Senegal - Terres Neuves Resettlement Project

s c2C 4 (- J cz f ..si --+ - . ,--- |---- R E S T D I C- T ,' D PA73 ~~~___ ___ 1j:o; ; - . , 'ig4 .-' T 'lhilrerort vs prepared for use within the Bank and its oftii:ited organizations. They do not .ccept ;esponsir;ility for its accuracy or completeness. The report may nor 9:>iA no! a nfior may it oe quoted as representing tneir views. INTERNTTIONAL BANK FOR RECCNSTRUCTION AND DEVELOPIMENT LNTERNATIONAL DEVELOPMENT ASSCCLATICN TIERRES NEUVES RESETTILEMENT PROJECT SENEGAL Ap.il. , 1,71 Agriculture Project3 Department - J '> rfLI; mU pDI:  _ RENCY EQYIVALENTS US$i D A 277--7 CFAF I a us$ O.o00 CFAF I ml. iIon - ss 3,60-.i00 WEIGHTS AMD YE-ARES Metric -System ABBSRIlATIONS BNDS: Banqtue Nationale de Developpement du Senegal MFr. Comanere Francaise pour le Developpement des Fibres Textiles IRAT: Institut de Recherches Agronomiques Tropicales et des (lltures Vivrieres IRCT: Institut de Recherches dih Coton et des Textiles Exotiques fUaD Ministry of Ru-al DeTe7opent OCAS: Office de CommAcialisation Agricole du Senegal ONCAD: Office Nationale de Cooperation et d'Assistance pour le Developpernent CSTMC: OffLce de la. Recherche Scientifique et Technique d'Outre-Mer FWD : Public Works Department SATEC: Soc:Lete d'Aida Technique et de Cooperation STN : Societe dos Terres Neures  -, trr. ERURES 'l-ru_T_S R, W O.ECT 'W'AUL. C*- rJ7tEM. Page No. SLAMARY AM CNCLIUSTOW. _ _ i - ii 1. INTROOUCTION . . . . . . . . . . . . . . . . . . . . . 1 II. BACKGROUND . . . . . . 1 . . . . . . . . . . . . . . . A. General . . . . . . . . . . . . . . . . . . . . . . 1 B. Agricultural Instit'zicns . . . . . . . . . . . . 2 C. Population Pressure - Y.-drar:lon and 'Z!tlemenz - 4 III. THE PROJECT AREA . . . . . . . . . . . . . . . - 5 IV. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . 6 A. General Description . . . . . . . . . . . . . . . . 6 B. Settlement Program . . . . . . . . . . . . . . . . 7 C. Detailed Features . . . . . . . . . . . . . . . . . 8 D. Project Deveiopment Methods . . . . . . . . . . 10 U fVCqr '-C-TtUA -E A\fDl - ~Af%, V. ST I. S Am C .....- - = . . - e 11 VI. ORGA.NIZATION! ArND K-ANrEMr:T . . = . . . . . . 16 A. Oroaniz;Htion and Staffing . . . . . . . . . . . 16 B. Settler Selection . . . . . . . . . . . . . . . 17 C. Credit Arrangements . . . . . . 18 D. Marketirtg Arrangements . . . . . . . 18 VII. YIELDS, OUTPUTS, PRICES AUND PARTICIPANTS' INCOMES . . . 19 A. Yields and Outputs . . . . . . . . . . . . . . . . 19 B. Markets and Prices . . . . . . . . . . . . . . . . 20 C. Farner Benefits . . . . . . . . . . . . . . . . . . 21 D. Government Revenues . . . . . . . . . . . . . . . . 21 VIII. BENEFITS AND JUSTIFICATION . . . . . . . . . . . . . 22 IX. RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . 23 This report is based on the findings of two IDA missions. The Lirst, consisting or Nessrs C.E. Metcalfe, R. Adams anu T . chul, visited Senegal in February/March 1970: the second consisting of Messrs P. Th- Gros4ean, J. T. Schul, . Co ert (FAO) an.d R.P. Chateau (consultant) in Sentemnber 1970.  AN!''I:XI: 1. Agricult:ural Backeround 2. Markets ane t'rices for Proiect Commodities 3. Organized S,Ztlement and Spontaneous Migration 4. Technical Aspects 5. La Societe des Terres Neuves 6. Project Costs Sumnary, Tax Element, Cost Details, and Disbursements 7. Farm Budgets 8. Government Cash Flow 9. Calculat:ion of Economic Rate of Return MAlkPS 1. Locatiorn of Protect Area 2. Project Area  SENEGAL TEtRES NEUVES RESETTLEMENT PROJECT SUMMARY AND CONCLUSIONS i. Tnis report anoraises a project for the settlement or 300 rarm families from the over-oonulated and over-farmed "Groundnut Basin" on undUeve'Lopedu .Landu ofgo aericulturaL potent-iaL in the Tlerres NL Ieuves area of Eastern Senegal. The project will be the first phase of a major reset- tlement progrm. and -uld include the pro:ision of azricultural extension and credit services to some 250 farm families now living in the project area. The nrn1iL-e t.ldA bep t-he) Rank Group's scond operion fnr a in Senegal. ii. Croundnuts account for 75% of agricultural cash incomes in Senegal and for aLmost 80Z of the cruntry's exports in terms of value. In large parts of the so-called Grou:idnut Basin, where due to population pressure the average adult male cultivates only 0.54 ha of rainfed crops, suils are deterioratinn. For that reason combined with various factors pertaining mainly to oroducer prices, t, credit and marketing crganizations, to insuffi- cient yield response to fert'.lizers, and doubtful quality of seeds, groundnut production is declining. Gov!rnment -s faced with two principal problems; maintaLning aiud irproving expccrt earnings, and alleviating overpopulation in the Groundnut Basin which occupies the eastern hinterland of Dakar. Undeveloped land of good production Dotential "-es fu-ther south and east, and gradually this is being developed through spontaneous settlement. Un- fortunately, thils uncontrolled migration is tendinR to create the very problerms which bedevil the Groundnut Basin - lack of tenure rights, uncon- trolleci cropping, fragmentation of holdirngs, and over-concentration on groundnut production. The project's objectives would be to control the dsevelopm,ent cot new lard, introduce =l1pro-ved cult.-vat.on mietho's, an' "iver- U V IJ.IIIL I.lW L .1U L IZ L Lu U 11 .Jl uV ~ UL Ii.Vj ul L1 Li UU dLU U.LV . sifv the cropping pattern. The project crop rotation would include ground- ntitq_ hlt, alqn 1nttnn fnT- Vnnot- :2 m47v. .",4 CeV-tJ1 in t- J- rnn1 en- 1 __-I--. .._,-..-r-- - ~- ~ swnmpticn. iii. The project is small, but this is warranted by its being the first phase cf what should develop into a most significant program of land develop- ment; iwere the project larger the problems of introducing and evaluating the new techniques on which its success depends would be substantially more difficult and probably beyond the present capacity of the authorities. None- theless, the project provides for a detailed evaluation of its progress, and should the situation so warrant, for the preparation of a larger seconi phase project in 1973 for the settlement of up to about 2,500 families. The proj- ect would be carried out by a statutory corporation - La Societe des Terres Neuves (STN), under the 3uthority of the Minister of Rural Development. STN would employ managing azents for the initial period of proiect development. iv. Project costs are estimated to total USS 1.8 million during the ten years needed to bring all Droject farms into full production. Project costs during the six-year period proposed ror disbursement or tne proposed IDA credit are USS 1.55 million including about USS 188,000 for establishing  - ii - a revolving credit fund zo provide participants with seasonal and medium- term credits. A further US$ 228,000 would be required in the period 1977 through 1980 to complete deve]opment of settlers' holdings and this cost would be mec by the Government. IDA would finance USS 1.25 million (ap- proximately 81% of project costs in the IDA credit disbursement period or 70% of the ten year total developmnt) representing the estimated foreign exchange component of USS 890,000 and US$ 360,000 local costs. Farmers' cot _tlv not L' _e. inlue in -PLV..J J_ _ _______bL. rre.'_ .__ COS L: LIdV l&U;%t [L.U ' LUL U .I.& jJLUJ =LL LJ1 ZO.LLL- LAI>Z. WUU LWULU IIUL L M U in kind; settlers would build their own houses with self-procured materials and be responsible for te bulk of land clearing and development. In vlew of the small size of procurement contracts for goods and services these i-uld be let throug-h local competitive bid-Jing- v. The proiect would generate foreign exchange earnints and imnort savings of about USS 328,000 at year at maturity. Based on the Bank's price forecasts fcr groundnuts, cotton, maize and sorghum, the economic return fron the project is estir2-1i at 13%. Individual rates of return for the settlerent and establish.il fa mer programs are 12.5% and 15.8% respectively. vi. At maturity, in 19b], the average settler family's cash income from their holding would be about USS 440 annually, about 70% higher than the current average farm incocie in the C,roundnjt Basin from where settlers would Lbe selected. The annual cash income of established farmers in the project area who participate In the project is estimated to increase bv US$ 110 after 8 years, an increase of about 3U2 over present incomes. vii. ir:e rroject is suitable for an IDA credit of UJSS 1.-5 million. The credit includes retroactive financing of up to USS 60,000.  SENEGAL TERRES _iEUVES RESETTLEWENT PROJECT 1. INTRODUCTION 1.01 In 1969 Senegal asked IDA to help finance an agricultural settlement project provid:Lng for the migration of some 1,000 farm families from overpopulated areas in Senegal's "Groundnut Basin" to the less populated Terres Neuves area of Eastern Senegal. Appraisal showed that a project in- volving 1,000 settler famiLlies would be too large to ensure the success of this initi3l operation and the proposed project involves the settlement of 300 families and making available extension and credit services to them and to s m 2 O __ rc-- l' n w llv_n _.._ _ ...X_ ._ _L __._ I-_ - -_ _ _._T'-- --- -- __ .. .. - ti some ~ ~ Lu i vl ..vn nL LIIC VL UJ c L d LLd . LLI P LUJ ULL WUUiLU be the first phase of a program for the settlement of some 6,000 families on 150S,000 ha of underdeveloped lan Aand inc'ludes "he cost of --4parln- the next phase. 1.022 In 1969 a Bank reconnaissance mission recommended a project feasi- bili ty study and orenared terms of reference. The studv was made by the French Societe d'Aide Technique et de Cooperation (SATEC), financed by the French Fonds d'Ai,le et de Cooperation (FAC;. This report is based on the findings of two IDA missions. The first, consisting of Messrs C. E. Metcalfe, R. Adams, and J. .J. Schul, visited Senegal in February/March 1970; the second consisting of Messrs P. Th. Grosjean, J. J. Schul, J. Coudert (FAO) and R. P. Chateau (Consulzar.t) in September 1970. 1.03 The proJect would be the second Bankc Group operation in the agri- cultural sector in Senegal. In February 1969 a USS 6.0 million IDA credit and USS 3.5 million Bank loan were aporoved to help finance a groundnut and millet improvement proeram which had been started in 1964 with the assistance of the European Economic Cormmunity (EEC). Progress of this project has been unsatisfactory: groundnut production has fallen in the project area, due to a combination of fIactors: poor weather, doubtful quality of seeds, low yield resp.onse to fertillzers, loW produ Pr prICeS, and Ipw pLUject administration and coordinaition. As a consequence of these developments, most farmers are heavily lndebted Innu have lost confidence in GoverTm.ent policies. Measures have been taken to correct the situation; in August 1970, cash payments on delivery of grnundmrucs hv farmerc were reincroduced Mnre recencly, in early April, Government announced an increase in the producer price for groundnuts and is now reorganizing proiect administration. Althoueh it is too early to assess the impact of these measures, thev are steps in the right direction. II. RACKGRObND A. General 2.01 Senegal's populattion is albout 3.7 million and is estimated to be increasing at about 2.2% per annum. Population densitv averages 19 persons  - 2-- per im , ranging front about 130 per k-'i in some areas of the 'Groundnut 3asin" in the West, to zero in oarts of the East. About 75% of the working popula- tion is employed in the rural sector. Annex 1 describes the country's agri- cultural situation. 2.02 Senegal has; an area of 197,000 km (see maD). Topography is generaiL4ly L"Lat, ardU Lvegetation ranges from hea-v-; forest Li the soutLU to desert in the north writh a corresponding .--nual rainfall range of 1,500 mm tV_VBE.t 1'.J'O w UMI X O&'... _ OLIL. L 7 g.a .s-V\-,,a aLS Jt p * L tOL C tend to occur in a cyclical pattern and affect the north more than the south. Soils 1 ar most1ly light and abut 15 of the