Senegal - Second Agricultural Research Project

e tDocument of The World Bank FOR OFCIAL USE ONLY Rleprt No. 7675-SE STAFF APPRAISAL REPORT SENEGAI. SECOND AGRICULTURAL RESEARCH PROJECT FEBRUARY 26, 1990 Agriculture Division Sahelian Department Africa Region This document has a restricted distribution si.d may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  { -4~~~~~~~~~~~~~~~~~~~~~~~ CURRfNCY QUIVALSENS Currency unit: CIA Franc (CIA?) 1 US$ - CIA? 324 1 SDR - USS 1.32 (as of December 1989) WEIGHTS AND MEASURES Metric system FISCAL YEAR Government: July 1 - June 30 ISRA: January 1 - December 31  FOR OFFmIAL USK ONLY ABBREVIATIONS AND ACROKMS CDH Centre d. D4veloppement Horticolo (Horticultural Research Center) CIAT International Center for Tropical Agriculture CILSS Conit6 Inter-Etat de Lutte Contre la S&cheresse Sah4lienne (Sahelian Drought Intergovernmental Committee) CIRAD French Center for International Cooperation in Agricultural Research for Development CNRA Centre National de Recherche Agricole, Bambey (National Agricultural Research Center) CNRF Centre National de Recherches Forestilres (National Forestry Research Center) CRODT Centre ie Recherches Ocdanographiques de Dakar-Thiaroye (Oceanographic Research Center of Dakar-Thiaroye) IEMVT Institut d'Elevage et de Medecine Vetdrinaire pour lea Pays Tropicaux (Animal Production and Health Research Institute for Tropical Countries) IRAT Institut de Recherche Agronomique Tropicale et des Cultures Vivrieres (Research Institute for Tropical Agriculture) ISNAR International Service for National Agricultural Research ISRA Institut Senegalais de Recherches Agricoles (Senegalese Agricultural Research Institute) LNREV Laboratoire National de l'Elevage et des Recherches Veterinaires (National Animal Health Research Laboratory) MDR Ministere du D4veloppement Rural (Ministry of Rural Development) ORSTOM Office de Recherche Scientifique et Technique Outre-Mer (Foreign Science and Technology Research Institute) PAPEM Point d'Appui pour Experimentations Multiples (Large Scale Experimental Test Areas) PQ ISRA's 5-year Research Program SAED Societe d'Am6nagement et d'Exploitation des Terres du Delta du Fleuve S6negal (Senegal River Valley Development Agency) SODAGRI Rural Development Agency for the South East SODEFITEX Societe pour le Developpement des Fibres Textiles (Rural Development Agency for the West) SODESP Societe pour le Developpement de l'Elevage de la Zone Sylvo-pastorale (Sylvo-pastoral Livestock Authority) SODEVA Societe de Developpement et de Vulgarisation Agricole (Groundnut Basin Extension Agency) SOMIVAC Societe de Mise en Valeur Agricole de la Casamance (Casamance Development Agency) This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bankc authorization.  SECOND AGRICULTURAL RESEARCH PROJECT STAF APPRAISAL Rr Table of Contents Pace Abbreviations and Acronyms Table of Contents {i) Credit and Project Summary (iii) Documents contained in the Project File (vi) I. Backoround A. Project Background. 1 B. The RuralSector. 1 C. Government Objectives and Strategy. 2 D. Agricultural Institutions ................................ 3 E. Bank's Lending Operations. 3 F. Sector Lending Strategy. 4 II. Agricultural Research A. Agricultural Research in Senegal. 4 B. ISRA. 6 C. Agricultural Research Project (Cr. 1176-SE). 8 D. Lessons Learned from the First Project .11 E. Current Issues ........................................... 11 F. Justification for a Second Research Project .12 III. The Project A. ISRA's Five-Year Research Program .13 B. Research Priorities .14 C. Planning and Management of Research .15 D Project Area .16 E. Project Objectives and Summary Description .17 F. Detailed Features .18 G. Anticipated Research Results during the Project .23 H. Project Costs and Financing .24 I. Procurement .26 J. Disbursements .27 K. Environmental Imact .27 This report is based on the findings of a Bank appraisal mission which took place in November 1988 and February 1989 and consisted of Messrs J. Cerych (mission leader), A. Spurling, P. Sihm, F. Schorosch and Ms. J. Masterson (IDA).  - ii - lV. Proiect ImDlementation a. Organizati.on and Management ...................................................... 28 B. Research - Zxtension Linkagk ............................. 30 C. Financial Control, Audit and Reporting ................... 31 V. Benefits and Risks A. Main Benefits ... . ........................................ 32 D. Project Risks . . .. 32 VI. Asoarances and Recommendation ................................. 33 Annexes 1. ISRA's 5-Year Research Program 2. Research Programs Proposed for IDA Financing 3. Salient Characteristics of Agricultural Zones 4. ISRA's Links with International Agricultural Research 5. ISRA's Fertilizer Recommendations 6. Results of ISRA's Agricultural Research (1974-1988) 7. Natural Resources Managemnent Research Program 8. Research Support Services 9. Project Costs 10. Amounts and Methods of Procurement 11. Estimated Schedule of Disbursements 12. ISRA's Operating Expenses 1983-87 Charts I. Organization of ISRA II. Research Plan.aing Process MaR IBRD 21318  - Iii - SICOD ASCULTUAL RUSA PROJECT Credit and Prouect Suiar, Borrowert Republic of Senegal Beneficiary: Institut Senegalais de Recherches Agricoles (ISRA) Amount: SDR 14.0 million (US$ 18.5 million) Terms: Standard, with 40 years maturity Onlending Terms: Proceeds of the Credit would be passed on in grant form to ISRA. Financing Plan: Government US$ 20.4 million IDA US$ 18.5 million TOTAL USS 38.9 million Economic Rate of Return:Not applicable Proiect Description: The project, to be implemented over five years, would focus on: (a) adaptive research involving the testing, within the farming environment, of the technologies developed during the first project; (b) applied research targeted at major technical problems in the priority agricultural zones; (c) development of an applied research program of natural resources management; (d) strengthening of the linkages between research, extension, development agencies and the farming community; (e) strengthening of administrative and financial management of ISRA; (f) providing financial support for ISRA's research support services and for establishment of a commercial production company to manage revenue-earning activities; and (g) establishing an unallocated Research Reserve Fund to enable urgent research work identified at the yearly research reviews to be financed without delay. The project provides funds for civil works including central headquarters of ISRA in Dakar, vehicles,  - iv - equipment, local training, technical assistance to ISRA's administration and financial management (two years residence plus short term missions) and incremental operat3ng costs. The total cost of the project is estimated at USS 38.9 million equivalent with a f,.eign exchange component of US$ 10.5 million (272). Benefits and Risks: The closer integration of research on crops, livestock and forestry will contribute to the development of sustainable farming systems that will assist with the restoration and conservation of soil fertility and so with crop productivity. An increased emphasis on adaptive research, with the extension service and the farming community participating in the research process, will assist with the adaption of technical advances made during the first project to the needs of the farming community. This will be further strengthened through the close coordination of this project with that concurrently proposed for agricultural services. Both the long-term needs of the environment and the most immediate technical problems of farmers will thus receive high priority and compartmentalized scientific research will be diminished. Possible risks include a program segmentation because of a multiplicity of cofinanciers of research. slowness of ISRA's management in achieving the shift in emphasis from thematic research to multi-disciplinary problem-oriented research, and ineffective feed-back from the production systems research teams and from the extension services. The major general risk is, as was the case for the first project, that the need to solve immediate specific problems will prevent manak .nt from concentrating sufficient supervision ar resources to the more conceptual necessity of a *eorientation of the research program. The annual reviews of the on-going and planned research would address these risks. Map: IBRD 21318 credit.sar SARI  Estgimted Cost$ and Financing Pln Ztimat,ed Cogts a/ Local foreinm ----------USS million--------- Civil Vorks 0.8 1.. 1.9 Zquipment 0.3 2.7 3.0 Vehicles 0.1 1.1 1.2 Operating Cost Research 14.9 2.5 17.4 Operating Cost Administration 6.2 0.9 7.1 Consultants, Audit, Training 0.8 0.2 1.0 Reserve Research Fund 0.1 0.9 1.0 Base Cost 23.2 9.4 32.6 Physical Contingencies 0.1 0.5 0.6 Price Contingencies 4.3 1.4 5.7 Total Project Cst 27.6 11.3 38.9 a/ Exclusive of taxes ard duties. Financing Plan Local, Foreign Total -(S$---- (US$ million)-------- Government 19.5 0.9 20.4 IDA 8.1 10.4 18.5 Total 27.6 11.3 38.9 Estimated IDA Disbursements (USS million) FY91 FY92 FY93 FY94 FY95 FY96 Annual 3.0 4.5 4.5 3.0 2.0 1.5 Cumulation 3.0 7.5 12.0 i5.0 17.0 18.5 costs.pre SAR2  - VI - S AGRCLTURAL C!PIO ! Docuimnt Aailable 1in the Proj*ct Fil. Strategies et Programmation des Recherches 1989-93 (10 volumes) Detailed Project Cost Tables Rapport Particulier Provisoire ISRA - Gestion du Personnel Groupe de Travail - La Situation Financiere de l'ISRA (2 volumes) docprfil.v SAR1  smm OECOND AMCULTURAL RESEARCP E lSAv, APPflAI3AL I * B&CKGROUND A. Proilot ackoround 1.1 The Government of Senegal has requested IDA's assistance in financing a second phase of the Agricultural Research Project (Cr.1176-SE) which will be completed in June 1989. The first project was conceived as a first phase of a long-term program of support and strengthening of the agricultural research capacity of the natioi:.al Agricultural Research Institute, the Institut S6nLgalais do Recherches Agricoles (ISRA). Although the broad lines of IDA's assistance to ISRA remain unchanged, the Second Phase Project is focused on consolidating achievements made under the first Project and on helping ISRA to implement its and Government's five-year research program (Strat6gies et Progra-mmation des Recherches 1989-1993). This Programme has been prepared by ISRA during 1987 and has been commented upon by IDA as well as by other donors (USAID, FAC/CIRAD). The final version of the Programme has been accepted by IDA and constitutes the technical outline of the Project. B. The Rural Sector 1.2 Senegal has a total land area of nearly 200,000 km2. Its population is currently about 7.0 million, and is growing at a cate of about 3% per annum. Per capita GNP for 1988 was estimated at US$ 630, the highest of the Sahel countries. Since 1960, Senegal has experienced, however, one of the lowest GDP growth rates (2-3% per annum) of any African state not affected by war or civil strife. Over the last few years, agriculture, which accounts for about 20% of GDP, has contributed on average 22% of export revenues and has provided nearly 70% of all employment in the economy. Over 93% of the total sector income is derived from rainfed agriculture, with groundnuts representing 75% of the total monetary income for a typical family. Almost all output of the rural sector is produced by small-scale units, but there is much diversity in farm size, labor availability, ownership of agricultural equipment, productivity, and income. Since seven out of ten Senegalese rely on the rurai sector economy tor their livelihood, the sector will remain the main source of employment and income for the large majority of the population for a long time. 1.3 Average rainfall has not only declined throtghout the country since the sixties, but it has also become highly variable from one year to the next. Arable land is estimated at 3.8 million hectares (about 19% of the land surface), of which about 2.5 million ha are cropped annually. Extensive agriculture is still dominant and population pressure is causing a constant shortening of fallow periods. The main crops cultivated are groundnuts and millet/sorghum, followed  -2- b, maize, rice, cotton, cowpeas and cassava. Agricultural exports, including fisheries, remain e*ssntial to Senegal's balance of payments, although export earnings dropped in 1986-88 due to falling international prices of groundnut and cotton and to the aprreciation of the CFA franc vis-&-vis the dollar. 1.4 Despite considerable efforts at modernization, rainfed agriculture continues to exhibit negative growth per head of the rural population. Aside from the poer climatic conditions, *ome of the sector's principal constraints relate tot (i) lack of dynaaism in agricultural technology generation and diffusion; (ii) the high level of dependence of the rural sector on millet/sorghum for domestic consumption,and on groundnut production for export and the limited efforts in crop diversification; (iii) the lack of a well- functioning capital market and credit system; (iv) the low productivity of large- scale public investments; (v) the weak institutional environment for project identification and implementation; and (vi) insufficient and weak agricultural producer organizations. C. Governmnt Obiectiven and Strateov 1.5 Government objectives, strategy and policies in the rural sector have evolved in response to changes in economic conditions and as a result of the poor performance of the sector. During the 1960s and 1970s, Government efforts to promote agricultural production focussed almost exclusively on the groundnut subsector. Input distribution was tied to groundnut sales, and cereals marketing policy did not encourage production of marketable surpluses. For most farmers, groundnuts were therefore the single most important cash crop, while cereals remained subsistence crops. 1.6 Adjustment of the economy became unavoidable at the end of the 1970., when a combination of poor finarcial policies, overambitious investment programs, excessive internal and external borrowings, worsened terms of trade, and successive droughts plunged an already weakened economy into a severe crisis. In response to this situation, an adjustment program was introduced in the early 1980s to restore the country's situation through firm management of aggregate demand. However, these policies were not sufficient to avoid deterioration of the country's financial situation and the growth of external debt. A new adjustment framework was thus formulated in which the agricultural sector plays a key role. This new framework concentrates on lifting supply-side constraints and on creating an environment conducive to private sector participation and to a reduced role for the State. 1.7 Within this framework, the Government issued in 1984 "La Nouvelle Politique Agricole" (NPA), of which the basic aim was to promote food self- sufficiency while consolidating the gains derived from industrial crops. The NPA is oriented around five main axes: (i) organization and active pzrticipation of farmers, and of the private sector in general with a concomitant reduction of public control; (ii) reorganization and reduction of public sector intervention; (iii) improvement of input supply through the provision of adequate financial means; (iv) better organization and management, and (v) reduction of pre- and post-harvest losses through intensified pest control. Thus the main thrust of the NPA was to refocus reforms so as to emphasize the management of both demand and supply.  -3- D. .oiultral Zn tLtutiQ 1.8 The inistry of Rural Develoment (MDR) has overall responsibility for development of the sector, but several other mlnistries, notably Livestock, Invlronmantal Protection, Hydraullcs, Social Development, Intorior and Public Works, each have som responsibliLty for rural development. While the Ministries are primarlly responsible for policy-makLng, the actual lmpl ee ntatlon of those policLes has, *snce lndependence, been entrusted to a number of para-publ