Burundi - Arabica Coffee Improvement Project

RESTRICTED Rep No. TO-673a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it -be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION BURUNDI ARABICA COFFEE IMPROVEMENT PROJECT October 22, 1968 Projects Department  CURRENCY QUIVALENTS Currency unit - Burundi franc (BFU) US$ 1 - BFU 87.50 BFU 1 = Us$ 0.01143 BFU 1 million - Us$ 11,429 WEIGHTS AND MEASURES 1 kg - 1,000 gram - 2.2046 lb 1 m ton = 1,000 kg = 2,204.7 lb = o.9842 lg ton 1 ha = 2.4711 ac 1 km = 0.6214 mi 1 km2 0.3861 sq mi Abbreviations used in the Report ACB - Association of Burundian Merchants CPF - Coffee Prcmotion Fund CPSF - Coffee Price Stabilization Fund IO0 - International Coffee Organization ISABU - Institut des Sciences Agroncmiques du Burundi (Agricultural Research Institute) OCIBU - Office des Cultures Industrielles du Burundi (Agency for Industrial Crops) PD - Project Department of OCIEU PMEA - IBRD Penranent Mission in East Africa  BURUNDI ARABICA COFFEE IMPROVEMENT PROJECT TABLE OF CONTENTS Page No. SUMMARY I. INTRODUCTION ...................................... 1 II. BACKGROUND ............................................. 1 A. General ........... 1 B. Coffee Sector ................................ 2 C. Development Prospects ........................ 5 III. THE PROJECT AREA ... ... . ... . ... 5 IV. THE PROJECT ..................................... 7 A. Project Description ...... ................. 7 B. Project Schedule ....... ...................... 10 C. Cost Estimates ........ ....................... 10 D. Financing ... ................................. 11 V. ORGANIZATION AND MANAGEMENT ...... ................. 13 A. Project Management ........................... 13 B. Ace.ounts and Audit . .......................... 14 C. Staff ................. ....................... i4 VI. YIELDS AND PRODUCTION, MARKET PROSPECTS AND FARM INCOME ........................................... 15 A. Yields and Project Production .. .............. 15 B. Market Prospects and Prices .................. 17 C. Farm Income ........... ....................... 17 VII. BENEFITS AND JUSTIFICATION .17 VIII. CONCLUSIONS AND RECOMMENDATIONS ..18 This report is based on the findings of a mission in March 1968 to Burundi, composed of Messrs. von Gontard, Adams, Reutlinger (IDA) and Mr. Henderson (of PMEA).  ANNEXES 1. Agricultural Development Projects 2. Coffee Exports, Grades and Prices 3. OCIBU 4. Proposed Improvement Measures 5. Project Organization 6. Development Schedule, Staff Requirements, Costs and Benefits MAPS 1. Location of Project Area 2. Project Area 3. Areas of Coffee Cultivation  BURUNDI ARABICA COFFEE IMPROVS4ENT PROJECT SUMMARY i. The Government of Burundi has applied for an IDA credit to help finance the improvement of productivity of about seven million existing arabica coffee trees cultivated by about 44,000 smallholders on 4,400 ha in the center of Ngozi province. There are no large holdings in the area. A typical smallholder has an average holding of 0.6-0.7 ha of which about 0.1 ha is planted with coffee. ii. Almost Burundi's entire active population is engaged in agriculture and about 60 percent of total GDP is subsistence production. Per capita GDP is low at US$ 50 - 60, of which more than half is subsistence consumption. Coffee, the only cash crop for about 300,000 farm families (cultivating about 41 million coffee trees), occupies an important position in the economy con- tributing 15 to 20 percent of monetary GDP and 80 to 85 percent of exports. Coffee exports have remained consistently 30 percent below the marketing quota allocated to Burundi by the International Coffee Organization. In- creased production resulting from the project can be accomnodated within this quota and therefore no marketing problems would arise. iii. The project consists of a package to imnrove coffee husbandry and processing including technical assistance for training Burundian extension staff, production requisites, and improvement of infrastructure and process- ing facilities. The proposed measures would introduce essential techniques and provide for inputs of proven value. Emnhasis would be laid on mobiliz- ing farmers' own efforts to the extent possible. Tmhe project would be managed by the Agency for Industrial Crops. iv. The project would be completed in five years at a total cost of about US$ 2.1 million of which 62 percent or USt 1.32 million is the esti- mated foreign exchange component. At full development, the yield of about seven million coffee trees is expeuted to increase by about 70 percent over current levels, increasing Burundi's exportable coffee by about 1,580 tons, and earning about US$ 1.3 million in foreign exchange annually. v. The project would add about 1.5 percent to current total monetary GDP and five percent to present monetary GDP earned in agriculture. Farmers' net cash return would increase by over 70 percent, on average. The internal rate of return to the economy from measurable project benefits would be about 32 percent. If only 70 percent of the anticipated annual gross benefits are realized, the rate of return would be 21 percent. Due to the expected spread of improved coffee husbandry to other coffee areas, there would be con- sequent increases in production and additional benefits. vi. The project would make a substantial contribution to the develop- ment of Burundi's agricultural sector, and would be suitable for an IDA credit of USA 1.8 million.  BURUNDI ARABICA COFFEE IMPROVEMENT PROJECT I. INTRODUCTION 1.01 The Government of Burundi has requested an IDA credit to help finance the improvement of existing arabica coffee cultivated by small- holders in Ngozi province, some 100 km northeast of Bujumbura. Coffee is the principal cash crop of the economy. Improvement of the productivity of existing coffee which has been mainly planted after 1948 and coffee quality affords an immediate opportunity for economic expansion. 1.02 Coffee cultivation in Burundi is an integral part of the tradi- tional smallholder's sector which is basically subsistenqe oriented. Coffee is the only source of cash income for the majority of smallholders living in areas suitable for coffee cultivation. The proposed improvement of coffee productivity would increase farm income and facilitate farmers' transformation from subsistence to cash oriented producers. 1.03 Successful improvement resulting in better coffee yield and quality depends on good coffee husbandry and processing. Coffee farmers would have to improve current cultivation and processing practices. This would be a complex task demanding a massive extension effort in farmers' training and a fairly high degree of supervision. Those improvements are clearly beyond the scope of the present extension services. Consequently, emphasis would be laid in the project on training Burundian extension staff specialized in coffee cultivation and processing. Initially expatriate technical assistance would be needed to bring the necessary expertize to the proposed project for training of extension staff and project execution. 1.04 Two FAO/IBRD Cooperative Program missions visited Burundi in April 1966 and in July 1967, to help prepare the project submission of the Govern- ment. An Association mission consisting of Messrs. von Gontard, Adams, Reutlinger (IDA) and Henderson (of PMEA) visited Burundi in March 1968 to appraise the project. This report is based on the findings of this mission and has been prepared mainly by Mr. von Gontard. II. BACKGROUND A. General 2.01 Burundi, a small land-locked country of about 28,000 km2 (see Map 1), gained independence in union with Rwanda in 1962. Both countries were formerly a Trusteeship Territory administered by Belgium. In 1964 the union split, and Burundi obtained nationhood. Most of the country comprises a hilly plateau averaging about 1500 m in altitude, To the east, the plateau slopes gradually down to Tanzania, to the west, abruptly into the Rift Valley. The capital, Bujumbura, lies in the Rift Valley at the northern tip of Lake Tanganyika. Climate is equatorial, tempered by altitude. Population, about 3.2 million, is distributed throughout the countryside, and less than three percent live in organized settlements. Bujumbura is the largest with 70,000 inhabitants.  - 2 - 2.02 Almost all the active population is engaged in agriculture, and about 60 percent of total GDP is subsistence production. Per capita GDP is low, estimated currently at US$ 50 - 60. In particular the economy is characterized by low cash incomes and a consequent lack of demand for con- sumer goods; difficult access to export markets; and low levels of education, skills and enterpreneurship. A number of development projects are being implemented. These are mainly concerned with the development of infra- structure, and the diversification of agricultural production. Since these are still in initial stages of development their benefits are yet to be felt (see Annex 1). B. Coffee Sector 2.03 Coffee is the principal cash crop of the economy. About 15 to 20 percent of monetary GDP comes directly from the coffee crop. Coffee accounts for S0 to 85 percent of total exnort earnings, and is thus of key importance to the balance of payments. The balance of payments has shown a 10 percent deficit for some years. Coffee export duties also account for 12 percent of Government tax revenues. Being the princioal cash crop, coffee production accounts for most of the activities in the monetary sector. 2.o4 Almost all the coffee, totalling about 41 million trees, is of the arabica type, produced by about 300,000 smallholder families, and is nurchased, cured, and exported by private traders. In the past, standards of cultivation and processing were vigorously supervised by the Belgian Administration. Since independence, however, the level of supervision has been relaxed and has re- sulted in fluctuating coffee production and exports, and declining quality (see Annex 2, Tables 1 and 2). Coffee Quota 2.05 Burundi is a member of the International Coffee Organization (ICO) and its coffee exports are thus subject to ICO quota. The basic quota fixed for Burundi in the new Coffee Agreement 1968-1973 is 13,980 tons. However, under the provisions of the Agreement the level of Burundi's annual exnort entitlements can be set as though its basic quota were 21,000 tons instead of 13,980 tons, provided that Burundi can show acceptable evidence of an export- able production larger than 13,980 tons. In recent years Burundi's coffee exports have averaged 16,000 tons. Even assuming, therefore, that for the duration of the new Agreement (i.e., up to 1973) the annual export entitle- ments of all member countries will gradually increase but still remain below the full amount of their basic quotas, Burundi will be able to increase its annual exports by as much as 5,000-6,000 tons and still remain within the Agreement's quota limitations. The ICO Secretariat has been kept informed of the details of the proposed project and since potential production increases would not raise Burundi's exports beyond the levels permitted under the new Agreement, has indicated that it expects no objections to this project from the member countries of the Agreement.  -3- Extension and Research 2.o6 Government assistance to coffee growers is provided by the general extension service of the Ministry of Agriculture and Animal Husbandry, and the Agency for Industrial Crops Burundi (OCIBU) 1/, (see Annex 3). OCIBU is an autonomous government agency, governed by a Board of Directors which is chaired by the Minister of Agriculture and Animal Husbandry. Until recently, OCIBU's main function in the coffee sector was to control the quality of exvort coffee; its other major activities, the maintenance of communal pulping centers 2/, the organization of coffee pest control camnnaians, and advising Government on general coffee policy, in particular, producer prices. Recently OCIBU has taken over similar responsibilities for tea and cotton. With implementation of the proposed project, OCIBU's role would be extended to providing participating smallholders with advice, inputs and supervision. Coffee research is carried out by the Agricultural Research Institute (ISABU) 3/. ISABU operates four research stations, and is governed in the same manner as OCIBU. Both institutions rely heavily on expatriate staff. Six out of fifteen of OCIBU's professional staff, including the accountant, are expatriate, as are all ISABU professional personnel. Coffee Prices and Marketing 2.07 The average producer price for parchment coffee is estimated and fixed each year in advance of the coffee campaign by Government in consulta- tion with OCIBU and the Central Bank. The estimate is based on the previous season's export price, prevailing world prices and government budgetary re- quirements. Care is taken that the producer price is adequate to aIlow a reasonable return to farmers. The latter received on average 67 percent of the value of their coffee, FOB Dar-es-Salaam, in recent years. This is satisfactory. Government levies an export duty between 15-16 percent of FOB value; and OCIBU collects an export tax to support its routine coffee activities, and a coffee promotion tax. These were about four percent of FOB value in 1965. Annex 2, Table 3, shows the method of estimating annual producer prices. 2.08 A Coffee Price Stabilization Fund (CPSF) and a Coffee Promotion Fund (CPF) are maintained by OCIBU. Both were built up prior to independence. No contributions were made to CPSF from coffee revenues in recent years. Be- cause of Government's policy to maintain high producer prices full collection of OCIBU taxes was not possible in 1966 and 1967. The CPSF was used instead of taxes to pay the bulk of OCIBU's operating expenses. The current net value of CPSF at December 31, 1967 was FBU 43.7 million (USt 0.5 million equivalent) and more than half of this is payable to OCIBU (see Annex 3, 1/ Office des Cultures Industrielles du Burundi. 2/ Large numbers of small pulping sheds were established by the Trustee- shiD Administration for the use of coffee farmers. 3/ Institut des Sciences Agronomiques du Burundi.  Tables 1 and 2). Unless producer prices are lowered in future to allow for an adequate tax collection, CPSF will be exhausted after a further coffee campaign. Similarly, coffee Dromotion taxes collected by OCIBU have not been paid to CPF. Its current net value, FBU 11 million (US$ 0.13 million equivalent), is almost entirely owed by OCIBU. Continued operation of CPF would depend on continued transfer of coffee promotion taxes. 2.09 OCIBU's current annual operating expenses which are almost entirely related to coffee amount to about FBU 50 million (US$ 0.57 million equiva- lent; see Annex 3, Table 2). Assuming an average annual production of 16,000 tons of exportable coffee, and constant export prices, tax revenues of 3-4 percent of FOB value would be needed to support OCIBU's routine activities in the coffee sector. This is approximately the rate collected prior to 1966. Assurances were obtained from Government during negotiation that producer coffee prices would be fixed annually so as to enable OCIBU to re- cover from taxes its future operating expenditure related to routine activi- ties in the coffee sector. 2.10 Marketing is handled by the Drivate sector. Exporters, all of whom are based in Bujumbura, buy parchment coffee 1/ through a network of traders who are licensed to buy at specified markets, on specified days and during fixed hours. Transactions are in cash at the fixed minimum producer price for average coffee. Traders obtain a commission of about FBU 1.40 per kg, and few have turnovers of more than 30 tons annually. Traders shin the parchment coffee to curers who produce and export green coffee. Curers have excess curing capacity since prior to independence Rwanda coffee was cured in Bujumbura. All Burundi coffee is exported to the U.S., where low grades are used for coffee extracts. Attempts to sell on the European market have failed due to low quality. The latter market prefers a higher grade coffee than the U.S. market and at present Burundi does not produce this in sufficient quantity to warrant separate exporting arrangements. 2.11 The Association of Burundian Merchants (ACB) was created with official support in 1967 to promote the participation of Burundian nationals in the import and exnort trade. At present, some 660 ACB members act as parchment coffee buyers in local markets, and in 1967 handled more than half of the crop, replacing traders of Greek and Arabic origin. Additionally, ACB arranged the curing of its members' purchases on contract and exported the green coffee on its own account. The whole operation was financed by a loan of FBU 150 million from the National Development Bank. The ACB plans to extend its operations in 1968. 1/ "Cherry` is the complete fruit of the coffee tree. It is picked when it turns red and normally contains two seeds, the "beans". These are separately covered by thin membranes, called "silverskins" and parchment- like shells, enclosed in a thin mucilaginous substance. Immediately surrounding this is the skin of the fruit. Fruit skin and mucilaginous substance are removed in the "pulping" process. Pulped coffee in its parchment shell is called "parchment coffee". The parchment shell including the silverskin is removed by the "curing process". "Green coffee" is the commercial produce in the naked bean form before roasting.  C. Development Prospects 2.12 Improvement of the productivity of existing coffee affords an immediate opportunity for economic exDansion. Burundi's ICO quota allows an increase in annual exports of 5,000 to 6,000 tons. Production from ex- isting coffee trees can be significantly increased by introducing improve- ments in cultural methods and a limited use of imported inputs. Benefits from the program would begin to develop within 12 months, and yield increases of coffee trees would level out at their peak after four years as a result of the proposed basic improvement. 2.13 Other agricultural development programs and projects are described in Annex 1. The two most significant are an irrigation and drainage project in the Rift Valley, which involves 5,000 ha, and a project for smallholder tea development, both financed by the European Development Fund. The gesta- tion period of both the projects is long and full benefits will not be ob- tained until the late 1970s. Thus the proposed coffee project is presently the only one which could make an early contribution to the economic develop- ment in the agricultural sector. III. THE PROJECT AREA 3.01 The project area comDrises about 600 km in Ngozi province, the heart of Burundi's coffee growing region (see Map 2), producing currently about fifteen percent of Burundi's coffee crop. WIith about 250 people per km2, population pressure is one of the heaviest in Africa. The almost en- tirely rural Dopulation lives on smallholdings in family enclosures. Ngozi and Kayanza, the area's administrative and commercial centers are the only urban areas. 3.02 The project area is a plateau with outcroDping hills and hillocks, intersected by an extensive system of perennial streams. Altitude varies from 1,500 m to 2,000 m with some hills rising to 2,500 m. Rainfall averages between 1,200 to 1,500 mm annually and is fairly well distributed. Soils are generally deep, friable, well drained, rich in organic matter and, when not sloping too steeply, are suitable for coffee and most tropical subsis- tence crops. 3.03 Roads are well developed. Two all-weather gravelled main roads cross the project area, and there are a network of secondary and feeder roads, and an extensive system of coffee tracks running roughly along the contours or on the ridges. Road maintenance is generally satisfactory. Tracks and bridges on these, however, maintenance of which is the resnonsi- bility of the farmers, are often not properly maintained. 3.04 The land close to the farmer's house is permanently cultivated. Banana is the main crop, and secondary crops include beans, sorghum, maize, sweet potatoes, and cassava. More distant plots are cultivated for two or three years, and then fallowed. More prosperous farmers keep cattle which  - b - are grazed on communal land, generally unsuited for field crops. The aver- age family holding is o.6 to O.T ha, made up of several plots. Nearly all farmers grow arabica coffee, on average 160 trees each. Land is communally owned and farmers have usufruct on a first-tenant basis. These tenancies are allocated by the local administrations. 3.05 About 44,000 smallholders in the area grow coffee which is their only source of cash income. All would be included in, and benefit from, the proDosed project. Half of their seven million coffee trees are planted along the contour or ridge tracks. Generally the trees are four to five deep on either side of the track. This system of planting was encouraged, and in some cases required, by the Trusteeship Administration, which also organized the construction of the tracks with communal labor. The remaining coffee is planted on scattered plots. Generally the spacing is regular, about 1,600 trees per ha. About 80 percent of the existing coffee has been Dlanted since 1948, and can be expected to continue in economic production for another 30 years. 3.o6 The coffee trees are usually trained in the multiple-stem system. Their growth, foliage and general health are satisfactory and compare favor- ably with coffee elsewhere in East and Central Africa. Weeding and mulching standards are adequate in holding along well-maintained tracks, but less than adequate along neglected tracks. Mulching material is available from bananas and grass. Through the local administration and general extension services OCIBU supplies pesticides to growers for the control of antestia bugs, 1/ the only pest of importance. The benefits of this campaign are marginal, however, due to insufficient organization and supervision. 3.07 Two different pruning techniques are used. Either the removal of all stems, or the retention of only one stem. Formerly pruning was carried out on a regional basis under direction of the Administration and the grower's entire plot was pruned at one time leaving him with a very small crop in the following two years. Following the decrease in extension service activity and cessation of enforcement after independence, pruning was generally neg- lected. Unsatisfactory pruning seems mainly responsible for low and fluc- tuating coffee yields in the project area. 3.08 Picking and on-farm processing are below the standard required to fully exploit the quality of coffee. All cherry, including that which is unripe and over-rire is nicked, hand pulped and washed in small communal pulping sheds, and then dried by the farmer. There are about 80 pulping centers in the project area, equipped with concrete washing channels, basins and one-disc hand pulpers. All these facilities need improvement. 3.09 An agricultural research station, managed by ISABU (see para. 2.06), is close to the project area at MIurongwe in Gitega province. It produces selected coffee seeds and researches on subsistence croDs. Coffee fertilizer 1/ The coffee bug Antestiopsis lineaticollis feeds on soft tissue of coffee trees, preferably immature berries. This results in irregularly shaped beans or no beans at all.  - 7 - trials on farmers' plots were conducted in the project area from 1962 through 1966, and have established that satisfactory yield increases can be achieved through better husbandry and that there is an economic response to the apDli- cation of nitrogen. 3.10 About 115 general agricultural extension staff are employed in Ngozi province. Of these, 25 have special training in coffee cultivation. Extension staff are responsible for subsistence crops, coffee husbandry and animal husbandry, and their du-ties include the distribution of pesti- cides to growers. The efficiency of coffee extension work has steadily declined since independence due mainly to a lack of specialized supervision. In order to better serve coffee farmers, OCIBU posted two agricultural officers to the area in 1967. Furthermore, ISABU has operated a well super- vised fertilizer extension scheme in the project area since 1966. This, however, will be discontinued in 1969. Fertilizers and pesticides, provided by OCIBU, are given free of cost to about 3,000 farmers. 3.11 The project area has been selected since (a) environmentally it is better suited to coffee cultivation than others, (b) it has the highest con- centration of coffee small holdings, (see Map 3) and (c) it is the only coffee area in which fertilizer trials have been carried out for a suffi- ciently long period to produce meaningful results. IV. THE PROJECT A. Project Description 4.01 The project is the improvement, over a five year period, of coffee production and quality from about seven million existing coffee trees. These trees are grow-n on some 4,400 ha and are owned by about 44,000 smallholders. The project consists of: (a) the creation of a specialized department in OCIBU for the extension of improved coffee production and processing methods; (b) the provision of in-service training for Burundian coffee extension and processing personnel; (c) the implementation of a program of fertilizer trials on farmers coffee plots; (d) the provision of farm inputs and tools to participating farmers; (e) the establishment of a fertilizer sales program; (f) the construction of four pulping and fermenting factories, and the improvement of about 80 communal pulping centers; and  - 8 - (g) the improvement of about 350 small bridges on existing coffee tracks. Extension of ImDroved Coffee Production and Processing Methods 4.02 The production methods extended would be essential techniques of proven utility - pruning, mulching, pest control, and fertilization which would be within the competence of all participating farmers. Details of the methods and the results anticipated from using them are given in Annex 4. Processing extension would be concerned with the improvement of picking, pulping and drying. Due to the small size of coffee holdings, their con- centration and the simplicity of the improvement methods, one farm level extension worker, moniteur, or assistant moniteur, would be appointed for each 330 farmers. The extension service would provide in-service training for its staff. Fertilizer Trials 4.03 ISABU operated a program of fertilizer trials in Ngozi province until 1966. It is essential that this program should be re-established to provide a basis for continuing advice on fertilizer use. Provision has been made in project costs for making available to ISABU the equipment and mate- rials for the re-established program. Farm Inputs and Tools 4.o4 Farmers would not be able to take advantage of extension advice unless they could obtain necessary inDuts and tools. With present cultiva- tion Dractices farmers have no cash expenses. However, farmers adopting the basic improvement measures, (see para. 4.02), would need to spend about FBU 1,700 (USt 20 equivalent) on inputs and tools in the first year of initiating imnrovements. Few, if any, could find this amount since it would represent about 75 percent of their annual cash income from coffee. A credit program would be impracticable, firstly because of the high overheads of servicing a very large number of small accounts and secondly, because in the absence of any agricultural credit organization one would have to be estab- lished especially for the project. 4.05 In view of these constraints, it would be more practical to pro- vide inputs and simple tools required for the basic improvement measures initially to farmers free of charge. These would include: (a) pesticides for the first five years of project operation; (b) three booster applications of fertilizer per coffee tree within the first five project years; (c) one set of simple pruning tools, and one drying tray to each of about 44,000 coffee farmers; and (d) a limited number of hand operated pesticides dusters.  - 9 - The cost of these inputs would be recovered by Government mainly through resulting increases in tax revenues (see para. 4.15). Increased farm income would enable coffee farmers to pay the market price for the replacement of tools after about the fifth year of the improvement program (see Annex 6, Table 6). Fertilizer Sales Program 4.o6 Through the booster applications of fertilizer included in the basic improvement, farmers would come to appreciate the benefits from ferti- lizer and create a demand for them. This demand would be met by a fertilizer sales program which would be started by OCIBU in the fourth year. The ferti- lizer would be distributed through private coffee traders to their farmer customers. The traders have adequate storage facilities. To promote regular fertilizer application to coffee after the initiation of the basic improvement, fertilizer would be sold initially with a subsidy of 66 percent in project years four through six; in years seven, eight and nine the subsidy would be reduced to 33 percent, thereafter being removed. Assurances to this effect were obtained during negotiations. The initial subsidy is justified on the grounds of low farmer cash income and would be recovered in the same manner as the cost of the inputs and tools provided free of charge to farmers. It is expected that by year ten about 50 percent of the farmers in the project area would purchase annually about 500 tons of fertilizer. Processing 4.07 Four small pulping, fermenting and drying factories would be established and operated commerciallv by OCIBU in the project area (see Annex 4). The output of these, about 400 tons of green coffee annually after year four, would be of a quality acceptable to the European market. The profits of these factories would accrue to OCIBU. Eighty communal pulping centers in the project area would be repaired and improved. In particular, more individual washing basins would be provided, existing washing channels would be extended and provision would be made for silt pits and fruit skin disposal. These improvements would be included in the project. Maintenance of the centers would continue to be the responsibility of OCIBU. Track Improvement 4.o8 Satisfactory repair and maintenance of the coffee tracks is an essential element of the coffee improvement program. Presently the major problem is the poor state of a large number of culverts and small bridges. About 350 small bridges would be reconstructed under the project. Pro- vision is made in the project cost estimates for supplying construction materials for this purpose. The work would be done by the coffee farmers without payments under the supervision of project personnel.  - 10 - B. Project Schedule 4.09 The proposed phasing of the project, including construction and recruitment schedules, is detailed in Annex 6, Tables 1 and 2. Phasing is largely dictated by the availability of trained field level extension moniteurs, (see Annex 4). Roughly one quarter of the seven million coffee trees would be brought under the project's basic improvement campaign in each of the first four project years. The improvement of communal pulping centers and the construction of pulping factories would be concluded by year three. Since it is essential that the moniteurs livre in their working areas, housing construction for them would proceed with their emtloyment and be completed in the third year. C. Cost Estimates 4.10 Total costs of the project are estimated at about FBU 186.9 mil- lion (US$ 2.14 million equivalent) including an overall contingency of ten percent but net of the farmers' labor contribution. Additionally, project costs are net of expenditures on existing coffee research and extension activity in the project area which would be continued but which would not form a specific part of the coffee imorovement project. The following table gives a summary breakdown by major type of expenditure, for futher details see Annex 6, Tables 3 and 4. Summarized Estimated Project Costs 1/ In Local Currency US$ Equivalent Local Foreign Local Foreign Foreign Cur- Ex- Cur- Ex- Ex- rency change Total rency change Total change ------ FBU t000