Tanzania - Second Cashewnut Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 8625 PROJECT COMPLETION REPORT UNITED REPUBLIC OF TANZANIA SECOND CASHEWNUT DEVELOPMENT PROJECT (CREDIT 801-TA) HAY 8, 1990 Agriculture Operations Division Southern Afria Department Africa Regional Office lhis docment bss a resteded dIsrbtion and may be used by e old y in te peromne of teir ogiciai duies Its contes may not oltherwise be disdosed wt Wodd Bank autdhzation.  CURRENCSDYt US$ 1.00 = Tsh 8.30 (1978) 1 8.30 (1979) 8.20 (1980) 8.30 (1981) 9.28 (1982) 11.14 (1983) 15.29 (1984) 17.47 (1985) 32.70 (1986) 64.26 (1987) 95.00 est. (1988) 130.00 est. (1989) 2 CATA :Cashewnut Authority of Tanzania CNSL :Cashewnut Shell Liquid CPIPP :Cashew Production Improvement Pllot Project GOT :Government of Tanzania MALD :Ministry of Agriculture and Uvestock Development MDB :Marketing Development Bureau NBC :National Bank of Commerce NCIP :National Cashewnut Improvement Project PCR :Project Competion Report PPMB :Projct Prepartion and Monitoring Bureau RMEA :World Bank Regional Office for Eastern Africa SAR :Staff AOpraisal Report TCMB :Tannia Cashew Marketing Board FL YEAR Government of Tanzania :1 July - 30 June CATAITCMB :1 October - 30 September 1/ Assumption in SAR of 1 May 1978. 2/ As per May 1989.  FO OMCIAL US ONLY THE WORtL SANK WashinUton. DC. 20433 UA. O0t* of Vy"WtaCmW&i 0owaiw fVibJStmn May 8, 1990 MIEMORANDUM TO THE EXECUTIVE DTRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Tanzania Second Cashewnut Development Proiect (Credit 801-TA) Attached, for information, is a copy of a report entitled "Project Completion Report on Tanzania - Second Cashevaut Development Project (Credit 801-TA)" prepared by the FAOICP Investment Center and the Africa Regional Office with Part II of the report contributed by the Borrower. No audit of this project has been made by the Operations Evaluation Department at this time. Yves Rovani by Ram K. Chopra Attachment This document has a restrited distribution and may be used by recipients only in the performance of their ofcial dutis. Its contents may not othems be disclosed without World Bank autodiaon.  FOR OMCI4L USE ONLY PROJECT C0ONPLETION REPORT UNITED REPUBLIC OF TANZANIA SECOND CASNEWNUT DEVELOPHENS PROJECT (CREDIT 801-TA) TABLE OF CONTENTS Page No. PRE ACE .... ..* ...................... EVALUATION SUMMARY .................**....******............. 1 PART I - PROJECT REVIEW PROK BAN'S PERSPECTIVE Project Identity .................................. 6 Background .............. 6 Project Objectives & Description ...................... 8 Project Design and Organization ....................... 9 Project Implementation ................................ 11 Project Results ...................................... 12 Project Sustainability ................................ 15 Bank Performance .......... . 16 Borrowr Performance .................................. 16 Project Relationship and Lessons Learned .............. 17 Consulting Services .... . 17 Project Documentation and Data ........................ 18 PART It - PROJECT REVIEW PROM BORROVER'S PERSPECTIVE Original Project ....................19 Project Design .................................... 19 Project Performance .................................. 20 The Project Impact and Sustainability 21 Cashewnut Production Improvemont Pilot Project (CPIPP) 22 The Project Design 22 Project Performance ................................... 22 The bmpact and Sustainability of the Project 23 World Bank Performance ................. 24 The Performance of Borrower (Government and CATA) 24 The Lesson Learnt ...................................... 24 Adequacy and Accuracy of the Factual Information Contained in Part III . 25 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not othcrwise be disclosed without World Bank authorization.  PART III - TABLES - STATISTICAL INFORNATION 1 - Related BDnk Credits/Loans ...................... 26 2 - Project Tltable ........................ ....... 27 3 - Estimated and Actual Disbursements per Year ..... 28 4 - Actual and Estimated Disbursemsuts.per Category.. 29 5 - Actual and Estimated Project Cost ............... 30 6 - Direct Benefits ................................. 31 7 - Compliance vith Major Covenaots ............... 33 8 - Use of Bank Resources for Supervision ............ 35 9 - stimated Marketed Annual Cashewnut Production... 36 10 - Factory Proceasing Capacities & Days of Production 37 11 - Production at Likombe and Kibaha (1988/89) ...... 38 12 - CPIPP Staffing * ................................. 39 13 - CPIPP Training Activities ....................... 40 14 - Consultants funded by CPIPP ..................... 41 15 - Sumary of CPIPP Studies, Surveys & Publications. 42 16 - TCNB Sumary Balance Sheets (1977189) ........... 45 17 - TCMB Sumaary Profit/Loss Accounts (1977/89) ..... 47 MAP - IBRD #13096R- REPUBLIC OF TANZANIA, SECOND CASREW DEVMLOIMENT PROJECT (1977)  - i - PROJECT COMPLETION REPORT UNITED REpUBLIC OF TANWIA SECOND CASEWRNUT DEVELOYMENS PROJECT (CREDIT 801-TA) PREFACE This is the Project Completion Report (PCR) for the Second Cashewnut Development Project in Tanzania, for which Credit 801-TA in the amount of USS 27.5 million was approved on May 16, 1978. By January 1985, an amount of USS 3.0 million was cancelled and the balance of US$ 3.5 million used for a redesigned Cashewnut Production Improvement Pilot Project (CPIPP). The reduced credit was almost completely disbursed (98.3X) while the last disbursement date was on December 29, 1989. The PCR was jointly prepared by the Agriculture Operations Division of Southern Africa Department (Preface and Evaluation Summary), the FAO/CP Investment Center (Parts I and III), and the Borrower (who prepared Part II after receiving Parts I and III). The Cashewnut Authority of Tanzania (CATA) prepared an initial PCR dated May 5, 1985 at the end of the factory construction phase of the project. Another PCR, covering the Cashew Production Improvement Pilot Project (CPIPP) was prepared in August 1989 by the pilot project staff. Preparation of the PCR was started in June 1989, and is based on the Staff Appraisal Report, the Development Credit Agreement; the initial PCR from CATA; project progress reports; supervision reports; correspondence between IDA and the Borrower; and internal Bank memoranda.  PROJECT COMPLETION REPORS NITSED REPUBLIC OF TANZANIA SECOND CASEMWNUT DEVELOPMENT PROJECT (CREDIT 801 - TA) EVALUATIONSIOMRARY Backaround - Protect Orinin 1. Cashewnut is the most important cash crop in Southern Tanzania, generating important foreign exchange earnings from exports. Production increased impressively during the 1960's and the early 1970's from an estimated 74,000 t in 1965 to 145,000 t in 1973 (Part I, table 1). The most important factors contributing to this development were adequate extension support, attractive prices and relatively satisfactory marketing arrangements. Cashewnuts were largely exported as raw nuts as the domestic processing capacity was limited to around 20,000 t p.a. (Part I, para 3). 2. During the late 1960's, the Government of Tanzania (GOT), in pursuance of the exploitation of the marked price differential between raw nuts and processed kernels which existed at that time, sought further ways to expand its domestic processing capacity (Part I, para 3). In 1974 the World Bank Group approved a loan of US$ 21 million (Loan 1014 TA) to finance the expansion of the Tanzania cashewnut processing capacity by 40,000 tons p.a. (Part I, para 4). Physical implementation of the project was generally satisfactory (Part I, para 5) and the five factories became operational between October 1978 and June 1981. In 1976, GOT prepared a follow-up proposal to increase its domestic processing capacity by a further 30,000 t p.a.s the main consideration being that the GOT had embarked on an ambitious planting program which sought to nearly double cashewnut production by 1992. In 1978, the Bank approved a credit of US$27.5 million for the Second Cashewnut Development Project (SCDP). Proiect Obiectives and Descriltion 3. The SCDP was expected to increase cashewnut processing capacity by an additional 30,000 tons annually, through the establishment of three more factories in Mtwara, Ribaha and Newala, under management of the Cashewnut Authority of Tanzania (CATA). This expanded processing capacity would increase Tanzania's foreign exchange earnings and the local value added utilizing local raw materials. Specifically, the project would provide financing for: (a) construction, installation and equipping of three cashewnut processing factories each with a 10,000 tons p.a. raw nuts processing capacity; (b) the expansion of port storage facilities of cashewnut shell liquid (CNSL) by 750 tons and the procurement of vehicles and truck tankers to transport CNSL; as well as: (c) the construction of staff houses for two factories; (d) strengthening cashewnut research; (e) a study to determine occupational health hazards in cashewnut industry and to  -2- formulate monitoring criteria; and (f) TA for project implementation and strengthening CATA's financial and technical management (Part I, para 8). 4. The total project cost was estimated at US$ 36.3 million over a 6 year implementation period. The project was financed by an IDA Credit of US$ 27.5 million (76Z); GOT provided the local cost (US$ 6.6 million); and the National Bank of Commerce provided the balance for CATA's working capital requirements (US$ 2.2 million) (Part S, para 9). Pro1ect ImDlementation 5. The main objective of the project - to establish three factories with a combined processing capacity of 30,000 t p.a. - was fully achieved without time and/or cost overruns. Yet, the project cannot be considered as having been successful, due to a dramatic decline in cashewnut production which occurred since 1973/74, and which has prevented the factories from being operational anywhere near their capacity. In fact, production declined from 145,000 t to a mere 44,000 t (302) in 1982 and to around 20,000 t (142) in 1986 (Part I, para 12). Consequently, the factories only operated at 451 of capacity up to 1985/86, when processing ceased altogether. The Phase I factories had already ceased processing by that time and were 'moth balled". Processing was resumed in 1987/88 in two of the three Phase II factories. At present, processing is around 52 of overall capacity. 6. The causes for the dramatic decline in cashewnut production are multifold and interrelated. First, the villagization policy, which started in 1974, and which sought to concentrate a previously scattered rural population in villages, caused an immediate drop in production. After the re-settlement, many farmers lived -4o far from their plots to allow rejular harvesting, and for a considerable period, movements outside the villages were restricted (Part I, para 12). The effects of this policy were aggravated as the marketing arrangements and producer prices deteriorated. 7. These causes would, most probably, have led to a significant decrease in production, but the decline should have levelled off after the initial period, especially as GOT had embarked in a planting program around the newly formed villages. The fact that the decline was not halted, was due to the emergence and spread of powdery mildew (Oidium anacardii) which affects the young leaves, flowers and young nuts, causing complete loss of production (Part I, para 13). 8. Alt_ough the appearance of powdery mildew only became evident after the project became effective, production had already decreased to nearly half of the 1973174 peak production (Part I, para 14) at the time of appraisal (1978). The SAR failed to recognize this decline, nor did it include a risk analysis showing the impact of significantly lower production on the financial viability. 9. A related issue was that the price relationship between raw nuts and processed kernels had changed after appraisal in favor of exporting raw nuts (Part I, para 24), rendering domestic processing of raw nuts in Tanzania at best only marginally economically viable.  Cashewnut Productior ZmDrovement Pilot Pro1ect (CPItP) 10. Towards the end of the original credit closing date of December 31, 1984, an estimated US$ 6.6 million remained undisbursed. In order to assist GOT in its attempts to counter the declining cashewnut production, the Bank agreed to use about half of the undisbursed funds to grant a three-year extension to allow the implementation of a pilot project aimed at determining and testing the reasons for the decline of production and how the trend could be reversed 1/. 11. CPIPP had four main componentst (l)Crop Development and Extension, which sought to train staff, develop production packages and assist farmers in adopting these packages; (2) Monitoring and Evaluation; (3) Research 2/, particularly in vegetative propagation and pathology; and (4) strengthening MALD's organizational and management capacity in the cashewnut subsector (Part I, para 21). 12. CPIPP developed improved production packages. These included thinning densely planted cashew groves, applying sulphur dust to control powdery mildew and intercropping. The application of these packages were inhibited however by practical, technical and environmental problems of applying sulphur and lack of appropriate inputs for annual crops. CPIPP carried out a substantial training program of 6,730 mandays, principally of extension staff. This enabled a T&V system to be successfully established, reaching 85 clusters of 3 to 4 villages or about 6,300 farmers; in excess of the originally planned 36 clusters. A M&E unit was established and covered all aspects of the cashewnut sector providing information and directing attention to its needs. CPIPP supported research at Naliendele, Agricultural Research Institute, conducted applied research and established a good relationship between Extension and Research. The applied research component covered farming systems, tree densities, selection of trees tolerant to powdery mildew, vegetative propagation and application of sulphur to control it. Three comprehensive Progress Reports were produced and, in addition, some further 40 reports and papers, containing much factual information (Part III, table 15). 13. Actual credit used amounted to US$ 21.4 million for the construction phase of 3 processing factories and about US$ 3.1 million for the CPIPP pilot project, which in total is about 892 of the original credit of USS 27.5 million or 98Z of the 1985 revised credit amount of US$ 24.5 million. 11 The three year extension was granted on the condition of an annual review. Subsequently, the project was granted another 1.5 year extension up to June 30, 1989, to allow the full three growing seasons to be covered as had originally been intended, but which a slow start had prevented. 21 Originally, this component was not included as it was to be implemented under an Italian bilateral program, which however did not materialize.  - 4 - 14. The successful implementation of the pilot project, which benefitted from the full support of GOT and a flexible approach, both in design and execution, by the Bank, has led to the formulation of a follow- up Cashew Improvement Program focussing entirely on cashew research and development support, under the Cashew and Coconut Treecrops Project (CCTP). The CCTP project was approved in June 1989. Results 15. The main objective of establishing additional cashewnut processing capacity of 30,000 ton p.a. was fully achieved (Part I, para 22). However, due to the perennial decline in cashewnut production (from 145,000 ton in 1974 to 24,000 ton in 1988), which prevented acceptable levels of utilization of the new processing facilities, the original project cannot be considered a success (Part I, para 23). 16. The consolidated financial results of CATA/Tanzania Cashew Marketing Board (TCMB) were positive due to the trading profit on the export of raw nuts and domestic sales and exports of factory processed kernels being a fraction only of the total sales turnover. The policy to promote raw nut exports rather than maximize local processing, induced by the relative comparative price advantage of raw nuts has benefitted the financial performance of TCMB. Yet, the financial performance of TCMB remains fragile, especially when seen in the light of the depreciation policy based on historic cost and the high debt servicing obligations, which TCMB will have to honer in a macro-economic environment of high currency depreciation and domestic inflation (Part I, para 24). 17. The CPIPP pilot project was highly successful in achieving its main objectives; i.e. to determine and test several hypotheses which had led to the decline in cashew nut production and which could lead to the reversal of this trend (Part I, para 26). Powdery mildew (Oidium anacardii) was identified as the main cause of the decline, affecting cashew trees at all ages, except in a few incidental cases where trees have. been identified as being tolerant to the disease. As a result several technical extension packages could be designed and successfully tested. i8. A reliable vegetative propagation method for tolerant trees uas developed by CPIPP and the Agricultural Research Institute at Naliendele. Sustainabilitv 19. Due to the dramatic decline of the cashewnut production (Part I, para 12), it is not sustainable to maintain all existing 12 processing factories and GOT should find alternative uses for 7 or 8 of the factories. The economic upkeep and operation of 4 or 5 strategically located factories would only be possible if these factories are more efficiently run by or with the assistance of the private sector. Additionally a more integrated planning and management system should be put in place for nut processing and raw nut production development in the immdiate areas, through production assistance to farmers and/or estates and through more attractive  direct payments (based on F.O.B. world market raw nut prices) in order to guarantee sufficient and regular factory supplies. 20. Raw nut production can only be improved and eventually sustained if Tanzania, with assistance from donors, continues to support proper Cashew Research and Extension as started under the CPIPP and followed up under the proposed Cashew and Coconut Treecrops Project. Findings and Lessons Learned 21. The decision for expanding the cashewnut processing facilities with additional capacity in Phase II should have been based on a solid understanding of the whole cashew nut industry, including the production and consumption trends of the raw materials to be processed (Part I, para 43 and Part II, para 6.1). However, in the early years of the first Cashew Development Project (Ln. 1014-TA) supervision was mainly concerned with the construction of project facilities and the staffing problems of CATA. Supervision was mainly carried out by non-agriculturists not understanding tecbnical problems or flagging them on time. Only in October 1978, after the Phase II May 1978 appraisal, was the problem of declining yields and the negative affect of villagization on production raised with the Tanzanian authorities. But the Bank did not pursue for any specific action nor did it redesign Phase IT on the basis of Phase I performance and declining yields. These aspects have been highlighted in paras 7.27 to 7.30 of the Project Performance Audit Report of the Phase I Cashew Development Project dated June 29, 1984. 22. A better inter action with and involvement of local field staff and Government officials at the time of preparation and appraisal would have led to a better understanding of the actual situation and would have led to a differently designed follow up Phase II project (Part I, para 43 and Part II para 6.2). 23. Once it was clear that the assumptions for the Phase II project were wrong (too optimistic view of raw cashewnut production projections), the project should have been immediately cancelled or redesigned, which was only done in 1985 after construction of 3 more factories. Project designs should be flexible and adjustable to changing circumstances at all times (Part II, para 6.4).  - 6 - PROJECT C-GMPLETION REPORT WIMTED REPUBLIC OF TAN SECOND CASINUT DVOPMENT PROJECT (CREDIT 801-TA) PART I PROJECT REVEV FROM BANS RSPECTr 1. Prjt IdnitY 1. Prolect name :Second Cashewnut Development Project Credit No :Cr 801-TA RVP Unit :AF6AG Counltry :Tanzania Sector :Agriculture 2. Agriculture is the largest sector in the Tanzanian economy, providing 40-50% of GNP. about 80%a ot export earnings and over 80%a of employment. The main cash crops are coffee, cotton, sisal, tobacco, tea, cashewnut, pyrethrum and cloves. Cashewnut is the main cash crop of southern Tanzania and is also grown to a lesser extent in the Coast and Tanga regions. Cashewnut is predominantly grown by smallholders, estimated at 280,000 tarn families on some 400,000 ha with 32 millon trees, in sole or mixed crop production systems. 2' Large-scale private plantations are restricted to about 2,000 ha in the Lindi and Mtwara regions. Cashewnut production, like other cash crops, increased substantially between the mid-sixties and mid-seventies, mostly as a result or a combination of an effective extension service, the availability of appropriate agro-technologies and attractive producer prices. 3. Nuts were yeneraly exported raw, prumanly to India, for further processing. By the mid- 1960's, processing capacity in Tanzania was limited to nine manual processing units witni a target capacity of 1,000 ton per unit p.a. as compared to an estimated annual raw nut production of around 120,000 ton. By 19W8869 GOT had embarked on the construction of Iwo processing faclites TANITA 1 (1965) and Mtwara (1968), with a capacity of around 20,000 ton p.a., so that the total gross processing capacity was estimated at around 27,000 ton of raw nuts p.a. The manual units were all operatng at a loss, however, and were closed by the early 1970's, while the total effective operating capacity of the two mechanized mills was estimated at around 17,000 ton p.a. In pursuance of the expoitation of the marked prie J/ This PCR is based on an FAOWIB Cooperative Programme mission which visited Tanzania in June 1989. Previously, the Tanzania Cashewrut Marketing Board (TCMB) had prepared, in cooperation with the Project Preparation and Monitoring Bweau (PPMB), a PCR covering the factory establishment period, i.e. up to end 1984 (Report dated 5 May 1985). 2/ For a full descnption of the cashewnut sub-sector, including statistical data, production systems, processng and marketing systems, see the Staff Appraisal Report on the Cashew and Coconut Treecrops Project, No. 7681-TA, 1989.  difHerential between the exported raw nut and kernel prices, GOT sought ways to expand its domestic processing capacty. To this purpose. GOT, assisted by the Regional World Bank Office in Eastem Afnca (RMEA), prepared a project proposal in 1972,73 to expand its processing capacity by around 50,000 ton p.a. and presented this to the World Bank for financing. 4. In 1974 the Board approved a loan for US$ 21.0 million (Loan 1014-TA) to finance the expansion of the Tanzanian cashewnut processing capacity by 40.000 tons (Table 10 of Part fil). The project included construction, installation and equipping of five new cashewnut processing factories, cashewnut shell liqutd (CNSL) 1' storage facilities at the port of Mtwara IM provision of technical assistance. The project also provided for five road maintenance units, extension services, a research and training programme, staff housing, rural water supply facilities, communty education centers and professional services 5. Overall physical execution of the first phase project, in particular with regard to construction and equipping of the factories and other cvil works, was satisfactory, althougth some cost and bme overruns were encountered ?,. Technical assistance and traning aspects of the project were only party implemented, while key staff recruitment remained a problem throughout the implementation period. The small research programme was not implemented since GOT preferred to use an Itatian Government grant and TA to implement a two-year breeding, FFst and disease control research programme, which, however, became operational only in 1979. The project had envisaged engaging 537 trained extension staff. In practice, elven senior positions were filled with qualified staff, but of the 344 extension assistants recruited only 32 had pnor training m agriculture. Subsequently, most extension staff became involved primarily in procurement of raw cashew nuts on behalf of the Cashewnut Authority of Tanzania (CATA). 6. A dramabc deine of raw nut production (see paras 12-15) prevented advantage being taken of the processing facilities. Shortage of raw materials caused four of the mills to be closed between 1982 and 1983, while the Newala I mill has never operated. At present, all Phase I mills are mothballed and the possibility of these mills being re-activated in the medium term future should be consKired unlikely (see para 31). 7. CATA was established in 1973 as A statutory authority, under the Ministry of Agriculture, desgnated to coordinate all aspects of producton, research, processing and marketing of cashewnuts. CATA was replaced in 1985 by the Tanzania Cashewnut Marketing Board (TCMB) with a more imitd mandate, ocussing on the marketing and processing aspects of the indwustry. TCMB is the offcial buyer of nuts from the Cooperative Unions and the sole export marketi agent. The Minustry of Agriculture (MALD) took on Fte r nsi ity for the producOtio aspects of cashewnut industry, icling research and extension services. GOT envisages that uktimately all proemet at farmate Wvel should be handled by Primary Cooperatve Sucieties, while the Cooperabve Unions would mnage the factories and TCMB would handle nut and kernel exports. The possible future role of private parties in the purchase of raw nuts, processing and exports is under active review. 1/ CNSL Is a cheivcal by-product of cashewnut processig (about 7-10% of the raw nut volume) and used rnostly in paints and lubricants. Z For more tinfoation regrdg the imentation of Loan 1014 TA see Project Performance AAdit Report No. 5197, dated 29 June 1984.  - 3 - amo -s t9Saan _ u 8. In 1976, GOT prepared a follow-up project proposal, to further expand the domestic processing capaciy. The main consideration was that, as GOT had embarked on an ambitious planting programme, which was expected to lead to an additional raw nut production of at least 100,000 ton p.a. by 1992, it wished to reap the benefits of increased domestic value added through domestic processing. (See Chapter 4). This Second Cashewnut Development Project (SCOP) would increase cashewnut processing capacity by an additional 30.000 tons annuafly (Table 10 of Part ll), through the establishment of three new factones. Specificaly, the project would provide financing for (a) construction, installation and equipping of three cashewnut processing factories each with a 10,000 tons p.a. raw nuts processing capacity, including water supply facilities; (b) expansion of port storage facilities of cashewnut shell liquid (CNSL) by 750 tons and the procuremealt of truck tankers to transport CNSL and vehicles; as well as: (c) construction of staff houses for two factories; (d) strengthen cashewnut research; (e) carrying out a study to determine occupational health hazards in cashewnut industry and to tormulate monitoring criteria; and (f) provd. TA for project implementation and strengthen CATA's financial and technical management. 9. The total ptolect cost was esttmated at US$ 36.3 million over a 6-year implementation period, with a foreign exchange component of 79YO. The costs per component are summarized below. s01 E_ Prq c *i@ of m LEQsreign IQ base cost ...... Million US$ ......... % Factory Devel.& Kibeba 1.3 6.1 7.4 25 Newala II 1.4 6.6 8.0 27 Mtwara 2 iQ u X Sub-total: 5.2 18.7 23.9 80 Vehicles and Tankers 0.0 0.1 0.1 1 Prot. Services 2A ffi iQ 2Q Total Base cost: 5.6 24.4 30.0 100 Phys.cont. 0.4 1.6 2.0 7 Price cont. DA 7 Li Z Total project cost: 6.4 27.7 34.1 Cl 114 note: Totals may not add up due to rounding. aI Wuding civil works, processing equipment and water supply. ti Of which supervision of construction US$1.5 milon and Agricultural research US$ I.0. Cl Excluding US$ 2.2 nullion working capital. ce Table 23 of Staff Appraisal Report.  -9- 10. The project would be financed by an IDA Credit of USS 27.5 million (76%); GOT would provide the local cost (US$ 6.6 million); and the National Bank of Commerce would provide the balance for CATA working capital requirements (USS 2.2 million). 4. P c Desiu M d (W M 11. The initial preparation of the project was carried out by the Ministry of Agriculture with some assistance of RMEA in the context of the First Cashewnut Developrmient Project in 1977. I/ Project design of this follow-up (or second phase) project focussed, as did the first project, entirely on increasing the national cashewnut processing capacity. Indeed, annual marketed raw cashewnut production had increased from between 70-80.000 ton in the mid- sixties to 145,000 in 1973174, which seemed to justify further expansion of the domestic processing capacity. In addition. GOT had embarked on a large scale plantation programme (see below) which sought to increase production by an estimated 100,000 ton p.a. by 1992. 12. Contrary to expectRt;ons however, produc&on had statted to decline significantly by 1975 as shown below. &PW Meted Production Raw Caedwm* 1JW&198 SWemd ZMs 1/ i 6 mazz 3iz~ im uAm m i i 19 8 i6 '000 ton 74 110 126 145 84 68 42 44 48 21 24 index Z/ 51 76 87 100 58 47 29 31 33 14 17 .. ....... ...... .... . .... 1! Source: Table 9 of Part ll. 21 Peak production 1973/74 taken as 100. A number of reasons were advanced for this declie 2t, including adverse climatic conditions in the main producng areas, increasing age of the bearing trees and GOT's villagization policy which started in 1974. Undoubtedly, the latter policy, which sought to concentrate a pevously scattered rural population in villages, had a serious impact on cashew production as s isevided by the sharp drop in production between 1974 and 1976 (Table 9 of Part Ill). After Xt viaazon many farmers hved too far from their fomer cashew plots to allow regular harvesting, while moreover, for a considerae period of time, movements outside the vilages were restricted. Yet, if villegization had been the main factor responsbe tor the 1/ The GOT proposal caled for a development programme ol five factories with a combined capacity of 55,000 ton p.a. This was reduced by the appraisal mission to 3 factories/30,000 ton p.a. 2' For a brief description of the causes of cashewnut decline in Tanania see: 'Suggestions for Production Improvement', CPIPP Supervision report by J.G.Ohler, Cashewnut Specilist. dated February 1987.  - 1e - production decltie, the declining production trend should have started to level off atter the inital period. This was not the case however. Moreover, GOT expected that this negative development would be compensated for by the increased production resulting from the large scale replanting programme, which had been initiated around the villages. Although estimates of the extent of successful new plantings vary wvdely, they do not appear to have had a significant impact on overall production. 13. The single most important factor responsible for the dramatic decline in cashew production appears to have been the occurrence of Powdery Mildew (Oidium anacardii). The disease, also known in some other producing countries, was first reported in Tanzania in the 1960s and has ntow affected virtually the entire cashew stand in the country. The theory is advanced that a combination of increased age of the trees and the villagization pohlcy - which caused maiiy cashew stands to be virtually abandoned - contnbuted to the emergence of the disease in ns rather virulent form. 1/ 14. At the tme of appraisal (1977). production had already declined dramaticaMy to levels around half ot those achieved in 1973174, to the extent that the existng and planned processing capaciy was already adequate to process the national crop. Furthermore, the continued emphasis on expanding processing capacity, rather than supporting production should be quened. With the benefit of hindsight, the SAR appears far too optimistic about future production levels, especially those expected to be achieved as a result of the GOT planting programnme. 16. The falure to acknowledge the dramaabc decline in production of raw nuts must be submitted as the single most aenous design flaw of the project. AMough at the time of appraisal the decline in production was probably not as evident as appears today, the SAR did not go beyond stating that production, at worst, could stagnate at around 120,000 ton p.a. 2/, while the potentially disastrous financial and economic results of a shortfall in raw nut production were not even mentioned in the risk analysis. Yet, at the time of appraisal (the 1977/78 season). production had already decreased to around 68,000 ton, or only 47% of the peak production year of 1973J74 and a mere 57% of the so-called average production level of 120,000 ton p.a. quoted in the SAR. Moreover, the Basic Economic Report of December 1977, prepared by the Bank, had indicated that by 1975'76, output had fallen to around 1/ The symptoms of the disease are usually triggered by some days of high humidity, such as normally occur in the middle of the dry season. Trees ful of flowers and young nuts may be covered by the fungus within one week. affecting all flowers and young nuts and causing in those cases total loss of production. On older nuts, the shell may be affected and although the kernel usually remains undamaged, water may penetrate the nut later during the humidifying process and influence the color of the kernel, thereby reducing its value. Control of the disease can be achieved by dusbtng or spraying with sulphur and probably also with other, mnore specitic fungicides. Yet, it is found that large-scale spraying is impractical due to the scale of the operations required and the amounts of water required during the dry season, while the tinancial viability of chemical control is, in many cases, highly dubious. As a result, it is at present generaly agreed, that viable control can only be acheved by substitutn existmg trees with tolerant varieties. Thus requires an extensive programme of reseach, the selecton and multiplication of disease tolerant varieties and assistance to farmers. The Cashewnut and Coconut Tree Crop Project, which is expected to become effective in January 1990, seeks to assist GOT in this effort Z Paras 2.06. 2.10, 2.13 of the SAR.  - 11 - 80,000 ton, while a 1977 GOT report 1' quoted similar figures without being overly optimistic about the future production trends. In view of the fact that at that time the existing and pinned castewnut processing capacity in Tanzania averaged already around 83,000 ton p.a. a more careful review of production trends and the achievements of the GOT planting programme would most ikely have led to proceeding with the project with less celenty. 16. Another point that should be raised was the sngular focus on agro-processing. The design lacked any form of production support, incuding cashew research, to ensure that the raw materials would continue to be fonhcoming. At the tine of appraisal, such support was considered adequately covered by the ongoing Government planting programme and the bilateral research assistance which was under negotiabon at that bme W. Even although the performance of GOT planting programme was sgnfilcantly lower than could reasonably have been expected, a small monionng component would probably have allowed a much more timely waring of the disastrous situation in the sector, which in turn would have allowed a more prompt action to remedy the situation. S>. P h_l 17. The implementation of the factory construction component was timely and without cost overruns (See also pars 22 and Chapter 11). Contrary to experiences with the Phase I project, procurement for Phase II factories was carried out by ICB prior to credit negotiations and the costs used in determining project costs. Advance contracts were signed and major retroactive finaning allowed to permit factory buildings to be constructed in time for the delivery of the equipment. 18. The proposed CNSL storage capacity of 750 ton at the port of Mtwara was not implemented, as GOT considered that in view of the declining production, no such storage was required. This decision was further supported by a declining international market for CNSL. i9. The SAR had proided tor the carrying out of a study to determine the occupational hazards in the cashew processing industry and to formulate cnterie for monitoring such hazards. It had been agreed dunng negotiations that this study would have been undertaken by december 1979. The study waz never undertaken, however, because GOT was of the opiion that the occation hazards of, especially CNSL, were well-known, while In addition the hazards were minunized due to the fully automated processes used in the eight plants constructed under the two Bank assisted projects. 1/ Price Policy Rommendations for the 1978'79 Agriculural Price Review, Annex 5 Cashewntts. MDB, Dar es Sala, August 1977. Z See also paras 2.29 and 2.31 of the SAR.  - 12 - CadbwflUt OO kmvo t O P-BXAc (CPUE) Owo: 20. Early 1985, the Bank proposed to GOT to extent the closing date of the Credit and to use around halt of the remaining funds 1/ to implement a pilot project which would tocus on understanding and alieviating some of the cashew production constraints which were experienced in the industry. The proposal was based largely on a project proposal which had been prepared by MALD in the previous year. This National Cashew Improvement Project (NCIP) included a large-scale investment programme in order to reverse the dramatic reduction in production. GOT agreed, however, with the Bank, that the causes of this reduction were multifold and not yet all clearly understood. It was therefore agreed that it would be more prudent to start with a pilot project, which would seek to determine and test several hypotheses of the causes of the decline in cashew production and to reverse this trend, before embarking on such a large-scale investment progrdnmne. The Cashewnut Production Improvement Pilot Project (CPIPP) would provide a model for the rehabilitation of the cashew sub-sector as proposed under NCIP. These objectives would be achieved primarily by strengthening MALD's managemnent, cashewnut research, monitoring and evaluation, crop development and extension support, traning. surveys and studies and technical assistance. 21. Follow-up preparation of the Pilot Project was carried out in Washington, assisted by two saff of MALD and PPMB. The Development Credit Agreement was formally amended, but it was considered practical to leave the design as flexible as possible Z.. Summarizing, the components of the pilot project included: (1) GM Dseogment and Extension by financing extension support and seed nurseries in each of up to 36 village clusters; (2) a of fied extension staff in all aspects of cashewnut production; (3) Monigoi and Ewkm by a unit to be established in Mwtara; (4) TeclM ssMc d &&Ift; (5) a _ strengthened by establishing a Cashewnut Section in MALD, headed by a Cashewnut Coordinator. Similarly, a Cashewnut Develpment Centre would be established in Mtwara. The piot projesu did not include a sesearch component as it was agreed that the ongoing blateral assistance m the field of cashewnut research in Naliendele would sufficently cover the requirements. Ourig the implementation of the project a research component was introduced however (see para 27). The cost of the ahove items was estimated to amount up to a maxunum ot US$ 3.1 milion over a three year implementation period. 6. BM&aot Res 22. The main objective of the project, to establish three cashew factories with a combined processing capaity of 30,000 ton p.a., was fully achieved (Tables 6 and 11 of Part ll). Technicaly, the factones perform satisfactorily, more or less as projected at the time of 1/ By January 1985 around US$ 6.1 million remained undisbursed. It was decided to cancel USS 3.0 milion from the origal credit, while the remaining USS 3.1 million would be used for the redesigned pilot project. 2/ Proposet in a letter to the Principal Secretary of the Ministry of Fnance, dated April 1985.  - 13 - appraisal and much better than any of the Phase I factories, partly due to their improved din as wel as to the continued presence of the manufacturers' engineers which allowed an adequate training of TCMB staff. In 1987188, kerne out-tum was 22-23% of raw nut intake as compared to an SAR estimate of 24%o 1/; the percentage of whole kenels is around 52ete (estmated at 50%L at time of appraisal); while the CNSL out-tum of 7100% compares favourably with the orginal estimate of 7%. 23. Due to the perennial dedine in cashewnut producfion which has prevented acceptable lvels of utilization of the additional processing facilities, the original project can not be considered a success. As shown in the table below, capacity utilization of the 10,000 ton p.a. factories was highly unsatisfactory. In the initial years of operaton, utilization was around 30- 40% Production then ceased enlirely between 1984 and 1986 and at present, only very small quwWes are processed. The only two factoies presently in operation, Kibaha and likombe, operating at less then 10%/e of their capacity, operate at a loss. KwM P,oducto Gbem and 1o/nbe I zam uA= =i oz VA~ am~ u" Au OR .......................... ton . Kibaha 0 4292 3180 2906 4111 470 0 0 431 Likombe 1415 4573 3753 2027 4233 n/a 0 0 679 11 Newala II factory was closed in April 1982 after 116 days of production. Source: TCMB; for furher information see Table 10 of Part l1l. 24. The consolidated financial results of TCMB present a more positive picture, entirely due to the trading profi on the export of raw nuts (Tables 16 and 17 of Part ll); domestic sales and exports of processed kemels only ben a fraction of the total sales turnover &I. The policy to promote raw nut exports rather than maxmze domestic kernel production, induced by the reatve comparative price advantage of raw nuts, has benefitted the financial performance of TCMB. The cumulative loss of Tsh 466 million in 19W85, changed into a cunulaive profit of Tsh 78 million in 1986/87. Yet, the financial performance of TCMB remains fragie, especially when seen in the light of the depreciabon polky based on historic cost and thhigh debt servicing obligabons which the Board wdl hae to honour in a macro-econoic enviro nient ot high currency depreciation and domesbc inflation. 25. At the end ot the original 6-year proiect implementation period (31 Decemnber 1984), the total project cost was estimated at Tsh 225.0 million, as compared to an SAR estimate of 11 This should be considered very satisfactory given the high percentage of raw nut intake affected by mildew. ! In 1987/88, total sales of kerels amounted to 1,012 ton as compared to raw nut exports of 14,635 ton. Dunng the previous two years. no kernels were Sold. In 1981/82, kernel exports had sti been 10,625 ton compared to raw nut exports of 15,326 ton.  - 14 - Tsh 283.5 million (Table 5 ot Part l1l) 1; IDA had disbursed an estimate USS 21.4 million at 31 January 1985. or only 78</o of the SAR estimate of US$ 27.5 million (Table 3 of Part IUl). The main causes for the underspending were the timely fashion in which the main component, factory construction, was implemented; and, more imponanly, the tact that the CNSL storage was not reaized; fewer houses were constructed and tewer vehicles purchased than onginally estimated; some major sub-components of the TA category were not implemented; and the category 'unaDocated' remained undisbursed. 26. The Pilot proect was highly successtul in achieving its main objectives; i.e. to determine and test several lhypotheses which had led to the decline in cashew production and which could lead to the reversal of this trend. 27. The research component was small but appropriate, to the extent that it provided some complementary and essential inputs requwed to render the existing resources, which were partialy provdd under a number of multi-lateral and bilateral assistance programmes. effective. During the project penod. more than 100 productive trees with some degree of tolerance to Mldew were identfied and recorded. Also, a successful budding and grafting technique was developed - something that had previously been considered not viable in Tanzanjia This has greatly enlarging the scope of propagating tolerant varieties in Tanzania within a relativelV short Period using vegetative propagation techniques. These resnarch results, obtned in a st.. I period of time, enabled the inception of the development of improved production packages. 28. The Crop dwvelopment and Extension cornponent succeeded in establishing a close relbonstip between extension and research. Seventy five extension clusters 2' were formed; more than double the panned number. Each was staffed with a Vllage Extension Agent and supported by a Subject Matter Speciaist. Staff was provided with transport and an intense staf training programme was developed (see Table 13 of Part l1l). At the basis of the extesion message are six cashewnut production packages, which were developed on the basis of the research results obtaed at Naiende and verified in field trials. The packages differ depending on the farmng system zones and include interplanwt wit food crops. 29. The field testng of sulphur dusting under biatwal assistance was extended. In 1988 finance was provided for inpjts and machimry required for sulphur dusting. Their provision was organized including the estabshment of an applbcation servce to be managed by the Vilage Cooperative Societies of the 346 ton of sulphur dust and 280 motor blowers imported for the 1988 dusting season, 113 ton and 267 units were actually distributed (see also para 34). 30. The develupTwn of a package of information to be communicated to the farmers, especially that on thinning over-dense trees and that on how, when and where best to apply sulphur profitably in the control of Midew. was one of the key elemn to the successful introduction of tue T&V system. Other major factors were the effective training and monitoring 1/ There is some doubt as to the accuracy of the project cost estimates as supervision reports draw the attention in several instances to the inadequacy of project accounting in particular with respect to GOT contribution. 2/ A cluster is a group of 3 to 5 villages in each of which around 20 farmers are selected for training under the T&V system.  - 15 - and evaluation of the performance of extension staff, of appropriateness of the extension package, and of the farmers' response to it. 7. Pt'ojct 9uai.~j 0La BM PlwllM 31. At the time of appraisal, the economics of cashew processing supported GOT's policy to promote domestic processing. This changed during the early 1980s. Recent information 1 seoms to confirn that domestic processing is stil at best only marginaly attractve. A number of other constraints such as shortage of packaging materials, spare parts and frequent power cuts, further impose the need to question the economic viability of domestic cashew processing in Tanzania and thus the future of the processing minls. Even if it were assumed. however, that the larger part of raw nuts would be processed ocally and that domestic processing of raw nuts would tnple to around 60,000 ton between now and the year 2000 as a result of present and pwanned development efforts, it is reported 1/ that a maximum of a mere 3-4 factones would be required to adequately process this supply. The remaining factories should be declared redundant and alternative uses could be found for them. The remainng factories could be put on a care and maintenance basis and be availble for use at short notice at some time in the future. The retenton of this capacity would effectively put a floor price under the raw nuts exports in the event of unforeseen negative developments in the world market raw nut prices. 32. Notwithstanding the notable success of the Pilot project, a number of issues will require addressing, partly through the successful implmentabon of the follow-up Cashewnut and Coconut Tree Crop Project, if the cashew industry is to be put back on the right footing. Cashew research has established that tolerant material i avaae and that .vegetative propagation is practical. Contiued confirmation of this tolance will be required, especially otl farmws' fields. Good studies are available on the techniques and viabiy of sulphur dusting. It stiUl appears necessary however, to intensify this research whereby in partcuar the financial, loistca and enviontal problems associated with its widespread use should be incuded. This should be camed out side by side with continued farm systems research as initialize by the piot project. Confirmation of the tecnMcal feasibility and financal attractiveness of producion packages. as proposed to brmrers, wi continue to be needed through an apphed research effort whereby the researchxndson link as established by the pilot pct should be further strengtened to ensure the essential farmer feedback to research. 33. The extension system itself, based on the T&V stem appears well established in the project area. The procedures for staff training and support are well deveoped and an expansion of the system shoud not pose undue problems. In the past. procurement problems have seriously affected proect perfornance, in particular as far as the establishment of demonstration plots and the provision of inputs to famers are concerned. Moreover, extension staff training should pay more attention to heightening the awareness of staff at all levels to the costs and benefits that are associated to chemical control of Mildew in particular and to the financal side of farm systems as perceved by the farmer in general. 1 See for example 'Cashew Marketing and processing in Tanzania', I.Duncan, 21 March 1989, Mimeographed.  - 15 - 34. Although the pilot prOect facilitated the provision of certain inputs and tools on credit, no fully satistactory arrangements have been found as yet for their distribution and cost recovery. The weak managerial and financial basis of the Vilage Cooperative Societies, is particularly alarmng in this respect. 35. Finally, there is no doubt that a recovery of the cashew industry will only take place in an environment where famers will be able to market their produce without excessive difficulties and at attractive pnces. In absence of such an environment, farmers will be insufficently induced to invest in replacing their trees nor wil they be persuaded to adopt improved management practices. S. ak PBsr* 36. The Bank's involvement during preparation, appraisal and the early stages of mplementation !ws been quite intensive. RMEA in Nairobi effectively supported GOT with proect preparation as well as with ensuring that the tendering for the factory construction phase, initiated betore Credit Effectiveness, was conducted effectively and timely. The Bank should, however, be held responsible for the major design ftw which impeded successful project implmentation. At the timne of appraisal, the Bank did not adequately appreciate the acuteness ot the decline in raw nut production, but rather based the new project on the projection of an - at the time of appraisal - outdated production trend. Given the experience of the first project and the presence of Bank-appointed staff in the agricultural sector, the celerity with which the follow-up project was pursued, is difficult to appreciate. 37. Bank supervision reports cornmenced to repott on the deteriorating production trends trom the time of the Phase It Credit Effectiveness date. Although the issues was raised with GOT on a regula basis, no specific atons were requested, most probably due to the poor understanding at the Bank of the underlying causes of the declining production. On the positive side, the willingness to extend the project and to finance out of the undisbursed funds a Pilot proiect to arnve at such an understanding and the flexible approach shown by the Bank regarding its impementation, should be recognized. In this respect. particularly notceable are (1) the acceptance of the fact that at east a three-year extension would be required for the pilot project to be successful; (2) the continuous and tangible supervision support during tlh piot projectfs implementation; and (3) the flxible approach regawding procurement procedures which assisted in creating a constructive environment to promote implementation. 9. r MM 38. Borrower performance should be considered as generally satisfactory. Procurement and tendering procedures for the factory construction phase were timely concluded with the aid of an outside consultant. GOT support to the piot project, both regarding its preparation and implementation was generally reported as posifive. 39. Project covenants were ally adhered to (See Table 7 of Part Ill), with the exception of the carrying out of an environmental hazard study (See also para 19). Procurement problems continued to seriously hamper CPIPP implementation, as is the case wih most other (multdaterally financed) projects. Procedures are complex, apparently not always fully understood, nor always followed. This frequently results in long delays in the amval of items essential for project impbmentation and consequent financial and economic loss, as well as deception of projet staff and project beneficianes.  - 17 - 40. Although stoll hampered by a shortage of skilled and experienced staff, TCMB's pefomace was generally better than duing the first phase project This improvement was nminly due to the improved financial management and staff training as well as to the policy decision to limit the parastatal's role, limiting its responsibiity to mostly raw nut and kemel trading and processing. 1. BM P _igf and Lg" Lamod 41. The relationship between the Borrower and the Bank was basically sound throughout the project's plmentation. Disagreement on a number of issues, mostly relating to the wider economic environment of cashewnut production and processing, in particular regarding raw nut and processed kerel marketing and pricng arrangements, as well as to a range of mangenal and financial issues relating TCMB, continued to characterize the Borrower-Bank relationship. 42. Coopewatin between the Borrower and the Bank regarding the preparation are4 inception of a project was a model of how to enhance a sound understanding of the scope of the pilot project by both the Bank and the Bonrower. Ths has greatly contributed to the successful implementation of the project, and has furermore faciftated the sound preparation of the follow-up Tree Crop Project. 43. Generally speaking, the following lessons could be earned from the implementation of the Second Cashewnut Development Project: (a) Expansion of agro-processng facilities should be based on a solid understanding of the production and consumption trends of the raw mrials to be processed. (bj Continued support and training is essental when relatively sophisticated equipment are being introduced in an envronrment were such technical expertise is scare. Manufacturers' support may be more approprite than other expatriate staff TA in such cases where the circumstances wil frequently lead to delays in recruimen of internaional staff. (c) Intense contacts with manufacturers, including arriving at cost estimates by pre- effectiveness ICS procedures. causes cost estimates to be realistic and mimiz possible time overruns. (d) Experiece with the CPIPP has shown that intensive supervision, especially of the type that includes a soid appreciation of the tchnical issues, promotes project impementation and may improve the chances of the project achieving its objectves. (e) Efort to invole, 'o tOe extent possible, locat staff in project preparation, benefits the Borrower's - and possibly also the B3ank's - understanding of the projct's objectives and the means with which these goals are to be achieved. 44T he factory construction programme greatly berefted from the services of a consultant emploed under te irst phase constuction programm and whose services were maintained durming the second phase. This, in combnation with the emplomt of a firm to assist in the  - 11 - tendering procedures prior to effectiveness, caused the iendering and the factory Construction phase to be implemented without delays. The project design fuither ensured the availability of manufacturers' technical services for training and the operations of the factories, which greatly benefitted the subsequent effective operations of the factories. 45. Following the failure of the Phase I project to substantialy improve CATATCMB's financial performance, the Phase It project included the appointment of a qualified financial director as a condition of effectiveness and the continuing satisfactory staffing of ttiat post was made the subject of a covenant. lthough the post was not always staffed, the implementation of these conddionis improved TCMB's financial management. 46. During project implementabon the SAR was generally perceived as useful as far as the factory construction phase was concerned. The Legal Agreements were generally adequate. although some of the covenants did not always facilitate the Bortower-Bank relationship nor always ease project implementation. 47. Data on physical project implementation was satisfactory both regarding the tactory constructon phase and the pilot project. The first is reflected in the relatively detailed PCR, covering the factory construction phase, prepared by GOT with the assistance of the PPMB in 1985. and the second, notwithstanding the relative lack of detail in the pilot project re- design, is mostly due to the effective M&E component of the pilot project, which ensured comprehensive monitoring of the project in adddion to collecting useful data on a wide range of sectoral issues.  - 19 - PROJECT REVIEW FROM 30UiROW7 L' S PMER CTMi 1. ORIGrNAL PROJECT Proiect Deuign 1. The project objectives and its components are highlighted in Part I of the Project Completion Report. This section reviews the scope, comprehensiveness and linkages in the project design and to what extent the latter explains the performance of the Second Cashewnut Development Project. 2. The project design was not comprehensive enough to take into consideration all the factors necessary and backward linkages to ensure for the full utilization of the ambitious factory processing program. The project design did not include a concrete strategy for increasing cashewnut production. There was no conscious strategy and program for Research/Extension linkages and extension was not included as a component in the project. The exclusion of extension in the project design was a serious oversight of the Staff Appraisal Report, bearing in mind the ineffective extension program in the First Cashewnut Development Project (1974 - 1978) whereby only 344 extension assistants of the 537 planned were recruited, only thirty two of the 344 extension assistants had training in basic agriculture whilst eleven of them held senior positions in CATA. In fact, most of the recruited extension personnel were not involved in extension but procurement. The latter was a clear indication that CATA was unable to implement a concrete extension program. Because extension was not included as a component, it is not surprising that the delayed Italian Research Program had very little effect on cashewnut production and in view of the little attention to Research/Exteusion linkages in the project design. 3. The project estimates of smallholder cashewnut production were exaggerated and overly optimistic. The optimism is perhaps explainable because in the early 19708 there was likelihood that during the independence struggle in Mozambique cashewauts might have found their way to Southern Tanzania. On the other hand, the short-term effects of the establishment of Ujamaa Villages may have led to reduction in cashewnut production as peasants were resettled away from their original cashewnut trees. Also, the negative price policy in early 19708 may have had a negative impact on the peasants to maintain or/and expand cashewnut production. 4. The overly optimistic estimates of cashewaut production in the staff appraisal report are a reflection of inadequate project identification. 5. Furthermore, the then existing CATA production program and the subsequent five-year cashewnut production program (1980181 - 1983/84) were  - 20 - very optimistic. The program projected an unprecedented increase in cashewnut production from 110,000 tons in 1976J77 to 160.000 tons in 1984/85 to increase to 200,000 tons in 1991/92. The latter increase in cashew production was to be realized from the CATA's ambitious estate program which would also involve more than 700 villages. CATA also anticipated an increase in smallholder production through distributing inputs and information drives. However, there was no concrete comprehensive strategy for support to and development of cashewnut production. The CATA endeavors to increase cashewnut production did not succeed. Despite optimism created by CATA and the World Bank, CATA was not able to develop the planned 25,000 ha nor was it able to prepare a planned feasibility study of a 50,000 ha estates of cashew trees. 6. The ambitious plans for cashewnut production are a reflection of how little is known about the cashewnut sector. CATA's obsession to start and increase cashewnut production from estates is also a reflection of CATA's disregard of the production potentials of peasant farmers. It is unfortunate that both the World Bank and the Ministry of Agriculture were not quick to realize that CATA was not strong enough as an organization to develop and manage the cashewnut sector. 7. The project design was also overly optimistic concerning factory capacity utilization, due possibly to inadequate project identification and overly optimistic expectations of CATA's performance to increase production. The planners for factories to operate at 752 in the first year of production and to rise to 952 in third and subsequent years of production. However, most of the factories operated at only between 10-20 percent of capacity and soon most were closed down - the Nachingwea and kasasi factories operated only for three months while Newala I never operated at all. Two factories (Mtwara and Kibaha) within the project, are still operating while Newala II production ceased in April 1982. 8. The Second Cashewnut Development Project design was not flexible enough to accommodate strategies to increase production. The World Bank, although in a number of supervision missions (e.g., the March 1979 Mission) raising concern over the decline of cashewnut production, did not take steps quickly enough to either support Government/CATA production proposals or reduce the number of factories under construction and concentrate on rehabilitating the existing ones. At best, the World Bank and the Government should have redesigned the project to accommodate measures, besides the price increases in the 1970s, to increase peasant farmer cashewnut production to fill the gap between cashew production and the factory processing capacity levels caused by the continuous decline of cashewnut production. 2. PROJEC? PERT OEMANCR 9. The construction of factories and procurement of equipments was performed timely and satisfactorily. Part I of the PCR correctly reflects that good arrangements for and timely construction works and procurement of equipments did not lead to cost overruns. CATA made a good and timely decision to continue to use the consultant it had employed to supervise the construction activities for the first project - the decision insured the smooth, efficient and successful construction programs. The choice of experienced contractors for civil works for all projects ensured good progress for the civil works which led to timely completion of the project.  - 21 - 10. However, the project performance for the other project components was not satisfactory. The training program was partially implemented and CATA failed to exploit the provisions for training in the project by failing to prepare a comprehensive training program. Some of the training which took place was inadequate and had little impact on institutional strengthening of CATA and cashewnut industry in general. For instance, the short course training of factory managers in U.K. (two months) was too short for the requirements of their training. The piece meal training for CATA staff and failure to utilize the 1 millicn US$ earmarked for research to train Naliendele researchers, further explains tLe apparent inability of CATA to manage the cashewnut industry and provide adequate support for its development. 11. Few houses were built and there were no health hazard studies on the consequer.ces of constructing Cashew Nut Shell Liquid (CNSL) storage facilities. While the decision not to construct the CNSL facilities is understandable following the decreased market demand of CNSL on international market, the dismissal of the health study and reasons given A.or not doing so were not convincing in a situation where funds were not a constraint. CATA also did not procure all vehicles earmarked for the project, although later the World Bank was requested to make adjustments to allow procurement of small vehicles instead of (CNSL) tankers. However, the refusal of World Bank to honor CATA's request for the procurement of lorries to procure cashewnuts from farmers is a reflection of the inflexibility of World Bank and failure to link factory processing to production and marketing aspects of the cashewnut industry. Disbursement 12. The inability to implement all the project components in a timely manner led to failure to utilize all the funds (foreign) earmarked for the project. More than 7 million US dollars remained unutilized at project completion in 1983184 and the Government of Tanzania lost altogether 3 million US dollars which were cancelled and were not transferred to the Cashewnut Production Improvement Pilot Project (CPIPP) (see Part III Table 3 on page 20). 3. THE PROJECT IMPACT AND ITS SUSTAINABILITY 13. The project created excessive processing capacity which largely remains unutilized. Most of the factories remain closed and there is no immediate likelihood of bringing them under full capacity utilization in view of the unlikely rapid increase of cashewnut production from current programs - the decline of cashewnut production to about 30,000 tons a year is very low and it will take a long time to increase the output to SAR estimate average of 120,000 tons which would have been optimal to utilize the factories at acceptable capacity level. Besides, the high price for raw nuts relative to processed nuts will encourage the export of most of the raw cashewnuts resulting from increased production. 14. Therefore, the sustainability of the processing cashewnut subsector is questionable in the immediate future. The factories will continue to be a burden to Tanzania's economy because of maintenance costs and because of the already increased high opportunity cost of establishing  - 22 - those factories. It is almost impossible to find an alternative use for most of those factories in the immediate future. 15. The failure of the project design to include and encourage peasant production right from the beginning and CATA's ineffective cashevnut production programs, finally put the impact and sustainability of the project in jeopardy. 16. The expected impact of the project on cashewnut producers through increased benefits from cashewnut pricing made possible by increased CATA benefits from increased value added has not been forthcoming because of the shortfall in cashew production and its steady decline throughout the 1980s. 17. The project effect on employment has also been not forthcoming because of the existing excess capacity of the factories (unutilized). The failure of CATA to fully take advantage of the training provided in the project and its failure to utilize the management information system provided by the consultants has left CATA unable to manage the cashewnut industry and to keep clean accounts. 18. The overall impact of the project has been poor, the factories have been left unutilized, and the project has been unsuccessful in increasing cashewnut production and to provide this production to the factories as raw materials. The project has also been unable to develop the institutional capacity for efficient management and development of the cashewnut industry. The inability to put the factories under full use has made both the actual FIRR & EIRR negative, reflecting wasted investment in the cashewnut industry and at the national level. 4. CASHEWNUT PRODUCTION IMPROVEMENT PILOT PROJECT (CPIPP) The Proiect Design 19. The project design was comprehensive enough and flexible to allow for smooth implementation of the project. The project design did not at first include research but later, during project implementation, the research component was introduced. 20. The World Bank encouragement to adapt a "pilot project" in view of many unknown production constraints which existed was a positive strategy. The inclusion of research and extension in the project was also a positive move to tackle basic issues and constraints at the core of the decline of cashewnut production. The decision also made it possible to have researchlextension linkage in the project to deal directly with farm- level constraints to help farmers to increase their capacity to increase cashewnut production. Proiect Performance 21. The general performance of CPIPP has been satisfactory, particularly in the field of research, extension and research/ extension linkage. As Part I points out (page 11), research was able to identify 100 productive trees, tolerant to Mildew disease and the latter together with the successful budding and grafting technique enabled the inception of the development of improved production packages.  - 23 - 22. The extension system finally managed to develop six cashewnut production packages developed as a result of the achievements in research at Naliendele. Extension managed also to organize and train farmers on how to apply sulphur. The control of Mildew disease has been contained in areas where the sulphur dust has been sprayed. However, the health hazards of application of sulphur have yet to be verified - a farming systems research approach to smallholder production should be emphasized in the upcoming cashewnut improvement program in order to show the net effect emanating from the various approaches to solving his production constraints. The health hazards of sulphur will need to be verified with a study within the framework of farming systems research. 23. Despite some achievements in monitoring and evaluation, the pilot project placed more emphasis on evaluation and less on establishing a formal and systematic monitoring of the extension system and the farmer. The pilot project did not adequately involve and train local staff in monitoring and evaluation. During the implementation of the (follow-tip) Cashewnut Improvement Program (CIP), a formal system for monitoring of the beneficiary farmer and the T and V extension system will need to be taken seriously. 5. THE IMPACT AND SUSTAINABILITY OF THE PROJECT 24. The impact of the project on both research and extension has been impressive, as Part I of PCR suggests and sections 1.2.1. and 1.2.2. of Part II reveal. There has been also impressive effect of sulphur in controlling the Mildew disease. The sustainability of the project has been made possible by its achievements in research and extension which have made it possible to go forward with a fully-fledged follow-up Cashewnut Improvement Program (CIP). The research and agronomy aspects of the pilot project will be continued under the new project and funding for these aspects is assured from both the British Overseas Development Administration (ODA) and the World Bank respectively. The Government of Tanzania will provide local costs to ensure smooth implementation of these project aspects and the whole project. 25. In order for the project to be viable and profitable to the farmers, the researchlextension/linkage established by the project will have to be continued and strengthened by the new project. The latter has been well emphasized in Part I. 26. Part I of the report points out correctly the need to intensify staff training to make the T and V system staff responsive to farmers' costs and benefits especially with respect to the chemical control of Mildew disease. In view of the non-availability of safer chemicals or other means to control Mildew disease, sulphur will continue to be used in the immediate future while efforts are taken to find safer alternatives. The monitoring and study of its impact on humans and soils should be taken seriously in the new project. 27. The recruitment of efficient staff for the new project, input availability, and continued cooperation between Naliendele research station and the new project (CIP) will ensure the sustainability of the achievements of the Pilot project.  - 24 - 6. WORLD BANK PERFORMANCE 28. In case of the Original project the World Bank was fully involved in the preparation and appraisal of the project. While the Bank was actively involved in the mutual project implementation, the Bank's role in subsequent years of the project implementation was moderate. The Bank was unable, as pointed out in Part I and in Section 1.1. in Part II, to respond positively to the unrested decline of cashewnut production and the approval to and construction of the three factories went on unmolested. 29. However, the World Bank agreement to extend the project in the form of CPIPP was a positive move in the right direction. The Bank has tully participated in making the performance of CPIPP a success and frequent supervision missions monitored the project. 30. The relationship between the Bank and the Tanzania Government was sound in both project aspects of the Second Cashewnut Development Project. In case of the Original project, however, some differences in respect to marketing, pricing arrangements and Tanzania Cashewnut Marketing Board (TCMB) 's managerial and financial issues were noted and some were sooner or later resolved. 7. THE PERFORMANCE OF BORROWER (GOVERNMENT AND CATA) 31. The Government provided all necessary support and cooperation to prepare and implement the Project. However in case of the Original project, there was less effective involvement of local staff in the appraisal of the project. Because of the latter and unavailability of a comprehensive review program of the cashewnut subsector or industry, the Government ended up supporting and approving the overly optimistic Staff Appraisal Report and subsequent CATA's over estimated production estimates. 32. The general performance of CATA was poor with exception in construction of factories. CATA was unable to implement the rest of the project components effectively and totally failed to manage and develop the cashewnut industry. CATA did not whole comply to some important covenants guiding the implementation of the project. For instance, the recruitment of Financial Director and Chief Engineer was delayed for about four and six years respectively, the failure to recruit Financial Director early in the program and inability to retain him and subsequent local staff on the same job may explain the continued weak financial management in CATA. 8. TUE LESSON LEARNT 33. The implementation experience of the original project reflects how inadequate project identification can be costly. There is need for extensive project identification and a study of sectors and subsectors concerned before full project preparation and appraisal. In-depth investigation of commercial aspects of a project is imperative. The SAR was very optimistic about the market for processed nuts, particularly given that Tanzania was a new comer to the market. 34. There is a need to emphasize effective involvement of local staff in preparation and if possible appraisal. The borrower should have the chance as early as possible to react to flaws in the project design. The borrower country could first prepare a project preparation report  -25 - (feasibility study) with some supervision from the Bank, if necessary. The Bank could go on to prepare the appraisal report and the borrowing country should have the report reviewed by senior and experienced local staff before implementation of the Project. 35. When starting agro-industry an integrated approach which takes into account sources of raw materials and marketing of products should be the guiding principle. 36. Project designs should be flexible to take into account changing assumptions and unplanned circumstances, in this respect, the Bank became more flexible in CPIPP than in the original project and CIPP implementation was more successful than the original project. 37. The recruitment of qualified and efficient consultants and contractors whom you already know for civil works and early arrangements for component procurement can pay dividends. 38. There is need to intensify the increase in cashewnut production and to have a concrete program to achieve the latter. The implementation of CIPP has shown that with conscious effort to understand the farmer and linkage between research and extension, increased cashewnut production is possible. Meanwhile, the use of sulphur has proved to increase cashewnut yields but effort should be taken to study its health effects and to look for alternative means to replace sulphur. 39. Organizational and institutional factors are important in ensuring satisfactory management and the lack of inefficient institutions can jeopardize the success of a project. 9. ADEQUACY AND ACCURACY OF TEE FACTUAL INPORHATION CONTAINED IN PART III 40. We confirm that the factual information in Part III of the Project Completion Report is adequate and accurate.  - 26 - Part III Table 1 PART III STATISTICAL INFOX1M&TIz LoanKke Ef _dw First Cashewnutt Construction of 5 26 Sept. Completed in Devlopment processing lactones 1974 December 1981. Project. 1! to increase the Outcome was unsatis- processing capacity factory, with a (Loan 1014-TA) by 40.000 tons of negative economic (US$21 Milfton) raw nuts annually. rate of return at Total cost US$30 M. completion. Cashew and To achieve long ferm Appraised October 1988 Coconut Tree growth by increasing Negoad May 1989 Crop Project. production of cashew Expected to be for export and coco- effective January 28, 1990 (Cr. 2050-TA nut for domestic (US$25.1 M) a vegetable odl market. In particular, the project would: i) expand cashew and coconut research breeding and selection; d) develop and operate 7 cashew development centers and 3 coconut seed farms; dii) train extension and research staff; iv) manage and coordinate production packages; vi) strenen input credit facilities. 1/ Se ) P= Poto,muce Audih Rnoma No. 5197. daed 29 eun 14. 2/ As pm SIM Appisa Rbpon No. 7661-TA d 30 by M t9a.  - 27 - Paft 01 I~2 fta Ti I_ ekmd da* te Rd M date 21 Actual date 31 Preparation 1976 4 Appraisal June;July 1977 i Loan committee review 3113-7 Appnl 1978 Credit negotiabons 10-17 Apnl 1978 Board approval 16 May 1978 Credit signature 14 June 1978 Credit effecbveness June 1978 2 Oct. 1978 Project completion November 1984 31 Dec.1987 30 June 1989 i Credit ctosing December 1984 31 Dec.1987 30 June 1989 1/ AS Oer Apcaa estmates. / AS eer ,_dein ofd Jii 198S. d_W he pOpW ito a Cashewnu PBaduon hi m PM PrB*d (CPIPP). g Esimad as p ue 1989. 4/ Was pened by GOT wdh as_m f WAE as a f12ou of the FMst Cashewr u ,tv _tmn PBmj The onal mi was lOW by q okW n .m isis b_ Sete mber 17 Md I 1978 to ao d d tl aid ecOmic asO _s df the gW"e G( WA a"pw date 26 pri 1978. U A finther 1.5 vr xesion as rang d over and abowe di aroal 3 year etension to ow fa 01paMMt_ d the CPIPP. which was oin desnd to oea ien ftd gto so seasns. Due to the moe gham VW dey m th o d ft CPe W tend f 127 on we eao ht ben coved: hence td fuher 1.6 ye extension  - 28 - part Estiated and actual br year 1/ . Estim ated ........................ million USs at appraisal * Annual 4.6 10.4 7.6 2.0 1.4 1.2 0.3 0 0 0 0 * Cumulative 4.6 15.0 22.6 24.6 26.0 27.2 27.5 24.5 24.5 24.5 24.5 B. Actual 4. - Annual n'a 16.0 1.4 2.0 0.3 0.0 0.3 0.1 0.4 0.9 1.8 -* Cumulative n!a 16.0 17.3 19.3 19.6 19.6 19.8 19.9 20.4 21.3 23.1 C. Actual cum. aa.s of ESt. n:a 106 77 78 75 72 72 81 83 87 94 11 Yem ral to Wodd ark n Uk am sy (^Ji MM. 2/ Enated iinr 1978i79 roIr to adoMe pmet to cao s and 3, USS &. min Mg"d in 1985. & kkdd CPIPP up to 30 Jne 199 ise dniburanomnt fkr loca _anibi LBSS 45dtOO and &rign eG=e p_ywa B USS 77.900. inchido tumi ds.ue a d tcornl _UnU  - 29 - pan I" Table 4 With- Org. With Esp. Tot. SAR After drawn CPIPP drawn up-to with est. real. up-to allot. up-to 6,89 draw. CaIMQry: I 2' 12/85 3' 4/89 41 CPIPP , ....................... Million US. ... 1. Civil Wurkti 9,000 8,700 8,367 333 89 0 89 27 U1. Vehicles & equipment 10.500 11.600 11,182 418 447 777 1224 293 Ill. TA 6,000 2,500 1,677 824 428 428 52 IV. Unallocated am 2 000 001Z a A2 1.201 Q Total 27.500 24,500 21,226 3274 1,872 1,229 3,101 95 1/ The Crei AaMMSn SW ha DA wotld dIxbur 66% of QUM I arid 10 at clatoie I ad iL 21t AMe m o1 mdso. LSS 3.0 nmon were ca ld ham the gal credt i.e. new aret Mvam USS24.S mWWo 2/ Agggrdi to CATAJc4B PR. Baikm Ibsm data sSte tha SWl99 mli was dishgd by 31 Oece& 1966. The difeence is gg&a due to tih m Mag betwee aNpIOat and achia dIsbwsemnL 41 wdhdawal CPEPP bewen D an Jam 9. I a_ ei M are 5/ TOW tag"Nece wihdrawa at 30 June 1969 as % 0alocain Dami doe CmIPP u. reibsment for beo _as inc4ld as a catevg=. f Mhs ,de the two cate e we ombine ratbon exedi was 50/60.  - 30 - Parmf Ackal and Esqnated Prq Cost - Factory Esft-Sh_M=t Phj, 1 Actual as % CategQrY Aoora,sal Est 2 Actual ESD/ Apramsal Est IDA GOT Total IDA GOT Total IDA GOT Total Million Tsh . Civdl Works 74.7 39.6 114.3 69.5 42.1 111.6 93 106 98 Equipment and Vehicles 87.2 4.4 91.6 91.7 6.0 97.7 105 136 107 TechAssistance 49.8 3.5 53.3 13.9 1.9 15.7 28 54 30 Unallocated 17.8 6.6 24.4 0 0 0 0 0 0 Total 229.4 54.1 283.5 175.0 50.0 225.0 76 92 79 Source: CATA'TCMB Proiect Completion Report, May 1985. Esiated P&Me Cost - Per FactoE , 2t Ca1egory Newala II Kibaha Mtwara .............. Milhon Tsh. FumitureEqu.ipment 0.2 0.7 0.1 Motor vehicles 0 1.1 0.2 Ladbudings 36.8 37.1 35.3 Plant & Macinr 42A 4DA Total 79.4 69.3 76.0 Soum: Audited accounts TCMB 1987/88. 1/ hidud l _ up to 31 JaM , IBM A converions btween USS md Tsh at th dfIc osga rat of LOd 1.00 = Tsh &30 as at Me pn of dail. 3? Augu_ _stiae soume frmn CATA(TCMB PCR dated Law 19a. which does not alwjy egacly t ih he do mnn p cost tdablb of fte SAF. As dead SAR cost tables wwr not i d i do SMR it is not nab to reoDe nhese mno dtlerne 3 For a sam o7 the MM gases of U_darnlg - Mpa 25 gd Prt L.  - 31 - LMS- aaum Ak Ouia Desian: il Factory Canaciy: Mtwara ton p.a. 10,000 10,000 100 Newala n1 ton p.a. 10,000 10,000 100 Kibaha ton p.a. 10,000 10,000 100 iiX Production at FO: Di Mtwara ton p.a. 9.500 4,233 679 45 7 Newala 112 ton p.a. 9.500 0 0 0 0 Kibaha ton p.&. 9,500 4,111 431 43 5 iii) Recovery rate 1 Mtwara % kernel 24 21 23 88 96 Newala It of raw 24 nia na n'a na Kibaha nut. 24 23 22 96 92 ivY Out-tum Kernel mixes t: ;Ulwara: W320 % of 30 10 23 33 70 Other qual. total 2Q X 22 190 145 Subtotal kemel 60 48 52 96 104 Other out-tum rn 52 M 104 2 Total 100 100 100 100 100 W320 % of 30 27 29 90 97 Oher qua. total 2Q 22 i; ii Subtotal kernel 50 60 52 120 104 Other out-lum 40 4Q 40 AO f Total 100 100 100 100 100 iv) Fancial rsults 3 FIRR 2 negative Q!a J/ Fsr a i kdannmaon se Tabbs 10 and t of Pan IL 2/ Prd n cad in 1982 i uer 116 das al M on. mgot due to shtg of Ay R _ed ate ( in at 1_78 va__s is bor hum ad 4% aftew t  - 32 - Part 111 Tabbl CPIPP re-desagn: ii gdeajQin: Village clusters Total 36 85 236 i; fl Training: ; iiii Monitonng and Evaluatigo Evaluation and other Reports: 6 3-45 50-750 3. l fl adr Ngl inhm M nole 3. T 13 d1 PBrt Pm Fag MI a Tabb 13 at Pan 11. ym for addibo inco M M sse Table 15 d Part Ml.  - 33 - PARt III Table I Page I Comp lance with Malor-Coven&nts Sectigns 0egrc;!aton Deadline Status $or coolon ce Prolect Aoreement 2.02(a) In order to assist CATA Complied with. with technical and manage- ment services in operating the project factories and in training project factory staff, CATA shall emoloy qualified and experienced experts. 2.02(b) In order to assist CATA in Compiled with. supervising the Project's construction, CATA shall employ experienced engin- eering consultants. 2.02(c) In order to assist CATA in 3016/78 A study for the design of implementing a management management information System information system and in was carrfed out. TCMB training CATA's financial management feels that not all and accounting staff. CATA recommandations could be shall employ qualified and adopted although some were experienced experts. resulting in somewhat improved financial systems and procedures. 2.04 Appointment of suitable Complied with. qualified Financial Director for CATA. 4.30(a)and(b) CATA shall have its Mostly due to the measures accounts and financial taken and described above. statements for each fiscal accounts are now up to date year audited and furnished and regularly audited. to the Association as soon as possible. 2.05 CATA shall submit to the CATA has not notified IDA in Association for its review a systematic way on the and approval a detailed trafning program. description of a training programm for the staff to be employed In the Project factories.  - 34 - Table X Page 2 Compliance with Maior-Covenants (cont'd) 5S*Cti2s Cescr10 ton Sedle2tatus 4.02 CATA Shall establish and CATA has not maintained maintain a separate separate accounts exclusively Project Accounts. for the Project. Oleveloaomnt Credit Agreement 3.04 The Borrower shall continue The Government has regularly to maintain a pricing reviewed producer prices. An structure for cashewnuts active policy dialogue is based on, inter alia. the entertained between the Sank grading of such nuts and GOT regarding the and closely relating farm- cashewnut pricing structure, gate prices (less appropriate processing and marketing costs) to appropriate world prices. 3.02 The Borrower shall carry CATA management feels this is out or cause to be carried not required and as a result. out. a stu1y to determine the study has not been occupational 4ealth hazard carried out. In its cashewnut industry.  - 35 Part III Table 8A Us of Sank Resources for Sunerviaoin and PCR V2. fith Q Ptof #bdaJil SI eeleliz htmo ntctMence Tk* of UKz pnrsong in field Djre entA d ttus-Tr* problez Supervision Nissions: 1. 9/78 1 9 fA 2 2 0 2. 4/79 1 8 FA n/a n/a n1/ 3. 12/79 2 14 FA, A 2 3 0 4. 6/80 2 14 FA, A 3 3 0, N 5. 2/81 1 11 FA 2 2 Ml 0 6. 10/81 2 10 FA, A 2 2 N, 0 7. 2/82 1 4 8. 6/82 2 16 FA. Eng 3 3 F.H.T.0 9. 12/82 2 15 A, E 3 3 F,N,T,O 10. 6/83 1 9 E 3 3 X,P,T,F 11. 10/83 1 7 A 3 3 W.P.T.F 12. 10/84 2 7 A. A 3 2 N,P,T,F 13. 2/85 2 7 A. E _/ n/a n/a n/a k/ 14. 7/85 2 7 , 1 1 15. 2/86 2 9 , 2 2 16. 6/86 1 7 A 2 2 17. 10/86 1 3 A 2 1 18. 1/87 2 15 A, A 2 1 19. 5/87 1 4 A 2 1 20. 11/87 2 8 A, A 2 1 21. 3/88 1 10 A 2 1 MLR 1hsaion 6/89 2 12 A. E i/ FA x Financial Analyst; A a Agriculturalist; Eng = Engineer; E Economist. Z/ %atjsj 1 a Problem free/minor probless; 2 * Moderate problems: 3 a Major problems. Perorsane : 1 a Improving: 2 * Stationary; 3 * Deteriorating. 2/ F a Financial: N s nanagomant: T Technical: P a Political; 0 Other. 4t Visit to evaluate and discuss with GOT their proposls for a Cashewnut Rehabilitation and Expansion Project. 5/ This Mission discussed the extension of the closing date and the redesign of the project into * pilot project. !/ Status and Trend no longer included in Supervision Mission Reports. From 1985 onwards Status and trend parameters indicate 'Overall status' and 'Development Ipact'. Pact EU Satwtesk bw Protl SV . Financlal Uere ACTIVITY T7 70 79 O6 1 St2 eJ 84 85 80 87 s8 TOTAL Preapprlesel - 12.4 .2 - - - - - - - - - 12.6 Appraisal - 1.0 47.1 - - - - - - - - - - 48.8 Nagotitlon - - 9.2 - - - - - - - - - - 0.2 Sup.rv1r10n - - .6 5.7 0.9 4.0 16.0 5.2 90. 26.7 17.5 90. 7.7 118.0 Other .6 - 2.1 - - - - .a - - - - - 2.5 TOTAL Y YEAR .0 14.6 5094 5.7 9.5 4.0 16.9 5.4 9.5 66.7 17.5 9.8 7.7 186.6  - 36 - PaMn (1965/66-1987/88) Year 1 / Pwm d I neb V Pducfo ('000 ton) ('000 ton) 1965'66 74.3 51 1976.77 97.7 67 1966.767 84.2 58 1977,78 68.4 47 1967/68 73.8 51 1978/79 57.1 39 1969.'69 118.0 81 1979180 41.4 29 1969/70 110.3 76 198w81 57.0 39 197011 112.5 77 1981'82 44.3 31 1971/72 126.0 87 1982'83 32.6 22 1972i73 125.5 87 1983184 47.6 33 1973174 145.1 100 1984/85 32.5 22 1974J75 118.9 82 1985/86 20.5 14 1975S76 83.7 58 1986i87 16.4 11 1987/88 a/ 24.0 17 1 Smy M4U - b4kbetng DOavpmntM EboaL. Arkuliew ir CaNite . Oar-Ps- _im. l9BSfi;8lm as p ined the draft WeR of the Caidhrnut ad Cocmnut Treecrons 2 Feak F rM* bMdton year 1OS?374 a taken as 1p0. wy U iat  - 37 - PART III Table 1C Factorv Processing Capacities and Days of Production Fctory Rated Operating Date of Fiscal Cumulative .Remark 21 Capacity Capacity Test-run Year No. of as of Production IL/ Phase I Lindi 10.000 8.600 Oct. 78 1978/79 301 Production ceased in June 1983 Ytama 5,000 4.300 Oct. 79 1979/80 358 Production ceased in June 1992 Nachingwea 5.000 4,300 Feb. 81 1980(81 95 Production ceased in June 1982 Masasi 10.000 8.600 Mar. 81 1980/81 91 Froduction ceased in June 1982 Newala 1 10.000 8.600 June 81 1980/81 - Was never operated Phase 11 Mtwara 10,000 8.600 June 81 1979/80 N/A Operating Newala 11 10.000 8.600 June 81 1980/81 116 Production ceased in April 1982 Kibaha 10.000 8.600 Oct. 80 1980/81 720 Operating Other Tanita 1 12.500 10,700 1965 1965/66 N/A Production ceased in August 1983 Tanita 11 12.500 10,700 1978 1978/79 N/A Production ceased in June 1982 Mtwara CC 8.000 6,800 1968 1968/69 N/A Production ceased in June 1982 Tunduru 10.000 8.600 - - Production ceased in June 1982 TOTAL 113.000 97.000 - - - Source CATA Records. .L/ The contract with the equipment suppliers from Phase It mentions that processing will be carried out over a period of 270 working days/year in 2 daily shifts of eight hours each. 2/ Factory has not functioned since data specified.  - 38 - Table I11 iA Prcduc ] at Lkemband Kia (19MS Actual prod. Est. production Total Est.Prod. Nov.'88-May'89 June'89-Sept.89 1 1988,89 Likombe Kibaha Likom Kibaha Likombe Kibaha Factory Days 157 98 64 64 221 162 Raw nuts (lOiu) 2,862 2,032 2,000 2,CO0 4,862 4,032 Kernels (ton) 638 389 450 450 1,088 839 CNSL (ton) 280 203 200 200 380 403 Cashew waste (t) 95 50 60 60 155 110 11 Due to the Wrated raw nut supply the Jue September estimates appear high to the Mission.  - 39 - PART III Table 12 C.PIPP staf-fi-ng It Position Establishment Starting Ending month month Project Manager 1 7/85 6/89 Planning and 2/ Eialuation Officer 1 11/86 6/89 Cashew Agronomist / 1 11/86 6/89 Financial Specialist Z/ X/ 1 9i87 2/88 6/88 6/89 Agronomists: 3 - Training Coordinator (South) 4/87 6/89 - CDC Coordinator 3/88 6/89 - Training Coordinator (North) 4/88 6/89 11 Other support staff. 7 at 11/86, 15 at 12/87 and 21 at 12/88 to 6/89. 2/ Technical Assistance Staff. I/ Time allocated between CPIPP and TCMB.  - 40 - Table 13 CP1PP Trcaining Aevti,,tie Xaar t aPsnnl Curs Coantent No a-A. AM Mandays 96187 40 VEA, 6 S4S J/ Cashew production end 6 2-3 690 reclamiation activities 50 VEA, 6 SM!S. Vegetative propagation 1 1 66 10 nurserymn 14 Farmers ll Cashew production end 1 5 170 reclamatiOn activities 87/88 SO VEA. 6 SMS. Cashew produCtion and 12 1 792 10 Others I/ reclemation activities 50 VEA. 6 SMS Pre-season instruction 1 6 336 530 PCS I/ Staff Operation of motorized 1 530 dusters 100 PCS leaders Orientation on strengthen- 2-3 250 ing input supply 88189 '5 VEA, 10 others Cashew production and 12 1 1.020 Zi reclamation ctivitites 27 SNS Cashew production and 12 1 324 reclamation activities 75 VEA. 27 SNS Pre-season instruction 1 6 612 10 VEA Enumeration of field 1 2-3 25 investigations 12 VEA Tree selection 1 2-3 30 25 nurserymen Vegetative propagation 1 IS 375 630 PCS staff Operation of motori:ed 1 630 dusters 200 PCS leaders Ortentation Mn strengthen- 2-3 500 ing input supply 40 Regional, Coop.. Cashew workshop 3 120 CR08 and AlI staff 6 AlI. 6 CPIPP Use of computers 20 260 & I TCM8 staff 6.730 I VEA. Village Extension Agents; SNS. Subject Matter Specialists; PCS. Primary Cooperative Society; ARl. Agricultural Research tnstitute. 2' 4 for the Teacher Training College. Nachingwea and 6 from folk Development Centres. ,1 Further farmer training was on the basis of 18 farmers * 25S per village, 3 to 4 villages per cluster: 86/87 36 clusters of 126 villages contacting approximately 2.835 farmers. 87/8S 50 clusters of 175 vilIa,- .,, i*.j