Cameroon - Cocoa Rehabilitation Project

Document of The World Bank FOR OFFICIAL USE ONLY C.OV O- q -c- Report No. 6293-CM STAFF APPRAISAL REPORT CAMEROON COCOA REHABILITATION PROJECT January 25, 1988 Agriculture Operations Country Department I Africa Region This document has a resrdcted distribon and may be used by redpient only in the perfonmace of their official dudes. Its contents may not oherwise be dislosed thu Wodd Bank athoriaton.  CURRENCY EQUIVALENTS Currency Unit = CPA Franc (CFAF) US$1 - 314 CFAF (May 1987) US$1 f 267 CFAF (January 1988) WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS ADB/ADF African Development BanklAfrican Development Fund CCCE Caisse Centrale de Cooperation Economique CENADEC Centre national pour le developpement des entreprises cooperatives COOP/MUT Cooperation et mutualite DEP Departement des etudes et projets FAC Foids d'aide et de coopOration FONADER Ponds national de dOveloppement rural GTZ Gesellschaft fUr Technische Zusammenarbeit IRA Institut de la Recherche Agronomique MCU Management Control Unit MEU Monitoring and Evaluation Unit MINAGRI Ministere de l'agriculture MINCI Ministere du commerce et de l'industrie ONCPB Office national pour la commercialisation des produits de base SOCOODER Societe cooperative de developpement rural SODECAO Societe de developpement du cacao USAID U.S. Agency for International Development  FOR OFFICIAL USE ONLY CAhEROON COCOA REHABILITATION PROJECT STA"F APPRAISAL REPORT TABLE OF CONTENTS Past No. SELECTED DOCUMENTS AND DATA IN THE PROJECT FILE ............ i LOAN AND PROJECT SUMMARY .............. .................. v INTRODUCTION 1..................... 1 I. BACKGROUND 1........................................... 1 II. THE AGRICULTURE SECTOR ..... oooo .............. 2 Agricultural Resources 2.............................. 2 Government Policy .............. .. .. .. . .. .. .. .. . .. .. . 2 World Bank Group Involvement and Strategy ........... 3 Main Institutions .......................... 3 III. THE COCOA SUBSECTOR ................................... 4 Government's Cocoa Development Strategy ............. 5 Constraints .. ........................ 5 The First Cocoa Project ............................. 10 IV. THE PROJECT ........................................... 11 A. Oojectives and Main Features .................... 11 B. Detailed Features ............................... 11 ; 1. Incentive Policy Packagec....... 11 2. Assistance to SOD. CAO.... . . ooo#*0**00**# 12 3. Marketing Systems, Cooperatives and CENADEC 16 4. Medium-Size Plantation Program ......... 17 S. Assistance to MI N A G R .................. 18 C. Technical Assistance and Consultancy Services ... 18 D. Organization and Management 18 E. Project Costs and Financing Plan ............. 19 F. Accounts, Audit and Reporting ............... 20 This report is based on the findings of an appraisal mission to Cameroon in March 1986, consisting of Messrs. I. Serejski (Mission Leader), L. Pohblmeier and Ms. R. Jaisaard (World Bank). The report was copy-edited by Mrs. M. Layton and the secretarial work done by Mesdames D. Lamour and P. Dalencour. ITh document ha a nstied dstdbuton and may be ud by eipnts only in tpefomanue ofthi offkc dutil Its contents may not odrwwi be dbcled witbout Wodd Bank authoraIn.  TABLE O CONTENTS (Continued) Pate No. G. Procurement and Disbursement .................... 21 H. Production, Markets and Prices .................. 22 I. Financial Results, Benefits and Project Risks ...22 J. Environmental Impact ........................... 24 V. AGREFMENTS, CONDITIONS AND RECOMMENDATION ............. 25 ,ANNEXMS 3-1 Analysis of Cocoa Incentive Policies 3-2 Terms of Reference for the Cocoa Export Marketing Study 4-1 Stateent of Policy 4-2 SODECAO Cost Reduction 4-3 Specific Targets for SODECAO Cost Reduction 4-4 Monitoring and Evaluation Unit 4-5 Agricultural Operations 4-6 Adaptive Research 4-7 Technical Assistance and Consu^ltancy Services 4-8 Total Project Costs 4-9 Proposed Financing Plan 4-10 Amounts and Methods of Procurement 4-11 Estimated Schedule of Loan Disbursement 4-12 Economic and Sensitivity Analyses ;MAPS: IBRD No. 19725R - The SODECAO Region IBRD No. 1972ER - The Cocoa Rehabilitation Project  CAMEROON COCOA REHABILITATION PROJECT SELECTED DOCUMENTS AND DATA AVAILABLE IN THE PROJECT FILE A. Selected ReDorts and Studies on Subsector Code Al. MINAGRI Statistics Yearbook 1981182. Cameroon - 400 A2. Study of the Financial Resources of Cocoa and Coffee Cooperatives in Cameroon, MINAGRI/Sedes; July 1982. 221.505 (a + b) A3. Note on Cocoa Marketing 1983/4 Campaign, ONCPB; May 30, 1984. 221.505 A4. Quant.itative Record of Cocoa Marketing 1983/4 Campaign, ONCPB; June 13, 1984. 221.505 A5. Price Regulation, Purchasing and Marketing Arrangements for Cocoa 1984-85 Season, ONCPB; August 28, 1984. 221.505 A6. Etude sur la Connaissance des Besoins des Agriculteurs au Cameroun (Phase 1 X Rapport qualitatif), SEDA-IDET CEGOS; October 1985. 229.451 A7. Proposition pour une Strategie Nouvelle du D4veloppement de la Cacaoculture au Cameroun, SCET-AGRI; December 1985. 229.452 A8. Tolerance des Mirides du Cacaoyer aux Insecticides, Campagne 198511986, SODECAO. 229.453 ; A9. Note sur le Lindane et son Utilisation au Cameroun, P. Mbondji Hbondji; February 1986. 229.454 Leaal Documents and Statutes A10. (a) Law 73/15 Relating to Rules and Regulations Governing Cooperative Societies in the United Republic of Cameroon; December 7, 1973. 126.790E (b) Decree 75/682 Concerning the Statute of CENADEC (Centre National de Developpement des Enterprises Cooperatives); October 25, 1975. 126.790F (c) Law and Decree Creating the Organization and Operation of the ONCPB; February 23, 1978. 126.790D  - ii - SELECTED DOCUMENTS AND DATA IN THE PROJECT FILE (Continued) Code (d) Resolution No. 4 of SODECAO's Administrative Council Concerning the Responsibilities of SODECAO's Director General; September 3, 1980. 126.790 (e) Decree 801080 Concerning the Reorganization of SODECAO; March 10, 1980. 126.790 (f) Arr#td No. 91/MINCI/DCE Pixant lea Conditions de Commercialisation du Cacao par les Organismes d'Encadrement Pendant la Campagne 198511986, Visa 006517; September 26, 1985. 229.455 (g) Decision No. 206/MINAGRIIDEP Concerning the Policies and Responsibilities of Organizations in the Cocoa Zone. 126.790B (h) Agreement Between SODECAO, CERADEC, FONADER and Cooperatives Regarding their Respective Operations in the Cocoa Zone. 126.790C (i) General Operating Regulations for CENADEC. 126.790 (j) Statutes for the Operation of SOCOODERs (Soci4tes Cooperatives de Ddveloppement Rural). 126.790 All. First Phase: Study Concerning the Development of :Medium-Scale Farms in Cameroon, MINAGRI/GERSAR; October 1984. 221.505 B. Selected Reports and Studies Related to the Proiect El. Analysis of SODECAO's Sectoral Activities, SODECAO-Sedes; January 1981. 221.505 B2. Rapport d'Evaluation, Projet de D6veloppement Rural Integre en Haute Sanaga - Cameroun, BAD; May 1982. 229.456 B3. SODECAO Balance Sheet and Management Accountr; 1982/83. SODECAOYR B4. SODECAO Summary Report; 1982/83. SODECAOYR B5. Monitoring and Evaluation for SODECAO SATEC Consultants; February 1983. 221.505  - iii - SELECTED DOCUMENTS AND DATA IN THE PROJECT FILE (Continued) Code B6. Report of Socio-Economic Study for Center and South Region Cameroon, A. Leplaideur (Consultant); July 1983. 220.036 B7. The Demand and the Market for Foodcrops in the Towns of Center and South Provinces (2 Volumes: Summary and Statistics), SODECAO; October 1983. 220.569 (1 & 2) B8. Project Ident4fication Report, PAOICP; October 1983. 128.855 B9. Socio-Economic Report on the Center,South Region, SODECAO-Leplaideur; November 1983. 220.036 B10. SODECAO Annual Report; 1983184. SODECAOYR Bll. SODECAO Anticapsid Treatment Report; 1983/84. 221.505 B12. Evaluation du Projet de Developpement Integr4 du D4partement du Nyong et Mfoumou, CCCE Yaounde; January 1984. 229.457 B13. Projet de Developpement Rural des Provinces du Centre et du Sud (Rapport Mission Preparation), 2 Vol.; April 1984. 220.777/1+2 B14. Project Preparation Report, FAO/CP; April 1984. 220.777 (1 + 2) B15. Study of Rural Roads Program, SODECAO Consultants (BCEOM); April 1984. 221.505 316. Inventory and Synthesis of Results of Foodcrops Research, SODECAO-BDPA; May 1984. 221.505 B17. Report of Study of SODECAO Vehicle Maintenance Operations, SATEC Consultants; July 1984. 221.505 (C + D) B18. SODECAO Budget for 1984/85; July 1984. SODECAOYBR Bl9. Socio-Economic Study for the Young Farmer Settlement in South West Province, AFCA; July 1984. 221.505 B20. The Cost and Impact of SODECAO's Operations in the Cocoa Sector, SODECAO/Baris/Zaslavsky; November 1984. 221.505  - iv - SELECTED DOCUMENTS AND DATA IN THE PROJECT FILE (Continued) Code B21. Evaluation du Projet de D6veloppement Int6grd du Ddpartement du Nyorg et Mfoumou, CCCE Yaounddt April 1985. 229.458 B22. Rapport Annuel d'Activit4, Exercice 1984/85, SODECAO; December 1985. SODECAOYR B23. Synthese des Cofts d- Ponctionnement des Vehicules et Engins en 1984-19d5, SODECAO; December 1985. 229.459 B24. Deux Coammnications sur l'Agriculture des Paysans de la Zone Foresti&re Camerounaise, CIRAD/IRAT, Leplaideur; December 1985. 229.460 B25. SODECAO Budget 1985/1986. SODECAOYBR 326. La R6g6n4ration Cacaoybre, Bilan des Realisations Campagne 84/85, SODECAO; January 1986. 229.461 327. SODECAO, Budget 1986-1987, SODECAO; February 1986. SODECAOYBR B28. Analysis of the Balance Sheets of Five Cooperatives in Lekie Department. 221.505 C. Proiect Working Papers 229.602 Cl. International Outlook for Cocoa C2. Feeder Roads Development C3 Cocoa Marketing System in the Southwestern Province C4. Cost Tables CS. Financing Plan C6. Farm Budgets C7. Economic Analysis C8. Cocoa Technical Aspects C9. Domestic Resource Cost Analysis C10. Cooperatives and Support Organizations Cll. SODECAO Region, Organization and Financial Situation C12. Analysis of the Cocoa Marketing System  - v - CAMnEROON COCOA REHABILITATION PROJECT LOAN AND PROJECT SUMMARY Borrower: The Republic of Cameroon. Beneficiaries: The Cocoa Development Agency (SODECAO), the National Center for the Development of Cooperatives (CENADE^), the Ministry of Agriculture (MINAGRI), and the National Rural Development Fund (FONADER). Amount: US$103 million equivalent. Terms: 20 years, including a fivo-year grace period at the Bank's standard variable interest rate. Flow of Proceeds: The Borrower will grant US$87.1 million equivalent of the loan to SODECAO, US$2.7 million equivalent to CENADEC, US$0.9 million equivalent to MINAGRI, and channel a line of credit for US$12.3 million to FONADER. Proiect Descriptiont The project will support the Government policy of lacreasing agricultural exports and rural incomes, assisting the country to respond to declining oil revenues. Its main objective is to help modernize the Cameroonian cocoa industry through reforms in the incentive and institutional systems. The project will (a) maintain cocoa producer incentives at appropriate levels; (b) increase the efficiency and effectiveness of the public enterprise (SODECAO) planting, pest control, research, and road programs; (c) review and improve the, operations of cocoa marketing cooperatives and supporting agencies; (d) launch a private medium-size plantation development program; and (e) strengthen the Ministry of Agriculture's capability for implementing the cocoa development strategy incorporated into this project and monitoring its execution.  - vi - Estimated Costs X of Local Foreian Total Base Cost -- -- (US$ million)----- SODECAO Operations Management & Administration ' 13.5 2.8 16.3 7 Field Development (Office) 3.5 1.3 4.8 2 Extension 41.6 11.4 53.0 23 Training 2.6 3.3 5.9 3 Crop Protection 22.6 45.7 68.3 30 Adaptive/Applied Research 3.6 0.9 4.5 2 Rural Infrastructure 29.3 19.1 48.4 21 Monitoring and Evaluation 1.9 0.2 2.1 1 Subtotal 118.6 84.7 203.3 89 Cooperative Development 3.4 4.8 8.2 4 MINAGRI 0.4 0.7 1.1 0 Medium-Size Plantation Program 12.5 4.4 16.9 7 Base Cost 134.9 94.6 229.5 100 Physical Contingencies 3.2 5.6 8.8 Price Contingencies 41.0 6.1 47.1 Total Project Costs 179.1 106.3 285.4 Financint Plan Local Foreign Total