Peru - Agricultural Research and Extension Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-3292-PE REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE .REPUBLIC OF PERU FOR AN AGRICULTURAL RESEARCH AND EXTENSION PROJECT April 28, 1982 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.  CURRENCY EQUIVALENTS The exchange rate is being adjusted daily roughly in line with the differential between domestic and international inflation. The exchange rate and currency equivalents in 1981 and as of March 31, 1982 were as follows: Currency Unit = Sol (S/.) Calendar 1981 March 31, 1982 US$1 SI. 426.60 S/. 575.28 S/. 1 US$0.0023 US$0.0017 S/. 1,00o0 US$2.34 US$1.74 FISCAL YEAR January 1 to December 31 ABBREVIATIONS ARE - Agrarian Reform Enterprises BAP - Banco Agrario del Peru (Peruvian Agricultural Bank) CGIAR - Consultative Group for International Agricultural Research CIPA - Centro de Investigacion y Promocion Agropecuaria (Agricultural and Livestock Research and Extension Centers) ERP - Economic Recovery Program IDB - Inter-American Development Bank INAF - Instituto Nacional de Ampliacion de la Frontera Agricola (National Institute for Expansion of the Agricultural Frontier) INIPA - Instituto Nacional de Investigacion y Promocion Agropecuaria (National Institute for Agricultural and Livestock Research and Extension) MA - Ministerio de Agricultura (Ministry of Agriculture) T and V - Training and visit extension methodology USAID - United States Agency for International Development  FOR OFFICIAL USE ONLY REPUBLIC OF PERU AGRICULTURAL RESEARCH AND EXTENSION PROJECT LOAN AND PROJECT SUMMARY Borrower: Republic of Peru Beneficiaries: National Institute for Agricultural and Livestock Research and Extension (INIPA) and the National Institute for the Expansion of the Agricultural Frontier (INAF) Amount: US$40.6 million equivalent, including a capitalized front-end fee of US$600,000. Terms: Repayable in 17 years, including four years of grace, at 11.6 percent interest per annum. The loan's proceeds would be transferred to the beneficiaries free of charges and repayment obligations. Project Description: The project's objective is to rebuild Peru's agricultural research and extension services. This would be accomplished through support for the program of INIPA at the national level and in the six northern departments of Peru. The project would include: (i) the construction and equipping of research facilities in northern Peru and, on a national level, training and the provision of technical services to develop research programs; (ii) the construction and equipping of facilities and the provi- sion of vehicles for the extension service in northern Peru and, on a national level, training and consulting services to introduce the "training and visit" (T and V) extension system; and (iii) institutional support for INIPA, including strengthening of its Planning Depart- ment, providing a computing and statistical service, constructing a documentation and training center and studies related to INIPA's operations. Finally, the project would include preparation of a follow-up research and extension operation and studies, to be carried out by INAF, for preparation of a third irrigation rehabilita- tion project for possible Bank financing. The project faces no special risks but the effectiveness of the research and extension service to be created will depend on the Government's future commitment to its support and the adequacy of agriculture sector policies. At present, both the degree of commitment and sector policies are satisfactory. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Estimated Costs: Local Foreign Total -----US$ millions----- A. Research Activities 12.5 10.7 23.2 (i) Civil Works 2.5 1.6 4.1 (ii) Vehicles, Equipment and Incremental Costs 9.4 6.2 15.6 (iii) Consultants'Services and Training 0.6 2.9 3.5 B. Extension Activities 16.9 8.8 25.7 (i) Civil Works 2.2 1.5 3.7 (ii) Vehicles, Equipment and Incremental Costs 14.1 6.1 20.2 (iii) Consultants' Services and Training 0.6 1.2 1.8 C. INIPA Administration and Services 5.6 9.4 15.0 (i) Planning 1.3 0.5 1.8 (ii) Statistical Services 0.4 0.5 0.9 (iii) Documentation and Training Center 2.2 1.4 3.6 (iv) Technical Assistance and Project Preparation 1.7 7.0 8.7 Base Cost 35.0 28.9 63.9 D. Physical Contingencies 1.5 1.1 2.6 E. Price Contingencies 9.2 7.6 16.8 TOTAL PROJECT COST 45.7 37.6 83.3 F. Front-end Fee on Bank Loan - 0.6 0.6 TOTAL FINANCING REQUIRED 45.7 38.2 83.9 Financing Plan: Local Foreign Total -----US$ millions