Liberia - Agricultural Development Project : Credit 0306 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 306 LBR Development Credit Agreement (Agricultural Development Project) BETWEEN THE REPUBLIC OF LIBERIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED MAY 17, 1972 CONFORMED COPY CREDIT NUMBER 306 LBR Development Credit Agreement (Agricultural Development Project) BETWEEN THE REPUBLIC OF LIBERIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED MAY 17, 1972 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated May 17, 1972, between THE REPUBLIC OF LIBERIA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, datled January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the deletion of Sections 5.01 and 6.02 (h) thereof and to the renumbering of Section 6.02 (i) into 6.02 (h) thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the term "Ministry" means the Ministry of Agriculture of the Borrower. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to one million two hundred thousand dollars ($1,200,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed under the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall 4 be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. Section 2.03. Except as the Association shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured on the basis of the procedures set forth in Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1976 or such other date as shall be agreed between the Borrower and the Association. .ection 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of I%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on February 15 and August 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each February 15 and August 15 commencing August 15, 1982 and ending February 15, 2022, each installment to and including the installment payable on February 15, 1992 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (11/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through the Ministry with due diligence and efficiency and in conformity with sound administrative, financial, agricultural and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without limitation to the provisions of sub-section (a) of this Section: 5 (i) the Borrower shall establish and maintain a bank account (hereafter called the Project Account) to be used exclusively for all expenditures made by the Borrower in respect of the cost of goods and services required for the Project; and (ii) as from the Effective Date the Borrower shall on the first day of each month deposit in the Project Account such amounts as shall be required to cover such expenditures for the following two months on the basis of estimates to be prepared each month for such purpose by the administrator (the Administrator) to be appointed in accordance with Section 3.02 (d) hereof. Section 3.02. (a) For the purpose of carrying out Part A of the Project, the Borrower shall establish and maintain at Suakoko a Pilot Rubber Scheme Management Unit and shall appoint as members thereof a Manager, an Assistant Manager and an Accountant. (b) For the purpose of carrying out Parts B and C of Ole Project, the Borrower shall appoint consultants and shall cause such consultants respectively to recommend a team leader who shall, upon mutual agreement, be appointed and be responsible directly to the Minister of Agriculture or his designee (who shall not be a person below the rank of the Assistant Minister), for the carrying out of their respective services. (c) For the purpose of carrying out Part D of the Project, the Borrower shall appoint rice research consultants who shall be responsible directly to the Minister of Agriculture or his designee (who shall not be a person below the rank of the Assistant Minister), and a rice agronomist who shall be responsible directly to the Director of Agricultural Research at the Suakoko Rice Research Station. (d) For the purpose, inter alia, of carrying out Part E of the Project, the Borrower shall appoint an administrator who shall be responsible directly to the Minister of Agriculture or his deputy. (e) (i) The Manager of the Pilot Rubber Scheme Management Unit and the consultants (including the Administrator) referred to in sub-sections (b), (c) and (d) of this Section shall in each case be persons acceptable to the Association and shall be appointed in manner and upon terms and conditions (including, without limitation, as to terms of reference, timing and duration) satisfactory to the Association. 6 (ii) Without limitation to paragraph (i) of this sub-section, the functions, powers and duties of the Manager of the Pilot Rubber Scheme Management Unit in respect of Part A of the Project and of the Administrator in respect of the Project shall be as specified respectively in Parts 1 and 2 of Schedule 4 hereto. Section 3.03. The Borrower shall cause (i) the Minister of Agriculture to keep such Departments and Ministries, Bureaus and other of its agencies and instrumentalities as shall be affected by or concerned with the Project, or any part thereof, informed of the progress of the Project (including evaluation of the studies financed under the Project); (ii) such Departments, Ministries, Bureaus, agencies or instrumentalities, to provide such support, cooperation or other assistance as shall be necessary or desirable in connection with the carrying out of the Project; and (iii) the Deputy Minister of said Departments and Ministries and the equivalent officers of said Bureaus and other agencies and instrumentalities to be available, on a continuing basis, for consultation with the Ministry of Agriculture for the purposes of paragraph (ii) of this Section. Section 3.04. In carrying out Parts A and D of the Project, the Borrower shall employ contractors acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.05. In carrying out Part A of the Project, the Borrower shall enter into contracts with farmers for the provision of rubber rehabilitation loans, to be financed by the Borrower out of the proceeds of the Credit, and of rubber replanting grants, to be financed by the Borrower out of its own resources, upon the terms and conditions respectively specified in Parts 1 and 2 of Schedule 5 hereof and upon such other terms and conditions as the Association shall approve. Section 3.06. (a) In carrying out Part B of the Project, the Borrower shall submit the rubber industry study carried out thereunder to the Association for review and shall cause the formulation of detailed investment proposals relating thereto to be undertaken only if the Borrower and the Association shall so agree in the light of the recommendations included in such study. (b) In carrying out Part C of the Project, the Borrower shall submit the Lofa Study to the Association for review and shall cause the Bong Study to be undertaken only if the Borrower and the Association shall so determine in the light of the Lofa Study. 7 (c) Following the preparation of the review included in Part E of the Project, the Borrower shall consult with the Association on the recommendations included therein and shall formulate a program for their implementation satisfactory to the Borrower and the Association. Section 3.07. (a) In carrying out Part F (1) of the Project, the Borrower shall, in consultation with the rice research consultants referred to in Section 3.02 (c) hereof, select the four rice research fellows to whom the fellowships included therein are awarded out of suitably qualified governmental staff or recent graduates and shall cause the said consultants to prepare and supervise the training programs of such fellows. Upon satisfactory completion of their training the Borrower shall appoint each fellow to the staff of the Ministry with senior responsibility for rice research at the Suakoko Research Station. (b) In carrying out Part F (2) of the Project, the Borrower shall: (i) cause the consultants, to be appointed by the Borrower in accordance with Section 3.02 (b) hereof, to provide training for nine suitably qualified agronomists or economists, five of whom shall be trained as counterpart staff to the consultants appointed in respect of Part B of the Project and four of whom shall be trained as counterpart staff to the consultants appointed in respect of Part C of the Project; (ii) upon satisfactory completion of such training assign such counterparts to such consultants respectively; and (iii) provide short courses for the training of rubber farm managers and detailed supervision of rubber tappers. Section 3.08. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. 8 Section 3.09. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the reports, studies, papers, plans, specifications, contract documents and construction, procurement and work schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's representatives to inspect the Project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.10. The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project. ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.02. Without limitation to the generality of Section 4.01 hereof, the Borrower shall: (a) cause the Administrator to maintain separate accounts and financial statements (balance sheets, statements of income and expenses, individual farmer rubber rehabilitation loan and rubber replanting grant accounts and related statements) adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expenditures in respect of each Part of the Project of the Ministry; and (b) (i) cause the Administrator to have the said accounts and financial statements for each fiscal year audited, in 9 accordance with sound auditing principles consistently applied by independent auditors acceptable to the Association, such audit to include a physical check of the goods financed out of the proceeds of the Credit; (ii) cause the Association to be furnished as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of the said accounts and financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) cause the Association to be furnished such other information concerning the said accounts and financial statements and the audit thereof as the Association shall from time to time request. ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views through their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the administration, operations and financial condition, resources and expenditures in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof, and other matters relating to the purposes of the Credit; and (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 5.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request 10 concerning the operations and financial condition, resources and expenditures in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof or the performance by either of them of its obligations under the Development Credit Agreement. Section 5.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. ARTICLE VI Taxes and Restrictions Section 6.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 6.02. The Development Credit Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. Section 6.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VII Remedies of the Association Section 7.01. If any event specified in Section 7.01 of the General Conditions shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon and upon any such declaration such principal and service charges shall become dre 11 and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. ARTICLE VIII Effective Date; Termination Section 8.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01 (b) of the General Conditions: (a) (i) the Pilot Rubber Scheme Management Unit referred to in Section 3.02 of this Agreement shall have been established and the Manager appointed; and (ii) the Administrator referred to in Section 3.02 (d) of this Agreement shall have been appointed. (b) The form of the rubber rehabilitation loan agreements and of the rubber replanting grants referred to in Section 3.05 hereof shall have been agreed between the Borrower and the Association in accordance with the provisions thereof. Section 8.02. The date August 17, 1972 is hereby specified for the purposes of Section 10.04 of the General Conditions. ARTICLE IX Representative of the Borrower; Addresses Section 9.01. The Minister of Agriculture of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 9.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: The Minister of Agriculture Ministry of Agriculture Monrovia Liberia 12 Cable address: Ministry of Agriculture Monrovia For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Indevas Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. THE REPUBLIC OF LIBERIA By /s/ Ellen Johnson-Sirleaf Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Mohamed Shoaib Vice President 13 SCHEDULE I Withdrawal of the Proceeds of the Credit 1. The table below sets forth the categories of items to be financed out of the proceeds of the Credit, the allocation of amounts of the Credit to each category and the percentage of eligible expenditures so to be financed in each category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Civil Works (a) Pilot Rubber Scheme 48,000 ) 80% of total ex- ) penditures (b) Rice Research 92,000 ) II. Furniture, Equipment and Vehicles (a) Pilot Rubber Scheme 16,000 ) 100% of foreign ) expenditures (b) Rice Research 35,000 ) for directly im- ) ported goods or ) 80% of total ex- (c) Department of Agri- 4,000 ) penditures for culture Reorganiza- ) locally procured tion ) goods III. Farmers' Rubber Rehabil- 45,000 80% of total ex- itation Loans penditures IV. Consultant Services (a) (i) Rubber Indus- 169,000 ) try Survey ) (ii) Rubber Indus- 75,000 ) try Investment ) Proposals* ) 80% of total ex- ) penditures 14 Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (b) (i) Lofa Study 119,000 ) (ii) Bong Study** 115,000 ) (c) Rice Research 24,000 ) V. Rice Research Training 24,000 80% of total ex- Fellowships penditures VI. Salaries and Allowances (a) Pilot Rubber Scheme 98,000 ) (b) Rice Research 50,000 ) (c) Department of Agri- 73,000 ) 80% of total ex- culture Reorganiza- ) penditures tion ) (d) Counterparts 35,000 ) VII. Unallocated 178,000 TOTAL 1,200,000 * Subject to Section 3.06 (a) hereof. ** Subject to Section 3.06 (b) hereof. 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods produced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower; 15 (b) the term "total expenditures" means the aggregate of foreign expenditures and of expenditures for goods produced in, or services supplied from, the territories of the Borrower. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit will be withdrawn on account of payments for such taxes; (c) expenditures under any one or more of the following sub-categories or group of sub-categories set forth in the table in paragraph I above, viz. (1) IV (a) (i) (2) IV (a) (ii) (3) IV (b) (i) (4) IV (b) (ii), or (5) I (b), II (b), IV (c), V and VI (b) unless the Borrower shall first have appointed in accordance with Section 3.02 of the Development Credit Agreement the person or persons whose services are to be utilized in respect of the survey, proposals, study or research respectively specified in such sub-category, sub-categories or group of sub-categories. 4. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the Credit; 16 (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated by the Association, at the request of the Borrower, to such Category from the unallocated amount of the Credit, subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expenditures; (c) if the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 5. Notwithstanding the percentages set forth in the third column of the table in paragraph I above, if the estimate of total expenditures under any Category shall increase and no proceeds of the Credit are available for reallocation to such Category, the Association may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 17 SCHEDULE 2 Description of Project The Project consists of the following parts: Part A The carrying out of a pilot rubber scheme comprising: (1) the rehabilitation of approximately 2,000 acres of rubber capable of sustained and economic future yield levels and the provision of credit facilities to farmers in respect of the costs thereof; and (2) slaughter tapping of approximately 500 acres of rubber ending its productive life and the rubber replanting thereof. Part B The carrying out of a study of the rubber industry in Liberia and of the .~ feasibility of an increase in rubber production and, subject to Section 3.06 (a) of the Development Credit Agreement, the formulation of detailed investment proposals relating thereto in the light of such study and of the results of the pilot rubber scheme. Part C The formulation of a rural development project in the county of Lofa to increase crop production and the preparation of detailed investment proposals relating thereto (in the Development Credit Agreement called the Lofa Study) and, subject to Section 3.06 (b) of the Development Credit Agreement, the formulation of a rural development project in the county of Bong to increase crop production and the preparation of detailed investment proposals relating thereto (in the Development Credit Agreement called the Bong Study), in each case in the light of the survey of human and physical resources to be carried out in the said counties by the Borrower. Part D (1) except as the Association shall otherwise agree, the establishment of a comprehensive rice research program at the Suakoko Research Station. 18 (2) the improvement of the facilities of the Suakoko Research Station comprising: (i) the provision of new housing (ii) the up-grading of existing housing (iii) the paving of approximately one mile of the main road adjacent to the swamp rice experimental plots (iv) the provision of an electric generator (v) the provision of fencing. Part E The review of the functions and organization of the Department of Agriculture and formulation of recommendations for the reform thereof, including the preparation of a staffing, training and financing plan. Part F The provision of: (1) fellowships each of 12 man-months, or such other period as shall be agreed to between the Borrower and the Association, for counterpart staff to be assigned to the Suakoko Research Station; and (2) training facilities for nine counterpart staff to be assigned to the consultants appointed in respect of Parts B and C of the Project and for rubber farm managers and rubber tappers. Part G The provision for the use of the Administrator of office equipment at the Department of Agriculture, Monrovia and of a vehicle. The Project is expected to be completed by June 30, 1976. 19 SCHEDULE 3 Procurement 1. The Borrower shall procure goods and services (other than consultants services): (i) wherever practicable, on the basis of international competition and procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in August 1969, as revised in May 1971; and (ii) on the basis of local competition and procedures similar to those set forth in the said Guidelines where international competitive bidding is not followed. 2. With respect to any contract for civil works and equipment estimated to cost the equivalent of $5,000 or more: (a) If bidders are required to prequalify, the Borrower shall, before qualification is invited, inform the Association in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification, shall be furnished by the Borrower to the Association for its comments before the applicants are notified and the Borrower shall make such additions or deletions from the said list as the Association shall reasonably request. (b) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedure as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (c) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to whom it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the reasons for the intended award. The Association shall, if it determines that the intended award would be inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. (d) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. 20 (e) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract. 3. With respect to any other contract for civil works and equipment, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract, two conformed copies of such contract, together with the analysis of bids, (including a copy of the record of the public opening of the bids and a bid examination report) recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract is not consistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. 21 SCHEDULE 4 Functions, Powers and Duties of the Manager of the Pilot Rubber Scheme Management Unit and of the Administrator Part 1 The Manager of the Pilot Rubber Scheme Management Unit The Manager will be directly responsible to the Minister of Agriculture or his designee, who shall not be a person below the rank of division head, for the carrying out of Part A of the Project and will, in particular: (a) prepare all necessary work schedules, plans and programs for the pilot rubber scheme included in Part A of the Project and a program for its implementation; (b) prepare an annual work program for the scheme; (c) select and supervise all scheme farmers; (d) administer the rubber rehabilitation loans and replanting grants referred to in Section 3.05 of the Development Credit Agreement; (e) train farmers, farm managers, and tappers required for the carrying out of the scheme. Part 2 The Administrator 1. The Administrator will carry out Part E of the Project. In particular: (a) in reviewing the functions and organization of the Ministry, the Administrator will prepare a survey of its present functions, an inventory of its present financial and manpower resources and an analysis of present weaknesses; (b) in formulating recommendations for the reform of the functions and organization of the Ministry, including the preparation of the staffing, training and financing plan, the Administrator will: (i) prepare a five-year estimate of the (A) staff requirements, by qualification, grade and salary 22 (B) staff training program (C) recurrent budget requirements (D) capital budget requirements, and (E) organizational structure, detailing responsibilities of all senior officers and their lines of authority; of the Ministry taking into account the general functions of the Ministry, the specific requirements arising from the implementation of the Project and the resources available to the Borrower; (ii) formulate the future role of and terms of reference for the Ministry; (iii) prepare a scheme of service for the Ministry's staff; and (iv) draft any legislation necessary to give effect to the said recommendations or otherwise for the carrying out of its functions by the Ministry. 2. The Administrator will supervise the carrying out of Part F of the Project and make arrangements for the award of the fellowships and provision of the training facilities included therein. 3. The Administrator will be responsible for the preparation of the estimates and the accounts and financial statements respectively referred to in Sections 3.01 (b) (ii) and 4.02 of the Development Credit Agreement. 4. The Administrator will be responsible for the coordination of all Parts of the Project. 5. The Administrator shall have access to the Minister of Agriculture for purposes of performance of the Administrator's functions under the Project. 23 SCHEDULE 5 Terms and Conditions of Rubber Rehabilitation Loans and Rubber Replanting Grants Part 1 Rubber Rehabilitation Loans Loans shall be made for the rehabilitation of 2,000 acres of rubber included in Part A of the Project on the following terms and conditions: 1. A loan shall only be made: (a) to a creditworthy farmer of suitable qualifications and experience; (b) where land suitable for the purposes of the loan and located at a distance of not more than 20 miles from the offices of the Pilot Rubber Scheme Management Unit (the Unit) at Suakoko is owned by such farmer or is held by him under a tenancy expiring on or after the final maturity date of the loan; and (c) where the Unit shall be satisfied that over the period of 10 years from the date of the loan such land has an annual yield potential of not less than 700 pounds dry rubber per acre. 2. A loan shall only be made in respect of a maximum of 100 acres per farmer, except as the Association shall otherwise agree, as follows: (a) of up to $10.50 equivalent per acre for tapping equipment and materials; (b) of up to $8.00 equivalent per acre for building materials for housing hired labor; and (c) of up to $10.00 equivalent per acre for payment of hired labor required for slashing, tasking, panelling, building construction and tapping during the first month of operations of the farmer in carrying out the rehabilitation provided for under the loan. 3. (a) payment of the principal and interest of each loan shall be scheduled over not more than 5 years from the date of the loan and shall be 24 effected in equal monthly principal repayments beginning in the third month after such date; and (b) each loan shall carry interest at the rate of 9% per annum on the principal amount from time to time outstanding. 4. No loan shall be disbursed until the farmer shall have furnished evidence satisfactory to the Unit that arrangements have been entered into between the farmer and a suitably qualified processing company for the processing of the entire rubber output of the farmer during the continuance of the loan and for the payment on the due date by the said processing company directly to the Unit of the principal and interest due under the loan out of the proceeds of sale of such rubber. 5. The proceeds of the loan shall be disbursed by the Unit in kind or in the reimbursement of the farmer in respect of expenditures for goods or services already incurred by him in carrying out the rehabilitation provided for under the loan. 6. Each loan shall provide for the farmer or the farm manager, who shall be a person approved by the Unit, to supervise on a full-time basis the carrying out of the rehabilitation provided for under the loan. 7. Each loan shall provide for the farmer or such approved farm manager to attend training courses upon request of the Unit. 8. Each loan shall include suitable provision to safeguard the financial interests of the lender and the operational interests of the rehabilitation provided for under the loan. Part 2 Rubber Replanting Grants Grants shall be made for the slaughter tapping of 500 acres of rubber over a period of 2 years and the rubber replanting thereof included in Part A of the Project on the following terms and conditions: 1. The terms and conditions set out in paragraphs 5, 6, 7 and 8 of Part I of this Schedule shall also apply mutatis inutandis to grants included in this Part 2. 2. A grant shall only be made: (a) to farmers of suitable qualifications and experience; 25 (b) where land suitable for the purposes of the grant and located at a distance of not more than 20 miles from the offices of the Unit at Suakoko is owned by such farmer or is held by him under a tenancy expiring not less than 20 years after the date of the grant; and (c) where the Unit shall be satisfied that during the period of the rubber slaughter tapping provided for under the grant the land under such slaughter tapping shall have an annual yield of not less than 900 pounds dry rubber per acre. 3. A grant shall only be made in respect of a maximum of 50 acres per farmer, except as the Association shall otherwise agree, as follows: (a) of up to $17.00 equivalent per acre for equipment and materials required for slaughter tapping; (b) of up to $9.00 equivalent per acre for payment of hired labor, required for slashing, tasking, panelling, building construction and tapping during the first month of operations of the farmer in carrying out the replanting provided for under the grant; and (c) of up to $75.00 equivalent per acre for replanting beginning in the third year after the date of the grant, including $45.00 equivalent per acre for hired labo-, and $30.00 equivalent per acre for tools, poison and seedlings.