Tanzania - Cashew and Coconut Treecrops Project

Document of The World Bank FOR OFFICIAL USE ONLY c-AZ O c'-774 Report No. 7681-TA STAFF APPRAISAL REPORT TANZANIA CASHEW AND COCONUT TREECROPS PROJECT MAY 30, 1989 Southern Africa Department Agriculture Operations Division This document has a restricted distribution and ma, he used by recipients only in the performance of |their offie' I dluti-s 1t- rr It t- r * - X *x  CURRENCY EQUIVALFNTS Currency Unit = Tanzania Shilling (TSh) US$1.00 - TSh 120 1/ TShl.00 - US$0.0083 WEIGHTS AND MEASURES Metric System ABBREVIATIONS CALD = Commissioner for Agriculture and Livestocl: Development CDC - Cashewnut Development Center CDP - Coconut Development Program CIP = Cashew Improvement Program CDPS Coconut Production Development Section CPIPP = Cashew Production Improvement Pilot Project CRDB = Cooperative and Rural Development Bank CU = Cooperative Union DALDO = District Agricultural and Livestock Development Officer EAT = East Africa Tall ERP = Economic Recovery Progiam FRG = Federal Republic of Germany GOT = Government of Tanzania GTZ = Gesellschaft fur Technische Zusammen Arbeit IDA = International Development Association IRHO Institut de Recherches pour les Huiles et Oleagineux LD = Lethal Disease MALD = Ministry of Agriculture and Livestock Development MATI = Ministry of Agriculture Training Institute MCU Management and Coordination Unit M&E = Monitoring and Evaluation MIS = Management Information System MLGCM = Ministry of Local Government, Cooperatives & Marketing NALERP = National Agricultural and Livestock Extension Rehabilitation Project NALRP = National Agricultural and Livestock Research Project NCDP = National Coconut Development Program ODA = British Overseas Development Administration PPM9B = Project Preparation and Monitoring Bureau PCS = Pilot Credit Scheme PS = Primary Society RALDO = Regional AgricultuLal and Livestock Development Officer SMS = Subject Matter Specialist TCC = Technical Coordinating Committee TCMB = Tanzania Cashew Marketing Board ZSTC = Zanzibar State Trading Corporation FISCAL YEAR Government of Tanzania . July 1 - June 30 1/ The exchange rate by May 1, 1989 US$1.00 = TSh 130. However, an ar.alysis shows no substantial change in total project costs resulting th refrorn  FOR OFFICLAL USE ONLY TANZANIA CASHEW AND COCONUT TREECROPS PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page No. Credit and Project Summary ............. . . .. (i) I AGRICULTURAL SECTOR BACKGROUND A Project Genesis . . . . . . . . . . . . . . . . . . 1 B Main Country Characteristics . . . . . . . . . . . . 1 C The Economy . . . . . . . . . . . . . . . . . . . . 1 D The Agricultural Sector . . . . . . . . . . . . . . 2 (i) Overall Structure . . . . . . . . 2 . I I 2 (ii) Performance . . . . . . . . I I . . . . . . 3 (iii) Government Policy and Strategy . . . . . . . . 3 E The Ministry of Agriculture and Livestock Development . . . . . . . 4 F The Agricultural and Livestock Extension Ser:ices . . . . . . . . . . . . . . . . . 4 G The Agricultural and Lirestock Research Services . . . . . . . . . . . . . . . . . 5 H Agricultural Marketing and Pricing . . . . . . . . . 5 I IDA's Involvement, Sectoral Strategy and the Proposed Project . . . . . . . . . . . . . . . . 6 J The Role of the Donor Community . . . . . . . . . . 8 II THE CASHEW NUT SUB-SECTOR A Background . . . . . . . . . . . . . . . . . . . . . 8 B Cashew Production . I . . . . . . . . . . . I . 9 This report is based on the main recommendations of the Project Preparation and Monitoring Bureau of the Ministry of Agriculture and Livestock Development, the National Coconut Development Program Agency and on the findings of an Appraisal Mission which visited Tanzania in October, 1988. The Mission comprised of Messrs. Ter Vrugt, Ranganathan (IDA); Waller, Harrison (ODA); Ohler, Berman and Lacroix vmonsultants). 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.  C The Cashew Production Improvement Pilot Project (i) Introduction . . . . . . . . . . . . . . . . . 13 (ii) Research . . . . . . . . . . . . . . . . . . . 13 (iii) Disease Tolerance . . . . . . . . I . . . . . 13 (iv) Chemical Control . . . . . . . . . . . . . . . 14 (v) Vegetative Propagation . . . . . . . . . . . . 14 (vi) Integrated Crop Development and Research Extension Linkages . . . . . . . . . . . . . . 15 D Marketing and Pricing . . . . . . . . . . . . . . 15 E Credit to Cashew Growers . . . . . . . . . . . . . 16 F Lessons Learned . . . . . . . . . . . . . . . . . . 17 III THE COCONUT SUB-SECTOR A Background and Production . . . . . . . . . . . . . 18 B The National Coconut Development Program and the Coconut Pilot Project . . . . . . . . . . . . . 18 (i) Research . . . . . . . . . . . . . . . . . . . 19 (ii) Seedfarms . . . . . . . . . . . . . . . . . . 19 (iii) Research-Extension Linkages . . . . . . . . . 19 C Marketing and Pricing . . . . . I . . . . . . . . . 20 D Lessons Learned .... . . . . . . . . . . . . . . 21 IV THE PROJECT A Project Rationale and Objectives . . . . . . . . . . 21 B Project Description . . . . . . . . . . . . . . . . 23 C Detailed Features for Cashew Improvement Program (i) Research .23 (ii) Planting Material Development . . . . . . . . 26 (iii) Production Development . . . . . . . . . . . . 27 (iv) Management and Coordination . . . . . . . . . 28 (v) Input Supply and Mavketing Support . . . . . . 29 (vi) Pilot Credit Scheme . . . . . . . . . . . . . 30 D Detailed Features for National Coconut Development Program (i) Research . . . . . . . . . . . . . . . . . . . 31 (ii) Seednut Production . . . . . . . . . . . . . . 34 (iii) Production Development . . . . . . . . . . . . 35 (iv) Program Management &nd Coordination . . . . . 37 E Treecrops Development Institute . . . . . . . . . . 39  V PROJECT IMPLEMENTATION A Organization and Management . . . . . . . . . . . . 39 B Coordination and Integration with ongoing Research and Extension Activities . . . . . . . . . 41 C Annual Work Plans . . . . . . . . . . . . . . . . . 41 D Credit Supply .... . . . . . . . . . . . . . . . 42 E Mid-term Project Review . . . . . . . . . . . . . . 43 F Reporting and Monitoring . . . . . . . . . . . . . . 43 VI COST ESTIMATES AND FINANCING A Cost Estimates .... . . . . . . . . . . . . . . . 44 B Financing . . . . . . . . . . . . . . . . . . . . . 44 C Procurement . . . . . . . . . . . . . . . . . . . . 46 D Disbursement and Special Accounts . . . . . . . . . 48 E Accounts and Audits ... . . . . . . . . . . . . . 50 VII BENEFITS, RISKS AND SUSTAINABILITY A Benefits and Justification . . . . . . . . . . . . . 50 B Risks .52 C Recurrent Costs and Sustainability . . . . . . . . . 52 D Environmental Effects . . . . . . . . . . . . . . . 53 E Focus on Women . . . . . . . . . . . . . . . . . . . 53 VIII ASSURANCES AND RECOMMENDATIONS ..54 ORGANIZATIONAL CHARTS 1. Miniscry of Agriculture and Livestock Development 2. Institutional Thtegration of the Project 3. Proposed Intel 1 Cashew Improvement Program Organization 4. Existing Internal National Coconut Development Program Organization ANNEXES I Summary Tables Table 1 Project Cost Sunmary 2 Project Components by Year 3a, b Summary Accounts Cost Tables  4a, b Summary Accounts by Year 5a, b Summary Accounts by Project Component 6 Financing Plan by Project Component 7a, b Financing Plan by Sum=ary Accounc II Project Feasibility Analysis/Farm Models III The Management of the Cashew Improvement Program IV Cashew Improvement Program, Sr. Management and Advisory Staff Terms of Reference V Documents available in the Project File MAPS IBRD 120926 Project Area Cashew Improvement Program IBRD #21494 Project Area Coconut Development Program  (i) TANZANIA CASHEW AND COCONUT TREECROPS PROJECT CREDIT AND PROJECT SUMMAR'. Borrower: The United Republic of Tanzania Beneficiaries: Ministry of Agriculture and Livestock Development (MALD) and Cooperative Rural Development Bank (CRDB) Amount: SDR 19.4 million (US$25.l million) Terms: Standard IDA, with 40 years maturity Onlending Terms: Of the US$25.1 million grant to MALD, US$3.3 million would be on-lent to CRDB US$1.1 million for inpu' supply support and US$2.2 million for a Credit Pilot Scheme at a fixed interest rate of 8.4Z with a 10 year maturity including 4 year grace period; foreign exchange risk would be borne by CRDB. Financing Plan: Government US$ 5.3 million ODA US$ 6.3 million FRG US$ 5.7 million IDA TS$25.1 million Total US$42.4 million Project Objectives and Description. The objectives are to achieve long term growth by increasing the national production of cashewnuts for export and the production of coconuts for the domestic vegetable oil market. The project would provide financing and technical assistance in support of: (i) expanded cashew and coconut research breeding and selection to develop higher yielding, more disease and drought-tolerant varieties/hybrids; (ii) the development and operations of seven cashew development centers and three coconut seedfarms for the propagation and dissemination of quality planting materials; (iii) the production development through the training of extension and research staff and the dissemination of cashew and coconut production packages; (iv) the management and coordination of the cashewnut improvement and coconut development programs; (v) the cashew input supply and local marketing support; and (vi) strengthening credit facilities in the southern cashewhtut production areas in the form of a pilot credit scheme managed by CRDB. Benefits and Risks. The project would benefit producers of cashewnuts and coconuts directly as well as the national economy in general, through increased cash income and increased vegetable oil prodluction. Based on the various farm models manday returns would increase from Tsh 60/day to Tsh 100-170/day for cashew and tn Tsh 200-300/day for coconut. Overall production would be doubled in ten years time to 45,000 tons of cashew and one billion coconuts per year. The balance of payments would thereby  (ii) be Improved by higher cashewnut exports and lower edible oil imports. The project will help integrate women farmers into the market economy because of their direct involvement in the cashewnut and coconut industries. The de~velopment of private input trade in remote areas and improvement of eashewnut and coconut research and development institutions will represent important additional benefits. The main risks would be lower than expected adoption rates of improved cashew and coconut production packages and inadequate producer prices. To minimize these risks the project provides for techrical assistance to facilitate attainment of research targets, and for intensive professional and management training to ensure development of the programs, by application of "lessons learned" from the two pilot projects. In regard to producer prices, agreement was reached that the cashew farmgate price would be increased by November 30, 1989 to at Least 501 of the export price. Total Projected Costs: Local Foreign Total ......... US$ Million. CASHEW Research 0.8 4.9 5.7 Production Development 0.8 2.5 3.3 Planting Materials 1.0 2.9 3.9 Input Supply/Marketing Support 0.2 1.4 1.6 Management & Coordination 1.3 3.8 5.1 Sub-Total Cashew 4.1 15.5 19.6 COCONUT Research 1.5 4.0 5.5 Production Development 0.4 1.9 2.3 Planting Materials 0.9 1.3 2.2 Management & Coordination 0.7 2.5 3.2 Sub-Total Coconut 3.5 9.7 13.2 Pilot Credit Scheme - 2.2 2.2 Total Baseline Costs 1/ 7.6 27.4 35.0 Price Contingencies 4.6 2.8 7.4 Total Project Costs 12.2 30.2 42.4 1/ Net of taxes and duties  (1ii) Financing Plan Local Foreign Total ........... .USS Million. IDA 5.0 20.1 25.1 FRG 1.0 4.7 5.7 ODA 0.9 5.4 6.3 GOT 5.3 - 5.3 12.2 30.2 42.4 Estimated IDA Disbursement Schedule IDA FY 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 . ........................... USS Million. Annual 2.5 4.2 4.8 4.2 4.2 4.0 1.2 Cumulative 2.5 6.7 11.5 15.7 19.9 23.9 25.1 Percentage of Total Credit 10.0 26.7 46.0 62.8 79.6 95.6 100.0 Economic Rate of Return No overall ERR has been computed duc to the R&D nature of the project. However, analyses of farm models indicate more than satisfactory returns.  TANZANIA CASHEW AND COCONUT TREECROPS PROJECT I AGRICULTURAL SECTOR BACKGROUND A. Project Genesis 1.01 In May 1987, IDA received a proposal for a follow-up phase of the Tanzania National Coconut Development Program (NCDP) executed as a pilot project under IDA Credit 1070-TA and cofinanced by the Federal Republic of Germany (FRG). The coconut pilot was extended until March 31, 1989. A similar pilot project on cashew development under the Cashew Production Improvement Pilot Project (CPIPP) was financed from the undisbursed balance of IDA Credit 801-TA, to analyze the main causes of cashew production decline since 1973 and recommend agronomic methods to reverse the decline. The cashewnut pilot was extended to June 30, 1989 and is regarded as being highly successful in bringing both cashew research and extension together. A proposal for a follow-up phase of the cashew project was prepared by MALD in March 1988 and presented to IDA in June 1988. Because of the similarity in technical problems in both treecrops and the need to select, breed and propagate disease tolerant nlanting materials for both crops, it was agreed with the Ministry of Agriculture and Livestock (MALD) to appraise the two proposals under one Cashew and Coconut Treecrops Project. The appraisal was carried out by a joint IDA/ODA/FRG Mission, which visited Tanzania in October 1988. B. Main Country Characteristics 1.02 Tanzania mainland encompasses some 945,000 sq. km., and has an estimated population of 22 6 million (1987). Agriculture is the most important sector of its economy. With the exception of a small area of private estates and parastatal operations, the country is characterized by relatively small farm sizes. The majority of the farms are less than 5 ha., with the average holding being about 1.2 ha. Agricultural land is underutilized and a considerable potential for incremental developr,ient exists. The topography is varied and includes vast semi-arid plains, plateaus and highlands. Precipitation is also varied, and presents different regimes in different areas. The country is divided into nine physiographic regions, subdivided into twenty agro-climatic areas. These may be grouped into four main agroeconomic zonles of which the Coastal Zone with 500-1000 mm/yr rainfall is the main area for cashew and coconut production (see coastal rainfall IBRD maps Nos. 20927 and 20928 in Project File). Administratively, Tanzania mainland is divided into 20 Regions, 110 Districts, 500 Divisions, and abcut 2,200 Wards, each encompassing 2-5 villages. Zanzibar is a semi autonomous Region under the Union of T2nzania with a higher rainfall of over 1600mm/yr aAld consists of the islands of Unguja and Pemba. C. The Economy 1.03 In the late seventies, the Tanzania economy entered a period of economic decline from which it is only now starting to recover. The  - 2 - downturn wds caused in part by a series of external factors, including success3ve droughts, the rapid increase in oil prices, the collapse of the East African Community and the war with Jganda, and in part by weaknesses in the management of the economy. These included inadequate incentives and resource allocation to the agricultural sector, an overly ambitious and uneconomic industrialization strategy, excessive administrative controls over economic activity, and continued growth in the size of the public sector without due regard to the limited financial and administrative capacity available. Between 1978 and 1982, GDP grew by only 0.42 per annum, with agriculturai and industrial output declining by 2.9Z and 16.6% per annum, respectively. Inflation accelerated, the fiscal situation deteriorated sharply with deficits averaging about 162 of GDP, and exports and imports declined significantly. By 1982. import volumes were 32Z below their 1978 level and 24Z below their level in the early 1970s. Throughout the early 1980s, the economy continued to decline despite the introduction of various adjustment programs. 1.04 Attempts at policy reforms in the early eighties proved too weak to succeed. It was not until June 1986, with the introduction of the Economic Recovery Program (ERP), that the reform measures became strong enough to have a positive impact. Under the ERP, reforms have been intrcduced in the areas of exchange rate, foreign exchange allocation, trade policy, prices, fiscal and monetary policies, and interest rates, as well as in the key sectors of agriculture, industry and transport. In support of these measures: (i) an 18-month standby arrangement of SDR64.2 million was approved by the IMF on August 28, 1986; (ii) a Multi-sector Rehabilitation Credit (MRC) was approved by the Bank on November 20, 1986, which incorporated financing from IDA and the African Facility (about US$100 million), and attracted Special Joint Financing (about US$50 million) by the Federal Republic of Germany, the Netherlands, Switzerland and the United Kingdom; (iii) a supplemental credit comprising US$30 million and US$26 million of IDA and Africa Facility financing, respectively, was approved in January 1988 and attracted cofinancing of US$4 million and 4 million Pounds Sterling from Saudi Arabia and the United Kingdom, respectively; and (iv) an Industrial Rehabilitation and Trade Adjustment Credit (IRTAC) was approved on December 13, 1988. An Agricultural Sector Adjustment Program to support improvements in agricultural pricing and marketing policies is currently being prepared. D. The Agricultural Sector (i) Overall Structure 1.05 Agriculture is the largest sector in the Tanzanian economy. It provides 40-50% of GNP, about 80% of exports, and over 80% of employment. The main cash crops are coffee, cotton, sisal, tobacco, tea, cashewnut, pyrethrum and cloves, and main food crops are maize, sorghum, millet rice, grain, legumes, cassava, banana, wheat, and sugarcane. Coconuts provide about 40% of the vegetable oils and fats consumed in Tanzania. Smallholder production (over 83% of total holdings) dominates the sector. Private estate production is important in tea and sisal, and government estates contribute to rice, wheat, sisal, sugar and meat production. Some areas of Tanzania have relatively low rainfall and are, therefore, subject to  - 3 - drought. However, ever, in areas of reliable rainfall, overall population density is low (19 per sq. km.). Only about 6 million hi out of 39 million ha of arable land are under cultivation. (ii) Performance 1.06 Throughout the first decade following Independence, the farming community was backed by a vigorous extension service, capable of extending appropriate agro-technologies. Therefore, a rapid expansion of smallholder export crops took place, and the volume of marketed coffee, cotton, cashewnuts and tobacco doubled between 1960/61 and 1966/67 and doubled again by 1973/74 for cashewnuts and tobacco. Self-sufficienc; in food- grain production was achieved by the late 1960s. However, the adoption of several new Government policies in the 1970s and early 1980s kincluding villagization, dissolution of cooperatives, establishment of parastatal export and food crop marketing monopolies, closure of private shops, confinement of supply of agricultural inputs to a few agencies, and encouragement of heavy indLstry at the expense of sii.allholder agri-culture) led to a steep decline in export crop production and a stagnation in food production not keeping up with population growth by the late 1970s and into the current decade. Between 1978 and 1985, real agricultural GDP grew at only 1.0% per annum, well below the population growth rate of 3.4% p.a. Between 1976/77 and 1985/86 the production of nja'or export crops declined by 8X per annum, and agricultural export revenues declined by 57Z from a peak of US$426.1 million in 1977 to US$184.1 million in 1985, with devastating effect on the national economy. (iii) Government Policy and Strategy 1.07 The main objectives of the Government's agricultural policy are achieving food self-suffic'.ency and improving national nutrition standards; restoring agricultural exports to former peaks and beyond; and improving rural living standards. To attain these objectives and to reverse the disappointing performance of recent years, the Government has since 1986, introduced major reforms in agricultural strategy within the Economic Recovery Program (Para 1.03). In addition to a major devaluation and continuing adjustment in the real exchange rate, which have benefitted the producers of both food crops and export crops, the Government has: (a) increased producer prices in real terms; (b) liberalized the marketing of maize; (c) re-established cooperatives to take over many parastatals' responsibilities for crop marketing; (d) liberalized the marketing of minor export crops; (e) permitted several private tea and sisal estates and cooperatives to export directly instead of through marketing boards; (f) privatized several previously expropriated coffee, tea and sisal estates; and (g) started to 'deconfine' input supply and distribution. These measures have already led to increases in food grain supply, and the improvement in export crop production incentives, together with favorable weather, have restored cotton production to its previous level. 1.08 However, some critical bottlenecks to the recovery of agricultural production and exports remain. These include: (a) the lack of foreign exchange to finance the rehabilitation of agricultural enterprises; (b) the inadequate capability of the banking system to channel term and seasonal lending to the agricultural sector; (c) the serious deterioration of the  - 4 - research and extension services; (d) the severe rural and trunk roads transport constraints; (e) the persisting shortages and late delivery of critical inputs, implements, and consumer goods; and (f) the land tenure problems which tend to discourage long-term private on-farm investmnent and employwent of farm labor. In the short-term, pricing, marketing and input policy changes have had, and will continue having the greatest impact on agricultural production. However, to sustain and expand production, attention mu3t be given to ovexcoming the remaining constraints. The IDA lending program, of which this project is a specific component, is designed to help the Government in that task. E. The Ministry of Agriculture and Livestock Development (MALD) 1.09 Between 1961 and 1985, there have been several changes in Government policies affecting MALD. One major change occurred in 1972 during the decentralization of development-oriented sector, including Agriculture and Livestock. During this period, many departments were merged, and all de-elopment functions were vested with Regional Development Directors. In 1983, the process was reversed to the pre-1972 situation, with control, policy and managemenit guidance, and supervision carried out by ot from headquarters. During the last 25 years, the agricultural sector has been associated with a variety of other sectors. This is reflected in changes in the Ministry's names: Agriculture, and Cooperative Development; Agriculture, Forestry and Wildlife; Agriculture, Food and Cooperatives; Agriculture, Natural Resources and Livestock Development; and since 1983, Agriculture and Livestock Development. Major national policies like villagization, dissolution of cooperatives, establishment of parastatals and the like have influenced some of these changes. Moreover, there have been internal organizational changes in MALD with respect to Divisions and also within the main Divisions. KALD, which was set up in 1983, was last reorganized in 1985 when six divisions were formed, namely: Agriculture; Livestock Development; Planning and Marketing; Irrigation Development; Research and Training; and Manpower Development and Administration. However, under the recently approved Extension Rehabilitation Project both Divisions for Agriculture and Livestock will be amalgamated into one Agricultural Extension Department. Likewise under the new National Agricultural and Livestock Research Project (NALRP) the two parastatals for crops and livestock research, the Tanzania Agricultural Research Organization (TAFU) and Tanzania Livestock Research Organization (TALIRO) have been amalgamated into one Research organization under the Department for Research and Training of MAILD. F. The Agriculture and Livestock Extension Services 1.10 MALD provides extension services at the village level through the regional and district agricultural offices. The centralized system of extension is intended to enable MALD to implement management and planning of daily extension activities and to provide a satisfactory linkage between research and extension. MALD is also responsible for identifying the type and quantities of inputs required by farmers and for communicating with the input supply institutions. Recruitment of extension officers is done by MALD which allocates extension staff to different regions through Regional  - 5- Agricultural and Livestock Development Officers (RALDO). The District Agricultural and Livestock Development Officers (DALDO) decide on the deployment of the extension staff in the villages of their district. Under the N4ational Agricultural and Livestock Extension Rehabilitation Project, the extension services will be strengthened, while under the proposed Cashew and Coconut Treecrops Project improved planting materials together with reconmmendations for mixed cashew and coconut tree and food crops production systems will be generated for the Extension Services for dissemination to farmers. G. The Agricultural and Livestock Research Services 1.11 The Ministry of Agriculture and Livestock Development is responsible for policy formulation, coordination and budgetary control tor all agricultural and livestock research, except that carried out by the University and the private sector. While its research department has virtual autonomy, its council and board is answerable to MALD. 1.12 The Department of Research and Training is responsible for: formulating agricultural research policy and objectives; establishing programs to fulfil cte objectives; and, controls and monitors the national research efforts, by membership in parastatal boards, councils and progranr coordinating land committees. It has not succeeded in this role, particularly in providing liaison between MALD and the various research institutions; among the different institutions themselves; and between research and the MALD controlled extension services; or in program plannind and introducing a system of priorities. The Department's authority has been inadequate for that purpose vis- -vis the amalgamated parastatals and these shortcomings account for the modest performance of Tanzania research in recent years. 1.13 The National Agricultural and Livestock Research Project (NALRP) aims to remedy the Department's weak status while the proposed Cashew and Coconut Treecrops Project will specifically strengthen production oriented research in cashewnut at Naliendele's Agricultural Research Institute arnd further strengthen production oriented coconut research as carried out under the National Coconut Development Program at various sites in Zanzibar and Mainland Tanzania, including the Chambezi Coconut Research Station. H. Agricultural Marketing and Pricing 1.14 Prior to independence in 1961, Tanzania had a rural marketing system operated by a network of itinerant tradcrs and rural shopkeepers, who were supplied by, and delivered agricultural products to, wholesalers who were mostly located in the major towns. It was a traditional trader network, found worldwide in rural areas, whereby the traders deal in a large variety of inputs required by farmers, including credit, and purchase produce from them. Immediately after Independence, the internal marketing of agricultural products in Tanzania was re-organized as a pyramidal three- tier system with primary cooperative societies at the bottom, secondary cooperative societies, called unions, in the middle, and the National Agricultural Products Board (NAPB) at the top, established by the  Agricultural Products (control of marketing) Act of 1962. NAPB appointed the Cooperative Unions and its affiliated primary cooperative societies as its sole agents. Thus, from about 1964/65, when the NAPB and its cooperative agencies were established, Tanzania's agricultural marketing became essentially a compulsory single-channel system with primary village societies as the only buyers and the NAPB as sole exporter or distributor for local consumption. This system led to inefficiencies and to gradual changes of marketing procedures, reducing sophistication and, most significantly, reducing and often eliminating the incentive for farmers to increase the quality of their products. 1.15 A new system we. introduced in 1973/74, based on what are now called village societies. The task of collection and transportation of agricultural produce was put in the hands of newly established crop authorities. in essence, though, not much changed the marketing system remained a compulsory single iIiannel system, with a village society as only buyer and a crop authority as monopoly exporter and distributor for the local market. The new system exhibited many of the weaknesses of the old system, often in more pronounced form. The village societies were cooperatives imposed from the top, instead of organically grown from the grassroots up. Farmers' allegiance to these new societies was weak; so was the discipline and authority of the new crop purchasing entities. Officially set producer prices were determined as a residual after all costs of the marketing system had been deducted from an assumed sales price. The farmer was, thus, completely divorced from any marketing signals that would provide incentives for crop production. Producer prices were established with little or no attention to the impact of intercrop competition. The important, market determined price-mechanism for resource allocation was largely abandoned. 1.16 In 1985 the earlier three-tier marketing system, based on primary societies and cooperative unions, was re-established. Marketing boards replaced most of the crops authorities. In 1986 efforts were made to diversify the maize marketing system away from a compulsory single channel system to a system where other channels, based on private initiative, would be allowed in parallel with the cooperatives channel. Gradually maize was deconfined. At the same time, trade in the other direction, i.e. of agricultural inputs and, most importantly, of consumer articles to rural areas, was substantially freed as well. Presently, the process of liberalization of trade of all agricultural products is continuing. A proposed Agricultural Sector Adjustment Program will support this process of trade liberalization, including the local and international trade of export crops like cashewnuts. I. IDA's Involvement, Sectoral Strategy and the Proposed Project 1.17 Between Independence and the late 1970s, agricultural projects including integrated rural development programs, accounted for about 30% of the Bank Group's lending program. Assistance was provided for 18 agricultural and three rural development projects totalling of US$240 million in IDA credits and US$37 million in IBRD loans. By the end of 1980, it was apparent that: (a) production was falling well short of projections that had been based on the early growth period; and (b) project  - 7 - implementation problems, rather than being project-specific, were common to the whole agricultural sector. Accordingly, the Bank Group stopped most agricultural project lending, pending a careful reassessment of the sector. After 1980, lending in the agricultural sector was substantially curtailed; what remained was either for specific balance of payments support (Export Rehabilitation Program, US$50 million under Credit 1133-TA), or technical assistance (Third and Fourth Technical Assistance Projects US$12 million under Credit 1206-TA, and US10 million under Credit 1524-TA). 1.18 The emphasis in previous IDA agricultural assistance efforts in Tanzania was on crop-specific projects built around agricultural parastatals and regional development authorities. IDA's support for agricultural credit was channelled through the Cooperative and Rural Development Bank (CRDB). In line with Government policy, few of these projects provided financial assistance to private entrepreneurs in the agricultural sector. Many of these projects are now recognized by the Government and IDA as having been unsuccessful. The principal reasons for this include lack of recurrent inputs due to the shortage of foreign exchange, unfavorable macroeconomic and sectoral policies, and mismanagement and politicization of parastatals. In additior., insufficient funds, lack of trained technical staff, and managerial deficiencies have been ubiquitous, affecting all agricultural projects. Disbursements lagged and significant sums were cancelled upon the closing of projects. IDA s agricultural portfolio was considerably reduced as a result of the four- year lending hiatus and only seven agricultural projects are currently under implementation, two of which have been totally redesigned including the Cashew Pilot Project. Due to the closing of several problem projects, the redesigning and streamlining of others and recent changes in the overall policy environment, the quality of IDA's project portfolio has improved considerably. 1.19 Presently, IDA's operational strategy in agriculture is to support GOT's effort to significantly reform, rehabilitate, modernize and expand the country's research, extension, input supply, marketing and credit systems. A core program of institutional support for the Ministry of Agriculture and CRDB is in place. 1.20 The core program includes support for the basic agricultural services such as research, extension, market analysis, and planning. Th.e first two areas are supported under the National Agricultural and Livestock Research Project (NALRP) and the National Agricultural and Livestock Extension Rehabilitation Project (NALERP); the last two areas are being supported through the ongoing Fourth Technical Assistance Project. With the Government's recent changes in policy, the discretionarv aspect of the Bank's strategy has also become active. A Multisector Rehabilitation Credit (Cr.1741-TA) supporting, among other things, agricultural marketing reforms, was approved in November 1986. In addition, an Agricultural Export Rehabilitation Credit was approved by IDA in 1988, and an Agricultural Sector Adjustment Program is under preparation. 1.21 In the Coconut and Cashew subsectors, the Government's emphasis has been on improving its technical services to farmers in suppurt of a program aimed at restoring cashew production to its 1970s level and increasing coconut oil production. Pilot research projects for bcch crops  - 8 - were started in the early 1980s with support from credits 801-TA and 1070- TA, and with cofinancing from Italy and the Federal Republic of Germany (FRG), respectively. The results of these projects, have been encouraging. They have succeeded in developing chemical control methods for powdery mildew and more disease tolerant materials for cashew and in the initial breeding of higher yielding coconut hybrids. To build on these initial successes, an expanded follow-up program of research, breeding, seedling propagation and production development will be carried under thE proposed Cashew and Coconut Treecrops Project. This project is an expansion of the above pilot projects and complementary in strengthening basic research and extension services (para 1.20). J. The Role of the Donor Community 1.22 Many donors are supporting the agricultural sector in Tanzania. The European Development Fund has been assisting coffee production and processing since the late 1970s, while the UK and Netherlands Governments are helping to rehabilitate the cotton industry. Few cashewnut processing factories were rehabilitated with Italian assistance. The UK Government assists with recurrent 'non-confined' imports, and through the Commonwealth Development Corporation, may help to rehabilitate selected coffee estates. The World Food Program has for several years helped the recovery of the sisal industry through its Food for Work Program. The European Investment Bank (EIB) is supporting cotton ginnery rehabilitation and the EEC and the Commonwealth Development Corporation, the cotton seed industry. Several donors are providing fertilizer supplies needed in the country. Danida and Finnida assist in the support of Cooperative Unions and have assisted in the forestry sub-sector. In relation to this specific Treecrops Project, the Federal Republic of Germany has supported the National Coconut Development Program (NCDP) and will continue to do so in supporting coconut research under the Project. The British Overseas Development Administration will specifically support the Project's cashewnut research at Naliendele's Agricultural Research Institute. II. THE CASHEW'NUT SUB SECTOR A. Background 2.01 Cashewnut is the main cash crop of southern Tanzania and is also grown to a lesser extent in the Coast (Pwani and Mafia districts) and Tanga Regions where it often is found in mixed stands with coconuts and food crops (see map IBRD #20926). Cashewnut is predominantly grown by smallholders, estimated at 280,000 farmer families, on some 400,000 ha with 32 million trees in sole or mixed crop production systems. Large scale private plantations total to about 2,000 ha in the Lindi and Mtwara Regions. Reliable information on age of trees is not available, but little effective replanting has taken place since 1974. Although the production of cashewnuts has declined dramatically for various reasons by about 85Z since 1973/74, from 145,000 tons to about '..,000 tons in 1987/88, it still remains the most important export crop of Tanzania after coffee and cotton and contributes 16 to 14% of all foreign exchange earnings. The average cashew farmer has 1-2 ha of cashew trees, sometimes intercropped with food  - 9 - crops, mainly cassava, grain staples and legumes. Yields vary considerably from tree to tree, area to area, end year to year, depending on the crop husbandry environment and the occurrence of powdery mildew (Oidium anacardii). Individual tree yields vary from zero to over 40 kg per tree per year. In a sample area where trees were treated with sulphur dust against powdery mildew, the average yield was 11.3 kg/tree as compared with around 1.1 kg/tree for the untreated trees. However, the presently recommended sulphur dust doses do not financially justify wide scale chemical control of powdery mildew by the farmer until producer prices are increased to an adequate level (para 2.16). Moreover, not enough is known about the long term environmental impact of sulphur use. Although it was assumed that the Naliendele Cashewnut Research Station could provide tolerant clonal seeds, .n reality farmers ended up with seedlings genetically segregating and with very variable tolerances and production potentials. Presently MALD through its Cashewnut Production Improvement Pilot Project (CPIPP) is identifying trees with high levels of tolerance which, after careful screening with assistance from ODA, will be vegetatively propagated in nurseries and in farmers' fields with the assistance of trained extension staff. It is expected that these tolerant planting materials will be sufficiently available within 3 to 4 years, and that subsequently sulphur dusting can be phased out. Methods of vegetative propagation have already been tried out successfully, both by CPIPP and Naliendele. 2.02 In the 1960s and 1970s, most nuts were exported raw to India for further processing since processing capacity was limited to one factory only. Since 1974, eleven additional processing factories were built for the Cashewnut Authority of Tanzania (CATA) and most of the cashewnuts were exported as decorticated nuts; cashewnut shell liquid (CNSL) was exported as well. Only a small part (estimated at 10-15Z) of the produce was consumed locally. The Tanzania Cashewnut Marketing Board (TCMB), formerly CATA, is now the official buyer of nuts from the Cooperative Unions and sole exporter. It also shares with the unions the management of the factories. Prospects for cashew on the world market remain good. Selling of Tanzanian Cashew kernel would present no major market problems. Contrary to the past, when Tanzania was a main supplier, its current production is only a modest 7 to 8 percent of the total world market supply. B. Cashewnut Production 2.03 The earliest recorded export figures for cashew nuts in Tanzania date from 1938. Systematic production data are available as of 1945. As the data in Table 2.01 show annual growth rates in production between 1945 and the early 70's were substantial; however from 1973/74 production declined sharply from 145,000 tons to 16,400 tons in 1986/87.  - 10 - Table 2.01: Tanzania - Production of Cashewnuts from 1945 to 1988 Year Amounts Index (HT) (peak of 73/74 is 1002) 1945 7,000 5 1950 11,000 8 1955 23,000 16 1960 42,000 29 1965/66 73,327 51 1966/67 84,050 58 1967/68 73,824 51 1968/69 118,008 81 1969/70 110,344 76 1970/71 112,302 77 1971/72 126,012 87 1972/73 125,523 87 1973/74 145,080 100 1974/75 118,947 82 1975/76 83,734 58 1976/77 97,652 67 1977/78 68,383 47 1978/79 57,069 39 1979/30 41,519 29 1980/81 56,558 39 1981/82 44,309 31 1982/83 32,556 22 1983/84 47,600 33 1984/85 32,500 22 1985/86 20,500 14 1986/87 16,400 11 1987/88 24,000 17 Sources: MALD- Marketing Development Bureau (MDB) Annual Review of Cashewnuts Dar-es-Salaam - 1965 through 1986  Table 2.32: Tanzania - Comparison of Producer Pric-s and Export Pric-, for Raw Cashewnuts Since 1979 (TSH. per kg.) National Avrg E rt Mrting Producer Price MrkotinW Nrgin Consumer Pr oducr 1) P!ric- 2) _jM r as a Percent of as*a c * rcno Pri--o- P-For;co Export Price Produc-r Pric- _n___x 3) Year ('79=100) current constant current constant current constant 1970/71 133 0.90 9.9s 1.26 1.26 o.3a 0.35 72X 39X 1971/72 1in 0.90 9.90 1.33 1.33 0.43 0.43 68! 48X 1972/73 114 9.90 9.79 1.29 1.13 3.39 9.34 70X 481 1973/74 129 0.90 8.73 1.72 1.34 0.82 0.64 521 91X 1974/75 171 1.03 B.6o 1.82 1.03 0.79 0.46 67X 77x 1975/78 171 1.03 3.6B 1.92 1.12 0.89 *.62 54X 86X 1976/77 200 1.03 3.63 2.61 1.26 1.46 *.73 42X 1371 1977/78 214 1.11 0.62 3.64 1.70 2.63 1.18 301 2281 197e/79 267 1.63 9.63 3.71 1.44 2.38 0.81 44X 128X 1979/80 329 1.73 0.53 6.33 1.84 4.33 1.32 291 2653 19890/81 414 2.76 9.66 11.47 2.77 8.72 2.19 241 817X 1981/82 714 4.63 0.65 7.43 1.04 2.80 8.39 62X 693 1982/83 986 4.63 0.47 7.33 0.74 2.70 0.27 63X 5se 1983/84 1186 6.48 0.6S 13.80 1.16 7.32 0.62 47% 1131 1984/86 1300 9.66 0.74 13.65 1.96 3.99 9.31 71% 411 1985/86 1429 11.58 0.81 31.47 2.20 19.89 1.39 37x 1721 1986/87 1857 17.93 0.97 72.89 3.93 64.96 2.96 265 397X 1987/88 2414 29.50 1.22 199.99 4.14 79.60 2.92 39X 2391 1) Weighted average producer price assuming 76X standard grade and 265 under grade from 1970/71 through 1983/84. After 1983/84, assumption is 96s standard grade and 5X under grade. 2) Export price rofers to colendar year, e.g. 1982/83 producer price in compared with the 1983 export price. 3) Using the National Consumer Price Index as the deflator, with 19709=-10, and inflation from 86/87 to 87/88 estimted at 30x.  - 12 - 2.04 Tanzania's main cashew production region is in the south, although cashew is produced all along the coast (see map IBRD No. 20926). As such, it is the central part of East African's coastal cashew production, which extends from Malindi in Kenya to Maputo in Mozambique. In Tanzania's most important region, in the south, cashew is grown to almost 500 km. inland, on the Makonde plateau, and up to an altitude of about 800 meters above sea level. Since the coastal plain proper is rather too humid for cashew, the best growing conditions, and hence the best quality of nuts, are found further inland. This phenomenon used to be recognized by the traders, when, up to the middle 60's cashewnuts from Masasi and Nachingwea districts in Mtwara region, and from Tunduru and Songea in Ruvuma region received the highest prices. When production reached a peak, in the early 70's, the production area was only half of the estimated 400,000 ha. presently under cashew of which 702 was under single cropping, and the remainder under intercropping, mainly with food crops and some oil crops. 2.05 Statistics on tree densities do not exist. Spot observations indicate that there are many single, isolated trees as well as stands with densities that exceed the optimum 50 to 60 trees per ha. Many trees have apparently sprung up spontaneously and are in heavy competition with the natural vegetation. As a rule, weeding is carried out only when harvesting begins. At the peak of production. in the middle 70's, yields per tree typically ranged from 1 to 10 kg of nuts, with top performers yielding as much as 40 kg, and average nationwide yields of about 4.5 kg per tree. 2.06 Cashewnut production in Tanzania, declined precipitous in the mid 70's (Table 2.01), due to an unfortunate combination of concurrent circumstances. A fungus disease, Oidium mildew and an insect pest, Helopeltis sp. began to be noticeable in the mid 70's, reaching catastrophic proportions in the late 70's to early 80's. Just prior to the first reported instances of Cidium, in 1973 and particularly in 1974, Tanzania undertook a country-wide villagization program (Ujamaa) of farmers who formerly lived scattered in the countryside. Farmer families were relocated in newly constructed villages, where social services could be provided efficiently. This relocation, had the effect of separating large numbers of erstwhile cashew farmers from their trees, making nut collection difficult to impossible. At the same time, producer prices for cashew in real terms were decreased year after year, until they reached, in 1982/83, a level that was only slightly more than half of what the price had been in 1970 (Table 2.02). Changes in the cashew marketing system that accompanied the villagization program led to substantial delays in both nut collection and payments. The collectivization of agriculture that accompanied the villagization program led to serious disincentives for farmers to go to former cashew producing areas and coJ'ect nuts on behalf of the village cooperative. This, a-id generalized forced abandomnent of a large number of cashew trees, led to a rapid increase of weeds, uncontrolled growth of spontaneously seeded cashew trees and other vegetation and, generally, to reverting to bush of much of what previously had been cashew producing areas. 2.07 By the mid 80's, production had declined to about 20% of its level of ten years before. At that point, the government started the Cashewnut Production Improvement Pilot Project (CPIPP) to identify the main causes of cashewnut production decline and to design a strategy for its  - 13 - rehabilitation. As a result, a production enhancing strategy to control pow-dery mildew is being developed along two parallel lines. One addresses the agronomic aspects of produc.ion, focusing on pest and disease treatment in the short and medium term and the other on replanting with disease tolerant, and hopefully resistant, varieties in the long run. The strategy also calls for an increase in the producer price as a proportion of the export parity price (para 2.16). C. The Cashew Production Improvement Pilot Project (i) Introduction 2.08 The Cashew Production Improvement Pilot Project (CPIPP) was funded with US$3.0 million dollers by IDA under the redesigned credit agreement of Credit 801-TA. The pilot -las initiated in August 1985 and will be completed by June 30, 1989. The primary objective of CPIPP was to formulate and test several hypotheses in the cause of the decline in cashew nut production, and provide a model for rehabilitation of the cashew subsector. To meet this objective, support was provided to MALD to carry out adaptive cashaw research; cashew development and extension; training and to strengthen monitoring and evaluation. CPIPP was initiated in 6 districts i.l southern Tanzania to allow for a new intensive cashew based farming system approach to be developed and tested and for experience to be gained before expanding and moving into new areas. The target of reaching 144 villages through the existing extension channels in the Region of Mtwara, Lindi and Ruvuma was expanded to 200, gro,.ped into 50 clusters of four villages per cluster. (ii) Research 2.09 During the pilot period however, it became clear that the cashew varieties recommended by the Naliendele Research Station were equally affected by cashew powdery mildew disease (Oidium anacardi) and that an intensive survey for more tolerant trees in farmers fields had to be undertaken, and reliable planting materials established, before a successful cashew nut production package can be recommended to farmers. The initial results were successful but further research and development is necessary. The objective of the proposed follow-up project phase will be to select and propagate tolerant high yielding clonal material and to prepare improved cashewnut production packages for the extension service to pass on to cashewnut farmers. This requires further strengthening of the cashewnut research at Naliendele, including breeding and selection, establishment of poly-clonal seed garder. in the main cashewnut production areas and training of subject matter specialists in improved cashew based production systems. (iii) Disease Tolerance 2.10 Early surveys of randomly selected villages in the field project areas identified Oidium anacardii (powdery mildew) as the most important factor to the production decline common to all trees. An Italian cashew research project operating at Naliendele from 1979-84 had also identified  - 14 - mildew as a major cashew disease and had formulated a control strategy based on the use of chemical disease control measures with sulphur dust. After a review of the materials released as seed from previously selected disease tolerant mother trees at Naliendele, it was concluded that the progeny of these trees was not true-to-type and had no guarantee of disease resistance or yield performance. CPIPP therefore had no resistant material for use in any proposed replanting program. A search for local trees showing good performance and acceptable levels of tolerance to mildew was first carried out in the 1986/87 season. A second phase started in 1987j88 and a number of promising trees were identified through farmer interviews in 160 villages with subsequent evaluation of yield size, Jisease severity and other criteria. In total 120 trees were identified for further tolerance screening, which will be finalized with ODA assistance by mid- 1989, before the start of the proposed follow-up project. It is highly probable that durable resistance to mildew will be found among locai populatiorns of cashew, but it is more likely to be found among younger trees. Disease scoring of inflorescence for mildew incidence is notoriously difficult and young leaves under the canopy are more likely to indicate relative resistance to mildew. Surveys for disease tolerant high yielding trees was never done in the past and should be carried out on at least a regular basis, during the next 4-6 years. (iv) Chemical Control 2.11 Sulphur dust applied by motorized blowers at 0.5kg/tree for each of seven applications at 14 day intervals from May was tested at 26 locations. Mean yield increase was from 1.4kg/trees for uncreated trees to 11.6kg/tree on treated trees while well maintained trees yielded 22kg/tree with sulphur treatment. These results confirmed that Odium control with sulphur dusting gives substantial yield increases. Inputs of sulphur and motorized blowers are provided under the pilot project .3 part of the package for integrated crop development. The results of this program have generated pressure from cashew farmers and political leaders for more intensive sulphur spraying as they now realize their production problems are soluble. However, problems of logistics, finance and environmental hazard indicate that application of sulphur can only be regarded as a temporary measure. Results from recent experiments at Naliendele show that rates of application could probably be halved to 1.75kg/tree/year or even lower in contiguously treated fields. Even so, sulphur dusting within the project should be restricted to those fields where stands of cashew are being thinned and intercropped to allow eventual replanting with resistant material. (v) Vegetative Propagation 2.12 Previously air-layering had been used in Tanzania for vegetative propagation of cashew which is a labor intensive and inefficie,.t method. Under the pilot project, in coordination with research, methods to top graft and side graft with buds were successfully tested for the first time in Tanzania. This break through will make it possible to rapidly multiply true to type tolerant trees, a practice which is _ritical for an improved tree planting program and the speedy introduction of high yielding clones at farmers' fields.  - 15 - (vi) Integrated Crop Development and Research Extension Linkages 2.13 To address the complex set of production problems, an integrated package approach was designed to improve production on individual farmers' fields and to demonstrate how to reclaim cashew groves. The village cluster demonstration farms set up by the pilot project, include component recommendations for clearing bush and thinning cashew to a suitable density, inter planting tolerant seedlings, planting varieties of high yielding annual crops to meet food production objectives and ease maintenance tasks, the use of fertilizer on annual crops, and applying sulphur dust on selected high yielding trees. The improvement of cashew production is inextricably intertwined and dependent upon the flow of new technologies from Naliendele's research program that help mitigate technical limitations; the extension servie'e which disseminates information about innovations and helps identify farmer problems; the supply of useful inputs to rural-based small-scale producers in a timely fashion; and the market arrangements for purchasing and transporting the nuts. In fact, it is through these institutions that the Government attempts to combine its interests with those of the farmers in order to achieve progress and development. Through the pilot project, subject matter specialists train village extension workers to assist the farmers in reclaiming their groves and go into more intensive production systems. D. Marketing and Pricing 2.14 Since Independence in 1961, cashewnut marketing in Tanzania has been organized in the form of a compulsory single channel marketing system with a cooperative structure at the base and a parastatal buying, processing and exporting monopoly at the top. A combination of steadily increasing costs and rents has made the marketing system progressively more costly; during the last years it has absorbed more than 602 of cashew export revenue. 2.15 Since 1985, when the cooperative system was reinstituted, the farmer's sole outlets have been the primary societies. These in turn, through the intermediary of second-tier cooperative unions, sell to the Tanzania Cashew Marketing Board (TCMB). The latter is sole exporter and processor. Producer prices are calculated as a residual, after all budgeted costs of the combined cooperatives and TCMB costs have been subtracted from an assumed export price. This system, which does not take into account either inflation or the attractiveness of other crops, was introduced in the early years of the villagization drive, i.e. around 1974/75. The producer price as a percent of export parity price has declined from a high of 70% in the early seventies to a level of about 302 at present, which is unacceptably low considering the need to revi.talize the cashew nut production (Table 2.02). Increased producer prices are an essential ingredient of any package of developments designed to resuscitate the ca hewnut industry. Such increases would have two major impacts; an immediate increased farmer ..ncentive to harvest all available nuts and two, a significant improvement in the benefit cost ratio of the chemical disease control program in the early stage of the Project. While prices would be important towards a partial short term resuscitation of the cashewnut industry, the long term solution however, is to increase tree yields from  - 16 - its present low level through the selection of disease tolerant materials due to the overriding effects of powdery mildew (para 2.10). 2.16 Marketing costs, both actual costs and rents obtained from the system, are extraordinarily high. The margin obtained by the cooperative part of the system is approximately 201 of the export price, less than half of which are actual costs. TCMB's calculated margins are approximately 40Z of the export price, but in reality are much higher. This is due to an underestimation of the future export price and to inflation, which generates windfall profits for TCMB with respect to prices that are determined once a year and remain constant in nominal terms for 12 months. In the event, net TCMB profits before taxes have been respectively 282 in 1985/86, 532 in 86/87 and 462 of the world market price in the first six months of the past season, i.e. through March of 1988. Therefore. there is more than sufficient room to pay the farmer a substantially higher price for his cashewnuts. This would allow him to pay for production enhancing procedures, such as disease and pest control and fertilization. It is also clear that more than sufficient room exists to make cashew trade attractive for the private sector. A strategy for improving cashewnut pricing and marketing system is being developed under the proposed Agricultural Sector Adjustment Program. The MALD has indicated already the need to adjust the farmgate prices. At negotiation assurances were obtained from GOT that cashew producer prices would be increased to at least 502 of the FOB price and announced by November 30, 1989 and that a plan of action for the improvement of the cashew marketing system will be provided by that date, acceptable to IDA (para 8.02j). E. Credit to Cashew Growers 2.17 Credit for inputs, normally in kind, is customarily provided through the Cooperative and Rural Development Bank (CRDB), Cooperative Unions (CU) and Primary Societies (PS) channel. Through this system, individual farmers' credit demand is aggregated at the PS and then at the CUs level. After approval, funds are provided by CRDB for CUs to procure and distribute inputs to producers. In line with the limited area controlled by individual producers and the labor intensive nature of the production process, credit requirements by cashew growers for purchasing seasonal inputs and investment items, both for production of annual crops and cashew, are relatively small. However, there are basic efficiency issues affecting the operation of the credit-cum-input distribution by the CUs, as the virtual monopoly of these regarding the sale of inputs on credit to producers has a negative impact in the development of inputs trade activities by the private sector. Alternative operational procedures to solve these issues in the Mtwara and Lindi regions will be tested under a proposed Pilot Credit Scheme, of the Project (paras 2.19 and 4.23). Critical inputs and equipment for cashew production such as sulphur dust and blowers are not available in the local market and access to foreign exchange to procure these in the foreign market has been a pervasive issue during implementation of the CPIPP. This constraint has been eased of under CPIPP by assisting CRDB to prccu;e the foreign goods and direct payment of the suppliers; alternative measures will be implemented under this Project (para 4.22).  - 17 - 2.18 Increasing the effectiveness of agricultural credit to a large proportion of Tanzania's smallholders is important for increasing the uptake of technology, fostering agricultural growth and rural incomes. The Cooperative Rural Development Bank (CRDB) efforts to serve farmers were disappointing in the past, but have improved recently, increasing its financial viability. High reliance on a relatively inefficient cooperative system for the administration and management of credit to smallholders was the main problem affecting the credit system. Experience to date indicates that except for a few, most of the Cooperative Unions (CUs) performed poorly, and that CRDB was unable to influence their financial discipline and management and to compensate for their poor financial structure. Also, CRDB had little or no interaction with end-users of credit at the Primary Society (PSs) level; through this system CRDB had de-facto delegated management of production credit to the CUs. Poor recovery performance was further aggravated by the general inefficiency of the output marketing system (cooperatives and parastatals) which resulted in late payments to farmers and poor loan repayments to CRDB, causing overall credit shortage and rationing. 2.19 Starting from early 1988, CRDB has taken significant steps to overcome these constraints through the implementation of programs to restructure its operations and financial basis. Assistance to this endeavour is being provided through the Agricultural Export Rehabilitation Project, Credit 1891-TA. Measures to solve the agricultural marketing problems and related parastatals efficiency issues are the main thrust of the Agricultural Sector Adjustment Program (under prenaration). Notvithstanding, additional efforts are required to improve performance of the credit delivery system in the cashesv production areas. In p'-t g cular, revised credit procedures and institutional arrangements to bring CRDB closer to farmers and to increase its accountability and that of the cooperative system are urgently required. Under the proposed Project a Pilot Credit Scheme would test and verify the above assumptions in the cashew production areas of Mtwara and Lindi Regions (para 4.24) F. Lessons Learned 2.20 Research and development of the cashewnut production improvement pilot project have shown that there is substantial scope for productivity increases of selected trees and replacement of non productive treestands by powdery mildew tolerant higher yielding clones. In the short term (3-4 years) sulphur dusting of selected trees will increase cashewnut yields, but this chemical control program should be interlinked with plantings of young disease tolerant planting materials in alternate rows. Once the young trees have grown up after (3-4 years), the remaining older trees will be replaced by tolerant young seedlings. Initially, these tolerant plantings will have to be vegetatively propagated, but in the follow-up phase after 4 to 5 years of project implementation, high producing poly- clonal seed gardens of tolerant clones should have been established and produce quality seeds for direct planting. Intercropping with food and oil crops in the early years will also be recommended to enable farmers to increase their income and spread their risks. In the follow-up phase, tolerant materials will be selected, propagated and disseminated to .armers, while cashewnut subject matter specialists will further train  - 18 - village extension staff in the integrated cashew based production systems. In the cashew production areas, more credit will be made available by supporting CRDB to provide better services in these areas, through a line of credit and the testing of a pilot credit scheme. III. THE COCONUT SUB SECTOR A. Background and Production 3.01 Coconut is Doth a subsistence and cash crop of the coastal areas of Tanzania and the islands of Mafia and Zanzibar (Unguja and Pemba) (see map IBRD 121494). Coconuts are presently grown by some 600,000 farmers on an estimated 240,000 ha with snme 22.4 million trees, producing some 530 million nuts per year. It is predominantly a smallholder crop and only some 52 of the total area is under large plantations. Smallholders invariably inter-crop coconuts with a range of annual and perennial crops. It is estimated that there is a potential area of about 500,000 ha or double its present area for coconut. Coconut yields have declined and are generally low and vary widely depending upon soils, climate, standards of maintenance, age of trees and incidence of pest and diseases. Insufficient replanting in the past 15 years has further cont-ibuted to the production decline. Latest estimates suggest the average annual yield to be around 26 nuts/palm while well managed hybrid trees on suitable soil can produce around 65 nuts per year. In genera', the agricultural services for the promotion of coconut production have been poor in the past. 3.02 Coconuts provide about 401 of the vegetable oils and fats consumed in Tanzania; other oil crops meet anocther 30% of the requirements while the remainder is imported. With the rapidJy increasing population, this deficit would continue to exist unless the coconut supply is doubled by the year 2010. This implies the importance of the crop in order to reduce vegetable oil imports and save foreign exchange. Main products are the fresh coconut which serves a variety of domestic uses (drir.k nut, home produced vegetable oil and fat), and copra (fire-cureu or sub-dried coconut meat) which is used for the industrial extraction of vegetable oil. The oil is used for cooking, margarine, soap, etc. The residual copra cake is an excellent animal feed. In addition, the coconut tree provides by- products which are used as roofing and construction material, mats and fuel. B. The National Coconut Development Program and the Coconut Pilot Project 3.03 To offset further decline of the coconut industry, the Ministry of Agriculture and Livestock Development with the assistance of the Federal Republic of Germany, established in 1979, the National Coconut Development Program (NCDP). Technical assistance for the management of the program was provided by the German Agency for Technical Cooperation (GTZ). The program was intended co develop pest and disease control measures, examine the potential for introducing improved varieties and production of quality seednuts and disease and drought tolerant planting materials, train MALD's extension staff in crop husbandry and support coconut field advisory activities.  - 19 - 3.04 In 1981, activities were expanded with the assistance of an IDA Credit (1070-TA) of SDR5.2 million for the "Coconut Pilot Project", to include more infrastructure and research facilities in the progrram. The pilot project was designed in close collaboration with NCDP to become an integral part of the ongoing program. Breeding research and lay out of seed gardens were done in cooperation with IRHO (Institut de Recherches pour les Huiles et Oleagineux) in Ivory Coast. Finance was provided for agronomy and crop rehabilitation trials; two seed farms, one in Zanzibar and one in Mafia, for the production of PB 121 hybrid nuts, (West African Tall x Malaysian Yellow Dwarf); technical assistance; training and additional support to extension activities. The pilot project was quite successful and terminated on Msach 31, 1989, but the present phase of the national program would cou,tinue with the assistance of FRG until June 30, 1990, thus overlapping with the proposed project. (i) Research 3.05 Major results have been achieved so far. In field experiments the good potential for successfully growing early producing and high yielding hybrids in the wetter parts and disease free areas of Tanzania and the advantages of weeding and intercropping was established, while rehabilitation trials proved the great economic advantages of improved crop husbandry practices. Disease research has greatly enhanced the understanding of the Lethal Disease (LD) enabling the assessment of the risk emanating from LD for planting activities; field trials have provided tentative information on different levels of tolerance in varieties. However, a cure for LD could not yet be identified. From research work on pests, first answers are available on the control of the Rhinoceros beetle and biological control work on the coreid bug (Pseudotheraptus wayi) is in progress. Results from pest control and farming systems research, are immediately channelled to the extension service. In breeding, the East African Tall (EAT) has been screened, and promising strains for increased production and drought tolerance were selected and planted in a first breeders' collection. In the follow-up project, even more emphasize wi 1 have to be placed on drought tolerance, in particular in hybrids. (ii) Seed Farms 3.06 Two farms were succesfully established in Zanzibar and Mafia, with a total of 180 ha, for the production of hybrid seednuts and have reached about 302 of the final capacity of about 1 million seed nuts per annum, to be reached by 1995. On the seed farms, farm buildings, laboratories and staff houses have been constructed under the pilot project. Operating expenses of the seed farms are being reduced by introducing animal traction for farm maintenance and transport. (iii) Research Extension Linkages 3.07 NCDP does not have its own extension organization but makes use of the general extension structure of MALD. The Coconut Production Development Section (CPDS) of NCDP works in an intergrated wav in a subject matter specialist function with the general extension services and covers 5 mainland regions (including the island of Mafia) with 25 districts and Zanzibar with its 9 districts. Efficiency and effectiveness of the general  - 20 - extension services is rather low but will be greatly improved during the implementation of the National Agricultural and Livestock Extension Rehabilitation Project. NCDP uses the rural broadcast radio system to address a wider audience and is in the air once a month for 15 minutes. CPDS cooperates with educational institutions and maintains direct contact with decision makers, technicians and administrators on regional, district, ward and village level. The spec4alist training of MALD extension officers remains a priority in order to achieve a reasonable degree of area coverage for the extension of production packages. Farmers field days in the research trial areas, on-farm Fl hybrid demonstrations and on the seed farms, have also proven to be successful. CPDS also assist farmers in selecting the best EAT seed nuts from heap selections and advices public village and private nurseries in the raising and selection of Fl hybrid seedlings for sale to farmers and estate planting. C. Marketing and Pricing 3.08 On the main land of Tanzania, the markets for coconuts and its products are completely free. In spite of this free market, there is little or no production of either copra or coir on the mainland as a result of the high prices fetched for fresh nuts. The latter is due to the severely depressed situation of the edible oil industry in Tanzania. Many years of price control over both raw material supply and finished products have paralyzed what once was a thriving oil industry. Of the more than 3G oil mills in Tanzania, capable of crushing a wide variety of oil seeds, only 3 are currently in operation. Total yearly edible oil production in Tanzania is now well under 10,000 tons, equivalent to a per capita consumption well under 0.5 liter per annum, one of the lowest in the world. Under this critical situation, fresh coconuts have increasingly replaced edible oils in the local diet. Local freshnut prices are about 120Z above the import parity price of the nut equivalent of copra. This reflects the scarcity of fresh coconuts in the local market and the high consumer preference for both freshnut consumption and its use as home processed coconut oil. Locally processed coconut oil sells in the market at a premium price over the fresh nut equivalent and also at a considerable premium over imported substitute vegetable oils. Unless the situation in Tanzania's edible oil sector changes fundamentally, and coconut production levels are increased to those of the early 70s, it cannot be expected that coconut prices would come down sufficiently to make production of copra, and hence of coir, once again economically feasible. 3.09 The situation on the islands is different. Tanzania's largest coconut plantation, Mafia Coconuts Limited on Mafia island, does produce copra, oil and coir, because there is simply no other market for the large numbers of nuts produced. Trade in fresh nuts is free on Zanzibar, but the trade of nuts off the islands of Zanzibar is for all intents and purposes prohibited. Furthermore, the Zanzibarian government operates a buying monopoly for copra, the Zanzibar State Trading Corporation (ZSTC), with prices that, in constant terms, have steadily declined, to 302 of the 1970 price level. Only 202 of the oil pressing capacity is being used in Zanzibar. The combination of market limitation to the islands and the buying monopoly for copra have resulted in depressed prices for nuts on the islands as compared with the mainland. Fresh nut prices on Zanzibar are  - 21 - about one third of what they are on the mainland. It appears that the cost of this consumer protection policy far exceeds its benefits. Also, and contrary to the professed aim of the policy, Zanzibar's depressed copra prices have not resulted in a thriving oil industry. Through NCDP. the Government of Zanzibar has become aware of the problem and has recently increased producer nut prices from TSh4 to TSh8 for each fresh coconut, and for copra from TShlO to TSh25 per kg. This increase is not sufficient, but is considered to be a short-term measure for further agricultural production incentives. D. Lessons Learned 3.10 Research and development of the coconut pilot project have shown that there is substantial scope for both productivity increases of existing palms and an expansion of the area under coconuts. The crop is attractive to small scale farmers and commercial producers. In view of the shortage of vegetable oils its development is of great urgency. On the other hand, expansion is limited by the fact that certain areas along the coast have a high incidence of Lethal Disease (LD) killing 20Z to 50Z of the trees over the years, while other areas are more drought prone. None of the hybrids with West African Tall as pollinator have shown sufficient tolerance to LD or to drought. There is most probably more LD and drought tolerance available in the indigenous environmentally adapted East African Tall palm. Therefore, in the proposed Project, a greater emphasis will be placed on the selection of outstanding East Africa, Tall palms in the diseased and dryer coconut areas to identify the best producers for seed nuts and pollen for further hybrid breeding. Also additional dwarf coconut varieties will have to be imported and tested in the EAT hybridization program. In the meantime, hybrid seed nut production on the Mafia and Zanzibar seed farms should continue for the less droughz affected, non diseased coconut areas. Village extension staft should be assisted in the selecticn of the best seedling producing EAT's for the dryer areas and further trained in coconut based production systems which include annual food crops as well. By irnterplanting other annual and perennial crops in coconut groves, the incidence of the worst coconut pest, the Pseudotheraptus wayi coreid bug, is effectively reduced through biological control of the bug by the majimoto ants (Oecophila longinoda). However, these leaf-weaver ants have their own smaller enemies which in turn need to be controlled through various means. Therefore, biological insect control work of the coreid bug is of great importance and should continue since hybrid trees in closer stands seem to be more prone to coreid bug attacks than taller wider planted coconut trees with interc..ops. IV. THE PROJECT A. Project Rationale and Objectives 4.01 Tanzania is a country with a large agricultural potential including cashew and coconut treecrops. However, it is essential to adopt and generate new technologies to realize this potential. While Tanzania can rely to some extent on the materials and findings of the various international research centers and other more technologically advanced  - 22 - countries, adoption to Tanzanian conditions will require improved research, development and dissemination capability. GOT recognizes that both the research and extension organization need to be strengthened in order to generate and disseminate new technologies effectively. Under the National Agricultural and Livestock Research Project and the National Agricultural and Livestock Extension Rehabilitation Project. both services will be strengthened. For the cashew and coconut industries, however, there was not sufficient disease and drought- tolerant materials available, nor were there any integrated production packages. Under the Cashewnut Production Improvement Pilot Project (CPIPP) and Coconut Pilot Project, with bilateral assistance from Italy and FRG respectively, new production technologies and new coconut varieties were developed, but they still need to be further tested because of the seriousness of the cashew powdery mildew and coconut lethal disease and the fact that treecrops need a long term research involvement and cannot be bred, tested and multiplied overnight. The Cashew Pilot Project's objective was to find out the main causes of the production decline from 1974 and what methods, technologies should be developed to reverse the situation (para 2.08) The findings and experience gained will form the basis of the proposed project. Cashew research will be supported by ODA. Likewise, the Coconut project has proven that higher yielding hybrids are acceptable to farmers particularly in non-drought sensitive areas (para 3.04). For the disease and drought prone areas, however, coconut breeding research has to continue under the proposed project with FRG assistance to obtain better tolerance to adverse growing conditions with the use of selected EAT's as father palms in the breeding program and imports of additional dwarf types not yet available in the breeding collection. 4.02 The aims of the propoced Project, which would be implemented along the coasts, islands and in the South of Tanzania (see IBRD maps Nos. 20926 and 21494) would be to increase cashewnut exports and reduce vegetable oil imports by increasing cashew and coconut production. Increased production would be achieved through: (a) rehabilitation of old plantings; (b) planting of disease tolerant clones (cashew) and improved hybrids and EAT varieties (coconut); (c) introduction of improved crop husbpn,dzy practices and basic inputs, including the use of chemical control of powdery mildew in the first 3 to 4 years on selected cashewnut trees, and the inter cropping of food, oil and leguminous crops; (d) expansion of coconut plantings in the Mtwara coastal area; and (e) the provision of credit for cashew and other farm inputs. The Project would continue to support specific cashewnut and coconut research and agronomic adaptive trials fcr pest and disease control, development of new tolerant clones (cashew) and hybrids (coconuts) and assist in upgrading of cashew and coconut specific research and extension services. Financial and institutional support to strengthen CRDB and private traders in the credit delivery, cashew input and marketing sectors would also be provided. The project would support policy reforms in cashew, copra and coconut oil marketing and pricing systems and facilitate monitoring and evaluation of project implementation and its impact. It would provide assistance for a mid-term review to decide on the need for establishing a Treecrops Institute during or at the end of project implementation and for the preparation of two separate national rehabilitation projects for cashew and coconut, including the cashew and vegetable oil processing industries.  - 23 - B. Project Description 4.03 The 6 year Cashew and Coconut Tree Crops Project, which will be implemented by two separate cashew and coconut management units under the overall responsibility of MALD, will provi.e financing and technical assistance in support of: (i) cashew and coconut treecrops research to develop better control measures for pests and diseases (through breeding and selection), particularly for disease tolerance and increased yield potential in cashew and for drought- tolerance in coconut hybrids; (ii) the propagation of new improved planting materials through the development and operation of seven Cashewnut Development Centers (CDC), and a combined EAT disease testing and multiplication coconut center and the operation of 2 existing coconut hybrid seedfarms in Mafia and Zanzibar; (iii) production development through the dissemination of cashew and coconut specific production packages including planting materials by specific subject matter specialists who would train MALDs existing extension and research staff and the support of on-farm demonstrations of cashew and coconut production packages; (iv) the management and coordination of the Cashewnut Improvement Program (CIP) and the National Coconut Development Program (NCDP); (v) the cashew input supply and marketing support through a line of credit to CRDB and technical assistance for local marketing support; and (vi) a pilot credit scheme to strengthen CRDB's credit facilities in the southern cashewnut production areas of Mtwara and Lindi. Technical assistance will be provided by the British Overseas Development Administration (ODA) for all aspects of cashewnut research at Naliendele's research station, while the Federal Republic of Germany (FRG) through its development agency Gesellschaft fur Technische Zusammmen Arbeit (GTZ), will continue to support all coconut research under the Technical Cooperative Program for NCDP, the present phase of which ends on June 30, 1990. There will he a special emphasis on the training of counterpart staff by all expert staff recruited under technical assistance. C. Detailed Features for Cashew Improvement Program (CIP) Ci) Research 4.04 The cashew research program will be production oriented to provide technologies that are urgently needed to increase raw nut production. The  - 24 - Cashewnut Program Coordinator and Naliendele's Research Team Leader are both represented in the Technical Coordinating Committee (para 5.03) and are responsible for direct coordination betweeii cashew research and extension staff. Cashew research will be carried out at Naliendele's Agricultural Research Institute under three basic programs: crop protection, va8,' '1 improvement and agronomy. A small socio-economic iesearch program o. bout US$300,000 complementary to the three basic programs, will also be carried out (para 4.14). The British Overseas Development Administration (ODA) will under a grant agreement with GOT fully support the cashewnut research component including the provision of 4 specialists (Pathologist, Crop Protection Specialist, Breeder and Research Development Agronomist/Team Leader), equipment, vehicles and funding for the improvement of existing research facilities, houses, some of the recurrent costs and overseas training to a total amount of US$6.0 million equivalent, including price contingencies. Existing ODA housing and workshop facilities at Mtwara will be made available in support of cashew research. The cashew research program, which is estimated at a total of US$5.4 million, and the detailed research base costs are provided in the Project File, Working Paper 1 and in Table 1 of Annex I. The grant agreement with GOT for para_lel financing of the cashew research is a condition of project effectiveness (para 8.01d) 4.05 Crop Protection. The current measure used to control Oidium by dusting trees with sulphur at 3.5kg/tree and seven applications must be regarded as a very temporary measure. Not only is it expensive, but the logistics of dusting large areas of cashew with sulphur and the likely ensuing environmental problems, particularly an increase in soil acidity, indicate that this is not a realistic option for controlling the disease (see Project File, Working Paper 1, Annex D). However, some form of chemical control will be required for 3 to 4 years to come until integrated disease control practices involving the use of Oidium resistant cashew plants are available. 4.06 A priority of the Crop Protection Team program will be to develop environmentally safer and more efficient methods of chemical control by investigating other fungicides, particularly the modern systemic compounds and ultra low volume application techniques. A reduction in the dosage of sulphur used appears to be an immediate measure which could help mitigate the side effects. A better understanding of Oidium epidemiology will enable the more efficient use and improved targeting of fungicides. 4.07 The tolerance and partial resistance to Oidium detected among introduced and local cashew populations provides the basis for the long term, sustainable answer to the Oidium problem. Resistance is likely to prove durable, but studies on the epidemiology and host/parasite relations of the disease are necessary to confirm this and to ensure that vertical race-specific resistance is not selected in the varietal improvement program (see Project File, Working Paper 1, Annex A). 4.08 In order to enable a timely start of the varietal improvement programme, it is necessary that the methodology of the rapid preliminary screening technique is worked out beforehand and that large numbers of candidate ortets (promising tolerant trees) identified from field surveys are subjected to it The primary objective of this will be to act as a  - 25 - negative screen to eliminate susceptible material from further, more detailed study. In addition, this technique will provide important basic information on host/parasite relat'ons. 4.09 Under the Project, studies on the resistance mechanisms of the various clones in the varietal improvement program and their performance under field induced epidemic conditions will be evaluated. In addition, the incidence and severity of the disease and pests will need to be recorded to ensure that resistance to these potential problems is incorporated. 4.10 Secondary objectives of the crop protection research program will include monitoring the effects of crop protection chemicals on the environment, including the effects on soil, cashew pollinators, predators and parasites of Helopeltis. Control of Helopeltis and associated die back diseases may become a priority consideration after the Oidium problem has been solved. 4.11 Varietal Improvement. Initial emphasis of the Varietal Improvement Team will be to breed for Oidium disease Lesistance or tolerance but will soon change to combining resistance or tolerance with higher yield potential (see Project File, Working Paper 1, Annex E for a description of the advocated 'Accelerated Varietal Improvement System"). There is good reason to assume that a variety with a reasonable level of resistance of tolerance can be produced after one year and a variety combining this tolerance level with increased yield potential produced after four years. Subsequent multiplication will also be rapid. Both targets are ambitious, and demand high research efficiency and no constraint in implementation. The two local plant breeders will be assisted by a specialist familiar with recurrent mass selection techniques suitable for rapid and progressive production of impruved varieties by vegetative propagation. The vegetative propagation program, assisted by FAO, will be essential to the proposed varietal improvement program and should be an integral part of it. The varietal improvement team will also be responsible for the establishment of poly-clonal seed gardens at the various cashewnut development centers. 4.12 Agronomy. ^-ily a moderate proportion of the effort of "he Agronomy Team will be on routine agronomy research such as determining optimum tree density per hectare in relationship to size and age of trees, fertilizer, minimum tillage methods for soil improvement, and devising cashew farming systems that combine annual food crops with cashew to optimize returns to labor and land. The main effort of the Agronomy Team will be directed to developing an integrated package of recommendations to farmers (on disease control, improved varieties and cultural practices) that works under the social and economic conditions of the farmer and the research is to be regarded as complete only when farmers actually use the recommendations. 4.13 All research staff will cooperate with extension staff and farmers and have joint experiments on farmers fields but the Agronomy Team will have the main responsibility for developing the already good research- extension linkage which has been achieved by the Cashew Production Improvement Pilot Project. The head of the Agronomy Team will be a senior  - 26 - experienced research and development agronomist, who at the same time will be team leader of the ODA team and responsible for coordinating all cashew research activities. He will be a specialist in research-extension linkages, and transfer of technology who will specifically cooperate with the project's cashew production agronomist, including cooperation in training and production of training materials. 4.14 Socio-Economics. Under the CPIPP, the Planning and Economic Unit has carried out some basic farm survey work in order to formulate and test a number of hypotheses as to the cause of the decline in cashew production. Although many factors have contributed to the decline (poor price incentives, villagization, poor crop husbandry, poor pPfment and marketing arrangements) the overriding cause found, was the