Liberia - Agricultural Development and Technical Assistance Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3008 PROJECT PERFORMANCE AUDIT REPORT LIBERIA AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANCE PROJECT (CREDIT 306-LBR) June 3, 1980 Operations Evaluation Department This docaet b a restricted distribution and may be ued by recipients only in the performance of their official duties. Its contents may net otherwise be diselesed without World Bank authorlatin.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT LIBERIA AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANC7 PROJECT (Credit 306-LBR) TABLE OF CONTENTS Page Preface i Basic Data Sheet ii Highlights iii PROJECT PERFORMANCE AUDIT MEMORANDUM I. Summary 1 II. Main Issues 2 A. Reorganization of the Ministry of Agriculture 2 B. Recruitment of Consultants 4 PROJECT COMPLETION REPORT I. Introduction 7 II. Formulation 8 III. Implementation 9 IV. Institutional Performance and Development 17 V. Financial Performance 20 VI. Project Impact and Bank Performance 23 VII. Conclusion and Summary 25 Map 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.  PROJECT PERFORMANCE AUDIT REPORT LIBERIA AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANCE PROJECT (Credit 306-LBR) PREFACE This is a performance audit of the Agricultural Development and Technical Assistance Project in Liberia for which Credit 306-LBR was approved in April 1972 in the sum of US$1.2 million. The final disbursement in respect of this credit was made on August 14, 1978. A remaining amount of US$36,530.50 was cancelled on April 25, 1979. The audit report consists of an audit memorandum prepared by the Operations Evaluation Department and a Project Completion Report dated February 23, 1979. The PCR was prepared by the Western Africa Regional Office on the basis of a country visit in June, 1978. The audit membrandum is based on a review of the Appraisal Report (No. PA-120a) dated March 7, 1972, the President's Report (P-1054) of April 6, 1972, the Credit Agreement dated May 17, 1972, and the PCR; correspondence with the Borrower and internal Bank memoranda on project issues as contained in relevant Bank files have also been consulted and Bank staff associated with the project have been interviewed. An OED mission visited Liberia in November 1979. The mission held discussions with officials of the Ministries of Finance and Agriculture. The information obtained during that mission was used to test the validity of the conclusions of the PCR. A copy of the draft report was sent to the Borrower on March 11, 1980 for comments but none have been received. The audit finds that the PCR covers adequately the project's salient features and the PPAM generally agrees with the conclusions. In addition to summarizing the objectives and results of the project, the PPAM expands upon the discussion of consultant selection and the efforts to reorganize the Ministry of Agriculture. The valuable assistance provided by the Government of Liberia and Ministry staff met during the preparation of this report is gratefully acknowledged.  PROJECT PERFORMANCE AUDIT REPORT BASIC DATA SHEET LIBERIA AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANCE PROJECT (CREDIT 306-LBR) KEY PROJECT DATA Appraisal Actual or Item Expectation Current Estimate Total Project Cost (US$ million) 1.60 1.55 Underrun - 3 Credit Amount (US$ million) 1.2 1.20 Disbursed ) - 1.06 Cancelled )- 1.04 Repaid to December 31, 1979 Outstanding to ) - 1.06 Date for Completion of Physical Components 06/30/76 08/78 Proportion Completed by Appraisal Target Date (%) - 90 Proportion of Time Overrun (%) 50 Incremental Economic Rate of Return (%) none calculated none calculated Cumulative Estimated and Actual Disbursements (US$ thousands) FY73 FY74 FY75 FY76 FY77 FY78 FY79 Estimated 186 754 1110 1200 - - - Actual - 20 613 708 890 1060 - Actual/Estimated (%) 0 3 55 59 - - - OTHER PROJECT DATA Original Actual or Item Plan Revisions Eat. Actual First Mention in Files or Timetable - 10/06/67 Government's Application 07/71 Negotiations 02/14/72 - 02/28/72 Board Approval 04/18/72 - 04/18/72 Credit Agreement Date 05/17/72 - 05/17/72 Effectiveness Date 08/17/72 10/15/72, 12/15/72 12/08/72 Closing Date 12/31/76 08/31/77, 12/31/77 06/30/78, 09/30/78 08/14/78 Borrower Republic of Liberia Executing Agency Ministry of Agriculture Fiscal Year of Borrower Jan. 1-Dec. 31; July 1-June 30 (as of 1977) Follow-on Project Names Lofa Bong Agr. Dev. Rubber Loan/Credit Numbers 577 700 1544 Amounts (US$ million) 6 7 6 Loan/Credit Agreement Dates 07/22/75 04/19/77 03/30/78 MISSION DATA Month/ No. of No. of Man- Date of Item Year Weeks Persons Weeks Report Appraisal 08/71 3 3 9 03/72 Supervision I 09/72 1 1 1 10/72 Supervision II 07/73 4/7 1 4/7 09/73 Supervision 110 05/74 4/7 1 4/7 06/74 Supervision IV 06/74 1/7 1 1/7 06/74 Supervision V 08/75 1 1 1 11/75 Supervision VI 02/76 1 1 1 03/76 Supervision VII 05/77 1 1 1 07/77 Supervision VIII 03/78 4/7 1 4/7 04/78 Super-vision IX 06/78 4/7 2 1-1/7 06/78 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) U.S. Dollar (US$) Year: Appraisal Year Average Exchange Rate: US$1 = 1 Intervening Years Average US$1 = 1 Completion Year Average US$1 = 1  - iii - PROJECT PERFORMANCE AUDIT REPORT LIBERIA AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANCE PROJECT (Credit 306-LBR) HIGHLIGHTS The project was to assist in the preparation of two integrated rural development projects, a survey of the rubber industry combined with the preparation of investment proposals for this sector, a pilot rubber rehabili- tation and planting scheme, improving rice research and also provided for technical assistance and training. The project was successful in several aspects. The surveys led to two Agricultural Development Projects (Credit 577-LBR of 1975 and Credit 700-LBR of 1977), as well as to a Rubber Development Project (Loan 1544-LBR/ Credit 786-LBR) of April 1978. Despite some delays encountered in the imple- mentation of rice research, the component can be termed successful. Training was not accomplished due to difficulties encountered in locating qualified candidates. A consultant study of reorganizing the Ministry of Agriculture was found unsatisfactory by both the Liberian Government and the Bank. Points of special interest are: - reorganization attempt of Ministry of Agriculture unsuccessful (PPAM, paras. 4, 6 to 17; PCR, paras. 3.20, and 3.21); - lack of prior interviews led to employment of unsatisfactorily performing expatriates (PPAM, paras. 7, 18 to 22; PCR, paras. 3.18, 3.19, 3.22, 4.02 and 6.04); - project lays ground for three agricultural projects (PPAM, para. 4; PCR, paras. 3.02 and 3.13); and - shortage of qualified Liberian staff main reason for failure of training component (PPAM, para. 4; PCR, paras. 4.05 and 4.06).  PROJECT PERFORMANCE AUDIT MEMORANDUM LIBERIA AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANCE PROJECT (Credit 306-LBR) I. SUMMARY 1. A Bank identification mission visited Liberia in 1969 and found that smallholder rubber, irrigated and rainfed rice, cocoa, coffee, coconut and regional agricultural extension development offered prospects for Bank assistance. However, the mission pointed out that available information on Liberia's agricultural sector was inadequate and that only a project for replanting and rehabilitating Liberian-owned rubber would be feasible within a relatively short period. Following preparation of such a project by consul- tants, the appraisal which took place in July 1970 found that the prospective project's ROR was low and detailed information on the Liberian-owned rubber industry still insufficient. 2. In discussions with Government, it was concluded that more studies on agricultural development possibilities and the rubber sector in particular would be needed. It was also decided that the planning and implementation capacity of the Ministry of Agriculture required strengthening and that this could be best accomplished through providing technical assistance. 3. The project that evolved from these discussions was to be carried out over three years and included preparation of two integrated rural develop- ment projects, a survey of the rubber industry and preparation of investment proposals, a pilot rubber rehabilitation and planting scheme, improving rice research, technical assistance and training. The project's technical assis- tance component was to focus on project administration and to plan the future structure and organization of the Ministry of Agriculture as well as the preparation of a staff training program. The project's main objective was to lay the foundation for future agricultural projects by preparing the Ministry of Agriculture for planning and implementing development projects. 4. Following postponements in credit effectiveness due to difficulties in locating a suitable project administrator, the project went ahead without any major delays. The studies on rural development possibilities in Bong and Lofa as well as on rubber development resulted in Bank assisted projects. The pilot rubber scheme was successful in its endeavor to rehabilitate small- holder rubber plantations, but less successful in a new planting program. The rice research component also proceeded satisfactorily, although part of the construction program developed slower than expected, leading to the project's time overrun. The training component did not come off the ground due to difficulties encountered in locating qualified candidates. The study of reorganizing the Ministry of Agriculture was found unsatisfactory by both the Liberian Government and the Bank.  - 2 - 5. Total project cost remained largely within appraisal projections, partly due to reallocation within Credit Categories and the allowance of 17% for price/physical contingencies. An unused amount of US$36,530 was cancelled in April 1979. Due to the nature of the project, i.e. mainly technical assistance research, studies and a pilot scheme, no economic rate of return was ever calculated. II. MAIN ISSUES A. Reorganization of the Ministry of Agriculture 6. The appraisal found that the Ministry of Agriculture's "impact was insignificant, due principally to poor planning and management capability, the wide dispersal of limited funds - about US$1.3 million or 2.4% of total Government expenditure annually between 1965-70 - the low caliber of staff, many of whom are unqualified and were appointed for non-professional rea- sons, and lack of Government interest in developing agriculture."I' It was thought that "under the project, the Ministry's functions and organization would be reviewed and, if necessary, revised, and a five-year staffing, training and financing plan prepared. Consideration would be given also to amending existing legislation and creating new legislation should this be required."2 It was thought that this task could be undertaken by an "expe- rienced administrator" who would also take care of administering and super- vising the other project activities. 7. After some delay an administrator was found but he succeeded within a short time in antagonizing top Liberian officials and had to leave the country after 2 months. His successor who was in post for about a year did not fare much better - his input regarding the reorganization was restricted to the preparation of a single questionnaire (PCR paras. 3.18, 3.19). 8. Following the unsatisfactory performance of the administrators, the Bank and the Borrower agreed to employ a consulting firm, which sent a single staff member to Liberia. His report on the reorganization of the Ministry was found unsatisfactory. To avoid possible litigation, the Bank convinced the Liberian Government to accept the report and settle the consultant's claims (PCR para. 3.20). 9. A total of more than US$26,000 of credit funds, plus the corre- sponding local counterpart funds, has been spent on studying the reorgani- zation of the Ministry. As a result relations between Government officials and the Bank became strained at times, and nothing evolved out of the exer- cise. 1/ Appraisal Report, page 4, para. 2.09. 2/ Appraisal Report, page 10, para. 3.12. u - 3 - 10. The appraisal identified several weaknesses of the then existing Ministry. First, the inadequacy of its planning and management capability; second, the limited financial resources available; third, the low caliber and limited number of staff available; and fourth, the lack of Government interest in develo-ing agriculture (para. 6 above). 11. With these four major constraints identified, it is interesting to analyze how much an expatriate consultant could contribute to alleviating these problems. The Bank provided draft terms of reference which were rather broad and not detailed enough to adequately cover the four problem areas identified by the appraisal. 12. To improve planning and management, the TOR required the consultant to estimate the Ministry's staff requirements, training needs, budget require- ments and organizational requirements for a 5-year period, an undertaking only a planning unit could have done. 13. The second constraint identified by the appraisal, the limited budget allocation, was also beyond the control of a consultant. How could any outsider be expected to influence the budget which is subject to the approval of the legislature. In addition it seems near to impossible for a consultant to obtain adequate information on bi- or multilateral financial aid likely to be forthcoming within the 5-year period he was expected to deal with. 14. One of the reasons for the Ministry's weakness as demonstrated in its understaffing and low caliber of staff was the non-competitiveness of its salary structure. This had been recognized at appraisal - it is men- tioned in the appraisal report that most agricultural graduates are employed in the rivate sector where they can get better salaries than in Government service/ - but the rather general reference in the consultant's TOR to advise on "a scheme of service for Ministry's staff" shows inadequate recogni- tion of the difficulties likely to be encountered when trying to establish higher salaries in one ministry or changing the whole salary structure for all civil servants. 15. The lack of adequate incentives to attract qualified staff to the Ministry of Agriculture had been taken into account by the Bank when appraising the first rural development project (Credit 577-LBR, Lofa County Agricultural Development). An autonomous project unit was established which permitted the introduction of an improved salary scale for project staff. The same approach was also used for the following agricultural projects. 16. Considering that the organization, staffing and financing of a ministry is a highly political issue, the Bank's decision to entrust the task of advising on the reorganization to a project administrator, an expa- triate without any knowledge about Liberian conditions and preoccupied with 1/ Appraisal Report, page 5, para. 2.13.  - 4 - getting several studies started and a pilot project initiated, was ill con- sidered. Once the Bank recognized the impossibility of finding a qualified administrator and, more importantly, of keeping him in post, the decision was taken to entrust the reorganization study to a foreign consultant firm. Due to the firm's inexperience of local conditions as wel" as the political nature of the task, the final report proved to be of liLtle value to the Liberian Government. 17. With the benefit of hindsight, it can be said that it would have been less costly and would have put less strain on Bank/Borrower relations had there been a dialogue on (i) the need to offer more incentives to the Ministry's staff; (ii) the alternative of establishing autonomous, better paying project units in case the upward revision of the Ministry's salary scale would be unacceptable to Government; (iii) a limited manpower study in the light of development projects evolving and, related to these, the efforts to be undertaken for improving the education sector so that more qualified local staff would become available; and (iv) the need to strengthen, expand or establish new technical, economic and planning departments within the Ministry. B. Recruitment of Consultants 18. The project provided for the employment of two experts for the key posts of project administrator and manager of the pilot rubber scheme. While the manager of the pilot scheme was already working in Liberia as an advisor on rubber, the administrator had to be found outside the country. This proved to be a rather difficult and time consuming task, leading to postponements in declaring the credit effective. Because of the need not to delay credit effectiveness any further, the search for a qualified candidate was unduly rushed. The first candidate chosen had to be eliminated because of unfavor- able medical reports. As an indication of the rush it should be noted that the Bank went ahead and declared the credit effective without waiting for the results of the candidate's medical examination, even though all conditions of effectiveness had not yet been met. 19. The Government, following Bank advice, entrusted the search for a suitable candidate to a national agency which restricted the nomination of candidates to the agency's country, thus favoring experts with an entirely different administrative background than the one prevailing in Liberia. The administrator finally selected left for Liberia without any briefing by the Bank and only limited information provided by the recruiting agency. Within a few weeks he had succeeded in antagonizing Liberian officials, and he left within two months after his arrival (PCR para. 3.18). 20. The Deputy Minister of Agriculture assumed the functions of proj- ect administrator while the search for a suitable candidate was resumed by the recruiting agency. The second candidate was also not interviewed by Bank staff to assess his qualifications, an omission the audit considers regrettable, since the credit agreement stipulated the appointment of the administrator as a condition of effectiveness, an indication of the measure of  - 5 - importance accorded to this position. A recruiting agency with limited experience of Liberia should not have been expected to take on this responsi- bility. 21. The second candidate fared slightly better, since he received some briefing by staff after having been selected and approved by the Government of Liberia. However, after he developed some personal problems, his contract was also terminated by Government within one year (PCR para. 3.19). The Deputy Minister of Agriculture again resumed the functions of the project admin- istrator - except for advising on the Ministry's reorganization, a responsi- bility which was assigned to a consulting firm - and no further replacements for this position were appointed. 22. The obvious lesson learned from this experience is that (i) small countries do not have the means to undertake the necessary interviews of candidates abroad, nor do they have the financial strength to invite large numbers of candidates for interviews to their countries; (ii) recruiting agencies without adequate experience in the countries for which they are expected to supply staff are of limited usefulness; and (iii) intensive briefing of candidates by Bank staff is essential. The Western Africa Region has learned from this unhappy experience and recruiting of expatriate proj- ect staff is now handled through the Agricultural Projects Management Unit (PCR para. 6.04).  - 6- LIBERIA AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANCE PROJECT Cr. 306-LBR PROJECT COMPLETION REPORT February 23, 1979  -7- LIBERIA PROJECT COMPLETION REPORT AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANCE PROJECT (Cr. 306-LBR) I. INTRODUCTION 1.01 This project represented the Bank Group's first involvement in agriculture in Liberia. The project evolved from a Bank identification mission in 1969 which visited Liberia to survey the state of agricultural development, and to identify possible projects in the following subjects: (a) smallholder rubber, (b) irrigated and rainfed rice, (c) cocoa (small- holders), (d) coffee (smallholders), (e) coconut, and (f) regional agricul- tural extension. The mission reported briefly that rice and rubber were the only crops for which Liberia's Ministry of Agriculture had prepared development programs, and there was insufficient information on agriculture as a sector. The Liberian Department of Planning and Economic Affairs was then preparing a scheme for carrying out a national agricultural census, but was in need of technical and financial help. The identification mission felt that this exercise would be a necessary prerequisite to a countrywide land-use survey, information which would assist in the formulation of investment projects. The mission concluded there was no scope for a rice project, but that a scheme for replanting and rehabilitating some 45,000 acres of Liberian-owned rubber deserved the Bank Group's consideration. It also recommended Bank Group assistance in data collection. 1.02 The next phase involved the preparation and appraisal of a rubber project. The Government of Liberia (GOL) requested UNDP assistance for a feasibility study. At the request of UNDP, the Bank undertook to finance preparation of the project, and appointed consultants for the feasibility study. The project was to be located in Southeast Liberia, where an estimated 10% of Liberia's rubber was produced. Smallholders had been increasing their area under rubber (by about 40% between 1960 and 1965), but they produced less than half the output of four concessions in the area. Smallholders had inadequate technical know-how, assistance from Government, and credit facilities. A project proposal was prepared which covered the rehabilitation of 24,000 acres of Liberian-owned rubber. Appraisal took place in July 1970, but the project was turned down because of a low rate of return and insufficient detailed informa- tion on the Liberian-owned rubber industry. - 8 - 1.03 During subsequent discussions with Government, it was concluded that development activities in agriculture as a whole, and the rubber industry in particular, could only be promoted if a series of studies were carried out, and technical assistance provided to strengthen the planning and implementation capacity of the Ministry of Agriculture. The project under review was con- ceived to meet these requirements. No further feasibility work was considered necessary, and preparation essentially involved a review of the available information. Appraisal took place in August 1971. II. FORMULATION 2.01 The project was to be carried out over three years and was to include: a) feasibility studies and preparing detailed investment proposals for two integrated rural development projects; b) a survey of the rubber industry and the preparation of investment proposals; c) a pilot rubber scheme to provide Liberian rubber farmers with credits for labor, fertilizers, tapping materials, and high yielding clones to rehabilitate 2,000 acres of untapped or poorly tapped rubber and government grants to replant 500 acres of old rubber; d) improving rice research at the Suakoko central research station; e) providing a specialist experienced in administration to administer the project and to plan the future structure and organization of the Department of Agriculture and prepare a staff training program; and f) providing training for Liberians in preparing investment projects, rice research, and in rubber farm management and tapping. 2.02 Since this was the first project in the agricultural sector, its broad aim was to serve as the basis for future agricultural projects. A key objective was to prepare the Ministry of Agriculture for planning and implementing development projects. In addition to the emphasis on rubber, the project provided for studies in Lofa and Bong Counties as sites for possible integrated rural development projects. -9- 2.03 After appraisal, the above project was accepted for finance by the Association. Total project costs were estimated at US$1.6 million, of which IDA credit amounted to US$1.2 million. This credit was to finance all foreign exchange costs of some US$0.88 million, and 44% of local currency costs. The balance of US$0.40 million was to be met from Government budgetary allocations. IDA funds were to be used for the following purposes: US$ (000) Project preparation and associated studies (para 2.01, items a and b) 478 Pilot Rubber Project including training (para 2.01, item c) 207 Rice research and training (para 2.01, item d) 225 Project administration and counterparts and ministry reorganization (para 2.01, item e) 112 Unallocated 178 1,200 III. IMPLEMENTATION 3.01 The main activities of the project involved the contract services of expatriate individuals or consulting firms, and implemen- tation is largely a story of knowing how this aspect of the project proceeded. A consulting firm was employed to carry out the studies for the Lofa and Bong integrated agricultural development projects, and the rubber industry survey and investment proposals. Two experts successively managed the pilot rubber scheme between 1973 and 1977. Under an agree- ment with an international institute as consultants for the rice research component, the Government appointed an institute staff member as Rice Agronomist. For project administration and the ministry reorganization study, the Government, with the assistance of IDA, employed a consultant in 1973, but terminated his services after three months. Shortly after, a second consultant was recruited with IDA's assistance, and he remained in post until the end of 1974. At this time, the Government accepted a firm as consultants to review the organization and functions of the Ministry of Agriculture and to make recommendations for its improvement. - 10 - Surveys and Feasibility Studies for Rural Development and Rubber Development 3.02 The consultants were chosen from a short list of three firms. Contract negotiations were made difficult by a Liberian ir istence that all earnings of the consultants must be taxed under Liberian law. At one point the Bank was accused of influencing the consultants in their stand against taxation, but tax exemption was eventually granted. At final agreement, the consultants' charges for the three studies were some US$638,000 against the appraisal estimate of US$628,000. The 20% contin- gency on consultant services adequately covered the extra expenditure. The Government made payments to the consultants in a slow manner, and did not adhere to the schedule in their contract. The consultants in charge of preparing the development projects performed well once the initial con- tract difficulties were clarified. Its relations with the Government were good, and the firm responded in a cooperative manner to criticisms and requests made by the Liberian officials to the three reports it presented. These reports have led to the financing of three projects by the Bank, namely, the Lofa Agricultural Development Project (Cr. 577-LBR, approved 07/22/74), the Bong Agricultural Development Project (Cr. 700-LBR, approved 04/19/77), and the Rubber Project (Cr. 786/Ln. 1544-LBR, approved 03/10/78). Rubber Pilot Scheme 3.03 Management and Organization. The two men who served as Manager of the Pilot Rubber Scheme had served on an ODM team which staffed Liberia's Rubber Advisory Services. The first manager encountered many administrative and logistics problems in trying to get the project started; but as a rubber specialist, he was effective in his work. His employment contract was not renewed apparently because he was associated with the difficulties experienced in filling the Project Administrator post (paras 3.18-3.19). His successor settled into his position easily with a practical approach that was success- ful in getting farmers to join the scheme. 3.04 The aim of this.pilot scheme was to ascertain useful information on what is required to ensure an economically viable future for the Liberian rubber farmer. To do this, the scheme proposed to offer a package of essential equipment, credit for rehabilitation, grants for replanting, and extension services. Some 280,000 acres or 75% of the total Liberian-owned rubber are found in Montserrado, Bong, Grand Bassa, Nimba, Marshall and Bomi- counties. Bong, with a total of some 157,200 acres, has the highest number of large Liberian-owned farms (60% of those over 100 acres); but of those farms under 100 acres, 65% were less than 20 acres, and more than 40% of these farms had never been tapped. Scheme operations were confined to a 33-mile radius around Suakoko in Bong County, and in 1973 implementation commenced. However, after the industry had been in a depressed state for a number of years, the scheme coincided with a sharp increase in rubber prices 1/ and there was considerable interest in a rapid rehabilitation of trees offered by the scheme's credit package, which included tapping cups, spouts, and knives. 1/ Average price per lb. non-specific coagulum in 1972 was 7.5 cts. Average price per lb. in 1973 was 20.1 cts. - 11 - 3.05 Implementation. Initially, in early 1973, the manager of the unit selected small and medium farmers 1/ for the scheme after he had inspected the farms. Farmers were informed of the conditions and benefits of the scheme, and some 63 farmers expressed an interest in joining the scheme. Unfortunately, the project unit was not able to meet their urgent requests for equipment, because stocks in the country had been depleted by the larger farmers who were also buying equipment to take advantage of the rising rubber prices. Thus the project could not start its program. 3.06 After efforts to obtain locally produced equipment failed, the project manager was forced to import the scheme's requirements. By the time the overseas order arrived in September 1973, only 13 of the farmers who had earlier been identified for project participation joined the scheme. Most of the rest had made other arrangements and had begun rehabilitation work on their own. The project staff therefore looked for more participants. 3.07 The project was faced with several problems related to the structure of the Liberian rubber sector. Absentee farming is one feature. Many landowners have converted idle land into rubber farms, relying on a variety of means for managing their holdings.. Those who could afford to do so often have employed resident headmen, who in turn recruited labor when necessary; others have retained farmers or friends residing in the vicinity of the farms. A second feature of the industry is that farmers, both resident and absent, employ labor, generally tappers, who clear the bush before tapping. Thus most farmers were not involved with or had knowledge of rubber technology. The resident farmer is primarily concerned with growing food crops for his family and for sale. Further, rubber in Liberia is considered primarily as a plantation crop grown by a large business organization. Tappers learn their trade while employed by the concessions, and only a very few small farmers have learnt rubber skills while working with the concessions or a large farmer. No training facility existed. Most farmers therefore accepted a convention that, if rubber is to be harvested, tappers must be employed. 3.08 Furthermore, with this farming structure, the attitude of the small farmer (below 100 acres) to rubber is largely one of opportunism. Since unused land in most areas of Liberia is available, the farmer can plant to rubber whenever the price is good, seedlings are available, and the farmer has extra funds to invest in rubber. During the long period before production (5-7 years), most farmers feel that their investment can be secured with minimal effort. When the trees become tappable, the farmer can tap or not tap, depending on the expected return. However, when rubber prices warrant investment in tapping, the farmer may have neither money nor credit with which to purchase tapping cups, etc., and to pay for labor. 1/ Small farmers - less than 30 acres rubber; medium farmers - 30-100 acres. - 12 - 3.09 In order to overcome these problems, the project offered to provide the equipment and some of the funds needed to get rubber harvested, as the initial steps in the rehabilitation program. Loans to be applied for up to 100 acres for a maximum of $28.50/acre and to be repaid over five years with intLzest at 9%. Where replanting was to be undertaken, grants of $101/ acre would be supplied to finance this operation. Project staff recognized that many participants would not be true rubber farmers, and that several types of management arrangements had to be accommodated within the program. In a few cases, the project virtually managed farms where participants had been unable or neglected to provide adequate management arrangements for rehabilitation. Fortunately, project management reported an increasing involvement of participants in managing their farms. It should be emphasized that, faced with a late start, the drop out of the majority of the original selectees, and, perhaps, a tarnished image caused by its initial inability to provide credit supplies, project staff had to sell the project anew, a task which slowed down project implementation. 3.10 Some 60 farmers participated in the scheme, and 2,070 acres of rehabilitation, and 324 acres of planting were accomplished. Through the project, farmers have been exposed to improved techniques for growing rubber, and to evidence that high productivity comes with careful attention to cultivation and tapping requirement. Perhaps, too, due to the activity of extension workers, farmers have come to feel that Government is interested in assisting them to play a more important role in the rubber industry. In a larger sense, the scheme provided information which was used in the prepara- tion of the expanded Rubber Development Project (Credit 786/Loan 1544-LBR)-- especially in the area of nursery techniques, training needs, management patterns, production costs, and marketing requirements. 3.11 Unfortunately, the project was not able to demonstrate in real terms the financial benefits of some of its recommendations to farmers. For example, the replanting scheme required that slaughter tapping be used for two years prior to the destruction of these trees for replanting. This technique was, however, alien to the farmers, and required tapping higher up the tree than normal. Farmers did not fully understand the benefits of this operation, nor did they see any justification for paying tappers the higher rate they demanded. Tappers, on the other hand, had had very little experience with this technique and were unable to help in convincing the farmers of its benefits. As a result, high level slaughter tapping was not successfully introduced to farmers in the scheme. 3.12 Construction of the rubber training center was not completed during the life of the scheme, and no formal training was carried out. How- ever, the needs for and scope for training of farmers and workers was clearly recognized by project staff, and, though not recorded in a separate report, the project experience was taken into consideration at appraisal of the rubber project. - 13 - 3.13 Producer Pricing. One problem revealed by the project's experience, and not yet clarified, is the setting of the producer price for rubber. Historically, Firestone, the major concessionnaire, has set the local prices for farmers' rubber. Each month, Firestone informs the Government of its prices and publishes them for the various grades of rubber. All buyers purchase from farmers at these prices. The problem is that small rubber farmers cannot understand the fluctuations in these prices, even though there may be a reasonable basis for them. 1/ The Concession Secretariat of the Ministry of Finance, which is responsible for rubber affairs, has been unable to explain the basis of Firestone's pricing, since prices depend to some extent on Firestone's policy and costing system. Firestone's policy of using Singapore FOB prices, rather than New York CIF prices, has been questioned. Rubber Advisors have claimed that other less obvious policy decisions may affect Firestone's prices. A fair and under- standable pricing system must not only reflect the market situation, but must also provide adequate incentives for farmers to produce more and better quality rubber. Funds have been provided in the Rubber Development Project (Cr. 786/Ln. 1544-LBR) for a study of the pricing structure for rubber to be carried out by a team of qualified consultants. This study should form the basis of a Government pricing policy, and should provide for annual price reviews. At negotiations, the Government assured IDA that such a study will be completed within 24 months of the loan/credit signing, and that Government would establish a suitable pricing policy for rubber purchased from Liberian farmers. Rice Research 3.14 An international research institute was selected by Government to provide a 5-year rice research program, a rice researcher to implement it, and follow-up consultancy services. The institute apparently delayed its involvement because of concern about a number of issues and events. It seemed to have been unsure that Liberia would fulfill its commitments under the credit agreement with IDA, especially concerning the appointment of an Administrator and the setting up of a separate account for the proj- ect. Its director was also concerned about the new rice research laboratory which at that time was about to be constructed without the institute being consulted, and about the tax exemption controversy with other consultants. But the institute ultimately felt assured enough to conclude an independent agreement with the Government for providing consultancy services and the rice researcher after the program had been approved. Both the research worker (rice breeder) and the institute have actively pursued project objectives in rice research. There were two agreements between Government and the institute--on covering services and salaries and other related expenses such as housing, transport, etc. In the first, GOL agreed to pay the institute for three years (1973-76) a total of US$30,000 each year (appraisal - US$20,000). In the second, a two year contract, the payment was increased to US$40,000 for the first year and US$44,000 in the second year (appraisal provided for three years only). The institute has recently claimed that payments by GOL were less than agreed under these contracts. They are seeking to have this corrected, and have requested IDA's assistance in the matter. 1/ In 1973 the price for non-specific coagulum rubber ranged from 10.8-28.8 cts./lb/; 1974 - 9.6-33.8; 1975 - 11.1-16.8; and 1976 - 17.6-21.8. - 14 - 3.15 The five-year research program wes prepared by a team of five scientists after visiting Liberia in September 1972. Emphasis was on three areas: varietal improvement (including pest and disease resistance), agronomy, and management and engineering aspects. As in all aspects of the project, the rice breeder experienced initial difficultier (e.g. with inadequate housing in the Suakoko area, transport, etc.), but good results were soon forthcoming. As a rice breeder rather than an agronomist, he shifted the emphasis in the program somewhat in the direction of varietal improvement. However, this also included useful agronomic work especially on fertilizer requirements. Outstanding among the results from this segment of the project is the release of the variety Suakoko 8 (named after the research station). This variety was selected from an introduced cultivar, specifically for its tolerance to iron toxic conditions which exist in a large number of cultivated rice swamps in Liberia, and which can cause sub- stantial reductions in rice yields. Under iron toxic conditions, Suakoko 8 outyielded the standard variety, IR5, by 15-20%, and over 3.5 tons/ha were obtained in these conditions. (In normal conditions, both varieties have yielded over 4 tons/ha, but IR5 did better.) Suakoko 8 also produces a slender grain of good cooking quality, and has exhibited considerable market appeal. Several other varieties for swamp cultivation have been screened, and the most promising selections are earmarked for further trials. 3.16 The program required Liberia to provide a counterpart to the rice breeder (preferably an agronomist, to provide support in agronomy) and three other researchers so that training in rice research could be undertaken during implementation, the full scope of the program could be accomplished, and rice research eventually handed over to Liberian researchers. Unfortunately, the Government provided only two counterpart agronomists during the project, and these were subsequently promoted to higher level posts (one became an Assistant Minister of Agriculture, and the other Director of Research). The Liberian research assistant who remained with the project was upgraded, and is earmarked to take over rice breeding work. A recent Liberian graduate was assigned to the project as an agronomist in 1977, but in less than one year resigned to pursue graduate studies on a private scholarship. Liberia was thus unable to adequately fulfill its undertaking to provide researchers for this component. 3.17 In September 1978, the institute submitted an expanded program for rice research, including a training component, to the Government. The program aims to set up a rice research organization with a national coordi- nator, a rice research director, training director and production director, and supporting professional staff under each. This program over a four- year period would involve a total cost of over US$1 million. The proposed organization would fall directly under an Assistant Minister and not be part of the research station at Suakoko. Government's response to the proposal is not known, but Bank staff were informed that it is being studied, and may be taken into consideration in a reorganization study of the Ministry of Agri- culture, which is being planned by USAID (para 4.3). While Government needs to get Liberian agricultural graduates into rice research as a career, the status of rice in the country's agriculture, though rising, does not yet merit a high-powered separate research organization which would be out of balance with other research needs. More use could and should be made of the regional - 15 - research organizations, such as the West African Rice Development Association (WARDA) which is based in Monrovia, and the rice research station at Rokupr in Sierra Leone. The project's research results need to be tested on a national basis, and the means of applying these results at the farm level must be created. On-farm trials by agronomists, seed multiplication facilities, and extension staff are all necessary elements in rice improve- ment, and Government must address itself to these as well. Project Administrator and Ministry Reorganization 3.18 Project Administrator. The holder of this position was required to coordinate all project activities (consultants for studies, rubber pilot scheme and rice research) and carry out a study for the restructuring of the Ministry of Agriculture. Filling this position was a major problem. The Crown Agents of Great Britain assisted the Government in recruiting the first Administrator who, without a proper briefing on the job requirements and conditions of service, and without a bona fide letter of appointment, bought his own air ticket, and hurried out to Liberia. However, no provision had been made for accommodating the new administrator. He therefore spent the first 4 to 6 weeks in negotiating a contract, conditions of which fell below what he had been advised in London to expect, and in arranging for transportation and living and office accommodations. In carrying out these necessary but irksome tasks, he incurred the animosity of the Minister of Agriculture and his Deputy. Within two months of his arrival and before he had been able to sign an employment contract, he was asked to leave. Since there were basic mistakes in approach on both sides, the Liberian Government settled a claim for compensation after correspondence and persuasion by IDA staff. 3.19 The Deputy Minister of Agriculture filled in for the Project Administrator while a new candidate was sought. Another consultant was selected from among four candidates, and he remained in post for one year, during which time he functioned mainly as the project coordinator (his efforts at studying the reorganization of the Ministry of Agriculture are represented by a single questionnaire). It is reported that he had a severe drinking problem which affected his performance and, perhaps, his health. When he overstayed his leave while undergoing medical treatment in the United Kingdom, the Deputy Minister terminated his services in January 1975. A claim for compensation was subsequently submitted by him on the basis of statements by his doctor, and the matter became the subject of correspondence. IDA took no official action in the matter; but through personal contacts between missions and the officials, the Government finally agreed to a financial settlement. 3.20 Study of Ministry Reorganization. After the administrator's services had been terminated, it was decided that no new administrator should be sought, and consultants were employed by the Government to carry out the study of the Ministry of Agriculture in 1975. They assigned one man to Liberia to do the study, and it is not clear whether his qualifications had been reviewed by either IDA staff or Liberian officials. The report he - 16 - submitted was initially rejected by the Deputy Ainister, who was adminis- tering the project at that time, on the grounds that it did not provide adequate details on the reorganization requirements, and that it was unprofessional. Although some controversy exists concerning the terms of reference for the study, IDA staff who reviewed this report agreed that it presented an outline for reorganization, even though it was not detailed enough, and was superficial in its understanding of Liberia's agricultural problems. The Deputy Minister was persuaded to accept the report, thereby facilitating payment to the consultants for work done. The firm offered to continue its study to provide the details asked for by the Deputy Minister, and one of its senior staff members visited Liberia to pursue this offer. However, the estimated costs were unlikely to be accepted by Government; and the matter petered out. 3.21 In summary, the consultants sent one man who did his field work inde- pendently, returned to his Washington office, and in due course, presented a report in final form to all concerned. At no time during his visit to Liberia was an attempt made to reconcile his proposals with what Liberians were expecting from the study. Issues could have been raised in the field, and perhaps settled there. Thus, the consultant's performance was disappointing. Relations with Government 3.22 In general, the relationship between Liberian officials, on the one hand, and consultants and expatriate staff, on the other, was noticeably shaky throughout this project. Liberians of the Ministry of Agriculture lacked experience in these matters, and were not only feeling their way into agreements and relations, but were also anxious to ensure that they did not lose in negotiations, and to assert their responsibility over these matters. Consultants and expatriates, on the other hand, felt uncertain in their dealings with these officials. All expatriates and consultants sought the assistance of IDA and the UNDP office in Monrovia in difficult situations and this aroused the suspicion of Liberian officials. These developments were not beneficial to good working relations. Senior Liberian officials accused some expatriate staff of adopting a colonial approach in their dealings with Liberians, and doubted that they were working in Liberia's interest. In the first three years of this project, mistrust and suspicion were strong factors in project relations with the Government. IDA staff devoted a lot of time to smoothing out these relations, mainly through personal . approaches to Government officials. Most of the staffing and other difficulties in this project were resolved in this matter. Compliance with Covenants 3.23 The credit agreement required Government to establish and maintain a project bank account and to deposit into it, each month, two months' estimated requirements for running the project. Government, having formally agreed to this arrangement (Article II, Section 3.01(b) of the Credit Agreement), resisted all IDA efforts to obtain its implementation. - 17 - Instead, the Ministry of Finance imposed an arrangement which consisted of a small imprest account ($500), and the submission of documents to the Ministry of Finance on the basis of which, after certification etc., payments were made. For the rubber pilot scheme located at Suakoko, 70 miles from Monrovia, this arrangement was always unsatisfactory, although the situation may have been aggravated by the below standard work of the project accountants. Ministry of Finance officials pointed out alternate arrangements which had been accepted by IDA staff for an ongoing education project. However, apart from the fact that the agreement was being violated, IDA objected to these arrangements as being cumbersome, time consuming, and dependent on processing by Government officials who were unlikely to deal with the relevant documents speedily. IDA's response to this issue was to prompt. Government from time to time to provide required funds. Good relations were maintained, and the project was only slightly inconvenienced. The larger projects that were later processed, Lofa, Bong and Rubber, have firmer and more satisfactory arrangements which include separate project accounts. IV. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT The Ministry of Agriculture 4.01 The discussion of the technical assistance component under Implementation concluded that the technical assistance aimed at providing a basis for strengthening the Ministry of Agriculture had not been a success (para 3.11). During the life of the project, the need for a substantially stronger Ministry of Agriculture had become even more apparent. Other factors which now justify a substantial strengthening include: better research coordination and direction is critical, as the Ministryts research center at Suakoko was found to be ill equipped, inadequately staffed and lacking direction; staff training and career development must be instituted, so that a well established and functioning Ministry can attract qualified agriculturalists; the Ministry must be given the capacity to cope with and utilize increasing aid and schemes under bilateral arrangements and from other international agencies; and rural development responsibilities must be clarified, including a possible need to decentralize agricultural administration to the county level. 4.02 With hindsight, we may question the proposal for the Project Administrator to carry out a reorganization study, in addition to project coordination. The administrative responsibilities were time consuming and required much discussing and dealing with procedural details, while at the same time the person was supposed to be conceptualtzing the structure of the organization. Perhaps it would have been an ideal short-term appointment for a highly qualified and experienced person with enough status to be clearly recognized and respected as a specialist. - 18 - 4.03 Although the employment of a qualified consultant firm was a correct alternative approach, their study did not provide a definitive pro- posal. However, had Government desired, the consultant report could have been used to initiate the reorganization process. The Government could have sought the assistance of a suitable external agency, if no 'iberian was available, to direct this operation, and the experienced FAO agricultural specialists and those from other agencies in Liberia could have provided assistance, especially since it was observed that their effectiveness was impeded by this very weak structure and direction. Following top level changes in the Ministry of Agriculture, Government expressed very little further interest in the reorganization proposals. In the Bong appraisal report, disbursements on rice research were made conditional upon IDA approval of proposals for reorganization. Successive supervision missions raised this issue with Ministry of Agriculture officials, who then took a fresh view of this matter, and, overlooking the basic recommendations of the consultant report, seemed to want a comprehensive study which would include such details as research direction, logistics requirements, costs, etc. The Government has since approached USAID, Monrovia, for assistance, and a tentative scheme has been jointly drawn up which would not only pro- vide a new study, but also assistance in its implementation, staffing and overseas training for Liberians. This is expected to be a 10-year assistance project. A team was expected from the U.S. late October 1978 to prepare the project. IDA must continue to pursue this issue with GOL, especially in view of its increasing involvement in sector investments, and its allocation for rice research under the Bong Project (Cr. 700-LBR). 4.04 Looking at project experience from a different standpoint, the borrower's managerial performance in project implementation was varied, and was perhaps too dependent on the personalities of the important people concerned with the project. The project was denied the independent coordinator that the credit agreement called for. Local Staff and Training 4.05 General. Staffing requirements under this project were very small. The rubber pilot scheme employed an Assistant Manager, Accountant and five Sector Heads (Field Supervisors), while the Project Administrator in his capacity of coordinator was provided with a counterpart coordinator. Over the life of the project, several changes in Liberian support staff occurred. Three persons held the counterpart rice agronomist position at various times, and the Government assigned other professional staff to this section from time to time. It was perhaps intended that the counterpart coordinator would gain valuable experience in project matters, and relieve the Administrator of some responsibilities, and thus provide continuity when the Administrator was away. In practice, however, this was not the case, and the counterpart functioned as a clerk most of the time, and as the project accountant on other occasions. It was never clear what direction this counterpart position was intended to take beyond the period of project implementation, and, instead of becoming more important with the departure of the expatriate Administrator, there was an apparent drop in status when the Deputy Minister took over the administration of the project. - 19 - 4.06 With regard to the training objective, on-the-job training was pursued mainly in the rubber and rice components of the project. Staffing problems were responsible for the failure to fulfill counterpart training in rice agronomy, and in investment preparation. In general, the project's experience reflects the general shortage of qualified agri- culturalists in Liberia. Also, as in other similar developing countries, there is considerable mobility of qualified Liberians, and the Government service provides only a start in the careers of many university graduates. The best of them soon find employment in the private sector, or obtain postgraduate training overseas (Liberia has no agricultural postgraduate training facilities). As was the case of one counterpart (rice agronomist), able graduates are also promoted out of the ranks of researchers and extension specialists, and replacements are uncertain. There is a need for Liberia to rationalize as much as possible its training requirements so that, as far as possible, qualified staff would be available. An office in the Ministry of Agriculture should be set up to coordinate all forms of training in the Ministry, identify training needs, maintain records of students who are being trained overseas, and, perhaps, assist in planning career develop- ment programs for the staff of the Ministry of Agriculture. 4.07 Rubber Field Supervisors. The rubber pilot scheme employed five field supervisors who received training from the Manager on rubber husbandry and processing so that they could fulfill their extension responsibilities. However, since the training center was not completed until near the end of the project, no arrangements could be made for further training. All of the staff on the scheme was transferred to the Rubber Development Unit (Cr. 786/ Ln. 1544-LBR). 4.08 Rice Researchers. Staffing problems related to the rice research program were discussed under Implementation (para 3.16). It may be useful to emphasize here that the rice research program has reached the stage where an agronomist is most needed. It also may be worth mentioning that two Liberians completed short-term courses at the International Rice Research Institute, in the Philippines, and IITA, Nigeria. The plan for post-graduate degree training in rice agronomy/breeding was not completed, as application to universities in Nigeria and the U.S.A. had not been successful. At project closure, one graduate had just been accepted for a Master's degree program at an Indian University, and may start it in 1979. - 20 - V. FINANCIAL PERFORMANCE Costs and Disbursements 5.01 Costs. Total costs for the project are estimated at US$1.55 million, which represent a small underrun of some US$50,000. The Government funded its agreed proportion of all expenditure, and fhe categories with disbursement overruns were met by the Bank from the contingency provisions. In general, inflation accounts for the overruns on most project costs. Consultant services, which accounted for 39% of total costs in the estimates, were provided by a firm whose charges were higher than estimated, but were adequately covered by the contingency provision. Because no Liberiancandidate was successful in getting into a postgraduate training program in rice research, the allocation for this item was used to finance a part of the disbursement overrun in other categories. A relatively high overrun under "Department of Agriculture Reorganization" is accounted for by the employment of consultants to undertake the necessary study, which should have been done by the project administrator. In general, because of the late start of the project, adjustments were made which resulted in the minor underrun. Had the project followed the normal schedule, the full impact of inflation would have caused an overrun. 5.02 Disbursements. Total IDA disbursement was US$1,163,469, or slightly less than was estimated inclusive of contingency. However, some 79% of the contingency was utilized to finance the overrun in other categories. No major disbursement problems occurred during the project. Slow disbursements were due to the delay in project start-up, and the unsatisfactory progress in constructing and equipping buildings. However, the foreign exchange component of consultants' fees, which represented nearly 40% of total dis- bursements, was paid by the end of 1976. Procurement 5.03 Civil works and procurement scheduling were realistic. Pro- curement problems early in the project were caused by the difficulties in appointing a suitable administrator. The Liberian official who administered the project may not have been fully aware of procurement procedures, and it is not known whether he was informed of them. The Deputy Minister of Agriculture, while acting as project administrator, awarded the civil works contract without following standard IDA procedures, but, after reviewing the actual procedures used in awarding the contract (the lowest bid was accepted), IDA staff approved the award. Mitigating this situation, when a representative of Controllers' visited the project, he found that Ministry of Agriculture staff could not find IDA guidelines on procurement and disbursements. Perhaps these matters had been left entirely to the expatriate administrator who had by then left the project. Problems relating to the contracting of expatriate consultants are discussed under Implementation (paras 3.02 and 3.14). - 21 - LIBERIA AGRICULTURAL DEVELOPMENT AND TECHNICAL ASSISTANCE PROJECT Cr. 306-LBR Disbursement of Credit Proceeds in US$ Allocation Under Credit Actual Agreement Disbursement I. Civil Works (a) Pilot Rubber Scheme 48,000 80,480.01 (b) Rice Research 92,000 87,328.73 II. Furniture, Equipment and Vehicles (a) Pilot Rubber Scheme 16,000 21,505.29 (b) Rice Research 35,000 44,010.82 (c) Department of Agriculture Reorganization 4,000 26,190.93 III. Farmers' Rubber Rehabilitation Loans 45,000 32,921.49 IV. Consultant Services (a) (i) Rubber Industry Survey 169,000 147,965.66 (ii) Rubber Industry Invest- ment Proposals 75,000 62,000.00 (b) (i) Lofa Study 119,000 150,254.40 (ii) Bong Study 115,000 146,254.40 (c) Rice Research 24,000 58,168.88 V. Rice Research Training Fellowships 24,000 VI. Salaries and Allowances (a) Pilot Rubber Scheme 98,000 122,731.01 (b) Rice Research 50,000 94,534.15 (c) Department of Agriculture Reorganization 73,000 64,698.32 (d) Counterparts 35,000 24,425.42 VII. Unallocated 178,000 - 1,200,000 1,163,469.50 - 22 - Auditing and Accounts 5.04 Project accounts were never satisfactorily maintained. The external auditors have consistently reported that records were often not up to date, and final accounts therefore were not available at the time of the audit. The auditors then had to complete the bookkeeping before auditing, an undesirable situation. However, they were able to detect an irregularity in the accounts which led to the dismissal of the countcrpart project administra- tor, who at the time was fully responsible for project accounts. Suitable accountants were not attracted to the project, and perhaps its smallness and short-term nature were contributing factors. 5.05 Late in the project, the major accounting activities were con- centrated in the rubber pilot scheme. These accounts were kept unsatisfactorily by the scheme's assistant accountant, who was located at the Suakoko office and who did not receive guidance from the scheme's Monrovia-based accountant. This unsatisfactory state continued to the end of the scheme, and was adversely commented on in successive audit reports. Rates of Return 5.06 No rate of return was calculated for this project, and its justification was based on recognition that preinvestment activities were necessary for the preparation of sound rural development projects. Experience elsewhere had shown that these projects can be successful and returns from such investment satisfactory. At appraisal, the economic rate of return for the projects prepared under the technical assistance component were: Lofa County Agricultural Development Project, 25.9%; Bong County Agricultural Development Project, 21%; and Rubber Development Project, 13%. - 23 - VI. PROJECT IMPACT AND BANK PERFORMANCE Project Justification and Major Impact 6.01 This project was fully justified as a precursor to the development of investment proposals in Liberia's agriculture sector. Three projects were appraised as a result of studies carried out under this project: two received credits (Cr. 577-LBR and Cr. 700-LBR), while one received a combined loan and credit (Cr. 786/Ln. 1544-LBR), a total Bank Group funding of US$26 million. The first of these, Lofa County Agricultural Development Project (Cr. 577-LBR), has had a smooth beginning and is progress- ing well. The others(Bong County Agricultural Development Project and the Rubber Development Project) have been more recently implemented. The impact of these projects has helped Liberia to realize its commitment to promote smallholder agriculture in areas where there was greatest pressure for development. It has also opened up opportunities for other external agencies to assist in this development. USAID has cofinanced the two agricultural development projects, with a total of US$11 million, while Great Britain's Ministry for Overseas Development and Commonwealth Development Corporation will finance a portion of the Rubber Development Project (Cr. 786/Ln. 1544- LBR). An Oil Palm Project is soon to be appraised by the Bank Group,1/ and pro- posals are being prepared for a rural development fund to be established with the Bank Groupts assistance. A Phase II of the Lofa Project is being considered by the Government, while similar projects are being planned for the remaining counties, the most populous of which, Nimba, will have a pilot agricultural development project financed with funds provided by the Federal Republic of Germany. The feasibility study for this project was carried out by the consulting firm AHT, which .gained considerable knowledge of Liberia through its involvement with the Lofa, Bong, and Rubber Development Projects. Bank Performance 6.02 The working relationship between IDA and the responsible Government representatives was good on the whole, and often it appeared that personal relationships between IDA staff and some of these officials were responsible for smoothing out problems. For the Ministry of Agriculture and the Bank Group, the project under review was therefore a testing time, and the result is an understanding among Liberian officials of how the Bank Group functions, and an acceptance of its genuine interest in Liberia's development. 6.03 A productive dialogue led to the definition of the project, with emphasis on preinvestment activities. During the implementation period, in addition to the normal supervision missions, other IDA staff visited Liberia and dealt with the project matters from time to time. However, in spite of the small size of the credit, the intervals of supervision missions 1/ In the meantime this project was appraised and Loan 1765-LBR in the amount of US$12 million was approved on October 30, 1979. - 24 - could have been more closely spaced (6 months), since a lot of its activities are related to the three resulting projects. Considering that IDA staff were unfamiliar with Liberian operations and procedures, supervision missions did reasonably well in sorting out the delicate issues that arose; but more frequent visits would have reduced the number and intensity of some of them. 6.04 Recruitment was the major problem area under the project. Better recruitment procedures are now in operation through APMlJ.I/ Although no formal agreement exists between Liberia and APMU, expatriate staff recruitment by APMU is done on a project-by-project basis; and in each case, a technical service contract which has been agreed to by APMU and the Government is generally issued to the appointed specialist before he arrives in Liberia. Bank staff brief project managers before they take up their duties, and they in turn brief other staff. APMU's search for expatriate staff is worldwide, and an excellent beginning was made with the expatriate staff for the Lofa project, with whose all-round performance Liberian officials are satisfied. Also, for Liberian staff, the new projects now offer far greater on-the-job training opportunities, with employment in the projects themselves serving as an incentive to career development. 6.05 The achievement of the rice research component is also note- worthy. Research has improved considerably through the involvement of IITA, and suitable varieties for upland and swamp conditions have been developed from the program. The Lofa and Bong Projects are being used as the vehicle for spreading the use of these higher yielding varieties, and improved yields have already been attained in these projects. LAC 23, the upland rice variety of Liberia, is now being used in Sierra Leone as a direct result of seed production work as part of the research program. 6.06 On the other hand, the need for reorganizing the Ministry of Agriculture is perhaps greater than ever in view of the increasing develop- ment activities, and, in the long term, this situation could affect all development projects in agriculture. Bank action must continue to help to effect this much needed reorganization. 1/ The Agricultural Projects Management Unit. - 25 - VII. CONCLUSION AND SUMARY 7.01 This was an unusual project, and as a first one in the sector, many lessons have been learnt from it by IDA staff and by Liberian officials. Most of these lessons relate directly to Liberia, but, taken as a whole, they represent the need to understand the borrower and to get the borrower to understand the Bank Group. This was largely accomplished in Liberia. 7.02 This project, starting from a base of inadequate sector informa- tion for Bank group investment, provided for three studies, all of which have resulted in projects with Bank Group funding. Two of these projects are for agricultural development with smallholder farmers, and one with Liberian owned rubber farmers. A rice research program was initiated and has resulted in improved upland and swamp rice varieties. The pace of activity in this sector has quickened considerably since the IDA's first involvement, and USAID and other external agencies have increased their participation in agricultural development in Liberia. The greatest need now is to strengthen the national institutions related to agricultural development, and the Government has already taken action that should bring this about.  BRD3656R (PPA) Vomnam~ SIERRA LEONE L O F c U N T Y G U i N E A t ç PROJE 6m B - Ciii Suckoko .N M B O N GGbango a,a RPA c 0 U N Klo ~~Tototoa ,U C kt Y VO0R Y COA 5 T GRAND ASSA CO TN ur- Ce.pmnr Iro. .r Are . . . . . . . . . . . * Rubbee PIornro:.or C".acession) - .1 I, roe., "'a - 'i .. . . .r.. . . . . .. F i- ~s~.ej ko,~d * ce a n Geen.,Ia - r -EHIA ASSISTANCEr PR.:ECT - --- bg,:lt.r. ---- - - ---- Ro .I.- - -- - - - - *'..n ound r.e.. . . . . .- .--.- . . . G.ber P.lo, Pro,et- HeaduJa rer "n øl_