Mali - Mopti Area Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 5042-4I STAFF APPRAISAL REPORT MALI MOPTI AREA DEVELOPMENT PROJECT April 22, 1985 Western Africa Projects Department Agriculture C 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 Currency Unit = CFA Franc (CEAF) US$1.00 = CFAF 490 CFAF 1 million = US$2,041 SYSTEMS OF WEIGHTS AND MEASURES: METRIC Metric British/US Equivalents 1 Meter (m) = 3.28 feet (ft) 1 Kilogram (kg) = 2.20 pounds (lb) 1 Metric ton (T) = 0.98 long tons (It) 1 Hectare (ha) = 2.47 acres 1 kilometer (km) = 0.62 miles FISCAL YEAR Government: January 1 - December 31 ODEM: January 1 - December 31 ORM: July 1 - June 30 FOR OFFICIAL USE ONLY ABBREVIATIONS AND ACRONYMS AfDF African Development Fund BNDA Banque Nationale de Dfveloppement Agricole (National Bank for Agricultural Development) CCCE Caisse Centrale de Coopfration Economique (Central Fund for Economic Cooperation, France) DNAFLA Direction Nationale de 1'Alphabftisation Fonctionnelle et de la Linguistique Appliquie (National Directorate of Functional Literacy and Applied Linguistics) DIGIS Directoraat Generaal voor Internationale Samenwerking (General Directorate for International Cooperation, Netherlands) FAO Food and Agricultural Organization FMO Financierings Maatschappy Ontwikkelings Landen (Company for Development Financing, Netherlands) GPR Groupement des Producteurs du Riz (Rice Producer Group) IER Institut d'Economie Rurale (Rural Economics Institute) ISRA Inst:itut Sfnfgalais pour la Recherche Agricole (Senegalese Institute for Agricultural Research) OACV Operation Arachides et Cultures Vivriares (Groundnuts and Food Crops Operation) ODEM Opiration DEveloppement de 1'Elevage Mopti (Livestock Development Operation, Nopti) ODIPAC Office du Dfveloppement Intfgri de la Production Arachidi&re et Crfaliare (Bureau for Integrated Development of Groundnut and Cereal Production) ODR Opiration de Diveloppement Rural (Rural Development Operation) OHM Opfration Mil Mopti (Hopti Millet Operation) OPAM Office des Produits Agricoles du Mali (Bureau for Agricultural Products of Mali) OPSS Opiration de Production de Semences Sflectionnfes (Operation for the Production of Selected Seeds) ORM OpEration Riz Mopti (Mopti Rice Operation) SCAER Sociftf de Cr6dit Agricole et d'Equipement Rural (Company for Agricultural Credit and Rural Equipment) SEPAMA Socift6 d 'Exploitation des Produits Arachidiers du Mali (Company for the Processing of Groundnut Products, Mali) SEPOM SociftE d'Exploitation des Produits Olagineux du Mali (Company for the Processing of Malian Oil Products) SHECKA Socift6 Malienne d'Etudes et de Construction de MatEriel Agricole (Malian Company for the Study and Construction of Agricultural Equipment) SRCSS Service de Reglementation et Coitrole des Semences Sflectionnges. (Service for the Control and Regulation of Selected Seeds) UNDP United Nations Development Program WARDA West Africa= Ri6e Development Association This doamet has a restriced distribution and may be used by recipients only in the performance of their official duties. Its centuas may not otherwise be disclosed without World Bank authoriration. MALI MOPTI AREA DEVELOPMENT PROJECT TABLE OF CONTENTS Page DOCUMENTS CONTAINED IN PROJECT FILE............................. iii-iv CREDIT AND PROJECT SUMMARY...................................... v-vii I. THE AGRICULTURAL SECTOR................................ 1 A. Resource Base...................................... 1 B. Agricultural Strategy in Mali..................... 3 II. THE PROJECT AREA.................. ........ 5 A. Physical and Socio-Economic Characteristics ...... 5 B. Land Use and Production Systems................... 6 C. Crop Systems..................................... 7 D. Development Activities and Agencies............... 7 E. Rice Research and Seed Production in Mali......... 9 III. PREVIOUS BANK GROUP INVOLVEMENT........................ 10 IV. THE PROJECT............................................ 14 A. Objectives and General Description................ 14 B. Detailed Features................................. 16 V. PROJECT COSTS AND FINANCING............................ 27 A. Cost Estimates.................................... 27 B. Proposed Financing................................ 28 C. On-lending and Administration of Funds............ 30 D. Special Accounts.................................. 30 E. Procurement....................................... 31 F. Disbursements..................................... 32 G. Accounts and Audit................................ 34 This report is based on the findings of two Bank missions which visited Mali in January and March 1983 led by Mr. T. Bredero (Agronomist). The mission consisted of Messrs. P. Sihm (Livestock Specialist), C. Moret (Irrigation Engineer), D. Jarvis (Economist), F. Falloux (Land Tenure Specialist) and Y. Paugam, J. M. Yung, R. Compare, R. Vandevenne, L. Authosserre (Consultants). The report was edited by Mich&le Moriarty and processed by Maryvonne Mauprivez and Alexandra Gripari. (ii) . VI. PROJECT IMPLEMENTATION................................. 34 A. Regional Level.................................... 34 B. Mopti Rice Operation ............................. 36 C. ODEM........................... .................. 37 D. BNDA (Medium-term Credit).......................... 38 E. Rice Research and Development..................... 40 F. Other Components................................... 40 G. Monitoring and Evaluation......................... 41 VII. PRODUCTION, MARKETS, PRICES AND FINANCIAL ANALYSIS..... 41 A. Rice Production, Markets and Prices............... 41 B. Livestock.............. ...................... - 49 C. Impacts upon Farmers' Income...................... 50 D. Financial Impact upon Government....... ......... 52 E. Recurrent Costs and Cost Recovery....... -....... 52 VIII. ECONOMIC JUSTIFICATION AND RISKS....................... 53 A. Production Benefits.... ......................... 53 B. Other Benefits.................................... 54 C. Economic Analysis..... .......................... 54 D. Economic Rate of Return and Sensitivity Analysis.. 55 E. Risk..... .............................. 56 Ix. AGREEMENTS REACHED AND RECOMMENDATION.................. 57 ANNEXES 4-1 Improvement of Flood Control and Land Use in the Polders. 4-2 Land Distribution in ORM Polders 1982/83 4-3 Stockwater Development Program 4-4 Agronomic Packages and Applied Research 5-1 Summary Accounts by Source of Financing 5-2 Estimated Schedule of Disbursements 6-1 Draft T.O.R. for Technical Assistance 6-2 BNDA Project-Related Cash Flow 7-1 Area, Yields and Production: Rice 7-2 ORM Projected Income Statement 7-3 ODEM Projected Income Statement 7-4 Crop Budgets 7-5 Government Project-Related Cash Flow 8-1 Key Parameters used in Economic Analysis 8-2 Economic Rates of Return: Sensitivity Analysis NAPS IBRD No. 17521: Mali - Project Location IBRD No. 17522: Mali - Project Stockwater Development CIII) NALI MPTI AREA DEVELOPIENT PROJECT DOCUMENTS CONTAINED IN THE PROJECT FILE No. 220.249 Code A. Report and Studies Related to the Sector 1. "Rapport de mission assistance technique de l'IRAN Cr. 753 l'Opération Riz Mopti, 22 Juin au 6 Juillet"; 1981. 128.171 2. "Propositions agronomiques pour une amélioration de la Cr. 753 riziculture flottante", G. Vallée (IRAT); March 1981. 125.422(D) 3. "Amélioration de la riziculture flottante Zone de Cr. 753 Nopti - Djenné Fiches techniques", G. Vallée (IRAT); 125.422(D) 1981. 4. "Essais de quantification de l'influence des aléas Cr.753 pluviométriques sur l'espérance de production en 125.422(F+G) riziculture sous submersion", F. Forest (IRAT); July 1981. 5. Recommendations for the Development of Agricultura-1 Mechanization and the Nanufacturing of Agricultural Equipment in Mali (in Dutch, French translation in preparation), DIGIS; August 1983. B. Selected Reports and Studies Relating to the Project 1. "Document de travail sur la production semencière du riz et l'amélioration variétale", R. Irandevenne; April 1983. 2. "Le Programme de crédit agricole", G. Pince et L. L'Aot; July 1983. 3. "Projet de développement de l'élevage, Deuxième Phase: Rapport de Préparation", FAO/CP; February 1983. 4. "Mission de pré-évaluation du Projet ODEN - 2ème Phase: Partie Pâturages, Recherche, Formation, Sous-produits agricoles", R. Compère; March 1983. 5. "Compte-rendu de mission d'évaluation ODEN effectué à la demande de la Banque mondiale - Contribution Socio-économique", SEDES; June 1983. 6. "Projet de développement de l'élevage - 2ème Phase - La Santé Animale"; June 1983. 7. "Projet de développement de l'élevage dans la région de Mopti (ODEK2). Hydraulique Pastorale au Mema Dioura, Karvassa, Seno Mango et Mondora", L. Authosserre; May 1983. (iv) 8. "Volet santé de l'opération de développement de l'élevage dans la région de Mopti (ODEM) Phase II et de l'Opération Riz Mopti (ORM) Phase III"; April 1983. 9. "Projet de développement agricole: Volet Forestier", J. Bathany; June 1983. 10. "Opération de production de semences sélectionnées: Structure - Organisation Comptable - Résultats 1979-1982 - Projections 1983-1988", Y. Paugam; May 1983. 11. "Analyse de l'exploitation de l'ORM (hors rizerie): Organisation Générale et Comptable. Examen de l'économie actuelle de l'ORK, (1977/1978) - (1981/1983). Scénarios de projections (1983/1984) - (1988/1989)", Y. Paugam; July 1983. 12. "Opération de développement de l'élevage Mopti", Y. Paugam; November 1983. 13. "Note sur la commercialisation du bétail", J. Bathany; June 1983. C. Selected Staff Working Papers 1. Irrigation and Drainage, C. Moret; June 1983. 2. "Problèmes Fonciers dans le Delta Vif du Niger: Recommandations pour le projet", F. Falloux; June 1983. 3. Scenarios for seed production of rice and dryland crops. Farm budgets for seed production, T. Bredero; March 1984. 4. System Study Monitoring and Project Preparation, P. Sihm; January 1984. 5. Projects Costs (Computer printout); selected working papers on economic and financial analysis; livestock herd projections;July 1984. 6. Organizational chart: ODEM Phase II. 7. Terms of Reference: Consultants and Studies. 8. Training at ORM/ODEM, D. Gooday; July 1984. 9. Pastoral Associations in Livestock Development Projects, P. Sihm; May 1984. WAPAC July 1984 Cv) MALI MOPTI AREA DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: Government of Mali. Beneficiaries: Mopti Rice Operation (ORM), Livestock Development Operation, Mopti (ODEM), National Bank for Agricultural Development (BNDA). Credit Amount: SDR 19.7 million (US$19.5 million equivalent). Terms: Standard. Relending Terms: Borrower to ORM (US$7.5 million): grant Borrower to ODEM (US$10.7 million): grant Borrower to BNDA (US$0.3 million): 3.0 percent per annum for 15 years. Project Description: The proposed project seeks to raise agricultural output and farm incomes in the 5th Region of Mali by increasing rice production and productivity of livestock herds. It will also protect and develop the production potential of the Inner Delta of the Niger river through an array of mutually supportive activities in crop and animal production. Main project components are: (a) hydraulic works to improve control of flooding in rice-growing areas; (b) a credit facility for the purchase of farm equipment and inputs; (c) support to the training. extension and general operations of ORM; (d) a program of stockwater development; (e) an animal health program for ODEM; (f) a program of range and pasture management; (g) an adult literacy program for the project region; (h) a rural health care program; (i) regional studies and resource inventories for future development programs; and (j) support of rice seed adaptive research and quality control. (Vi) Estimated Project Costs (net of identifiable taxes and duties): Local Foreign Total US $uMilion- Rice Production 3.1 2.6 5.7 Support to ORM Operations 0.4 2.9 3.2 Livestock Production 2.3 6.4 8.7 Support to ODEM Operations 2.5 4.4 6.9 Varietal ResearchlSeed Production 0.8 2.4 3.1 BUDA Operations 0.2 0.1 0.3 Rural Health 0.1 0.2 0.3 Forestry 0.1 0.1 0.2 Production Systems Studies 0.5 2.1 2.6 Training Center 0.2 0.6 0.8 Base Costs 10.3 22.7 a/ 33.0 a/ Physical Contingencies 0.7 2.1 2.8 Price Contingencies 2.2 3.7 5.9 Total Project Cost b/ 13.2 28.5 41.7 Proposed Financing Plan: IDA 4.4 15.1 19.5 AfDF 1.0 5.0 6.0 CCCE 4.1 5.7 9.8 DIGIS 0.1 0.4 0.5 Government/Farmers 3.6 2.3 5.9 TOTAL b/ 13.2 28.5 41.7 a/ Includes US$ 1.0 million PPF advance. 1/ Rounded figures. Estimated Disbursement: FY86 FY87 FY88 FY89 FY90 FY91 FY92 - US-million Annual 2.6 2.8 3.6 3.9 3.2 2.3 1.1 Cumulative - 5.4 9.0 12.9 16.1 18.4 19.5 Economic Rate of Return: The estimated overall ERR is 26%. calculated on 55% of total project costs (excluding the costs of studies, functional literacy and research components, and support to ORK during restructuring). The ERR for the rice production component is 26%; for the livestock component it is 25%. (vii) Benefit and Risks: Project beneficiaries consist of low-income farm families in and around the rice growing polders of the Mopti region, and pastoralists throughout the 5th Region. Rice farmers' incomes are expected to double over 7 years, as a result of improved yields and water security. The project's risks, apart from the risk of drought, which could lower rice production levels, are mainly operational, and concern (i) the speed with which ORM will be able to reduce operating costs by transferring marketing and managerial responsibilities to producer groups and the private sector; and (ii) the rate of formation of pastoral associations. Staff Appraisal Report: No. 5042-MLI, dated April 22, 1985 Maps: IBRD 17521R IBRD 17522R WAPAC April 1985 MALI MOPTI AREA DEVELOPMENT PROJECT I. THE AGRICULTURAL SECTOR A. Resource Base 1. General Remarks 1.01 The population of Mali, numbering about 7 million, of which over 80Z is in the rural areas, depends for its food supply mostly on the wetter zones (800 - 1,200 mm rainfall) currently covering roughly 3 million cultivable hectares. Of these, about 2 million hectares are cultivated: 1.8 million hectares support rainfed crops while 200,000 ha are irrigated and/or inundated (see Map No.17521). The vast Saharan zone in the North and East is almost uninhabited. Most farm families cultivate 4-5 ha, with additional areas held in fallow, except for the densely populated areas in and along the south- eastern part of the Inner Delta, where land is scarce. Here farms are smaller and fallowing is no longer possible. Tillage with animal traction is more widespread in Mali than in any other Sahelian country; more than 400,000 oxen are at work. Apart from domestic rock phosphate, all inorganic fertilizers are imported, with the vast majority used on cotton and coarse grains. The use of manure as a fertilizer has increased rapidly over the past three years, particularly in the cotton production areas, because of the growing integration of crops and livestock, and the removal of subsidies on fertilizer prices. Average rural income lies within the US$60-70 per capita range, or about two-thirds of the average rural income for low-income sub-Saharan countries. 2. Crop Production Patterns 1.02 Almost all the irrigated and/or inundated land is sown to rice. Apart from 80 - 100,000 ha of maize, the major part of the rainfed crop area is sown to sorghum and millet, accounting for about 1.5 million ha. Sorghum and millet yields are in the 500-800 kg/ha range (no varietal improvement has been achieved to date) giving a total coarse grain production of about 0.9 - 1.0 million metric tons. Cotton, grown in rotation with cereals, is currently the major rainfed "industrial" crop. and accounts for about 100,000 ha. The groundnut area has declined considerably from its peak of 150,000 ha in recent years because of stagnating yields, steep increases in prices of farm inputs, and falling export prices. The current area under groundnuts is estimated at 70,000 ha. Foodgrain availability, even in "normal" rainfall years, appears to fall short of demand by about 150,000 tons, and Mali receives substantial food aid (averaging 40,000 tons per year). This will remain necessary as long as the irregular rainfall observed over the last decade continues and no steps are taken to compensate for it through improved soil tillage, soil and water conservation practices, and - 2- improvements in the irrigation sector. The drought conditions of the last two crop seasons have seriously affected production, which was 40Z below the 1978-80 average. 3. Livestock Subsector 1.03 The country's livestock constitutes the major store of wealth and income in rural areas. Livestock production, based on 6.4 million cattle and 12.4 million goats and sheep, still relies on an extensive nomadic grazing pattern. However, the encroachment of crop cultivation into grazing lands, resulting from migration and population growth, has severely constrained this type of land use in certain areas. Livestock production, limited by the lack of watering points in the North and by tsetse fly in the South, is of three major types: (i) the pastoral system, (ii) livestock associated with dryland and irrigated agriculture, and (iii) agropastoralism, where livestock is owned by farmers, but provides less than half of their total revenues. The last two systems are overtaking the first one in importance, a process accelerated by recent droughts which forced many pastoralists to sell their animals. Livestock is second to cotton as earner of recorded export revenues. 4. Irrigation Subsector 1.04 Mali is well endowed with water resources; in terms of per capita potential irrigable land, Mali, with 2.5 million ha or 0.36 ha per capita, has about 3 times as much as other Sahelian countries. Of the 200,000 ha currently under irrigated cultivation, about half is cultivated traditionally, mainly in the Inner Delta and bottomlands, by farmers completely unassisted by Government. The rest is cultivated within the Rural Development Operations ("Operations de D&veloppement Rural": ODR). The most important of these is the "Office du Niger", which presently cultivates 40,000 ha, nearly all devoted to rice production, apart from 3,000 ha of sugarcane. A number of projects, affecting about 60,000 ha at full development, have applied a low- cost irrigation technique consisting of controlled flooding along the Niger and in the Inner Delta, but yields remain low (explained in para 3.03). Studies have begun for the rehabilitation of irrigation works at the Office du Niger, which could eventually expand rice production to about 60,000 ha and double current average yields. Studies 1/ conducted under the ongoing Mopti Rice II project (Credit 753-MLI) indicate the potential for rice production under improved controlled flooding on a further 90,000 ha, and for improving livestock production on 80,000 ha of natural grazing lands. I/ Pre-feasibility studies: Djennf Barrage. (para 2.01). -3- B. Agricultural Strategy in Mali 1. Description 1.05 The 1974-78 Plan and subsequent 1979-81 investment program gave absolute priority to food production investments designed to prevent a recurrence of the shortages experienced in the 1972-73 droughts. Under the plan, over 80% of foodcrop expenditure went to irrigated rice. This period also saw a major expansion of industrial processing capacity for cotton lint, cottonseed oil, and groundnut oil, largely based on the buoyant world commodity markets of the aid-1970s. Throughout the period, Government maintained a comprehensive (and partially effective) system of quantity and price controls on trade In foodgrains and other commodities. However, agricultural inputs, and particularly fertilizers, were subsidized until 1980/81 by as much as 45% of the costs delivered to farmers. The 1970s also witnessed the creation and/or expansion of some 26 semiautonomous rural development agencies, the ODRs, whose major sources of revenue were commissions on Input sales, water charges, and official margins on commodity sales, determined by official price schedules known as "barames". The "barEme" system became by the late 1970s a major mechanism for resource allocation in several subsectors, including cotton. 2. Evaluation 1.06 With hindsight. State intervention in the agricultural sector (i.e.. pricing and marketing controls) has resulted In artificially low producer prices and heavy recurrent costs. First, the bias towards irrigated rice resulted in less attention being paid to the under-populated areas in the South with adequate rainfall for Intensive rainfed cereals cultivation at much lower costs. Second, investments In local agro-based export industries ignored the high capital requirements of processing and the high transport costs of reaching markets. The resulting overcapacity and overstaffing have proved politically difficult to tackle ever since. Third, most of the ODRs were primarily vehicles for extension and social infrastructure services, the costs of which could not be recovered directly from farmers. Behind the legal fiction of financial autonomy, their rapid expansion and resulting accumulated losses have added to the present recurrent cost and budgetary problems. Finally, the "barfme" process became an increasingly burdensome transfer price system, resulting in downward pressure on producer incentives, poor cost control at all intermediary stages, and severe financial costs to Government. 3. New Policy Directions 1.07 The accumulated losses of major agricultural state enterprises, particularly the Office of Agricultural Products of Mali ("Office des Produits Agricoles du Mali": OPAM); the Malian Import-Export Company ("Soci&tf Malienne d'Importation et d'Exportation": SONIEX; other consumer goods), the Agricultural Credit and Rural Equipment Company ("Soci&ti de Crfdit Agricole et d'Equipement Rural": SCAER; -4- agricultural inputs and medium-term credit) , and the Malian Oil Products Company/alian Groundnut Products Company ("Sociftf d'Exploitation des Produits Olagineux du Mali": SEPOM"Sociftf d'Exploitation des Produits Arachidiers du Mali": SEPAMA; oil seed and groundnut processing) attracted increasing critical attention as their growing debts and arrears paralyzed their operations, weakened the state banking system, and drained scarce budgetary resources. Major revisions in the scope of their operations and the extent of State subsidies were decided in late 1980. Many of these reforms are included in the two IMF standby programs and some are being supported under IDA-financed technical assistance (Economic Management and Training Project, Credit MLI-1307). In the agricultural sector, additional reforms included: (a) the removal of restrictions on domestic trade in coarse grains, and a parallel reduction in OPAM's responsibilities; (b) abolition of Government control of groundnut marketing in early 1982 when it could no longer absorb the losses resulting from the fall in world market prices; (c) large increases in the remaining administered producer prices for rice and cotton in 1981/82, and the progressive elimination of subsidies for fertilizer and pesticides by 1987/88; (d) an in- depth review of all aspects of the ODRs, begun in April 1982 with IDA assistance; and (e) introduction of a new system for cotton exports, shifting control from SOMIEK to the Price Stabilization Board (OSRP), which reallocates export profits away from consumer subsidies to thne cotton producing authority. a revenue stabilisation fund, and the Treasury. Despite financial pressures and political tensions stemming from budgetary shortages, drought, a four-year freeze on public sector wages, and re-entry into WAMU (West African Monetary Union), the Government has stood by past reforms. 4. Remaining Policy Constraints 1.08 After an initial period in 1981-2 of impressive reform initiatives, the pace of policy change has, however, begun to slacken, as the Government comes face to face with the bite of fiscal restraint and as implementation of reforms begins to be felt by the population. For example, there has been a notable slowdown in the increase in official prices of grains in 1983-84. More importantly, one area of agricultural policy reform has been consistently resisted: the liberalization of paddy and rice marketing in the three large Government-administered irrigation developments--Ofice du Niger, Operation Riz Segou, and ORM, which are the only areas where official producer prices are effectively enforced and where paddy sales to the Government are compulsory. Government's reluctance to relinquish control of the paddy marketing stems from its fear that such a reform would reduce the supply of rice at low official consumer prices to Bamako and other urban areas, and that it would reduce further the already low capacity-utilisation of Government-owned rice mills. The Government also believes that the private sector would be ill-equipped to substitute for public marketing channels. This constraint continues to be addressed under the IMF Standby program and the Cereals Marketing Restructuring Program ("Programme de Restructuration du March& CErfalier": PRMC) supported by a consortium of food-aid donors; it will - 5 - also be dealt with by this project (see para 7.11) and by the proposed Office du Niger Rehabilitation project. Dialogue is continuing on other issues such as the selling procedures of OPAM and the introduction of base-point pricing for purchases and sales of grains. 5. Sector Lending Strategy 1.09 The broad objectives of IDA lending to Mali's rural sector have been to: a) facilitate transfers of fiscal resources from consumption to productive subsectors, through price incentives and institutional reform; b) concentrate investments in support of rainfed agriculture in the areas with maximum potential (the Mali Sud Area Development, Office for the Integrated Development of Groundnut and Cereals Production ("Office du Dfveloppement IntfgrE de la Production ArachidiZre et CErialiare": ODIPAC), projects located in the 1st, 2nd, 3rd and 4th Regions); c) give priority to consolidating existing irrigation systems before undertaking new investments (Mopti Area Development and Office du Niger); d) support the development of private trade and informal producer groups through training and improved price incentives, to increase their participation in farmer support services and reduce public recurrent costs; e) improve the financial management and independence of key agribusinesses (notably the Malian Textile Company (Compagnie Malienne du Textile: CMDT) and Office du Niger). II. THE PROJECT AREA A. Physical and Socio-Economic Characteristics 2.01 The proposed project covers the area of responsibility of the Operation for the Development of Livestock in the Mopti Region ("Opiration pour le Dfveloppement de 'Elevage dans la Rggion de Mopti": ODEM; para 2.05), namely: the whole 5th Region, the District of Niafunk6 (part of the 6th Region), and two sub-districts of the District of Gourma-Rharous (7th Region), or 95,000 km2 in-all (see Map No.17521R). The most productive part of the region is the "live" Delta of the Niger river covering about 18,000 km2, which floods from early September to late November. The Delta, with its alluvial soils, annual inundation and highly productive dry season grazing areas, represents the largest single area in Sahelian West Africa with a potential for intensified crop and livestock production. Low yielding (0-500 kg/ha) extensive rice -6- cultivation during the rainy season and subsequent flooding is rapidly gaining ground in the more populated higher rainfall areas (Pondori, Yongari, see Map No. 17521R) of the southern and eastern part and has spread to more than 100.000 ha (about 15%) of the traditional grazing area over the last decade. After the floods recede, the flood plains provide dry season grazing to at least 90% of the estimated 1.9 million cattle and 3.1 million sheep and goats of the project area. In the most recent years, 1982 and 1983, lower floodlevels and irregular flooding patterns have been observed due to decreased rainfall in the catchment area of the Niger and its major affluent, the Bani river. 1/ The technical feasibility of a low retention dam in the Bani river near Djenn& (see map No. 17521R) has been studied under the ongoing Mopti Rice Project (Cr. 753-MLI). The dam would result in improved water control on 19,000 ha of the existing polders and increase the probability of flooding of an additional 90,000 ha in the Yongari and Pondori flood plains: further studies will be funded by the proposed credit (para 4.29). 2.02 The population of the 5th Region is estimated at 1.3 million (20% of Mali's population) of which some 220,000 reside permanently in the Delta. The population density is highest in the eastern part, reaching 50/km.2. Mopti, the regional capital with over 50,000 inhabitants, is the third largest urban center of Mali. The ethnic composition of the Delta is mixed, with many descendants of the originally nomadic Peul and associated groups now settled in villages. The Peuls' main source of capital and income is livestock, but many of them have adopted crop cultivation. The pressure on land is growing rapidly because many of the Dogon and Bambara peoples of the drought-stricken uplands in the East and South are migrating to the better-watered Delta to take up crop cultivation there. B. Land Use and Production Systems 2.03 The three primary economic activities in the area are, in order of importance, livestock, crop production and fishing. The original livestock production systems were transhumant, predominantly practiced by the Peul and the Tamachek. The flood plains of the Delta provide grazing during the dry season. During the rainy season, all animals, except for some village milk cows, leave the inundated Delta to graze the pastures to the East and West, where they rely on natural ponds for water. Much of the herd was owned by farmers, traders or merchants, who would hire a Peul pastoralist to tend the cattle. In recent years, however, the system has come under severe pressure as a result of three factors: 1) an increase in the number of livestock owners practicing Droughts and much lower than normal rainfall were observed during the years 1982 and 1983 in Ivory Coast, Southwestern Burkina and Guinea, which until then had been considered drought-proof. -7- extensive and itinerant crop production; 2) an increase in the use of cattle for traction and milk production and in .the tending of such herds by sedentary farmers themselves (estimates 1/ indicate that they now own 70Z of the total cattle population); 3) a continued increase in the size of the herd after it recovered from the devastating drought of 1972. As crop cultivation has expanded, grazing resources have diminished, to the point where the most valuable dry season grazing, the "bourgou" 2/ pastures, are threatened, and the hitherto abundant resources of the Northern Delta can now barely support the herds until the rains permit the start of another migration. In addition, the construction of polders on 40,000 ha in the Eastern part of the Delta under the Hopti Rice Projects I and II blocked a number of traditional trek routes. The inherent contradictions between transhumant livestock production and wide-spread itinerant crop production lead to confrontation and conflict between herdsmen and farmers as population pressures grow, and the availability and productivity of the scarce grazing resources decline. The close integration of the two activities in the proposed project is aimed at resolving this issue (para 6.01). C. Crop Systems 2.04 The climatic uncertainties of the area (deteriorating rainfall and floodlevels since the late 1960s) have exposed farmers to increasing risk. As a result, the majority, particularly in the southern part of the Delta, have adopted a mixed farming system under which they cultivate rainfed crops such as millet/sorghum on the non-inundated land, and rice at shallow as well as deep flood levels, both inside and outside the ORM polders. There is a highly developed system of trade in production factors where land, labor or use of equipment is acquired in exchange for money, services, or a share of the crop. Farmers decide on the basis of the early rains which crop or activity should receive the bulk of their resources, security of production being the overwhelming concern. D. Development Activities and Agencies 2.05 Four separate ODRs, reflecting the four major economic activities, and dependent upon Government, are charged with agricultural development in the region. Based at Mopti-S&var6, they are: Operation Millet Mopti ("Opfration Mil Hopti": OHM), Fish Processing Operation (Operation P^che), Mopti Rice Operation ("Oparation Riz Hopti": ORM) and ODEM (para 2.01). OMM handles the extension, training and input supply activities for dryland crops in the 5th Region. It is now practically 1/ ILCA studies under Livestock I Project (Cr. 583-MLI). 2/ Bourgou (Echinochloa stagnina) is an indigenous, protein-rich and palatable grass species characteristic of the inundated Niger banks. - 8 - inoperative for lack of funds, and its impact has always been limited in any case by the lack of a technical package to improve yields which is affordable to the farmer. Op6ration P9che supports fishing cooperatives and operates smoking and warehouse facilities in Mopti, aid is currently in serious financial difficulty. ORM was established in 1972 with the first Mopti Rice Project under the supervision of the Ministry of Agriculture. It is currently responsible for the operation and maintenance of the hydraulic works covering about 40,000 ha of endyked polder area, paddy marketing and rice milling, agricultural extension, and input distribution to some 14,000 farm families in and around its polders in the southeastern part of the Delta. It employs about 250 people, of which 90 are contractual village extension workers. ODEM was created in 1975 at the start of the first livestock project as a public autonomous organization under the supervision of the Ministry of Rural Development; it covers a much larger area than ORM. The purpose of the organization was to improve livestock productivity, increase livestock production and the rational exploitation of livestock products and by-products in the Fifth Region. The Director General is named by decree by the minister and has under him administrative and financial services and a technical service consisting of five sections: animal health, range management, adult literacy, sociology and economics. In the field, the area under ODEM's jurisdiction is divided into nine districts consisting of 27 livestock stations in all. ODEM employs a staff of 298. ORM and ODEM are competently managed at this time. They have established, in their project areas, voluntary pre-cooperative producer organizations called Rice Producers Group ("Groupement de Producteurs de Riz": GPR) and Pastoral Association ("Association Pastorale": AP), respectively . These village-level organizations are consistent with the Government policy of increasing participation of producers in support services (e.g. input supply, marketing) and of thus reducing the recurrent cost burden upon the Government. Forestry activities in the area are the responsibility of the National Directorate of Forestry and Water Resources (Direction Nationale des Eaux et Forits: DNEF) whose small regional operation is based at Hopti. 2.06 Agricultural credit in the region is channelled through the National Agricultural Development Bank ("Banque Nationale pour le D6veloppement Agricole": BNDA). This was established in 1981 with financial and technical assistance from the Aid and Cooperation Fund ("Fonds d'Aide et de Coopfration": FAC) and the Central Fund for Economic Cooperation ("Caisse Centrale de CoopEration Economique": CCCE), both French. Its equity base of CFAF 1,000 million (US$ 2.4 million) is held by the Malian Government (55%), CCCE (20%), Central Bank for the West African Monetary Union (Banque Centrale des Etats de l'Afrique de l'Ouest: BCEAO) (15%), and the Malian Development Bank ("Banque de Diveloppement du Mali": BDM) (10%). Its governing Board is chaired by the Minister of State for the Economy and Plan and includes the Minister of Agriculture. Day-to-day operations (including approval of loans below CFAF 2.5 million (US$6,000)) are the statutory responsibility of a General Manager, currently an expatriate, and about 10 senior staff, including one other expatriate specialist. BNDA is -9- subject to considerable control by the 3CEAO which regulates interest rates on loans and deposits, sets liquid asset and gearing ratios, and limits exposure on individual accounts. It does this through administrative controls and as a condition of access to its rediscounting facilities. BNDA's policy is to expand prudently, helping to fill the gap left by the demise of SCAER (para 1.07) by providing financing for seasonal and medium-term agricultural inputs, complementing the existing services of BDM and commercial banks and (eventually) providing a vehicle for mobilizing rural savings. BNDA is already working in close cooperation with the extension service in the Mali Sud area and plans to apply the positive experience gained there in working with producer groups to its operations in the Mopti area. Preliminary steps, taken in the past two years, have had encouraging results (para 3.04). E. Rice Research and Seed Production in Mali 2.07 The lack of quality rice seed, an especially serious problem in Mali because of the never-ending threat of wild rice contamination, is a serious constraint to raising rice yields, not only at ORM, but in all other rice production centers, including the IDA-assisted Mali Sud and Office du Niger. Rice seed production in Mali is handled, theoretically, in 3 phases: a) the production of breeder and foundation seed by the rice research stations at Kogoni, run by the Institute of Rural Economics ("Institut d'Economie Rurale": IER), and at Mopti, operated by the West African Rice Development Association (WARDA); b) the multiplication of certified and registered seed by the Operation for the Production of Selected Seed ("Opiration Production Semences Sdlectionnies": OPSS, an agency under the Ministry of Agriculture); c) the multiplication of registered seed under contract by selected seed growers in the major rice projects. 2.08 The research station of IER at Kogoni suffers from inadequate irrigation and drainage facilities. Its buildings are dilapidated and its equipment either broken down or obsolete. Moreover, a chronic shortage of funds prevents it from maintaining a large enough varietal collection and from conducting an off-station testing program. The on-station program is conducted well under very difficult conditions. The Service for the Control of Selected Seed ("Service de Reglementation et Contr8le des Semences Silectionn6es": SRCSS), a division of IER, is charged with quality control for all 3 phases of seed production but, despite technical competence, can do so only for the first two phases because of lack of operating funds. - 10 - 2.09 OPSS is principally concerned with producing rice seed, and averages 500T a year, but it is also responsible for rainfed crop seed, of which it produces approximately 100T a year. It does this on an excessive number of farms (seven), all of which lack adequate irrigation and have unnecessarily high staffing levels. Moreover, OPSS has insufficient funds to operate efficiently and to fulfill its seed obligations to the rice projects. Its technical management at present is weak and does not perceive the need for change. III. PREVIOUS BANK GROUP INVOLVEMENT 3.01 Previous Bank Group lending for the rural sector has amounted to US$105.2 million in the form of eleven IDA credits as follows: a) two projects (and one Supplementary Credit) for engineering and construction or improvement of polders in the Mopti area, financed by Credit 277-MILI (US$6.9 million and amendment US$2.6 million, 1971 and 1975), and 753-MLI (US$15.0 million, 1977); b) a Drought Relief project, involving mainly small-scale irrigation and livestock schemes, through Credit 443-NLI (US$2.5 million, 1973); c) an integrated rural development project in the groundnut zone (Credit 491-MLI, US$8.0 million, 1974), and a follow-up technical assistance project to develop alternative production systems through Credit 1174-MLI, (US$6.5 million, 1982); d) a technical assistance project for the Office du Niger irrigation authority through Credit 854-MLI (US$4.5 million, 1978); e) a livestock development, extension, health and water supply project, through Credit 538-MLI (US$13.3 million, 1975); f) a forestry project, designed to establish pilot industrial rainfed plantations, through Credit 883-MLI (US$4.5 million, 1979); g) the first and second Mali Sud Agricultural Projects through Credit 669-MLI, (US$15.5 million, 1977), and Credit 1415-MLI, (US$25.9 million, 1984). - 11 - In addition, IFC approved in April 1982 an investment of US$2.6 million equivalent for a sheanut 1/ butter extraction plant aimed at the export market and heavily dependent on supplies collected in the Mali Sud area. 3.02 Project performance has been patchy, with wide variation in management effectiveness, and, more recently, a deteriorating environment for public finance and credit. Project Performance Audit Reports have been issued for four projects: Mopti Rice I (Credit 277-MLI); Drought Relief Project (Credit 443-MLI); Integrated Rural Development Project (Credit 491-MLI); and Office du Niger Technical Assistance Project (Credit 854-MLI). Important lessons for the presently proposed project can be learned from a comparison of the two major rural development projects undertaken to date: Integrated Rural Development in the groundnut zone (Credit 491-MLI) and Mali Sud I (Credit 669- MLI, originally to be completed by December 1981, but extended to December 31, 1983). The failure of the groundnut zone project, completed in 1980, provides a striking contrast to the first Mali Sud project's considerable success under comparable starting conditions. The audit report cites the following pitfalls of the groundnut zone approach, which have largely been avoided by Mali Sud: (i) heavy dependence on outside organizations for the logistics of input supply, industrial processing capacity and working capital; (ii) limited absorption of expatriate technical assistance in the Malian project organization; (iii) poor financial information and control systems; (iv) insufficient attention to cereals technical packages acceptable to farmers; and (v) slow policy reaction on the part of management to deteriorating world market conditions. 3.03 Lessons learned from past IDA-assisted projects in the project area. The second Mopti Rice Project of 1978 (total cost US$32 million, of which IDA contributed US$15 million) had as its objectives increasing rice production by some 34,OOOT of paddy through additional polder construction, training and extension, input supply and agricultural credit. It fell short of these objectives as a result of critical oversights at appraisal: a) The construction of hydraulic works to achieve controlled flooding on the maximum area obtainable was based on the assumption that the available improved rice varieties introduced from Asia would show the same adaptability to varying inundation and rainfall conditions as traditional indigenous varieties. This assumption proved false, however. The indigenous varieties have a yield potential limited to 0.8 - 1.OT/ha. The Asian varieties, while they have a much higher yield potential, can only perform in more narrowly defined 1/ Karit6, an oilbearing nut producing a cocoa-butter substitute. - 12 - flood levels, and large areas were lost when seed was planted on land that was too low or too high, prematurely flooded or lacking in water. b) Proposed supplementary works, such as intermediate dykes and secondary irrigation channels to improve the control of flood levels, were considered unessential and hence were rejected by the appraisal team. An opportunity to reduce drought impact in a vulnerable area was thus foregone, and losses of 25% or more in sown areas were common; c) no provisions were made to secure quality seed. Farmers' seed thus became infested by low-yielding wild rice species, which in turn invaded fields freed earlier of wild rice; d) agricultural equipment was often inappropriate and expensive and the agricultural credit terms inappropriate (35% down payment with the rest due in 2 years). Demand for credit stagnated and the recovery rate was low. As a result, 60% of the farmers remained without draft oxen or animal-drawn implements, both important for better yields; e) Seedbed preparation and sowing could not be done at the recommended time and according to the recommended methods because of the absence of the draft oxen during that period and limited availability of equipment. No provisions were made for grazing facilities near villages or for improved feed for draft oxen, which were thus forced to graze outside the polder areas, far from the villages; the interest of farmers in traditional rainfed crops as well as rice growing outside the polders was ignored; f) low official producer prices for paddy, particularly in the early years of the project, marketing controls and lack of water security did not justify farmer's investment in expensive inputs or encourage intensification; g) attacks by insects, birds and rodents destroyed hundreds of hectares of sown area annually, because no protection was available. In addition to the above, the droughts of 1982/3 and 1983/4 deprived the area of the necessary flooding and rainfall. All these factors caused yields and production to lag far behind projected levels, although where cultural practices were properly applied, yields matched those obtained on research plots (well over 2T/ha). These should be compared with average yields of 400-600 kg/ha outside the polders. 3.04 The positive results of the project lie mostly in its "adaptive research and studies" component. This component identified higher yielding varieties which are better adapted to varying flood levels, and developed and convincingly demonstrated the benefits of improved land - 13 - preparation techniques. Moreover, detailed analysis over several years of the flooding pattern for each individual polder resulted in a new water level and land reallocation plan of great precision. In addition, a practical seed multiplication program was successfully implemented, and is now in its third year. A new agricultural credit program extending credit through village groups at affordable terms has been developped by OR1 and successfully tested in 10 villages and will now be taken over by the BNDA. Tests in 4 villages in 1983, transferring full responsibility for the paddy marketing to village groups supported by short-term marketing credits, resulted in 100% repayment of the credit and 150T paddy voluntarily marketed, despite a severe drought. The success of the experiment paves the way for a radical change in the marketing system (paras 6.04 and 7.10-7.12). In short, the preparation work done by ORM for a follow-up project has been good. Project management has performed well in difficult circumstances. 3.05 The First Livestock Project. Credit 538-MLI of 1973, at a total cost of US$17.3 million (US$13.3 million from IDA), became effective on July 24, 1975, and its original closing date was extended from 12/31/1979 to 6/30/1984. It had as its major objectives: strengthening animal health services in the 5th Region, stockwater development, development of cattle markets, construction of an abattoir at Mopti-Sfvar6, and research on fodder crops and livestock feed. The project was poorly managed in its early phases; as a result, the stock- water development was delayed and the fodder crop research component was not implemented. However, the animal health component had an important impact in reconstituting the herds decimated by the 1969-73 drought. The abattoir at Mopti-SEvarf is operating efficiently, though still at a deficit. The first organized and fenced livestock market in the region was established at Fatoma, and its weekly markets are efficiently managed by ODEM in collaboration with producers and traders. The market currently handles over 60,000 animals a year. 3.06 With hindsight, the design of both projects was too limited to their respective sectors and commodities. In the case of ORM, the project was basically limited to engineering works and studies, and there were serious technical shortcomings in the agricultural development component (para 3.03). Polder construction created land use conflicts by blocking traditional cattle routes and limiting grazing rights. The special feed and grazing needs of work oxen and milkcows were not addressed. Most importantly, the narrow approach of both projects caused the rapid integration of livestock and crop production at farm level to be overlooked (para 2.03). The reconstitution of the herds due to Improved animal health services to levels above those of 1972 was accompanied by an absolute reduction in available grazing land and fodder. The net effect of both projects was thus to contribute to the destabilization of the Inner Delta. - 14 - IV. THE PROJECT A. Objectives and General Description 4.01 The proposed project would build on the experience of the previous two projects in the area, Mopti Rice II and Livestock I. Its central goal is to protect and develop the production potential of the Inner Delta through an array of mutually supportive activities in crop and animal production, recognizing their close interrelation (para 2.03). 4.02 The project specifically aims to: a) increase rice production through improved water management and the provision of clean rice seed, thereby boosting small farmers' incomes; promote dryland crop cultivation inside and around the polders on the non-inundated land; b) increase the off-take from the livestock herds, thereby increasing herders' incomes, and protecting pasture lands by reducing overgrazing; c) strengthen the institutional framework for agricultural development at the local level through the creation of new producer groups, the reinforcement of existing groups, and the restructuring of regional development agencies; d) strengthen adaptive research and seed production for the Mopti area; e) further decontrol and rationalize the paddy and rice pricing and marketing system; f) acquire greater knowledge of land use patterns in the Delta, with a view to reducing conflicts in the future. 4.03 The project would achieve the above objectives by financing the following investments and activities: a) under the rice production program: (i) hydraulic works for improved flooding of rice-growing areas; (ii) a credit facility for the purchase of farm equipment and farm inputs; (iii) support to the training of the extension service and of GPRs, and general operations of ORM; (iv) support to applied research and seed production; - 15 - b) under the livestock development program: (i) establishment and training of Pastoral Associations; (ii) a program of stockwater development; (iii) an animal health program; (iv) a program of range and pasture management; (v) construction of four cattle markets, and other market infrastructure; (vi) a "Production Improvement Fund" to aid livestock owners; c) miscellaneous investments covering the entire project area, including programs for rural health (funded through ODEM); village tree planting (funded through ORM); and support for cooperatives and adult literacy training through ORM and ODEK; d) studies of regional production systems and supplementary physical resource inventories leading to future development programs; e) under the applied research and seed production program: (i) the establishment of one seed farm at ORM; (ii) the rehabilitation of one rice research station at Kogoni; (iii) operational support to IER and WARDA for varietal improvement, and to the Seed Inspection and Certification Service. 4.04 IDA financing of the proposed project is justified by the following considerations: a) our long involvement with the Delta (para 3.01), as well as the Government's wish that the Bank continue to play a leading role in its development. Preservation and management of the Delta's productive potential has been declared a national priority demanding public intervention; b) the constructive dialogue initiated during project preparation on priority sectoral issues, namely the liberalization of paddy and rice marketing and the future form and function of the ODRa; - 16 - c) exploitation of the sunk costs in the preceding projects (Mopti Rice I and II and Livestock I) by improving on their design and profiting from the lessons learned (para 3.03); d) the logical place of this project in the sequence of our comitmnts in rainfed agriculture (Mali Sud II and ODIPAC) and our proposed intervention in irrigated agriculture (rehabilitation of the Office du Niger). It represents the next-in-line priority in the project pipeline. 4.05 Failure to proceed with the project would jeopardize the continued operation of two viable and well-run rural development agencies, ORM and ODEM, whose interventions are essential for the management of the Inner Delta. This could lead to an accelerated degradation of one of West Africa's few areas of great productive potential (para 2.01) a process which would be extremely costly to reverse. B. Detailed Features 4.06 The project objectives outlined in para 4.03 would be achieved through technical improvements in areas affecting rice and crop production (the responsibility of ORM), livestock production in the whole of the 5th region (the responsibility of ODEM), and the interaction between them in and around the ORM polders. In addition, rice foundation seed production, quality control, and varietal research at the national level would be strengthened (IER). 1. Improved Flood Control 1/ 4.07 The predictability of water delivery to rice cultivable areas would be increased by lowering the water levels admitted, and by concentrating rice cultivation on a smaller, and more suitable, area. Land on the higher fringes, now only marginally suitable for rice cultivation because of its low probability of being inundated, would be freed up for dryland crops. Land too low-lying for rice cultivation would be converted to pasture. The risk of non-submersion of higher areas or drowning of lower areas, which now causes average annual losses of 25-30% in sown areas, would be reduced by half (Annex 4-1). The new plan for lowering the water levels through a change in operation of the hydraulic system would reduce the potential area under rice from the originally contemplated 39,000 ha to 27,000 ha, but would at the same time raise the flood probability and yield potential. Thus twelve thousand (12,000) ha would now be available for cultivation of such dryland crops as millet, sorghum, groundnuts and cowpeas (7,000 ha), or for use as improved grazing areas (5,000 ha) to be planted by villagers with high-quality local pasture grasses. Enhancing the probability of 1/ For details see Document Cl. - 17 - inundation would require additional works consisting of secondary channels and intermediary dykes (map No. 17521 and Annex 4-1), as well as additional equipment for the maintenance of the works. Detailed engineering designs have already been prepared. Execution will be the subject of a contract to be awarded through ICB (paras 5.12 and 5.13). In addition some small investments would be made to improve water delivery at the Sivari rice mill. 4.08 The new land use and water management plan would require a reallocation of land among area farmers. This has already been implemented for the 1984/85 season based on the new water levels. Under the land distribution plan prepared by ORM, 75Z of area farmers would see their holdings increased to at least 3 ha for rice, and 1 ha for dryland crops (either within the polders or close to the villages) and would receive assured access to the improved communal dry season grazing land for draft animals. Land availability in the polders is such that this reallocation can be implemented with minn displacement or hardship (Annex 4-2). Only "indirect" or "absentee" farmers (traders, civil servants) with larger holdings would be inconvenienced by seeing their irrigated land reduced to 3 ha. This land reallocation plan would increase the average farm size to the minimum considered necessary to support the financial charges associated with equipment credit (para 4.10). 1/ Implementation of the first phase allocation plan has begun and is proceeding smoothly. 4.09 The project will finance the development of a forecasting model which should predict, with reasonable accuracy, the approximate timing and quality of the river flood at Mopti to be expected in a particular year. If, as is expected, such predictions can be made a minimum of two months in advance of the flood, they will permit the farmers to orient their planting in order to minimize losses: if a good flood is predicted, they will plant the maximum area to rice; if poor, then they will give more area over to rainfed crops. Their risks will therefore diminish. The model will be developed on the basis of the existing mathematical model of the Niger river covering the whole Niger basin. Once developed, the model may require the establishment of additional monitoring stations - financing for these has been included in the project costs. ORM will direct the initial study in conjunction with the Naional Directorates of Hydraulics and Energy, and Rural Engineering, and present its results for IDA's review by December 31, 1986. Once agreement has been reached, ORM will implement the recommendations. 1/ For details, see Document B2. - 18 -. 2. Agricultural Credit 1/ 4.10 Hedium-term (4 year) credit would be provided through BNDA (para 2.06) for the purchase of work oxen and soil tillage equipment by individual, unequipped farmers, and to blacksmiths (para 4.12). Small portable threshers (costing about US$2,000 each) would be purchased by groups of 8-10 farmers on medium-term credit, with repayment also guaranteed by the village producer group. These threshers have been tested under similar conditions in the Office du Niger and perform satisfactorily. The credit guarantee system has been successfully tested in 10 villages. The pace of implementation of the agricultural credit component depends upon that of the new land reallocation plan (para 4.08). A list of equipment to be financed under the project is given below. The structure of interest rates and organization of the credit program is discussed in Chapter VI (para 6.09). Equipment Financed under Credit Program Item Year 1 Year 2 Year 3 Year 4 Year 5 Total Work Oxen (pair) 100 300 500 850 1,250 3,000 Ploughs 200 450 700 1,100 1,550 4,000 Harrows 200 450 700 1,100 1,550 4,000 Carts 100 200 300 400 500 1,500 Small Threshers 10 20 20 20 30 100 Smithing Equipment 8 8 8 ... ... 24 Welding Equipment 2 2 ... ... ... 4 4.11 The farm mechanization made possible through the agricultural credit component would increase the percentage of farmers equipped with oxen, plows, and harrows from 40% to 75%, thus permitting most of the fields to be plowed immediately after harvest when the soils are still workable, instead of after the first rains. This would have the triple advantage of: a) better control of wild rice; b) better interception of the early rains; and c) better distribution of the workload for rice and upland crops, for which work is now bunched in a period of 4-6 weeks after the first rains. The period available for seedbed preparation (harrowing) and sowing would then be greatly extended, permitting sowing at the correct time and to the correct depth. Given the positive results of the pilot agricultural credit program and the pent-up demand for oxen and equipment, the targeted increase in equipped farmers is considered realistic, in particular since a 40% decrease in current equipment prices is expected from improved local manufacturing. 2/ The provision of one hundred portable threshers under this component (para 1/ For details, see Document B4. 2/ Through a joint venture agreement between the local manufacturer SMECKA and a Dutch company with financing by FM (Document AS). - 19 - 4.10) would moreover reduce the threshing period from three months to one month, thereby reducing crop losses, now estimated at 15-25%, to a more acceptable 5%. The cost of mechanical threshing would also be reduced from its current level of CFAF 12 per kg paddy (actual OEM 1982 costs) to about CFAF 4 per kg. 3. Training and Extension 4.12 Training of producer groups, and agricultural extension by experienced technicians from ORM, ODEK, BNDA, the Forestry Department and the Regional Department of Health, supported by consultants, would address the following main concerns: a) credit handling; b) communal paddy marketing; c) seed production; d) improved care and feeding of draft animals; e) conservation and rational use of crop by-products; f) proper handling of improved agricultural equipment; g) primary health care; and h) village tree planting. Improved training and extension methods initiated under the current Nopti Rice project would be an important factor in encouraging farmers to adopt rFcommended agricultural techniques. 1/ The ORM and ODEK training program would fall in two categories: (a) refresher training for technical staff; and (b) training of the officials of the pastoral associations and GPRs (para 2.05) in the management of a cooperative and its associated tasks. In addition the credit will finance technical assistance in the fields of training and financial management (para 6.05). 4.13 Twenty-four village blacksmiths would be equipped through a credit, and trained in the routine repair and maintenance of farm equipment, following a formula successfully implemented in the first Mali Sud project. 2/ Four additional blacksmiths would receive further training and be provided, under a medium-term credit (BNDA) program, with welding equipment to repair breakages and construct new equipment. In addition to equipment already available on the market, improved farming equipment for row seeding, weeding and post- harvest operations would be introduced, tested with the farmers, and adapted to their needs by the trained blacksmiths. Technical assistance would be provided for the implementation of this component (para. 6.05). 4.14 The extension of improved agricultural equipment and techniques would aid in the control of wild rice by promoting such practices as plowing at the end of the rainy season, harrowing, multiplication by the farmers themselves of weed-free seeds, row seeding, and interrow weeding with animal-drawn implements (Annex 4-3). 4.15 ORM would be equipped with mobile spraying equipment and chemicals to combat predators when the first attacks are signalled. 1/ For details, see Documents Al, 2, and 3. 2/ For details, see Documents AS and B2. - 20 - 4. Stockwater Development 1/ 4.16 In order to extend grazing through the dry season on about 1 million ha of productive land outside the Delta now used only for rainy season grazing, the project would finance the construction of 44 stock-ponds and 30 watering points. The control of the grazing land around the watering points, modelled on traditional land use (para 4.17), would prevent overgrazing in the dry season. The stock-ponds, for the use of nomads on their trekking routes, would be constructed free of charge as a public service. The 30 watering points, mainly deep wells with storage wells (see attached sketch in Annex 4-3), would be constructed within the framework of pastoral associations and under the supervision of a qualified consulting engineer. Details of the contract arrangements and implementation schedule are given in Annex 4-3. The cost of the deep wells will be paid by Government. They are estimated on the basis that only one well in three will yield results. The construction of the storage wells, however, would be financed through ten-year credits extended to pastoral associations by the BNDA. The conditions of the credit would be: a) the establishment of a pastoral association and the identification of the grazing land to be serviced by the well; b) an up-front payment by the association of not less than 1OZ of the cost of the storage well; and c) the acceptance by the association of a contract ("cahier des charges") setting out criteria, agreed between the association and ODEM, for the use and management of water and grazing. In case of default the credit risk would be shared equally between BNDA and Government. The costs of the stockwater development component is estimated at US$1.4 million for stock ponds, US$1.6 million for deepwells, and US$1.5 million for the storage wells. In view of the importance of the investment, the number of deep-wells contracted would be limited to the number of pastoral associations identified to a degree satisfactory to IDA at the end of PY2, and would correspond to their areas as demarcated. 5. Pastoral Associations 2/ 4.17 A key step in the realization of the above stockwater development scheme would be the identification and establishment of about 30 livestock producer groups in the form of voluntary associations, cooperatives, or other common-purpose groupings modelled on traditional social structures, for which an adequate legal framework exists. Each association would be assigned responsibility for the protection and rational use of specific grazing lands. A team within ODEM, consisting of a sociologist, a livestock technician and a cartographer, is responsible for the dialogue with producers and for the formal establishment of the groups, which will in most cases have strong 1/ For details, see Document 37. 2/ For details, see Documents B5 and C9. - 21 - family links. This experimental activity has already begun. Under the PPF (para 4.35), 8 of these associations have been formed around existing watering points with their installation and operation as common goal and binding force group size varies between 30-50 families. Additional associations have been identified and their areas are being demarcated. The process followed by the team begins with the identification of a potential grouping. They then enter into dialogue with the pastoralists, with their neighbors and with any third parties who may have an interest in the land or water resources. Once consensus has been reached within the group that they indeed wish to form an association, they then elect a representative body to carry on dialogue with the authorities. At this point they formally petition the regional Governor for recognition of their legal existance. Once granted, the ODEN team can proceed to the work of demarcating and allocating the land to the association. The final step is the drawing up of a grazing management plan to be done jointly by the pastoralist and the technical specialists at ODEM. Groups are more able than individuals to absorb financial risks and are certainly better able to enforce the rational use of such critical resources as grazing lands. Once the groups are established, ODEK's technical services would provide annual vaccinations against rinderpest and pleuropneumonia, and would sell veterinary drugs (both activities currently payable at cost). The establishment of these voluntary pre-cooperative livestock producer groups, such as the pastoral associations, would expand the distribution network. Individuals selected by the group would be trained by ODEM staff in veterinary first-aid and would also handle the sale of inputs on a commission basis, a new practice designed to reduce ODEX's direct involvement and recurrent costs. 6. Animal Health Program 1/ 4.18 The program to be run by ODEM would provide the following support services: a) extension services for the maintenance of draft and dairy animals and small stock; b) distribution and sale of mineral licks, and distribution and sale of feed; c) establishment of a revolving fund for purchase and sale of vaccines. 4.19 ODEM staff capabilities would be upgraded through regular training by experienced technicians from within, as well as from outside ODEK, in the areas of improved animal care and feeding, and development activities relevant to livestock owners. For details, see Document B6. - 22 - 7. Pasture Improvement 4.20 The improvement of 5,000 ha of irrigated "bourgou" pasture using existing unpoldered lands, including the introduction and multiplication of forage plants, would be the responsibility of the range and pasture management section of ODEN. The planting of the "bourgou" would be done by the adjacent villages, who would also control its use. Initial tests have been successfully conducted with participation of interested villagers. This component would improve the feeding of village herds through rational distribution and use of crop by- products, and further support the integration of crop and livestock production. 1/ 4.21 A land demarcation program, to be carried out by ODEM with consultant assistance under project financing, would use aerial photo coverage and photomaps (para 4.29) to improve the quality of data on village land use, and help develop procedures for demarcating and landmarking grazing areas and cattle routes. 2/ 8. Marketing Infrastructure 4.22 The project would finance the construction of four markets; Douentza, Teneninkou, Kona and Korientze, to be owned and managed by ODEK along the lines of the successful Fatoma market (para 3.05). 9. Production Improvement Fund 4.23 The project would finance a Production Improvement Fund of CFA 250 million, disbursed in two tranches, to be used for small interventions (up to CFAF 20 million each) to which livestock owners are willing to contribute at least 30% in cash or in kind, yet which are not suitable objects- for financing through credit, because they do not generate directly measurable revenues. The second tranche would be disbursed upon IDA's receiving confirmation that the initial deposit was 90% exhausted, and that funds had been correctly used. Interventions to be financed on a grant basis would be small hydraulic works, eradication of noxious weeds, and other forms of pasture improvement. For investments of less than CFAF 5 million (US$12,500) (including producers' contribution), the fund would operate with the approval of the ODEM director. Investments of over CFAF 5 million would require prior IDA approval. Each investment would be documented in sufficient detail to allow a review and evaluation of its proper use to be made at the time of supervision by IDA, and would be included in the scope of the annual audit. For details, see Document B4. 2/ For details, see Document C2. - 23 - 10. Miscellaneous Livestock Activities 4.24 The project would provide a line of credit through BNDA (US$240,000) for short-or medium-term financing of productive and commercially-oriented activities, such as livestock fattening or Improvement of market facilities. Provision has also been made for the financing of BNDA's Mopti Office operations for five years (US$20,000) after which it is expected to be financially self-supporting. 11. Ancillary Activities 4.25 The project would finance a rural health component to be implemented by the regional medical officers, ODEM and ORM, under the supervision of the Ministry of Health. The component would strengthen the health infrastructure in the area, provide medicines and vaccines to rural health centers, and train health work3rs and villagers in basic health care. In addition, about 60 first-aid boxes (village pharmacies) in the project area would be stocked with medicine for sale. The component is consistent with the IDA-funded health project (Cr. 1422-MLI) and Government policies nationally. 4.26 To begin to remedy the alarming wood shortage in the 5th region, the project would promote modest village-managed nurseries for pre-tested eucalyptus species. 1/ Young trees would be sold from three nurseries in the project area for individual or communal planting in and around the villages, on land not used for crops. The regional forestry department would train ORM extension agents to teach correct tree care and to mobilize and monitor the participation of the local population. Several additional tree species would be introduced and tested for their adaptability to the varying watertables and inundation periods experienced in the Delta (estimated base cost: US$230,000). 4.27 A training center, to be built at Sfvari and mAnaged by ORM, would be used by ORM and ODEM to train extension workers, and prepare leaders of producer groups for management of credit and marketing. The center would also house a cartographic unit, and would rent space to other agencies as BNDA, Op&ration P9che and regional authorities as required (cost: US$525,000). In addition a number of fellowships would be financed to train staff both locally and overseas. Adult literacy programs successfully implemented elsewhere in Mali and started in the 5th region would be continued and reinforced. They would be carried out by ORM for the sedentarized farmers and by ODEM for the pastoral associations. The aim of the programs (cost included under 4.11) is to prepare village leaders for such tasks as management of agricultural credit, marketing and production, village forestry, primary health care and other forms of self-development. This component would be supervised by DNAFLA, the national agency responsible for adult literacy programs. 1/ For details, see Document B9. - 24 - The project would finance technical assistance in the form of a coordinator for the centre. 1/ 12. Systems Study and Project Preparation 4.28 Despite the availability of considerable data on livestock in the 5th region, the issues of land use, the expansion of itinerant crop production in the Delta and the links between agriculture and livestock production have not been the subject of formal study. No regional development action for the whole Delta should be contemplated without detailed knowledge of this complex situation. The proposed project would, through studies and monitoring of production systems, devise an area development plan for most of the Delta. The studies, carried out by a team of senior Malian professionals, supported as necessary by consultants and managed by ODEM in consultation with ORM, would focus on the family unit in order to understand the microeconomy, and thus the linkages and competition between production systems; they would deal with the three major systems -- agriculture, livestock and fishing - in terms of land use, labor, other means of production and output. The objective would be to provide feedback to increase the impact of ODEM and ORM in the region, to examine their roles, to improve the training and extension services provided to pastoral associations and crop cultivators, and to prepare a regional strategy to be implemented by regional and local authorities and ODRs. Government has accorded high priority to the development of such a strategy and will look to the study for details of the optimal institutional means of carrying it out. 4.29 The staff recruitment and design of the three-year study would start in advance of the project under PPF financing. A study director, assisted by an agricultural economist and a sociologist, all three to be recruited locally, would present the findings in PY3, in a second phase of the exercise, and draft a development plan. This plan, after review by Government and IDA, could serve as the basis for a follow-up project. 2/ This component consists of the following elements: a) Systems Study (US$290,000) b) Monitoring and Evaluation Units (US$320,000) c) Technical Assistance (US$500,000) d) Project Preparation (US$100,000) e) Aerial Photography (US$660,000) 4.30 The project would also finance the following studies: (a) supplementary topographic and physical resource studies of the area to be affected by the Djenne Dam (US$220,000; para 2.01); (b) a study of the private rice milling and marketing industry in Mali (US$130,000. 1/ For details, see Document C8. 2/ For details, see Documents B5, C4. - 25 - para 1.08); (c) additional studies of hydraulics, land use, and soils of the Inner Delta, in support of the eventual regional plan (US$220,000). 13. Applied Research and Seed Production 4.31 Applied research in the project area conducted jointly by ORM and WARDA, under the supervision of IER, has already identified two Improved medium-flooding rice varieties and tested improved methods of land preparation, sowing and weed control (para 3.04). The proposed project will finance a program of applied research which would focus on (a) improvement of agricultural equipment; (b) continued varietal improvement; (c) fertilization, in particular with the Tilemsi rock phosphates; (d) chemical weed control; (e) dryland and fodder crops; (f) farming systems; and (g) seed production systems (Annex 4-4 and Documents A2, A3 and AS). 4.32 In view of the limitations of OPSS (para 2.09), the project will finance the construction of a small (20 ha) seed farm within the ORM polders (US$510,000) to secure the first multiplication stage of seed production for use by the ORK contract farmers. 14. Support to IER 4.33 The rehabilitation of the rice research station at Kogoni (cost: US$0.9 million) would include the improvement of the station's hydraulic structures, reconstruction of buildings, staff housing, and provision of essential field and laboratory equipment and vehicles permitting the conduct of farm tests. Moreover, it would receive operational support (cost: US$430,000) in the form of vehicles, operating funds, and technical assistance to implement the varietal improvement program at Kogoni and conduct applied research in the area of Office du Niger. The investments and operational support of the Kogoni station would not only serve the proposed Mopti project, but equally the Office du Niger Consolidation project under preparation. 4.34 Support to the Seed Inspection and Certification Service (SRCSS) would consist of a field laboratory and equipment in Kogoni and vehicles for regular field inspections of the RI and R2 multiplication operations in the rice operations in the Delta (US$550,000). 15. PPF 4.35 Project prefinancing was made available to an amount of US$ 1.0 million to finance the following activities: a) the preparation of the ORM and related components; b) preparation of the detailed engineering studies of hydraulic works and buildings and topographical maps; c) tests with new forms of agricultural credit (para 3.04); - 26 - d) analysis and strengthening of accounting systems of ORM and ODEM; e) identification and establishment of pastoral associations (para 4.16); f) start-up of the production system study (para 4.27). 16. Environmental Impact 4.36 A central objective of the proposed project is the protection of the unique and fragile ecology of the Delta region (para 4.05). For centuries, the scarce grazing resources were preserved by a system of annual migration and strictly controlled access, but recent years have seen a gradual breakdown of the traditional protection mechanisms (para 2.03). Through stockwater and pasture development outside the Delta (para 4.15 above), the project would support approximately 200,000 head of cattle which would normally have come to the Delta during the dry season, thereby relieving pressure on the grazing land. The integration of livestock and crop activities under the project should minimize the risk of negative impacts upon the region's environment. Care has been taken, under the project, to minimize the impact of development upon the elephant population of the Gourma. Stock-water development in this area is limited to improving existing ponds which will be shared by the elephants (as now), and will be closely monitored. Livestock and elephants already coexist in the region and the actions proposed should improve the situation for both. 17. International Water Rights 4.37 Since the project requires the lowering of the water levels in the polders from those previously practiced, no additional water will be drawn from the Niger river. All the Niger river basin riparians have signed the 1980 convention creating the Niger Basin Authority, which requires member states to inform the authorities of any works undertaken on the river. Government confirmed at negotiations that they have complied with this requirement. - 27 - V. PROJECT COSTS AND FINANCING A. Cost Estimates 5.01 Total project casts are estimated at CFAF 20.4 billion (US$41.7 million) with a foreign exchange component of 68%. A sumary of costs is shown in the table belov. mmE IMIL1M EMMMKw f wWMDC (CAF Ellin (IM Hållin) Z Total 2 Foui huue Local Foem Total Lcel Foi Total EIO han~ Cust A. RIE RMULTIOM IMEB FLIMD C=IUM In 1M3.4 1,241.7 1,430.1 0.4 2.5 2.9 87 9 FAM MEMUTiZATIM i CfEfi 19210.2 - 1p210.2 2.5 - 2.5 - 7 1MIlliFUMEIIM. LI1EMACT, PmuEERINPPT 113.6 72.6 1N.2 *.2 0.1 0.4 39 1 SMTMT 18 <M WEMTIM 192.6 19405.8 1^58.4 0.4 2.9 3.2 9 10 S~Total RIM P ImTIf 1,694.8 29720.1 49414.9 3.5 5.6 9.0 62 27 8. LIUESTM PUMETI ST1 MiEMEIENT 317.1 1,952.7 2349.8 0.98 4.0 4.8 83 15 ~ OR1MBSUPORT TO PA1M A ~MI:IATMB 415.9 246.5 662.4 0.9 0.5 1.4 37 4 MDm ILIlH 190.0 782.6 972.6 0.4 1.6 2.0 e0 6 ^NE mI NBIlE o ii IEN T 111.2 87.3 198.5 0.2 0.2 0.4 44 1 IETIIB IIREiEE 26.0 57.2 93.2 0.1 0.1 0.2 a 1 9IPUT TU i IEEMTIllIS 1s242.2 2:145.2 3^37.4 2.5 4.4 6.? 63 21 SbTtal LIE~11CK MIETIM 23P2.5 5s271.4 79653.9 4.9 10.8 15.6 69 47 C. MEA BEULDENT aM ~PEMTIOIS 77.1 48.7 125.8 0.2 0.1 0.3 39 1 RM HEALI 62.3 104.5 166.8 0.1 0.2 0.3 63 1 FhIESThT MELIWIT 73.3 34.9 108.2 0.1 0.1 0.2 32 1 TR~IING CERE 110.8 293.2 403.9 0.2 0.4 0.9 73 2 PMIIIINB PMATIm 254.4 1.019.7 1,273.1 0.5 2.1 2.6 90 8 S MTotal E ~UEIET 577.8 19500.1 2v077.9 1.2 3.1 4.2 72 13 B. oPPLIE REK i S N M TI "MIEAL 1ESEMIIM 54.2 26.3 321.0 0.1 0.5 0.7 83 2 m lEm EMTIPUCAT00 61.4 204.9 26.3 0.1 0.4 0.5 77 2 MI SEED PIRi IER 174.2 49.3 6M3.5 0.4 1.0 1.4 74 4 SED CERTIFICATI EEa 90.0 195.5 2M.5 0.2 0.4 0.6 6 2 SubT~ta NTID MfimRE ~ m SEM PIETI 379.8 1z156.5 156.3 0.8 2.4 3.1 75 9 E. EFIMEIN PPF PPF - 490.0 490.0 - 1.0 1.0 100 3 S~Total RfIIMCD PPF - 490.0 490.0 - 1.0 1.0 100 3 Total DELIIE CI55 5,34.9 11D1X.0 16,173.0 10.3 22.7 33.0 69 100 P~iical Cmntiusn~ies M 1e017.9 1.356.0 0.7 2.1 2.8 75 8 Pric Continmies 1^092.1 1,2.3 2904.5 2.2 3.7 5.9 63 1B Total PECT CeSTS k.492 13,9~.2 20#433.4 13.2 28.5 41.7 8 126 -ý - ý - 1 - - - ~= - 28 - 5.02 Cost estimates are based on May 1983 prices adjusted to April 1985, the date of negotiations, using an adjustment factor of 21.0% for both foreign and local costs. Costs are calculated net of all identifiable taxes and duties. For those items where quantities are clearly defined (staff, vehicles, equipment), no physical contingencies have been included. Elsewhere they have been set at 15%, except in the case of the deep wells, where, because of higher uncertainty, an allowance of 20% has been made. Total expected price increases amount to 14.0% of total project costs (18.0% of base costs); these figures are based on the following projected rates of inflation: Assumed Local and Foreign Rates of Inflation 1985 5.0 1986 7.5 1987 8.0 1988 8.0 1989 8.0 1990 8.0 It is assumed that any significant difference between local and foreign rates of inflation would be rapidly adjusted through the exchange rate. Detailed costs may be found in the Project File, C-5. B. Proposed Financing 5.03 The proposed financing plan is based on a combination of joint and parallel arrangements: a) IDA and CCCE will jointly finance: (i) a line of credit for storage wells (CCCE 80%, IDA 20%); and (ii) a contribution to ODEM operating expenses (IDA 35%, CCCE 5%), 40% of expenses excluding local salaries. b) All other costs will be financed under parallel arrangements. The proposed financing plan by type of expenditure is summarized in the table below. A more detailed table is given in Annex 5-1. Detailed lists of equipment and civil works have been prepared specifying the source of financing. - 29 - Proposed Project Financing by Type of Expenditure a/ (million US$) Item Total ID CO ADF DMES BOW GMw 1. (EE A. Hydraulic Wbrks b/ 3.8 ... 3.8 ... ... ... ... B. Civil brks 1.7 1.1 0.2 0.3 ... C. Vehicles & Equip. 1.5 1.4 0.1 ... D. Consultants, Studies and Audits 4.7 4.3 0.4 ... ... E. Support to Operations 8.4 2.9 0.5 ... ... ... 5.0 F. Vaccine and Prodcwtin Fuad 0.8 0.6 0.2 .. G. Rural Health 0.4 0.4 ... ... ... 2. O(4 A. Hydraulic Works 3.0 ... ... 3.0 ... ... ... B. Civil Works 0.5 0.5 ... ... C. Vehicles & Equip. 1.1 0.4 ... 0.8 D. Vehicles & Equip. Forestry 0.1 0.1 ... ... ... E. Stuies, T.A., Trainimg and Audits 2.5 2.3 ... ... 0.2 ... ... F. Support to Operations 2.5 2.5 ... ... ... ... ... G. Forestry erations 0.1 0.1 ... ... ... H- Warking Capital 0.4 .. 0.3 .. .. .. .. I. Trainirg Center 0.8 0.3 ... 0.5 ... 3. IER A. Hy draulic Works 0.3 ... ... ... 0.3 ... ... B. Civil Works 0.9 ... ... 0.9 ... ... ... C. Vehicles & F4uip. 0.7 0.3 ... 0.4 ... ... D. Research Progrn 0.8 0.8 ... ... ... .. .. E. Technical Assistance 0.2 0.2 ... ... .. .. 4. IM A. Ines of Credit 5.2 0.3 4.1 ... ... 0.8 c/ B. Operatirg Costs 0.3 ... 0.2 ... 5. Financing PPF 1.0 1.0 . ... Total 41.7 19.5 9.8 6.0 0.5 0.8 5.1 a/ Figures rounded: totals may not sum. Includes contingencies; hydraulic and civil works net of direct taxes. b/ Excludes storage wells (included in item 4A US$2.0 million). c/ Represents beneficiaries' downpayments. - 30 - 5.04 IDA's credit will amount to US$19.5 million equivalent, representing 47% of project costs, excluding taxes. 5.05 The proposed loan from Caisse Centrale de Coopgration Economique (CCCE) will amount to FF 100 million (US$9.8 million equivalent), representing 24% of project costs. It would be made for a term of 30 years, including a grace period of 10 years on payments of principal at an interest rate of 1.5% per annum for 10 years and 2% per annum thereafter. 5.06 African Development Fund's proposed credit will amount to US$6.0 million equivalent, on standard terms identical to those of IDA, representing 15% of project costs. 5.07 Directoraat Generaal voor Internationale Samenverking (DIGIS) proposed contribution will amount to Dutch Guilders 1.5 million (LS$0.5 million equivalent), representing 2% of project costs. It would be in grant form. 5.08 Beneficiaries' financial contribution will be made through downpayments towards the cost of agricultural equipment and storage wells. Total beneficiaries' financing amounts to about CFAF 334 million (US$0.8 million), or 22 of total project costs. 5.09 The Malian Government will finance a portion (60%) of ODEM operating costs, including all local salaries, as well as all incremental salary costs resulting from the project. The total amount is approximately CFAF 2,090 million (US$5.0 million), or 12% of total project costs. C. On-Lending and Administration of Funds 5.10 The proceeds of the IDA Credit would be passed on !y Government in grant form to OM and ODEK. The credit amount for the wells would be onlent to BNDA by Government at 3.0% for a minimum of 15 yv. -rs for each portion of the loan drawn down (para 6.11). The conclusion of a subsidiary agreement, satisfactory to IDA, between Government and the BNDA regarding the on-lendine of IDA funds would be a condition of IDA credit effectiveness. D. Special Accounts 5.11 In view of the limited capacity of ODEM and ORM to prefinance expenditures to be reimbursed under IDA Credit and CCCE Loan, a revolving fund for each institution will be established immediately after credit effectiveness. The funds would be maintained in local currency in interest- bearing accounts in IDA approved financial institutions and may be used to finance operating costs, local civil works contracts and locally-procured goods under the project. The amounts of these funds will be: (a) US$0.2 million equivalent for ODEM; (b) US$0.2 million equivalent for OM (equivalent to approximately 4 months of IDA-financed expenditures). These would be financed by IDA - 31 - as an advance upon the credit. IDA would replenish each revolving fund upon receipt of satisfactory evidence that expenditures made were eligible for financing. Should any disbursement made from these accounts not be acceptable to IDA, Government would be required to deposit the corresponding amount into the respective account. A special account will be opened for each agency as a condition of effectiveness (para 9.02). E. Procurement 5.12 Procurement arrangements are summarized in the table below, with the figures in parenthesis showing respective amounts to be financed by IDA. Procurement Arrangements (USSr.illions) Item to be procured Itsn No Procurement Nedd Total costs (table p. 29) B I;B al Other b/ N.A. Hydraulic wors IA, 2A, 3A 3.0 ... 4.1 ... 7.1 civil works IB. 2B, 3B ... 3.7 c/ ....3.7 ... (1.6)7.. ... (1.6) Vehicles & Equi t IC, 2C, 2D, C 2.8 0.8 0.2 ... 3.8 (1.9)d/ (0.6) ... ... (2.0) Cre4A ... 4.3 ... ... 4.3 ... (0.3) ... ... (0.3) Consultant Services e/ ID, 2E, 3E ... ... 7.5 ... 7.5 & Teduhical Assist. ... ... (6.8) ... (6.8) operati%g support. PFrF.. .. . 15.3 15.3 Special Wmts ... ... ... (8.3) (8.3) Total 5.8 8.8 11.8 15.3 41.7 (1.9) (2.5) (6.8) (8.3) (19.5) a/ Procurment mill be subject to Govenment regulatims governing local coopetitive biddIng, hfdch are acceptable to the Bank. Itwns costing less dn US10,000 equivalent my be procured by prudent sbopping. b/ Itens listed under "Other", apart fran coaultant services, are finamced by COCE and DIGIS and will be aarded through procedures acceptable to them c/ The 'Tivil Works" cansist of mIwa works and buildlqg of estasted contract sie less than US$0.5 ilUlicn each, widely scattered throug&out the project area and udlikely to attract foreign bidders. - 32 - 4/ Veldcles and eqtidpment vll be grouped to the etant possible in pmaEs oE US$100,000 equivalent or more, to allow ICB fbolluf IDA didellnes. Domestic manfacturers would receive a preference in bid evalumtim about 15%, or the amount of customs duties and other Iqort taxes which a non-exazpt importer would have to pay, uidchever is lower. el The 1TRs for all expatriate and local consultant staff financed by the Project wll be agreed with ]DA. The q=nlIfficaUom and experience of consultants to be fiunoced by IDA would be subject to prior reviead nd appErval, alg with their e 0d conitions of employment. 5.13 Contract Review All bidding packages for IDA-financed works over US$200,000 equivalent, and bidding packages for goods over US$100,000, would be subject to IDA's prior review of procurement documentation. This represents approximately 55% of total contracts. The balance of contracts would be subject to random review by IDA after contract award. F. Disbursements 5.14 The IDA Credit of SDR 19.7 million (US$19.5 million equivalent) would be disbursed over 7 years under the following categories: - 33 - Disbursement Categories of IDA Credit Category Amount Disbursements as % of (US$ million) Expenditures I. ORK 1. Civil Works 0.5 100% of total a/ 2. Vehicles and Equipment 0.7 100% of total 3. Consultants, training, fellowships, studies and audits 1.9 100% of total 4. Operating costs a) IER and OEM research activities 0.2 95% of total (excluding salaries) b) ORM general operations 1.1 80% of total (excluding salaries) up to 660,000 SDRs, 50% up to 990,000, 20% thereafter 5. Goods and Services for Forestry Development and Experimentation 0.2 95Z of total 6. Operating costs, IER 0.5 95% of total (excluding salories) II. ODEM 7. Civil Works 0.7 100% of total a/ 8. Vehicles and Equipment 1.3 100% of total 9. Consultants, training, fellowships, studies and audits 4.3 1002 of total 10. Operating costs 2.2 35% of total (excluding salaries) 11. Goods and Services for Rural Health Support 0.3 95% of total (excluding salaries) 12. Deposit to Production Fund 0.6 III. BNDA 13. Line of Credit for Storage Wells 0.2 20% of total credit committed IV. Other 14. Refund of PPF 1.0 15. Unallocated 3.8 Total 19.5 a/ Civil works net of direct taxes. - 34 - 5.15 Disbursement against the IDA Credit would be fully documented except for operating costs, medium-term loans made by BNDA , and for locally procured civil works, goods and services whose individual cost is less than US$20,000, which would all be disbursed against certified statements of expenditures. Documentation (SOE's) would not be submitted to IDA, but held by ORM, ODEK, IER and BNDA for review by IDA supervision missions and auditors. Disbursements for IER would be on the basis of approved overall work programs and targets, to be reviewed annually by IDA (paras 6.13 and 9.03). IDA will not accept any reimbursement application for a total of less than an estimated US$ 20,000 equivalent. 5.16 The estimated Schedule of Disbursement of the IDA Credit is shown at Annex 5-2. along with the regional disbursement profile for Area Development projects. The estimated schedule differs slightly from the profile owing to the high initial payments expected under the proposed project (Special Accounts). G. Accounts and Audit 5.17 ORH, ODEM and BNDA currently maintain their accounting systems in accordance with sound and recognized accounting principles and practices acceptable to IDA. IDA is in possession of audit reports for ODEM and ORM for the financial year ending June 1983 provided under on-going projects. Assurances were obtained at negotiations that these entities will provide quarterly progress reports and annual financial statements which accurately reflect the financial performance and position of the project and of the respective entity to be financed by the credit. An external auditor's opinion and report satisfactory to IDA on such statements would be provided within six months of the close of each financial year. The auditor's reports would include a statement on the adequacy of the accounting system and internal controls, on the reliability of statements of expenditure as a basis for credit disbursements, and on compliance with financial covenants. The appraisal mission reviewed the accounts of ORM and ODEK for the period 1982/83 .and the information obtained was judged sufficient to give a fair reflection of the current financial position of the entities. Support will be provided under the project to strengthen their accounting systems (para 6.05). VI. PROJECT IMPLEMENTATION A. Regional Level 6.01 The key agencies responsible for regional development activities in the project area are ORM, ODEM and BNDA (described in para 2.04). The proposed project will be implemented in large part through ORM and ODEM. through a series of actions requiring an increasing number of joint and coordinated activities between these two entities. Immediate fall - 35 - integration of the two agencies was deemed inadvisable at appraisal, given their widely disparate geographic areas and the different training and orientation of their personnel. The proposed production system study of the Delta (para 4.27) would make recommendations as to the most appropriate institutional mechanism for implementing future integrated development. Under the proposed project, joint activities, aimed at strengthening the integrated approach to the conservation and development of the Delta, would cover the areas of: i) training of extension agents and support of producer groups; ii) demarcation of cattle routes; iii) improvement of pastures and watering points in the polders; iv) introduction of fodder crops, use of crop residues and improved animal feeding; v) health care of draft animals; vi) studies of production systems; and vii) monitoring and evaluation.- The existing close collaboration between ORM and ODEM in a number of those areas would be formalized in written agreements, to be approved by IDA and executed as a condition of effectiveness (para 9.03). 6.02 Individual implementation responsibilities would be distributed as follows: a) ORM would be responsible for all aspects of crop production including production and distribution of animal feeds for the work oxen in and !round the rice polders, and for providing training and support to producer groups (strengthening the services that already exist); b) ORM would also supervise the technical execution of the forestry component by the Regional Forestry Service; c) ODEM would be responsible for: i) livestock services in the area, including stock water development, cattle markets, the establishment and guidance of pastoral associations, pasture improvement in the Delta and the management of grazing polders, distribution of animal production inputs; and ii) studies of production systems; d) ODEM would also supervise technical execution of the rural health component by the Regional Service of the Ministry of Health; e) BNDA would be responsible for establishing and operating the credit components for farm equipment, oxen and storage wells; f) OEM and ODEM would each be responsible for the execution of the adult literacy training program within their respective areas, with technical supervision from the National Directorate of Functional Literacy and Applied Linguistics (DNAFLA); and g) IER would be responsible for the implementation of the seed research component (Kogoni) and the operation of the seed certification service. - 36 - B. Nopti Rice Operation 1. Staffing 6.03 ORM has a relatively centralized management structure which functions well with the current personnel. Staffing levels are reasonable given present responsibilities. However, a reduction in the size of the extension service, in particular in the number of contractual field agents, will be necessary under the proposed project. This will be possible in view of the fact that about 40% of the extension service time is now spent on activities which would be transferred in large part to producer groups under the project (para 7.11). 2. Proposed changes 6.04 The abolition of the compulsory paddy delivery quota (currently 20Z of production) and the gradual transfer of responsibility for the primary marketing and collection of watercharges to the village producer groups will allow ORM's extension service to be reduced by attrition from 90 field agents to 45 over 5 years. A few of these agents would be redeployed as interviewers for the K and E unit, and their tasks enlarged (para 6.16). 3. Technical Assistance Requirements 6.05 ORM requires external support in three areas: financial management, training and farm mechanization. Accordingly, the project would finance: a) a financial controller, full-time for PY1-3, after which point the T.A. for financial management of ORM would be combined with that provided to ODEM (para 6.07); in addition, a series of short-term missions in FYI and 2 would be financed to introduce compatible cost-accounting systems to ORM and ODEM and improve the management information system; b) a training specialist, full-time throughout the project, responsible for managing the training center, developing training programs for ORM and ODEM, and advising BNDA and other regional agencies on their programs; c) a specialist in agricultural equipment, who would manage the program of equipment development with blacksmiths and farmers for the full 5 years of the project (para 4.12), after which the program should be self-supporting. The profiles and draft TOR for the long-term T.A. staff are given in Working Paper C 7, and Annex 6-1. In addition, short-term (3-4 weeks a year) missions would be financed for specialists in monitoring and evaluation. The terms of - 37 - reference and qualifications of all consultants financed under the project would be subject to prior approval by IDA (para 9.01). C. ODEM 1. Staffing 6.06 The current structure and staffing levels of ODEK are adequate. The project will require a reassignment of responsibilities within ODEM to reflect the key functions to be performed, but no additional personnel will be required. The main change is the creation of two new divisions: one providing support to pastoral associations, and the other pasture management. The PA support division will also absorb the unit dealing with in-house training and will become responsible for training of producer groups as well as functional literacy programs. The revised organizational chart for ODEM may be found in the project file (Item C6). Implementation of the changes has already begun and will be substantially completed by the time the project is expected to be effective. For the supervision of the implementation of the storage wells component, ODEM would enter into a working agreement with the National Directorate of Hydraulics ("Direction Nationale de l'Hydraulique et de 1'Energie": DNHE) specifying their supervision roles and responsibilities (para 9.01), and a similar agreement with the National Directorate of Rural Engineering ("Direction Nationale du Gfnie Rural" - DNGR) for the stock ponds. 2. Technical Assistance Requirements 6.07 ODEM currently has a permanent expatriate financial controller. This post would continue to be financed under the project, with the goal of dividing the post's responsibilities between OEM and ODEK in PY4. ODEM will adjust its financial year to correspond to that of ORM by July 1986. The production systems study would require a full-time team of local consultants for PY 1 and 2, supported by 6 man-months of internationally recruited consultants each year. The same consultants would provide 2 man-months of support to the ODEM monitoring and evaluation unit. In PY4, a team of local consultants (4 man-years) would undertake preparation of a follow-up project with support (2 man-months) from internationall.7 recruited consultants. 1/ The project would finance a hydraulic engineer, at the level of ODEM to oversee the implementation of the stockwater development for a total of 25 man-months. A pastoral specialist would advise on implementation of the range and pasture management component for one month each year. The terms of reference and qualifications of all the above T.A. are subject to approval by IDA prior t- appointment (para 9.01). 1/ For details, see Document C4. - 38 - D. BNDA (Medium-term Credit) 1. Implementation 6.08 The medium-term credit program will be implemented by a line of credit through the BNDA (para 2.06) assisted by the field staff of ORM (for agricultural equipment) and ODEN (for livestock related activities). BNDA was appraised in the context of the recent Mali Sud II project (Cr. 1415) and found satisfactory. It is already operating in the project area offering short and medium-term credit to village groups and is fully capable of undertaking the increased volume of lending forecast under the project. Credit over 4 years would be provided for the purchase of work oxen and equipment by individual, unequipped farmers (para 4.09). Such loans would be subject to approval by the village level farmers' groups (GPR), which would share responsibility for repayments. In case of default, the whole village would be excluded from further credit and the equipment repossessed. Loans in early years will be made to those holding 4 ha of land under rice cultivation, with extension later to those with a minimum of 3 ha. All farmers will benefit from Year 1 from the increased water security which should allow them to make provisions for fulfilling the credit eligibility conditions. Under the current project, BNDA would open a branch office in Mopti in PY1. ORM and ODEK staff will screen loan applications from individuals and the producer groups, procure and deliver equipment and verify installation. Remuneration for these services will be covered by a surcharge on the purchase price passed on to borrowers. BNDA would be responsible for disbursement, loan administration and collection, and would bear the total financial risk for all loans other than those for storage wells, where the risk will be shared with Government. BNDA has entered into agreements with ORM and ODEM, satisfactory to IDA, covering the procedures and responsibilities for loan administration. 2. General Lending Terms and Condition 6.09 Loan maturities and minimum down-payments on the credit financed under the project may be summarized as follows: Loan Type Maturity Minimum Cash Minimum Total (years) Downpayment Downpayment Agricultural Equipment 4 10% 10% Village Equipment (thresher) 4 20% 20% Blacksmith's Equipment 5 20% 20% Storage Wells 10 10% 10% Livestock investments 5 20% 20% Interest rates would be consistent with those agreed with Government for the Mali Sud II project, namely 10% for individuals (for small-scale equipment loans such as those proposed under the project) and 9% to producer groups where these absorb significant risks and administrative costs. These rates are in line with the interest rate structure of the BCEAO, represent a slight positive real interest rate (average GDP deflator during 1979-82 was 9% p.a.), and are consistent with - 39 - the cash flow produced by the contemplated investments. The introduction of a front-end fee of at least 6% (para 6.08), for equipment loans financed by the project has the effect of raising the effective annual percentage rate paid by most borrowers to over 12%. As agreed under Mali Sud II, Government and IDA would review interest rates on all project refinanced loans by April 30 each year, beginning April 30, 1986, with the objective of maintaining positive real rates as measured against the GDP deflator calculated by the I4F,within the linits of the financial structure of the BCEAO. The cash downpayment of 10% was agreed with BNDA and the project management to be the maximum that can reasonable be asked for in view of the droughts of the recent years. Loan commitment would begin with the better-off farmers, extending to others after they have benefitted from the results of improved water control. The down-payment requirement would be the subject of review at the end of PY2 and PY3. 6.10 The onlending rate of 1.5% from CCCE to BNDA for the agricultural group and blacksmith's equipment has been calculated as a residual so as to just balance BNDA profitability and cash flow, given projections of other costs 2/ This allows an 8.5% gross spread, of which 4.5% would be used to create provisions for bad debts and rescheduling. In addition, in view of the high climatic risk in the area, a credit insurance calamity fund would be established: the amount would be equivalent to 25% of the equipment loans, plus commissions and work oxen insurance, and would be directly financed by CCCE as a grant to the BNDA. A cattle health insurance premium (3.5% of the purchase price) would be added to annual repayments not only for the initial equipment loans (where oxen are financed), but also for supplementary equipment loans (since this is dependent upon animal traction for its efficacy). Net external financing requirements (apart from the calamity fund) amount to 59% of project lending: beneficiaries will supply 41% of the necessary financing in the form of downpayments (19.5%) and reimbursements in Years 2 through 5 (21.5%). In view of the low volume of loans and interest revenue in the early years and of BNDA's narrow owned-funds base, a significant direct BNDA contribution to the medium-term financing program is not possible. The project will also finance the investment and operating costs of the Mopti office until it is self-supporting (end of Year 5). 6.11 In the case of the line of credit for the storage wells, funds would be onlent by Government to BNDA at 3.0% interest (a similar rate will be applied to CCCE lending directly to BNDA). This allows a 7.0% gross spread, of which 1.5% is a commission to BNDA for loan administration (only 30 loans maximum are involved) and 5.5% to be used to create provisions for bad debts. In the case of default, BNDA would bear 50% of the loss, the remainder being carried by Government. On-lending maturity from Government to BNDA for IDA refinancing would be for at least 15 years on each tranche drawn down, allowing BNDA a safety margin over its maturity of 10 years to 2/ For details see Document B-2. - 40 - subborrowers. A project-related cash flow projection for BNDA is given in Annex 6-2. 3. Other Provisions. 6.12 In the context of the earlier Mali Sud II project, BNDA agreed to a number of conditions relating to its overall lending activities. The most important of these restrict BNDA to an overall debt-equity ratio (including statutory reserves) no greater than 10:1, 1/ and commit the entity to maintaining accounts. which clearly identify project-related loans. Annual audits of BNDA's accounts, and particularly of statements of loans submitted to IDA for refinancing, will be financed under Mali Sud II. No additional controls are deemed necessary under the current project, but all relevant covenants will be repeated in the legal agreements. E. Rice Research and Development 6.13 Under the project, the responsibility for varietal renewal and the production of rice foundation seed would continue to lie with IER at its Kogoni station (para 4.31). Its work programs and budgets for this purpose would have to be submitted to IDA for approval by March 30 each year. Such approval would be a condition of disbursement. Disbursements for IER operating costs will be channeled through ORM. Commi:ment will be sought that IER maintain separate accounts for the operation of Kogoni and SRCCS (para 9.01). IER will enter into an agreement with ORM' concerning implementation of the components as a condition of effectiveness (para 9.03). 6.14 An expert will be provided for the duration of the project to assist with the applied research and varietal improvement programs, with grant financing provided by the Dutch government. Since he will also cover the Office du Niger project, currently under preparation, the cost of this assistance has not been included under the proposed project. 6.15 The Service de Reglementation et Controle des Semences Silectionnfes (SRCSS) is competently managed and well able to implement the expanded operations envisaged under the project (para 4.34). F. Other Components 6.16 The health and functional literacy components are continuations of activities funded under earlier projects. DNAFLA, which is responsible for supervising the functional literacy program, has been effective with 1/ It is currently operating well within this limit and is not expected to exceed 8:1 during the project. - 41 - earlier programs in the region, as demonstrated recently with village groups in the ORM area. The forestry component is small and relatively simple, and financial control over it will be assured by 0RM. Similarly, financial control of the health component would be assured by ODEM. The National Forestry Department has experience with the type of operation proposed under the project: to ensure satisfactory implementation assurances would be sought from Government that adequate staff would be assigned to the regional offices to execute the forestry component (para 9.01). G. Monitoring and Evaluation 6.17 The current monitoring systems of ORKM and ODEM operate efficiently, each organization possessing its own monitoring and evaluation unit. This system would continue under the proposed project, with increased interaction between them. In order to avoid duplication of effort, and to ensure consistency of data gathering, a joint committee would be established to agree upon annual work programs and allocate the specific responsibilities of the two teams. The ODEM unit would be strengthened with periodic technical assistance (preferably linked with the Production Systems Study team). The M & E unit of 0M would now cover all the farm activities of ORM farmers, and not simply rice production. Key monitoring studies to be carried out from the beginning of the project would be the implementation of the land re-allocation program, the progress of paddy marketing liberalization, and the impact of agricultural credit. In order to perform these expanded functions, the unit would be strengthened with additional personnel, equipment and short-term T.A. missions by an expert in M & E whose TOR and qualifications would be subject to approval by IDA (para 9.01). Toward the end of the project, the two units will collaborate in producing a report on the achievements and progress of the proj*ct. VII. PRODUCTION, MARKETS, PRICES & FINANCIAL ANALYSIS A. Rice Production, Markets and Prices 1. Project Production and Yields 7.01 The project would result in incremental production of about 16,000 tons of paddy per year at full development. Average yields would increase by about 410 kg/ha (a 45% increase) as shown below. - 42 - Growth of Yields and Production: ORM Polders Year 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 Sam area (1,000 ha) 23.9 25.7 27.0 28.7 28.7 28.7 28.7 28.7 28.7 Yields (kg/ha sown) 915 925 950 1,050 1,130 1,250 1,300 1,320 1,325 Production (1,000 T) 21.9 23.8 25.7 30.1 32.5 35.9 37.3 38.0 38.1 Without Proj.Prod. (1,000f) 21.9 21.9 21.9 21.9 21.9 21.9 21.9 21.9 21.9 Incremnntal Prod. (1,0001) 0 1.9 3.8 8.2 10.6 14.0 15.4 16.1 16.2 The yield development would be a function of the gradual introduction of additional oxen and equipment, plus improved seed, starting at a low level in the early years and accelerating over time with the gradual implementation of the new land attribution plan that gives the equipped farmers 3 ha of riceland. In addition to the agronomic effects described above, the total production will rise as a result of the reduction in loss due to inadequate flooding (achieved by the new water management plan). The average yield projections are conservative, making ample allowance for those farmers who may be slow to adopt the recommended techniques and for losses in sown area (Annex 4-3). Some farmers are currently obtaining yields of over 2T/ha. 7.02 Studies carried out under the Mopti II Project established average production levels by type of farmer: the classification is shown in the table below. It excludes farmers in the polders of Karbaye, Ibetemi and Diaby (675T production) which become grazing polders, and Dia and Tenenkou, which are unaffected by the project (production of 900T). Project Impact on Equipment and Production Levels Rumber of Number of Fanmrs Fanmers Technical Performance Avere Yield Beging Production End Production level Eupnent havested) Project (mtric tons) Poject (umtric tons) 0. Uequipped - 900 5,670 5,600 2,439 2,190 1. Mini=m Equipped Oxen, plough 1,200 1,000 2,970 3,231 16,880 2. Fully Fquipped + Harrow, Cart 1,70D 1,141 4,845 1,691 9,000 3. Equipped & Fertilizers - 2,20D 450 2,475 900 6,180 Absentee Rented Fquipuent 1,200 2,675 4,410 n.a. 2,900 Total 037a. The net effect of the project-related actions will be a reduction in the number of absentee farmers and in their land holdings, a large reduction - 43 - in the area farmed by unequipped farmers and a substantial increase in the number of equipped farmers and in their area. Further details of the development of yields over the project life can be found in Annex 7-1. 2. Domestic Demand 7.03 Mali has been a perennial importer of cereals to meet domestic demand, much of these imports coming in the form of food aid. Domestic production in the best of years is sufficient to cover only some 70% of needs (based on an FAO norm of 200 Kg per capita per annum). The most recent harvests have been especially poor as a result of low and unevenly distributed rainfall: in 1982/83, production was 30% below the 1978-80 average, in 1983/84, 40% below with a similar shortfall in 1984/85. The bulk of cereals consumption is in the form of millet and sorghum, with a growing consumption of maize in the southern areas. Overall, rice provides only 10%-20% of a typical diet, but this figure rises to 50% in urban and rice-producing areas, and is higher in the upper socio- economic groups. Demand is increasing: in 1981 Government lifted import duties on rice, thus encouraging increased imports to meet domestic demand. Total rice imports (excluding food aid) are estimated to have been between 40,000 and 50,000 tons in 1982/3, and reached 100,000 tons in 1984. There is little prospect of food self-sufficiency in the medium-term, given population growth of 2.8% p.a. and production levels which have hardly changed over the past 20 years. The additional rice produced by the project will therefore not lack a ready market. It should be noted that the current cereals shortfall may be as much the result of misguided marketing and pricing policies as of inadequate rainfall; these policies will be addressed in a regional context under this project (para 7.11). 3. Rice Marketing 7.04 It has been estimated that approximately 75% of overall cereal production is consumed on farm, and that the remaining 25% is marketed. Paddy marketing takes place in two ways. About 90% of the total marketed goes through the official channel, where paddy produced on irrigation schemes managed by ODR9 is compulsorily purchased by them on behalf of OPAM, processed locally in state-run mills, and then passed on to OPAM. The remaining 10% goes through the parallel market, where private traders buy paddy and rice direct from the farmer, procest the paddy in small village mills, and sell the rice locally or in Bamako. The table shows the estimated amounts of paddy and rice produced and officially marketed in recent years. - 44 - Mali: Paddy Production and Rice Marketing ('OO0T) Crop Season 1979/80 1980/81 1981/82 1982/83 Total Paddy Production 165 165 176 129 Tonnage Marketed through Official ODRs 48 31 41 45 Rice Equivalent a/ 30 19 25 28 OPAM Purchases n.a. n.a. 23 24 a/ Based on 0.62 conversion rate (observed average, Government rice mills). Source: Ministry of Agriculture. 7.05 Until 1981, OPAM held a legal monopoly on all cereals marketing. This was originally intended to ensure low, stable cereal prices for urban consumers and poorly-supplied rural areas. However, faced with a very limited market share in coarse grains (because of the excessively low producer prices fixed by Government), OPAM's role became limited to supplying a small segment of the population (notably che army and civil service) with cereals, at a price set by Government. With fixed margins, prices that bore little relation to real operating costs, overstaffing and low efficiency, OPAM generated constant deficits that were funded by Government subsidies and growing indebtedness. By 1981, these deficits could no longer be financed, and Government undertook a reform of OPAM under the aegis of the Cereals Marketing Restructuring Project, which provides deficit financing through food aid sales while reforms are carried out. This program was backed by many donors, including the IDA financed Economic Management and Training Project and the IMF Standby Credit program, and completely liberalized the marketing of coarse grains. OPAM, however, retained its monopsony over paddy grown within the ODRs. OPAM now has the responsibility for managing national food security stocks and food aid; procuring cereals for "public interest institutions" (e.g., army, hospitals, prisons); ensuring an adequate supply of cereals to deficit areas; and helping protect faragate and retail prices. It now supplies some 40Z of Bamako cereal consumption. With the lifting of controls on coarse grains marketing, rice (which was always the most important of OPAM's products) has become central to its operation. Rice is also the preferred cereal of the army and urban-based civil servants. Any potential impact on the supply or price of rice is thus an extremely sensitive issue, which has kept Government from liberalizing rice marketing. 7.06 In thr Mopti region, ORM farmers are currently obliged by regulation to sell 20% of their production to ORK in a normal year. ORM purchases the paddy (with monies advanced by OPAM), processes it in the rice mill at Sivarf, where OPAM takes delivery. OEM receives payment for its services according to the "bar&me" (price schedule), established annually by Government. As the table below shows, in recent years ORM has never filled its quota, and its contribution to OPAM's stocks has been negligible. - 45 - OR!f Production and Sales 1976/83 ('OOT) Season 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 OWf Paddy Production 26.9 16.6 22.9 13.0 13.4 17.8 1.8 a/ 5.0 a/ Caqisary Sales to ON (Quta) 8.0 10.0 8.0 3.0 5.0 5.0 ... ... Qmntity Delivered 6.0 2.4 2.2 2.1 3.1 3.4 ... a/ 1982/83 and 1983/84 were drought years in the Mapti regin bence very low yields. Source: Barines: Gf; Ministry of Agriculture. 4. Prices 7.07 The price of rice marketed through OPAM is established by the Government. Recent prices are shown in the table below, along with the price of rice on the parallel market in Bamako. It should be noted that in past years, the parallel market price for rice would fluctuate by as much as 200% during the year. Since 1979, however, rice imports (commercial and food aid) have reduced seasonal price fluctuations to 15-20%, and since mid-1982 imported rice (para 7.03) has stabilized the price at about CFAF 150-175/kg year-round. Mali: Paddy and Rice Prices 1977/84 (crA/kg) Item 1977/78 a/ 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 Produce Price (Official white paddy) 23 25 30 38 50 55 60 OPA Purchase Price (GIR rice) 62 80 90 117 135 n.a. n.a. Official Selling Price b/ 68 75 90 100 115 125 125 Market Pricec/ 145 130 153 165 170 163 166 (PAM Price as %Krket Price 47 57 59 61 68 76 75 a/ Producer prices refer to year of planting, i.e. 1977/78-1977. Consumer prices refer to year of consumption, i.e. 1977/78=1978. b/ Official, 40% broken. c/ Bamako Market, 40% broken. Source: Bulletin Statistiques Mensuel du Mali; PRMC. It is clear that the price at which OPAM sells its rice has been heavily subsidized. The beneficiaries of this subsidy are clearly identified if one examines the breakdown of OPAM's sales of cereals on the Bamako market (where most of its sales take place) between November 1982 and July 1983: - 46 - OPAM Cereals Sales 1982-3, Bamako Groups Quantity (T) Z Public Service Institutions (hospitals, prisons) 600 3 Army 6,000 27 Civil Servants a/ 4.400 20 Consumer Cooperatives 10,800 50 Total 21,800 100 a/ On a routine basis according to family size, or for special occasions (births, marriages). Source: USAID Public service institutions throughout the country also benefit, but the quantities involved are small. 7.08 The curren; marketing and pricing system for paddy and rice leads to public sector financial deficits, masks inefficiencies, and results in poor production incentives. These losses appear in the Government paddy production agencies, the publicly owned rice mills, and the cereals marketing board (OPAR). The deficits occur both because the margins in the official price schedules are too small and because the agencies are overstaffed and have excess capacity. The excess capacity is in part caused by the pricing policies which maintain producer prices at a level too low to increase production and attract sales. The beneficiaries of these policies are consumers -with access to officially marketed rice and, to some extent, the production agencies who have a guaranteed margin because of their monopsonistic contrel over sales. These deficits are financed by transfers from various sources, like paddy farmers (who are forced to sell at lower than market prices), the Government Treasury (through transfers from the Price Stabilisation Board), food aid donors (who are currently underwriting OPA's operating deficit), and, to some extent, depletion of productive capital Ry deferring maintenance. 7.09 The Government has resisted reform in paddy and rice marketing both because of the political sensitivity of raising consumer rice prices and the inability to finance the losses by transfers from other sources. such as the food aid donors. However, the dialogue on this issue is being pursued on a number of fronts, including the IMf Standby program, the PRMC, and IDA policy discussions with Government. The objective of lifting controls on paddy and rice marketing for the whole country has been accepted by Government, and they share IDA's view that ORM offers the opportunity to test the ways in which liberalization can be achieved with minimum disruption to producers, consumers and intermediaries. Under the proposed project ORM would withdraw from marketing, passing the responsibilities to the producer groups and the private sector, which can perform the functions more efficiently. - 47 - 5. Proposed Reforms 7.10 The objectives of the proposed reform in the Mopti area reflect IDA's policy alis in the agricultural sector in Mali namely (a) that producer prices should reflect import parity prices, (b) consumer prices should reflect import parity prices (meaning existing official prices need to be progressively raised), and (c) Government's role should be limited to that of buyer of last resort offeriing a floor price, which is not an "incentive price" but which meets certain minimum costs incurred by the producer. In addition the public sector should eventually end its involvement in rice milling. In accordance with these objectives commitments were obtained from Government at the time of negotiations that private merchants are now allowed to purchase paddy in the ORR area beginning with the 1984/85 production season. The paddy quota and compulsory marketing requirements have been dropped and farmers are now free to sell their paddy to whoever they chose (para 9.01). 7.11 During the life of the project, ORK will progressively rationalize and reduce its marketing and threshing operations until, by the fifth year after start-up, the entire marketing of paddy is handled by farmers and the private sector. The speed of the withdrawal will be determined by the rate of formation of the farmer groups (GPRS); this is a function of the success of the functional literacy component and the support offered by ORM. During that period, ORM will reduce staff and operating costs. During the period of transition, the project will finance the operating deficits of OM resulting from loss of marketing income, at an estimated cost of US$0.64 million. To ensure that progress on the transfer of responsibilities and on cost and staff reduction is satisfactory, ORM has prepared an outline program of implementation which was agreed at negotiations. Progress in realizing this plan will be reviewed periodically. 7.12 During the transition period, ORM will continue to purchase paddy under the fixed price "bar&me" system for those villages where no farmers' group (GPR) exists. The current system, whereby OPAM prefinances the paddy purchases, will continue. In the absence of an established system of seasonal commercial credit, and especially during the transition period, a floor price and guaranteed purchase system is needed to protect the small farmers from the dangers of a very imperfect market and manipulative entrepreneurs. Therefore, at all times (even after official marketing has ceased), ORM will continue to offer a "floor price", or intervention price, at a level to be set by Government, with prefinancing and guaranteed purchase by OPAM. Purchases at the floor price would be made at the S6varE mill-gate. The floor price will be equal to the "official" price in the initial years. Agreement was obtained at negotiations that the floor price will be subject to discussion with IDA during the life of the project. Similarly, commitment was obtained that OPAN will buy the paddy purchased at a price reflecting ORM's real costs or OEM will be free to sell to the highest bidder. These changes would bring the Mopti area paddy marketing system into line with the procedures currently followed nationally for coarse cereals. Government would need to exercise care that a coherent policy regarding food aid and rice imports is pursued. - 48 - 7. Financial Impact upon ORM 7.13 During the twelve years of its operation ORM has accumulated a deficit of CFAF 842 million. The causes of its perennial losses have been (a) the high cost of the inefficient enforced collection of the compulsory paddy quota which is not adequately reflected in the margin allowed under the barime, and (b) the inadequate design of the flood control system which has forced ORK to exonerate many users from paying watercharges, thus diminishing revenue still further. The consecutive years of drought (1982 and 1983) have exacerbated the situation. In addition, ORK's accounts are distorted by the inclusion of the First Mopti Rice Credit (Cr. 227) on the books of ORM. This was never the intention of IDA and should be corrected by the removal of this item from OR's accounts (para 9.02). ORM cannot and should not be responsible for this credit. By the end of Project Year 5, in the absence of marketing, ORM's sole income will be derived from watercharges and minor services. In order for the charges. to reflect better the real costs of services involved, commitment was obtained at negotiations that: (a) the level of watercharges will be raised in 1986 from CFAF 10,800/ha pr.ddy equivalent to CFAF 12,500/ha (in 1983/84 prices), to be increased annually in consultation with IDA and in line with inflation as measured by the IfF's GDP deflator; (b) there will be a requirement of advance and non-reimbursable payment of watercharges in cash by the absentee (non-resident) farmers; and (c) services such as threshing, deep ploughing will be charged at cost (para 9.01). The level of revenue from watercharges will be sufficient to cover the cost of operating and maintaining the hydraulic works. However, OEK will continue to provide extension services in addition to its role as supplier of inputs and water. The cost of extension is a legitimate cost of government, and Government will accordingly continue to finance the salaries of the extension staff. Annex 7-2 gives ORM's projected cash flow over the project period. Through reducing operating costs and improving revenue collection, a small net surplus is achieved by the end of the project. 8. Disaster Fund 7.14 ORM will establish a fund to support operating expenses in case of drought or other mishaps which would make it impossible for ORM to recover the watercharges due from farmers. The fund would be placed with the BNDA in an interest-bearing account replenished annually by a small percentage of the watercharge revenue. Use of the fund will be at the discretion of the existing watercharge committee consisting of the director of ORM, the representatives of the farmers groups, and the Ministry of Agriculture. In the event of drought or other natural causes affecting over 30% of water-charges during the life of the project, and should the fund be inadequate to cover the shortfall in operating revenues, Government may request IDA to increase the percentage of operating costs reimbursed under the credit. Commitment was obtained from Government at negotiations that should the fund prove insufficient in any one year budget allocations would be made to replenish it, as required, thus assuring the continued 0 & M of the hydraulic works (para 9.01). - 49 - 9. Svari Rice Mill 7.15 The rice mill is currently operated by ORM. whilst maintaining a separate accounting system and distinct personnel (para 2.05). The mill is obliged to charge a price fixed by Government, which is far from covering its actual operating costs. These costs are high per unit of production, since the mill has high fixed costs and very low turnover. The result is a high annual average deficit, which has been paid by Government, and through deferred maintenance. Assurances were obtained at negotiations that ORM will continue to operate the rice mill only provided that it charges a price that covers its costs, including depreciation (para 9.01), and that best efforts will be made to transfer the mill to the private sector. B. Livestock 1. Production 7.16 At full development (PY 14), the project would generate an average of 30,000 live cattle for sale per annum, compared with the no-project situation. This does not imply any increase over the current average sales, which are estimated at about 200,000 head per annum. Without the project, sales are expected to fall considerably as mortality rises. With-project herd size is estimated at 1.9 million head in PY1, declining to 1.6 million in PY20. In addition, the project would generate an average of 26 million litres of milk per annum over the "without project" situation. Current milk production is estimated at 105 million litres per year (150 1 per cow). These projections are based on two main assumptions: a) that a pattern of droughts approximately every five years will continue, but that with the project the negative impact of drought will be greatly reduced; and b) that with the project offtake will increase from 11% to 12% by the 7th year after project initiation. These figures are an average for the zone as a whole; production increases would be more significant for the pastoral association herds 1/ The critical element in achieving these production figures is the animal health component of the proposed project. It has been accepted that the development of pastoral associations, and management of pastoral resources by these groups, is an experimental activity affecting only a small proportion of the livestock population of the zone. For this reason, the possible additional production increases due to pastoral associations have not been counted as a benefit in the figures noted above, nor have they been counted in the economic analysis. In addition, important but non-quantifiable production benefits will accrue from the increased care devoted to work oxen, the use of animal by-products and the integration of livestock and cropping activities. The project will also increase the production of small ruminants, an important economic resource, in great demand for both domestic and export markets. For lack of data, no attempt has been made to estimate the extent of the increase. 1/ For details, see Document C5. - 50 - 2. Prices and Markets 7.17 Mali has a very active commercial livestock sector serving foreign and domestic markets, and providing significant export revenue. Government intervention is limited to taxes on exports, and nominal, largely unenforced, controls on the retail price of meat. The production from the project would be destined for both domestic consumption and export. Mali currently exports at least 70,000 head of cattle a year (the exact figure is unknown owing to the very large numbers of unregistered animals exported on the hoof). The most important export market is the Ivory Coast, which has become even more dominant as internal problems in Nigeria and Ghana reduced demand from those countries. It is reasonable to expect that market demand will remain strong in Bamako and Abidjan and grow elsewhere over the life of the project as other export markets recover. The domestic market can easily absorb the incremental production of hides without depressing prices. Milk is a valued commodity thoughout the project region, and is a major source of protein. It is sold fresh, or made into cheese. Much is traded directly for cereals. Price fluctuates widely throughout the year ranging from a low CFAF 75/1 to highs of CFAF 200/1 in the dry season when lactation falls. All production under the project is expected to be consumed locally. 3. ODEK Finances 7.18 Since its creation, ODEM's sources of revenue have been limited to receipts from sales of drugs, pump assembly and abattoir operations (the last two running at a loss). Government recently decided to make vaccinations payable at a price that includes a small mark-up for ODEH's operating costs. Since the pump and abattoir activities currently add to ODEM's deficit, assurances were obtained at negotiations that: a) the abattoir charge structure would be reviewed and charges raised to cover all operating expenses plus part of depreciation; and b) the pump operation would be terminated if it is not profitable after PY3. Lickstone manufacturing is being financed by the CCCE. This should be profitable, provided that input supply is secure. Assurances were obtained that: (a) efforts would be made to find a private buyer for the plant once it is in operation; and (b) the operation would be closed down (at minimal cost) if it should prove not to be profitable by the end of PY3. ODEM's projected funds statement is shown at Annex 7-3. Whilst ODE4 remains in deficit and Government will necessarily have to continue to contribute to its ongoing operations, this can be justified in that the direct returns to the Treasury (from the per capita cattle tax and licensing fees), and indirect returns through indirect taxes on incremental generated revenue outweigh the subsidy required. C. Impacts upon Farmers' Income 1. Crop Budgets 7.19 Farmers affected by the project derive their income from numerous sources (paras 2.03 and 2.04) other than rice. Whilst some data are available concerning their activities in rainfed agriculture, data are scarce on the - 51 - substantial revenues derived from livestock, fishing, market gardening and non-agricultural sources (seasonal labor migration is important). Instead of preparing family farm budgets, therefore, analysis has been limited to the activity most directly affected by the project, namely, rice cultivation, with some account being taken of rainfed crop production. The increased ownership of farm equipment will also have a beneficial effect upon rainfed crop production. However, the basic impact of equipment is to remove the competition for scarce labor resources between rainfed and rice cultivation at critical moments. Since rice consistently suffers in such a conflict, it is rice cultivation that stands to gain most from the provision of equipment. The overall impact of the project on rainfed farming yields would be negligible. 7.20 Detailed crop budgets are shown at Annex 7-4 and summarized below: Income from Rice Production (CFAF) Without Project With Project Technical Performance Level 0 1 2 3 (related to Equipment Level) Paddy yield (kg/ha) 900 1,500 1,700 2,200 Loss to predators, water problems (%) 25 20 20 20 Net yields (kg/ha) 675 1,200 1,360 1,760 Gross value of production a/ 43,875 78,000 88,400 114,400 Production Costs: Seeds b/ 6,500 8,700 9,740 12,340 Watercharges 10,800 12,500 12,500 12,500 Other charges c/ 5,675 11,926 12,086 31,940 Total costs 22,975 33,126 34,326 56,780 Net Income 20,900 44,874 54,074 57,620 Labor (no. of mandays) 60 90 90 82 Net Income/manday 348 499 601 703 a/ Based on current official price of CFAF 65/kg paddy. b/ Based on production foregone: 100 Kg in without project case; 1/10 ha production plus 10Kg selected seed at CEAF 90/kg in with project case. c/ Includes 1/3 of credit charges in with-project case (costs spread over minimum 3 ha rice). Level 3 has no financial charges (credit paid off), but includes fertilizer costs. "With project" production costs would increase by about 46% at levels 1 and 2, while gross value of production increases 78% at technical performance level 1, and 13% at level 2. For level 3 production costs rise by 150% but gross value of production increases 260%. Net incomes per ha are expected to more than double as a result of the project, and net incomes per man-day rise by between 45% and 100% depending upon the technical level reached. The higher water charges demanded will be more than offset by the reduction in crop losses from inadequate water control (para 7.01). Net - 52 - income compares favorably with the average actual labor rate of CFAF 350 per day observed in the Mopti area. 7.21 The yield response to fertilizer in the uncertain flooding conditions of the polders is very limited: for this reason, the project is not promoting the use of fertilizers. No provisions for short-term credit will be financed, and use of fertilizers will be at the individual's discretion and risk. 2. Livestock Producers 7.22 Financial benefits accruing to the individual pastoralists under the project are virtually impossible to quantify because of the wide variation in herd size, complexities of ownership structure and participation in mixed farming systems. Over 70% of the total area herd is thought to be owned by sedentary farmers throughout the 5th Region. Therefore, no attempt has been made to show a "farm budget" for pastoralists. However, the financial impact of the project upon the pastoral associations to be formed has been estimated reflecting the benefit from their investment in a well. Based on the assumption that an association would start with 2,300 TLU 1/ and that this figure would remain constant (since it is limited by the carrying capacity of the grazing land around the water points), the net incremental revenues to the association would be CFAF 0.65 million (US$1,555) in PY2, rising to CFAF 2.03 million (US$4,856) in PYI 2/ . This represents CFAF 8,725 (US$22) per family in PY2 rising to CFAF 25,300 (US$68) per family in PY11. Some 14,000 persons in pastoral associations are expected to benefit from the project's well component, in addition to an unknown much larger number of pastoralists throughout the zone. D. Financial Impact upon Government 7.23 The Government project-related cash flow is shown in Annex 7-5. The cash flow remains positive throughout the project life after Year 5 when indirect taxation revenues are taken into account. These are applied only to livestock revenues and therefore somewhat understate the cash returns to Government, ignoring indirect revenues from increased rice income. E. Recurrent Costs and Cost Recovery 7.24 The project has been designed with a strong emphasis upon improving both the cost accounting systems of the various entities and their ability to support recurrent costs. Given the long-term nature of the hydraulic investments, it is reasonable for Government to bear the cost of amortization. The current ORM system of water-charge collection works relatively well; 1/ Tropical Livestock Unit: the standard unit by which the carrying capacity of grazing land is measured. 2/ For details, see Document C-5. - 53 - financial autonomy would increase the incentive to enforce collection. The charges would now be indexed and the proposed rates of CFAF 12,500/ha would provide sufficient revenue to cover O&M operations. No attempt should be made to tax the incremental benefits from the project until it is demonstrated that these are real and reliable. The agricultural credit and stock water credit programs demand substantial downpayments from beneficiaries, and repayment in 4 and 10 years, respectively, at market rates. The reimbursements will constitute funds for relending, thus permitting an extension of these activities. In the health and forestry components, charges for medicines and plants will cover the cost of materials and contribute towards operating costs. In the field of animal health services, however, there will be at best only a marginal attempt at cost recovery: the sale of vaccinations and drugs will cover the cost of materials plus a small margin for delivery charges, but this represents only a small percentage of the cost of maintaining the livestock service. Until livestock owners can be persuaded to spend much larger sums on health services to protect their capital, Government will continue to face high recurrent costs with only an indirect return. Whilst some portion of the cost may be seen as a legitimate Government expense similar to extension costs in agriculture, attempts must be made in the medium term to increase the percentage of cost recovery from the beneficiaries. The proposed Animal Health Project, currently under preparation, will directly tackle this question. No cost recovery is attempted for the seed varietal research program at Kogoni, or for the seed certification service (SRCSS), both responsibilities of IER. Research is a legitimate responsibility of Government and, as such, can reasonably be accepted as a budgetary cost.The cost of certification of seeds will eventually be borne by the beneficiaries,the farmers,but cost recovery under the current system of seed production is impractical. In view of Mali's current budget constraints, the project is financing the initial operations of IER at Kogoni and the SRCSS. VIII. ECONOMIC JUSTIFICATION AND RISKS A. Production Benefits 8.01 The main quantifiable benefits of the project would be the increased production of paddy, and the production of cattle (mostly for export) and milk that would be forgone without the project. At full development, the annual incremental production of paddy would be 16,OOOT, valued at CFAF 1,040 million. In addition, some 6,OOOT of rainfed cereals, valued at CFAF 300 million, would be produced annually inside the polders. This production has not been included in the benefit streams, however, as it may simply replace cultivation outside. Annual incremental milk production available for human consumption would be about 26 million liters, valued at CFAF 2,060 million, and incremental cattle production would average 30,000 head annually, valued at CFAF 1,000 million. 8.02 Crop production increases are to be achieved through an increase in water security and the use of animal traction equipment, clean seed, and intensification techniques. Extension services for both livestock and crop - 54 - production would be upgraded through training and increased cooperation between the services. The livestock components would, throughout the zone, increase calving rates, reduce mortality and encourage a more productive herd structure. At the lerel of the pastoral association, the provision of wells would further reduce mortality and increase weight gain and milk yields. The animal health components would also improve the health and strength of draft oxen. Key parameters used in the projection of herd growth are given in Annex 8-1. B. Other Benefits 8.03 The project has two major benefits whose impact cannot be easily quantified, namely, the restructuring of the rural sector support institutions in the Mopti region and, no less important, a reduction in the need for Government budgetary support to the agricultural sector as costs are shifted to the beneficiaries who will reap benefits at least commensurate with its increased costs. The rice varietal research component could have a significant impact in improving and sustaining paddy yield in all rice operations. The close linkage established under the project between research and farm conditions should ensure that any worthwhile developments would be rapidly assimilated by the farmers in the project area. The pasture - management activities, combined with the creation of "grazing polders" and the opening up of underutilized grazing lands through the stockwater program, could have an invaluable effect, not only in developing rational grazing practices, but also in arresting the deterioration of the scarce Delta resources. The small health component should contribute to the reduction of the extremely high rates of mortality and morbidity in the region, while the functional literacy and producer group development components of the project would encourage village entrepreneurial skills and permit farmers to take charge of simple services, thus further reducing the role of Government with its accompanying costs. The forestry component will increase awareness of the critical need to preserve tree cover, and the research program will offer indications for future reforestation actions. The important studies component in the project will greatly increase knowledge and understanding of the critical region, and will lay the basis for a genuine regional intervention at a later date. Finally, the close linkage between crop cultivation and livestock development efforts within the project should yield a major benefit for the future of the Delta and the development efforts within it. C. Economic Analysis 8.04 The following are the main assumptions used in the economic analysis. The key parameters are summarized in Annex 8-1. 1. With and Without Project Situation: Paddy 8.05 The "without project" situation is taken to be the projected production situation for the 1985/86 season. All incremental benefits and costs are calculated with reference to this level: areas, yields and input use are projected to remain at this level without the project. Dryland crop - 55 - production outside the polders is assumed to be unaffected by the project (although some benefit may be expected from the probable use of new agricultural equipment on these areas). Individual hydraulic works affecting specific areas were evaluated assuming a linear relationship between incremental costs and benefits. 2. With and Without Project Situation: Livestock 8.06 The economic analysis of the livestock component falls into two parts. The first considers only the stock water and animal health component for the zone as a whole (excluding the pastoral associations and related wells investment costs). The "without project" situation is considered to exhibit a slow decline in fertility and an increase in livestock mortality throughout the project period, with overall mortality rising from 9% to 10%, while the off-take remains steady at 11%. With the project, mortality falls from 9% to 8%, while the culling rate climbs from 11% to 12%. The most noticeable impact of the project is the improvement in herd resistance to drought-related mortality. The herd and its milk production recovers muich more quickly from projected droughts in the with-project case. A second, separate evaluation was performed for the pastoral associations to estimate the returns from well investment. Here, the cost of the well and additional drugs were considered as the only incremental costs, the benefits being improved weight gain and reduced mortality, compared with the average for the zone as a whole. 3. Treatment of Seed Components 8.07 The cost of the Kogoni research and certified seed production component were not considered, since these do not relate directly to the production gains under the project, but rather to future, non-quantifiable countr-wride gains. The incremental costs of investments for rice seed production needed for ORM were included in the ORM "with project" costs. 4. Other Major Assumptions 8.08 Project life is estimated at 20 years with no residual values. Farm equipment is replaced at the end of ten years after initial investment; maintenance costs of this equipment are assumed to be 5% of cost after first year of purchase, continued throughout the project. All project investments relating to incremental paddy production were deducted from the direct benefit in paddy production (operating cost support to ORM during restructuration was not included). All livestock-related components were costed against the direct benefit in cattle and milk production. The health, forestry, systems study and research components were not included. The analysis was carried out on 55% of total project costs. Details are in Document C 5. D. Economic Rate of Return: Sensitivity Analysis 1. Rice production component: OR 8.09 The economic rate of return for the base case, with total value of production slipped by 6 months, is 26%. A further one-year lag in benefits - 56 - results in a rate of return of 20% and, in the unlikely event that benefits decrease by 20% and costs increase by 20% at the same time, the rate of return falls to 13%. A three year lag in benefits (e.g. if credit take-up is slower than projected) reduces the rate to 14%, still a satisfactory return. Net present value at a discount rate of 10% is CFAF 7.9 billion, and switching values for benefits and costs at that rate are 39% (shortfall in benefits) and 64% (costs overrun) under and over the base case. Other tests involved more unfavourable drought patterns and further lags which might result from slow take-up of credit for agricultural equipment. The relatively satisfactory result obtained may be explained by the level of sunk costs from the Mopti I and II projects. The effects of alternative assumptions upon the ERR are shown in Annex 8-2. 2. Livestock 8.10 The economic rate of return for the base case is 25%. This return is relatively insensitive to changes in costs and benefits: even if benefits fall 20% and costs rise 20% simultaneously, the rate of return would be 17% (Annex 8-2). Switching values at a 10% discount rate are a fall in benefits of 56%, or a rise in costs of 126%. 3. Total Project 8.11 For the total project, including both rice and livestock related components, the economic rate of return is estimated at 26%. In the unlikely event that benefits fall 20%, while costs rise 20%, the ERR falls to 16%. Switching values at a 10% discount rate are a 50% fall in benefits, or 100% rise in costs. E. Risk 8.12 As has been demonstrated, the project's economic viability, in whole and in part, is relatively insensitive to probable changes in base costs and benefits (which already incorporate lags and allowances for drought). However, a substantial level of risk remains for each element of the project. For the rice component there remains a risk that flooding or rainfall will be insufficient for rice production. The new water management plan reduces this risk but it must be recognized that Mopti lies in a region subject to unpredictable but frequent droughts. Nonetheless, the potential benefits justify proceeding with the project. Incremental yields are largely dependent upon the equipping of farmers, which in turn depends upon their rate of credit up-take. There is a risk that the rate foreseen in the yield projections will not be achieved. Nonetheless, the present level of pent-up demand for credit and the nature of the proposed terms make this risk relatively small. Financially, there is a risk that ORM will not reduce operating costs sufficiently or quickly enough to achieve the position projected at the time of appraisal, increasing the need for support from Government. To secure adequate financial resources during the transition period, a generous allowance of operating cost support has been included. The attainment of the staff reductions will be linked to the speed with which tasks can be safely transferred to the producer groups. To facilitate this, the project is financing an important training effort which must be closely supervised. - 57 - 8.13 For livestock, the main project risk concerns the formation of the pastoral associations and the benefits associated with the well development. These are experimental activities and the pace of their implementation is difficult to predict. For this reason, the storage-well investment contracts would be linked to the numbers of associations formed (para 4.15). A further risk relates to the increased offtake rates for the associations: increasing herd productivity in this way has proved difficult to achieve in other livestock projects. Failure to increase offtake rates would jeopardize the well credit program, and the pasture protection objective. Once again, the extension and training components are critical in minimizing risk, and should be closely supervised. IX. AGREEMENTS REACHED AND RECOMMENDATION 9.01 Assurances on the following points were obtained at negotiations: 1. ODEM would limit the size of the contract for the construction of the deep wells, subject to the number of pastoral associations identified and formed in a manner satisfactory to IDA, at the end of project year 2 (para 4.16). 2. Commitment of a loan by BNDA for the construction of the storage wells would be subject to the establishment of a pastoral association; a downpayment of at least 10% of the estimated construction costs; and the establishment of a management agreement satisfactory to IDA between ODEM and the Pastoral Association concerning the use, operation and maintenance of the storage well, as well as the use of the pasture land serviced by the well. BNDA will share the credit risk equally with Government (para 4.16). 3. ODEM would review the results of the system studies with IDA, no later than June 30, 1987, and on that basis draft a development plan acceptable to IDA no later than December 30, 1987 (para 4.29). The Government would cause a study on the Malian rice milling industry and on private rice trading to be carried out by outside consultants not later than June 30, 1986 (para 4.30). 4. The TOR, qualifications and experience, and terms and conditions of employment of all consultants and technical assistants financed under the project would be subject to review and approval by IDA (para 5.12). 5. ORM, ODEM, BNDA and IER would develop and maintain accounting systems in accordance with sound and recognized accounting principles and practices acceptable to the Bank to provide annual financial statements reflecting the financial performance and situation of the project, as well as their own overall financial situation from the commencement of project execution (para 5.17). - 58 - 6. Government would agree not to impose a major reorganization or reassignment of responsibilities of ORM and ODEV.. during the project life without the prior consultation and agreement of IDA. 7. ORM would recruit under terms and conditions acceptable to IDA: a) a financial controller and a counterpart; b) a training specialist; c) a specialist in agricultural equipment; and d) short-term specialists in monitoring and evaluation (para 6.05). 8. ODEM, DNHE and DNGR would enter into a working agreement specifying the roles of each for the supervision and implementation of the deep well construction program, and for the stockponds and storage well components (para 6.06). 9. ORM, ODEM and BNDA's accounts would be submitted to annual audit by independent external auditors under terms of reference satisfactory to IDA. tudit reports would be submitted to IDA not later than 6 months following their fiscal year's end (para 5.17). No later than June 30, 1986, ODEM would have adjusted its fiscal yea: to coincide with that of ORM (para 6.07). 10. ODEM would maintain a financial controller in place throughout the life of the project. They would also recruit under terms and conditions acceptable to IDA: a) the staff necessary to carry out the production systems study and project preparation; b) a hydraulic engineer to oversee the implementation of the stockwater component; and c) a pastoral specialist for at least one month each year (para 6.07). 11. BNDA would follow loan monitoring, supervision guidelines and downpayment conditions set out in para 6.08 to 6.11, and would maintain positive real interest rates (para 6.09). 12. BNDA would review with ORM, CCCE and IDA the downpayment within the financial structure of the West African Monetary Union requirements for agricultural equipment no later than April 30, 1986, and again by April 30, 1987, and agree on any necessary adjustments to the rates (para 6.09). 13. Government and BNDA would agree to consult with IDA before selecting a new General Manager for BNDA (para 6.12). 14. BNDA would maintain an overall debt-equity ratio (including statutory reserves) of not more than 10:1 (para 6.12). 15. Government would cause IER to maintain separate accounts for the operation of the rice research station at Kogoni and for the SRCSS, and to prepare annual work programs and budgets for the Kogoni operation (para 6.13). 16. Government would maintain staff of sufficient number and quality at the Mopti regional office of the National Forestry and Water - 59 - Directorate (DNEF) to permit satisfactory Implementation of the forestry component (para 6.16). 17. Government would remove the current obligation that ORM show on its books the long-term debt incurred under the 1st Mopti Rice Project (Cr. 277-MLI). This change is to be reflected in the financial statements of ORM for the year ending June 30, 1986 (para 7.13). 18. Government has agreed to abolish the paddy quota and compulsory marketing in the ORM zone. Farmers are henceforth be free to sell their paddy to whomever they choose. (paras 7.10-7.11). 19. ORK would, by the end of the 5th year after project start-up, have abandoned all marketing operations other than those related to support price intervention. This target will be the subject of a mid-term review by GON and IDA (para 7.11). 20. Government would permit OEM at all times, even after year 5, to buy paddy on behalf of OPAN4 at a floor price to be agreed with IDA. The official pricing point shall be at Sivarg mill-gate. Sellers who do not deliver there would be charged variable amounts to reflect ORM collection costs. The floor price to be charged would be the subject of annual discussions with IDA (para 7.12). 21. Government would oblige OPAM to pay ORM for the paddy purchased at a price which adequately covers ORM purchase, transport, handling and milling cost. The current system of prefinancing by OPAM4 will continue (para 7.12). 22. ORM would require advance payment, in cash, of the water charge by the absentee farmers. Services such as threshing and deep ploughing would be charged at cost to all farmers (para 7.13). Water charges would be increased to an equivalent of CFAF 12,500 not later than May 31, 1986 and would be adjusted annually in line with inflation as measured by the IMF GDP deflator for Mali, in consultation with IDA. Such adjustments would be agreed with IDA by 30 March each year (para 7.13). 23. Government would supplement the Disaster Fund at ORM should the reserve be insufficient to cover ORM's operating costs (para 7.14). 24. Government would only allow ORM4 to operate the Sivari rice mill providing it charges a price which adequately covers the operating costs of the mill, including depreciation (para 7.15). 25. ODEM would close down the manufacturing facilities for hand pumps and lickstones if they cannot generate profits at the end of project year 3 (para 7.18). - 60 - 9.02 Conditions of effectiveness would be: 1. The subsidiary loan agreement between Government and BNDA, and the grant agreements between Government and ORM and ODEN would have been executed (para 5.10). 2. ORM and ODEN would each open a Special Project Account in a financial institution acceptable to IDA (para 5.11). 3. OK and ODEM would execute the working agreements referred to in para 6.01). 4. BNDA would have opened a branch office at Mopti Sivari (para 6.08). 5. ORM and ISR would execute a working agreement for the implementation of the rice research component (para 6.13). 9.03 Conditions of disbursement would be: 1. Disbursements for the operating costs of the IER Station at Kogoni would be subject to annual approval by IDA of the work program and budget for the varietal research program and the production of foundation seed at Kogoni (para 6.13). 2. Disbursements for the line of credit for storage wells would be subject to the fulfillment of all conditions precedent to the first disbursement of the CCCE loan to ODEM. 9.04 With the indicated assurances and conditions, the proposed project is suitable for an IDA Credit of US$19.5 million on standard terms to the Government of Mali. WAPAC April 1985 -61- MALI Annex 4-1 page L of2 MOPTI AREA DEVELOPMENT PROJECT IMPROVEMENT OF FLOOD CONTROL AND LAND USE IN THE POLDERS The controlled flooding system allows for the cultivation of rice on the assumption that a flood, the behaviour of which has been statistically analyzed, vill rise to a given level at a given time, so as to meet the crop's water requirements. Formerly, the sown area often exceeded the zones actually flooded, and thus, extensive sown areas were lost to drought when the flooding failed to reach the expected level. The ratio of harvested area to sown area has historically been erratic, usually varying between 0.70 and 0-85, and much lower in exceptionally dry years such as the 1982 season. The new operational criterion proposed under the project is to accept, as the "standard flooding level" for each polder, the level that has been reached in 19 out of 20 years on or about the 25th of August, i. e., an accepteA risk of 5%. The new criterion considerably reduces the risk of failure. With the lowering of the expected flooding level, rice cultivation in the polders would be concentrated on a smaller total area. Land on the higher fringes, only marginally suitable for rice because of its uncertain inundation Levels, would be freed up for dryland crops. Land previously too low-lying for rice would be used for pastures. O 7--0-OP OA - :pasture zone AB - floating rice zone BC - non-floating rice zone CD - safezy zone (cropless) DE - dryland crops -62- Annex 4-1 page 2 of 2 When the risks of not reaching the expected flooding levels (i.e., the complement to the probability of reaching them) are weighted by cultivated area, the weighted average riska for each zone are as follows: Zone flooded Area Weighted Average Risk Present Progsed without Project WI-t Project (ha, net) Uf) Nopti Sud 15,400 11,100 16.1 8.2 Kopti lord 13.360 10,800 11.11 5.0 Sofara 7,420 5.100 21.6 16.5 1/ Total (average) 36,180 2/ 27.000 2/ 15.4 8.5 1/ A higher risk has been accepted for Sofara because of the yields and production levels which are well above the ORK average in normal" flooding years. 2/ The areas no longer sown to rice under the na plan would be devoted to: (i) dryland crops, such as millet/sorghum, groundnuts and copeas (7,000) for which OE would provide the inputs; and (ii) grazing areas (2,000 ha) to be improved under the supervision of ODEK. In addition, 3,000 ha of new low-lying land would be used for pastures. The improvement in the security of flooding on 27,000 ha (net) depends not only on improved operation of existing hydraulic works, but on an additional investment of USS2.8 million in secondary distribution channels, and secondary partition and access dykes. (see map). After detailed analysis of recorded flood levels and topographical maps, a new reallocation plan for each polder was drawn up that would provide 75% of the farmers with at least 3 ha of rice land, I ha for dryland crops (in the polder or a short distance from villages) and a communal dry season grazing area for draft animals. Land availability in the polders is such that this reallocation plan can be implemented with little displacement or other hardship. Moreover, the now land use pattern permits the implementation of a financdally sound agricultural credit component. (para 4.09). WAPAC July 1984 .-63- KALI A"ex 4-2 MOPTI AREA DEVELOPMT PROJECT LAND DISTRIBUTION IN ORM POLDERS 1982/83 (numbers of farmers, by size of holding) 2 : 3 4 5 : 6 : 7 : 8 9 10 TOTAL Ciers 2 et 7- Cair-------------------------- ----- -- ---------------- : -7 Perimpe : 238 :277 :105: 76: 32: 34: 14 14: 4: 12 806 Tibo :292 :282: 80: 58: 9: 17: 2: 1: 0: 3: 744 Tororokor: 304 :253: 85: 64: 19: 21: 13: 7: 1: 1: 768 206 :238: 95 : 77 :40 41 :16 :14: 9 : 33: 769 Sarsala :231 :260 :124 :105: 51: 43: 19: 18: 4: 17: 872 -- - -- - -- - ---ee -------ee ---eef eelSeeflee e Tangorango: 376 :368 :189: 86: 34: 35: 8: 6: 2: 6: 1 110 Sevare :762 :610 :191: 92: 19: 7: 1: 1: : 2: 1 685 Tiroguel :47 :166 :91 :39 :18: 6:3:3: : 373 Ouroneua :330 :473 :280 :126: 33: 29: 10: 12: 5: 5: 1 303 courou :38 :22 :20 :10: 4: 9 :4 :4 :2 : 3: 116 Sofara :271 :100: 40: 22: 4: 6: : : : : 443 Syn :304 :289 :122: 73: 20: 18: 7: 3: 1: 9: 846 Sougoula : 285:483 :145: 76: 20: 21: 6: 5: 3: 3: 1 047 TOTAL :3684 :321 :1567 :904 :303 :287 :103: 88: 31: 94 :10 882 dont indi- :1008 :925: 341 :193: 53: 53: 16: 14: 4: 14: 2 621 rects : Source: ORM Attribution Lists, February 1983 WAPAC June 1983 -64- MALI Annex 4-3 page 1 of 2 MOPTI AREA DEVELOPMENT PROJECT STOCKWATER DEVELOPMENT A. Storage Wells (Puits-Citernes) Storige well with Borehole with metal tubing concrete masonry lining lining 0 CC oU Water Level in storage vel, . Waterlevel in borehole Connecting * I VI - 65 - Annex 4-3 page 2 of 2 The project will finance the construction of 44 stock ponds and 30 watering points over a period of 5 years. The implementation schedule is given in the table below. Included are two deep wells for livestock markets. Investmnmt tal 1 P 2 M13 Pr14 P5 Prom t R_di source Stock-prls 44 2D 24 - CCe Deep walla 2 - 10 17 Govenumt Shallm wals 5 - 5 - - - U:B Govemmt Stigewls 30 - 7 12 7 4 Suface Installation 3 - 7 12 7 4 LCB Beficiaris The Stock ponds (financed by CCCE) would be constructed in Ir 1 and 2, the full cost being carried by Government. (b) Deep wells will be the subject of one contract, to be executed in Y2 and Yr 3, under the supervision of a qualified consulting engineer and the DNH. The wells total 27:25 for pastoral associations, 2 for markets. Cost to be borne by Government. (c) Storage wells (30) will be constructed from PY2 or, at a rate determined by the rate of formation of pastoral associations. They will be paid for by producers through a facility at BNDA. (d) Shallow wells (5) will be constructed in YR2, by the same contractor responsible for the storage wells. The contract will be the subject of local bidding. Cost will be born by Government. (e) Surface installations (30): linked to rate of construction of storage wells: paid for by producers through credit. WAPAC July 1984 - 66 - Annex 4-4 page 1 of 4 MALI MOPTI AREA DEVELOPMENT PROJECT AGRONOMIC PACKAGES AND APPLIED RESEARCH A. Applied Research 1. The applied research conducted by the Research Division of OEM jointly with the WARDA station at Mopti with approval of IER. during the first and second Mopti Rice Project has resulted in a number of recommendations which have been successfully tested and demonstrated under actual farming conditions. They consist of the following elements: a) Land Preparation: plowing should preferably be done as soon as possible after the harvest when the soil is still relatively moist and friable and temperatures are relatively low. The advantages are i) the lower traction and energy demands on the oxen permit a greater depth and quality of plowing ii) the greater plowing depth turns more wild rice (Oryza longistaminata) rhizomes to the surface so they will dry out and die off during the dry season iii) the soil aeration achieved allows a greater fixation of atmospheric nitrogen by the free living Azotabacters and hence a greater flushes of nitrogen with the first rains iv) the period available for final seedbed preparation (harrowing) and sowing is extended which allows more time for row seeding and coverage of seeds v) the first rains are mostly intercepted by the rough tilth resulting from the dry season plowing and is stocked in the rooting zone instead of running off the non-tilled soil. The improved soil tillage and the water conservation that results from it, as well as the line sowing at the right depth, determine the growth and survival of the crop during the rainfed period. b)Varietal performance: the introduced Oryza sativa varieties have not the same degree of adaptability to drought during the rainfed and fast and deep flooding during the inundation period as the indigenous 0. glaberrima varieties. Applied research at ORM/WARDA has identified among the introduced 0 sativa varieties two varieties DM 16 and DM17 with a good drought resistance during the rainfed period, a good tolerance of medium flooding depth up to 120 cm, and, which consistently outyield current varieties under shallow and medium flood conditions. On-farm tests have confirmed their performance under farm conditions and these varieties will be multiplied through the new ORM seed farm and seed multiplication program. More promising shallow to medium flooding varieties are in the pipe line, one of which has its origin in a rare, successful interspecies cross between an glaberrinma and 0. sativa parents. - 67 - Annex 4-4 page 2of4 B. Current and Future Applied Research 2. The current and future research programs are concentrating on the following aspects: (a) continuation with WARDA and IER of the varietal improvement program. (b) testing and improvement of agricultural equipment such as plows, harrows, seeders, threshers, straw balers and interrow weeding equipment. This component will be supported with technical assistance from the Netherlands who have already worked for three years successfully in this field in the Office du Niger. (c) Fertilization; in general, the soils are very deficient in phosphorus. Observations in 1983 demonstrated marked responses to the natural rock phosphates of Tilemsi; more systematic response tests will be conducted to deterine optimal application levels as a function of available soil moisture, flood levels and nitrogen application. Nitrogen levels will be tested when all other conditions of seedbed preparation, timely and correct sowing and weeding have been met. Nitrogen application on ill established crops or on fields heavily infested with wild rice should be discouraged. (d) Trials with herbicides will continue since weeding remains still a serious labour bottle neck with negative effects on yields, if early weed control is not achieved. (e) replicated trials and on farm-tests have started in 1984 with crops such as short duration (10 weeks) maize and sorghum sown in single or double lines with a wide space between the rows or lines shortly before or Immediately the first rains early June. When the crops are well established, rice will be sown in the f.nterspace between the rows or lines. The expectations are that the maize and sorghum will mature and be harvestable before arrival of the floods early September during which the rice will be irrigated. If the floods fail to arrive, at least one grain crop will be harvested to provide subsistence to the farmers; if the rains and floods arrive on time and in sufficient volume, farmers could have a major part of their subsistence from their maize and sorghum, and market most of the paddy. (f) crops such as high-yielding groundanut and trailing cowpeas with a high production of vegetative growth will be tested as intercrops for sorghum and millet on the higher, non-inundated parts of the polders (about 7,000 - 68 - Annex 4-4 page 3 of 4 ha) which will become available after lowering of the inundation levels. Their main purpose is to provide additional high protein fodder for the work oxen. C. Agronomic Packages 3. The thrust of the agronomic packages extended consists of the following points: (a) seed multiplication of recommended varieties by contract seed growers and of the production seed by the farmers themselves; (b) dry season plowing as soon as possible after harvest. This has not only the advantages described above but alleviates the competition for labour, equipment and oxen between the dryland crops and rice during the peak labor demand period in June-July; (c) line sowing to the required depth, and early weeding to assure sufficient soil moisture and reduce competition from the weeds; (d) fertilizer application when and where a good crop establishment and subsequent irrigation is assured; (e) early threshing by means of portable small threshers (type "Votex") to avoid serious post-harvest losses due to delays in threshing. D. Effects on Yields 4. As base line data, a yield of 900 kg/ha has been chosen which reflects the actual yields harvested of non-equipped farmers taking into account losses of sown areas due to drought, excessive flooding, and predator damage of up to 25% of the sown areas. Improvement of water security through lowering water levels and additional works, would result in reducing losses of sown area from 25 to 20%. This assumes that losses due to predator attacks and other causes remain at 102. In reality, it is hoiped that losses in sown area will eventually be much less due to the combined effect of increased inundation probability, insect control and improved soil tillage and sowing techniques. For the incremental benefit calculations, however, the figure of 20% loss is maintained. Yields of unequipped farmers have been observed to hover around 900 kg/ha. Partially equipped farmers possessing plows who practice early plowing obtain yields around 1200 kg/ha. Farmers, who are fully equipped and who practice row sowing and early weeding would - 69 - Annex 4-4 page 4 of 4 obtain yields of 1700 kg/ha. If fertilizers are applied by them on the fields where the crop is successfully established and inundation is certain, yields up to 2200 kg/ha could be obtained. WAPAC June 1984 fi' ¯ - bl| r.~ ~~ ~~ ~ ~~~~~. . .. . .. .. . .. . . . .. .:. : . .. . . . . .: I is . 1 ... .1...... .i.... LI5 ... ..L Le ..... ..... II S ..... ! |- *41 .I. .. & e . .... : .,..ISS .... iIIS. S5. 4. Sr 415...ö1 ... Ii . . . . . . . . .h . . . :. . . . . . . . r . . . . . &3 | | . . | . . . . .P . . . . . .P..... . . . . . . . ap.. . . I- tt l:lt4 | |rL a -4le. Ir tt s- rl mcc_. p? l 2 m 1 1. 15 55 al S Siil 1.15 5 555 5 SI 115 ISdS IllII MALI MOPTI AREA DEVELOPMENT PROJECT ESTIMATED DISBURSEMENT PROFILE (US$ million) IDA FY Quarter Ending By Quarter Cumulative 1986 1 1.7 1.7 It 0 1.7 221 0.5 2.2 AraD IV 0.4 2.6 Mopti Area Development Project 1987 1 0.6 3.2 11 0.6 3.8 II 0.9 4.6 IV 0.8 5.4 17 loe- 1998 1 0.8 6.2 fe- II 0.9 7.0 14- II 1 8.0 $1 - IV 1 9.0 12- 19a9 I 1 10.0 E o II t 11.0 - III 0.9 11.9 a . IV 1 12.9 7 . 1990 I 0.9 13.8 II 0.9 13.7 1 1 0.9 14.7 11 0.7 15.4 I IV 0.7 16.2 2 1991 1 0.6 16.7 1 II 0.7 17.4 I III 0.5 17.9 rya M7 re6 Pfae PYo Pot PYS IV 0.5 18.4 bre 1992 I 0.4 18.8 4 ~1 A.DPrehl 1I 0.3 19.1 III 0.2 19.3 IV 0.2 19.5 a/ Assumes credit effectiveness Sept. 1985. Includes refinancing of PPF (US$ 1,000,000), initial deposits to special accounts (US$ 400,000), b/ Region-wide profile for area development projects in West Africa IDA countries, May 1984. I Sources World Bank data (historical profile). WAPAC April 1985 - 72 - Annex 6-1 page lof3 MALI MOPTI AREA DEVELOPMENT PROJECT DRAFT TERMS OF REFERENCE A. Draft Terms of Reference of Training Specialist at ORM/ODEM. 1. The expert would be responsible for : (a) Designing anAd programming training courses to be given by the regioval development agencies, such as ORM, ODEK, BNDA and Lnrdinate the use of the training center to be constructted at Sevare by the regional agencies. (b) Develop andior improve methods for refresher training programs and continuous in-service training programs of the extension services of ORM and ODEM as well as the training of village group leaders. (c) Assist the subject specialists employed by ORM and ODEM for the refresher courses in implementing these courses. (d) Train and assist the training and extension services of ORM and ODEM with their continuous in-service training programs and the training of village leaders. 2. The expert should have had at least a five-year experience in the above fields in a comparable rural development project in West Africa and should be fluent in written and spoken French. - 73 - Annex 6-1 page 2of3 B. Study of Production Systems: Outline Terms of Reference 1. The Study 1. There is currently a scarcity of data on the land tenu-e situation and the expansion of itinerant agriculture in the Niger Delta and on the interrelationships between agricultural and animal production. This information is necessary for the elaboration of a comprehensive regional develoment plan for the Delta. 2. For this reason, a 3-year study of sample groups representing the different production systems in the region is planned. This study will be entrusted to a team of senior Malian specialists, supported where necessary by consultants. 3. The objective of the study is to obtain the above-mentioned information, with a view to improving the quality of training and extension offored to pastoral associations and farmers, and to prepare for the introduction of a decentralized regional development strategy. 2. Content 4. The study, preceded by an examination of existing documentation, will take the form of an interdisciplinary description of a carefully chosen sample of Niger Delta production systems. The study will treat the three main production systems - agriculture, livestock, and fishing - from the standpoint of land resource utilization, labor requirements, household economics and yields. A number of resource inventories and concrete case studies will be included. The important positive or negative links between systems and obstacles to optimal functioning of the systems will be identified. The family unit will be the main focus of attention throughout in order to better understand its micro-economic functioning and the links and competition between production systems. 3. The Study Team 5. The study team will be composed of four experienced Nalian specialists in agricultural economics, socio-economics, livestock, agronomy and pasture management. The team will be headed by one of the economists. 6. Expatriate consultants assistance will be required in the areas of agrcultural economics, livestock, socio-economics, statistics and pastoral production systems. The consultants will be recruited individually, or as a team and will support the Malian team in definition of the study itself, the development of a detailed workplan and preparation of the appropriate questionnaires. A staff of 15 local surveyors would be recruited for the duration of the project. - 74 - Annex 6-1 page 3of3 4. Staffing 7. The Malian team would be in place for the full 3 years of the study. Contracts would be annual, but renewable. They would be assisted by a locally recruited data processor in Year 1 and 3 to prepare and then process the data collected. Expatriate consultant support needs are estimated at 36 man-months, over the 3 years: the entire team should be in place for the initial three months of the study, and subsequent missions (2-3) per year per specialty would be made as deemed necessary by the local team leader and IDA. 5. Logistics 8. The study team will be housed in its own buildings, with cartographic facilities. Two 4-wheeled drive vehicles with chauffeurs, would be made available to the team. 6. Reporting 9. The team would produce an Initiating Report at the end of 4 months work. A Ist Phase Report would be produced at the end of Year 1, setting out the data collection procedure followed, and the overall scope of the study. The final Report would be produced in Draft by end Year 3 for discussion with Government and IDA. It would then be finalised. It will include the outline of a regional development plan, with clear guidelines as to how such a plan would be implemented, with emphasis upon the institutional issues involved. WAPAC June 1984 ml mil MA mmLIC Pai M Møl øm~mim1 E1151m11 An EFICIMIY FMINB MILLIN CF,Ef1 "ICUm 1e fi Mie."W 195 51 1907 ! 5911 10 T Iw ii 92 1N3 W1 1f15 5196 If17 IMG 19Wl l"00 If l5 2042 23 2# 44 2*4 5 NU f%mCl IM l 1 3 4 5 ~l, & 7 t i 40 1 12 13 14 13 146 17 le 19 » 21 22 l. MT EUNiMi t clmaeLM M I9 0XiC ii Ai ~In DI&I A.511 EMIMUT 22.4 73.60 13.50 253.N 409.48 014.40 .m M 2.10 4.16 1." 9.75 13.5 3.10 C $M 5.# 9.45 13.0 IT." 25.15 73." f. em" 4.5 9.75 l6.3 33.75 32.59 66.00 i mi- 6.6 14.M 15.95 17.55 29.0 13.64 m itølM 1."6 7.15 3.25 11.0 W-1611 MT 49.1H 1N.5 11." 323.13 59.N 1193." LIUSIfM M . LLl 560.N 299.» 114.20 117. 767.2 m. Ilff 21.0 .90 le.M li."0 74.N m. Iw »n ."0 N.0 N* »."0 ».46 *.0 M .14 315.75 50M. mi.9 651.16 2114.2 4..' 19 54.14 -71 ».å 8. i. 2. UMFItIM FIEM UInt I , mM I. 4.40 54.76 27.S 5.66 15.66 57N. 6, .5 O.4 1.0 1.15 2.65 7.54 C. 4.14 I.9 2,76 3,6 5.4 14, F. 5.4 1.55 .65 0.66 4.0 3.66 8. S. 16.92 29.93 19.92 lW15 16.132 8. .M 1.55 1."9 11 5.14 7.42 5. 4.66 4.00 4.60 4.06 4.6 14.U I-1ST. 53.02 45." 75.16 49.3 iie.73 342.4 6. 4H. 51.42 In.4* N26 327.52 15.52 I, 4 IM5 2.32 3.M 5.66 7.0 1.6 34.16 C. 4 (MS 4.56 7.56 51.4 4 5. ».64 9.0 ø. 4 ~M 3.64 7.96 13.4 l9.* 26.ø 69.44 I. 4 "M 5.N 1.6 12.76 14.04 23.» 46.N6 WTiAL, Mwi 15.16 N.o* 42.44 56.14 79.44 224.6 f, 4 VM .å 5.6. 6.20 6 M 14. 4,0 . lo vM 0.40 144.1 209.37 1ti.16 145.75 6". K. I 141"M 900 13."15 6.05 56.56 10.26 éé.n4 1. 3 n5 16,M 146.0 16.00 16.60 l6."6 m6."6 S. . . . . . . .......... . . .............. 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The assumptions underlying the projections with and without the project are explained below with respect to cultivated areas and yields. 2. Farmers were classified by technical level according to studies carried out under Hopti II Project: (a) Indirect (absentee farmers: no technical differentiation made. Assumed production of 1200 kg/ha harvested, the overall average for the Mopti polders; (b) Unequipped Farmers: 900 kg/ha harvested; (c) Partially Equipped Farmers: 1200 kg/ha harvested (lacking harrow); (d) Equipped Farmers: 1700 kg/ha (harrow, cart); (e) Equipped Farmers: full equipment + fertilizer: 2200 kg/ha. 3. Farmers in the polders of Dia and Tenenkou, who will not be touched by the project, are assutted to produce the same average yield as the last 7 years (1000 kg/ha harvested). 4. Farmers in the polders of Karbaye, lbetemi and Diaby are assumed to produce the'same yields in PYI and 2 (1000 kg/ha harvested): in PY3 these polders become grazing lands and rice production ceases. Situation at beginning of project 5. Table I below shows the production levels, areas and yields at the beginning of the project. Without the project this situation is expected to continue unchanged. (see Table 1). Yield Development During Project Life 6. The effects of the project are of three kinds: (a) Reduction in the loss of sown area due to inadequate flooding, from 252 to 20%: M Increase in the sown area within polders resulting from increased security; (c) Increase in yields resulting from mechanization, improved seed and fertilizers. 7. Table 2 shows the gradual rise in area, yields and production, as the program of mechanization takes place. Table 3 shows how the distribution of farmers by technical level is expected to change as a result of the project. ---―·―-----&―·톨―--- ! 。，·「 - 79 - 7-1 page 3 of 4 Table 2: YIELD DE~ P= OF FARIIERS THROUGHOUT 1PROJECT YEM tig m i WM2 m 4 %m 5 L 68 OMVAMOMT19 NY a= 11F FARM Lufflåffl Tco~ f~ am fade ?m tom 70 2~ 191 ENDM N OMELT sa Lin 3418 ma täte alm UMM NAMY PWWLT MIM 3= Sade 2m 2173 tåla 3M im 4W M5 m du Gm U~176« LI» lim 2m 31N 3598 3519 4.1å~ FIMMIffi 4m 510 4M »39 » » » EM4KAL. 21M 23M 2»5 27= 27m 2~ 2~ TLE= WHA WA p aM LIPIEIW~ Tilltm~ mffil 675 475 675 73 79 7» 7» 2.F 151 ffillm a MJECT 1125 1m3 12" Lum im 1426 LFIM1M Kliffly RMULY =M IM) 2f 9% m W m m m (13601 w5 1275 w$ g= lm LM 117601 ma lim 1769 1769 171* 17m 4.8~ 9m m m r~tom (Tt l. MINtlIPIG =~ ~ 560 6143 60 7VI 5m 2W 2.MM IST EWIllffi M PUM 8 465 1758 4m ma 14217 u4111 3-miffi m~ PWIKLY mim mi wm 29» 211414 2912 2m 119 4 8 LM i 4M 5= 5"1 7160 79» ffl 90 LM 2 ?475 2M =3 410 5491 6178 6176 4.AE~ FM~ 4419 45N 02 2m 2M 2m im WfiffAL 293M 2142 24M 207 31401 3» ~7 8~ DU~AL remilom Leo 4418 m [w 14M 1m45 MM 11: Mm KL ATTRwo Lm MILL E s» Fm VEM 3 % Am up FAUS fam 25Z Ta M in UR s. 2/. FIM KM UM EN19PINS TIEUS REMIN UD AS FAMM 1,1^ - 80 - Annex 7-1 page 4 of 4 Table 3: EVOLUTION OF FARMERS BY TECHNICAL LEVEL TECHNICAL LEVEL LEVEL NO. BEGINNING PROJECT END PROJECT No. Z No. z EXTENSIVE SYSTEM s' 5670 69 2670 32 900KG/REAPED HA. SEMI-INTENSIVE all 1000 12 0 1200KG/REAPED NA. INTENSIVE NB FERTILISER "2' 1140 14 4390 53 1700KGIREAPED HA. INTENSIVE,FERTILISERS '3" 450 5 1200 15 TOTAL (EXCLUDING ABSENTEE FARHERS) 8260 100 8260 100 WAPAC July 1984 MALI MOPTI AREA DEVELOPMENT PROJECT ORM: PROJECTED INCOME STATEMENT NAMI WHTI AREA EWLOPMINT PIOECT PROJECTED INCO STATENT i0M CRRENT PRICES TO 199190.CONINiT 1990 PRICES IMMAFTER (CFAF 1 '001 - ----- -PA- -CT-- - - ----------*- PR*CTYEAR --------- ITN YEAR 1911/2 1932/3 1931/4 198415 1985/6 191617 19711 191m/9 1919/90 I 2 3 4 5 6 7-20 PMW ION DATA INTE 1 ISTIMTED ESTIMTIO ATTIIll0 AREA MI 29000 29000 29000 300 26212 27221 28740 23740 23740 28740 26740 n MA IM) 24000 24000 27159 24100 25675 27005 20740 20740 23740 28740 23740 HARESD AREA 13000 3000 2856 510 192 20254 22992 22992 22992 22992 22992 PAtY MNCTlN ITI 19900 3000 5000 1000 23715 25630 30075 32510 35 37215 38000 YIELD KIM/ WAVESTED 100 1000 1751 1965 1232 1268 1301 1414 1561 1622 .653 YIER. KUlm SO 825 t25 184 40 924 951 1046 1131 1249 12917 1322 PART PUIA 1 BY O II 3960 0 0 0 4269 4109 3609 2601 1435 0 0 1 AIC LD ic OPAR OlS Si 21 2455 0 0 0 2647 2547 2238 1612 690 ' 0 00 MYEAOMAS CFA/M AIRINTE 9900 t00 l0 10800 10900 12300 14500 17500 20020 20020 20020 MTEROARVES 142390 - - 207965 259251 33384 402360 46030 460300 460300 Milms COLLECTED 3l 71195 0 0 0 155974 207401 266707 321w6 368240 368240 368240 . ................. ..... . .- ............. .................... . ..... ..... .... ......-- - - -... ... . ....-..... . ....- A.PAHI NAETIM TIVITIES EVINKS MICE OF RICE EI-HILL lCrF/Kd) 135 t35 135 146 ISO 189 206 222 250 MTITY SOL 2455 0 0 0 2647 2547 2238 1612 990 MVIK CA1000) 332066 0 0 0 4761 481469 460941 357974 222437 TWI1 OWS 7.5CFNIK6.PANY 41 30000 0 0 0 32671 24329 190M 11336 10766 All-TOTt 362066 0 0 0 50909 50579 40029 369310 233253 COSTS AELATED 106 NAKETI PAYT PtI0CMM5 MICE 1tFAF11 55 55 60 60 65 77 84 90 100 CST OF PA1 (CFll 10003 217100 0 0 0 277466 316378 303556 234072 143540 CUT OF RILL ITO OM,1ME CFF9.5S/ 23324 0 0 0 2509 27294 21415 12716 12716 CoI F Cv LCTIO,TI9 D11 61 10M40 30964 34082 37490 145205 138441 101073 64765 64765 SAKS 71 11000 0 0 0 13310 12743 999 5937 5937 SO-TOTAL 357964 30914 34042 37490 464490 494856 443647 317490 12695 WT MFiTLOSS1 WETIN A 4102 -30914 -3402 -37490 4456 10943 36382 51120 6295 &.--!-&-!----&--―『―--&-&&-&-&‘『―「―&―「’ U二쁘d Z-L ’灌｀LuV - Z요 - ‘돛’-----------------&-―「「「「’―「―-----&I&&-----&1―》’-―「―『―·· -l - 84 Annex 7-4 MALI page 1 of 2 MOPTI AREA DEVELOPMENT PROJECT CROP BUDGETS Table 1: One Hectare Rice a MITN0QI NJ to PRIVECT PROIECT NO ENIPPED PROJECT PRIVECT IEOUIPPEV IST (EQUIPPED 20 M31VN TEAN (rint. STAGE REVENUES WNEWIPPEDI UllEgUIPPED? PER10111 PER1001 1EITS TECHNIVOE) GIMISS YIELD HINA. 900 900 1500 1700 Im zwo NET YIELD KRIM. 11 675 720 1200 1360 1360 1760 PRODUCER PRIM CFAFM. 21 65 63 65 63 65 0 GROS REVENUE CFAFINA. 43975 46800 71000 Mgt U400 114400 PRODUCTION COSTS SEEDS 31 AM fiso om 9m q740 123" EQUIPPENT RENTAL 300 5000 - - TRANSPORT 41 675 720 Izoo 1360 1360 1760 NATENCIARGES S/ 19800 123" 12300 12500 12500 LEW FERTILIZERS 61 - - - - - 17400 INM ING COSTS 71 - - - - - 7040 90-18TAL 75 24720 22400 23600 23600 SION CATTLE FEED,M 3123 1123 3123 3125 NAINTEMANCE ERDIPNENT 91 2613 2615 2615 2615 FINKIAL 010113 191 49U 4986 - - PROVOCTION1 COSTS ANINAL TRACTION lom 1077A 5740 5749 TOTAL COSTS if/ 22M 24720 3312A um 2m 36M MET REVEIMJEINA. 20M 22M 44974 54074 37620 LABOR NERUIREHENTS(Ill-DAVS) 60 60 90 12 RETURN PER MR-DAY 348 368 "9 bet 636 703 NUB: It ASSURES LOSS DUE TO INARMTE FLOODING OR PREIVITURS OF 2M MIIHWT PROJECT,RERM TO M 21 MOM PRODUCER PRIM.ACTIAL PRICE LIKELY TO BE N1018 V IOWG.AT STANDARD PRICE 1/0 P?MECT;1O KUT VDCFAF/KG. VlPWJEC1 # INCOME F ON 1/10 NA MGM USED FOR PILTIPLICITION 41 ICFWA(9. PAIDY UNERAM OISERVED PRICE) 31 MID PROJECI IlOK6. MOVINA. RAISED TO 12500 CFAFINA. 10 TO 1. if IODKO.P tEINA. OII0CFAFM.;5OKG.tllEA 3 I27CFAFfKG.lONLY FOR FINK STAGW 71 VOTE1 TIMESNER,CONNOMALLY AM: 4 CFAF/106.71111ESHED 11018 HAINTENINICi (FEED SOMPLENENTSoVETERINARY C11101-TAKES17.n OF 1 0113106E PRICE PER YEAR M 3 NO. 91 101 OF PORCMISE PRICE PER VIL OVER 3 HR. 101 I= REINIONSENENT,ANIML IWJWU ETC. OVER 3 IN it/ HWK CULTIVATION COSTS # ANINAL TRACTION COSTS - 85 - Annex 7-4 page 2 of 2 Table 2: One Hectare Millet/Sorghum (Traditional Variety) UITHNIITHDUT PROECT REVEWES 1WIPPEDI OROS YIELD KBIN. 600 - 1ET YIELD goIM. 11 500 PROMICER PRICE CFAF/KB. 21 45 mgs 1VEIE CFAFIHA. 22500 PAGWCTIN COSTS 31 0 NET REVENE/M. 22500 LAR REIUIREWETS(MN-DAYS) 41 60 RETI PER NAN-DAY 51 375 NTES: 11 100 KA.LDHAI E FOR SEED REMIREENT. 2/ OFFICIAL 1982185 PRICE 31 CMPLETELY NAIMI CULTIYTI:NO PRODICTIUN COSTS 31 100KG.AT STANDARD PRICE 1/0 PROJECT;10 KS. 41 REMIN UNCMNGED IITH PROJECT (N YIELD INCREASE IIUTED). 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Pal prices net of identifiable taxes and duties. Standard Conversion Factor (SCF) Used to convert miscellaneous local costs into order price terms in lieu of item-specific border prLcing): .95. Paddy Price:- a) Economic: i) Bamako CFAF 65 per Xg- Import parity price; Bamako reference market ii) Nopti CPAP 75 per kg- for 45% of proauction (via Dakar); Hopti reference market (via Abidjan) for 55% of b) Financial: CFAF 60 per kg. production; world prices per Bank projections, local costs revalued using SCF. Rice by-products: CFAF 4434 per T. paddy Valued at market prices in the project area, revalued using SCF. Cattle and Milk: a) Milk CFkF 100/1 Observed time weighted average market prices in b) Cattle CFAF 25,000 the project area: benefit streams revalued using SCF in absence of consumption conversion factor (CCF).1/ Labor: Incremental farm labor valued at CFkF 350 per day: time-weighted average of actual peak and off-peak rates, equivalent to average "without projectw net return per year in Moptl area. Benefit Lag Benefits accrue six months after on-farm expenditures. Benefit streams lagged throughout. Sensitivity to Drought: Tests Crop benefits were reduced 50% in years 5, 10, 15 and 20 (observed 5-year drought pattern). A similar pattern of drought is applied to the livestock projections. This is in addition to the allowance for drought already made in the yield projections, which is based on average losses 1974-82. 1/ Milk is fresh, consumed locally: market price adequately reflects opportunity costs. Cattle is sold on the hoof: again, market price is best available measure of opportunity cost. - 88 - Annex 8-1 LIVESTOCK PARAMETERS page 2 of 3 ZIEMITI~UT PRNECT Ce ITALITY MTES FM PERIff omn mIP QE.1ER 1 2 3 4 6 7 l 0 g MUMLS væEEDIE ciS 702000 0.04 0.04 0.04 0.04 0.10 0.04 0.04 0.0 0.04 0.15 NIL ULVES DM In YERR 10000 0.30 0.30 '0.3O 0.30 0.40 0.30 0.30 0.30 0.30 0.45 HEIFB CALVES MI IR VER 203000 0.2 0.29 0.29 0.26 0.35 0.29 0.2B 0.2 0.2B 0.40 HEIFENS (1-2 )5 169000 0.0 0.0 0.06 0.06 0.10 0.06 0.0< 0.0< 0.06 0.15 HEIFERS (2-3 RS) 125000 0.04 0.04 0.04 0.04 0.10 0.04 0.04 0.04 0.04 0.15 BULLS & ST. 1-2 VM) 143000 0. 0.0 0.0< 0.0 0.10 0.0< 0.06 0.0 0.< 0.15 BULLS 6 ST.(2-3 IRS 97000 0.04 0.04 0.04 0.04 0.09 0.04 0.04 0.04 0.04 0.10 RUa.S & ST. 13-4 YS) 74000 0.04 0.04 0.04 0.04 0.0B 0.04 0.04 0.04 0.04 0.10 OLLS 6 ST.14-51 ISI 65000 0.4 0.04 0.04 0.04 0.08 0.04 0.04 0.04 0.04 0.05 EILLS & ST. (MER 5 VM) 104000 0.03 0.03 0.03 0.03 0.01 0.04 0.04 0.04 0.0 0.05 AUDITIML Cm CULLED SUDOTAL 1962000 BIRTHS, IN Z 0.54 0.54 0.54 0.54 0.54 0.50 0.53 0.53 0.53 0.53 NILK PiMETIM,IN LITERS 150. 0 %.00 150.00 150.00 80.00 150.00 130.00 130.00 130.00 60.00 MTXITY MTES FOR PERIOD uf IuMIIf 1* TYPE OF E.YEAR 11 12 13 14 15 16 17 1 19 20 ANIMLS BREEDIM CONS 567201 0.04 0.04 0.04 0.04 0.15 0.04 0.04 0.04 0.04 0.15 LL CALVES øM INM IE 180000 0.32 0.35 0.35 0.35 0.45 0.32 0.35 0.35 0.35 0.45 HEIFER CALVES DMN IX YEAR 203000 0.30 0.30 0.30 0.30 0.40 0.30 0.30 0.30 0.30 0.40 HEIFERS 11-2 VS) 10E027 0.0< 0.06 0.06 0.0< 0.15 0.06 0.06 0.06 0. 0.15 HEÆRS (2-3 VRS) 104829 0.04 0.04 0.04 0.04 0.15 0.04 0.04 0.04 0.04 0.15 BULLS & ST.(1-2 VRSI 99024 0.06 0.04 0.04 0.04 0.15 0.06 0.06 0. 0.0< 0.15 ltiLLS & ST. (2-3 VIS) 101917 0.04 0.04 0.04 0.04 0.10 0.04 0.04 0.04 0.04 0.10 mLLS & ST. 13-4 1MS) 830 0.04 0.04 0.04 0.04 0.10 0.04 0.04 0.04 0.04 0.10 sa.Ls & ST.<4-5 TRS) <9342 0.04 0.04 0.04 0.04 0.05 0.04 0.04 0.04 0.04 0.05 VA.LS & ST.VER 5 VRS) 60791 0.04 0.04 0.04 0.04 0.05 0.04 0.04 0.04 0.04 0.05 AUDITINAL COUS CILLEP CULLING RTES FM PERIDD TBPEOF 1 2 3 4 5 6 7 8 9 10 MMILaS O NEEDI CBWS 0.12 0.12 0.12 0.12 0.16 0.15 0.12 0.12 0.12 0.16 KU DLYVES M IN YEM HEIFER CALVES M in VEAR HEIFERS (1-2 VMS) 0.05 0.00 0.05 lEIFERS (2-3 1RMi 0.05 0.00 0.05 WULLS & ST. (1-2 VfS> 0.03 0.03 0.03 0.03 0.05 0.00 0.03 0.03 0.03 0.05 IULLS & ST. (2-3 ViS> 0.10 0.10 0.10 0.10 0.15 0.05 0.10 0.10 0.10 0.15 BULLS & ST.(3-4 VM) 0.15 0.15 0.15 0.15 0.20 0.10 0.15 0.15 0.15 0.20 HUlLLS 4 ST. (4-5 MIS> 0.35 0.35 0.35 0.35 0.40 0.30 0.35 0.35 0.35 0.40 BUlLLS & ST. (ER 5 VRS) 0.62 0.62 0.62 0.62 0.70 0.60 0.62 0.62 0.62 0.70 ADDITIAMIL 015 CILLE .�+ м ai� "� о Ф � SiCRiiiБйrl`iZBi'� ° ё� �� �R{�F��SSйR'�8'L� е r� � � � � � W S �'у � .°. :°. 'Ь"b'l4иi�i$� $ $вt�°...._..°..sаёв IЧ в й в€±�igëëë�'�ёё r+ в� � д ддддддё д д е д д д д д д д д в' д д д а ё д д д д д ё g Е " 3lCf��3�3�Eo � 8 � о�К7�доОо�о R 8 °' � g�sЯ�в д д д д д д а' д д д д г�' д д д д д д д о д д д $ q ё д д д о I � в ë1��3ë3aa3g 1R 8 � a�qrd�g�gë� � S� Ф а B=�R� . О в е О О д О д О О 0 я О q О О о о О О О р О $ О О е О О О ^ i As7siZSa"t {а в .�. �:3rJë�ëgëëë, а $� � д ёдёоа д�д�:евsодд д g daSoddeioe е в гв i СΡ�� �j '� Ev�14aEa3aSв в� в 'S 9iОг�!3�'a�gë� S� $ ° � SSвo^�.4�r$ 8 д edr'ддддд а� дддддёдёдд д в' д ддоддед .. 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