultivated per active person, in line with Bank experience in other rice projects in Africa, it can be assumed that the project benefitted between 3,800 and 7,500 extended families each cultivating between 1.4 ha and 0.7 ha rice during the rainy season. Greater precision in the estimates is unwarranted taking into account the limited data avail- able. However, it is safe to conclude that the project benefitted a larger number of families than shown either in the appraisal report or in the PCR, that the average farm grows less than 1.6 ha2/ rice during the rainy season and that actual income per family is lower than assumed in the PCR. 2.06 Farmer Motivation. Experience gained from this project does not support the appraisal and PCR mission's assumption that farmers have no alternative employment opportunities and that, therefore, the opportunity cost of family labor can be costed at zero. At periods of peak demand, (planting, weeding and harvesting during rainy season) labor is scarce. For instance, farmers delay rice transplanting if prevailing rainfall pat- terns require them to spend more time than expected on subsistence crops. At the time of planting during the rainy season hired labor costs CFAF 600 to 800 per man-day; as compared with the official minimum daily wage rate of CFAF 320 for rural labor. Hired labor costs also exceed average returns per man-day of CFAF 265 without the project (valuing crops at free market prices) and CFAF 4143/ with the project (with rice at the official Govern- ment fixed price). From this evidence, the audit concludes that there is no excess farm labor available for project activities. 1/ In contrast with the other projects visited, SEMRY provides farmers with mechanical plowing. This service, however, has only a limited effect on the rice area cultivated per farmer, because of the labor constraints during transplanting and weeding. 2/ The average size of 1.2 ha per extended family given in the second phase project, seems therefore more realistic than the 1.6 ha used in the PCR. 3/ Man-days for one crop of rice = 195. Yield of 5 tons paddy/ha, a price of CFAF 30/kg, costs at CFAF 60,000/ha and crop transportation costs of around CFAF 2,500/ha. The latter are high because of the lack of tertiary roads and crossings, which obliges farmers to hand-carry their produce to the markets. It appears that the Bank's refusal to increase its financial contribution to the project is one of the reasons for the lack of improved roads within the project area.  - 10 - 2.07 Since labor is the limiting factor to increased incomes, farmers can be expected to allocate their work time among crops largely on the basis of anticipated returns per man-day. In this project, returns on labor input for rice measured in man-days exceed those of non-project crops by nearly 60% (para. 2.06). The farmers' favorable response to project proposals can be explained largely on the basis of this incremental return. There are, of course, additional factors which explain the continuous farmers' interest in the project; such as the more regular and higher annual income, mentioned in the PCR, or the threat of being expelled from the project area if recommended crop husbandry methods are not strictly adhered to. Any analysis, however, of farmers' response, the appropriate levels of water charges and Government- fixed producer prices (paras. 2.12-2.14) is incomplete without taking the return per man-day calculation into consideration. Since the Bank erroneously assumed labor to be in abundant supply, a calculation of returns per man-day was not included in the appraisal report and PCR. 2.08 Role of the Extension Services. The project preparation and apprai- sal reports were skeptical about farmers' receptivity to rice cultivation techniques to be introduced by the project. The preparation report suggested establishment of a state farm on 20% of the area to offset a likely lack of interest or competence on the part of the farmers. The same report proposed a high extension density to convince farmers to join the project. The appraisal mission rejected the idea of a state farm but retained the concept of high extension coverage for which 10% of project costs were allocated. The extension service was expected to succeed in gradually convincing farmers to adopt new rice growing techniques to prevent agricultural development from lagging behind the progress and the expected timely completion of physical works. The appraisal mission seems to have thought that rice husbandry tech- niques would be known only to extension staff and not to farmers, and that the latter would resist innovation so that only unremitting extension work would gradually overcome their resistance. 2.09 In fact, farmers adopted rice transplanting and dry season culti- vation as soon as the superiority of the techniques had been demonstrated in their fields. Rice transplanting was at first tried out with a few farmers by the first project manager, who had experience with rice cultiva- tion, in other projects. He was assisted by an illiterate extension worker, who was previously a farmer himself experienced in traditional farming methods. The demonstration plots, which convinced farmers to adopt the techniques, were organized and established by expatriate project tech- nicians and a few extension agents. Belatedly it was recognized that farmers knew the techniques of transplanting and had already experience in dry season cultivation, methods which they had used in the past growing mouskouari, a traditional sorghum. As it turned out, farmers adopted the new techniques before the project organization had time to train extension staff in this subject.  - 11 - 2.10 The reduced role of the extension services as compared to the appraisal is reflected by the project management decision to reduce staff numbers and also by less staff time allocated to farmer training. Without decline in production, extension staff had been reduced from 208 in 1974/ 75 to 170 in 1976/77,, partly as a consequence of better staff training, but also as a step to save project costs. As a result, extension actually accounts for only 5% of total project costs. Extension staff spend most of their time in gathering statistics, supplying inputs to farmers and handling credit. Only a minor part of their time is now spent on tech- nical assistance to farmers. 2.11 Thus the SEMRY project highlights the importance of (i) an in-depth ex-ante analysis of farmers' cultivation practices; (ii) determining technical recommendations which offer substantial improvements over ongoing cultivation practices, with likely results borne out by on-farm experiments; (iii) limiting technical assistance to a few agents knowledgeable of traditional cultivation practices and supported by a skeleton of highly qualified technical staff; and (iv) efficient input supply and credit handling. 2.12 Role of Women. Women interviewed by the audit mission consistently complained about household heads retaining the income from rice sales although they, the women, provide the labor for the most critical operations of seedbed preparation and transplanting. The women's resentment reaches its peak when the household head uses the product of their labor to acquire another wife. High yields are the result of the women's dexterity in transplanting operations and the high production levels can therefore be maintained only if women continue to support the project. Bank documents, however, do not dis- cuss this important aspect of farmer motivation in sustaining yields. Government Policies on Prices and Water Charges 2.13 Policies on prices and water charges have to strike a delicate balance, on the one hand by providing producers with adequate incentives to ensure their participation in the project and on the other hand by putting the project executing agency on a sound financial basis. Concerning SEMRY, the producer price of rice fixed by the Government is lower than in other African rice projects audited by OEDI/ and falls below prices obtainable 1/ The projects are The Gambia Agricultural Development Project (Cr. 333-GM), Audit Report No. 1724; Madagascar Lake Alaotra Irrigation Project (Cr. 214-MA), Audit Report No. 1622, and the Senegal and Sierra Leone projects mentioned in the Preface. Only the Madagascar project seems to have avoided difficulties with prices. Rice prices in CFAF/kg equivalent were: in SEMRY: 30; The Gambia: 43; Senegal: 45; Sierra Leone: 41; Madagascar: 31.15; parallel free market in SEMRY: 45.50.  - 12 - on the "free market" in Cameroon. Although low producer prices impaired successful implementation of other projects, there is no evidence of this happening in SEMRY. The mission believes that farmers have so far accepted the low price in SEMRY because returns on a man-day basis remain substan- tially above returns from other crops (para. 2.06). To achieve this favorable return, despite the lower producer price paid by Government, the project needed to and si4cceeded in increasing yields 4.5 times. This spec- tacular yield increase! has been accomplished by a superior technological package, and capital intensive investments providing water control. The comparison between the SEMRY project and the Benin and Senegal projects (Preface) suggests that in areas where climatic conditions and prevailing technical knowledge limit development opportunities, investments in capital intensive water control schemes may be necessary to achieve the high levels of productivity increases that will bring farmers to respond to the low Government fixed producer prices. 2.14 SEMRY is likely to become financially self-sufficient soon because (a) SEMRY's operation and maintenance costs are fully charged to farmers and depreciation costs are partly covered, and (b) private traders can obtain licenses for rice marketing only if they agree to buy a fixed percentage of their requirements from SEMRY at a price which covers SEMRY's management and processing costs. Thus, the Government's policies on prices and water charges have so far succeeded in safeguarding producer incentives while maintaining the operation on a sound financial footing. Only the future will show, however, if farmers' defection to the greener pastures of the "free market" can be minimized in order to maintain the satisfactory achievements over the project life. The PCR is particularly frank on this issue (para. 1.3 of the Summary). Institution Building 2/ 2.15 SEMRY. Because of expatriates-/ managing SEMRY, two potential problems had to be overcome: liaison with the Government and training of counterparts. 2.16 SEMRY maintained good relations with all local authorities. The Chairman of SEMRY's Board of Directors is the Governor of the Province and the Vice-Chairman, the Prefect of a Department. This appropriate institu- tional arrangement and the expatriate team's commendable efforts to accommo- date the views of the local Government representative on project organization were conducive to the Government's continuous and effective support of the project underlined in the PCR. 1/- SEMRY I is one of the few irrigation schemes in West Africa in which double cropping has been successfully introduced on a large scale. 2/ Staff from several French consulting firms.  - 13 - 2.17 Delays were encountered in the Cameroonization of project manage- ment. According to the PCR, one of the main causes of the delays was SEMRY's non-competitive salary scale improved belatedly in 1976. The PCR also men- tions in a cursory manner (para. 1.2), project management's lack of attention to training counterparts during the initial years. 2.18 The latter point, however, deserves more emphasis. Project manage- ment claims that during the initial project years, the number of graduates from agricultural schools was inadequate to fill all Government administrative posts and project requirements at the same time. In addition, OED found in a previous reviewl/ that establishing a project agency, supervising construc- tion and training counterparts are activities difficult to be carried out simultaneously. In SEMRY, the first management team concentrated on estab- lishing the project organization and getting construction started; until its departure, training efforts were limited. The new team taking over in 1975 arrived at a time when most physical work was completed and Zhey could con- centrate therefore on Cameroonization and training aspects.2 Supported by the Bank, they succeeded in getting the salary scale changed, the prerequisite to attracting more Cameroonians to join SEMRY. Earlier revisions of salary scales alone, however, would not have accelerated Cameroonization significantly except at the expense of delayed physical development. Although more and better qualified local staff might have been employed by SEMRY, training would have still been the bottleneck. 2.19 In the light of the above, it appears that the need for continued expatriate assistance is not only due to delays in adjusting the salary scale, but is also in a way due to the Bank's optimism concerning the available supply of qualified Cameroonians and the time likely to be spared by expatriates for training their counterparts during the initial period of project implementa- tion. In other words, at appraisal, the Bank underestimated the time needed to make SEMRY a self-supporting organization that could operate without external assistance (technical and financial). The second SEMRY project is therefore also justified because it provides the expatriate assistance necessary to complete the institution building efforts of the first SEMRY project. 2.20 Producer Organizations. During project execution, neither SEMRY management nor the administrative and political authorities considered the promotion of producer organizations. Extension and loan operations are still 1/ Madagascar Beef Cattle Development Project (Loan 585-MAG), Audit Report No. 1559. 2/ The training aspect is still important even under the Cameroonian system which has abandoned the counterpart approach in favor of gradually increasing responsibilities of qualified nationals. The need of in-post training remains.  - 14 - conducted on an individual basis, marketing is handled by purchasing teams answerable directly to SEMRY, and irrigation discipline is ensured by close supervision and authoritarian control methods. In the mission's view the establishment of farmer groups at the outset of the project would have resulted in less costly and more efficient field operations. The recent step, for instance, of entrusting responsibility for a plant nursery to a farmer group reduced seedling requirements by 25%. By organizing farmers' savings on a collective basis, the project could initiate cash purchases of ferti- lizers, with savings of 10% materializing to individuals. The lack of organizing farmers seems to have in fact increased signs of irresponsibility as shown by disputes over use of irrigation water, theft of sluice valves, etc. Shortcomings have also been observed among inadequately supervised and insufficiently trained and motivated extension staff resulting in misappropri- ation of funds or an overbearing authoritarian attituae. The establishment of farmer groups is a long-term undertaking, and the audit mission does not wish to imply that such groups could have become operational by now. However, the mission deplores the absence of a concept to initiate the process. Both SEMRY management and local administrative authorities begin to realize that problems could be solved by educating and organizing farmers in such matters as water control, farm credit, procurement of supplies and marketing.L/ The experience with the plant nursery points in the right direction to be pursued in the second SEMRY project. Project Impact 2.21 Economic Rate of Return. At this stage it is difficult to determine the rate of return with accuracy. The PCR estimates the average rate of return at 23% and suggests in the text that the ROR may drop to 11%. In the annexes, however, a range between 4% and 30% is shown. The audit accepts 23%, but feels that in the absence of better data and extraordinary foresight, any percentage between 4% and 30% is plausible. 2.22 Depending on whether one takes either all non-mutually exclusive favorable or unfavorable assumptions underlying the PCR calculations, the rate of return will be very high or very low. Assumptions, on which only limited information to support them is available, concern farm labor costs and produc- tion without the project. One should also take into account that the first- phase project would not be self-sufficient without the assistance provided under the second-phase (para. 2.19) and that doubts have been expressed about farmers' participation (para. 2.14). 1/ The SEMRY-FONADER credit administration agreement for SEMRY II stipulates the establishment of farmer groups/pre-cooperatives.  - 15 - 2.23 The main uncertainty clouding the ROR assessment is related to price calculations and fluctuations. In calculating the economic price of rice, the PCR estimated the final use of incremental project production according to the appraisal, allocating the same hypothetical percentages to export, import substitution and local consumption. There is, however, no data on local consumption, and the actual use of project rice for export and import substitution is different from what was assumed at appraisal because of the unexpected unofficial exports to the Nigerian market, which the PCR assumes to continue for the remaining forty years of project life - a likely but nevertheless uncertain assumption. 2.24 The PCR ex-mill price of CFAF 93.7/kg is 150% (in current terms and 43% in constant terms) of the CFAF 37.6/kg projected at appraisal. The plus or minus 20% change in benefits used in the PCR sensitivity analysis, therefore, correctly reflects the uncertainties underlying the calculation of the rice prices which may vary in the future as much as in the past. Considering thy above, the mission feels that the low 4% and the high 30% realisticall1/ indicate the range in which the project's ROR may ultimately fall. The PCR should not have shied away from discussing in the text of the report the wide margin which at this stage is still unavoidable. III. CONCLUSIONS 3.01 The SEMRY Rice Project is a successful undertaking. Production exceeds the original appraisal forecasts, not only because the area developed is larger than originally proposed, but also because productivity is higher than anticipated, following the introduction of transplanting and double cropping. In addition, rice prices increased much more rapidly than unit costs and expenditures were kept at a reasonable level by an efficient manage- ment. The result has been an economic impact that will, in all likelihood, remain favorable as long as there is no major fall in rice prices. 3.02 The project has also significantly increased farmer incomes. The audit's findings indicate actual incomes per family lower than stated in the PCR, but still comparing favorably with appraisal forecast. On the other hand, the number of project families is higher and income distribution more equitable than assumed in the appraisal report and the PCR. In the absence of socio- economic data on family composition and farm size, however, figures on this project achievement must remain tentative. 1/ The Audit Report on Madagascar Lake Alaotra Irrigation Project (Cr. 214-MAG) No. 622, which is similar to the SEMRY project, estimated the ROR to be between 10% and 30%.  - 16 - 3.03 The implications of the Bank's apparent inadequate knowledge of project impact at farm level are difficult to recognize. The limited knowl- edge did not prevent the project from becoming a success and the second SEMRY project incorporated several lessons learned from the first: smaller farm sizes, reduced extension coverage and costing farmers' labor. What the mission is concerned with, however, is the absence of any reference in the PCR to the Bank's inadequate analysis at appraisal of ongoing farm practices, the excessive provision for extension, the farm size and family composition as well as the failure to review labor availability and the role of women. These are important elements and lack of attention to them in the PCR com- pounds the insufficiency of project appraisal and design. 3.04 The audit's comments on the role of women, and polygamy (para. 2.12), may appear out of place in a Bank document intended to emphasize economic and financial performance. The above references are, however, only part of a wider picture which seemed to escape the staff analysis of farmer responses to incentives, including their propensity to spend incremental income on purchasing inputs on cash (para. 2.20), improving project infra- structure (para. 2.06, footnote 3), or providing counterpart funds for Government investments in social infrastructure which has been requested by farmers for a long time. The mission wishes to emphasize in this con- text that Bank project analysis may be deficient whenever participants are considered as economic production factors rather than as human beings and Government's attention is not drawn to a dimension of the development process considered important by a significant part of the ultimate bene- ficiaries under the project.l/ 1/ The Bank is taking account, to an increasing extent, of the broader issues, i.e., covering social factors, than it did a few years ago.  CAMEROON SEMRY RICE PROJECT PROJECT COMPLETION REPORT Table of Contents Page No. I. Summary and Conclusions-................................. II. Background ............................................... A 1 III. Identification, Preparation and Appraisal ................ A 1 IV. Project Design and Physical Implementation ............... A 3 1. Project Design .................................... A 3 2. Physical Implementation ........................... A 4 V. Agricultural Development ................................. A7 1. Appraisal Estimates .............. A 7 2. Actual Development and Revised Estimates .... ...... A 7 VI. Project Cost and Financing ...... ............. A10 1. Original Cost Estimates and Financing Plan .... .... A10 2. Subsequent Changes ................................ All VII. Economic and Financial Aspects ........................... A16 1. Market Prospects and Prices ....................... A16 2. Farmers' Benefits ................................. A19 3. SEMRY's Financial Situation ....................... A20 4. Rate of Return .................................... A20 VIII. Organization and Management .............................. A24 1. Staffing .......................................... A24 2. Accounting ... ..................................... A27 3. Research .......................................... A27 IX. Ecology and Health ........ ............................... A29 X. Government, SEMRY, Bank and Co-Lender Performance ........ A31 XI. Changes in a Second Project .............................. A33 1/ Included in the Audit Memorandum. Table of Contents (continued) Annex 1 - Project Description from the Credit Agreement Annex 2 - SEMRY Extension Annex 3 - Agricultural Development Annex 4 - Project Cost and Financing Annex 5 - Credit 302-CM Annex 6 - Farm Budgets Annex 7 - Financial Data Annex 8 - Economic Analysis Annex 9 - SEMRY Personnel  - A l - Project Completion Report CAMEROON - SEMRY RICE PROJECT (Credit 302-CM) II. BACKGROUND 2.1 The SEMRY Rice Project, for which an IDA credit of US$3.7 million (Credit 302-CM) was approved on January 25, 1972, was the third Bank Group operation in Cameroon's agricultural sector. The purpose of the project was to improve rice cultivation on about 4,300 ha in northern Cameroon through the introduction of pump irrigation permitting yield increases and double cropping, with the twin aim of raising the incomes of some 2,800 farm families receiving plots of 1.5 ha each, and reducing the country's dependence on rice imports. At full development, from 1982 onward, some 17,200 tons of paddy were to be produced annually. 2.2 External financing for the project was also provided by the French Fonds d'Aide et de Cooperation (FAC) and Caisse Centrale de Cooperation Econo- mique (CCCE). The Credit Agreement between the Federal Republic of Cameroon 1/ and IDA was signed on April 26, 1972, and became effective on July 28, 1972. The credit was fully disbursed on June 24, 1976, four days before the estimated closing date. The beneficiary of the credit is the Societe d'Expansion et de Modernisation de la Riziculture de Yagoua (SEMRY), a "Societe de Developpement" established and operating under Law No. 68/LF/9 of June 11, 1968, and Decree No. 71/DF/74 of February 24, 1971. III. IDENTIFICATION, PREPARATION AND APPRAISAL 3.1 The first paddy fields around Yagoua were developed between 1956 and 1960, but there was only partial water control and no proper drainage. In October 1966, an FAO/IBRD mission visited Yagoua and indicated that a rice 1/ Now United Republic of Cameroon.  - A 2 - development project in the area would receive favorable consideration if pre- pared by experienced consultants following the guidelines for irrigation projects established by the FAO/IBRD Cooperative Program. FAC was approached by the Government and agreed to finance a feasibility study. After a survey of available information, terms of reference for the consultants selected to do the study were prepared by FAC and the Bank in September 1967. The con- sultants (BDPA, SOGETHA, IRAT) started work in Cameroon between November 1967 and January 1968. In December 1968, work completed so far was reviewed and a project outline established by the donors, consultants and Government. The final version of the feasibility report was ready in September 1970. 3.2 Since the Bank felt that certain points in the feasibility report still needed clarification, a preappraisal mission was sent to Cameroon in late January 1971. The mission was to do a full appraisal, however, if satisfactory answers were found to the points in question. This was the case, and the project was appraised in February 1971. An environmental consultant visited SEMRY in June 1971 to study the bilharzia problem. Credit negotia- tions between the three co-lenders and the Government took place in Washington in November/December 1971, and the project was presented to IDA's Board of Directors on January 25, 1972. 3.3 The project presented to the Board of Directors was identical to the one in the feasibility report in all but one aspect: The feasibility report had envisaged the construction of new irrigation and drainage canals to serve 3,800 ha, of which 3,000 ha were to be cultivated by small farmers and 800 ha as a state farm. After studying the costs and benefits of this latter com- ponent, the appraisal team decided to delete it. The main civil works were to be done by contractors, and on-farm development works by SEMRY on force account under the supervision of engineering consultants. 3.4 SEMRY was originally created as a section of a Government organiza- tion engaged in agricultural development in northern Cameroon. In 1971, it was transformed into an autonomous development corporation under the super- vision of the Federal Ministry of Planning. The Government decree established SEMRY as the sole owner of irrigated paddy fields along the Logone river, including all buildings and installations, and guaranteed the continued right of usufruct to farmers who followed sound farming practices and delivered their paddy to SEMRY. The decree also provided that SEMRY would operate and maintain all irrigation works and roads, carry out mechanical land prepara- tion for farmers, supply them with inputs, buy their paddy against cash and process it in its mill. SEMRY's share capital of CFAF 245 million, cor- responding to the assessed value of land and installations, was held by the Government, but it was foreseen to transfer shares to farmers (1 share per 0.5 ha of cultivated land) who had met their obligations for five consecutive years. 1/ Under the project, share capital was raised to CFAF 645 million 1/ Not to be applied retroactively.  -A 3- (the amendment of SEMRY's statuts to this effect was a condition of credit effectiveness), and a further increase was decided in 1976 under the extension program IDA's co-lenders agreed to finance. 3.5 As long as the number of shares held by farmers is less than 5% of the total number constituting the initial authorized capital, their represen- tatives on SEMRY's Board of Directors are appointed by the Government on the recommendation of a mixed committee. When the number of shares is 5% or more, the representatives will be chosen by the farmers holding shares. Other means of communication between SEMRY management and farmers are the farmers' meet- ings, convened as often as necessary to acquaint them with all questions re- lating to their holdings and to receive their suggestions, and the day-to-day contacts with the extension agents. IV. PROJECT DESIGN AND PHYSICAL IMPLEMENTATION 1. Project Design 4.1 As appraised in 1971, the project was to provide a controlled water supply for the irrigation of about 4,300 ha of rice land on the left bank of the Logone river in northern Cameroon. Project works consisted of: - reinforcement of the 49 km long Logone dike and improvement of a parallel road; - construction of the Guerleo intake control structure to reduce the amount of Logone flood water entering the Guerleo channel which could then be used as the gravity outlet for the project's main drain; - construction of a 32 km long open channel main drain; - construction of four pumping stations, each equipped with 4-5 diesel-driven pumps; - rehabilitation of existing irrigation and drainage networks to serve about 1,300 ha; - construction of new irrigation and drainage networks to serve about 3,000 ha; - on-farm development works on about 3,000 ha carried out on force account by SEIRY with equipment provided under the project;  - A 4 - construction of a 4 t/h rice mill, to complement the existing mill, and of storage buildings for 6,900 tons; and construction of staff housing and utility buildings. The project also included the purchase of farm equipment and vehicles, the expansion of management and extension services, and the employment of a consulting firm to assist in the design, construction and supervision of works. 4.2 Detailed designs had been prepared for the dike, road, Guerleo structure, main drain and pumping stations. For the irrigation and drainage networks only preliminary designs had been completed, but they were considered adequate for appraisal; final designs were to be prepared by the consultants. 4.3 The main civil works were to be started in the 1972/73 dry season and completed in the 1973/74 dry season. On-farm works were to be carried out over three dry seasons, and the rice mill and storage buildings were to be constructed at the same time as the main civil works, so that all construction would be completed by June 1975. To ensure that this schedule would be kept, the consultants were to be engaged from February 1972 onward (their employ- ment was a condition of credit effectiveness). 2. Physical Implementation 4.4 The project was implemented with few delays and no major problems have arisen. The quality of works and equipment is generally satisfactory. A number of points are worth mentioning, however. 4.5 Main Civil Works: After short initial delays due to the late employment of the engineering consultants, the main civil works contract 1/ was awarded to the Italian firm COGECAM in December 1972. The contractor started work in February 1973 and, continuing through the rainy season, finished in April 1974, six weeks ahead of schedule. After some defective portions of the Logone dike had been repaired, the work was formally accepted in July 1975. Within the original fixed price contract of CFAF 870 mil- lion it has been possible to construct not only the main networks serving 4,500 ha (compared with 4,300 ha estimated at appraisal), but also part of the networks serving an additional polder of 800 ha (Gabareye polder, No. 8). Remaining works have been completed by SEMRY, increasing the net irrigable area of the project to 5,300 ha. 1/ Dike and road; Guerleo structure; main drain; four pumping stations; primary and secondary irrigation and drainage networks.  - A 5 - 4.6 On-Farm Development Works: On-farm works on 3,000 ha were to be carried out by SEHRY on force account with equipment provided under the project as well as some existing equipment. In April 1973, the Government proposed -- and IDA approved -- to cover the entire project area instead. By June 1975, a total of 3,614 ha had been completed, of which 485 ha in 1972/73 (against 400 ha estimated at appraisal), 1,402 ha in 1973/74 (1,100 ha) and 1,727 ha in 1974/75 (1,500 ha). Actual achievements were thus consistently higher than appraisal estimates. At the end of April 1976, the project was completed with a total of 4,527 ha fully developed. On-farm works on Polder 8 are expected to be finished under the extension program by mid-1977 raising the acreage to about 5,300 ha. 4.7 Pumps: Instead of the diesel pumps originally planned electric pumps have been purchased, since the national power company offered to build a transmission line (35 km) to SEMRY's four pumping stations -- a possibility not foreseen at appraisal. CCCE extended a loan to the power company to finance the necessary investments (including the expansion of the Yagoua power station). SEMRY was expected to share in the cost through the price it paid for electricity. The precise terms are not known as the copies requested by the co-lenders of the agreement between the power company and SEMRY were not provided. The purchase of electric pumps brought benefits in the form of greater simplicity of installation and reduced operating and maintenance costs. From July 1973, station No. 3 was supplied from a mobile unit, and by July 1974 all four stations were equipped with pumps (18) and connected with the Yagoua power house. 4.8 Rice Mill and Storage: Following ICB, the contract for the milling machinery was signed with SCHULE of Hamburg, Germany in April 1974. It speci- fied March 1, 1975, as the mill's start-up date. Due to delays in delivery and the need to replace items damaged during shipment, the mill became opera- tional only on July 30, 1975. After a test run involving 1,000 tons of paddy during August 1975, it stood idle until the end of the rainy season. When it was started again, a number of breakdowns occurred. By mid-November 1975 these problems were solved and the mill was formally accepted in November 1976. Less than 3,000 tons of storage capacity were built by November 1975, against 6,900 tons estimated at appraisal. But this shortfall was made up in 1976 under the extension program. 4.9 Equipment and Buildings: SEMRY's insistence on standardization and interchangeability of equipment for on-farm development and regular farm work has proven effective in holding down project costs. Office buildings and staff houses were also constructed at considerable savings by local artisans under SEMRY supervision. Because of the urgency to complete construction and lower costs than could be obtained from contractors in the area, IDA approved this procedure and did not insist on competitive bidding (letter of January 4, 1973). In May 1974, SEMRY requested IDA approval to purchase workshop equipment and buildings directly from COGEGAM. Since the price (CFAF 19 million) was favorable considering the condition of the items, IDA approved the purchase.  Table 1 CAMEROON SEMRY RICE PROJECT CONSTRUCTION SCHEDULE WORKITEM197 1 97 3 WORK ITEM- 19 7 4 1 975 J F M AM J J A S O N D J F M A M J J A S O N D J F M AM J J A S ON D J F M A M J J A S O N D RAIN - RAIN RAIN RAIN1 A. DIKE AND ROAD- n m B. GUERLEO FLOOD - STRUCTURE C. MAIN DRAIN un.m D. PUMPING STATIONS NO. I to 4 A b 4 2 3 E. REHABILITATION NETWORKS 1,30 ha 1 030 ho 270 ha F. NEW NETWORKS 3, ODD ha 400ha 2,600ho G. ON -FARM WORKS 3,000ha i1 0 a1 C)k CLEARING - PLANING TERTIARIES 4 haI obho- 1,500 hP H. RICE-MILL AND STORAGE mum..... Ex P. Actual - Main civil works contract (COGECAM) Actual - On-farm works (G type), 4527 ha - Actual - Rice mill (Februiary through May 1975) and storage (2,600 tons) Source: IHIRL-5651(2R) HF14RY  - A 7 - V. AGRICULTURAL DEVELOPMENT 1. Appraisal Estimates 5.1 Broadcasting was assumed throughout. The actual wet season paddy yield was put at 1.2 t/ha. On rehabilitated lands (1,300 ha from project year 3 onward), this yield was expected to rise to 3 t/ha over six years due to better land preparation, line sowing (which allows proper weeding), fer- tilizer application (80 kg N per ha) and threshing by portable machines in- stead of by hand. On newly developed lands (3,000 ha from project year 4 onward), where better land leveling would be achieved, the same yield was to be reached over five years. 5.2 A second, dry season crop was to be introduced in project year 3. The dry season area was expected to expand to 1,500 ha by project year 7, with paddy yields rising from 2.2 t/ha to 3 t/ha in the same time. These "conservative assumptions" (PA-103, Annex 15) were made because double cropping was new to the area and it appeared uncertain whether the higher yield of over 4 t/ha achieved by farmers on 20 ha of 0.5 ha plots 1/ could be duplicated on the much larger project area. 5.3 In the case "without the project", farmed area (wet season only) was assumed to remain at 1,300 ha and yields were expected to rise marginally from 1.2 t/ha to 1.3 t/ha over ten years. 5.4 Based on these assumptions, paddy production was estimated to reach 17,400 tons at full development (project year 10), of which 12,900 tons would be wet season and 4,500 tons dry season paddy. The incremental annual produc- tion due to the project was estimated at 15,700 tons. 2. Actual Development and Revised Estimates 5.5 Actual paddy production has substantially exceeded app'raisal esti- mates (see Table 2 below), and production at full development (project year 9, 1980/81) is now expected to reach 35,000 tons with the extension under way (32,000 tons for the original project of 4,500 ha), twice the amount foreseen at appraisal. The chief reasons for this performance are: (1) the extension of on-farm works to the entire project area not planned at appraisal; (2) the higher yields made possible by the general acceptance of transplanting instead of broadcasting, and the strict discipline that goes with it; and (3) the earlier introduction and faster expansion of double cropping. The results achieved so far, the larger area that will be available, and the continuing strong interest of the population in the area have led to the revised esti- mates at full development. 1/ Yields exceeding 3 t/ha were achieved over three years in a 200 ha pilot scheme managed by the Chinese at Bongor, on the Chad side of the Logone.  -A 8 - Table 2 SEMIRY Rice Project Agricultural Development ('4) (5) (9) (lo) 1975/76 1976/77 1980/8' 1981/82 Appraisal Estimates Cultiveted Area (ha) - Rainy Season '4,300 '4,300 '4,300 4,300 - Dry Season 450 750 1,500 1,500 Production (t) - Rainy Season 8,762 lC),L)19 12,900 12,900 - Dry Season 1,035 1,830 4,420 4,500 - Total 9,797 1?,279 17,320 17,400 Yield (t/ha) 1/ - Rainy Season 2.0 2.4 3.0 3.0 - Dry Season 2.3 2.J1 2.9 3.0 Actual Development and Revised Estimates Cultivated Area (ha) - WJith F?older 8 - Rainy Season 3,169 3,853 '4,795 4,795 - Dry Season 1,073 1,350 2/ 3,000 3,000 - Without Polder 8 - Rainy Season 3,169 3,853 4,075 4,075 - Dry Season 1,073 1,350 2/ 3,000 3,000 Production (t) - With Polder 8 - Rainy Season 15,206 17,770 21,575 21,575 - Dry Season 5,252 6,075 13,500 13,500 - Without Folder 8 - Rainy Season 15,206 17,770 18,335 18,335 - Dry Season 5,252 6,075 13,500 13,500 Yield (t/ha) I/ - Rainy Season '.8 4.6 4.5 4.5 - Dry Season 4.9 h.5 2/ 4.5 4.5 1/ Rounded. 2/ Ftimate. Note: Actual production figures are the sum of marketed production plus esti- r.m,ed home cnnsiimption (-ormally l0f,t ef marketed oroduction).  - A 9 - 5.6 On-Farm Works: At appraisal, on-farm works, including land level- ing, tertiary irrigation and drainage canals, field dikes and small struc- tures, were foreseen on 3,000 ha. For the balance of 1,300 ha only minor rehabilitation works were plannned. In 1973, the Government proposed (letter of April 16, 1973) to extend on-farm works to the entire project area, with additional costs to be met out of its own resources. Since this would permit the use of high-yielding varieties throughout the project area, IDA agreed to the proposal (letter of June 19, 1973) and the Credit Agreement was amended accordingly. As a result, SEMRY now has 4,527 ha of fully developed polders (since net irrigable area turned out to be somewhat larger than expected), and the development of another 800 ha to the same standards is to be completed under the extension program by mid-1977. 5.7 Transplanting: In the early phase of the project, the possibility of increasing yield by transplanting was repeatedly discussed with supervision missions, but it appeared impossible to obtain quickly general acceptance of this technique which involves additional hard work. Besides, a practical way of seedbed preparation was not yet fully established. 5.8 In 1973, when the first polder (No. 5, 485 ha) was put into cultiva- tion, broadcasting was the rule. For the 1973/74 dry season crop, 470 ha had been sown this way, and only 10 ha had been prepared for transplanting by SEMRY for demonstration purposes. Exceptionally low January temperatures put the crop into jeopardy. But SEMRY management succeeded in convincing farmers that they could still get a good crop: it immediately prepared 16 ha of seed- beds and received farmers' assurances that they would transplant. The action was a success: In June 1974, farmers who had transplanted harvested nearly 3 t/ha, while those who had not harvested practically nothing, competing with the birds for the little paddy that had matured. The contrast was so strik- ing that SENRY organized a series of visits for farmers who were expected to cultivate the polders next to be developed, providing transportation for those living too far away to walk. As a result, broadcasting was abandoned in the project area. 5.9 Double Cropping: Because of drought, the traditional wet season campaign was an almost complete failure in 1972, with an average paddy yield of 0.4 t/ha. Therefore, farmers went eagerly for dry season cultivation under the project. With provisional pumps installed by SEMRY by December 1972, some 150 ha were cultivated by 288 farmers, and yield prospects were excellent, leading the March 1973 supervision mission to predict a much faster development of double cropping than estimated at appraisal. In fact, dry season area was 1,073 ha in 1975/76 (appraisal estimate: 450 ha) yielding an average 4.9 t/ha and is expected to reach 1,350 ha in 1976/77 (appraisal estimate: 750 ha). 5.10 Farmers' Attitude: During the start-up phase of the project, it was feared that the new polders could not be cultivated as quickly as they were developed. Since proof had been shown that transplanting guaranteed consistently high yields, however, demand for plots increased strongly. In  - AlO - June 1976, it exceeded land availability by 30%. For polder No. 8 that is now being developed 2,700 applicants have been registered, while there is land for only 1,450 (at the rate of 0.5 ha per applicant). This situation allows management to be selective in accepting new applicants and to expel participating farmers who do not live up to expectations. 5.11 Revised Estimates: From mid-1977 onward, SEMRY will dispose of a net irrigable area of about 5,300 ha. Cultivated area in the rainy season is expected to be 90% of irrigable area, allowing for seedbeds and incomplete transplanting. This implies a slight improvement over the last two seasons when the ratio of cultivated to irrigable area was 88% and 85%. Dry season cropping is limited by water availability which is governed by t e Logone Water Agreement between Cameroon and Chad (maximum offtake: 5 m Is). A maximum of 3,000 ha will be cultivated at full development, twice the area projected at appraisal. 5.12 Based on the last four seasons (dry season 1974/75 to rainy season 1976), during which paddy yields averaged 4.7 t/ha, the revised projections assume an average yield of 4.5 t/ha -- 50% more than estimated at appraisal. Unless the quality of SEMRY's management and farmers' discipline in follow- ing the cultivation calendar decline substantially from present standards, this assumption does not appear unreasonably high. On the other hand, yields assumed at appraisal for the "without the project" case now seem to be optimistic. Over 23 seasons, traditional paddy cultivation in the project area yielded 980 kg/ha on average, with a peak of 1,460 kg/ha achieved in 1957 under exceptionally favorable rain and flood conditions, and a low of 390 kg/ha resulting from the drought in 1972. There is no discernable upward trend. Therefore, paddy yield "without the project" has been revised down- ward from 1.3 t/ha to 1.0 t/ha. On this basis, the incremental paddy produc- tion resulting from the project would be 30,000 tons at full development. Details are given in Annex 3. VI. PROJECT COST AND FINANCING 1. Original Cost Estimates and Financing Plan 6.1 At appraisal, project cost (including contingencies) was estimated at CFAF 2,056 million, equivalent to US$7.4 million at the prevailing rate of CFAF 278 per US$. Financing was to be provided by IDA (47.3% of project cost), FAC (18%), CCCE (14.7%) and the Government (20%). The proposed IDA credit of US$3.5 million was to cover the estimated foreign exchange cost of civil works, on-farm development works, the rice mill and equipment as well as some local cost of civil works and on-farm works (US$0.5 million). French aid was to cover technical assistance, consultants' and local staff costs, and the Government's contribution all remaining cost.  - All - 6.2 The IDA credit to the Government, on standard terms, was to be passed on to SEMRY partly as a grant (US$0.5 million) and partly as a loan at 3.5% interest repayable over 35 years, including a grace period of five years. The conclusion of the loan agreement between the Govern- ment and SEMRY was a condition of credit effectiveness. The FAC grant to the Government (CFAF 370 million) was to be passed on to SEMRY as a grant. The proceeds of the CCCE loan to the Government (CFAF 303 million at 3.5% interest repayable over 15 years, including a grace period of five years) were to be made available to SEMRY partly as a grant (CFAF 103 million) and partly as a Government participation in equity. About half the Govern- ment's contribution was also to be a participation in equity, the other half a loan, through the Banque Camerounaise de Developpement (BCD), on the same terms as the portion of the IDA credit on-lent as a loan. 6.3 Exchange rate adjustments between appraisal and Board presentation reduced the CFAF value of the proposed IDA credit from 973 million to 896 mil- lion, and the Government asked IDA to increase the credit to US$3.8 million to maintain its original share in project cost, as the other co-lenders. IDA informed the Government that it could only provide an additional US$200,000 and a US$3.7 million credit (equivalent to CFAF 947 million) was approved by the Board of Directors and signed on April 26, 1972. Thus, the SEMRY Rice Project started its life with an unfunded amount of CFAF 26 million, pending revision of the original cost estimates. Details are given in Table 4 below. 2. Subsequent Changes 6.4 In March 1973, shortly after the main civil works contract had been awarded, the first project cost revision produced a total of CFAF 2,264 mil- lion. This led the Government, which had already provided CFAF 15 million in drought relief, to increase its contribution by another CFAF 170 million, of which CFAF 110 million as a grant and CFAF 60 million as a loan through BCD. Following the decision to extend on-farm works to the entire project area, consultants' cost was reestimated late in 1973, and FAC raised its grant by CFAF 85 million to cover the expected increase. In 1974, the Government pro- vided another grant of CFAF 61 million to finance SEMRY's operating deficits. 6.5 Although the Government repeatedly asked IDA for supplementary financing because exchange rate changes continued to erode the CFAF value of its credit, IDA did not provide any more funds, since (1) the amounts involved did not appear to be an excessive burden on the Government or exceedingly difficult to raise from local banks or external sources; (2) further Bank Group assistance was envisaged for a second phase SEMRY project; and (3) more substantial cost overruns were experienced by other Bank/IDA projects in Cameroon, and efforts had to be concentrated there. 1/ At the 1975 Annual Meeting, the Cameroonian representative agreed that his Government would no longer seek additional IDA financing for the SEMRY Rice Project. 1/ Office memorandum of August 25, 1975.  - A12 - Table 3 SEMRY Rice Project Estimated and Actual Cost (Original Project, Excluding Extension) In CFAF Million Appraisal Revised Actual Estimate 1/ Estimate 2/ Cost 3/ Construction 951 1,133 1,289 Of which: Main civil works 722 870 870 On-farm development works 97 172 331 Equipment 432 376 373 Of which: On-farm development 159 .. 110 Farm machinery 119 .. 69 Personnel 673 61i 612 Of which: Technical assistance staff 130 ) 340 181 Consultants 240 328 Local staff 303 271 103 Contingencies 144 Total Project 2,056 2,264 2,274 Exchange Rate 256 230 245 US$ Equivalent 8.o 9.8 9.3 Cost per Hectare (US$) 1,870 4/ 2,290 2,050 5/ Cost per Family (US$) 2,870 -/ 3,510 3,230 7/ 1/ PA-1nl3, December 29, 1971, Annex 7. 2/ March 1973. 3/ February' 1977. 1W Li,300 ha. g/ 4,527 ha. c/ 2,800 families. 7/ 2,870 families.  - A13 - 6.6 At CFAF 2,274 million, actual project cost 1/ is only about 10% higher than estimated at appraisal -- 16% in current dollar terms. This small cost overrun is mainly due to three factors: (1) the main civil works contract was completed at a cost (CFAF 870 million) that was low by 1972 standards -- the four other bids received amounted to CFAF 920, 1,450, 1,550 and 1,650 million -- and could only be obtained then because COGECAM had just finished work on the new Yaounde-Ngaoundere railroad and wanted to keep its personnel and equipment in Cameroon; (2) some of the 36% increase in con- struction cost, part of which resulted from the upgrading and expansion of the project, was compensated by savings on equipment and personnel; and (3) a large portion of cost was incurred early in the life of the project when the impact of world inflation and rising oil prices was not yet fully felt. Original and actual cost figures are compared in Table 3 above; more detail is given in Annex 4. 6.7 As Table 3 shows, cost per hectare is now US$2,050 against US$1,870 estimated at appraisal, and cost per family is US$3,230 against an appraisal estimate of US$2,870. Including the estimated cost of the extension program (except items not directly related to SEMRY), cost per hectare would rise to US$2,240 and cost per family to US$3,550. 6.8 As a result of the changes in project cost and financing, IDA's con- tribution decreased from 46% at credit signing to less than 38% today. The credit of US$3.7 million, which was fully disbursed by June 24, 1976, repre- sents the equivalent of CFAF 857 million (average exchange rate: CFAF 232 per US$) against CFAF 947 million expected in early 1972. A comparison of esti- mated and actual credit use by category and of expected and actual disburse- ments is at Annex 5. As Annex Table 2 and Graph 1 show, actual disbursements followed appraisal estimates quite closely. 6.9 The on-lending terms foreseen at appraisal have remained unchanged with one exception: The grace period regarding repayment of the IDA and BCD funds loaned to SEMRY has been applied to interest payments as well. Thus, the first payments will be due in the second semester of 1977. 1/ Original project, excluding extension.  - A14 - Table 4 SFI4RY Rice Project Finnrcing (Original Project, Excluding Extension) In CFAF Million Passed on to SEMRY as Scurce of Funds Grant Loan Equity Total % Original Plan _/ ITA (credit) 152 821 _ 973 2/ 47.3 FAC (grant) 370 - - 370 18.0 CCCE (loan) 103 - 200 303 1L4.7 Government - 210 200 1410 20.0 - ?cD ( - ! (210) ( 20) (230) (11.2) - Other ( _ ) ( _ ) (180a) (V30) ( 8.3) Total 625 1,031 boo 2,056 100.0 11< 30.4 50.1 19.5 100.0 Revised Plan 3/ IDA iho 807 - 947 4/ h6.o FAC CCCE ) 5/ 473 210 o0o 1,033 52.7 (overnment Unfunded 12 ilb - 26 1.3 Total 625 1,031 L00 2,o56 100.0 Actual Plan IDA 135 722 - 857 37.7 FAC 455 - - 455 20.0 CCCE 103 - 200 303 13.3 rC.-Dernment 189 270 200 65' 29.0 - ROCD (_ ) (270) ( 20) (290) (12.8) - Other (1,89) (_-_ (180) (369) (16.2) Total 582 992 400 2,27b 100.0 38.8 143.6 17.6 100.0 1/ December 1971. 7/ U.3$3.5 million at CFAF 278 per US.' / Janiary 1972. T,,/ iT5,j3.7 mil I ion at CT,AF 256 per US$. 71 Unchanged from oricjIn2l plan.  1~---.>- 1 !!!ri______;, ,_ I,_- ,--,- Ii---!- ' - H--i -- ' I ~-~ - -- t-i- 1----t----- I~- -- ---- w--- I ~ ~ ----- ~ ~ ~~~~~~~~~~~~~~~~~~~~~I J _-r-- -~ ~ . -~ -;-- --- --- -! .---. -. .01 / _ , _ _ l *_L_ . I_ , _. .. .- .. _ -tt , - -~~- - r- -f- - - FF~~~~~~~~~ ~ ~~~~~~~~~~~~~~~~~~~ - Z. -7B~ a Lt. . -t~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t 3- 0~~~~~~~~t IL t+I I +-E>H 4 ~-1/SlQ iJ~j , ... . . _ _, _ - . i't_, - -4¾-'-4. 7'i iV-'r- -L- 1 -1 ,~ ii ' i- -1, _ K +__,,,_,__, -1'- * H-t '_. L I,' - :'-- ------------ < **|.J. .. -F __ _f_ t:t t_q_ 51_ sX~~~~~~~~~~3uai1sJnq.s[ ty. ten?V p?UB (O s) X@ UO1 lltW $CEf  - A16 - VII. ECONOMIC AND FINANCIAL ASPECTS 1. Market Prospects and Prices 7.1 At appraisal, most rice demand was estimated to come from urban areas. With an urban population growth rate of around 7% and the expected increase in per capita incomes, rice consumption was projected to reach 38,000 tons by 1980 -- 21,000 tons above the actual level at the time. SEIRY's estimated production covered only about 25% of this total and was therefore assumed to find a ready market, especially since there were no major rice projects planned elsewhere in Cameroon in the near future. In addition to the domestic market, export possibilities were seen in neigh- boring countries where demand was also rising while production was not ex- pected to rise correspondingly. It was therefore assumed that at full de- velopment 20% of SEMRY's production would be exported and 80% consumed domestically, the bulk of which in the southern towns. SEMRY's ex-mill prices were substantially above world market levels, but duties and taxes on imports enabled S1IRY to compete with imported rice on the Yaounde mar- ket. Using expected world market prices and eliminating duties and taxes, SEMRY's economic ex-mill prices for standard and broken rice were projected to be CFAF 37,200 and CFAF 35,800 per ton by 1980. 7.2 Information available now leaves the demand forecast made at appraisal essentially intact. Until 1970, rice consumption was about 19,000 tons or 3 kg per head per year, one of the lowest consumption levels in West Africa. Nevertheless, imports of 9-10,000 tons per year were required because of stagnating domestic production. Stimulated by exceptionally low import prices in the early 1970's consumption doubled, but declined again as prices rose to record levels in 1974 and 1975. In 1976, rice consumption was 31,400 tons or about 5 kg per capita. About 70% of this total was consumed in towns, mainly in the south, where per capita consumption averaged about 10 kg, where- as in rural areas it was only about 2 kg. Based on past development and ex- pected population 1/ and income 2/ growth, rice consumption would be close to 70,000 tons in 1985 (44,000 tons in 1980). Per capita consumption would reach 13 kg in urban and 3 kg in rural areas (see Tables 5 and 6 below). SEMRY's marketed rice production of about 21,000 tons would cover about 30% of total demand. 7.3 Except in 1976, when low-priced rice imports forced SEMRY to suspend milling and sales for several months, SEMRY rice experienced no marketing problems despite the great distance (1,500 km) from Yagoua to the main consum- ing centers and the resulting high shipping costs (30% of ex-mill price). As in the past, the system of variable import taxes and trade margins could have been used to maintain SEMRY's competitiveness. But the problem should not re- turn, since the Government later in 1976 introduced the system of "jumelage" 1/ 2.6% total, 7.5% urban growth rate, based on Mr. Champaud's 1975 report. 2/ 3% per capita in real terms; assumed income elasticity of rice demand = 1.  Table 5 SEMRY Rice Project Cameroon Rice Market, 1968-1976 Retail Price Yaounde as Domestic Per Capita Import Price Retail Price % of Other 4/ Year Production 1/ Imports 2/ Consumption 3/ Population Consumption C.T.F. Yaounde Food Prices (t) (t) (t) (thd.) (kg) (CFA/kg) (CFA/kg) 1968 10(11o 8,970 19,110 5,620 3.4 43.8 79 2114 1969 9,480 10,230 19,710 5,727 3.4 40.9 79 208 1970 10,680 7,760 18,440 5,836 3.2 50.0 19 203 1971 8,220 31,880 40,100 5,960 6.7 27.3 58 129 1972 9,180 28,010 37,190 6,o87 6.1 26.3 65 118 1973 7,500 23,720 31,220 6,216 5.0 53.2 92 1614 1971t 9,700 17,300 21,-000 5/ 6,348 3.3 123 142 245 1975 12,100 1,700 20,100 5/ 6,483 3.1 115 143 183 1976 18,800 12,600 31,1400 6,632 4.7 73 125 1/ Rice equivalent of paddy production at .60. 2/ Net imnorts from official trade statistics through 1973. 3/ No stock data are available. 14/ Cereals and cereal-based products, roots and tubers. 5/ 6,000 t imported at CFAF 120,000 per ton in August-October 1974 were not sold and consumed until early 1975.  Table 6 SEMHY Rice Project Cameroon - Rice Consumption Estimates Population 1/ Consumption 2/ Per Capita Consumption 3/ Year Urban Rural Total Urban Rural Total Urban Rural Total 1971 1,546 4,414 5,960 31,715 8,385 40,100 20.5 1.9 6.7 1975 2,071 L,412 6,483 11,280 8,820 20,100 5.4 2.0 3.1 1976 2,229 4,403 6,632 22,590 8,810 31,400 10.1 2.0 4.7 Average 1971-76 1,871 4,417 6,288 21,630 8,540 30,170 11.6 1.9 4.8 1980 I 2,993 4,367 7,360 35,920 8,730 )4,650 12.0 2.0 6.1 IT 34,120 10,040 44,160 11.4 4/ 2.3 6/ 6.0 1985 I 4,327 4,o85 8,412 51,930 8,170 60,100 12.0 2.0 7.1 II 57,120 10,620 67,740 13.2 4/ 2.6 8.1 Iii 6)4,900 12,250 77,150 15.0 5/ 3.0 i/ 9.2 1/ In thousand. 2/ In tons. 3/ in kg. 1/ Assuming 3%S real income growth per year from 1976 onward and an income elasticity of demand for rice equal to 1. 5/ Figures reported by 1977 SEM'RY supervision/preappraisal mission (compte rendu, p. 10); the implied rate of real income growth is 4.5%' per year.  - A19 - under which traders can only obtain import licences if they agree to buy certain amounts of SEMRY rice. A number of other rice projects are now in various stages of preparation. Most of them are situated nearer the main consuming centers than SEMRY. Even if they develop more slowly than planned, SEMRY will face growing competition from domestic producers in the future. But SEIRY is well located to sell rice to northern Nigeria or Chad and should be able to expand these markets as its domestic sales decline. Unofficial exports (mainly to Nigeria) have in fact grown recently and were estimated at 7-9,000 tons in 1976. Moreover, the Government has decided to adopt a policy favoring exports of rice. For these reasons, it has been assumed that all rice produced by SEMRY will find a market either in Cameroon or neighbor- ing countries. In the recalculation of SEMRY's economic ex-mill price, the same market shares have been used as at appraisal; an increase in the export share would raise the ex-mill price. Based on present forecasts of world market prices for rice, SEMRY's weighted ex-mill price for 1980 and later years would thus be nearly CFAF 94,000 per ton (see Annex 8, Table 2), about 2-1/2 times the price expected at appraisal. 2. Farmers' Benefits 7.4 Except for a home consumption quota of about 10%, farmers are required to sell all their paddy to SEMRY. Because of local Government support, enforcement of this rule is generally quite good. Deductions are made from the paddy price for the cost of inputs and services provided by SEMRY. The resulting net price received by farmers was CFAF 11.3 per kg at the time of appraisal. A small reduction in this price was expected to enable SEHRY to recover all field operating costs, including operation and maintenance of the irrigation network, as well as the cost of handling, milling and overheads, with no change in the ex-mill price of rice -- then CFAF 44,600 per ton. 1/ This measure was also expected to provide a suffi- cient margin for amortization and debt service. There was no danger that it would reduce the incentive to grow paddy, since farmers' net incomes would substantially increase with the expected increases in cultivated area and yield. 7.5 In fact, average net prices paid to farmers were CFAF 17.0 (rainy season) and CFAF 15.9 (dry season) per kilogram of paddy in 1975/76 despite the cost inflation in recent years. This was possible because the Government, following the steep rise in international prices, raised producer prices from CFAF 16/kg at appraisal to CFAF 30/kg in 1976 and part of the cost of services provided by SEMRY was not charged directly to farmers but covered by SEMRY's operating budget. This in turn was possible because the Government also authorized substantial increases in the ex-mill price of rice -- to CFAF 79,000 per ton 1/ by 1975/76. 1/ Weighted average of all qualities sold.  - A20 - 7.6 With a larger cultivated area (because of a higher share of double cropping) and higher yields (because of on-farm works and transplanting) and paddy prices than expected at appraisal, average farm family income is now estimated to reach CFAF 218,000 (US$890 at CFAF 245 per US$) at full develop- ment, almost three times the appraisal estimate and almost six times the in- come that could be expected without the project. The projection assumes that, as in the past, a portion of the cost of services SEMRY provides (largely extension) will not be charged to farmers. This seems justified by the size- able income differences between the north and the rest of Cameroon: per capita income at full development would reach only about 50% of the national average now. The projection also assumes that maintaining the high average paddy yields achieved over the past few seasons will pose no problems. The project will also substantially increase the security of farm income. With- out the project, total farm income in a bad harvest year may fall over 80% from the average, and rise 50% in an exceptional year. With the project, the variation is reduced to about 20% in either direction (see Annex 6, Table 1). A summary comparison between appraisal and revised estimates is given below (Table 7). 3. SEMRY's Financial Situation 7.7 Annex 7 presents actual financial data through December 31, 1976, and revised estimates through 1981/82 (project year 10); a summary is given in Tables 8 and 9 below. Actual operating results compare favorably with appraisal estimates: Because of the rice price increases authorized by the Government and considerable improvement in the collection rate of farmers' charges -- from just over 50% in 1973/74 to over 96% in the 1974/75 dry sea- son and both seasons (average) 1975/76 -- proceeds from rice sales were higher and the cumulative deficit of the operating account was substantially lower than estimated at appraisal, and no operating subsidies have been required since 1974/75. The cash surplus generated by SEMRY did not develop as favor- ably, chiefly because of the involuntary stock build-up in 1975/76 due to the cheap rice imports mentioned above (para. 7.3). Tentative estimates for the coming years, based on present price levels and farmers' charges, show that SEMRY should be able to produce an operating surplus from 1976/77 onward that is large enough to cover its debt service obligations -- CFAF 1.13 bil- lion, including the extension program, at 3.5% interest -- and provide a sufficient margin for the replacement of equipment. 4. Rate of Return 7.7 At appraisal, incremental paddy production from the project was estimated at 15,700 tons, equivalent to 10,500 tons of rice. Cameroon was expected to remain a net rice importer. The incremental rice production was valued at an economic ex-mill price of CFAF 37,600 per ton, reflecting the assumption that 20% would be exported, 20% consumed in northern Cameroon, and 60% in southern towns. Hired labor was valued at the actual wage rate and family labor at zero. Project cost was adjusted to allow for the fact that one component served an area about three times the project area. On this basis, the rate of return was 11%, and the sensitivity analysis showed it to vary between 9% and 13.6%.  Table 7 SEMRY Rice Project Average Farm Family Budgets (At fiw]] development.) Appraisal Estimates 1/ Revised Estimates 2/ Without Project With Project Without Project Wrlith Project Pd(idy Area, ha 0.8 2.07 3/ 0.8 2.6 )4/ Paddy Yield, t/ha 1.3 3.0 1.0 4.5 Daddy Production, t 1.04 6.21 0.8 11.7 Paddy Production Cost, CFAF/ha 8,000 30,550 12,500 60,000 Paddy Price, CFAF/kg 17.6 5/ 20 30 30 PEet Tncome from Paddy, CFAF 11,900 60,960 1L,000 195,000 Net Tncome from Other Crops 6/, CFAF 17,070 17,070 24,200 22,750 7/ Total Net Income, CFAF 28,970 78,030 38,200 217,750 (Minimum) ( 5,300) (180,675) (Maximum) (58,900) (259,125) 1/ PA-103, December 29, 1971, page 17 and Annex 18. 2/ January/February 1977 project supervision (PCR) mission. 3/ i.5 ha, of which 0.53 ha double cropped. T/ 1.6 ha, of which 1.0 ha double cropped. 4/ Official price of CFAF 16 plus premiums. 4/ Mostly sorghum (rainy season) and mouskouari (dry season). 7/ Reduction mainly due to need for paid help.  Table 8 SEIvRY Rice Project Financial Data (CFAF million) 1972/73 1973/7h 1974/75 1975/76 1976/77 Proceeds from rice sales - Appraisal eFtimates 171 254 376 ML8 510 - Actuals 1 134 389 584 1,180 1/ Net surplus (deficit) of operating account - Appraisal estimates (!46) ( 84) (97) ( 75) (29) - Actu2als (126) ( 8) 11 ( 22) 150 1/ Cumulative surplus (deficit) of operating account - Appraisal estimates ( L6) (130) (227) (302) (331) - Actiials (126) (134) (123) (1h5) 5 1/ Rice stocks -Appraisal estimates 9 L 6 L 3 - Actuals 1 12 21 223 Annual cash surplus (deficit) - Appraisal estimates 33 37 61 90 110 - Actuals 53 407 33 (MOl) Cumulative cash surplus (deficit) - Appraisal estimates 33 70 131 221 :131 - Actuals 53 460 L93 92 1/ Forecast based on actual information through December 31, 1976.  Table 9 SENRY Rice Project Estimated Cash Position 181/82 1976/77 1977/78 1978/79 1979/80 1980/81 and later Paddy purchased (t) 1/ 22,300 28,950 29,900 31,300 31,885 31,885 Rice equivalent at .T7 (t) 1L,9 4 0 19,395 20,030 20,970 21,360 21,360 Paddy price (CFAF'/kg) 30 30 30 30 30 30 RIice price (CFAF/kg) 2/ 79 79 79 79 79 79 Cost of paddy purchased (CFAF mln.) 669 868 897 939 957 957 Staff and operating expenditures - Salaries (CFAF mln.) 222 217 225 230 233 233 - Supplies and services (CFAF mln.) L59 557 580 609 623 623 Total expenditures (CFAF mln.) 1,350 1,642 1,702 1,778 1,813 1,813 Proceeds from rice sales (CFAF mln.) 1 150 1,532 1,582 1,657 1,687 1,687 Other sales proceeds (CFAF'mln.) 13 15 17 17 17 17 Levies paid by farmers (CFAF mln.) 307 389 41 6 4L2 460 46o Total receipts (CFAF mln.) 1,500 1,936 2,015 2,116 2,164 2,164 Operating surplus (CFAF mln.) 150 294 313 338 351 351 Debt service payments (CFAF mln.) -- 27 49 54- 55 57 / Replacement of equipment (CFAF mln.) 149 124 120 120 120 120 Annual cash balance (CFAF mln.) 1 1L3 1lt 16L4 176 17Lt 4/ 1/ Including production from Polder 8. 2/ Ex-mill, weighted average of all qualities sold. R/ CFAF 115 million in 1982/83. 5/ CFIF 116 million in 1982/83.  - A24 - 7.8 Incremental production is now estimated at 29,800 tons of paddy or about 20,000 tons of rice. Cameroon would still remain a net rice importer. Using the same market shares as at appraisal, the weighted economic ex-mill price now is CFAF 93,700 per ton. Labor has been valued as at appraisal, assuming that incremental requirements can still be satisfied by formerly underemployed family members. Project cost, at 1977 prices, includes the extension program, except for two pilot schemes and a study not directly related to SEMRY. On this basis, the project's rate of return is now 23%, assuming a project life of 40 years. With benefits reduced by 10% and 20%, the rate would be 19% and 15%. If benefits are lagged one year, which some- what understates the project's contribution to the economy, the rate of re- turn is 17%. With benefits reduced by 10% and 20%, it would decline to 14.5% and 11.5%. Details are given in Annex 8. VIII. ORGANIZATION AND MANAGEMENT 8.1 Overall, management has done a very good job, and its achievements are not diminished by the fact that it enjoyed the full support of the Govern- ment and in particular the Government of the Northern Province. Results in production, yield improvement and agricultural practices substantially exceed appraisal estimates. In two areas results were disappointing, however: em- ploying national counterparts to be trained by and eventually to replace ex- patriate management staff, and establishing proper accounting. But in both areas significant progress has been made over the last 18 months, and it can be hoped that these shortcomings will soon be corrected. 1. Staffing 8.2 At appraisal, SEMRY had a staff of 200 and consisted of four tech- nical departments (on-farm works and land preparation; repair shop; rice mill; and extension), all headed by expatriates and functioning adequately. The project director was also an expatriate. Under the project, SEMRY was to add two new departments (operation and maintenance; finance and administration) and employ a farmers' training officer. Total staff was to reach 400, justi- fied by the intensity of the operation and the extent of services provided to farmers. In-service training was to be given to all local staff. 8.3 The Government and SEMRY were anxious to replace expatriates by nationals, but due to the scarcity of qualified and experienced local person- nel this could not be done in the immediate future without endangering the quality of work. It was agreed (side letter dated April 26, 1972) that (1) in addition to the foreign personnel employed at the time, SEMRY would hire three more expatriates to be in charge of the two new departments and farmers' training; (2) within three years after the start of the project, Cameroonians would be appointed to work with all foreign staff and be trained by them; (3) the nationals would replace the expatriates when this was justified by their performance; and a schedule of projected personnel development was drawn up.  - A25 - 8.4 Following recommendations of supervision missions, additional foreign experts were hired to strengthen SEMRY's technical and financial departments. As early as May 1973, supervision staff also drew the Govern- ment's attention to the need for additional counterparts. In September 1973 and again in May 1974, staff requirements after project completion in mid-1976 were discussed with the Government, and detailed recommendations were made. The Government accepted them in principle, but insisted that key positions (project director, chief accountant) would have to be occupied by expatriates beyond that date. FAC was prepared to consider favorably the financing of 2-3 management positions after June 1976, when the current "convention" expired. Despite further urging and no disagreement in prin- ciple, the November 1975 supervision mission still found recruitment of counterparts unsatisfactory, in part due to unattractive salary levels, but also because candidates from the south were hesitant to move to the north because of the socio-cultural differences between the regions. The mission also noted with regret that the Cameroonian assistant technical director, who had acquired over two years' experience and was expected to replace the technical director, had decided to leave SEMRY. The mission received assur- ances that three engineers and six technicians would be appointed within the next half year, and in May 1976 SEMRY's Board of Directors approved a new competitive salary scale that should attract qualified Cameroonian personnel. Nevertheless, it was clear by then that expatriate staff would have to be maintained beyond mid-1976 to ensure continuity, and FAC agreed to provide financing, under the extension program, for five management positions for an additional year. 8.5 At the end of 1976, total SEMRY staff was 535. Of the 34 manage- ment and middle level staff ("cadres"), 13 were expatriates, including three (out of 18) middle level employees. Of these 13 positions, two (project director, administrative and financial director) had been occupied longer than expected at appraisal. Of the six management positions foreseen at appraisal and still occupied by expatriates, two had counterparts in place (project director, garage and repair shop manager); no counterpart was fore- seen for one of the remaining four. Of the four management positions added since 1972, two had counterparts in place (rice marketing manager, technical director) while two had not (chief accountant, head of construction). The arrival of a physician in January 1977 raised the number of management level foreign staff to eleven. Details are given in Table 10 below; a comparison of projected and actual staff development is in Annex 9. 8.6 In urging speedy appointment of Cameroonian counterparts, the super- vision missions had argued that the alternative would be either to replace expatriates by insufficiently trained local staff or to keep them longer, at high cost to the project. Quite likely, an earlier revision of SEMRY's salary structure would have produced a larger number of counterparts in time, although it would not have overcome the sociological obstacles to attracting qualified candidates. But the Government's insistence (in line with its original position) on quality of performance deserves admiration and support (as FAC provided), not only because it contributed to the success of the project, but also in itself. The performance of the counterparts in place now, their spirit of cooperation and dedication to the task augur well for the future of the project.  ! ti, e JAJ) SFMRY Rice Project Ex.patriate Staff Fore- Fxcess OnTer seen Fore- Apprapi½l CounterVari(s) ½n Place For seen Tn Place in 1976/77 Fstimate in 1976/77 Number (Years) Until Yes No Nurbler (Years) Yes No NMumber A. 5ta,ff. :o's Lions loreseen at Anoraisal Project director 1 4 1975/76 x 1 1 x PiMannciga and adminis- trative director 1 4 1975,'76 x 1 1 x Irrigation engineer, OCM 1 3 1975/76 x 0 x 3 Foreman, landl preparation 1 5 1976/77 x 1 0 x 'Gara_e/renair shop manager 1 5 1976/77 x 1 0 x . qt"ce milr manager 1 5 1976/77 x 1 x> Di,rector of extension 1 5 1976/77 x 1 0 x1/ a/ Research agronomist 1 2 1973/7 x 1 2/ x Research assistant 1 2 1973/7L x 0 x 1/ Training officer 1 3 19?7)1/75 x 0 x 1/ P. Staff Positions Added S;nce 1972 Chief accoulntant 1 x 1Y Fcreman, on-farm development 3/ x Garage/repair shop mechanic T x 2 Rice marketin- manager 1 x 1 x Asst. rice rmarketing rmanaaer 1 x 1 Technical director 1 x 1 x Head of construction 1 x 1 x Farm machinery service 1 x x Physicign 1 x 1 x I/ None foreseen at appraisal. 2/ Retained until 197IV/75. 3/ Six in 1972/73, eight in 1973/?l, drorpring to four in 1977/76. h/ One in 1972/73, two in 1973/74, three in 197)/75 and 1975/76.  - A27 - 2. Accounting 8.7 At appraisal, SEMRY's accounting system was inadequate and needed to be reorganized. Assurances were obtained during negotiations that the reorganization would be completed by July 1, 1973 (Section 4.02 (b) of the Project Agreement). SEMRY gave high priority to complying with this covenant, and CCCE dispatched a financial expert to help in the task. The March 1973 supervision mission found that the accounts were adequately kept and detailed enough to permit identification of project costs and credit disbursements. 8.8 The rising volume of work soon made it clear that a chief accountant would have to be hired (besides the administrative and financial director). But, as in many other African countries, none could be found in Cameroon. As an intermediate solution, French national service volunteers were employed, supported by short-term missions of a CCCE financial expert. Unfortunately, because of sickness of one of those volunteers, SEMRY was without an account- ant for eleven months in 1973/74. Routine work suffered and the envisaged improvement of the accounting system could not be realized. The two 1974 supervision missions urgently recommended the employment of a permanent chief accountant, and France offered to finance an expatriate, if necessary. 8.9 Since June 1975, SEMRY has employed an expatriate chief accountant. His 1975/76 work program focused on establishing an analytical accounting system and providing written instructions for accounting clerks. The system is now operational. As shown in Table 11 below, it breaks up the general accounts into five cost centers -- (1) General administration; (2) Garage, repair shop, storage; (3) Land development, construction; (4) Extension; (5) Rice mill -- which greatly improves the flow of base cost information to management and promises to ensure tighter cost control. Looking at the budget for the second semester of 1976, the first based on the new system, the 1977 supervision mission commented on the high cost of "General admini- stration" and suggested that part of these overheads be considered as investment and capitalized accordingly. 3. Research 8.10 Applied research under the project had been entrusted to IRAT until February 1975, when its contract expired and a Cameroonian agronomist took over at the head of the Vounaloun research station. The program IRAT had established included varietal research (about half a dozen varieties, equiva- lent to IR8 and IR24 but with a shorter cycle, were found to be promising) and fertilizer trials (nitrogen balance, soil evolution under intensive cul- tivation, plant response to certain elements). 8.11 The 1975 supervision mission recommended to reshape the program by improving varietal screening, expanding fertilizer trials and introducing phytosanitary research supported by observations covering the entire project area. In view of the lack of specific experience of the Cameroonian agronomist the mission also recommended to obtain technical assistance through regular visits of a rice specialist. It was hoped that the Cameroonian agronomist could then also be put in charge of seed multiplication and seedbed preparation without endangering the research program.  - A28 - Table ll SEMRY Rice Project Breakdown of Accounts into Cost Centers V-_. UstpT?Snao IMU3M 4_ 6s"_mPOW - *tM. KAStS t 1- 2 AA .- AWUtI MR-CAA1OUt- IAQARIA I.. izit - PflGDUCT1014 A AnmArSime*T DRS CASIER. *P COSTRUCTION .~ ~ ~ ETOS .__.__ 00- MI&LIStS CPA !~~~~~ _ - - _L - - sTocKs AU , VENTI MARCHANOtSES 3' .72 14 294 44 37 417 S6 025 _ VETi, PpoDUCTIOw _2_ 527 2208 n SUNIVERTIOI O'XPLOITATIOOft __1__ 9 960 to 09 o PRODUITS DIVERS __ _ 14 249 223 639 366 _ _. - TOTAL -34 doz 19102 1A724 124-085 574951B67T as STOCKS D'ENTRKE AU _l ______ _ 04ARCHANMfSES VENOUES 1 230 _1A803 fl J i _ 4ii4L MATIERES FOURN. CUNSOMMNUS -E° . 29 67£ 7L 5 2 429 03 *- NSPORTS TNTRA CONSON tS 717 5l tg 6 1 193 42. 5D8.- AUTRES SERVICXS CONSOMNES 4a22.6 LI. 8 9 Pi 456 16 145i 11 *it CHARGES PER1lS DIVERSES _I2 370 31al 5 1 107 _4 6 U47 x APPOINTS SALAIRES 10 5SZ. L 046 b 112 IiA 11 420 _- 2.L54 Z RARES APP SALAIRES 2t33 .3 25I15 LM0 947 17 41 IHPOTS ET TAXES - 1 3 3 1 344 J9lt3 4 142 ta 602 fRAIS FINANCIERS 21 68 446 06_ 22 014 OOTAT IONS. AHORT. ET PROY. 7 aIQ 33L444A .6d 8S3 _*U3 132 52aZ. TOTAL 106 6Z Ali I-580 22.74L 64Q4L *3_ . Z _ CHARSES INTERNES _ _ __= _ = __ 2 PRESTATIONS 4 327 31_ i6263 20.124 72 _531 r PRODUITS INTERNES _ .____ - VA PRESTATIONS 275231 72 531 WA 0- TOTAL PRESTATIONS - 4 32 t 72 31 517 -16 I -20 324 O MAR GE _ ( ) _ 7 1 9 -11319 5 126 40 1+9.54 IMMOBILISATIONS NETTES 726 ___ =__-= VALEURS O'EXPLOITATION -__ __ -____ _4-4_2_ CLIENTS _ _ _ __ __ _3 25__ X DEEITEURS DIVERS _ __ 5714L 8 SANQUES - CAiSSES - 2 Z26552 ____ DEFICIT APPARENT _ __ ____ _ TOTAL _ --3180 521 CAPITAL NET _ 23 2___- 2___ PROVISIONS __4n_ ___ -__ ____- SUBVENTIONS _ _2 _106_ __1 EMPRUNTS ___-- -9A_ __ _ __ _ _ _ 24_ WI FOURNISSEURS - -_ _ _- 44 4_ CREDITEURS DIVERS ___ __ _ _ _____ _ 7Q72L AVANCES ORGANISMES __3 ___ ____ -_ 05 3 QO BANQUES ____ _2._0538 BENEFICE APPARENT ___ _____ ___ _= _ __ Z 9_QQ TOTAL _______ .4I&  - A29 - 8.12 Unfortunately, the 1977 supervision mission found that the agro- nomist had taken the place of the departed assistant technical director (para. 8.4) and research had come to a stand-still. The mission strongly recommended to restart a research program focused on the areas suggested in November 1975: (1) periodic introduction of new varieties, maintenance of the purity of varieties used by farmers, elimination of unsuitable vari- eties; (2) multi-locational fertilizer trails; and (3) research on plant protection measures, particularly protection against insects (borers), linked to the evolution of varieties, cultivation techniques and farm machinery. The mission also reemphasized the 1975 recommendation to engage the help of the specialist responsible for the national rice program at the "Institut de Recherches Agricoles et Forestieres" (IRAF) and received the assurance of the Minister of Economy and Plan that this could be arranged directly between SEMRY and IRAF. IX. ECOLOGY AND HEALTH 9.1 At appraisal, the situation was characterized as follows: (1) The project would not change the ecology of the area. Bush clearing would not be required, and the use of pesticides would be limited to the minimum needed for adequate pest control. (2) Bilharzia (schistosomiasis) is the most dam- aging endemic disease along the Logone river, affecting about 90% of the pop- ulation. Malaria is also endemic. (3) An environmental consultant visited the project area to review the bilharzia problem. His report said that some project features could reduce the transmission of the disease (flood protec- tion), while others might increase it (paddy fields, main drain with contin- uous flow). Mass control measures were not considered, however, because of their uncertain success and prohibitive cost. (4) It was agreed during nego- tiations (Development Credit Agreement, Article IV, Section 4.02) that the Government's health services would study closely the development of bilharzia in the project area and adjacent areas and in particular make periodic checks on the snail population in relation to the number of cases and strains of the disease contracted in these areas and take measures to combat the disease. 9.2 The agreement regarding bilharzia has not been followed and the first mention of health in a supervision report appears in that of the November 1975 mission. However, this inaction must be seen in the context of the general health situation in the area. 9.3 Until 1975, over long periods of time there was no physician at all in the department of Yagoua. Four French physicians (cooperants) succeeded each other between 1971 and 1975, three of whom had to leave for health rea- sons. When there was a physician, he and the small hospital staff could not possibly cope with the demand of the 180,000 inhabitants of the department. 9.4 Since 1975, one departmental physican has been permanently in place, assisted since 1976 by one French (cooperant) and one Cameroonian physician. At the same time, the nursing staff has been increased, and the modernization of the hospital is to be completed in 1978.  - A30 - 9.5 Following the recommendation of the 1975 supervision mission, SEMRY engaged a young French physician (cooperant) who arrived in January 1977. After a short information tour under the auspices of OCEAC (Organisation de coordination pour la lutte contre les grandes endemies en Afrique centrale) he took up his duties, which consist of (1) serving SEMRY's personnel and (2) starting with the help of the extension service a program to improve the sanitary and health situation of SEMRY rice farmers and their families. 9.6 Regarding the main diseases in the area, SEaRY has done or plans to do the following: a) Hepatitis: Eight persons among SEMRY's management staff contracted this widespread disease since 1973; the probable cause was the existing water supply, which is being improved under the extension program. b) Malaria: SEMRY keeps a supply of medicine at the disposal of its staff, participating farmers and their families. The company physician is expected to increase the number of patients reached. c) Bilharzia: There is still no economically feasible way to eradicate bilharzia, according to the secretary general of OCEAC. The Government and SEMRY are aware of the problem, but little has been done because of lack of staff. Based on the few observations that could be made in the Yagoua hospital and dispensaries in the area, the incidence of the disease is esti- mated between 90% and 95%. There seems to be neither an increase nor a de- crease since the start of the project. SEMRY's physician will estimate by his own observations the incidence of the disease and will try to establish its geographical distribution. He will also try to check on the geographic and seasonal distribution of the snail population in the area. 9.7 The daily radio link with Garoua and Yaounde, the installation of which the first supervision mission recommended in 1972, has helped to save several lives. 9.8 The use of pesticides, which the appraisal report wanted to be kept to the strict minimum, has not been necessary in the project area so far. Herbicides are not needed because the plots are small enough so that farmers can weed manually, which is facilitated by transplanting. Insecti- cide use is also not justified since damage particularly from borers has been light so far and does not seem to increase. 9.9 Thus the project appears to have had no deleterious effect on ecology and health and, rather, to have improved health care through treat- ment of malaria and better communications with Yaounde.  X. GOVERNMENT, SEMRY, BANK AND CO-LENDER PERFORMANCE 10.1 Government and Bank performance has already been commented upon in the sections above. In spite of the delays in appointing counterparts to expatriate staff (paras. 8.4, 8.5) and the neglect of the bilharzia surveys (paras. 9.1, 9.2), the Government, SEMRY, the Bank and the two co-lenders worked harmoniously and well together to achieve the generally successful project outcome. All other covenants were followed and, within the given limitations, efforts were concentrated on the main purpose of the project. In project financing, IDA acted strictly as a lender of last resort, insti- gating the co-lenders and Government to mobilize additional funds -- the Government and French aid provided a total of US$9.0 million, including the extension program, against IDA's US$3.7 million. The Government's strong interest in the project also showed in its regular participation in the joint supervision missions of the co-lenders. This supervision was adequate and, as far as the Bank was concerned, executed with more than usual continuity in staffing. Discussions with the Government and SEMRY were frank and con- structive. Follow-up action was taken with reasonable promptness. The supervisory ministry of SEMRY on various occasions thanked the supervision teams for their work (e.g., letter of December 27, 1975; letter of October 22, 1973). On the other hand, SEMRY fulfilled its reporting duties only ir- regularly. This function was in fact taken over by the joint supervision missions.  - A32 - Table 12 SEMRY Rice Project Supervision Missions ToR Report # Days # Persons 1st mission 4/20/72 BTO 5/18 10 2 FS 6/6 (4/29-5/8) 2nd mission 1/24/73 CS 5/1 10 2 (3/3-12) 3rd mission 9/6/73 BTO 10/18 12 2 FS 11/7 (9/27-10/8) hth mission 5/1/7L CS 7/5 11 2 (5/6-16) 5th mission 11/15/74 CS 1/2/75 10 2 11/21/74 (11/23-12/2) 6th mission 10/22/75 CS 1/13/76 8 3 (11/12-19) 7th mission 12/15/76 BTO 2/22 13 3 1/26/77 C 5/5 (1/29-2/10) BTO - Back-to-Office Report C - Completion Report CS - Combined Full Supervision and Back-to-Office Report FS - Full Supervision Report  - A33 - XI. CHANGES IN A SECOND PROJECT 11.1 The Government has asked the co-lenders to help finance a follow-up project -- SEMRY II -- and appraisal will take place shortly. The project, as described in the feasibility study prepared in 1974, would include the con- struction of a dike between Pouss and Guirvidig, across the flood plain, and a dike between Pouss and Tekele, along the Logone river. About 15,000 ha would be protected against flooding, and the Pouss-Guirvidig dike would permit to store water to irrigate two rice crops per year by gravity on about 7,000 ha. The project would be located some 70 km north of Yagoua and would thus have its own day-to-day management, extension service, equipment and rice mill. It is foreseen, however, that SEMRY I and II would be under a common general manager and staff who would supervise both projects and have overall respon- sibility. Paddy production would be organized along similar lines as in SEMRY I. Besides paddy, the project would provide benefits from additional production of mouskouari and sorghum in the area protected from flooding (about 5,000 ha). The artificial lake created by the 2dike would 2be fished and, as it would shrink in the dry season from 360 km to 120 km , its fringes would provide cattle grazing land (about 6,000 ha). 11.2 From the outset, SEMRY II should avoid the problems that SEMRY I experienced and is in part still experiencing. The accounting system should be sufficiently stron1g to serve the needs of the project and the financing agencies. Hiring and training of Cameroonian counterparts should receive more attention than in the past. In view of the large expanse of water that would be created by the project, a health unit should be included to monitor the numerous endemic diseases and protect, to the extent possible, participating farmers and their families. Finally, applied research should be considerably strengthened to help settle the crucial question of yield maintenance over an extended period of time.  DOCUMFNTATION Republique Federale Perimetre du SEMRY - D6veloppement de la Riziculture du Cameroun (MINPED) ETUDE DE FACTIBILITE Rapport et Annexes (BDPA - SOGETHA - IRAT) IBRD/IDA Report No. PA - 103 Appraisal of the SEMRY Rice Project - Cameroon December 29, 1971 IBRD/IDA Report No. P - 1015 Report and Recommendation of the President to the Executive Directors on a Proposed Credit to the Federal Republic of Cameroon for a Rice Irrigation Project January 12, 1972 Republique Unie du ETUDE DE PREVISIONS DE LA PRODUCTION ET DE LA Cameroun (MINEP/MINAG) CONSOMMATION DE RIZ AU CAMEROUN Rapport et Annexes (1975) SEMRY SEMRY 1 - TRAVAUX EN REGIE Bilan des r6alisations du 23-1-73 au 30-4-76 Republique Unie du PROJET SEMRY I - PROGRAMME COMPLEMENTAIRE Cameroun (MINEP/MINAG) (Mai 1976) SEMRY SEMRY I - RAPPORT DE SYNTHESE AU 31-12-76 Republique Unie du NOTE D'ACTUALISATION Cameroun (MINEP/MINAG) a l'6tude de Previsions de la Production et de la Consommation de Riz au Cameroun (31.12.76) IBRD/IDA CAMEROON - Semry II Irrigation Project Project Brief March 11, 1977  ANNEX 1 PROJECT DESCRIPTION FROM THE CREDIT AGREEMENT 1. The purpose of the project is to provide a controlled water supply for the irrigation of 4,300 ha. 2. The project consists of the following parts: Part A: Civil Works (1) Reinforcement of the 49 km Logone dike and improvement of a parallel road; (2) Construction of the Guerleo intake control structure; (3) Construction of a main drain; (4) Construction of four pumping stations; (5) Rehabilitation of irrigation and drainage net- works to serve approximately 1,300 ha; (6) Construction of new irrigation and drainage networks to serve approximately 3,000 ha; (7) Construction of a rice mill and related storage facilities; (8) Construction of housing and utility buildings. Part B: On-Farm Development Works The execution of land clearing and levelling, and construction of tertiary canals, drains, field dikes and farm roads on approximately 3,000 ha of newly irrigated lands. *) Part C: Engineering and Supervision of all works included in Parts A and B above. Part D: Equipment The purchase of pumps, construction equipment for on-farm develop- ment, farm equipment, rice milling equipment, repair shop equipment and vehicles. Part E: Management, Research and Extension Services The expansion of management and extension services provided by SEMRY as well as a continuation of its research activities. *) "... on approximately 4,300 ha of newly irrigated lands." as amended on June 19, 1973.  ANNEX 2 Page 1 SEMRY EXTENSION Project Components, Cost and Financing 1. Since part of the main networks and pumping facilities for an additional polder (No. 8, Gabareye) had already been provided under the SEMRY Rice Project, the 1975 supervision mission recommended to fully develop this polder, thus increasing SEMRY's net irrigable area from 4,500 ha to 5,300 ha. Other components were added to form the SEMRY Extension Program ("Programme complementaire") intended to consolidate SEMRY and to prepare the ground for a SEMRY II project, the implementa- tion of which ranks high on the Government's priority list. The main components of the program are (in order of their estimated cost): a) increase of storage capacity and improvement of paddy handling; b) continuation of grant aid to finance technical assist- ance staff; c) on-farm works on Polder No. 8; d) provision of additional housing and office space and improvement of potable water supply; e) establishment of an irrigation works maintenance unit; f) establishment of a medical service; and g) two pilot schemes regarding livestock and fisheries in the project area. 2. In mid-1976, the cost of the program was estimated at CFAF 750 mil- lion (including contingencies); since IDA could not provide funds on short notice, financing was obtained from CCCE, FAC and the Government. Cost esti- mates and financing are summarized in the table below; details are given in Attachment 1. All items not covered by FAC are jointly financed by the Government and CCCE (42% and 58%). The funds are made available to SEMRY in the following way: a) CFAF 355 million as equity contributions (Government: 220 million; CCCE: 80 million; FAC: 55 million), raising SEMRY's equity capital from CFAF 645 million to CFAF I billion; b) CFAF 255 million as grants (FAC: 175 million; CCCE 80 million); and c) CFAF 140 million as a loan (CCCE; 3.5% interest, repay- ment over 30 years, beginning 1978).  ANNEX 2 Page 2 SEMRY Extension Program Cost and Financing CFAF Million Paddy storage and handling 130 Technical assistance staff 115 On-farm works on Polder No. 8 114 Buildings 72 Network maintenance equipment 56 Water supply 50 Transport equipment 14 Furniture for staff houses and dispensary 13 Hydrological study 12 Pilot livestock program 98 Pilot fishery program 8 Subtotal 682 Contingencies 68 TOTAL COST 750 FAC - Technical assistance staff 115 - Consultants' services, Polder No. 8 55 - Part of water supply 30 - Part of pilot livestock program 30 230 CCCE 300 Government 220 TOTAL FINANCING 750  ANNEX 2 Page 3 Justification of Main Components 3. On-Farm Development Works on Polder 8: Under the SEMRY Project, the firm contract price for civil works construction (CFAF 870 million) was not reached with the development of 4,500 ha. Rather than try to nego- tiate a reduction, SEMRY management asked the contractor to execute certain primary and secondary works on an additional polder, Polder No. 8, and the 1975 supervision mission recommended an extension program to ensure its full development, since the cost of on-farm works was expected to be relatively low if done on force account by SEARY. Including consultants' services, cost was estimated at CFAF 142,500 ($582) per hectare in mid-1976. 4. Storage: In November 1975, existing storage capacity was 4,500 tons, while requirements were estimated at 10,000 tons for 1976/77 and, following the extension of area to 5,300 ha, 16,000 tons at full development, assuming half the annual marketed production was to be stored. Thus, addi- tional capacity was urgently needed and a storehouse of 9,000 tons was in- cluded in the program. Further storage construction was to be financed out of SEMRY's own funds. 5. Technical Assistance Staff: Despite the urging of consecutive supervision missions, SEMRY was unable to hire and train qualified Cameroonians to replace its technical assistance staff as foreseen at appraisal. There- fore, FAC agreed to extend its grant financing of five management positions (managing director; administrative and financial director; technical director; credit and marketing director; chief accountant) by one year and to provide funds for two additional foreign experts (training officer, irrigation; live- stock expert). 6. Buildings, Water Supply: With the planned increase in staff, strengthening of the accounting section and establishment of a medical service, additional housing and office space and a dispensary were needed. Also, a new well was needed to prevent the recurrence of hepatitis, since past cases were probably caused by polluted water from the existing source. The use of Logone water was considered, but proved more expensive than tapping groundwater. 7. Irrigation Works Maintenance Unit: Proper maintenance is essential for the functioning of an earthen irrigation and drainage network. Until 1975 little maintenance had been done, on the one hand because the network was new and built to oversize dimensions, thus requiring little maintenance; on the other hand because SEMRY lacked staff and equipment to do more than a limited amount of work. To change this the purchase of two excavators and one bull- dozer was included in the program. Other equipment was to be bought (or re- placed) out of SEMRY's own funds. 8. Establishment of a Medical Service: Up to 1975, there were long periods when the Department of Yagoua had no physician at all. Since then the situation has improved, but remains inadequate. To provide a minimum of  ANNEX 2 Page 4 medical care for SEMRY's staff and participating farmers, the program included the construction and furnishing of a dispensary, and a house and car for a physician whose salary was to be paid out of SEMRY's own funds. The airplane to be purchased under the extension program would also serve to speed up emer- gency evacuations of patients. 9. Pilot Schemes: With rice production an apparent success, the time had come to explore other development possibilities in the area. An experi- mental scheme was included in the program to study the potential of livestock raising on the basis of fodder crops as well as crop by-products and residues (rice flour and straw; cottonseed), and to work out an appropriate package for the extension service. The fishery scheme consists of pond fishery trials to substantiate a FAC-financed study undertaken in preparation of SEMRY II, which is to include a sizeable fishery sub-project. Implementation 10. The supervision mission that visited SEMRY in early 1977 found the extension program to be progressing satisfactorily. Its cost was reestimated at CFAF 785 million, the increase over the original estimate (CFAF 35 million) being covered by a corresponding increase in FAC's contribution. 11. The 9,000 ton storehouse has been completed, raising SEMRY's storage capcity to 13,500 tons; but additional capacity will have to be provided to satisfy storage needs full development. Unless major equipment breakdowns occur, on-farm works on Polder No. 8 should be completed by the end of 2May 1977 as scheduled. In early February 1977, 203 ha were completed. A 300 m store- house was built near Polder No. 8, financed out of SEMRY's own resources. Two staff houses have been completed, four other and the dispensary are under con- struction. For lack of space the original office extension plan cannot be2 implemented; a building for general management and conference rooms (180 m ) has been started, but the other services will stay in the existing office building. Test drilling for the new well started in February 1977. 12. One hydraulic excavator and the bulldozer have been purchased; the other excavator wil be ordered soon -- for the time being SEMRY prefers to rent a second excavator. The purchase of the airplane has been postponed until the garage manager receives his pilot's license. 13. The training officer for irrigation staff has not yet been hired. The physician has taken up his duties in January 1977. Regarding the pilot livestock scheme, nothing has been done so far; the arrival of the livestock expert was scheduled for April 1977. The experimental fish pond has been filled in July 1976. The next steps would be to hire the fishery technician and to have the experimentation program started by an expert of the Foumbam Centre de Perfectionnement et de Recherche en Pisciculture.  ANNEX 2 Page 5 Problems 14. Recently, a dispute has arisen with SONEL, the national power company, which asks for a retroactive rate increase of 50% maintaining that an error has been made in the interpretation of its contract with SEMRY. This would mean a corresponding increase in pumping cost paid by farmers and the rate charged to them would be substantially higher than that applied to other consumers. SEMRY has submitted the matter to its supervisory ministry.  PROIlP RIZ (15) - SE')?) RICF PRJFJI(( l-rogrmne compl meatalre-Extension Program (meillions de 1C9A - CFAF -1ll-o) CoGts - Costs Fi---osment - Finooc.. g 1976 1977 1977 1978 TOTAL FAC CCCE G-otv. TOTAL TI T T5 1 (58/) (42%) Stockage de paddy 110.00 20.00 - - 130.00 - 75 00 5 00 130 00 Paddy Storage Hangar de 9 000 T 80.00 80.00 M-nutentnos storehouse (9,000 t) 25 00 20.00 45.00 Paddy h-odling Aire do manoeuvre 5.00 5.00 Paved yard Asistt.an. technique 57.22 47.44 7.64 2.70 115.00 105 00 - - 115 00 Technical Asalatase- Dir. general 11.40 7.60 19.00 Dir. aditn. at financier Masag-ng D-re-lor 6 64 9.96 16.60 OIr technique Ad.i.ttati--d Fi-n1.1 DI- 9 96 6.64 16 60 Technical Director Dfr credi ee-co t iernia- li.ation 9 96 6.64 16.60 Credit and MarketLig Director Chef -omptable 9.96 6 64 16.60 Chief Accounteot Formation, tc. 8.30 9.96 6.64 24.90 Training Officer (irrigation) Appoia et 1 00 Imprevs 1.00 2.70 4.70 Con-tngency Sippor- Casier 8 (800 ha) 47.50 66.50 _ - 114.00 55.D0 34 04 24.96 114.00 Polder Nc 8 (800 b-) Fonctionnement macArte- 17.00 17.00 34.00 - 19.62 14.38 34.00 Equip .e.t Operation Mat riano 12.50 12 50 25.00 - 14 42 10.58 25 00 Mater-ala Insgen-eur consenT 18.00 37.00 55.00 55.00 - - 55.00 Consoltanie' services Iditmenti 36.00 30.00 6.00 _ 72.00 - 41 54 30.46 72.00 Buildings Dispe-sairs 5.00 5.00 Onio-ion bore.o. llspeosary 10.00 l0.00 OEfice Extension '.ogemients cad res sopOrlenin 16) 24 00 6.00 6.00 36.00 Log-rtncs cadres moye-n Staff houses (7) 12 00 9.00 21.00 Staff house. mlte-rfl eteorreuio 56.08 - - 56.00 _ 32.31 23 69 56.00 Set-erk M.ainienag.e Egulpmqnt 2 pollee (sydrauliqoec 36.00 36.00 I bh1l 2 Hydr-alic E-cavators 20.00 20.00 1 bulld.oer Add-tonr d'ea 50.00 - - 50.00 30.00 11.54 8.46 50 00 Water Soppis Macdriel do t-ca-por- 5.70 6.00 - 2.00 13.70 7290 5.80 13.70 Tr.nsport E-oip-ent Avion 6.00 2.00 8.00 Voiture gdedtin Airpl.ne 1.80 1.80 Voltures ontrotnen, Car (for phy.-SOn) fnrm- Cars (0.11c-enanno, crsin-g, tins, .b-otche 3 90 3.90 iientnck) Moheller Inoosmnis et din- pensnire 13.00 - 13.00 - 7 50 5 50 13 00 FPr-it-r (Staff Houate and Disp Echelle onus, tops et 6tude 12.00 - - - 12.00 - 6.92 5 08 12 00 Hydrological Study SOUS TOTAL 387.42 169.94 13.64 4.70 575.70 200.00 216 75 158 95 575 70 Subthtal  0 D r 0:1 0 W 0 4~ 0 O: O . .3 3 . 0 *....... oo3 -! ° >300 or. < -o 33 0 - 30 n 0 0 o3 c 0. 0zX 0w o . to - oo o o3S 0 :3 C - ° CD < D. n . . t n :3~~~~ r3 _o 0n D 0D. :3~~~ _ r 03 -.  ANNEX 3 Table I SEMRY RICE PROJECT Page 1 Agricultural Development WITH THE PROJECT 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 CULTIVATED AREA (ha) Appraisal Estimates 1/ Traditional land 1,300 270 - - Rehabilitated land - 1,030 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 Newly developed land - 400 1,500 3.000 3.000 3 3,000 3.000 3,000 Total rainy season 1,300 1,700 2,800 4,300 4,300 4,300 4,300 4,300 4,300 4,300 Dry season _ - 150 450 750 1,100 1,500 1,500 1,500 1500 Total "With project" 1,300 1,700 2,950 4,750 5,050 5,400 5,800 5,800 5,800 5,800 Actual and Revised Estimates (2/77) 2/ Traditional land 2,734 2,273 310 - Developed land 174 572 2.206 3,169 3.853 4 075 3/ 4 075 4,075 4.075 4,075 Total rainy season 2,908 2,845 2,516 3,169 3,853 4,075 4,075 4,075 4,075 4,075 Dry season 149 516 846 1,073 1 350 / 1 800 2,250 2,700 3 ,0 0 0 -/ 3.000 Total "With project" 3,057 3,361 3,362 4,242 5,203 3,875 6,325 6,775 7,075 7,075 PRODUCTION (t) Appraisal Estimates Traditional land 1,560 335 - - - Rehabilitated land - 1,545 2,259 2,752 3,169 3,559 3,846 3,900 3,900 3,900 Newly developed land - 680 2.750 6.010 7.280 8,180 8,700 9,000 9,000 9.000 Total rainy season 1,560 2,560 5,009 8,762 10,449 11,739 12,546 12,900 12,900 12,900 Dry season - - 330 1.035 1.830 2.810 3.945 4,230 4,420 4,500 Total "With project" 1,560 2,560 5,339 9,797 12,279 14,549 16,491 17,130 17,320 17,400 Actual and Revised Estimates Traditional land 1,057 2,115 317 - - - Developed land 270 1,122 6,282 15,206 17,770 18,335 18,335 18,335 18,335 18,335 Total raitny season 1,327 3,237 6,599 15,206 17,770 18,335 18,335 18,335 18,335 18,335 Dry season 319 972 3.597 5,252 6.075 8,100 10,125 12.150 13,500 13,500 Total "With project" 1,646 4,209 10,196 20,458 23,845 26,435 28,460 30,485 31,835 31,835 1/ Corrected for mistake in appraisal report. No distinction is made between developed and cultivated area. 2/ To permit comparisons with appraisal estimates, the extension program (Polder No. 8) has been left out here. 3/ Beginning with the 1976/77 dry season , cultivated area is assumed to be a constant 90% of irrigable area, based on pastexperience that 5% have to be substracted for seedbeds and 5% for incomplete transplanting. 4/ Maximum irrigable within the limits of the Logone Water Agreement. 5/ "Actual" production figures are the sum of marketed production plus estimated home consumoption and sales outside SEMY. These amounts are put at 10% of marketed production in normal years, 30% for the 1972 wet season, and 20% for the 1975/76 dry season, and the 1976 wet season.  ANNEX 3 Table I Page 2 SEMRY RICE PROJECT Agricultural Development WITH THE PROJECT 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 YIELD (t/ha) Appraisal Estimates Traditional land 1.2 1.24 - - - - - Rehabilitated land - 1.5 1.74 2.12 2.44 2.74 2.96 3.0 3.0 3.0 Newly developed land - 1.7 1.83 2.00 2.43 2.73 2.90 3.0 3.0 3.0 Total rainy season 1.2 1.51 1.79 2.04 2.43 2.73 2.92 3.0 3.0 3.0 Dry season - - 2.20 2.30 2.44 2.55 2.63 2.82 2.95 3.0 Total "With project" 1.2 1.51 1.81 2.06 2.43 2.69 2.84 2.95 2.99 3.0 Actual and Revised Estimates Traditional land 0.39 1/ 0.93 1.02 Developed land 1.55 1.96 2.85 4.80 4.61 4.5 2/ 4.5 4.5 4.5 4.5 Total rainy season 0.46 1.14 2.62 4.80 4.61 4.5 4.5 4.5 4.5 Dry season 2.14 l/ 1.88 -/ 4.25 -/ 4.89 4.5 4.50 4.5 4.5 4.5 4.5 4.5 Total "With project" 0.54 1.25 3.03 4.82 4.58 4.5 4.5 4.5 4.5 4.5 INCREMENTAL PRODUCTION (t) 4/ Appraisal Estimates - 950 3,719 8,167 10,639 12,899 14,831 15,460 15,640 15,710 Actual and Revised Estimates 486 1,599 7,296 16,938 19,565 21,935 23,960 25,985 27,335 (Including extension project) 27,335 (24,375) (26,400) (28,425) (29,775) (29,775) 1/ Drought effect. 2/ Achievable with good management and strict discipline. 3/ Without bird damage yields would have been 3.34 t/ha in 1972/73, 2.31 t/ha in 1973/74 and 4.55 t/ha in 1974/75. 4/ Details on "without project" case are given in Table 2.  ANNEX 3 Table 2 SEMRY RICE PROJECT Agricultural Developmient WIThOUT THE PROJECT 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 'PRAISAL REPORT Area (ha) 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 Yield (t/ha) 1.2 1.24 1.25 1.25 1.26 1.27 1.28 1.28 1.29 1.3 Production (t) 1,560 1,610 1,620 1,630 1,640 1,650 1,660 1,670 1,680 1,690 TUAL (Feb. 1977) Area 2,900 2,900 2,900 3,520 4,280 4,500 4,500 4,500 4,500 4,500 Yield 1/ 0.4 21 0.92 2/ 1.0 2/ 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Production 1,160 2,610 2,900 3,520 4,280 4,500 4,500 4,500 4,500 4,500 Over 23 representative seasons traditional paddy yields averaged 980 kg/ha, with a peak of 1,460 kg/ha in the late fifties and a low of 390 kg/ha during the Sahelian drought (1972 wet weason). There is no discernable upward trend. Actual.  ANNEX 4 Table I SEMRY RICE PEJECT Original Cost and Financing (CltlF million) Cost Estimates 1/ Financing Plan I/ 2/ Revised Financing Plan 3 _/ Excluding Including IDA CCCE FAC Govt. IDA Unfunded CCCE FAC Govt. Contingencies Construction COGECAM contract 584 Second rice mill 20 Paddy and rice storage 52 Housing, utility buildings 35 On-farm development works 78 Subtotal 769 951 563 - - 388 548 15 - - 388 Equipment Pumps 52 On-farm development equipment 138 Rice mill equipment 60 Farm equipment 104 Repair shop equipment, vehicles 22 Subtotal 376 432 410 - - 22 399 11 - - 22 Personnel Technical assistance staff 99 130 130 130 Consultants 228 240 240 240 Other 270 303 303 _ 303 Subtotal 597 673 - 303 370 - - - 303 370 TOTAL BASE COST 1,742 Physical Contingencies 115 Price Contingencies 199 TOTAL PROJECT COST 2,056 2,056 973 2/ 303 370 410 947 4/ 26 303 370 410 1/ December 1971 (PA-103). 2/ Exchange rate 278 CFAF per US$; proposed IDA Credit US$ 3.5 million. 3/ January 1972 (P-1015). 4/ Exchange rate 256 CFAF per US$; approved IDA Credit US$ 3.7 million.  ANNEX4 ITble 2 SEMRY RICE PROJECT Ora-i..l Schedule of Expenditures- US Th ..... d CEF ' 1o1 1972/73 1973/74 1974/5 1976/77 TOTAL 1972/73 1973/74 1974/75 1975/76 1976/77 TOTAI. Civil vorks 1,140 1,320 26 - - 2,486 317 367 7 - - 691 On-fare develop.ent w-rks 94 122 65 = 281 26 34 18 _ 78 B'lle "Ists,3 1,442 91 -- 2,767 343 401 25 -769 1iS2 phys co1c IB5 216 14 415 51 60 4 - - 115 Price cont. 67 160 13 _ _ 240 19 44 4 _ _ 67 Subtot.l 1,486 1,818 118 - - 3,422 413 505 33 - - 951 ip-,ent BOse tosts 626 352 374 _ 1,352 174 98 104 - - 376 Price cont 50 56 96 _ _ 202 14 1 27 _ 56 Subtotal 676 408 470 - - 1,554 18B 113 131 - - 432 sonnel Expenditures Base oosts 235 285 300 294 213 1,327 65 79 84 82 59 369 Price cont 22 41 57 65 45 230 6 12 15 18 13 64 Subtotsl 257 326 357 359 258 1,557 71 91 99 100 72 433 .. lt.nts Base costs 299 400 121 - - 820 83 111 34 - 228 Pri-e cont. 16 21 6 _ 43 4 6 2 _ - 12 Subtoc-l 315 421 127 - - 863 87 117 36 - - 240 AL BASE COSTS 2,394 2,479 886 294 213 6,266 665 689 247 82 59 1,742 -cot. 185 216 14 - - 415 51 60 4 - - 115 ce cont, 155 278 172 65 45 715 43 77 48 1 13 199 AL PROJECI COSTS 2,734 2,973 1,072 359 258 7,396 759 826 299 100 72 2,056 PA-103, Annexes 7, 8 snd 12, p.ttly e-tsmted.  Table 3 SEMRYRICE PROJECT - PROJECT R1Z SEMRY Actual Cost and Pinancino - Cofto tRels ct Finnce=ent -/ (CFAF million - millions do FCYA) Cost - Cofts Financing - ancenent ... 1972/73 1973/74 1974/75 1975/76 TOTAL IDA CCCE FAC URC - RSUC BCD Otber - unres 2/ Constroction 550 421 101 217 1,289 596 _ - 255 438 Genie civil Civil entkhscontract (C0CECAM) 518 352 _ - 870 505 - - 222 143 8eood rite ill Marchb COGECAM - - 11 8 19 - - - - 19 27 i-etie Paddy snd in storage - - 12 14 26 - - - - 26 Mgas.ina do paddy ou ni. Housing, otility buildings 17 16 9 1 43 19 8 16 Log-aente, On-farm development vnrks bhtiaents 15 53 69 194 331 72 - - 25 234 Asdnage=ent des parnells. Etuipenet 101 114 77 81 373 261 _ - 15 97 Mat6riel Poops 9 20 19 5 53 37 - - - 16 Po=ps. ic-Ern development 88 5 10 7 110 101 8 1 Amnsagassnt Second rice mill des p-rceltes - 42 28 70 50 - - - 20 2e eieerle Form equipment - 64 - 5 69 62 - - 7 - Labour Repair shop - 6 6 5 17 6 - _ 11 Atelir Vohicles 4 19 - 31 54 5 - - - 49 Vihi-ules Personnel 150 220 123 119 612 - 103 435 - 54 Personnel tssisitnce tebinel staff 21 43 52 65 181 - - 181 - - Connulranta Assist-nne techniqoe 89 126 59 54 328 - - 274 - 54 logdoi-ors conseila Research, eateosion 40 51 12 - 103 - 103 - - - Reher-h, vulgatisftio, encadre.ect TOTAL SISSY I PROJECT 801 755 301 417 2.274 8573/ 103 455 270 589 TOTAL PROJET SEHRY I Protect Elpnesion (Polder No 8) 94 94 Pro -rae ncmpPldsaniti-e (C -ier8) Coairc-titon 67 Equipmeet 67 Genie clvil 16 16 Conmo.rants Msrdtiai 11 11 Ecgdnieroe SEMRY 11 STUDY 37 37 37 ETUDE SEMRY II 1/ BRae =id-1976 - base =i-1976 2/ CCCI equity po-ticipation (CPAF 200 million), 2ovor0act equity participaton (CFAF 200 million), G-veromect investent grant (CFAF 110 million) and other Government grnt. Prtic-pation so capital au itre de is CCCE (200 millions de FCFA) et do S'Ett (200 millitoc de FGYA), nubve-ti-c d'investieeoment de 1' Etlt (110 millions de FCFA) et autes euhveciiocs de 1' tant 3/ Credit 302-CM of $3.7 million, average e-chaoge rate 231.6 CFAP/$. Credit 302-CM de 3,7 nilliocn de S, t.o. d'dchahge noyen rdalind 231,6 FCFA/S.  ANNEX 5 Table 1 CREDIT 302-CM, SEMRY RICE PROJECT - CREDIT 302-CM, PROJET RIZ SEMRY Allocation of Credit Proceeds - Affectation du Credit Allocation - Affectation Category - Categorie Original - Prevue Final - Effective 2/ $ %$% I. Equipment - Mat6riel 1,270,000 34.3 1,048,055 28.3 II. Civil works (excluding pumps) Genie civil (pompes non comprises) 1,440,000 38.9 2,338,587 63.2 III. On-farm development works (excluding equipment) Amenagement des parcelles (materiel non compris) 160,000 4.3 313,358 8.5 IV. Unallocated - Non affecte 830,000 22.4 - TOTAL 3,700,000 100.0 3,700,000 100.0 1/ Development Credit Agreement, signed April 26, 1972, Schedule 1. Accord de credit de developpement, signe le 26 avril 1972, Annexe 1. 2/ June 24, 1976. Le 24 juin 1976.  ANNEX 5 Table 2 CREDIT 302-CM, SEMRY RICE PROJECT - CREDIT 302-CM, PROJET RIZ SEMRY Estimated and Actual Disbursements - Deboursements Estimes et Effectifs (US$ thousand - milliers de $ E.U.) Estimates - Estimations Actuals as % ef End of Period - Fin de pgriode December 1971 January 1972 Actuals-Effectifs Estimates - Effectifs Decembre 1971 1/ Janvier 1972 2/ en % des Estimations 1972/73 3/ September - septembre 1972 - - December - decembre 1972 400 420 - March - mars 1973 700 750 949 126.5 June - juin 1973 1,100 1,170 1,379 117.9 1973/74 September - septembre 1973 1,400 1,500 1,728 115.2 December - decembre 1973 1,800 1,900 2,060 108.4 March - mars 1974 2,200 2,200 2,797 127.1 June - join 1974 2,700 2,900 3,051 105.2 1974/75 September - septembre 1974 3,000 3,200 3,148 98.4 December - decembre 1974 3,200 3,400 3,259 95.9 March - mars 1975 3,300 3,500 3,447 98.5 June - juin 1975 3,400 3,600 3,447 95.8 1975/76 September - septembre 1975 3,500 4/ 3,700 -/ 3,613 97.7 December - decembre 1975 3,646 March - mars 1976 3,697 June - juin 1976 5/ 3,700 6/ I/ Appraisal report, PA-103, Annex 8, Table 2. Rapport d'evaluation, PA-103, Annexe 8, Tableau 2. 2/ President's report, P-1015, Annex III, page 2, and second supervision report, May 1973, Annex 3. Rapport du President, P-1015, AnnexeIII, page 2, et deuxieme rapport de supervision, mai 1973, Annexe 3. 3/ The credit became effective on July 28, 1972. Le credit est entre en vigueur le 28 juillet 1972. 4/ "The Project is expected to be completed by June 30, 1975." (Development Credit Agreement, Schedule 2, page 18). L'achevement du Projet est prevu pour le 30 juin 1975 (Accord de credit de developpement, Annexe 2, page 18). 5/ The closing date was June 30, 1976. La date de cloture etait fixee au 30 juin 1976. 6/ The credit was fully disbursed on June 24, 1976. Le dernier deboursement etait effectue le 24 juin 1976.  ANNEX 6 Table I SEMRY RICE PROJECT - FARM BUDGETS (At full development) Cultivated Average Average Average Average _Change of Net Income with Change in Yield Area Yield Price Gross Income Production Cost Net Income Min.Yield Min.Income Max.Yneld Max.Income (ha) (t/ha) (CFAF/kg) (C}AF) (CFAF) (CFAF) (t/ha) (CFAF) (t/ha) (CFAF) Without the Project Rice 0.8 1.0 30 24,ooo 10,000 14,000 o.4 - 400 1.4 23,600 Sorghum and millet (rainy season) 0.5 1.0 37 18,500 1,200 17,300 0.3 4,350 1.3 22,850 Mouskouarl (dry season) 0.3 0.7 37 7,770 870 6,900 0.2 1,350 1.2 12,450 Other crops 0.1 Total 1.7 50,270 12,070 38,200 5,300 58,ooo (100%) (14C) (154%) With the Project Rice - rainy season 1.6 4.5 30 216,000 96,000 120,000 4.25 108,000 4.9 139,200 - dry season 1.0 4.5 30 135,000 60,000 1/ 75,000 4.25 67,500 4.9 87,000 Sorghum and millet 0.5 1.0 37 18,500 1,500 - 17,000 0.3 4,050 1.3 22,550 Moutkouari 0.25 0.7 37 6,475 725 5,750 0.2 1,125 1.2 Other crops 0.°5 10,375 -___ -___ Total 3.4 375,975 158,225 217,750 180,675 259,125 (100%) (83%) (119%) Note. Estimates for the "without oroject" case are based on the actual situation in the Pouiss area (SEMRY II) which has remained at the level of the Yagoua area before the start of the project. Paddy yields (minimum, average, maximum) are results registered during 1952-1976 outside the project area and during four seasons (1975, 1976) under the project. lrices are averages; for sorghum, millet and mouskouarl prices vary between 30 CFAF/kg just after the harvest and 45 CFAF/kg just before the next harvest. Paddy production costs are given in detail in TIable 2. Production costs for other crops are estimated. Rainy and dry season paddy areas under the project represent the average holding of the "sar6" (extended family) and the portion of it that can be irrigated during the dry season within the limits of the Logone Water Agreement (3,000 ha out of 4,795 ha, net, including the Polder 8 extension, or 62.5%). 1/ Including outside labor required.  ANNEX 6 Table 2 AVERAGE PADDY PRODUCTION COSTS (CFAF/ha) Outside 1/ Project Project Area - Area 2/ Amortization - 3,880 Network maintenance - 2,780 Irrigation - 7,440 Extension - 3,800 Ploughing 7,000 7,000 Seeds (80 kg at 35 CFAF/kg) 2,800 - Seedlings - 9,000 Land Preparation - Type 0: 400 CFAF - Type 1: 1,200 CFAF - Type 2: 2,700 CFAF 2,700 - Fertilizer - Urea (140 kg) - 17,500 - Ammonium Sulfate (100 kg) - 8,600 TOTAL 12,500 60,000 1/ The cost of services provided by SEMRY can only partially be recovered because farmers are too poor to pay the full amount. 2/ Charges to be paid by SEMRY farmers in the dry season 1975/76. The ploughing charge is taken from the rainy season 1976 to permit comparison with the outside project case.  ANNEX 7 Table 1 $EMRY RICE PROJECT - PROJET PIZ SEMPY Operating Account - Compte D'Exploitatlon (CFAF mlli on - millions de FCA) 1972/73 19'73/74 1974/75 1975/76 1976/77 - 1976/77 2 Revenue Recettes Proceeds from rice sales 47 134 389 584 527 1,180 Produit de la vente du riz Proceeds from bran sales - 1 1 3 - 13 Produit de la vente du son Total 47 135 390 587 527 1,193 Total Expenditures Depenses Cash payment for paddy 34 74 170 339 224 362 Palement du paddy Mechanical cultivation ) ( Culture m6canis6e Inputs ) ( Fournitures Operation and Maintenance ) 139 69 209 270 274 681 ( Exploitation et entretien Handling costs ) ( Frals de manutention Rice milling coats ) ( Frais d'usinage Other personnel expenditures) _( Autres d6penses de personnel Total 173 143 379 609 498 1,043 Total Net surplus (deficit) (126) ( 8) 11 ( 22) 29 150 Excedent (ou d6ficit) net Less interest on credit - - _ - - - Moins interet sur le pret Net surplus (deficit) of Excedent (ou d6ficit) net du operating account (126) ( 8) 11 ( 22) 29 150 compte d'exploitation Cumulative surplus (deficit) (126) (134) (123) (145) (116) 5 Exc6dent (ou d6ficit) cumule 1/ December 31, 1976. 1/ 31 decembre 1976. 2/ Forecast for June 30, 1977. 2/ Pr6vision 30 juin 1977.  SEMRY RICE PROJECT - PROJET PIZ SEMRY ANNEX 7 Table 2 SOURCES AND USE OF FUNDS - ORIGINE ET AFFECTATION DES FONDS (CFAF million - millions de FCFA) 1972/73 1973/74 1974/75 1975/76 1976/77 1/ SOURCES ORIGINE Net surplus (deficit) of operating account (126) ( 8) 11 ( 22) 150 Exc6dent (ou deficit) net du compte d'exploitation Plus depreciation 2/ 24 49 59 75 Plus anortissements 21 Interest on credit - - - - Int6ret sur pret Cash income (102) 41 70 53 Revenu mon6taire Loans, grants, equity capital Prets, subventions, participations au capital IDA credit as loan 182 392 92 56 Credit e IDA sous forme de pret IDA credit as grant 135 - - - Credit IDA anus forme de subvention FAC grant 110 169 111 65 Subvention FAC CCCE loan as equity capital 200 - - - Pret CCCE sous forme de participation au capital CCCE loan as grant 40 51 12 - Pret CCCE sous forme de subvention Government equity capital 200 - - - Participation au capital de l'Etat Government loan (BCD) 14 256 - Pret de l'Etat (BCD) Government investment grant - 110 - - Subvention d'investissement de l'Etat Government operating grants 15 61 6 _ 2ubventions d'equilibre de l'Etat 896 1,039 221 121 TOTAL 794 1,080 291 174 TOTAL USE AFFECTATIONS Consultants' fees 89 126 59 54 Remun6ration des ing6nieurs conseils Fixed assets 651 535 178 298 Imobilisations 740 661 237 -52 Stocks 3/ 1 12 21 223 Stocks 2/ Loan repayments - _ Remboursement des prets TOTAL 741 673 258 575 TOTAL Annual cash surplus 53 407 33 (401) Excedent annuel de tr6sorerie Cumulative cash surplus 53 460 493 92 Excedent cumul 6 de tr6sorerie 1/ Forecast. 1/ Prevision. 2/ Equipment and machinery. 2/ Materiel et machines. 3/ Rice stocks. 2/ Stocks de riz.  ANNEX 7 Table 3 SFThCRY RICE PROJECT - PROJET RIZ SENMY BALANCE SHEETS - BILATIS (CFAF million - millions de FCFA) 1973 1/ 1974 1/ 1975 1/ 1976 1/ ASSETS ACTIF Fixed assets 651 1,186 1,364 1,662 Immobilisations Less accumulated depreciation 24 73 132 207 Moins amortissements cumul6s 627 1,113 1,232 1,455 Consultants' fees 89 215 274 328 Remun6ration des ingenieurs conseils Total fixed assets 716 1,328 1,506 1,783 Total des immobilisations Less capital grants 224 46o 519 519 Moins subventions d'investissement Total net fixed assets 492 868 987 1,264 Total des immobilisations nets Current Assets Actif r6alisable Stocks 1 13 34 257 Stocks Cash 53 460 493 92 Tresorerie TOTAL ASSETS 546 1,341 1,514 1,613 TOTAL DE L'ACTIF LTABILTTIES PASSIF Government equity 2/ 400 400 400 400 Participation de l'Etat 2/ Government loan 3/ 196 844 936 992 PrRt de 1'Etat 3/ Plus interest - - - - Plus interet Less repayments - - - Moins remboursements 596 1,2W 1,233 1,392 Retained earnings - from operating Ben6fices non distribu6s du account (126) (134) (123) (145) compte d'exploitation Plus grants for operating Plus subventions pour d6penses expenditures 76 231 301 366 d'exploitation TOTAL LIARILITIES 546 1,341 1,514 1,613 TOTAL DU PASSIF 1/ Years ending June 30. 1/ Annees se terminant le 30 juin. 2/ Including CCCE funds. 2/ Y compris les fonds CCCE. 3/ Including IDA funds on-lent as a loan. 3/ Y compris les fonds IDA r6tro- c6d6s sous forme de prSt.  ANNEX 7 Table 4 Page l SEMRY RICE PROJECT Estimated Operating Account (CFAF million) 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 Paddy Production Purchased (t) - From Project !/ 2/ 20,330 26,975 28,815 30,660 31,885 31,885 31,885 31,885 31,885 31,885 - From Outside Project - 1,970 1.975 1.085 640 - - - - - - - Total 22,300 28,950 29,900 31,300 31,885 31,885 31,885 31,885 31,885 31,885 Paddy Price (CFAF/kg) 30 30 30 30 30 30 30 30 30 30 Value of Paddy Purchased **) (CFAF mln ) 669 868 897 939 957 957 957 957 957 957 Rice Equivalent of Paddy Purchased (.67) 14,940 19,395 20,030 20,970 21,360 21,360 21,360 21,360 21,360 21,360 Weighted Average Ex-Mill Price of Rice (CFAF/kg) 79 79 79 79 79 79 79 79 79 79 Proceeds from Rice Sales (CFAF mln) *) 1,180 1,532 1,582 1,657 1,687 1,687 1,687 1,687 1,687 1,687 Levies Paid by Farmers - Area (ha) !/ 5,200 6,595 7,045 7,495 7,795 7,795 7,795 7,795 7,795 7,795 - Levy per ha (CFAF) 3/ 59,025 59,025 59,025 59,025 59,025 59,025 59,025 59,025 59,025 59,025 - Total Levies Paid (CFAF mln) ) 307 389 416 442 460 460 460 460 460 460 Other SEMRY Expenditures (CFAF mln) - Salaries 222 217 225 230 233 233 233 233 233 233 - Supplies and Services 459 557 580 609 623 623 623 623 623 623 - Total **) 681 774 805 839 856 856 856 856 856 856 Other SEMRY Sales Proceeds (CFAF mln) - Flour 10 12 12 12 12 12 12 12 12 12 -Other 3 3 5 5 5 5 5 5 5 5 - Total *) 13 15 17 17 17 17 17 17 17 17 TOTAL REVENUE *) 1,500 1,936 2,015 2,116 2,164 2,164 2,164 2,164 2,164 2,164 TOTAL EXPENDITURE **) 1.350 1,642 1.702 1.778 1.813 1,813 1.813 1.813 1.813 1.813 Operating Surplus 150 294 313 338 351 351 351 351 351 351 Cumulative Surplus (Deficit) 5 299 612 950 1,301 1,652 2,003 2,354 2,705 3,056 1/ Includes Polder No. 8 beginning 1977/78. 2/ Expected to disappear gradually with the development of SEMRY II. 3/ Weighted average of "redevances directes" for dry season 1975/76, rainy season 1976 and dry season 1976/77.  ANIIEX 7 SEMRY RICE PROJECT Table Tstj!rnated OperaLting AccOUnt Page 2 AN14EX 7 (CFAF Mi*§My RICE PROJECT Table 1976177 1.973/178 ~Esti eratin p pt 1980/81 1981/82 1982/83 Page 2 1977/78 1936/B :978/79 :979/80 1980/81 1981182 1982/83 .ir-olus from Operating Account 150 294 RI: - 351 3,5 Interest Paynent, 351 Account _ 150 18 294 35 313 35 338 35 35 351 81, - Si,;RY 7 f Operating 8 8 8 7 7 7 - Extension Progralt. vCCCE) - 26 43 43 142 42 91 Interest Pavment 81, _ 18 35 35 35 35 Caittal Pella 7 (:rA and BCD) _ 1 3 8 8 7 7 7___ - SEZ'RY T (. D$TAXsWD)Prograr. vCCCE) - 26 3 43 6 43 6 42 142 6 91 - Extension Program (CCCE' - Capital Partyments 1 11 13 15 - SE.'RY I (TDA and BCD) 1 3 5 7 9 18 _ _ 3 6 6 6 6 Tc.al Debt -SJMrt4 s:rrTlnkiam (CCCE' - 19 138 043 11 42 124 15102 21, - SEMP.Y I 8 11 14 13 13 1_3 - Extension Frog-am - 27 49 54 55 57 115 Tctal Debt Service Payments - EMP.Y I 19 38 40 42 44 102 pi_c ement- 61ZxEtveArairltr RE am 149 - 1214 2 12O i4 120 ___ 13201 _ - 27~~~~~~~~~~q- 55 11 1 143 144 164 176 1714 116 nn.ual Cash Balance 149 , 1214 120 120 , 120 120 120 %l.:iuatjve '5A IeTp& Equtpment 1 143 144 164 176 174 1:6 -,-nual Cash Balance ItlVe tUl.m Ca.sh ~1aflce Scultce SETME.Y,CCCE; Fe'crLary 1977. Sculrce SET1R.Y, CCCE; Fe'crLary 1977,  ANNEX 8 Table I SEMRY RICE PROJECT Econo=ic Price of Rice (Coostant 1977 Ter.-) 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 Thai 5% brokec, FOB Bangkok, connt. 1977 $/MT 300 319 353 390 390 390 390 390 390 Lees 307 dedoction for loeer grade 90 96 106 117 117 117 117 117 117 210 223 247 273 273 273 273 273 273 Ocean freight, i..r.ance. etc. 80 80 80 80 80 80 80 80 80 CIF price Do.ala, $/MT 1/ 1/ 1 290 303 327 353 353 353 353 353 353 CIF price D.oala, CFAF/Mj 86,150 162,480 - 132,790 - 79 090 - 71,050 74,235 80,115 86,485 86,485 86,485 86,485 86,485 86,485 Handling, port chargs 2/ 3,250 2,260 2,575 3,810 3,500 3,520 3,565 3,615 3,615 3,615 3,615 3.615 3,615 Importere' .onta 3/ 5.425 5.380 5 060 7,950 7J150 7.150 7.150 7 150 7,150 7.150 7,150 7,150 7.150 Price oarehoone Donola 94,825 170,120 140,425 90,850 81,700 84,905 90,830 97,250 97,250 97,250 97,250 97,250 97,250 Tranaport to Y...ndi 8.090 6.605 6 005 5.635 5.200 5.200 5,200 5 200 5,200 5,200 5.200 5.200 5.200 Price warehouse Yaouode 102,915 176,725 146,430 96,485 86,900 90,105 96,030 102,450 102,450 102,450 102,450 102,450 102,450 Lena: Transport Yagoom-Yaou.di 38.835 31.705 31 180 31.200 30.000 30,000 30.000 300 30000 3 330000 30000 30,000 Economic ea-ill price for sales to the orban south 64,080 145,020 115,250 65,285 56,900 60,105 66,030 72,450 72,450 72,450 72,450 72,450 72,450 Price warehouse Yaounde 102,915 176,725 146,430 96,485 86,900 90,105 96,030 102,450 102,450 102,450 102,450 102,450 102,450 Transport to GCarooe/Mrovs, 32m360 26,420 25.980 26.000 25,000 25.000 25,000 25 000 25,000 25,000 25,000 25,000 2 Econooic em-mill price for sales to northern Cmeroon 135,275 203,145 172,410 122,485 111,900 115,105 121,030 127,450 127,450 127,450 127,450 127,450 127,450 CIF price Lago., CFAF/MT 4/ 73,650 76,735 81,115 86,485 86,485 86,485 86,485 86.485 86,485 Handliog, port charges 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 1mporters' cost 7,500 7,500 7,500 7,500 7,500 7,500 7.500 7,508 7,50 Tranaport LAgon - Maiduguri 33,000 33,000 33-000 33 000 33 000 33,000 33.000 33,000 33,0OO Price vaarehose northern Nigeria 138,570 130,010 120,000 123,085 127,465 132,835 132,835 132,835 132,835 132,835 132,835 Lesa Tramaport Tagou--Maiduguri 10.390 9,750 9,000 9,000 9,000 9 000 9,000 9.000 , 000 9.D00 9.000 Economic a-mill price for sales to orthern Nigeria 128,180 120,260 111,000 114,085 118,465 123,835 123,835 123,835 123,835 123,835 123,835 PA-103, A.nem 20, maspriopion.: 60% Sales to Y-o-ndi (Sooth) 60% 207 nalen to northern Cm.eroon 20% 20% emports 20% I/ Actual import mit ve;oes. 2/ Port and phytonanitary chargen, unloading, eran.port to vreho.ne, cuatms chargen. 3/ "Frais gio6raom actoriads" T/ Through 1979 a.nomed higher than CIF Douala becaue of higher imnurance r.ta.  ANNEX0 Table 2 SEMRY RICE PROJECT Proiect Benefits 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 Total paddy production (t) 1,646 4,209 10,196 20,458 23,845 29,675 31,700 1/ 33,725 -/ 35,075 1/ 35,075 35,075 35,075 35,075 Paddy production without projeot (t) - SEfRi I area 1,160 2,610 2,900 3,520 4,280 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 - Polder 8 - - - - - 800 Rio800 800 B8o 800 800 800 1,160 2,610 2,900 3,520 4,280 5,300 5,300 5,300 5,300 5,300 5,300 5,300 5,300 In-reoeotal paddy prodoetion (t) - With Poldee 8 486 1,599 7,296 16,938 19,565 24,375 26,400 28,425 29,775 29,775 29,775 29,775 29,775 - Without Polder 8 21,935 23,960 25,985 27,335 27,335 27,335 27,335 27,335 Rice e.i-taleut (at 67) - With Polder 8 326 1,071 4,888 11,348 13,109 16,331 17,688 19,045 19,949 19,949 19,949 19,949 19,949 - WOthoot Polder 8 14,696 16,053 17,410 18,314 18,314 18,314 18,314 18,314 Production ahare goinR to (7) - Northern Camer-on 50 50 45 25 25 20 20 20 20 20 20 20 20 - Southern C-eroon 50 50 50 60 60 60 60 60 60 60 60 60 60 - Enport mcrket. - - 5 15 15 20 20 20 20 20 20 20 20 Weighted acononic en-nill price 99,677 174,082 141,618 87,831 78,765 81,901 87,517 93,727 93,727 93,727 93,727 93,727 93,727 (CFAF/t) 2/ Value of inoreo,etal rice pro- docti-n (CFAF =.I) 32 186 692 997 1,033 1,338 1,548 1,785 1,870 1,870 1,870 1,870 1,870 (Withou. Polder 8) (1,203) (1,405) (1,632) (1,717) (1,717) (1,717) (1,717) (1,717) Detail a) With Pnld-r 0 Value Or lucremectuBl production nold to - Northern Ctaeron 22 109 379 347 367 376 428 485 509 509 509 509 509 - Southern C-meroo. 10 77 282 445 448 589 701 828 867 867 867 867 867 - Eiport machete - - 31 205 218 373 419 472 494 494 494 494 494 b) Without Pold-r 0 V'lue of uncrenentel production -ond -o - orthern Cameroon 22 109 379 347 367 338 389 444 467 467 467 467 467 - Southern C .eroon 10 77 282 445 448 530 636 757 796 796 796 796 796 - Enport mckhete - 31 205 218 335 380 431 454 454 454 454 454 1/ With Polder S. 2/ From Tble 1 Economic Prtice of Rite.  ANNEX 8 Table 3 SEMRY RICE PROJECT Economic Costs and Benefits (CFAF Million) 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 Index of inflation 61.8 75.7 86.6 92.3 100.0 108.0 Construction COGECAM contract 838 465 - - - - - - On-farm development works 24 70 80 210 59 Rice mill - 13 9 Paddy and rice storage - 14 81 69 - - - _ Housing, utility buildings 28 21 10 8 66 - - Water supply -50 _ - - Subtotal 890 556 117 308 244 - - Less: Indirect taxes 1/ 108 71 18 50 33 - TOTAL CONSTRUCTION 782 485 99 258 211 - - - - Equipment Pumps 15 26 22 5 - - - - - On-farm development 142 7 12 8 Other 6 118 55 92 65 2 - - - TOTAL EQUIPMENT 163 151 89 105 65 2 - - - Engineering Consultants 144 166 68 70 44 Incremental Staff and Labor Costs 20 79 101 150 136 131 139 144 147 147 Incremental vperat ion and Maintenance Costs - 69 101 210 318 445 539 562 590 604 604 Equipment Renewal - - _ 149 124 120 120 120 120 TOTAL COST 1,178 982 567 901 1,050 796 821 854 871 871 Value of incremental production 32 186 692 997 1.033 1.338 1,548 1,785 1,870 1,870 Net benefits (1,146) ( 796) 125 96 ( 17) 542 727 931 999 999 1/ 18% on on-farm development works, 12% on other construction (from PA-103, Annex 20). 2/ Excluding taxes on fuels and lubricants (20%).  ANNEX 8 Table 4 SEMRY RICE PROJECT Economic Rate of Return Calculation Sensitivity Analysis (40 years) Case I - Benefits Not Lagged: Rate of Return 22.75% Costs constant - Benefits -10% 18.95% -20% 14.95% +10% 26.45% +20% 30.05% Benefits constant - Costs -10% 26.85% -20% +10% 19.35% +20% Benefits -10% - Costs +10% 15.75% Benefits -20% - Costs +10% 5.35%  ANNEX 8 Table 5 SEMRY RICE PROJECT Economic Rate of Return Calculation Sensitivity Analysis (40 years) Case II - Benefits Lagged One Year: Rate of Return 17.15% Costs constant - Benefits -10% 14.45% -20% 11.45% +10% 19.75% +20% 22.15% Benefits constant - Costs -10% 19.95% -20% 23.35% +10% 14.65% +20% 12.45% Benefits -10% - Costs +10% 11.95% Benefits -20% - Costs +10% 3.65%  ANNEX I able I SEMRYRICE PROJECT SENRY PERSONNEL - PERSONNEL SEMRY Situation with the P-roj ocr-Sttoutin aver to Projt _ Situat-on - -2/ - -- - before Project I Expected - P6- Actual - Effectins _ avant is Projet - 1972/73 1973/74 1974/75 1975/76 1976/77 1972/73 1973/74 1974/75 1975/76 1976/77 General Macagnecn - Direction g.ngrait 7 IS 15 17 17 15 29 33 35 36 29 Macagging Director - Directeoc g66rel- (E)* 011- 1 DOpoty Director - DG. adjoici - 1 I Fin. nd Adio. Dicector - D. adni. et ficancier (E) - 1 1 1 1 1 1 1 Assiscant Ad.ticistrot. Officer - D.A F. *djoint ~ ~~- - - 1 1 1' Chief Accouctant - Chef co-ptable (E) - - - - - -1 Pernonnel Director - Chef do persocn.l.- - - - I 1 Accoucting Anaistant - Attschd de cuopt.a- bilitd 1 2 2 2 2 2 1 1 1 2 2 Clerks - Esploy6s de borneo 4 6 6 6 6 6 23 25 25 25 19 Secrstaries - S.critaires I 5 5 5 5 5 2 5 5 4 3 On-Fant De-slopre.t - A6nnagee-ent den enploitations 15 22 22 22 16 - 41 151 158 150 - Forenen - CoctrecItres (E) - 7 2 22-6 8 5 4 Engine Operators - Cocducteors d'eugiiu 8 1I 10 10 8 - 13 13 13 13 Assistant Operators - Aide.--onducteurs + asneuvres 7 10 10 10 8 10 30 30 29 M.asocs sd Asst. Maso.s - Maq,ons et aides - - - - - - 12 100 110 104 - Operatioc, Maicteca-ce - Ecploititico ct entretien 11 21 35 52 55 54 10 12 14 17 28 Irrigatio- E8gi-eer ; Icgenieur de 1Iirrigatio-(E) - - 1 I 1 - 1 1 i 2 - Assistant Rogiceers - Ingenieure adjoint - - - 1 2 2 1 1 2 3 Enginc Operators - Condocte-rs d'engins 2 2 5 7 9 9 - - - - I Ditch Riders - Surv illants do r6seax d' irrigation 9 15 25 35 35 35 9 10 12 15 24 Pumping Stitioc Mechacics - M6c. de station de ponpge - 2 2 4 4 4 - - - - Assistact Meohanics - Aides-s6...iciens - 2 2 4 4 4 - - - - - Lacd P-eparatios - Pripar-tioc des solc 21 29 41 50 58 58 21 23 30 32 20 FPreta - CostrescTatr (E) 1 I 1 1 1 1 1 1 1 1 1 Assistant Foren - Coctranaitre sdjoint - - - 1 1 1 EnginoOperators - Conducte.rs d'engicn 10 14 20 24 28 28 10 12 14 14 13 Assist. Operators - Aide-conducteurn 10 14 20 24 28 28 10 10 15 17 6 Girage, Repair Shop - larage et *tclier de r6paration _ 21 26 _27 __32 35 35 40 61 77 97 88 M:noger - Di-cte- (E) 1 1 1 1 1 1 1 1 1 1 1 Asslstact Macager - D. adjoict - - - 1 I 1 1 1 1 1 1 Mech-nics - Micanioieni (E) + (E) l - - - - - - 1 2 3 3 2 Mechanics - M6ca-iciens iS 13 13 15 15 15 10 12 15 18 12 Assist. Meehsics - Aides ic...nicci- et gardiecs 6 8 8 IS 10 10 20 35 43 55 52 Truck Drivers - Conducteurs vh. Ieg-rs et poids lords 4 4 5 5 8 8 7 10 14 19 20 Rice Mill - RL.erie coscci.lis.tioc 54 57 64 70 74 75 28 43i 94 106 1039 M ager - Directer (E) I 1 1 1 1 1 1 1 1 1 I Assistant Managers - D. djcints - I I I 1 2 - - Equipsiact Operators - Conducteurs de -tchi-n o maenceuvren 18 18 22 26 30 39 25 29 84 95 89 Stortge keepers - Gardie.s de silos 35 37 40 42 42 42 2 2 2 3 5 Marketing Ma.aggr - Dir. conercis- liastion (E) - _ - - 1 1 5 1 Assistact Marketing Manager - Adjoict S.C. (C) - _ - _ - - 1 Assistant Marketing Manager - Adjoict D.C. - - - _ _ - Marketing Staff - Personnel de connercia- lisation - - 10 5 5 6 5UBTOTAL - SOUS-TOTAL 129 170 204 243 255 237 169 3234 408 438 2684  G~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. s I I. .4 -D .4 0 0 I 4 0.~ ~~~~~ ~~~~~~~~~~~~ 4i '0 - e c c -4 °. v0 n ;| 014 E 1. e' °4 D n | ''ooF @N nI ) eO 1. 0wo 0'>* w S144 In 44 440 1 0~ oceUz: >1 44Ce4 \ ~ ~ e 41. Ic .4 - 0f C 0 c '0 -,_ 0~~~~ c Xe <>°v4 1 0.> > , e ° co sa + ZX X 0.cct4)vaa0 a0 e S ev v e .| U e b c c" U e v W l Z C C g 1_ * 5 ' e1 b4 v w0e4 1. X*eX .ov41vba4 0fi1*4 In ei v'004O4'44' c~I d c o Q e ' ~ '' Zn '0 >vt5W _-_l C e44 gI h e e I I I h t~v i4 . o ,, _ _ _ 0  -a _ne en- cC e r. tne-nN° = en o _ _ _N N _ ~~~~~~~~~~~~~~~~~~~N I C~~~~~~~~~~~C 5.b ON en° S .ae ne gbeS C, sle 01 ab b C o o _ I |I VMI-I ICI 3 l~~~~ oe ,._e , _~~~e aa-a an -0 A C> 0- UN O ( CCtOwV -. a a a o a CCC esn 0e o< 08 I- lo a o 4iC bC Ol-e-o,,o _ g I  M A L I { ./ f ° bThr hfm,daJin stlw-,, 0 a. , 1, - NIGER / CHAD DA& dsna,,.y .... ... a hr CHAD SU5DAN daan a/t- 14 I ,rsf hound Th/u'The f / Sl his ciulp ctNt D inplly enodn,r,el,nc,i or Sec C/Ae 01. -Z AN lolBan aid itsaffiliates. h~~~~~~~~~~~~~SU L$%_ Ix ZL9 t @Gt 9 9 ,f N I G 21{ o' E4 CER \5 %( K.E CH CA ERON C' HFr'djms >ASON . V" CAER00NN 1 t>CEAfV , e Sndv~~~~lb o dI tQlATI N._ G ouR2a I Azt/t . Gunl olrlo .. raot ........ 14. 6 g/,v~ f 2 4Joo GABON ArLANr/C 13 5IOWoizc OCEAA EOJTRA. ..A 4E.O r¶dsf Poved .' 4 () Pkors °°vlov/>M aroJods Railroads SCNSEEMRY~ RIC~I~CETRJCtO+s Ib ILOMETERS /XgFR Ar SECON ~ ~ ic_ Fl International airports orts ~ L CT\n0 on MILES o00 T \WATMN )COII / SE PROJS rentinlboundo rAM\ 0 E ROON TAI SECOND SEMRY RICE PRO.JECJ ICCPTN E 1 _____ 20/ 00X O~~~~~~ 40 8_ 100> tO ~~~~~~~~~~Paved roads NE I R G A=XtrS erS + Grovel roads 4;oi HQR, Mr Earth roads ~~~~0 20 4 0o 120 140 160Fi I z r' g 08 1 j Railroads > v < - s (49\ E S $9tW / < rfRI 0 100~~~~GNT A 40v ^< g > / A wXCEBJ~~~~art r ads r L_ ~ j>t A Mv Port t t ; Me.g./ tt-., /MoR tdOuNk vt \ /JMb AtA~~WZ v). g i, >Ud \ OCLt 8 aEQ+aJofEf IAt,SA; A isO N en co N G O n fArl ($ .~~