Argentina - Provincial Agricultural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6927-AR MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT OF US$125.0 MILLION TO THE ARGENTINE REPUBLIC FOR A PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT March 21, 1997 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (As of March 1997) Currency Unit = Peso (Arg$) EXCHANGE RATE (March 1997) US$1.00 = Arg$1.00 Arg$1.00 = US$1.00 FISCAL YEAR January 1 to December 31 WEIGHTS AND MEASURES Ihe metric system has been used throughout the report. Vice President: Mr. Shahid Javed Burki Director: Mr. Gobind T. Nankani Division Chief: Ms. Constance Bernard Task Manager: Mr. Guzman Garcia-Rivero  FOR OFFICIAL USE ONLY ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CC Consultative Commnissions CFA Federal Agricultural Council Consejo Federal Agropecuario CORFO-RC Corporation for the Development of the Rio Colorado Valley Corporaci6n de Fomento del Rio Colorado CPI Consumer Price Index DGI General Irrigation Department - Province of Mendoza Departamento General de Irrigacidn-Provincia de Mendoza EA Environmental Analysis EM Project Environmental Manual EPDA Provincial Agricultural Development Agency Entidad de Programacidn del Desarrollo Agropecuario ERR Economic Rate of Return FIAHS Fund for Innovative Approaches in Human and Social Development FMD Foot-and-Mouth Disease GDP Gross Domestic Product GOA Governmcnt of Argentina IASCAV National Institute for Phytosanitary Health and Quality Control Instituto Argentino de Sanidady Calidad Vegetal IBRD International Bank for Rcconstruction and Development ICB Intcrnational Competitivc Bidding IDB Intcr-American Development Bank IDC Institutional Devclopment Component IERR Internal Economic Ratc of Return 11his doctuen has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  LIBOR London Interbank Offered Rate MA Projects Environmental Manual Manual Ambiental del PROSAP M & E Monitoring and Evaluation Seguimiento y Evaluaci6n MEyOySP Ministry of Economy and Public Works and Services Ministerio de Economia y Obras y Servicios Pzublicos MERCOSUR Southern Cone Common Market Mercado Comuin del Cono Sur NBF Non-Bank Financed NCB National Competitive Bidding NGO Non-Governmental Organization NPV Net Present Value O & M Operation and Maintenance OED Operations Evaluation Department PDP Provincial Development Project POA Annual Operating Plan Plan Operativo Anual POM Project Operation Manual PROMSA Agricultural Services and Institutional Development Project Proyecto de Modernizacion de los Servicios Agropecuarios PROSAP Provincial Agricultural Development Project Proyecto de Servicios Agricolas Provinciales SAGPyA Secretariat of Agriculture, Livestock, Fisheries and Food Secretaria de Agricultura, Ganaderia, Pesca y Ahmentaci6n SBD Standard Bidding Document SENASA National Service for Food and Agricultural Sanitation and Quality Servicio Nacional de Sanidad y Calidad Agroalimentaria SOEs Statements of Expenditure  SSAGyF Undersecretariat for Agriculture, Livestock and Forestry-SAGPyA Subsecretaria de Agricultura, Ganaderia y Forestaci6n-SAGPyA TORs Terms of Reference UA Environmental Unit UnidadAmbiental UE Evaluation Unit Unidad de Evaluaci6n UEC Central Project Coordinating Unit Unidad Ejecutora Central UEP Project Implementing Unit Unidad Ejecutora de Proyecto WUA Water Users Associations   ARGENTINA PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: The Argentine Republic Implementing Agency: Secretariat of Agriculture, Livestock, Fisheries and Food (SAGPyA) and the Provincial Governments. Beneficiaries: Directly, about 120,000 small and medium-sized commercial farmers and, indirectly, the entire rural population in the subproject areas. Poverty: Not applicable Amount: US$125 million Terms: Repayment in 15 years, including a grace period of five years, with loan amortization based on level repayment of principal and standard variable interest rate for LIBOR-based single currency loans. Commitment Fee: 0.75% on undisbursed loan balance, beginning 60 days after signing, less any waiver. Onlending Terms: Provincial subloans would be repaid in 18 years (including a grace period of five years) with variable interest rates at the average between IBRD and IDB rates. In addition, provinces would pay commitment and inspection fees (also the average of the rates for both banks) in proportion to the amounts of the provincial subloans. Financing Plan: See Schedule A. Net Present Value: The NPV of total net benefits has been estimated at US$127.3 million (at a 12% annual discount rate), and the overall IERR at 22.2%, for a set of subprojects with completed feasibility studies ('Group A'), plus the full costs of the project institutional development and coordination components (at federal and provincial levels). This set of subprojects and components has a total baseline  - 11 - cost of about US$194 million, representing about 63 percent of total project base costs. Staff Appraisal Report: IBRD No. 15454-AR Map: No. IBRD 27905 Project Identification No.: AR-PA-6010  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE ARGENTINE REPUBLIC FOR A PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to the Argentine Republic for US$125.0 million to help finance a Provincial Agricultural Development Project. The loan would be at the Bank's standard variable interest rate for LIBOR-based single currency loans with a maturity of 15 years, including five years of grace. 2. Background. In 1991, Argentina initiated a reform program that streamlined the public sector, transformed the monetary system and contracted its foreign debt, and thus restored confidence in the market as the primary force behind economic growth and monetary stability. As the mainstay of this program, a fixed exchange rate regime (Convertibility Plan) was established in 1991, under which the monetary base has to be fully backed by international reserves. In addition, the reform process restructured relations between the Federal and provincial governments supported by two Agreements (Pacto Federal and Pacto Fiscal), signed in 1992 and 1993 respectively, through which provinces pledged to reduce the size of their public sector and balance their fiscal situation. At the same time, the Federal Government pledged its assistance to this process by implementing a broad incentive program and establishing an automatic system for sharing with the provinces the tax revenues collected at the Federal level (Ley de Coparticipaci6n). 3. As a result, Argentina dramatically reduced inflation (from an annual rate of 4,023% in 1989 to a rate of 3.9% in 1994) and sustained an average annual real economic growth rate of 5.5 percent during 1991-94. Nevertheless, following the fast expansion of the first four years of the program, as a consequence of the repercussions of the Mexican financial crisis the Argentine economy suffered a recession in 1995, and GDP declined approximately 4.4% during the year (with an inflation of about 1.6%). By the fourth quarter of 1995, the indications were clear that the economic deterioration had ceased, and that Argentina was pulling out of the recession. The 1995 economic crisis was the first real test and a validation of the Convertibility Plan and, more importantly, a clear demonstration to investors, domestic and international, of Argentina's commitment to preserve it. Preliminary results for 1996 confirmed that the recession was over. Real GDP growth rate for 1996 is estimated to have reached 4 percent, with inflation during this year almost nil (CPI increased 0.2% in 1996). Lagging fiscal revenues showed signs of improvements, reflecting the increase in economic activity. However, due to a relatively higher increase in imports with respect to exports, the trade balance has been reduced to US$250 million in 1996. 4. The agricultural sector has traditionally played a central role in the national economy. Presently, it contributes only around 5% of GDP (down from around 15% in the late 1980s), provides about 12% of total employment (plus another 12% in  - 2 - farm-related manufacturing and transportation, and 10% in related services), and about 70% of export revenues from agricultural products or manufactured products of agricultural origin. This decreasing contribution of the sector has been the consequence of relatively lower rates of growth compared to other sectors of the economy. During the period 1985-94, agricultural growth has lagged behind the rest of the economy, reaching an annual average rate of only 1.6 percent during this period (3.8% in 1994), compared with 2.7 percent for industry (6.5% in 1994) and 3.1 percent for services (8.5% in 1994). In part, this resulted from decades of discriminatory policies against the sector, including heavy export taxation and an overvalued currency, which contributed to reduced investments in the sector and resulted in a land-extensive production system. During the early 1990s, this trend was reinforced by exceptionally low international prices for major commodities, as well as changes in the structure of relative prices in the economy (higher prices for non-tradables) adversely affecting many small and medium-sized farms. However, the situation has been changing in the last few years as a consequence of the opening up of the economy, the elimination of price controls and trade barriers, and the reduction or elimination of import and export taxes. In addition, adoption of new technologies and reduction in production costs, derived from lower input and transport costs, have increased sectoral competitiveness and made investments more profitable. All these factors, helped by a recent recovering of international prices of some traditional export products, as well as new trade possibilities arising from MERCOSUR, contribute to a positive trend in the level of net investment in the sector. 5. Because agriculture relies heavily on external trade, the sector is poised to benefit from fiscal and trade reforms creating a more open and competitive economy. However, appropriate macroeconomic policies alone would not achieve sustained agricultural growth. Certain regions, which had depended upon government support for a few agricultural products, need to adjust to the economic reforms. New investments in agriculture are essential to remove the bottlenecks created by years of neglect by both public and private sectors. Also, substantial investment would be required to rehabilitate rural infrastructure, including irrigation and drainage systems, transport, communications and marketing. Long-term strategies for diversifying the agro-export mix and penetrating new markets would however require a major reorientation of agricultural support services, including technical assistance, health and quality control, export promotion and marketing, as well as investment in rural infrastructure and advanced technology. Since provinces must now provide most agricultural support services as well as construct and maintain rural infrastructure, many are seeking innovative ways to fulfill their obligations, including institutional strengthening and closer private sector collaboration. 6. Project Objectives. The main development objectives of the proposed project are to: (a) increase and diversify agricultural production and exports, through intensifying land use, increasing productivity per hectare, as well as introducing new crops and modern varieties; (b) increase and stabilize the agricultural incomes of 120,000 small and medium-sized commercial farms; (c) improve the effectiveness of basic agricultural support services to increase the international competitiveness of agricultural products, by introducing new and more productive technologies, increasing quality and improving sanitary conditions of products, and eradicating diseases that limit access to international  - 3 - markets; (d) improve rural productive infrastructure to reduce production and marketing costs, through a significant reduction in the risk of losses (crops, livestock, equipment and facilities), as well as more efficient use and better conservation and management of natural resources; (e) strengthen national and provincial institutional capacity to formulate and analyze sectoral development policy, as well as to identify, prepare and implement investment projects; and (f) rationalize public investments and promote an expanded private sector role (e.g. farmers' organizations, NGOs, and service providers) in agricultural development. 7. Project Description. To achieve its objectives, the project would: (a) finance subprojects (about 93% of project costs), presented by the participating provinces in accordance with their priorities, development strategies and investment plans, and which satisfy the eligibility criteria established for the Project. Most of these subprojects would be provincial initiatives to be implemented at the local level by a provincial executing agency. However, in special cases in which several provinces need to address a common regional issue by coordinated actions, the proposed project would finance national subprojects with multi-provincial coverage. In these cases, the implementation of the subprojects would be under the coordination of a executing agency with regional or national coverage to achieve overall consistency at the national level, increase effectiveness, and take advantage of potential externalities. Provisionally, the amount of subprojects to be implemented by a single province would be limited to 25% of total project costs, and the total amount of the national subprojects to be approved during the life of the project would be restricted to 30% of total project costs. (b) strengthen institutional development (about 2% of project costs), both at the national and at the provincial levels, to: (i) establish permanent operational mechanisms for supporting implementation of the proposed project; (ii) help define the role of the public sector and increase coordination between different public and private entities to increase their effectiveness; (iii) increase capacity to formulate and analyze agricultural policy, as well as to design legal and institutional reforms, which would facilitate the transfer of responsibilities to users' groups and promote sectoral development; and (iv) identify, prepare and implement agricultural development initiatives, promoting an increased participation of the private sector. (c) provide project coordination and management, and monitoring and evaluation (M&E) (about 5% of project costs), at the national and provincial levels.  - 4 - 8. Project Cost and Financing. The total estimated project cost would be US$357.2 million equivalent over a seven-year implementation period. This total project cost includes allowances for physical contingencies of US$20.6 million (5.8% of total costs) and for price contingencies (domestic plus international inflation) of US$26.5 million (7.4% of total costs), as well as taxes and duties estimated at US$41.5 million (11.6% of total costs). The main investment categories would be: (i) civil works, US$124.8 million (35% of total costs); (ii) vehicles and equipment, US$38.8 million (10.9%); (iii) consulting and auditing services and technical assistance, US$72.8 mnillion (20.3%); (iv) training and institutional development, US$12.1 million (3.4%); (v) incremental local staff, US$50.3 million (14.1%); and (vi) operation and maintenance, materials and supplies, and miscellaneous, US$58.4 million (16.3%). Project costs are summarized in Schedule A. 9. From the total project cost estimated at US$357.2 million equivalent, the Bank and the IDB would finance US$125 million each, representing a total for both financiers of about 70% of project cost. The national and provincial governments would provide about US$90.0 million as counterpart funding from their own budgets (about 25.2%), and the remaining US$17.2 million (4.8%) would be financed directly by the beneficiaries. Project financing between the Bank and the IDB would be done in parallel, with each donor financing separate subprojects. The exceptions would be the institutional development component (IDC), and the coordination and management components (federal and provincial), in which the Bank would finance technical assistance and consultants, and the IDB would finance all other categories within these components. A summary financing plan is also presented in Schedule A. 10. The provinces would assume responsibility for repayment to the Central Government for loan proceeds on-lent to them for financing provincial subprojects. The Central Government would assume sole responsibility for the loan proceeds which finance regional or national subprojects, implemented by or under the coordination of specialized federal agencies. Regardless of the external funding sources, repayment terms for provinces would be the average of the terms of the Bank and IDB loans, including the foreign currency risk and commitment and inspection fees. The Federal Government would charge each participating province commitment and inspection fees in proportion to their subloans. The provinces would guarantee repayment of subloans with their shares of funds from federally-collected taxes (Fondos de Coparticipaci6n). 11. A set of eleven priority subprojects (Group 'A'), with feasibility studies and engineering designs ready, has been reviewed at appraisal. Seven of these subprojects would be financed by the Bank loan--four provincial irrigation subprojects and three regional subprojects (animal health and phytosanitary services). The other four subprojects (three irrigation and drainage and one national agricultural information) are to be financed by a loan from the IDB. These Group A subprojects have a baseline cost estimated at US$194 million, approximately 63% of total project base costs. The implementation of the subprojects in Group A would start immediately after loan approval, thus facilitating good implementation performance and rate of disbursements at early stages of project execution.  - 5 - 12. Project Implementation. The Secretariat of Agriculture, Livestock, Fisheries and Food (Secretaria de Agricultura, Ganaderia, Pesca y Alimentaci6n, SAGPyA), within the Ministry of Economy, and Works and Public Services (MEyOySP), would be responsible for overall coordination and administration of the project. The Federal Agricultural Council (Consejo Federal Agropecuario, CFA), chaired by the Secretary of SAGPyA and including all the provincial agricultural authorities, would serve as a discussion forum for sectoral strategies and exchange of information on policies and procedures. 13. Within the SAGPyA's Undersecretariat for Agriculture, Livestock and Forestry (Subsecretaria de Agricultura, Ganaderia y Forestaci6n-SSAGyF), the Central Coordinating Unit (Unidad Ejecutora Central, UEC) would be in charge of overall project coordination, financial administration and management, as well as supervision and monitoring. The UEC would consist of an Executive Coordinator (Coordinador Ejecutivo) and about 16 professional and administrative staff divided into five technical units and an advisory group. 14. In each of the participating provinces, a provincial agricultural entity (Entidad de Programaci6n del Desarrollo Agropecuario, EPDA) would be responsible for project coordination and management at the provincial level. Most subprojects would be provincial subprojects and would be implemented by a Project Implementing Unit (Unidad Ejecutora de Proyecto, UEP), consisting mainly of a specialized provincial agency selected according to its experience and implementation capacities, and which would be implementing all activities directly or through agreements with experienced and capable private or public organizations (e.g., NGOs, farmers' organizations, cooperatives, and service providers). Other subprojects, especially programs for the eradication or control of animal and crop diseases, would be executed on a regional or mnulti-provincial level. These would be implemented under the coordination of specialized federal agencies with competence and experience in that area. These agencies would be mainly autonomous institutions related to SAGPyA with specific mandate in the subjects involved and with experience in internationally-financed projects (i.e., Servicio Nacional de Sanidady CalidadAgroalimentaria-SENASA, for animal health, plant protection and phytosanitary services, for the subprojects included in Group A). 15. During implementation, the project would consider any other technically feasible, economically sound, and environmentally sustainable subproject proposals presented by the provinces, based on their priorities and implementing capacities, and when consistent with the project's objectives and eligibility criteria. The subproject selection process would be simple and transparent. All eligible provinces could approach the UEC with subproject ideas. If the idea is considered promising and consistent with national and provincial priorities, the UEC could finance pre-feasibility studies required to continue the analysis of the idea. The UEC would assess the feasibility study against the subproject selection criteria to determine if the subproject would be included in the pipeline for further consideration. Each subproject proposal would be assessed and rated based on the selection criteria, to compete against all other proposals presented on the basis of the following characteristics: (i) technical feasibility; (ii) financial viability; (iii) scale and  - 6 - coverage; (iv) environmental impact; (v) implementation capacity; (vi) internal economic rate of return; (vii) beneficiary participation; and (viii) social impact. 16. Lessons from Previous Bank Involvement. The most important lessons from LAC relevant to this project, corroborating the experience in other Regions, are as follows: (i) the emphasis should be on upgrading existing irrigation systems to standards appropriate for changing agricultural, economic and social conditions, and decentralizing control of those systems to the provincial and local levels; (ii) such projects need to work with provincial and local governments, which have an important regulatory, coordination, monitoring and supervisory role, and help to build institutional capacity; (iii) the overall performance of irrigation systems improves markedly when water users, organized into associations, have direct responsibility for system development, operation and maintenance, and full decision-making power over technical and financial aspects; (iv) investments in irrigation rehabilitation, to realize their full productive and economic impact, need complementary investments in a range of agricultural services, including technology generation and transfer, animal and plant health, technical assistance and marketing; and (v) projects should aggressively explore opportunities for private delivery of public goods, including agricultural research, extension and rural infrastructure. 17. Project Sustainability. The project would build on existing organizational structures, strengthening their operational capacity and thereby improving mechanisms for transferring technical assistance and for subproject implementation. At the same time, it would promote decentralization of key support services and the integration of public and private sector activities. Specific subprojects would promote the gradual transfer of operation and maintenance responsibilities (technical and financial) for irrigation, drainage and flood control schemes to the water users' associations, constituting a substantial saving for the provincial budget. 18. For other basic agricultural support services (i.e., technical assistance, animal health, and plant protection), the project would introduce a gradual sharing of responsibilities with private entities (beneficiaries' associations, NGOs, etc.) which would have an increasing control over the services provided. Building upon the experience with existing federal programs, contracts for generation and transfer of technology and for extension services in the subproject areas, especially irrigation, would be awarded through an open, competitive processes. The increased level of beneficiary participation, as well as control and cost-sharing, would be a major contribution toward project sustainability. 19. Cost Recovery. The project would strengthen existing mechanisms for recovery of investment and operating costs from direct beneficiaries. Every investment subproject resulting in direct benefits for the private sector would include a plan, defining institutional and financial arrangements, to establish an effective system for cost recovery. This plan would be a condition for approving the Subsidiary Loan Agreement for each specific subproject. Each subsidiary agreement would specify the rates and tariffs needed to cover operational, administrative and maintenance costs, and the level of investment cost recovery to be achieved (based on the beneficiaries' repayment capacity), as well as an appropriate time schedule to achieve this goal. In general, full O&M cost recovery and  - 7 - between 60 and 80 percent investment cost recovery, depending upon the specific circumstances, would be the project goal. The cost recovery systems would include provisions ensuring that O&M funds are kept separate and available only for the operation of the scheme, under a management system with direct participation by the beneficiaries. These arrangements would evolve gradually to management of funds by the beneficiaries, as they assume full technical and financial control over the operation of the scheme. 20. Rationale for Bank Involvement. The agricultural sector warrants Bank support in view of the significant opportunities it offers for environmentally sustainable economic growth, employment generation, and foreign exchange earnings. Bank intervention can play a catalytic role in rationalizing public sector investment, in defining the public sector role, and in strengthening key institutions. The proposed project is fully supportive of the Bank's Country Assistance Strategy (CAS), as discussed by the Board of Executive Directors on May 4, 1995, and the progress report discussed on April 25, 1996, of helping Argentina consolidate recent macroeconomic reforms and deepen their impact by fostering economic growth, improving international competitiveness and increasing the involvement and accountability of beneficiaries in the management of agricultural infrastructure and support services, thus promoting development of the private sector. The project would also help provinces to rationalize the provision of agricultural support services in the context of fiscal adjustment required by macroeconomic policy. It would further contribute to a reduction in the social and economic costs of the adjustment process by enabling each region to take full advantage of its potential competitiveness, developing new sectors for both the domestic and export markets, modernizing agricultural technology, improving product quality and providing additional employment in the rural and farm-related sectors. This would be an important contribution for the consolidation of economic stability and growth, and to the development of sustainable and complementary roles for the public and the private sectors. 21. An ongoing operation, the Agricultural Services and Institutional Development Project (PROMSA-Loan 3297-AR), cofinanced by the Bank and the IDB, has been helping federal agencies to modernize their agricultural support services. The provinces have requested the Federal Government to provide a mechanism for financing priority investment projects at the provincial level. Consequently, the Government of Argentina (GOA) has requested assistance from the Bank and the IDB to build on their experience at the federal level and provide a comprehensive framework for supporting provincial agricultural development, combining priority investments with substantial support for provincial institutional strengthening and development, and helping these provinces carrying out the new responsibilities devolved upon them by the Federal Government. 22. Participatory Approach. A grant from the Fund for Innovative Approaches in Human and Social Development (FIAHS) has provided financing during project preparation for specialized assistance to: (i) develop systematic consultation processes with the stakeholders; (ii) carry out an organizational analysis of the beneficiaries' organizations; and (iii) help prepare a strategy for permanent beneficiary participation in the project.. The crucial challenges that emerges from this consultation have been to: (a) develop confidence, credibility and commitment on the producers' associations;  - 8 - (b) increase consultation and participation during implementation, as important means of influencing project activities; and (c) strengthen producer associations, particularly their organizational, technical and managerial skills. 23. To ensure proper analysis of social issues and to promote permanent beneficiary participation during project implementation, specific actions and procedures agreed with key stakeholders and the Government have been included in the project design (with corresponding costs) and the procedures described in the Project Operational Manual (POM). These actions are the following: (a) introduction of social analysis in the screening and appraisal of subproject proposals; (b) implementation of dissemination activities to increase information among beneficiaries; (c) establishment of institutional mechanisms to promote permanent beneficiary participation in the decision-making process and in the monitoring of project activities and impacts (i.e., local fora and the Consultative Commission (CC) at the provincial level); and (d) institutional strengthening, including technical assistance and training, to increase managerial and organizational development of public agencies as well as beneficiaries' associations to be able to increase participation at all levels. 24. Environmental Aspects. The project would significantly improve water management and reduce salinization and erosion arising from inadequate irrigation and drainage infrastructure. Also, the project would improve soil conservation, land use and animal husbandry practices. Agricultural technology transfer and training of technicians and farmers would contribute to improved, more sustainable natural resource practices. In particular, training for irrigation water users would promote efficient water resource use, management and administration. Plant and animal health measures would reduce morbidity and mortality, and control the use of agro-chemicals, with economic and health consequences for producers and consumers. As project-funded infrastructure rehabilitation and construction would take place in zones which have been primarily under cultivation for some time, the project would have little effect on the natural fauna and flora. Institutional strengthening would improve provincial capacity for project implementation, including introducing or strengthening environmental analysis and monitoring of actions, both at the national and at the provincial levels. 25. The Flood Control and Drainage Subproject in-Pozo Borrado (Province of Santa Fe), involves the rehabilitation of around 424 km. of existing canals and drains, and the construction of about 32 km. of new ones. The purpose would be to complete the network and make it fully operational to reduce losses (to crops, livestock, natural resources and physical facilities) derived from seasonal flooding. Given some potential environmental impacts of these civil works over local wetlands, the Bank required a full Environmental Analysis (EA) of this subproject. In addition, it also recommended carrying out complementary studies, including: (i) quantitative estimates of natural habitats affected; (ii) identification of existing protected areas to be strengthened or new areas that need to be created; (iii) a rapid field survey to determine the endangered species present in the area; and (iv) a plan of action to establish these protected areas, as well as to implement all environmental measures and mitigatory actions in the Pozo Borrado subproject. These studies and the introduction of the mitigatory actions in the subproject  - 9 - design are conditions for the approval of the Subsidiary Loan Agreement for Pozo Borrado and, therefore, for the initiation of its implementation. 26. Since some subprojects have components which may include minor construction of new infrastructure, the environmental classification assigned to the project is A. An initial database would be established to be able to verify the project's environmental impact during implementation. The Project Operational Manual (POM), as well as the Project Environmental Manual (EM), contain detailed procedures for subproject environmental screening, impact evaluation, environmental monitoring and impact mitigation. The Environmental Unit within the UEC, would ensure that proper procedures are carried out in compliance with these manuals, in accordance with the Bank policies and procedures regarding environmental issues. Approval of these Manuals by the Bank would be a condition of loan effectiveness, and agreement has been reached that they will not be amended without the Bank's prior consent. 27. In accordance with Bank procedures for projects classified as environmental category A, an Executive Summary of the Environmental Assessment for the entire project was distributed to the Board on December 21, 1995. 28. Program Objective Categories. The proposed project would promote decentralization, greater private sector participation, increased rationalization of public investment, agricultural production and exports, employment generation and poverty alleviation. In addition, the project would establish innovative mechanisms to help provincial governments fulfill their responsibilities to: (i) maintain rural infrastructure; (ii) provide agricultural services; and (iii) promote sectoral competitiveness by supporting the adoption of sound technology and increasing the value of exportable commodities through better quality and health controls. The project would strengthen the managerial and technical capacities of the provincial agencies, as well as emphasize closer collaboration with the private sector in the delivery of rural and agricultural services. All these objectives would contribute directly to the promotion of Environmentally Sustainable Development and Private Sector Development and, indirectly, to Poverty Alleviation, which are the main objective categories. 29. Poverty Category. Since the poor in Argentina are increasingly rural, the project's poverty alleviation spill-over effect could be significant. While not targeted to the poor, the project would benefit many poor farmers, particularly in the north/northwest and the south, which are the areas with highest incidence of poverty. These farmers would benefit from improved productivity and higher returns on their harvests resulting from diversification to higher-valued crops and greater market access. The project would also provide substantial employment opportunities in the rural areas, where unemployment rates of 21% surpassed the national average rate of 18.6% in 1995. The project's many infrastructure rehabilitation works would rapidly provide short-term employment. More importantly, the project would increase longer-term employment opportunities by stimulating provincial economies, introducing more labor-intensive technologies, intensifying land use, and promoting rural enterprises.  - 10- 30. Project Benefits. The proposed project would result in: (a) increased and diversified production with higher proportion of high-value products (in some cases, derived from upgrading and accrediting production to internationally recognized sanitary and quality standards), thus increasing the competitiveness and value of exports (total value of production would increase about 45% over baseline levels); (b) increased net incomes (between 25 and 50% in real terms for different types of farmers) and improved standard of living of about 120,000 direct rural beneficiaries; (c) improved provincial fiscal situation derived from reducing current expenditures through the transfer of financial responsibilities to the private sector and increased tax revenues from a more dynamic sector; (d) improved provincial capacity to take policy decisions and to plan, select, implement and monitor investment alternatives; (e) strengthened and more integrated private sector, sharing implementation responsibilities and, therefore, increasing the long-term sustainability of proposed actions; and (f) mitigation of existing environmental problems (e.g. soil erosion, salinization and desertification, seasonal floods, inadequate drainage, and inappropriate water management) and improved capacity to monitor environmental effects. 31. Estimated IERRs for the eleven subprojects in Group A range between 15.0% and 40.1%. Considering aggregate benefits and total costs for these subprojects and adding the full costs for institutional strengthening, project coordination and management (both at the federal and provincial levels) for the project as a whole, gives an estimated overall IERR of about 22.2%. This represents the IERR for a total investment of about US$214.2 million, or 60% of the total project costs of about US$357.2 million. Therefore, considering that several of the subprojects and components included in the economic analysis do not have estimated benefits and assuming Group A is representative of subprojects to be financed, this IERR could be considered as a very conservative estimate of the final overall project economic rate of return, including all benefits and costs for all subprojects and components. 32. Risks and Remedies. Measures have been taken to address five elements which could jeopardize the full success of the project. These are: (i) the complexity of the project relative to the provincial institutional capacities has been addressed by the project's strong focus on institutional strengthening and development; (ii) to ensure the provincial ability to assume additional debt burdens, the project would apply sound provincial eligibility criteria designed to ensure borrowers' creditworthiness and adequate counterpart funding. In addition, given the level of external cofinancing between the Bank and the IDB, as well as the support of the Federal Government and the level of beneficiary participation in financing of activities, the project assumes a relatively low level of public counterpart funding from the provinces; (iii) since the political commitment to the project might shift in the future, enough flexibility is included in the project design to be able to adapt to these changes by allocating resources in accordance with local commitment. More importantly, careful selection of subprojects and promotion of strong beneficiary participation would build a strong enough momentum to withstand changes in political priorities; (iv) while greater trade liberalization increases the sector's exposure to world market instability, the project would increase the sector's capacity to compete and respond rapidly to changing market conditions; and (v) the project includes technical assistance  - I1 - funds for financing complementary studies to learn more about specific constraints affecting access of beneficiaries to long term investment credit, as well as for proposing actions to remove some of these constraints. 33. Recommendation. I am satisfied that the proposed loan complies with the Articles of Agreement of the Bank, and I recommend that the Executive Directors approve it. James D. Wolfensohn President by Caio Koch-Weser Washington, D.C. March 21, 1997 Attachments   Schedule A ARGENTINA PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT Project Cost Summary (US$ million) PROJECT COST SUMMARY: Local Foreign Total ( --------------------US$ Million------------------) A. IBRD SUBPROJECTS 1. Provincial a. Buenos Aires-CorfolRio Colorado 10.0 3.4 13.4 b. Mendoza-Montecaseros 4.6 0.6 5.2 c. Mendoza-Provincial Program 10.0 3.2 13.2 d. Santa Fe-Pozo Borrado 5.2 0.7 5.9 Subtotal Provincial 29.8 7.9 37.7 2. Regional a. Northwest-Phytosanitary Services 11.7 4.1 15.8 b. Mesopotamia-Animal Health 18.3 2.6 20.9 c. Southern Patagonia-Animal Health 8.1 0.7 8.8 Subtotal Regional 38.1 7.4 45.5 3. Other Subprojects (to be identified) 51.9 11.1 63.0 Subtotal IBRD 119.8 26.4 146.2 B. IDB SUBPROJECTS 1. Provincial a. Mendoza-Constitucion 6.8 0.7 7.5 b. Rio Negro-Upper Valley 41.7 6.9 48.6 c. Neuquen-Centenario 6.1 1.5 7.6 Subtotal Provincial 54.6 9.1 63.7 2. National Agricultural Information System 14.9 6.9 21.8 3. Other Subprojects (to be identified) 43.8 9.2 53.0 4. Miscellaneous a. PPF Recovering -- 1.5 1.5 b. Inspection and Monitoring -- 1.3 1.3 Subtotal Miscellaneous - 2.8 2.8 Subtotal IDB 113.3 28.0 141.3 C. IBRD/IDB CO-FINANCED COMPONENTS 1. Institutional Strengthening 6.8 0.7 7.5 2. Provincial Executing Units 5.3 0.2 5.5 3. Central Coordinating Unit 9.4 0.2 9.6 Subtotal IBRD/IDB 21.5 1.1 22.6 Total BASELINE COSTS 254.6 55.5 310.1 Physical Contingencies 16.2 4.4 20.6 Price Contingencies 23.0 3.5 26.5 Total PROJECT COSTS 293.8 63.4 357.2 FINANCING PLAN: Source Local Foreign Total World Bank 94.8 30.2 125.0 IDB 91.8 33.2 125.0 Federal and Provincial Governments 90.0 -- 90.0 Beneficiaries 17.2 -- 17.2 TOTAL 293.8 63.4 357.2  Schedule B ARGENTINA PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT Summary of Proposed Procurement Arrangements' (US$ million) PROCUREMENT METHOD TOTAL ................ ii....................I... ........... ........................................................................... CATEGORY LIB NCB OTHER SUB- NBF2 COSTS TOTAL BANK 1. Civil Works 17.1 22.9 8.23 48.2 70.4 118.6 (13.5) (18.1) (6.5) (38.1) --- (38.1) 2. Goods 7.6 1.54 13.0 14.85 36.9 35.6 72.5 (5.4) (1.2) (8.6) (8.2) (23.4) --- (23.4) 3. Consulting Services a. Individual Consultants 33.9 33.9 33.7 67.6 (28.2) (28.2) --- (28.2) b. Firms 19.1 19.1 3.7 22.8 (19.1) (19.1) --- (19.1) 4. Training Services 5.1 5.1 6.4 11.5 (5.1) (5.1) --- (5.1) 5. Incremental Recurrent 17.8 6.3 24.1 Costs6 (5.3) --- (5.3) 6. Incremental Salaries and 24.0 24.0 13.3 37.3 Travel7 (5.8) (5.8) --- (5.8) 7. Financial Services8 2.8 2.8 (0.0) TOTALS 24.7 1.5 35.9 122.9 185.0 172.2 357.2 (18.9) (1.2) (26.7) (78.2) (125.0) --- (125.0) ICB: International Competitive Bidding NCB: National Competitive Bidding NBF: Non-Bank Financed. I . Figures in parentheses represents amounts financed from the Bank loan. 2. To be procured in accordance with IDB's procurement procedures. 3. Lump-sum, fixed-price contracts for civil works below $350,000 awarded on the basis of three price quotations. 4. Goods for which there may be a limited number of suppliers in Argentina, to be procured following Limited Intemational Bidding (LIB) procedures. 5. Intemational or national shopping for goods (except computers, vehicles and civil works equipment) below $100,000, based on price quotations requested from at lease three suppliers. 6. Insurance, Utilities, Repairs and Maintenance. 7. Salaries and travel expenses for incremental project staff. 8. IDB's fees, including PPF recovery and Inspection Fees.  Schedule B Allocation of Loan Proceeds Loan Category Amount Disbursement Rate (US$ million) (% of Total Eligible Expenditures) 1. SUBPROJECTS a. Civil Works 40.0 80% of total expenditures b. Goods 16.0 100% of foreign expenditures 80% of local expenditures c. Consulting, Auditing and Training Services 28.0 100% of eligible expenditures d. Incremental Recurrent CostsL' 18.0 75% up to US$6 million disbursed 50% up to US$12 million disbursed 25% up to US$18 million disbursed 2. INSTITUTIONAL STRENGTHENING AND PROJECT COORDINATION a. Consulting, Auditing and Training Services 10.0 100% of eligible expenditures b. Incremental Recurrent Costs 3.0 75% up to US$1 million disbursed 50% up to US$2 million disbursed 25% up to US$3 million disbursed 3. UNALLOCATED 10.0 TOTAL 125.0 1/ Incremental expenses include: salaries and travel of incremental project's staff, insurance, utilities, repairs and maintenance of equipment. Estimated IBRD Disbursements1' IBRD FY l9982l 1999k 2000 2001 2002 2003 2004 ----US$ millions- Annual 7.75 7.75 20.0 25.0 35.0 25.0 4.5 Cumulative 7.75 15.50 35.5 60.5 95.5 120.5 125.0 1 Based on the Standard Disbursement Profile for Argentina (all sectors) as of June 30, 1995. 2 Includes the deposit into the Special Account of US$8.0 million, corresponding to about five (5) months of average disbursements, spread over the first two years and recovered during the last two years.  Schedule C ARGENTINA PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT Timetable of Key Project Processing Events (a) Time Taken to Prepare: 19 months (from effective start of preparation to appraisal) (b) Prepared by: Argentina's Secretariat of Agriculture, Livestock, Fisheries and Food (SAGPyA), with financial assistance from a Japanese Grant (PHRD). (c) First Bank Mission: April 1993 (d) Appraisal Mission Departure: February 1996 (e) Date of Negotiations: September 1996 (f) Planned Date of Effectiveness: July 1997 (g) List of Relevant PCRs and PPARs: PCRs: Second Agricultural Credit Project (Loan 2970-AR), Report 14740, June 29, 1995. Agriculture Sector Loan (Loan 2675-AR), Report 9913, September 1, 1991. Grain Storage Project (Loan 1521-AR), Report 9346, February 1, 1991. PPARs: Agriculture Sector Loan (Loan 2675-AR), Report 11925, May 1, 1995.  ARGENTINA Schedule D PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT Status of Bank Group Operations in Argentina IBRD Loans and IDA Credits in the Operations Portfolio Difference Original Amount in US$ Millions Between actual Loan or Fiscal and expected Project ID Credit No. Year Borrower Purpose IBRP IDA Cancellations Undisbursed Disbursements a/ Number of Closed Loans/credits: 50 AR-PE-5945 L26410 1986 GOVERNMENT WATER SUPPLY 60.00 0.00 20.03 1.64 21.67 AR-PE-5968 L28540 1987 SEGBA SEGBA V 276.00 0.00 0.00 68.45 68.45 AR-PE-6009 L32970 1991 GOVT OF ARGENTINA INA AG SERVCES&INST DEV 33.50 0.00 0.00 5.10 2.60 AR-PE-5977 L32810 1991 ARGENTINE REPUBLIC WTR SUPPLY II 100.00 0.00 0.00 73.74 60.21 AR-PE-6005 L32800 1991 REPUBLIC OF ARGENTINA PROVINC DEV PROJ 200.00 0.00 0.00 68.48 68.48 AR-PE-6003 L36110 1993 GOVT OF ARGENTINA INA RD MAINT & REHAB SCT 340.00 0.00 0.00 165.53 122.41 AR-PE-6051 L35210 1993 ARGENTINA FLOOD REHABILITATION 170.00 0.00 0.00 10.11 10.11 AR-PE-6036 L35200 1993 GOVERNMENT YACYRETA II 300.00 0.00 0.00 4.02 3.60 AR-PE-6062 L37100 1 9 9 4 MIN OF ECONOMY CAPITAL MKT TA 8.50 0.00 0.00 5.75 3.73 AR-PE-5988 L37090 1994 REP OF ARGENTINA A CAPITAL MKT DEVT 500.00 0.00 0.00 393.64 -106.36 AR-PE-6025 L36430 1994 GOVT OF ARGENTINA INA MTNAL CHILD HLTH & N 100.00 0.00 0.00 58.58 26.28 AR-PE-6018 L38770 1995 ARGENTINE REPUBLIC PROV DEVT II 225.00 0.00 0.00 225.00 19.17 AR-PE-6060 L38600 1995 GOVT OF ARGENTINA MUNIC DEVT II 210.00 0.00 0.00 202.81 -1.61 AR-PE-6035 L38360 1995 REP OF ARGENTINA PROV.REFORM 300.00 0.00 0.00 100.37 .37 AR-PE-5992 L37940 1995 GOVT OF ARGENTINA INA SECONDARY ED I 190.00 0.00 0.00 177.82 95.99 AR-PE-45687 L40040 1996 REP. OF ARGRNTINA H.INSURANCE TA 25.00 0.00 0.00 21.57 -3.43 AR-PE-40909 L40030 1996 REP. OF ARGENTINA H. INSURANCE REFORM 100.00 0.00 0.00 100.00 0.00 AR-PE-40909 L40020 1996 REP. OF ARGENTINA H. INSURANCE REFORM 250.00 0.00 0.00 100.00 -52.73 AR-PE-6057 L39710 1996 GOV'T OF ARGENTINA SECNDARY ED 2 115.50 0.00 0.00 115.50 19.37 AR-PE-38883 L39600 1996 REPUBLIC OF ARGENTINA ENT.EXPORT DV. 38.50 0.00 0.00 35.99 13.24 AR-PE-37049 L39580 1996 GOVT OF ARGENTINA PUB.INV.STRENGTHG 16.00 0.00 0.00 16.00 2.23 AR-PE-35495 L39570 1996 SEC.OF SOC.DEVIT (OFFICE SOCIAL PROTECTION 152.00 0.00 0.00 38.80 17.57 AR-PE-6040 L39480 1996 GOVERNMENT FORESTRY/DV 16.00 0.00 0.00 15.56 .49 AR-PE-6030 L39310 1996 REPUB OF ARGENTINA PROVCL HLTH SCTR DEV 101.40 0.00 0.00 97.33 8.66 AR-PE-6055 L39270 1996 GOVT. OF ARGENTINA MINING SCTR DEVT 30.00 0.00 0.00 19.09 -6.71 AR-PE-40904 L39260 1996 REPUBLIC OF ARGENTINA BANK REFORM 500.00 0.00 0.00 166.00 166.00 AR-PE-34091 L39210 1996 REP OF ARGENTINA HIGHER ED REFORM 165.00 0.00 0.00 156.72 45.55 AR-PE-46821 L41310 1997 GOVT.OF ARG PENSION TA 20.00 0.00 0.00 20.00 .39 AR-PE-6052 L41170 1997 GOVT OF ARGENTINA FLOOD PROTECTION 200.00 0.00 0.00 200.00 0.00 AR-PE-44445 L41160 1997 REPUBLIC OF ARGENTINA PROV.PENSIONI 300.00 0.00 0.00 150.00 0.00 AR-PE-5980 L40930 1997 GOVT OF ARGENTINA PROV ROADS 300.00 0.00 0.00 300.00 4.33 AR-PE-40808 L40850 1997 GOA N.FOREST/PROTC 19.50 0.00 0.00 19.50 0.00 Total 5,361.90 0.00 20.03 3,133.12 Active Loans Closed Loans Total Total Disbursed (IBRD and IDA): 2,208.75 6,044.76 8,253.51 of which has been repaid: 164.72 2,743.91 2,908.63 Total now held by IBRD and IDA: 5,177.15 3,302.99 8,480.14 Amount sold 0.00 12.79 12.79 Of which repaid : 0.00 12.79 12.79 Total Undisbursed : 3,133.12 2.13 3,135.25 a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. b. Rating of 1-4: see OD 13.05. Annex D2. Preparation of Implementation Summary (Form 590). Following the FY94 Annual Review of Portfolio performance (ARPP), a letter based system will be used (HS = highly Satisfactory, S = satisfactory, U = unsatisfactory, HU = highly unsatisfactory) : see proposed Improvements in Project and Portfolio Performance Rating Methodology (SecM94-9011, August 23, 1994. c. Following the FY94 ARPP, "Implementation Progress" will be reported here. Generated by the Operations Information System (OIS)  ARGENTINA Schedule D PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT Argentina STATEMENTOF IFC's Conmitted and Disbursed Portfolo As ofOl/31/97 In Millions US Dollars Committed Disbursed --IFC------------- --IFC---------- FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1960 Acindar 0.00 0.00 0.00 0 00 0.00 0.00 0.00 0.00 1977 Alpargatas 0.00 0.00 0.00 0.00 0.00 0.00 0 00 0 00 1978 Minetti 0.00 00 000 000 000 0.00 0.00 0000 1981 Minetti .67 000 000 000 67 0.00 0.00 0.00 1984 Alpargatas 0 00 1.05 0.00 0 00 0 00 1.05 0.00 0.00 1985 ROPASA 0.00 .05 0.00 0 00 0.00 .05 0.00 0.00 1986 Alpargatas 0.00 0.00 0.00 0 00 0.00 0.00 0.00 0 00 1986 Minetti 23 0.00 0.00 1.17 23 000 0.00 1.17 1987 BGN-Bolland 0.00 0.00 0.00 0.00 0.00 0.00 0.00 000 1987 BGN-CENCOSUD .07 0.00 0.00 0.00 .07 0.00 0.00 0 00 1987 BGN-CILSA .01 00 000 M000 .01 0.00 0.00 0.00 1987 BON-COLORTEX .07 000 000 0.00 .07 0.00 000 0.00 1987 BGN-Flichman .02 0.00 0.00 0.00 02 0.00 0.00 000 1987 BGN-Longvie 03 0.00 0.00 0.00 03 0.00 0.00 0.00 1987 BGN-Moldeada .07 0.00 0.00 000 .07 0.00 0.00 0.00 1987 BGN-Noroeste .03 0.00 0.00 0.00 .03 0.00 0 00 0 00 1987 BGN-Sebastian .07 0.00 0.00 0.00 .07 0.00 0.00 000 1987 BGN-Tevycom .02 0.00 0.00 0.00 02 0.00 0.00 0.00 1987 BGN-TBR 21 000 000 0.00 21 000 0.00 0.00 1987 BGN-Valley .03 0.00 0 00 0.00 .03 0.00 0.00 0 00 1987 BGN-Vandenfil .03 000 000 0.00 .03 0.00 000 0.00 1987 BRLP 0.00 000 000 0.00 0.00 0.00 0.00 0.00 1987 Minetti .47 000 000 2.33 47 000 000 2.33 1987 Terminal 6 000 0 00 0.00 0.00 0.00 00 0.00 0.00 1988 Alpargatas 1.70 0.00 137 0.00 1.70 000 137 000 1988 BungeyBom 0.00 000 000 0.00 0.00 0000 0 00 1989 AstraCAPSA 0.00 000 000 0.00 0.00 000 000 0.00 1989 BancoFrances 4.31 000 000 1.14 4.31 000 000 1.14 1989 BGN-Algodonera .32 0.00 0.00 0.00 .32 000 0 00 0 00 1989 BGN-Bolland .27 0.00 0.00 0 00 .27 0.00 0.00 0.00 1989 BGN-Fernun 1.00 000 000 0.00 1.00 0.00 0.00 000 1989 BGN-Flichmnan .20 0.00 0.00 0.00 .20 0.00 0.00 0.00 1989 BGN-FRIGOTOBA .15 000 000 0.00 .15 0.00 0.00 0.00 1989 BGN-Genaro .82 000 0.00 0.00 .82 0.00 0.00 0.00 1989 BGN-Interpack .30 0.00 0.00 0.00 .30 0.00 0.00 0 00 1989 BGN-Parafina .75 0.00 0.00 0.00 .75 0.00 0.00 0.00 1989 BGN-Willmor .82 0.00 000 0.00 .82 0.00 0.00 0.00 1989 ROB-COMESI .38 0.00 0.00 000 38 0.00 000 0.00 1989 ROB-Fracchia .21 0.00 0.00 0.00 21 0.00 0.00 0.00 1989 ROB-INTA .38 0.00 0.00 0.00 38 0.00 0.00 0.00 1989 Terminal 6 0.00 0.00 0 00 0.00 0.00 0.00 0.00 0 00 1990 CIP 0.00 08 000 0.00 0.00 .08 000 000 1990 Petroken 8.33 0 00 5.00 3.67 8.33 0.00 5.00 3.67 1990 Terminal 6 0.00 0 00 0.00 0. 0 00 0.00 0.00 0.00 1991 AstraCAPSA 11.57 0.00 0.00 20.42 11.57 000 000 2042 1991 BCA 2.20 0.00 0.00 2.80 2.20 0.00 0.00 2.80 1991 Minetti .58 0.00 0.00 0.00 .58 0.00 0.00 000 1991 ROB-Alimenticia .28 000 000 0.00 .28 0.00 0.00 000 1991 ROB-Emprigas .3B 000 000 0.00 .38 0.00 000 000 1991 ROB-Guilford .20 0.00 000 0.00 .20 0.00 0.00 0.00 1991 ROB-Interpack 33 0.00 0.00 0.00 33 0.00 0.00 0.00 1991 ROB-Jugos 06 0.00 000 0.00 .06 0.00 0.00 0.00 1991 ROB-Longvie 45 0.00 000 0.00 .45 0.00 000 000 1991 ROB-Mendoza .38 0.00 0.00 0.00 .38 0.00 0.00 000 1991 ROB-Surfactan .04 000 0.00 0.00 .04 0.00 0.00 0.00 1992 Astra CAPSA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1992 Bridas 2436 0.00 1500 3814 24.36 0.00 15.00 38.14 1992 BRLP 10.78 0.00 0 00 1.95 3.24 0.00 0.00 1,95 1992 FEPSA 10.80 000 000 10.27 8.60 000 000 1027 1992 MaltenaPampa 7.19 000 000 13.27 7.19 000 000 13.27 1992 OleaginosaOeste 7.64 000 5.00 11.83 7.64 000 5.00 11.83 1992 Rioplatense 6.33 1.00 0.00 2.00 6.33 100 0.00 2.00 1992 San Jorge 10.00 27.00 000 23.33 10.00 000 000 2333 1993 ArgentinaEquity 000 4.00 0.00 0.00 000 400 000 000 1993 BungeyfBom 4.25 0 00 0.00 32.08 4.25 000 0 00 32.08 1993 Cadipsa 9.29 0.00 5.00 11.70 9.29 000 500 1170 1993 Malteria Pampa 0.00 0.00 0.00 0.00 0.00 0 00 0.00 0.00 1993 Minetti 1 62 0.00 0. 00 0.00 1.62 0.00 0.00 0 00 Generated by the Operations Infornation System (OIS)   ARGENTINA Schedule D PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT Committed Disbursed -IFC -----------------IFC------------ FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1993 Molinos 000 4.31 0.00 0.00 0.00 431 0.00 0.00 1993 Nuevo Central 7.50 300 0.00 12.50 7.50 3.00 0.00 12.50 1993 Yacylec 9.35 5.04 0.00 36.13 9.35 5.04 0.00 36.13 1994 Aceitera 15.00 10.00 0.00 0.00 15.00 1000 0.00 0.00 1994 Aguas 36.53 7.00 0.00 107.60 36.53 700 0.00 10760 1994 Alpargatas 11.54 500 5.00 16.57 11.54 500 5.00 1657 1994 BGN 12.00 000 300 0.00 12.00 0.00 3.00 0.00 1994 Cia. Combustible 19.46 15.00 0.00 32.80 19.46 15.00 0.00 32.80 1994 EDENOR 21.13 0.00 15.00 9925 21.13 000 1500 99.25 1994 LaMaxima 000 10.19 0.00 000 000 1019 0.00 0.00 1994 LBAR 0.00 1.17 0.00 000 000 .64 0.00 000 1994 LBAV 0.00 3.62 0.00 0.00 0.00 3,62 0 00 0.00 1994 Molinos 0.00 1.24 0.00 0.00 0.00 1.24 0.00 0 00 1994 MASISA 9.63 0.00 0.00 0.00 9.63 0.00 0.00 0.00 1994 Petroken 15.91 0.00 0.00 2.27 15.91 0.00 0.00 2.27 1994 Quilmes 1264 0.00 0.00 11.25 12.64 0.00 0.00 11.25 1995 Acindar 15.00 0.00 1000 20.00 15.00 000 10.00 20.00 1995 Aguas 40.00 0.00 0.00 173.00 40.00 0.00 0 00 173.00 1995 BancoRoberts 0.00 000 20.00 0.00 0.00 0.00 2000 0.00 1995 Bridas 2000 1000 0.00 40.00 20.00 M0. 0.00 40.00 1995 CEPA 13.00 0.00 0.00 4.20 13.00 0.00 0.00 4 20 1995 EDENOR 0.00 0.00 0000 000 000 0.00 0 00 0 00 1995 Kleppe/Caldero 6.00 000 0.00 0.00 6.00 0.00 000 0.00 1995 LaMaxima 0.00 000 4.00 0.00 0.00 0.00 396 0.00 1995 Mastellone 38.57 0.00 0.00 35.00 38.57 0.00 0.00 35.00 1995 Nahuelsat 30.00 500 000 000 3000 5.00 0.00 0.00 1995 SanCor 20.00 0.00 20.00 30.00 20.00 0.00 20,00 30 00 1995 Socma 24.99 0.00 0.00 0.00 24.99 000 0,00 0.00 1995 SIDECO 0.00 15.00 000 0.00 0.00 15.00 0.00 0.00 1995 TerminalesPort. 10.00 2.00 0.00 0.00 700 1.40 000 0.00 1995 TowerFund 0.00 1871 0.00 0.00 0.00 5.54 0.00 0.00 1995 TowerFundMgr 0.00 .13 000 000 000 .03 0.00 000 1996 Aguas 0.00 0.00 000 000 000 0.00 0.00 000 1996 Alpargatas 15.00 0.00 0.00 81.00 1000 0.00 0.00 81 00 1996 Banco Frances 40.00 0.00 0.00 0.00 2.31 0.00 0 00 0.00 1996 Banco Galicia 30.00 0.00 0.00 200.00 30.00 0.00 0.00 200.00 1996 Brahma-ARG 18.50 0.00 0.00 33.00 18.50 0.00 0.00 3300 1996 CAPSA 12.00 0.00 5.00 33.00 0.00 000 0.00 0.00 1996 Grunbaum 8.00 0.00 2.00 0.00 8.00 0.00 2.00 0.00 1996 MalteriaPampa 6.00 0.00 1.00 0.00 6.00 0.00 1 00 0.00 1996 Minetti 10.00 0.00 10.00 12.30 4.10 0.00 1000 1230 1996 MBA 0.00 .16 0.00 0.00 0.00 .16 0.00 0.00 1996 NeuquenBasin 0.00 26.40 0.00 0.00 0.00 15.74 0.00 0.00 1996 Refisan 20.00 0.00 0.00 30.00 0.00 0.00 0.00 0.00 1996 Termnal6 10.50 0.00 000 6.50 10.50 000 0.00 6.50 1996 Transconor 25.00 0.00 2000 210.00 25.00 0.00 2000 21000 1996 Zanon 14.00 0.00 600 0.00 12.00 0.00 600 0.00 1997 Acindar 25.00 000 15.00 0.00 0.00 0.00 15.00 0.00 1997 Milkaut 10.00 0.00 10.00 0.00 10.00 0.00 10.00 0.00 1997 Vicentin 25.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Pending Commitments 1996 * AGUAS III - INC 15.00 0.00 0.00 75.00 1996 * BANSUD CL 25.00 0.00 0.00 0.00 1994 *EDENORINCREASE 0.00 0.00 0.00 8.00 1996 * EDESUR II BLINC 0.00 0.00 0.00 108.00 1996 *EDESURREHAB 40.00 0.00 0.00 80.00 1993 * FEPSA (II) 0.00 0.00 0.00 4.00 1997 * FRIAR 1000 000 2.50 7.00 1997 * GUIPEBA 15.00 0.00 5.00 20.00 1995 *R-E-CTOLLHlWAY 20.00 000 0.00 61.00 1997 *TGNIIBLINC 0.00 0.00 0.00 10.00 1996 *TRANSCONORII 5.00 0.00 0.00 0.00 1996 * WESTERN ACCESS 30.00 0.00 5.00 130.00 Guzman P. Garcia-Rivero L:\WORD\DOC\ARGENTIN\BUFF\IFC.DOC March 6, 1997 6:10 PM Generated by the Operations Information System (OIS)  ARGENTINA-PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT Schedule E Argentina at a glance Latin Upper- POVERTY and SOCIAL America middle- Argentina & Carib. Income Developmmet diamonid' Populalion mil-1995 (nilliolls) 34.6 480 440 GNP ptr capila 1995 (US$) 7,770 3,300 43300 1 Iloxipecla;Incy GNP 1995 (hfi/lons USS) 268 8 1,584 1.892 Average annual growth. 1990-95 PI"pululinh (%J 1 2 1.8 1 7 GNFP G- Labor force 2%J 2.0 2.4 2.1 pIIII<1> Most recent estimate ('lo.t pnt :vnlf.nlrln o.inc:' IDES) r1.989l;r ngrnrrllrrirrinl Posnily: headcounl hidet (% ofpopuuation) 26 Unbani popUlialinn (5% of total popukillon) 88 74 74 Life oxpectsincy at birth (yeahrs) 73 68 69 lifianit rninirality (pr. 1,000 11w, 1Vvlas.) 22 41 36 Au:r:rro;!. li '., tIc Viahn ChildJ malinuti ion (% f chilhJ,nn tinner 5) 5 Acrarss li stile wai1O (Sf ctpxpirtlatcin) 64 81 89 Illloraily (56 finlixilaiont afJnJ 15+) 4 13 13 -_ unt.law GIC iS3 p1 itTitly 0111il ,.ltIiit ('% ot arhno/-; q':,IaXrtJIOll) 107 110 107 Maill 108 tJlt-ntllc.tt.,it'oIil F.-i;tlude 107 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1994 1995 Economic l-lttOS' GDP (hillions US$J 52.4 88.4 280.5 276 0 GInISs di)lilT!SlfC inv,!stihieii/GDP 29 4 17 6 19 9 17 8 Extrinis of t(inmlKS reIcl nrl-l:an:loi snnviorrslGDI' 5 8 11 7 6 6 a 9 C)lcr.ti r,l ,it cetitty Gills. uluillostic scivililIs/GDP 29 3 23 1 176 IsG 0 Grwos; natlional s.avinut.:GDP 26 9 16 5 16 6 1 F 0 Clinil rnaccouit ll,lalmrce-GDP -2 5 -1 1 -3 3 -0 8 nlnrehlt py.innyW.s.DIP 0 9 5 0 1 3 1.8 S .1 lOlip. IIIvim,linvtil Tilal fe!l.l/GDP 14.7 57.6 27.6 30.3 Ii dI;i (lridJl sh!ivici/di;Iti!s 44 1 60.1 32 6 33.6 V Pvsmlrit vlglin ofr doInilCOP . 24 4 Pntn',i lili Value 111 dloldtoxp III. 325 8 . l lt ! 19754114 1985-95 1994 1995 1996-04 ffVnti.Qg thlliu/ q rowtlt) -- Arqlnt. CDP I 0 2 8 7 4 .44 4 ft qqnlcu.' nwt'um q:r'tu GNF' ;xmr u.tpila 1 5 2 0 5 9 -5 2 3 / Expuiis nl gunils aild n:h h 1 5.9 14 8 25 7 8 0 STRUCTURE of the ECONOMY (6 of GDP) 1975 1985 1994 1995 Growth rates of output and investment (%) Agriculture 6.6 7.6 4.9 40 T Industry 50.1 39.3 30.1 20 - Manufacturing 38.2 29.6 20.0 Services 43.3 53.1 65.1 0 91 92 93 94 N -20r Private consumption 58.1 66.5 69.2 69.6 -40 General government consumption 12.6 10.4 13.3 12.4 - GDI -O--GDP Imports of goods and non-factor services 6.0 6.3 9.2 8.7 1976-84 1986-95 1994 1995 (average annual growth) Growth rates of exports and imports (%) Agriculture 1.7 1.6 3.8 2.1 s0 Industry -1.1 2.7 6.5 -6.0 Manufacturing -1.4 1.4 4.2 -6.5 /0 Services 2.5 3.1 8.5 -3.4 420 20 Private consumplion .. General government consumption .. .. 90 92 93 94 Gross domestic investment -2.4 5.4 19.0 -15.9 -20 Imports of goods and non-factorservices 4.5 14.0 20.9 -10.6 Exports lmparts Gross national producl 0.0 3.4 6.9 -5.0 Note: 1995 data are preliminary estimates. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.  ARGENTINA-PROVINCIAL AGRICULTURAL DEVELOPMENT PROJECT Schedule E Argentina PRICES and GOVERNMENT FINANCE 1975 1985 1994 1996 Domestkc prices Inflation (%) (% change) 4,000 Consumer prices 182.6 .. 3.9 1.6 3.000 Implicit GDP deflator 198.2 618.0 1.8 2.5 2,000 Government finance 1,000 (% of GDP) 0 _ Current revenue .. .. 16.6 16.5 90 91 92 93 94 95 Current budget balance .. .. 0.7 -0.1 GDP det. -Q-cp Overall surplus/deficit .. .. 0.0 -1.0 TRADE 1975 1986 1994 1995 (millions US$) Export and import levels (mitt. USS) Total exports (fob) 2,961 8,396 15,839 20,968 2,000 Food . .. 1,323 1,956 Meat 1,546 1,572 20,000 Manufactures .. .. 8.059 10,635 15ixoo Total imports (cii) 3.947 3,814 21,590 20,124 1o000 Food 700o Fuel and energy 591 628 5000. Capital goods 6,039 4,754 s Export price index (1987=100) .. 118 124 89 90 S1 92 93 94 95 Import price index (1987=100) . . 115 120 o Exports 0 Imports Terms of trade (1987=100) .. .. 102 103 BALANCE of PAYMENTS 1976 1985 1994 1995 (millions US$) Current account balance to GDP ratio (%) Exports of goods and non-factor services 3,498 10,039 18,507 23.857 2 Imports of goods and non-factor services 4,324 5,285 25,591 23,724 Resource balance -826 4,754 -7,084 133 1 - Net factor income -466 -5,706 -2,547 -2,842 0 Net current transfers 6 0 320 432 9 90 91 92 3 94 95 Current account balance, -2 t before official transfers -1,286 -952 -9,310 -2,277 -2 Financing items (net) 208 2,200 9,868 2,208 3 - Changes in net reserves 1,078 -1,248 -558 69 -4 Mfemo: Reserves including gold (mill. JS$) 848 4,703 19,758 19,888 Conversion rate (local/US$) 3.7E-10 6.OE-05 1.0 1.0 EXTERNAL DEBT a,ai RESOURCE FLOWS 1975 1985 1994 1995 (millions US$) Composition of total debt. 1995 (mill. USS) Total debt outstanding and disbursed 7,723 50,946 77,457 83,724 ISRD 341 700 4,109 4,913 G A IDA 0 0 0 0 7171 4913 c 5131 Total debt service 1,603 6,209 6,847 8,609 | IBRD 43 114 709 565 / 4501 IDA 0 0 0 0 Composition of net resource flows E1142 Official grants 0 6 16 20 11\ Official creditors 58 217 715 851 Private creditors -111 2,350 5,805 1,993 Foreign direct investment 0 919 1,200 3,900 F Portfolio equity 0 0 1,205 294 498 World Bank program Commitments 0 0 509 2,272 A - IBRD E - Bilateral Disbursements 19 144 547 941 B - IDA D - Other multilateral F - Private Principal repayments 17 68 425 259 C - IMF G - Short-term Net flows 1 75 122 682 1 Interest payments 26 46 284 306 Net transfers -25 30 -162 376 International Economics Department 8/20/96  IBRD 27905 >70