Colombia - Agricultural Research and Extension Project

Document of The World Bank ' FOR OFFICIAL USE ONLY Report No. 4384-CO STAFF APPRAISAL REPORT COLOMBIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I May 12, 1983 Projects Department Latin America and the Caribbean Regional Office 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 (At the time of appraisal and used in this Report unless otherwise stated) Currency Unit = Colombian Peso, Col$ Col$ 10 = US$0.14 Col$ 100 = US$1.44 Col$ 1,000 = US$14.36 Col$ 1,000,000 = US$14,367.82 Col$ 69.6 = US$1.00 WEIGHTS AND MEASURES Metric System GLOSSARY OF ABBREVIATIONS CIAT Centro Internacional de Agricultura Tropical International Center for Tropical Agriculture CIMMYT Centro Internacional de Mejoramiento de Maiz y Trigo International Maize and Wheat Improvement Center CIP Centro Internacional de la Papa International Potato Center ICA Instituto Colombiano Agropecuario Colombian Agricultural Institute TICA Instituto Interamericano de Cooperacion para la Agricultura Interamerican Institute of Cooperation for Agriculture IRDP Integrated Rural Development Program FFAP Fondo Financiero Agropecuario Agricultural Financing Fund PLANIA Plan Nacional de Investigacion Agropecuaria del ICA National Plan for Agricultural Research of ICA PLANTRA Plan Nacional de Transferencia de Tecnologia para la Agricultura National Plan for the Transference of Technology for Agriculture COLOMBIAN AGRICULTURAL INSTITUTE FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY COLOMBIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I STAFF APPRAISAL REPORT TABLE OF CONTENTS Page I. THE AGRICULTURAL SECTOR ............................... 1 A. Role in the National Economy. 1 B. Public Policy for the Sector. 2 C. Agricultural Development and Institutions. 3 D. Bank Involvement in the Sector. 4 II. AGRICULTURAL RESEARCH AND EXTENSION. 6 A. The Development of Agricultural Research. 6 B. The Development of Agricultural Extension Services 8 C. The Colombian Agricultural Institute (ICA) in 1982 9 D. National Post-graduate Training Program .12 E. National and International Collaboration in Research 12 fIII THE PROJECT.15 III. THE PROJECT ............................................... 1 A. Introduction .15 B. Brief Description .16 C. Detailed Features .17 D. Project Cost .22 E. Financing .24 F. Procurement .24 G. Disbursement .25 IV. PROJECT IMPLEMENTATION .27 A. Organization and Management .27 B. Planning for Implementation .28 C. Staff Training and the Use of Consultant Services 29 D. Operation and Maintenance of Facilities and Services 30 E. Accounts and Auditing .30 F. Monitoring and Reporting .31 V. RESEARCH STRATEGY AND DIRECTIONS .32 A. Introduction .32 B. Agronomy .33 C. Animal Sciences .35 D. Veterinary Sciences .37 E. Agricultural Engineering .37 F. Technical Supporting Services .38 This report is based on the findings of an appraisal mission that visited Colombia in November/December, 1982. The mission comprised Messrs. J.A.N. Wallis (Mission Leader), P. Marko, F. Portilla and A. Tobelem (Bank); and J. Gregor, J. House and N. Raun (Consultants). 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.  Table of Contents (Continued) Page VI. PROJECT BENEFITS .......................................... 38 VII. SUMMARY OF AGREEMENTS REACHED AND RECOMMENDATION .... ...... 41 ANNEXES 1. Terms of Reference for Consultant Services and Studies. 42 2. Audit Requirements .................................... 51 3. Selected Documents and Data Available in the Project File ............ .................................... 53 SUPPORTING TABLES 1. Numbers of Staff in the Research Department of ICA by Levels ........................................... 57 2. Total Expenditures by the Ministry of Agriculture and ICA - 1970-81 ................................... 58 3. Income and Expenditure of ICA - 1978-82 .... ........... 59 4. Training and Consultant Service Requirements by Work Unit ........................................ 60 5. Technical Assistance: Summary of Training and Consultant Services ................................. 62 6. Annual Cost of Scientific Premia ...................... 63 7. Annual Personnel Costs and General Costs .... .......... 64 8. Annual Training and Consultant Services Cost .... ...... 65 9. Annual Project Investment Cost by Category ............. 66 10. Procurement Method .................................... 67 11. Estimated Schedule of Disbursements ................... 68 12. Project Cash Flow ..................................... 69 13. Annual Numbers of Research Projects by Program and Disciplines ....................................... 70 14. National Average Crop Yields, 1970-82 and Average Yields at Research Stations ......................... 71 CHART - Organization Chart of the Colombian Agricultural Institute (ICA) ...................................... 72 MAP - IBRD No. 16816, Colombia, Agricultural Research and Extension Project I ..............................  COLOMBIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I I. THE AGRICULTURAL SECTOR A. Role in the National Economy 1.01 Agricultural output grew at an average annual rate of 4.2% during the period 1960-81, which was about 1.5% below the average growth rate of the economy as a whole. The sectoral share of agriculture in GDP decline from 32.7% between 1960 and 1964 to 25.7% for the period 1978 to 1981. The share of agriculture in Colombia's GDP is almost twice the average for middle-income countries, partly because of a continuing substantial participation of high-value cash crops, such as coffe, in the value added. However, it also reflects the strong long-term performance of the sector, relative to others in the economy and as compared to agriculture in other countries at a similar stage of economic development. 1.02 In the 1970s, over half the additional value of agricultural output was derived from increased exports of farm produce which constituted between 68% and 75% of all recorded exports. Most of the increase was from coffee, but exports of other agricultural products doubled in real terms during the decade. In the same period, annual per capita consumption increased 2.7% because the import of products of agricultural origin tripled, and more non-coffee farm products became available from domestic production for local consumption. 1.03 In contrast to the generally good performance of the sector in the 1960s and 1970s, the situation deteriorated markedly in recent years, and for the period 1979-82 the annual growth rate was no more than 2.5%. In part, this slow-down was the consequence of adverse weather conditions and in part the result of the local effects of the world-wide economic recession during this period. In addition, there is a wide range of policy and structural constraints affecting the sector that will make it difficult to regain the average growth rate achieved in the 1960s and 1970s. These issues have been reviewed in a recent report based on a common evaluation of the agricultural sector by the Bank and the Government that includes recommendations on some directions for public strategy for the sector (Report No. 4275-CO, January 31, 1983). The main conclusions of the report are summarized in the following paragraphs concerning issues that affect the production environment (a) by providing incentives through policies affecting the pricing of farm inputs and outputs; and (b) by improving production methods, systems for the transfer of technology, the supply of farm inputs and the marketing of farm outputs.  - 2 - B. Public Policy for the Sector 1.04 It is estimated that during the 1980s, the aggregate domestic and external demand for Colombian farm produce will increase by at least 3% per annum. Public policies are required that stimulate domestic demand and encourage exports of farm production. On the production side, incentives to raise output can be improved by reducing the costs of farm inputs, adopting appropriate trade policies, modifying policies for pricing outputs and improving the availability of inputs, including credit. 1.05 There is considerable scope for reducing the costs of farm inputs, most of which are above comparable international levels because of tariffs and other taxes, and high distribution costs. For example, it is estimated that Colombian farmers pay more than double the world market prices for fertilizers and consequently are slow to use them at rates which are known to be effective in raising yields substantially. Studies are required to examine (a) taxes, port charges, and transport and distribution costs; bulk transport and transport in bags; changes in the location of blending plants; and the relative economic efficiency of increasing domestic production of importing fertilizers; and (b) the efficiency of fertilizer use for various crops; the appropriateness of the levels currently recommended and used; the composition of compound and mixtures of fertilizers; and improvements in the definition of fertilizer requirements at the farm level. 1.06 Trade policies have had a strong effect on agricultural growth and exports. The trade reforms initiated in 1967 and favorable developments in the world economy stimulated rapid increases in both production and exports of non-coffee products and at first there was a significant positive association between the real exchange rate and the value of these non-coffee exports. However, during the period of high world market prices for coffee in the latter part of the 1970s, the situation changed, because the depreciation of the Colombian peso was not consistent with international price movements, which reduced incentives for increasing non-traditional exports. Policy alternatives for improving the competitiveness of Colombian exports in world markets should be examined. Along these lines, the efficacy of export subsidies should be compared with the effect of a more rapid depreciation of the Colombian peso on resource allocation and price inflation. Also, further studies are necessary on the effects of the protection of local industrial production, including agricultural inputs and selected agricultural products, on the relative prices of exported farm products and the competitiveness of Colombian produce on the world market. 1.07 There is less opportunity for raising agricultural incentives through changing policies for pricing outputs. The prices to farmers of most non-perishable food products subject to price intervention are already at or above world price levels. However, the operations of the Agricultural Marketing Institute (IDEMA) merit further study to determine the extent to which support prices and import regulations are required to stimulate a steady increase in domestic production. The appropriate balance between price supports and input subsidies and the possible role for commodity marketing funds also require detailed examination.  1.08 The availability and cost of credit clearly influences the use of other inputs; however, in the 1970s the relationship between the value of outstanding loans and aggregate agricultural output was not very close, with the annual increase in the value of outstanding loans averaging 1.2% in real terms and average sectoral output growth for the same period reaching 4.5% suggesting that credit availability did not restrict farm production, but the demand for credit probably exceeded the supply at the prevailing concessionary rates. The Agricultural Financing Fund (FFAP) of the Bank of the Republic became of increasing importance during the latter part of the 1970s, both because it served as a source of funds for rediscounting through the banking system and because it provided financial support to the Colombian Agricultural Institute (ICA) for technical assistance services for small-scale farmers from a 1% levy charged on agricultural lending to other than small-scale farmers. In the same period, in real terms, the outstanding portfolio of the Colombian Institute for Agrarian Reform (INCORA) managed by the Agricultural, Industrial and Mining Credit Bank (Caja Agraria) decreased by almost 40%, not counting some support from Bank Loans 1118-CO and 1163-CO. The Bank has recommended a study to examine: (a) ways to improve savings mobilization; (b) provision and recovery of credit funds with regard to small-scale farmers; (c) the appropriateness and cost to the banking system of maintaining credit subsidies for medium- and large-scale farmers, the principal users of the FFAP; and (d) the provision and management of credit for the marketing and distribution of farm produce. 1.09 One of the highest priorities of the Colombian administration which took office in August 1982 is the development of the agricultural sector, with particular attention to food production, the generation or saving of foreign exchange, and policies and programs that have positive social impacts. An essential and explicit part of this strategy is to rehabilitate ICA as the leading agricultural research institution and to rationalize and strengthen the whole national network of public and private entities involved in the transfer of agricultural technology and provision of farm advisory services. C. Agricultural Development and Institutions 1.10 In the 1970s, there were substantial increases in agricultural productivity through the application of improved farming methods and the use of new varieties of crops and breeds of livestock. About 32% of the increased coffee production and 44% of the increase in production of other farm products is estimated to have come from improved yields, while the balance was from extensions in the area under production. 1.11 It will be necessary to continue to bring new land into productive use. Priority should be given to low-cost alternatives, such as increased cropping intensity on small-scale farms; rehabilitating and completing existing settlement schemes and flood control, drainage and irrigation schemes, rather than initiating colonization in new areas. The long-term development strategy should place high priority on the conservation and more efficient use of natural resources through systematic watershed management, including forestry development. 1.12 The underlying strategy of the Integrated Rural Development Program (IRDP), which began in 1976, has been to encourage and enable small-scale  -4- farmers (less than 20 ha) to exploit rationally and more fully their existing holdings. So far the program has involved about a quarter of the farmers in this size range, which has been sufficient to demonstrate that substantial increases in production can be achieved by using effectively the technical knowledge and practical experience which is already available. This strategy for development is successful and will be expanded, but it will have to be associated with the establishment of more efficient linkages between producers and consumers, including the promotion or better product handling, storage and processing facilities. In this type of totally integrated agricultural development, considerable experience is available in the coffee zones of Colombia as a result of the agricultural diversification program of the National Federation of Colombian Coffee Growers (FEDERACAFE) which was begun in the late 1960s. 1.13 The agricultural sector's share of national public sector investment dropped from 17% in 1970 to 8% in 1982. All agricultural institutions suffered from this severe reduction in the allocation of resources, but the impact was particularly serious for INCORA and ICA. The national land policy was not well defined in the 1970s, but it was clear in this period that, while INCORA was not required to carry out an active agrarian reform program, it still had responsibility for the provision of supervised credit and other services to about 200,000 families of settlers and beneficiaries of earlier phases of agrarian reform although it was entirely unable to provide an adequate coverage to more than a small proportion of these farmers. For ICA the reduction of funds affected principally the departments of research and technology transfer because the Rural Development Department of ICA received additional resources from FFAP and from the IRDP to finance small-holder extension services in selected areas. The reduction of funds for research led quite rapidly to a reduction in appropriate research, failure to maintain facilities and replace equipment, and, more slowly, to the loss of experienced research workers from ICA and a decline in the number of Colombians and students from other Latin American countries being trained in scientific disciplines relevant to agricultural investigations. D. Bank Involvement in the Agricultural Sector 1.14 Since 1966, the Bank has made 13 loans, totaling US$349.6 million, to Colombia for the agricultural sector. Project Performance Audit Reports have been issued for five of them, including Loans 502-CO (Atlantico Irrigation), 624-CO (Agricultural Credit), 651-CO (Second Livestock Development), 739-CO (Caqueta Land Colonization - Phase I) and 849-CO (Second Atlantico Development). In addition, an Impact Evaluation Report was issued in 1982 on the Atlantico Irrigation Project (Annex 3). None of these projects provided experience of direct relevance to the proposed Agricultural Research and Extension Project, but each revealed weaknesses in its technical base and also enabled the Bank to learn about the legal and administrative systems under which the public sector operates in Colombia. These experiences have been of assistance in preparing the present project. The recent review by OED concerning the Bank's experience with the strengthening of agricultural research and extension includes recommendations with which the proposed project is fully consistent.  1.15 There are eight agricultural projects (loan total of US$266.5 million) currently being implemented, three of which were made in support of INCORA's agrarian reform efforts: the Caqueta II Rural Settlement Project (Loan 1118-CO to the Government for US$19.5 million); the Cordoba II Agricultural Development Project (Loan 1163-CO to the Government for US$21 million); and the Third Agricultural Credit Project (Loan 1737-CO to INCORA for US$20 million). Serious difficulties have been encountered with these projects, principally because of the lack of counterpart funds and poor financial management and subloan recovery by INCORA. Nevertheless, the Caqueta II Project is a particularly interesting example of a settlement scheme on the edge of the Amazon basin. 1.16 The other five ongoing operations are the Integrated Rural Development Project (Loan 1352-CO to the Government for US$52 million), the Second Agricultural Credit Project (Loan 1357-CO to the Bank of the Republic for US$64 million), the Irrigation Rehabilitation Project (Loan 1996-CO to the Colombian Institute of Hydrology, Meteorology and Land Improvement (HIMAT) for US$37 million), the Upper Magdalena Pilot Watershed Management Project (Loan 2069-CO to the National Institute for Renewable Natural Resources and the Environment (INDERENA) for US$7.5 million), and the Second Integrated Rural Development Project (Loan 2174-CO to the Government, for US$53 million). All these projects are proceeding satisfactorily, although the last two have only recently been approved, so it is too early to form a judgment on their performance. 1.17 In accordance with the public policies for the sector outlined in paragraphs 1.04 to 1.09, discussions are proceeding, or will soon be held, with the Government concerning the possible financing by the Bank of any of the following studies and projects: (a) fertilizer study (paras 1.05 (a) and 3.14); (b) agricultural marketing study (para 1.07); (c) agricultural credit study (para 1.08); (d) second phase of irrigation and drainage districts rehabilitation (HIMAT) (para 1.11); (e) third phase of Caqueta Settlement scheme (para 1.10) provided INCORA institutional problems can be resolved (para 1.15); (f) agricultural diversification (FEDERACAFE) and a third phase of the IRDP (para 1.12); and (g) second phase of agricultural research and extension project (ICA), with emphasis on extension (para 1.13).  - 6 - II. AGRICULTURAL RESEARCH AND EXTENSION A. The Development of Agricultural Research 2.01 Agricultural research in Colombia can be traced back to the establishment of an official livestock acclimatization farm in 1879 and official crop research stations in the 1920s at three key locations (Picota, Cundinamarca; Amaro, Tolima; and Palmira, Valle). Agricultural research by the private sector began in 1938 with the creation of the National Center of Coffee Research (CENICAFE).This was followed by the formation of an Institute of Cotton Development (IFA) in 1947 and the initiative of the National Federation of Rice Growers (FEDEARROZ) in assigning a cess on rice to finance public research. This example was followed by producers' associations and firms concerned with barley, cocoa and tobacco who agreed to contribute to the cost of research carried out by the Ministry of Agriculture. In 1938 the Ministry took over responsibility for the Palmira station, where, at that time, research was in progress for sugarcane, rice, tobacco, plantains, cassava, maize, beans, soybeans and forage crops. 2.02 Following a long period of review (1943-50), responsibility for public agricultural research was brought together within the Ministry of Agriculture in the Office of Special Studies (OIE) that was to receive strong support from the Rockefeller Foundation. OIE initiated soil and plant protection studies and included potatoes among the commodities under research. The OIE was upgraded to a Division of Agronomic Research (DIA) in 1955 and eight years later ICA was created as an autonomous entity, dependent on the Minfstry of Agriculture. It was given responsibility for all public agricultural research, extension and graduate education, in accordance with Decree 3116 of 1963. As a result of the restructuring of the public agricultural sector, in accordance with Decree 2420 of 1968, ICA was assigned additional responsibilities for a number of regulatory and service functions which previously had been carried out directly by the Ministry of Agriculture: these functions included plant and livestock quarantine; the regulation and inspection of farm inputs; the certification of seeds; and rural development, which later became a major undertaking with the development of the IRDP. 2.03 During the 1970s there was increasing general concern with the suitability of the institutional framework and the orientation, effectiveness and financing of agricultural research. Farm advisory services expanded substantially during this period, both in the public and private sectors, but these were not well coordinated; they did not convey the results of research very effectively to many farmers; and did not constitute an effective channel of communication between the farming community and the agricultural research workers. 2.04 In 1977/78 the Interamerican Institute for Agricultural Sciences 1/ (IICA) carried out a study with ICA on the assignment of priorities and resources to agricultural research. A seminar on this subject was held at the International Center for Tropical Agriculture (CIAT) in 1/ Later titled the Interamerican Institute of Cooperation for Agriculture.  February 1978. Later in that year the Bank carried out a review of agricultural research and extension in Colombia (Annex 3), that drew particular attention to the need to restructure these activities and to establish for them clear priorities and reliable sources of finance from both the public and private sectors, but there was not much recognition in the public sector of the importance to the national economy of having a comprehensive well run and financed network of agricultural research and extension services. 2.05 At about this time (1977) the Association of Sugarcane Growers (ASOCANA) established a Center for Sugarcane Research for Colombia (CENICANA). 2.06 The National Planning Department (DNP) prepared a Plan for National Integration, 1979-80 (PIN) that was approved by the National Council for Economic and Social Policy (CONPES) for publication in March 1980. This was not explicit concerning the revitalization of agricultural research, but proposed a Research Council for Agriculture and Renewable Natural Resources and recommended the simplification of the institutional structure of ICA. In a concurrent analysis of Policy for Science and Technology prepared with the Colombian Fund for Scientific Research and Special Projects "Francisco Jose de Caldas" (COLCIENCIAS) (para 2.22), DNP proposed the reestablishment of an earlier National Council of Science and Technology, but it was not specific concerning the degree of control or influence the council should have over agricultural research. The difficulty at this time was that there was no overall assessment of agricultural priorities or a diagnosis of the factors limiting farm production. This was provided between 1979 and 1982 through the following stages, for which the titles of the reports are given in Annex 3, Section B. (a) at the suggestion of DNP and in cooperation with the Agricultural Sector Planning Office (OPSA) of the Ministry of Agriculture, ICA compiled a detailed "Diagnosis of the Agricultural Technology of Colombia" and then proposed a "National Plan for Agricultural Research by ICA" (PLANIA) that was published in January 1981; and (b) during 1981 DNP prepared a document incorporating much of the PLANIA and titled "Bases for the National Plan for Research in the Agricultural, Forestry and Fisheries Sector," which was approved by the National Council for Economic and Social Policy (CONPES) in November, 1981. This established: (i) that public funds for research are to be allocated in accordance with the priorities of the national development plan; (ii) that a policy must be developed concerning the use of agricultural technology; (iii) that a National System for Research and Technological Development of the Agricultural Sector would be created comprising a National Council and a National Fund, in both of which the private sector would participate; (iv) that the institutional structures and financing of ICA and INDERENA would be modified to enable them to carry out their research responsibilities more effectively; and v) that the financing of research by the private sector should be encouraged, but care should be taken not to establish numerous small private research stations. This document demonstrated the new  determination of the Government to rehabilitate the national agricultural research capability and to establish the financial and managerial systems to sustain sound research over the long term, involving both the private and public sectors. 2.07 The ideas concerning agricultural research and technology, which had evolved since 1978 were consolidated and received political support and impetus during the 1981/82 election campaign. This included the formation of a Peace Commission with a Sub-commission on Research and Transference that brought together the views of farmers' organizations and the official entities of the agricultural sector. The various issues and options were discussed again at length at a seminar at CIAT in April 1982. Shortly after the new administration took office in August 1982, a Presidential Commission was set up by Resolution 385 of September 16, 1982 to: (a) define the policies and priorities for agricultural research; and (b) propose alternatives for the restructuring of ICA. 2.08 The Commission submitted its report to the Minister of Agriculture in December 1982 and, in January 1983, the President accepted the advice of the Commission concerning priorities and adopted the institutional alternative for ICA that will lead progressively to ICA becoming once more an institution responsible for (a) agricultural research; (b) the transference of the results of research to intermediary institutions or extension agents; (c) extension services for small-scale farmers within the IRDP; and (d) graduate agricultural education. The implementation of these decisions is disc-ussed in Chapter IV. There has been no agreement yet to activate the National Council and Fund for Research and Technological Development of the Agricultural Sector (para 2.06 (b) (iii)) although the ideas are under active study, with the intention to draw the private sector into more active participation in agricultural research. B. The Development of Agricultural Extension Services 2.09 Throughout the long period of analysis and debate on agricultural technology, less detailed attention has been paid to the flow of information to and from farmers than to the generation of new technical solutions. There is now no lack of understanding in Colombia of the vital importance to the country of having an efficient extension network, and it is widely recognized that the present proliferation of services is inefficient and costly and does not provide more than limited coverage of the farming sector. Now that the overall strategy for agricultural research has been determined, following systematic analysis and consultation, it is proposed to begin immediately the process of restructuring and strengthening research. A similar systematic analysis and extensive consultation on the national requirements for, and most efficient organization of, farm advisory services has already begun, and this process would be supported by the proposed project through financing of the preparation of a National Plan for the Transference of Technology for Agriculture (PLANTRA) that is expected to be completed early in 1984. It is the intention of the Government that PLANTRA will set the institutional and financial framework within which there will be effective two-way communication between research workers extension staff and all parts of the Colombian farming community.  - 9 - C. The Colombian Agricultural Institute in 1982 2.10 The Minister of Agriculture is the chairman of the board of directors of ICA that is formed of the Chief of DNP; the General Manager of INCORA; the Manager of FEDERACAFE; the Rector of the National University; a representative of the National Association of Small-scale Farmers (ANUC); and two members designated by the President of the Republic. This structure ensures participation by the national representatives of the main users of research results, but insufficient local involvement of farmers in the shaping of research priorities or in the practical interpretation of the results of investigations. This issue would be addressed by the proposed project (paras 4.04 (a) and 5.02). The institute is directed by a General Manager operating through (a) five Sub-managers responsible for departments of research, rural development, crop production, animal production and administration; and (b) nine Regional Managers each of whom has overall administrative responsibility for all ICA activities within defined areas of the country. The structure of ICA is summarized in the Chart. 2.11 ICA is responsible for the following functions in the agricultural sector: biological, physical, economic and social research; the transference of technology to other entities; extension services for small-scale farmers, particularly for the IRDP; analysis and control of the quality of agricultural inputs and outputs; registration of private farm extension agents; crop and livestock health campaigns; the use of improved inputs and techniques; and post-graduate training in agriculture. At present some control and regulatory functions are intermingled with responsibilities for research and extension. This has led to lack of consistency in the objectives of some work units and this, in turn, has led to reluctance in the private sector to support ICA financially, other than through discreet narrowly focussed research contracts (para 2.16). 2.12 There are 27 research centers and stations distributed throughout the farming areas of the country (Map IBRD 16816). These are classified as four national research centers and one national veterinary laboratory; 12 regional centers and one regional veterinary laboratory; and nine research stations. In addition, ICA has 30 diagnostic centers for animal diseases, and 13 laboratories which provide services for the public as well as in support of the commodity research programs. Other complementary services provided by ICA are a livestock quarantine station at Barranquilla; a specialized agricultural library; and a program for post-graduate training in association with the National University. 2.13 For administrative purposes all centers and stations outside Bogota are subordinate to the local Regional Manager of ICA. On the other hand, in matters of research the line of control runs from the Sub-manager of the Research Department to the National Program Division Chief and then through Program Coordinators responsible for each scientific discipline, commodity or group of commodities, to Regional Directors of Research, the Directors of research centers or experiment stations, and, finally, to the leaders of multidisciplinary groups that are formed for specific research programs or projects. These parallel but separate chains of control for funds and for scientific matters are unsatisfactory. The Directors of research centers and  - 10 - stations have lacked clear guidance on the overall research strategy of ICA and have not had the funds or the local authority to take decisions. These structural problems have contributed to the reluctance of research workers to consult with local farmers about the relative priorities of problems faced by producers because, even if a local understanding is established, ICA staff are not able to undertake the necessary research. 2.14 At the end of 1982, ICA had a staff of about 5,800, of whom 1,200 (21%) had professional qualifications, including 50 PhD and 413 MS. Only 38% (2,200) of the ICA staff was directly engaged in the work of the Research Department of whom 391 (18%) had professional qualifications; 31 PhD, 162 MS, and 198 BA (Table 1). This level of staffing for research was considerably below that of the early 1970s, principally as a result of resignations of qualified staff in the second half of the 1970s, because of dissatisfaction with working conditions and declining public priority and financing for research. By 1979 the total emoluments provided by ICA for PhD and MS staff were less than provided by FEDERACAFE, the National Apprenticeship Service (SENA) and the three principal universities. It became particularly difficult to retain staff with MS qualifications in plant pathology, agricultural economics, statistics and systems analysis. At the PhD level, voluntary resignations were even more serious than at the MS level and between 1970-79, 41 of the 62 hired by the Research Department of ICA in this period resigned. 2.15 Expenditures by the Ministry of Agriculture on all investments and operations declined sharply in constant terms from 1974, and even by 1981 they still had not recovered the real level of the early 1970s. Expenditures by ICA, which were equivalent to about a quarter of the Ministry's, were also cut by 10% in real terms over the four-year period 1974-77 but thereafter almost regained their former level and by the end of the decade were equivalent to about 38% of the expenditure of the Ministry. The percentage of expenditure on research to the total expenditures of ICA dropped steadily from 37% in 1970 to 26% in 1974 but subsequently recovered to around 32% of the total (Table 2). Average Annual Expenditures Col$ million constant (1980) Period Ministry of Agriculture All ICA ICA Research Dept. Value % of all ICA 1970-73 8,239 2,362 747 31.6 1974-77 5,993 2,117 603 28.5 1978-81 5,541 2,180 704 32.3 2.16 The financial stringency of the mid-1970s led ICA to try to reduce its dependence on the national budget by (a) increasing income from the sale of produce from its farms and charging for all services; and (b) raising more financial support from the private sector. In fact, between 1978-81 the dependence of ICA on the national budget increased from 69% to 75% (Table 3), principally as a result of its new responsibility to provide farm advisory  - 11 - services for small-scale farmers in the IRDP (para 1.12). From the private sector the main support came through the FFAP levy which was to finance advisory services for other small-scale farmers (para 1.08). During the period 1978-81 these two sources provided 23% of ICA's income which was approximately equivalent to the cost of the Rural Development Department. Private sector support for research was provided through cesses on cotton and tobacco production and sundry other small research contracts, but in aggregate these covered only about 6% of expenditures on research by ICA. This disappointing level of private support for research by ICA reflected the general perception that ICA was losing its best staff, was not adequately maintaining its research facilities, and was a regulatory agency of the Government to which the private sector was reluctant to provide financial support. Income of ICA (Col$ million current) 1978 1979 1980 1981 Income Public sector funds 849.8 1,078.0 1,785.9 1,948.0 ICA sales and services 157.7 260.5 292.2 339.5 Private sector funds 173.3 219.3 361.0 284.0 External funds 44.1 34.2 51.5 41.4 Total Income 1,224.9 1,592.0 2,490.6 2,612.9 Col$ million (1980) 2,011.3 2,038.4 2,490.6 2,062.3 2.17 Expenditure totals followed income availability and over the period 1978-81 were remarkably consistent in overall pattern (Table 3). Expenditures on personnel accounted for 70% of the total; 23% was for operating and marketing costs and 7% went on financial charges and depreciation. Operating and marketing expenditures for ICA as a whole were equivalent to one-third of all personnel costs (salaries, other personnel emoluments and transfers, such as social security payments), but for some research units, operating funds dropped to as low as 10% of the budget. Expenditure of ICA (Col$ million current) Expenditure 1978 1979 1980 1981 Personnel 909.2 1,174.9 1,451.3 1,948.5 Operating and Marketing 301.6 370.0 497.6 646.7 Financial charges 72.7 103.2 192.8 208.5 Total Expenditure: 1,283.5 1,648.1 2,141.7 2,803.7 Col$ million (1980) 2,107.6 2,083.6 2,141.7 2,212.9 of which for research: Col$ million current 431.9 555.5 670.3 928,5 Col$ million (1980) 709.2 702.3 670.3 732.8  - 12 - 2.18 In terms of constant pesos of 1980, from 1978 to 1981 there was no substantial change in the level of expenditure of ICA as a whole or for the Research Department. During the 1970s the expenditure by ICA on agricultural research accounted for a proportion declining from 85% to 70% of the national total. The balance was made up by CENICAFE (para 2.01) throughout the period and, from 1978, by CENICANA (para 2.05). The total expenditure by these three institutions as a percentage of the Gross Domestic Product (at factor cost) from the agricultural sector declined from 0.36% in 1970 and 1971 to about 0.25% from 1974 until 1981. This proportion may be compared with an average of 0.42% for 13 middle-income Latin American countries quoted in Annex 1 of the Bank's Sector Policy Paper on Agricultural Research (June, 1981). D. National Post-graduate Training Program 2.19 The national Post-graduate Training Program (PEG), that has been running since 1967, is an important part of the responsibilities of ICA, since it prepares agricultural scientists at the National University for the whole sector and not only for ICA itself. So far PEG has produced about 480 graduates from Colombia and other Latin American countries with MS degrees around one-third of whom have joined the staff of ICA. For the period 1983-88 it is planned to train about 500 graduates to the MS level. 2.20 All training outside Colombia is coordinated by the Colombian Institute for Educational Credit and Advanced Studies Abroad (ICETEX), which is an autonomous agency of the Ministry of Education. At the end of 1982, there were 76 ICA staff undergoing formal training, (17 at the PhD level and 59 were on MS courses) and a further seven on short courses abroad. The courses of training being followed do not correspond fully with the recently determined priorities for ICA; however, through the proposed project, it is planned to bring the professional training program closely into line with the needs of ICA for trained scientific and managerial staff. E. National and International Collaboration in Research 2.21 There are numerous contracts between ICA and public and private national and international financing and research entities. At the end of 1982 there were 47 current agreements between ICA and national entities and 40 agreements in effect with foreign and international entities. Many of these agreements have not been operational, because ICA has been unable to provide the necessary counterpart facilities, staff and funding. Furthermore, there has not been a coherent research strategy into which national and external support could be channeled effectively. 2.22 COLCIENCIAS (para 2.06) was established in 1969 as an autonomous entity under the Ministry of Education to receive and allocate public and private funds for scientific research in all sectors of the economy, and to cover the associated expenses for travel and meetings. Until recently it has not had much involvement with the agricultural sector, but since 1980 it has provided ICA with a number of grants for specific studies. In 1982 it received a loan of US$20 million from the Inter-American Development Bank (TDB), of which about one quarter is to be assigned to the agricultural  - 13 - sector. Projects to be financed in ICA include (a) the organization and management of germplasm collections; (b) the formation of a semen bank for local breeds; (c) the design and evaluation of farm machinery for steep hillsides; and (d) a study of the incidence of crop diseases. 2.23 Research on coffee and white sugar production is carried out by the specialized institutions of CENICAFE and CENICANA, respectively, and, in addition, these institutes have contracts with ICA for specific studies or services. The following other federations of growers and other entities provide limited funds for research and analytical services provided by ICA and some also contribute to the cost of investigations carried out on some of their members' farms: (a) National Federation of Cocoa Growers; FEDECACAO, maintains six seed producing farms and carries out research in collaboration with ICA and the Brazilian Institute of Cocoa Research (CEPAL); (b) Program for the Diversification and Development of Coffee Zones; PRODESARROLLO, carries out land use studies; forestry development research with National Corporation for Forestry Research and Development (CONIF) (para 2.24); cocoa research in association with FEDECACAO and the chocolate industry; and research on beans, cassava and pastures in collaboration with ICA and CIAT; (c) Association of Banana Growers and Farmers of Uraba; AUGURA, supports research on disease control on individual plantations; (d) National Federation of African Palm Growers; FEDEPALMA, carries out some economic research, while some individual plantations conduct research with assistance from the French Institute for Research on Oils and Oilcrops (IRHO); (e) Colombian Confederation of Cotton; CONALGODON, is investigating the possibility of establishing a cotton research institute; (f) National Federation of Cotton Growers; FEDERALGODON, already supports research and wishes to attract more support from the textile industry and agrochemical suppliers; (g) National Federation of Rice Growers; FEDEARROZ, has an effective collaborative program with ICA and CIAT; (h) National Federation of Cereal Growers; FENALCE, has collaborated with CIAT and the International Maize and Wheat Improvement Center (CIMMYT) as well as Spain and Yugoslavia in the local testing of maize and wheat varieties; (i) Maltery of Colombia, S.A.; carries out barley variety trials to improve the quantity and quality of malt production; (j) Colombian Association of Seed Producers; ACOSEMILLAS, principally interested in collaborative testing of imported seeds;  - 14 - (k) Colombian Federation of Cattlemen; FEDEGAN, maintains diagnostic centers which could be more closely linked to ICA; (1) National Association of Milk Producers; ANALAC, wishes to expand collaboration with ICA in studies of cattle health and nutrition; and (m) Corporation for Livestock and Crop Studies; CEGA, was established by the Livestock Bank in 1981 to carry out economic and policy studies. 2.24 In 1974 the Government and the private industry created CONIF (para 2.23 (b)) as a non-profit institution to be responsible for research and development related to forestry and forest products. In 1981 CONIF completed an analysis of the national forest resources and proposed a National Plan for Forestry Research (PLANIF). This is complementary to PLANIA (para 2.06 (a)), but does not form part of the proposed project, although it might be incorporated into a later phase (para 1.17 (g)). 2.25 The IDB made a loan 1/ to ICA in 1971 which was applied mainly to the construction and initial equipping of research facilities over the following 10 years. In 1977, the US-AID program provided a loan 2/ for technology transfer to small-scale farmers. Other valuable support was received by ICA in the 1970s from Canada, France, the Netherlands, the Federal Republic of Germany, and the United Kingdom. The recent successful rehabilitation of the Veterinary Medical Research Laboratory (LIVET) with aid from the Federal Republic of Germany has provided a valuable basis upon which to plan the rehabilitation of ICA as a whole. Regional collaboration in agricultural research is being developed between the nations of the Amazon basin (Brazil, Colombia, Ecuador, Peru and Venezuela) and the Colombian Government has recently agreed to provide technical assistance from ICA to the nations of Central America and the Caribbean. ICA maintains regular contacts with many other international and regional specialized agencies, including FAO, UNICEF and IICA, as well as the International Center for Epizootics, and the Panamerican Centers for Foot and Mouth Disease and Zoonosis. 2.26 Strong linkages have been developed between ICA and several of the international research centers of the Consultative Group for International Agricultural Research (CGIAR). ICA is responsible for the field testing of improved rice, beans and cassava varieties developed jointly with CIAT, and ICA's Carimagua station is an important center for pasture studies of CIAT for acid, infertile soils of the tropical lowlands. A strong program of collaborative work with potatoes has been established between ICA and the International Potato Center (CIP) which is about to move its regional office to the La Selva station of ICA where conditions are particulaly suitable for testing for disease resistance. ICA maintains a duplicate international potato germplasm collection for CIP at Tibaitata to safeguard against any mishap occurring to the master collection at Lima, Peru. Collaboration with CIMMYT is to be reinforced through the proposed project, principally through 1/ Loan 303-SF/CO, US$17,646,887. 2/ Loan 514-T-080, US$2,157,582.  - 15 - the interchange of improved seeds of maize, wheat and triticale, and the provision of training for ICA's staff at CIMMYT headquarters in Mexico. It is planned also to strengthen links with the International Institute of Tropical Agriculture (ITTA) in Nigeria, and the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) in India, concerning research into farming systems. III. THE PROJECT A. Introduction Project Identification and Preparation 3.01 The Government of Colombia has requested the Bank to finance the first phase of a program to rehabilitate the national agricultural research and extension services through a loan to ICA. The feasibility study for the proposed project was prepared by ICA, with assistance from Bank missions that visited Colombia in April, June and September 1982, and the project was presented to the Bank in October 1982. A list of Colombian and Bank studies and working papers related to the proposed project is given in Annex 3. Project Priorities and Strategies 3.02 Following a comprehensive review by Colombian authorities,including ICA, of the factors of production, current farming systems and the definition of problems susceptible to scientific research, priorities have been established by the Government for the crop and livestock products upon which research is to be conducted and the research centers that are to be improved (Annex 3, Section B). The principal criteria used for the determination of priorities are as follows: (a) the relative importance of each product for human consumption; (b) the participation of the product in national exports or imports; (c) the intensity of labor use; and (d) price and income elasticities. 3.03 During the review of priorities, it was decided to follow a strategy for strengthening the national agricultural research service that called for: (a) rehabilitation and equipping of existing laboratories and selected research and experiment stations; (b) improving the remuneration of scientific staff and training professional, technical support, administrative and service staff;  - 16 - (c) provision of funds adequate to permit active research and the effective transfer of technology, while properly maintaining the buildings, equipment, vehicles and other facilities of ICA for agricultural research; and (d) strengthening of the administrative and financial management of ICA, through the development of effective systems for the management, access and use of general and scientific information. 3.04 The project would assist the national research and extension services principally by: (a) intensifying biological, physical, economic and social research in topics of national importance and the sharpening of the analytical ability of ICA in order to raise the output of the agricultural sector, with particular reference to: (i) food production, particularly in rainfed areas; (ii) export or import-substitution products; and (iii) labor-intensive systems of production; (b) promoting the dissemination and application of results of agricultural research and carrying out studies on the transference of technology; and (c) training scientific and technical personnel for service within ICA and the agricultural sector as a whole. B. Brief Description 3.05 The project would comprise the following main components to be carried out by ICA over six years: (a) the rehabilitation, development and equipping of 15 agricultural research stations and about two veterinary laboratories over five years; (b) establishment of one new agricultural and livestock research station; (c) training of about 270 staff at the post-graduate level over six years and providing short courses for about 250 research and support staff over five years; (d) national and international consultant services totaling 14.5 man-years for scientific, technical, building design and management support; (e) salaries and operating costs for five years for about 300 new research staff and a salary premium for about 190 existing and about 230 new research workers with PhD and MS qualifications to attract and retain high-level staff (Table 1); if) the monitoring and evaluation of the research and technology transfer activities of ICA; and  - 17 - (g) review of the national farm extension systems and the preparation of a plan and policy document (PLANTRA) as a basis for further improvement to the farm advisory services of ICA and other public and private institutions. C. Detailed Features Investments 3.06 The rehabilitation and development of research facilities of ICA would be carried out through the establishment of one research station and improvements to some of the existing centers, laboratories and stations which have been selected on the basis of their suitability as sites at which to study the farm products of highest priority. At each of the following 1l sites (four National Research Centers (NRC); 12 Regional Research Centers (RRC); and two Research Stations (RS)), one existing and one to be established. All necessary physical improvements, essential equipment and vehicles would be provided through the proposed project (Map IBRT) No. 16816). These requirements have been identified in detail for each center or station listed below except for the new station proposed for the Orinoco Region and include the following types of investment: (a) water, power and telecommunication services; (b) land preparation, including drainage and internal roads; (c) repairs and modifications to existing buildings and the contruction of some minor buildings, such as stores; (d) vehicles, machinery, furniture and equipment for farm, office and laboratory use; and (e) library and computing facilities. Andine Region Caribbean Region Inter-Andine Region Tibaitata (NRC) Turipana (NRC) Palmira (NRC) Veterinary Medical Veterinary Medical Nataima (RRC) Research Labora- Research Labora- Pacific Region tory (LIMV) (Bogota)(NRC) tory (LIVET) El Mira (RRC) Obonuco (RRC) (Turipana) (RRC) Amazon Region El Nus (RRC) Motilonia (RRC) Macagual (RRC) La Selva (RRC) Tulenapa (RRC) Orinoco Region El Arsenal (RS) Caribia (RRC) La Libertad (RS) El Carmen (RRC) New Station (RS) 30.7 The specific investment requirements for five years of each of the following research work units have been determined individually, avoiding duplication of facilities or equipment that could be shared between work units. Lists of civil works, equipment, vehicles, livestock and improvements have been compiled, (Annex 3, Project File) taking into consideration the condition of existing equipment and facilities and, for the commodity research programs, the relative level of priority of each program. The priority levels range from A as the highest, to D for the lowest priority. Consultancy services (para 3.13) would be provided to the work units marked with an asterisk.  - 18 - Division Priority Division Priority AGRONOMY ANIMAL SCIENCES (a) Programs (a) Programs Maize and Sorghum A/C Beef Cattle A Rice A Dairy Cattle A Minor Cereals B Dual Purpose Cattle A Grain Legumes B Poultry C Cotton A Other Species D Perennial Oil Crops B Root and Tuber Crops B (b) Disciplines Plantains B Animal Physiology Sugarcane (non-centri- Animal Genetics fugal sugar "panela") C Animal Production Tobacco C Systems Cocoa A Animal Nutrition Vegetables * A Pastures and Forages Fruit * C Multiple Cropping N/A VETERINARY SCIENCES Programs (b) Disciplines Infectious Diseases Plant Pathology * and Epidemiology * Plant Entomology * Parasitology and Plant Physiology * Entomology * Soil Science Pathology and Plant Breeding * Toxicology * Vesicular Diseases AGRICULTURAL ENGINEERING Programs CENTERS AND STATIONS Land and Water Development * Agricultural Processes * Agricultural Machinery Land Improvement at Centers and Stations 3.08 A laboratory for infectious livestock diseases would be built near Bogota, because the existing laboratory at LIMV does not provide an acceptable degree of biological containment. The new high-security laboratory would have specialized air-handling and effluent disposal facilities to minimize risks to research workers and to the human and livestock populations in the vicinity of the laboratory. Preliminary requirements for the new laboratory and the adaptation of the existing laboratory have been defined, but specialist consultant services are essential before detailed plans can be prepared (para 3.13). A virology laboratory would be established near Monteria by modifying existing buildings at LIVET and small laboratories for the study of ticks would be built at El Nus and La Libertad. 3.09 Investments by the following four coordinating, service and support units would be principally for equipment and vehicles:  - 19 - (a) Project Coordination; (b) Statistics and Biometry; (c) Socio-economic Studies; and (d) Library and Communications. The project would finance consultant services (para 3.13) and the investment costs necessary to strengthen each of these units, to expand the computing facility at ICA headquarters, and to provide microcomputers for the regional research centers. Library equipment would be provided for the indexing and retrieval of technical information, including the establishment of links with international information systems. Additional printing and audio-visual equipment would be installed for the communications unit to publish the results of research and to disseminate the latest technical recommendations to the farming community. Technical Assistance 3.10 The detailed requirements for technical assistance were defined following a review of the current strengths and future responsibilities of each of 49 work units in ICA (Table 4). The gaps in the currently available skills in each unit to carry out the tasks summarized in Chapter V would be met through a comprehensive staff training program and the provision of consultancy services (Table 5). The phasing of the training program over six years has been planned in accordance with the proposed research program; however, consultant services would be engaged in accordance with detailed terms of reference previously approved by the Bank as soon as a suitable candidate has been identified for each task summarized briefly in Annex 1. 3.11 Training. During the first five years of the project, about 66 staff of ICA would proceed on three-year periods of study leading to PhD; the last group would return to Colombia in the sixth year of the project. About a further 204 staff would follow two-year courses leading to MS or equivalent qualifications; about half would attend courses in Colombia and the balance would study at foreign institutions (Table 5). 3.12 Short courses (up to three months) in Colombia have been planned for about 250 of the support staff. Some members of the staff may attend more than one short course in five years of the training program. It would be a condition of disbursement from the corresponding category that ICA had submitted a plan, satisfactory to the Bank, for the training of professional staff at the post-graduate level and the provision of short courses. 3.13 Consultant Services. Consultancy requirements would amount to 14.5 man-years, of which it is estimated that two man-years would be available locally. For budgeting purposes, it has been assumed that the local consultants would be hired in the second and third years of the project and that, overall, consultancy engagements would be distributed according to the following percentages over the first five years of the project, respectively:  - 20 - 28, 26, 27 10 and 9. Further details are provided in Annex 1 and Table 5 to provide an indicative, but not restrictive, statement on the range of consultancy services to be engaged for the proposed project. Summary of Technical Assistance Local Foreign Total Training (Number) Doctoral courses (3 years) 66 66 Masters courses (2 years) 104 100 204 Short courses (2 months) 250 - 250 Consultant Services (man-years) 2 12.5 14.5 3.14 Studies. A study would be carried out by ICA in about one year in two phases to provide a basis for a national plan to improve and coordinate all forms of technical assistance to the agricultural sector (PLANTRA). The first phase commencing in April 1983, which would take about six months, would define the main categories of farmers and farming systems requiring assistance; examine the efficiency of current farm practices, in particular the use of fertilizers (para 1.05 (b)); and identify the main sources of technical information and improved animal and crop genetic materials as well as the principal public and private channels of communication that are currently used. The second six-month period would be required for ICA to analyze the information collected during the first phase and to prepare an overall strategy and draft plan of action for consideration by representatives of the farming community and the many public and private institutions engaged in or affected by the provision of technical assistance to farmers (Annex 1, Section B). Following a period of consultation of about three months in which the Bank would take part, a final plan would be prepared by the Government, as a basis for an investment project for which external financing would be required (para 1.17 (g)). The review of the study may lead to the conclusion that there should be some modifications to the research priorities and strategies of PLANIA (para 2.06 (a)), in which case any corresponding modifications to the proposed project would be considered by the Government, the Bank and ICA. Assurances were obtained during negotiations that the above study and plan would be carried out and furnished to the Bank by June 30, 1984 and December 31, 1984 respectively. Operating Costs 3.15 Personal Emoluments. These include salaries, allowances (except for the proposed scientific premia) and mandatory transfers from ICA to other entities, such as the social security fund,amounting to about 267 of salaries and allowances. All these expenditures are included in the total cost of the proposed project for personnel of the ICA divisions who would participate in the project (Chart) additional to the numbers present in 1982 (Year 0). The total numbers in the Research Department for each of the five years are given in Table l and summarized below.  - 21- Unit Costs and Numbers of Staff in the Research Department Average Annual Gross Year 0 Year 5 Incremental Level Unit Personel Costs Col$'000 US$'000 No. Col$ M No. Col$ M No. Col$ M PhD 1,500 21.6 31 46.50 117 175.50 86 129.00 MS 1,160 16.7 162 187.92 307 356.12 145 168.20 Subtotal: 193 234.42 424 531.62 231 297.20 BA 660 9.5 198 130.68 290 191.40 92 60.72 Technical Assistant 375 5.4 599 224.63 1,116 418.50 517 193.87 Secretarial 306 4.4 172 52.63 333 101.90 161 49.27 Others 191 2.7 1,037 198.07 1,576 301.02 539 102.95 Total: 2,199 840.43 3,739 1,544.44 1,540 704.01 3.16 Scientific Premia. A premium is proposed for qualified research personnel with equivalent degrees to a MS degree or higher in order to attract former staff to return to ICA and to retain existing experienced staff. In order to be competitive with other Colombian institutions (para 2.14) and regional institutions such as IICA, an average scientific premium of 40% of the basic salary is proposed as follows: Transfers: Average Annual (1982) Scientific 26.33% of Average Annual Unit Level Basic Salary Premia Scientific Cost to ICA of Average 40% Premia Scientific Premia (Col$'000) (Col$'000) (Col$'000) (Col$'000) PhD 970 388 102 490 MS 750 300 79 379 The number of staff with PhD qualifications is expected to increase from 35 in the first year to 117 by the fifth year of the project. During the same period, the number of other staff eligible to receive a scientific premium over their basic salary is expected to rise from 162 to about 307 (Table 1). 3.17 General Expenses. These are made up of the following items, for which the percentages of all general expenses in 1981 are shown for reference: (a) materials and supplies, including spare parts and tools, 27%; (b) sundry items, 22%; (c) travel and subsistence, 19%; (d) rental and similar charges, 12%; (e) public utilities and communications, 9%; (f) operation and maintenance of vehicles, other than those of professional staff, 9%; and (g) printing and publications, 2%. For ICA as a whole, these expenditures have been equivalent to about one-third of gross personnel costs (para 2.17), but nevertheless funds have been very limited for the Research Department, for which the operating budgets have been of between 10% and 20% of personnel costs. It is proposed to include within the total project costs incremental funds above the current budget level equivalent to 20% of the estimated gross personnel costs of the Research Department in Year 0, in order to bring into full use the installed research capacity and, for incremental operations, general  - 22 - expenses would be equivalent to 40% of the incremental gross personnel costs or 28% of total recurrent expenditure, other than for financial charges. D. Project Costs 3.18 The total cost of the proposed project is estimated at US$206.6 million, including contingencies. These costs include IJS$3.5 million in taxes. The foreign exchange component is estimated at US$52.7 million, or 25% of total project cost. Project baseline costs are updated to December 1982. Physical contingencies equivalent to 1.8% of total baseline costs have been added, based on 12% of estimated costs of civil works and station development and 5% of estimated costs of equipment. Price contingencies have been calculated separately for local and foreign costs, and a correction was also applied for the Bank's projected devaluation of the Colombian peso, according to the following assumptions: Col$ to USS International Year Domestic Price Nominal Ex- Price Index Index change Rate 1982 = 100 1982 100 69.6 100 1983 125 82.8 108 1984 155 96.5 116 1985 189 111.0 124 1986 227 126.5 131 1987 272 144.2 139 1988 - 164.4 147 A breakdown of project costs by program, station and category of investment and operating expenditure is given in Tables 6 - 12. The average gross baseline costs per man-year of internationally recruited consultant services are estimated at US$74,000 for a total of 12.5 man-years and at half this rate for two man-years of local consultancy services. Baseline training costs are equivalent to US$21,600 per man-year for PhD for a total of 198 man-years and to US$12,665 per man-year for MS for a total of 408 man-years (Table 5).  - 23 - SUMMARY PROJECT COSTS Foreign Z of Project Components Col$ million US$ million Exchange Proj. Local Foreign Total Local Foreign Total Component Cost I. INVESTMENT 1. Civil Works 343.2 60.7 403.9 4.9 0.9 5.8 15 2. Equipment and Furniture 390.5 1,307.5 1,698.0 5.6 18.8 24.4 77 Subtotal: 733.7 1,368.2 2,101.9 10.5 19.6 30.2 65 3. Vehicles 115.5 462.2 577.7 1.7 6.6 8.3 80 4. Livestock 48.7 - 48.7 0.7 -- 0.7 0 5. Station Develop- ment 343.1 60.6 403.7 4.9 0.9 5.8 15 Subtotal Investments: 1,241.0 1,891.0 3,132.0 17.8 27.2 45.0 60 32 II. TECHNICAL ASSISTANCE 1. Consultant Services (a) Internationally Recruited 62.6 62.6 0.9 0.9 (b) Locally Recruited 6.9 6.9 0.1 0.1 Subtotal: 6.9 62.6 69.5 0.1 0.9 1.0 90 2. Training (a) Foreign -- 536.0 536.0 -- 7.7 7.7 (b) Local 146.0 -- 146.0 2.1 -- 2.1 Subtotal: 146.0 536.0 682.0 2.1 7.7 9.8 78 3. Studies PLANTRA 69.6 0.0 69.6 1.0 0.0 1.0 0 Subtotal Tech. Ass.: 222.5 598.6 821.1 3.2 8.6 11.8 73 8 III. OPERATING COSTS 1. Monitoring and Evaluation 76.6 -- 76.6 1.1 -- 1.1 9 2. Personal Emolu- ments 3,187.7 -- 3,187.7 45.8 -- 45.8 0 3. Scientific Premia 617.2 -- 617.2 8.9 -- 8.9 0 4. Other Costs 1,521.2 506.4 2,027.6 21.8 7.3 29.1 25 Subtotal Operating Costs: 5,402.7 506.4 5,909.1 77.6 7.3 84.9 9 60 IV. PROJECT BASELINE COST: 6,866.2 2,996.0 9,862.2 98.6 43.1 141.7 30 100 V. CONTINGENCIES 1. Physical 101.7 80.0 181.7 1.5 1.1 2.6 2 2. Price 6,525.4 a! 591.9 7,117.3 53.8 8.5 62.3 44 Subtotal Contingencies: 6,627.1 671.9 7,299.0 55.3 9.6 64.9 15 46 VI. TOTAL PROJECT COST b/: 13,493.3 3,667.9 17,161.3 153.9 52.7 206.6 25 146 a! Weighted exchange rate, Col$ 121.41US$; all other figures, Col$ 69.6/US$. b/ Including front-end fee.  - 24 - E. Financing 3.19 The proposed Bank loan of US$63.4 million (including the 0.25% front-end fee) would finance 317 of total project costs, including the entire foreign exchange cost and US$10.7 million of local costs (5% of total project costs). Some local currency expenditures would be financed in order for the Bank to retain a meaningful participation in national agricultural research and extension. ICA would provide from its own resources and with funds from the national budget, 69% of the total project cost. ICA Bank Total Project Components Expenditures Tr$ M % tJS8 M % US$ M X Investments 25.2 38 41.1 62 66.3 10O Technical Assistance 6.4 38 10.6 62 17.0 100 Incremental Operating Costs 111.1 91 11.2 9 122.3 100 Working Fund 0.5 50 0.5 50 1.0 100 Total Project Cost 143.2 69 63.4 31 206.6 100 3.20 The loan would be made to ICA with the guarantee of the Government for a term of 17 years, including approximately four years of grace, at a variable interest rate that would be one-half percent above the cost of qualified borrowings by the Bank for the semester immediately preceding each six monthly interest period. The foreign exchange risk on the servicing of the loan would be borne by ICA. Assurances were obtained at negotiations that financing would be as specified in this and the preceding paragraph. F. Procurement Works 3.21 Civil works contracts totaling USS8.4 million, including contingencies, would be awarded according to local competitive bidding procedures that are satisfactory to the Bank, with foreign bidders having the opportunity to participate. The balance of civil works estimated to cost about US$1.0 million would be carried out by force account (Table 10). However, because of their modest size and limited scope, these contracts are unlikely to interest companies not already operating in Colombia, or even those already established in the regions where the research stations are located (Map IBRI) No. 16816). Goods 3.22 Vehicles (US$12.0 million, including contingencies) and laboratory and other equipment (US$15.1 million, including contingencies), totaling US$27.1 million, would be procured through international competitive bidding in accordance with Bank Guidelines. Qualifying domestic manufacturers would  - 2j - receive a preference in bid evaluation of up to 15%, or the import duty, whichever is the lower. 3.23 The balance of farm and office equipment and furniture, totaling US$10.4 million (including contingencies), and research station and laboratory development investments (US$6.6 million, including contingencies) would be procured in many dispersed purchases spread over five years under local procedures with foreign bidders having the opportunity to participate. A wide range of international and local manufacturers of vehicles, equipment, materials and agricultural inputs are represented in Colombia, competition is satisfactory, and servicing and spare parts are available. Contract Review 3.24 All bidding packages estimated to cost over US$150,000 equivalent for equipment, or over US$700,000 equivalent for civil works, would be subject to the Bank's prior review of procurement documentation, resulting in a coverage of about 70% of the total estimated value of works contracts and about 50% of contracts for goods. The balance of contracts would be subjected to random review by the Bank after contract award. Consultant Services 3.25 The services of consultants would be engaged in accordance with "Bank Guidelines for the Use of Consultants by the World Bank Borrowers and by the World Bank as Executing Agency" (August 1981). Assurances were obtained at negotiations that the procurement procedures specified in this and in paragraphs 3.10 and 3.21 to 3.24 would be followed. G. Disbursements 3.26 The Bank would disburse over a period of seven years: (a) 100% of foreign expenditures for directly imported goods and 60% of local expenditures for locally procured goods and services for the following total values: (i) equipment, furniture, materials, agrochemicals and spare parts US$24,600,000; (ii) vehicles - US$ 6,600,000; (iii) local and foreign training for a total value of US$ 8,800,000; (b) 100% of expenditures for: (i) civil works US$ 6,200,000; (ii) consultant services and studies for a total value of; and US$ 850,000; (c) incremental operating expenditures 1/ US$ 5,550,000; (d) 50% cost of scientific premia for a total value of US$4,700,000, subject to the limits described in paragraph 3.27; 1/ Excluding salaries, benefits and related expenditures.  - 26 - (e) initial deposit for the working fund - US$500,000; and (f) front-end fee of IJSSl58,105. The balance of US$5,441,895 would be unallocated in the loan. 3.27 Disbursements for the scientific premia to be paid to all eligible staff would be made at quarterly intervals on the basis of statements of expenditure on declining scale. These would indicate the number of eligible staff who had been on duty for the entire quarter and the aggregate of their basic salaries, not exceeding three monthly salaries for any individual member of staff. In order to phase out Bank participation in financing the scientific premia, the following would be the maximum cumulative amounts to be disbursed by the Bank for each of the first five years of the proposed project. June 30 Distribution of Loan Disbursement Limit Baseline Cost of Premia US$ million 7 1984 14 1.1 23 1985 28 2.2 47 1986 48 3.3 70 1987 72 4.0 86 1988 100 4.7 100 3.28 In an effort to facilitate rapid project execution, a working fund would be established with US81.0 million equivalent to cover about three months of local expenditures. The establishment of a special accotnt for such a fund would be a condition of effectiveness and the ordering by the Government of the release of US$0.5 million equivalent would be a condition of disbursement of US$0.5 million equivalent from the Loan Account to the fund. In order to allow for the necessary time to complete the budgetary process, the Government would have up to 30 days to deposit the monies in the special account. Subsequent disbursements to replenish the fund would he carried out according to standard Bank procedures, but provided that the Government has already approved the release of ICA's share of the replenishment. Every six months, the Government, the Bank and ICA would rcview the operation and size of the fund and agree on any necessary changes. 3.29 Retroactive financing is recommended for eligible payments made before the date of the Loan Agreement, but after January 1, 19R3, for an amount not exceeding the equivalent of US$1 million for final design studies for civil works; consultant services; equipment; materials; agrochemicals; spare parts and furniture; and incremental operating expenses. Other conditions of disbursement are contained in paragraph 4.11. 3.30 Disbursements for the scientific premia and studies and incremental operating expenses would be made against Statements of Expenditure. The supporting documentation would be retained by ICA and made available to the Bank and external auditors for inspection during the course of project supervision and audit inspections. All other disbursements would be supported by ecandard documentation.  - 27 - 3.31 The estimated schedule of disbursements by the 'Bank is summarized below, assuming that the date of effectiveness of the proposed loan would be no later than October 31, 1983.1/ This schedule is based on conservative projections made separately for each line of expenditure to be financed by the Bank. The estimated date of project completion would be June 30, 1989 and the estimated closing date would be June 30, 1990, which would be one and a half years shorter than indicated by the regional standard disbursement profile for agricultural projects (Ta-ble 11), because expenditures to be financed by the Bank would be predominantly in the first three years of the proposed project. The project cash flow is summarized in Table 12. Fiscal Year Disbursed and Semester During Semester Cumulative -------------- US$ million --- FY84 1 0.7 0.7 2 2.2 2.9 FY85 1 6.9 9.8 2 10.4 20.2 FY86 1 11.2 31.4 2 9.4 40.8 FY87 1 7.5 4R.3 2 5.1 53.4 FY88 1 3.6 57.6 2 2.7 59.7 FY89 1 2.1 61.8 2 1.3 63.1 FY90 1 0.2 63.3 2 0.1 63.4 IV. PROJECT IMPLRMFNTATION A. Organization and Management 4.01 The project would be implemented by ICA through its established administrative and technical Divisions coordinated by a Project Coordination Unit to be formed for that purpose within the Office of Planning with the assistance of a consultants (Annex 1). The unit would be headed by a Project Coordinator and comprise the following three groups: (a) administration; (b) human resources; and (c) monitoring and evaluation. 4.02 During the course of implementation, the overall structure of ICA would be substantially changed, but this should not disrupt the working of the divisions to be involved in the proposed project and, furthermore, the linkages between research and the transfer of technology would be 1/ This assumption is based on Board presentation in mid 1983. The project completion date would remain unchanged if retroactive financing was approved from January 1, 1983 (para 3.29).  - 28 - strengthened (para 4.04) and later would be reinforced through PLANTRA (para 3.14). The stages of institutional transformation at the departmental level are summarized below. Present structure Transitional structure Eventual Structure Administration Administration Administration Research Research Research Rural Development Transfer of Technologv Transfer of Technology Crop Production Agricultural Development Agricultural Education Livestock Production Agricultural Regulations and Control 4.03 Eventually the functions of agricultural development, regulations and controls would revert from ICA to the Ministry of Agriculture or be transferred from ICA to other public institutions of the agricultural sector, WMhile the study to prepare PLANTRA is carried out by ICA to define the national strategy and priorities for farm advisory services, the Government would assess how best to reassign responsibilities for agricultural development, regulations and controls that are now performed by ICA. Assurances were received during negotiations that the broad strategy for the reorganization of ICA would be determined by the end of 1983 and be implemented during 1984. B. Planning for Implementation 4.04 Overall priorities and strategies for agricultural research have been established (paras 3.02 and 3.03) to the level of particular commodity programs and among the research centers, and these are expected to continue to be broadly the same throughout the execution of the project although they should be reviewed by December 31 of each year, and in the light of the outcome of the study for PLANTRA (para 3.14). ICA, until the project has been completed would furnish to the Bank a detailed plan of activities, satisfactory to the Bank, to be carried out under the project during the following calendar year. The plan would include the Borrower's proposed annual budget for the execution of such plan. Within groups of commodity research programs (minor cereals, vegetables, etc.) and for each research center the planning and review of research would be carried out in the following two ways: (a) research consultative committees for groups of commodity research programs and centers, comprising the respective directors as chairman and farmers, research workers and farm extension agents. Each committee would meet at least once a year and no more frequently than quarterly. These committees would usually total seven to nine members each. Their purpose would be to agree upon the nature of the problems requiring investigation and to comment on the practical significance of research results produced by the respective programs and stations. An assurance was obtained during negotiations that, by no later than December 31, 1983 ICA would present to the Bank for approval detailed proposals for the constitution and operations of research consultative committees; and (b) research review meetings would resume assessing the justification of initiating or continuing individual research projects. These meetings are formed of the program coordinator, a member of the Statistics and Biometry Division, a research worker from the same division as is proposing the research project and two other members  - 29 _ of ICA's staff. These meetings are convened periodically by the corresponding head of the division. Assurances were received during negotiations that, by no later than December 31, 1984, these research review meetings would be resumed and thereafter maintained. These meetings would include senior representatives of each division involved and would take into consideration the views of the local research consultative committees and comments by the Bank and international scientists; and (c) in addition, at about two year intervals there would be external reviews of (i) ICA's overall research strategy; and (ii) ICA's commodity specific research objectives and accomplishments in which scientists of international reputation would take part. The first overall review of ICA's research strategy would take place shortly after the completion of the study of PLANTRA (para 3.14). 4.05 Through the implementation of the project, ICA would be able to take advantage of the many offers of national and international cooperation (paras 2.21 and 2.26). During negotiations discussions were held with ICA with a view to activate contracts which would contribute to the current research program and cancel the balance of contracts outstanding. 4.06 Funds for research programs and disciplines and for the development, maintenance and operations of each research center and to the technology transfer divisions would be transmitted directly from ICA headquarters to the centers and divisions, where the expenditure is to be incurred and would not be channelled through the office of the MAG regional directors. Increased responsibility and autonomy would be given to the directors of centers and divisions to ensure that all research work, demonstrations and seed production is carried out in accordance with the needs of the surrounding farming community and consistent with the overall national research and development strategy for the agricultural sector (para 3.03). An assurance was obtained at negotiations that the lines of control and the transmission of funds would be consistent with the proposals in this paragraph. 4.07 The planning for future extension work would be the purpose of the PLANTRA study (para 3.14); meanwhile, the Department of Rural Development would continue to carry out its responsibilities for providing farm advisory services to small-scale farmers, particularly in IRDP districts partially financed by Loans 1352-CO and 2174-CO. C. Staff Training and the Use of Consultant Services 4.08 The Project Coordinating Unit, through its human resources group, would maintain under continuing review the skill-gap assessment conducted during appraisal (para 3.10) for each of ICA's work units involved with agricultural research, extension or administration. This would provide a basis for determining (a) if ICA has the necessary trained staff to carry out a proposed work program; (b) the training needs of the institution; and (c) the requirements for consultant services to supplement the skills of the staff of ICA.  - 30 - 4.09 The administration and human resources groups in the Project Coordinating Unit would be responsible for locating training courses for ICA staff in accordance with the continuing skill-gap assessments and for external training; they would work in close collaboration with ICETEX (para 2.20). These groups would also be responsible for locating and hiring external consultant services in accordance with Bank guidelines for the purposes summarized in Annex 1 and Table 5. 4.10 The human resources group would submit quarterly reports to the Project Coordinator including particulars on (a) staff requiring training; (b) staff under training; (c) staff returning from training, with assessments of the quality and appropriateness of the training received; (d) requirements for consultants; (e) consultants hired; (f) the performance of consultants; (g) administrative matters, including staff and consultant remuneration, travel and subsistence expenses; and (h) the status of the commitment and disbursement of tunds allocated for training and consultants. 4.11 It would be a condition of disbursement from the corresponding categories of the proposed loan (para 3.26) that ICA had submitted plans, satisfactory to the Bank, for (a) local and foreign training of the project, and (b) for the establishment of the proposed new research station, including research objectives, staffing, equipment needs, and civil works designs. D. Operations and Maintenance of Facilities and Services 4.12 The coordination of operations and maintenance of all facilities and services at research centers and stations would be the responsibility of a division recently created for this purpose in the Research Department. This division can call upon the General Services and Contruction divisions of the Administrative Department to carry out all major works, and, in addition, station directors have limited funds for local works by force account. 4.13 ICA will seek approval from the Comptroller General to use some funds generated from sales of produce and the provision of services by ICA to purchase each year indexed Government bonds equivalent in value to the annual depreciation of vehicles and equipment shown in the annual balance sheets of ICA. The value of these bonds should keep more or less in line with the cost of replacing worn-out equipment; therefore, following the proposed Bank loan, it should not be necessary for ICA to seek external funds to replace vehicles and equipment which would then be financed through the sale of the indexed bonds. E. Accounts and Auditing 4.14 ICA would maintain separate project accounts for the proposed project in accordance with sound accounting principles and methods, consistently applied. Consultancy services would be contracted no later than June 30, 1984 to review the existing system of accounting and to design a system to improve the presentation and flow of information to management (Annex 1). The project  - 31 - accounts and related basic financial statements would be audited annually, in accordance with sound auditing standards, by independent auditors appointed by ICA and acceptable to the Bank. The scope of each annual audit examination would be sufficient to enable the independent auditors to express an opinion on compliance by the Guarantor and the Borrower wit" the obligations of the Guarantee and Loan Agreements and an opinion as to whether or not the project's annual balance sheet, related statements of activity and changes in financial positions, present fairly the financial position of the project and the results of its operations for the period covered by the audit on a basis consistent with that of the preceding period. A specific opinion of the Fiscal Auditor of the Comptroller General's office would be required on the accuracy of each Statement of Expenditure submitted to the Bank (para 3.30). The independent auditors would be required to communicate to the Board of ICA any material weaknesses in internal accounting control that may come to their attention in the course of their examination of the financial statements made in accordance with sound auditing standards. Details on audit requirements are in Annex 2. 4.15 The basic financial statements, together with the independent auditor's opinion on compliance with the financial and accounting clauses of the Loan Agreement, would be forwarded to the Bank not later than six months after the end of each fiscal year. The underlying annual financial statements would be prepared using the accrual basis of accounting and would consist of a balance sheet, statements of activity and changes in financial position for each year with comparative figures for the previous fiscal year, and such explanatory notes and supporting schedules as may be appropriate in the particular circumstances and with such other additional information as the Bank from time to time might request. Assurances were obtained at negotiations that the accounting and auditing procedures outlined above would be followed. F. Monitoring and Reporting 4.16 The Project Coordinator would be responsible for monitoring operational progress for the duration of the proposed project, according to a program previously agreed upon by the Bank. Separate books, accounts and records would be kept in reasonable detail, to reflect the transactions relating to the inputs, outputs, sales, market prices, employment, and operational and administrative costs of the investments and investigations of the project and to permit measurement and evaluation of overall performance in monetary and physical terms against programmed budgets or such other criteria as the Bank or the Project Coordinator may reasonably adopt. The Project Coordinator, with the assistance of consultants (Annex 1), would also design and maintain systems of internal control in order to ensure accountability for project programs, investments and assets and would be required to submit to the Bank half-yearly progress reports and annual evaluation reports. 4.17 Local research consultative committees (para 4.04 (a)) would ensure that regional and local research centers and stations would investigate immediate local problems and make suggestions concerning the balance between  - 32 - the various types of research (para 5.01). The recommendations of the committees would be compiled by the monitoring and evaluation group of the Project Coordination Unit (para 4.01 (c)). ICA's internal research review meetings (para 4.04 (a)) and special external program reviews would use the criteria specific to each commodity and discipline program summarized in paragraphs 5.04 to 5.18. These stratagies and others to be identified by the consultative and review committees would be used to evaluate the accomplishments of research programs and the capacity of the scientific staff of ICA to design and conduct research relevant to the requirements of the Colom1hian agricultural community. 4.18 Assurances were obtained during negotiations that: (a) monitoring and evaluation procedures would be carried out as outlined in paragraphs 4.10, 4.16 and 4.17; (b) half-yearly progress reports would be received by the Bank within two months of the end of each period; (c) annual evaluation reports would be received by the Bank within four months of the end of the fiscal year; and (d) a draft project completion report would be prepared by the Project Coordinating Unit and be submitted to the Bank no later than four months after the investments of the proposed project had been completed. V. RESFARCH STRATEGY AND DIRECTIONS A. Introduction 5.01 Research activities would be of the following four main types, with the type of investigation to be undertaken, depending upon the current state of national and international knowledge in the particular field: (a) Basic research: there would be little if any research into fundamental biological and physical processes, but units specialized according to scientific discipline would be maintained and strengthened to form elements of multidisciplinary teams to carry out other types of research; (b) Applied research: the majority of the investigations would be of this type, the objectives of research being to resolve problems faced by farmers; (c) Adaptive research: this would include checking locally the performance of farm practices and genetic material developed in other countries and in other parts of Colombia. This type of research would often be carried out on private farms, but under the full control of ICA staff; and (d) Verification and demonstration: in this type of research on private farms, responsibility would be shared between the farmer and staff of ICA. The PLANTRA study would examine how to improve the quality of the design and management of this type of research. 5.02 With the greater local autonomy to be given to research station directors (para 4.06), it will be possible to involve local farmers more effectively in defining local problems to be studied, consistent with the overall national priorities (para 3.07 and 4.04 (a)), and periodically to  - 33 - review the results of research. ICA has a well established system of peer reviews of both research plans and papers for publication. Through the project, the system would be strengthened by providing adequate funding for the research itself and to resume meetings of local and international scientists to review regularly research strategy, directions and results (para 4.04 (b)). 5.03 The following paragraphs summarize the broad lines of research to be followed by each major program or discipline. These have been well thought out and would be supported through the proposed project. However, the number of research activities or experiments shown by years for each work unit in Table 16 should be regarded as only indicative of the rates of change expected for each line of research during the implementation of the proposed project. These paragraphs provide some indicators against which the proposed project could be evaluated after it has been completed. B. Agronomy Food and Feed Grains 5.04 Maize varieties would be developed with support from CIMMYT (a) for integration into multiple-cropping systems on small-scale farms on steep hillsides; (b) for planting at low altitudes in hot climates; and (c) for use in larger scale, mechanized production systems. Sorghum studies would aim to (a) improving the grain: leaf ratios; (b) reducing the vegetative cycle; (c) increasing resistance to diseases of the grain and panicle; and (d) developing varieties suitable for the lowlands of the north coast. Rice research under irrigated conditions with support from CIAT would seek (a) high yielding varieties with resistance to diseases of the leaf and panicle; and (b) more efficient use of water and fertilizers. More attention would be given to upland rice varieties adapted to acid soils, such as found in the eastern lowlands. Wheat research would continue at a modest level and with support from CIMMYT to (a) provide disease resistant varieties with acceptable grain quality and yield; (b) improve the efficiency of weed control and fertilizer use; and (c) introduce improved systems and equipment for land preparation and harvesting on steep hillsides. Research objectives for barley as a feed grain and for triticale from CIMMYT would be similar to those for wheat. Grain Legumes and Seasonal Oil Crops 5.05 Bean research would continue the recently successful efforts, in association with CIAT, to combine disease resistance, good agronomic features and high yields, with satisfactory cooking characteristics. More attention would be given to selecting varieties to be grown in association with other crops on small-scale farms on steep hillsides. Soybean research would work toward developing production systems for the northern coastal lowlands to reduce the dependency of that region on cotton. Studies would include seed treatment, plant populations and the use of herbicides. Sesame production has been limited by Fusarium wilt; therefore, research would continue to focus on combining resistance to wilt with high yields and minimizing losses during harvesting. Cotton research would continue despite the current adverse world and local market demand for cotton fiber, because of the long-term importance of this crop as a source of material for the national  - 34 - textile industry, high quality edible oil, and employment in areas of high unemployment. Investigations would be directed to (a) developing systems of integrated pest management; (b) breeding for resistance to pests and diseases; (c) improving water management and fertilizer use, particularly in the northern coastal region; and (d) quality of fiber. Associated and Multiple Cropping 5.06 ICA research workers have been leaders in the field of studies of associated and multiple cropping and this work would continue to have high priority to integrate the work of other agronomy programs and to determine the farming systems most appropriate to raising the standard of living of small-scale farmers. Perennial Oil Crops 5.07 Oil palm research would continue to check on the performance of imported material and adapt introduced management systems to local conditions, with particular attention to limiting losses from pests and diseases and raising the yield of oil. Work on coconuts would be limited to identifying varieties suitable for the Pacific coast. Root and Tuber Crops 5.08 Potato research would continue, in close collaboration with CIP, to focus on producing varieties which combine resistance to blight and bacterial wilt with high yields of tubers that have the appearance and cooking characteristics favored by consumers. In addition, frost-resistant lines would be sought for use at high altitudes. Cassava research, in association with CIAT, seeks to reduce the vegetative cycle while producing high yields of tubers with good cooking characteristics. Agronomic practices would be studied in conjunction with the program for associated and multiple cropping. If demand develops from the stock-feed industry and for industrial starch, it may then be justifiable to develop industrial-scale production methods for this crop. Other Crops 5.09 Plantain research would be increased to include studies of (a) plant population; (b) response to fertilizer; and (c) the optimum time of harvesting. Sugarcane investigations would be designed to assist small scale farmers on steep hillsides by (a) reducing the period between harvests from 20 months to 16 months and raise the yield at each cut by 20%; and (b) developing varieties resistant to leaf rust and smut, in conjunction with CENICANA. Tobacco research would aim at selecting varieties (a) suitable for the dry parts of the north coast; (b) resistant to diseases and pests, including nematodes; and (c) responsive to fertilizer applications while maintaining good leaf quality. Cocoa research would be carried out in collaboration with FEDECACAO with the main emphasis on developing (a) varieties resistant to witches'broom and monilia diseases; and (b) practical methods for the control of these diseases on at least 30% of existing plantations.  - 35 - Horticulture 5.10 Vegetable research is to be expanded considerably, particularly forpeas, tomatoes, onions, carrots and members of the cucurbit family. In addition to studies of plant protection and agronomic practices, local seed production would be investigated. Fruit research would be limited to developing (a) citrus material resistant to tristeza; (b) papaya material resistant to the lethal complex of viruses prevalent in Colombia; and (c) harvesting and marketing systems to reduce losses. Agronomy Disciplines 1 5.11 The five scientific disciplines would be principally involved in the implementation of the various crop research programs. In addition, however, they have general objectives which are summarized in the following paragraphs: (a) Plant Pathology. To quantify the physical and economic losses atributable directly or indirectly to pathogens (fungi, bacteria, nematodes, viruses) of the main crops; (b) Plant Entomology. To reduce the cost of control of insect pests of the main crops from the current level of between 20% and 40% of input costs to 15% to 35% of input costs, principally through the development and testing of integrated pest management systems, which, it is hoped, will be used by 40% of large-scale farmers and 20% of small-scale farmers; (c) Plant Physiology. To develop a better understanding of plant physiology, particularly of fruit formation, in order to improve plant breeding. To develop an economic control of Cyperus spp. suitable for use in rice and cotton production; (d) Soil Science. To study (i) the interactions between crop plants and saline and alkaline soils; (ii) the availability and management of minor elements; (iii) the standardization and calibration of methods for the analysis of soils and plant material; and (iv) strategies of soil management to reduce soil erosion in collaboration with the Agricultural Engineering Division; and (e) Plant Breeding. To construct and equip facilities for a germplasm collection that would be regenerated periodically; to collect genotypes of all crops of importance to the country; to classify and evaluate plant material of national and foreign sources; and systematize and process the documentation and data on plant improvement with the assistance of a minicomputer. C. Animal Sciences 5.12 The results of past research have had a notable impact on livestock production in Colombia, particularly through cattle breeding that has combined the local "criollo" and introduced zebu cattle. The proposed  - 36 - project would enable this good work to continue and, in particular, would support the following programs of research, all of which would be subject to economic as well as technical analysis: (a) Beef Cattle: to improve management systems to raise reproduction and growth rates; conserve, multiply and improve criollo breads to be used in cross-breeding programs with zebu cattle; (b) Dairy Cattle: to improve dry season management of pastures and forages; improve reproductive performance; evaluate and improve breeds for subtropical (intermediate altitude) regions; and milk processing; (c) Dual-purpose Cattle: to develop criollo x zebu crosses with improved milk production characteristics and better systems for pasture and forage management and calf-rearing; and (d) Poultry: to develop management systems based on locally grown feedstuffs. Animal Science Disciplines 5.13 The following scientific disciplines would support the commodity programs and also conduct research in the topics listed below: (a) Animal Physiology: (i) studying cattle semen and ova production and physiology; (ii) monitoring commercial production, freezing and transplanting of cattle embryos; and (iii) studying the effect of nutrition on the reproductive performance of cattle; (b) Animal Genetics: (i) conserving the most valuable criollo breeds of cattle; and (ii) developing crossing programs that maximize hybrid vigor of cattle and can be used by farmers; (c) Animal Production Systems: (i) adapting international livestock production simulation models to Colombian conditions; and (ii) evaluate the relation between pasture stocking rate, pasture consumption and livestock production; (d) Animal Nutrition: determining the nutritive value of (i) pastures and forages; (ii) by-products for ruminants; and (iii) non-traditional feeds for non-ruminants; and investigating mineral deficiencies and forage toxicities; and (e) Pastures and Forages: (i) identifying species tolerant to low soil fertility; (ii) studying pasture management for dryseason grazing; (iii) determining incidence and resistance to pests and diseases; and (iv) conserving forages for specialized dairy operations.  - 37 - Veterinary Sciences 5.14 The proposed project would strengthen the staffing and facilities of four disciplines of veterinary medicine to provide a sound basis for the existing 30 diagnostic centers that have direct contact with livestock producers. In the light of the findings of the PLANTRA study, the network of diagnostic centers may be modified through the second phase of the proposed project. (a) Infectious Diseases and Epidemiology: (i) classifying and characterizing all main infectious and contagious diseases; and (ii) preparing control programs to cover 50% of livestock producers by 1990; (b) Parasitology and Entomology: (i) classifying endo- and ectoparasites according to their economic importance and ecosystem; (ii) reducing annual preventive treatments for cattle ticks from 16 to six for half the herds that are treated; and (iii) increasing the level of control of endoparasites from 25% to 50% of young cattle. (c) Pathology and Toxicology: (i) classifying and evaluating the incidence of cattle diseases and the occurrence of toxic effects of plants and agrochemicals; and (ii) raising from 30% to 50% the number of livestock producers with satisfactory programs of disease control; and (d) Vesicular Diseases: characterizing and controlling foot and mouth disease and vesicular stomatitis of cattle at about 70% of the known foci of infection; E. Agricultural Engineering 5.15 A substantial increase is planned for research to be carried out by the following work units, which would pay special attention to the needs of small-scale farmers on steep hillsides and the general requirements for conserving soil, water and energy. (a) Land and Water Resources: (i) determining irrigation timing, frequency and amounts; (ii) identifying underground and surface water sources; and (iii) developing application systems to economize water and energy; and to minimize soil erosion; (b) Agricultural Processes: (i) reducing post-harvest losses; (ii) small-scale on-farm crop storage units; and (iii) crop drying and processing, using non-traditional sources of energy; and (c) Agricultural Machinery: in collaboration with local universities and manufacturers of farm machinery (i) testing and adapting agricultural machinery and equipment, particularly for use by small-scale farmers; (ii) seeking energy-efficient machinery suited to local conditions; and (iii) improving the technical and economic efficiency of cultivation on small, steep farms.  - 38 - F. Technical Supporting Services Statistics and Biometry 5.16 Staff of this headquarters division would be encouraged to visit research centers and stations regularly (a) to gain first hand understanding of conditions in the field; (b) to advise on the design and analysis of experiments; (c) to train research staff in elementary biometry and the uof microcomputers; and (d) to ensure that cost:benefit criteria are included within research considerations. Socio-economic Studies 5.17 High priority would be given to increasing the understanding of research workers concerning the socio-economic conditions in the agricultural sector and farm management issues and agricultural economic considerations applicable to farms of different scales. This would be done by (a) reviewing farming conditions and problems through PLANTRA and other studies; (b) taking part in the design and analysis of research projects; and (c) assisting in the transformation of the results of research into practical recommendations. Library and Communications 5.18 Reference facilities would be provided at the national and regional levels to give research workers access to national, regional and international scientific and technical publications. This would include use of the AGRIMTER and AGRIS document abstracting services. The Communications Division, in conjunction with the Socio-economics Division, would (a) develop improved methods of communication between the farming community to research workers; and (b) test alternative methods for communicating technical recommendations and transferring improved animal and plant material to farms of different scales of operation. VI. PROJECT BENEFITS 6.01 Benefits from public investment in agricultural research have been estimated ex-post for investigations of six crops for varying periods between 1934 and 1974 (Annex 3). As may be seen below, the economic rates of return for research in Colombia were generally highly satisfactory, but only marginal for wheat and zero for cotton research. For wheat and cotton most of the benefits were from foreign research, while local research efforts were not sufficiently focussed to produce useful results. Product Period of Research Economic Rate of Return % Best Estimate Range Cotton 1934-74 0 Oil Palm 1960-73 31 Potatoes 1949-75 63 44 to 78 Rice 1957-72 60 to 82 Soybeans 1960-72 79 to 96 Wheat 1953-73 11 to 12  - 39 - On the basis of this evidence and experience in many other parts of the world, investment in agricultural research usually yields a high rate of return, but regular technical and economic reviews are essential to avoid wasting resources on unrewarding lines of investigation. 6.02 The average national yields of most crops in Colombia increased steadily and, in some cases, substantially, between 1970-82. Annual average yields for IR crops during this period are given in Table 14. In general it appears that in this period yield increases at the national level were less impressive than during the periods referred to in paragraph 6.01. The increases were the result of (a) improved planting material and farming practices; (b) shifts in areas of production to more favorable areas; and (c) changes in the characteristics of the crop, for example, from mainly rainfed and upland rice to mainly paddy-rice production. ICA played a key role in each of these types of change, but it is not possible to quantify this in financial or economic terms. 6.03 Despite the undoubted technical improvements made possible for many crops through successful research, the production of some of these crops (maize, beans and sesame) in terms of the domestic resource cost was not attractive in 1981 at the average levels of yield obtained on farms (1.4 m ton/ha). However, there is a wide range between the average yields on research stations and commercial yields because of inefficiencies in the national systems for the transference of technology and improved genetic material. 6.04 The benefits from livestock research by ICA have also been considerable, but there has been no attempt to estimate these in economic terms. The principal achievements have been the incorporation of "criollo" germ plasm into zebu cattle stocks; the introduction and propagation of improved grasses and legumes; and the development of stock-feed rations based on locally available constituents. The veterinary research work of ICA has achieved some success in containing the spread of foot and mouth disease of cattle and in estimating the occurrence and distribution of the main diseases of livestock. According to recent estimates of the economic losses in 1981 from all diseases of livestock, these totalled 1JS$917 million. 6.05 The proposed project should have a direct effect on the main technical problems of the agricultural sector through: (a) providing the policy framework, institutional system and well trained staff with adequate facilities and operating funds to carry out well designed and conducted research (para 3.03); (b) establishing the infrastructure and coordination system to implement research contracted and financed by the private sector (paras 2.21 and 2.23); (c) attention to food crops, rainfed agriculture and the socio-economic analysis of research results and farming systems (paras 3.04 and 5.17); (d) reinforcing and using all available channels of communication between farmers and research workers (para 4.04');  - 40 - (e) preparing a strategy and a plan of action for the reorganization and strengthening of public and private farm advisory and communication systems to make full use of the results of research and to influence the directions of future studies (para 3.14); (f) eliminating the environmental hazard represented by the existing veterinary medical research laboratory (LIMV) in Bogota (para 3.08); (g) reducing losses from livestock diseases (para 5.14); (h) making full use of the existing research staff and infrastructure (para 3.17); and (i) recalling former research workers who left ICA because of lack of support and insufficient remuneration (para 3.16). 6.06 The main risks that would be faced by the proposed project are the following: (a) it might not be possible to rehire experienced former ICA research staff as fast as planned unless the scientific premium is approved promptly. In addition, existing research staff may leave ICA if there is much delay in improving the gross salary for senior research staff; any delay might seriously postpone benefits from the project; (b) although the present national administration is strongly committed to supporting and financing agricultural research, a future administration might be reluctant to continue to provide the necessary support; and (c) the rehabilitation of the national network of extension services might not be undertaken, despite the preparation of PLANTRA, in which case the benefits from the rehabilitation of the national research service would not be effectively exploited. 6.07 The legal and political feasibility of providing a scientific premium for research staff were determined during negotiations. The assurance of future funding for research would depend on the effectiveness with which the proposed project responds successfully to the needs of farmers. The careful attention to their problems, which is an essential feature of the institutional reformation of ICA, should ensure that research is well focussed. With the competent staff already in ICA and the additional staff facilities and funds to be provided by the project, there are excellent prospects for generating significant research results which would themselves provide the main justification for future administrations and the private sector to support strongly the agricultural research and extension services of Colombia, and this would ensure continuity in the support for the research program.  - 41 - VII. SUMMARY OF AGREEMENTS OBTAINED AT NFGOTIATIONS AND RECOMMENDATION 7.01 Assurances were obtained during loan negotiations that the following conditions would be fulfilled: (a) the study referred to in paragraph 3.14 would be carried out and reviewed by the Bank as outlined in that paragraph; (b) the project would be financed as specified in paragraphs 3.19,and 3.20 and 3.31; (c) procurement procedures would be in accordance with paragraphs 3.10 and 3.21 to 3.25; (d) the reorganization of ICA would be carried out according to the program in paragraph 4.03; (e) by no later than December 31, 1983, ICA would present to the Bank for approval detailed proposals for the constitution and operations of research consultative committees (para 4.04 (a)); (f) annual research review procedures would be in operation at all research stations of ICA no later than December 31, 1984 (para 4.04 (b)); (g) the lines of control and transmission of funds would be consistent with the proposals in paragraph 4.06; (h) accounting and auditing procedures would be as specified in paragraphs 4.14 and 4.15; and (i) monitoring and reporting would be in accordance with the procedures in paragraphs 4.16 to 4.18. 7.02 It would be a condition of effectiveness that a special account for the working fund had been established by ICA (para 3.28). 7.03 It would be conditions of disbursement under the respectives categories, that ICA had submitted a plan of action satisfactory to the Bank, for (a) local and foreign training; and (b) ICA had prepared a comprehensive justification for the establishment of the new research station (para 3.12 and 3.06 respectively); and the Government had ordered the release of its initial contribution to the special account (para 3.28). 7.04 With these assurances obtained at negotiations, the proposed project would constitute a suitable basis for a loan to ICA, with the guarantee of the Government, for the equivalent of USS63.4 million. The loan would have a term of 17 years, including four years of grace, at a variable interest rate linked to the borrowing costs of the Bank. May 12, 1983.  - 42 - ANNEX 1 COLOMBIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I Terms of Reference for Consultant Services and Studies A. Consultant Services General Observations All consultants would require appropriate qualifications, usually at the Ph.D or equivalent level, with about ten years of practical experience in their fields of specialization; preferably this experience should include work in developing countries. Fluency in Spanish is essential and a reasonable command of English would be useful. Consultants would work under the overall supervision of the Project Coordinator of ICA, but be assigned to the relevant division for their specific tasks. During the assignment the consultants may be required to work in any part of Colombia. Prior to the arrival of the consultant the receiving division will prepare a briefing folder containing all material relevant to the consultancy. Within one week of arrival each consultant would submit a detailed proposed work program. At the mid-point of each contract the consultant would submit a progress report to the Project Coordinator, and at the end of the contract term, each consultant would submit a final report on the consultancy. A critical element of all consultancies would be to train staff of ICA and some consultants may be required to assist the graduate training program at the National University.  - 43 - Consultants Required Division: Agronomy Position Title: Vegetables; Production Expert Duration: 12 months Qualifications: PhD or equivalent in a discipline related to horticulture, with specialization in seed physiology and production. Extensive field experience in the production and quality control of horticultural seeds. Position Description: Advise on the strategy for the development of a local seed production operation for selected horticultural crops. Advise on the design and staffing of a horticultural seeds quality control laboratory. Division: Veterinary Sciences Position Title: Laboratory Design Expert Duration: 3 months Qualifications: Experience in the design and mangement of microbiological laboratories, biological safety, air handling and effluent disposal systems. Position Description: Advise on (a) design criteria and detailed specifications for studies of vesicular and infectious diseases and epidemiology at LIMV (Bogota); and (b) modifications to the facilities at LIVET (Turipana, Monteria) to provide cell culture supply, media production and virology work areas and improve distilled water supply and glass sterilization facilities. Division: Veterinary Sciences Position Title: Infectious Diseases; Epidemiology Fxpert Duration: 15 months Qualifications: PhD or equivalent in veterinary medicine with specialization in the economic evaluation of preventive measures to reduce the incidence of livestock diseases. Position Description: Advise on criteria and data management systems for epidemiological and economic evaluations of livestock diseases. Assist in the organization and delivery of graduate courses on preventive medicine practices for livestock.  - 44 - Division: Veterinary Sciences Position Title: Tick Epidemiology Expert Duration: 3 months in 1984/85 Qualifications: PhD or equivalent in veterinary medicine or entomology with specialization in ectoparisites of cattle. Position Description: Advise on the design of studies for the control of ticks, with particular reference to the relation between knowledge of life cycles and the use of acaricides. Train local veterinary staff in recent advances in the control of ticks of cattle. * *** ** Division: Agricultural Engineering Position Title: Land and Water Expert Duration: 24 months total Qualifications: PhD or MS in soil and water sciences with specialization and extensive practical experience in (a) irrigation engineering, particularly localized and sprinkler applications; (b) drainage and levelling tropical soils; and (c) groundwater hydrology and well development. Position Description: The expert would evaluate ongoing research programs and advise on future investigations with particular reference to evaluating the financially and economically most efficient use of water resources in the following subjects: (a) Irrigation: research and development of the use of localized (drip) and sprinkler application techniques; (b) Drainage: research and development of methods for surface drainage under tropical high intensity rainfall; distribution of rainfall and irrigation water over cultivated land; and (c) Groundwater Hydrology: well testing and development, with particular attention to practical training of local staff.  - 45 - Division: Agricultural Engineering Position Title: Agricultural Processing Expert Duration: 24 months Qualifications: MS in mechanical or chemical engineering with specialization in heat transfer systems. Position Description: Advise on research leading to more efficient evaporation of sugarcane juice to produce non-centrifuged sugar (panela) using agricultural wastes as the energy source. Division: Project Coordinating Unit Position Title: Advisor (1) Duration: 30 months Qualifications: PhD, MS or equivalent qualifications in relevant disciplines with appropriate practical experience. Position Description Monitoring and Evaluation; (6 months). Advise on systems (i) to monitor the physical and financial development of the project; (ii) to prepare periodic progress reports; and (iii) to evaluate the results and consequences of research programs. Division: Statistics and Biometry Position Title: Computer Expert Duration: 9 months Qualifications: Professional qualifications relevant to the design and installation of a computer center for biological research and management information. Position Description: Advise on (a) the formation of a computer center to process scientific and administrative data from regional and national agricultural research stations; and (b) the procurement of the necessary hardware, software and associated facilities.  - 46 - Division: Socio-economic Studies Position Title: Agricultural Economist (1) Duration: 15 months total Qualifications: PhD or equivalent in relevant fields with specialization in: (a) economic analysis of hilogical research (12 months); and (b) production economics (3 months). Position Description: Both consultants would (a) evaluate ongoing work of the division; (b) advise on improved work planning and execution; (c) train staff through seminars and short courses; and (d) assist the interpretation of the results of the PLANTRA study. Division: Communications Position Title: Library Management Expert Duration: 3 months Qualifications: Professional qualification relevant to the management of information systems, with extensive experience in the organization and management of specialized libraries. Position Description: Advise on (a) the design of a system for the processing of library information, including inventory control and linkages with relevant international and national information systems on technical documents; (b) preparations for the implementation of the system; and (c) the implementation of the system. Division: Planning Position Title: PLANTRA Study Advisors (3) Duration: 24 months total Qualifications: PhD, MS or equivalent relevant qualifications, with experience in the design, organization, financing and management of farm advisory services. Position Description: (a) General Advisor: (12 months). Assist in (i) the design and analysis of a national survey of existing farm advisory systems; (ii) the preparation of a report on the existing systems; and (iii) the design of a framework for an improved organization for farm advisory services;  - 47 - (b) Agricultural Extension Expert: (3 months). Assist in (i) the design of the most appropriate methodology for the communication of information to and collection of experience from each main category of farmer; and (ii) the design of a national extension system involving many private as well as public entities; and (c) Agricultural Economist: (6 months). Assist in (i) the design and analysis of surveys to define dominant farming systems and categories of farmer requiring technical assistance; and (ii) the economic and financial analysis of alternative combinations of farm advisory services to be recommended. Division: Administration Position Title: Accountancy Expert Duration: 12 months Qualifications: Internationally recognized accountancy qualifications, with experience in accounting of public sector entities. Position Description: Review existing system of accounting; design a system to improve the presentation and flow of information to management; prepare instructions for the improved system; and supervise the implementation of the new system. A sample invitation to selected international accounting consultants follows.  - 48 - ANNEX 1 Attachment A Sample Invitation to Selected International Accounting Consultants 1. The Instituto Colombiano Agropecuario (ICA), with headquarters in Bogota, has decided to approach a limited number of international accounting firms known for their expertise in the field of the design and implementation of administrative and accounting systems focused towards provision of management and cost control oriented financial and cost accounting information, capable of functioning within the framework of statutory recording and reporting procedures and statutory audit requirements as they now exist. 2. It is ICA's understanding that your firm has the required expertise. If this is so and if your firm is interested in submitting an initial proposal, you are requested to do so not later than March, 1984. Your proposal should he addressed as shown in the top right hand corner and should include information indicated in the fifth paragraph of this invitation. If your firm does not intend to respond to this invitation, please advise ICA to that effect at your earliest convenience. 3. ICA has applied to the World Bank for a loan to assist it with the strengthening of its work on agricultural research and extension and the consultancy mentioned in this Invitation would be financed with part of the proceeds of that loan. 4. The abbreviated Terms of Reference are: (a) examine the existing administrative arrangements and related accounting system in all its aspects with particular reference to its present status of decentralization. Prepare a brief report of findings, followed by recommendations for further work, indicating a time frame for its execution; (b) Prepare a preliminary design of such systems as would enhance provision of regular financial and cost information to management at national, regional and other selected levels, indicating the related reporting system bases thereon; (c) Carry out the detailed work, prepare the necessary manual(s) and supporting stationary design, describing the books, records and typical statements in support of the system; (d) Supervise the implementation of the system; (e) Completion of each of the preceding four stages will be regarded as individual phases of the consultancy and ICA's Board approval will be required prior to commencement of the next succeeding phase.  - 49 - (f) Two ICA staff members with appropriate educational background and practical experience will work with the consultants on a full time basis; (g) For the consultancy to succeed in its objectives the following requirements are essential: (i) the consultant must be fluent in Spanish; (ii) have academic qualifications and experience appropriate to intensive interaction with highly qualified staff of ICA; and (iii) have a personality conducive to an atmosphere of close cooperation with others and ability to impart knowledge to his counterparts. 5. Your proposal should initially assume an overall time requirement of twelve man-months, with a break between some or all of the four phases. It should briefly outline your firm's specific experience with assignments of this nature, giving details as deemed appropriate and giving academic and experience details of staff available for this assignment. 6. While your proposed charges will have a bearing on the final selection process, the cost factor will account for about 30% of the weighting of the bid evaluation with the balance made up as follows: 10% previous achievements in similar assignments; 30% suitability of proposed individual(s); 10% commitment to supply the individual nominated; 20% general quality of proposal. B. Studies Preparation for a National Plan for the Transference of Technology for Agriculture (PLANTRA) The objective of the study would be to prepare the bases for a plan to improve and coordinate all forms of technical assistance for the agricultural sector of Colombia. The study would set out to: (a) identify dominant systems of crop and animal production in the principal farming regions of the country; (b) define the dominant categories of producer and the ecological and financial circumstances of each such category; (c) determine, with the assistance of farmers, the principal technical problems that are amenable to research;  - 50 - (d) identify and describe the dominant traditional and non-traditional means of communication among all sectors of the farming communitv; (e) provide additional views on research needs and technical assistance requirements for areas of the country not studied under the PLANIA or the Integrated Rural Development Program (IRDP). Also, determine if it is advisable to modify any of the strategies developed for agricultural research in the preparation of PLANIA; (f) propose alternative methodologies to provide technical assistance to all dominant farming systems in Colombia, through public or private agencies including on-farm adaptive research and verification trials as well as field demonstrations; (g) provide a working plan for the improvement of technical assistance and suggest an organization and its location within the Colombian public sector to oversee the improvement of technical assistance to the agricultural sector; (h) advise on training programs to familiarize research workers with farm conditions and extension agents with methods and disciplines of agricultural investigations. (i) recommend a system for improving coordination between extension activities and other complementary services and inputs including credit, farm supplies, veterinary diagnostic and soils conservation services. May 12, 1983.  - 51 - ANNEX 2 COLOMBIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I Audit Requirements 1. Separate project accounts would be kept by ICA, which would ensure that they were submitted in due time to the external auditor. 2. ICA would submit the following information on the project accounts to the external auditor each year: (a) as a minimum, a statement of sources and application of funds, with comments on the most significant changes with respect to the previous year; (b) a report on the system of internal control; (c) a report on the corrective actions taken in response to the opinions and recommendations made by the external auditor in the report of the previous period; (d) a report by ICA with comments regarding the time intervals between the date of the expenditures, approval of the disbursements by the Bank, disbursements and receipt of funds by ICA; (e) a report showing and analyzing budget execution during the year, compared with initial appropriations and budget execution during the previous years; and (f) all documentation supporting the statements of expenditures. 3. ICA would present such financial and complementary information to the external auditor no later than 90 days after the end of the fiscal year. Immediately upon receipt of the external auditor's report, the agencies would forward a copy to ICA. Content of the External Audit Reports 4. The auditor's report should give the project account amounts and express an opinion on the fairness with which they are presented. The auditor would also report on: (a) compliance by the Government with its obligations under the Guarantee Agreement; (b) compliance by ICA with its obligations under the Loan Agreement;  - 52 - (c) the system of internal control and the reliability of any statements of expenditure; (d) corrective measures taken by ICA in response to observations and recommendations made in the previous report; (e) the adequacy of the reserve or provision for doubtful debts and changes in the provision or reserve; (f) the accounting system used; and (g) compliance with procurement regulations. 5. Not later than six months after the close of its fiscal year, ICA would present to the Bank the result of an audit of the statements of expenditures carried out by independent auditors acceptable to the Bank. This audit report would convey the auditors' opinion and comments on the methodology employed in the compilation of the statements of expenditure, their accuracy, the relevance of supporting documents, eligibility for financing and the standard of record keeping and internal control. May 12, 1983  - 53 - ANNEX 3 COLOMBIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I Selected Documents and Data Available in the Project File A. Project Performance Audit Reports Report No. Board Title Document No. 1841 SecM78-15 Atlantico Irrigation (Loan 502-CO) 2124 SecM78-556 Caqueta Land Colonization (Loan 739-CO) 1804 SecM77-828 First Agricultural Credit (Loan 624-CO) 1344 SecM76-745 Second Livestock Development (Loan 651-CO) 3959 SecM82 Atlantico Irrigation (Loan 502-CO): Impact Evaluation Report. - - Strengthening Agricultural Research and Extension - The World Bank Experience. B. General Reports and Studies Relating to the Project Preparatory Colombian Studies and Reports (in order of publication). ARNDT, T. M., DALRYMPLE, D.G. and RUTTAN, V.W., 1977. Resource Allocation and Productivity in National and International Research, University of Minnesota Press, p. 86-123. HERTFORD, R., ARDILA, J., ROCHA and TRUJILLO, C., Productivity of Agricultural Research in Colombia. ARAGON, T.J. and FORERO, L.F., 1976, Estudio Socio-economico de las Inversiones Realizadas en Investigacion y Fomento de la Palma Africana de Aceite en Colombia. Revista ICA XI (3), 243-256. PENA, M., 1976, Evaluacion socio-economica de las Inversiones Estatales en la Investigacion sobre el Cultivo de la Papa. ICA, Boletin de Investigacion No. 45. SCOBIE, G. and POSADA, R., 1977, The Impact of High Yielding Rice Varieties in Latin America with Special Emphasis on Colombia, CIAT, p. p. 78. IICA, 1978. Asignacion de prioridades y recursos a la investigacion agropecuaria en Colombia. Seminario organizado por la Unidad de Estudios Agrarios del Departamento Nacional de Planeacion con la colaboracion del Proyecto Cooperativo de Investigacion sobre Tecnologia Agropecuaria en America Latina (PROTAAL). CIAT, Palmira (Serie: Informe de Conferencia, Cursos y Reuniones No. 153).  - 54 - DNP, 1979. Propuesta para la estructuracion del sistema de investigacion y transferencia de tecnologia agropecuaria y de recursos naturales renovables de Colombia, Bogota. ICA, 1980. Sector Agropecuario Colombiano: Diagnostico Tecnologico. Tomos 1 y 2. DNP Integracion Nacional 1979-82. ICA, 1980. Plan Nacional de Investigacion Agropecuaria del ICA. PLANIA. Tomos I, II a, b, c, y III. ARDILA, J. 1981. Diagnostico sobre la situacion de la Investigacion Agropecuaria en Colombia y Propuesta de Reorganizacion Institucional. IICA-OPSA. Vols. I, II y III. DNP, 1981. Bases para el Plan Nacional de Investigaciones del Sector Agropecuario, Forestal y Pesquero. Documento DNP-1828-UEA. MINISTERIO DE AGRICULTURA, 1981. Recomendaciones de la Subcomision de Investigacion y Transferencia de Tecnologia. Comision Intersectorial de Concentracion del Sector Agropecuario. NAVAS, J., et. al, 1982. La organizacion institucional de la investigacion agricola en Colombia y el Plan Nacional de Investigacion Agropecuaria, Cali. Primer Seminario sobre Investigacion y Desarrollo Tecnologico en el Sector Agropecuario Colombiano. SAMPER, A., 1982. La funcion del Sector Privado en la organizacion y financiamiento de la Investigacion agropecuaria en Colombia. Cali. Primer Seminario sobre Investigacion y Desarrollo Tecnologico en el Sector Agropecuario Colombiano. CIAT, 1982. Seminario sobre Investigacion y Desarrollo Tecnologico en el Sector Agropecuario Colombiano I. Conclusiones y Recomendaciones y Plan de Accion. ARDILA, J. Antecedentes para la creacion del sistema de investigacion agropecuaria y la reestructuracion del ICA. Ministerio de Agricultura. Comision de Trabajo. Resolucion 385 del 6 de septimbre de 1982. ICA, 1982. Proyecto de Investigacion Agropecuaria de Colombia para consideracion del Banco Mundial. PRESIDENTIAL COMMISSION, 1983. Comision sobre Politicas y Prioridades para la Investigacion Agropecuaria y sobre la Reestructuracion del ICA.  - 55 - C. Bank Preparatory Studies and Reports a) Sector Missions NESTEL, B. and WORMER, T.M., 1978. Agricultural Sub-sector Report: Research and Extension. Colombian Agriculture: Selected Issues and Some Directions for Strategy. Report No. 4275-co, January 31, 1983. b) Project Preparatory Mission Reports, August, 1982. Working Papers 1. Potatoes 2. Vegetables 3. Fruits 4. Beans 5. Rice 6. Cassava 7. Sugarcane (panela only) 8. Cocoa 9. Plantains 10. Soybeans 11. Sesame 12. Maize 13. Sorghum 14. Dairy Cattle 15. Beef Cattle 16. Cotton 17. Poultry 18. Wheat. 19. Lists and quotations for civil works, equipment and vehicles per center and per program. c) Project Appraisal Mission Project Working Papers 1. The Colombian Agricultural Institute (ICA): Institutional Framework; 2. The Colombian Agricultural Institute (ICA): An assessment of the Institution; 3. Agricultural Extension; 4. Research Design, Appraisal and Review; 5. Training and Consultant Services;  - 56 - 6. Crop Research, Agricultural Engineering and Seeds; 7. Research Facilities and Support Services; 8. Animal Production, Range and Pasture Research; 9. Veterinary Research; 10. Detailed Project Costs. May 12, 1983  COLOMBIA AC,RICTLTURAT, RESFAARCH AND FXTFENSION PROJFCT Number of Staff in the Research Department of ICA by Levels Year Year 1 Year 2 Year 3 Year 4 Year 5 Levels 0 Additional Total Additional Total Additional Total Additional Total Additional Total Total Incremental Staff PhD 31 4 35 5 40 11 51 35 R6 31 117 86 MS 162 16 178 1 179 74 253 31 284 23 307 145 BA 198 100 298 120 418 -36 384 -46 338 -4R 240 9 Subtotal 391 120 511 126 f37 51 689 20 709 6 715 321 1 Technical Assistants 599 245 844 138 982 42 1,074 37 1,111 5 1,116 517 Secretaries 172 101 273 29 302 14 316 17 333 0 333 161 Other 1,037 226 1,263 154 1,422 98 1,520 45 1,565 11 1,576 539 Total 2,199 692 2,891 452 3,343 255 3,598 119 3,718 22 3,740 1,540( Source: Mission May 12, 1983.  COLOMBIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I Total Expenditures by the Ministry of Agriculture and ICA - 1970-81 Ministry of Agriculture All ICA ICA Research Department Cost of Ex- Col$ million Col$ million Col$ million Col$ million % of Col$ million Col$ million Z of All Living change current constant current constant Ministry current constant ICA Index rate 1970 1,224.5 9,419.2 284.6 2,189.2 23.2 104.9 806.9 36.9 13.0 19.1 1971 1,261.3 8,465.1 366.9 2,462.4 29.1 120.8 810.7 32.9 14.9 20.9 1972 1,446.9 8,511.1 412.8 2,428.2 28.5 123.7 727.6 30.0 17.0 22.8 1973 1,390.9 6,560.8 502.1 2,368.4 36.1 136.2 642.5 27.1 21.2 24.8 Average 1970-73 - 8,239.1 - 2,362.1 - 746.9 1974 2,896.8 10,768.8 575.6 2,139.8 19.9 147.4 548.0 25.6 26.9 28.6 1 1975 1,398.2 4,410.7 711.5 2,244.5 50.9 211.6 667.5 29.7 31.7 33.0 1976 1,376.7 3,450.4 843.5 2,114.0 61.3 240.5 602.8 28.5 39.9 36.3 c 1977 2,762.3 5,342.9 1,018.1 1,969.2 36.9 307.1 594.0 30.2 51.7 38.0 Average 1974-77 - 5,993.2 - 2,116.9 - 603.1 1978 2,964.2 4,867.3 1,283.5 2,107.6 43.3 431.9 709.2 33.7 60.9 41.0 1979 4,149.7 5,246.1 1,648.1 2,083.6 39.7 555.5 702.3 33.7 79.1 44.0 1980 6,287.7 6,287.7 2,141.7 2,141.7 34.1 670.3 670.3 31.3 100.0 50.9 1981 7,300.1 5,761.7 2,803.7 2,212.9 38.4 928.5 732.8 33.1 126.7 59.0 Average 1978-81 - 5,540.7 - 2,136.5 - 703.7 1982 3,452.6 2,179.7 1,056.2 666.8 30.6 158.4 69.6 1983 (budget) 1,401.3 Source: Mission. May 12, 1983  COLOMBIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I Income and Expenditure of ICA - 1978-82 1978 1979 1980 1981 1982 (provisional) Col$ million x Col$ million % Col$ million % Col$ million % Col$ million - Income a. Public Sector Direct allocation to ICA 667.2 807.6 1,414.4 1,474.3 2,226.6 Transfers from others 25.3 178.8 20.0 126.2 IRDP and PAN 157.3 ___9 91.6 351.5 347.5 707.1 Subtotal 849.8 69.4 1,078.0 67.7 1,785.9 71.7 1,948.0 74.6 2,933.7 71.0 b. Income from ICA sales and services 157.7 12.9 260.5 16.4 292.2 11.7 339.5 13.0 766.0 18.5 c. Private Sector Cotton and tobacco cesses 10.9 28.3 65.1 24.5 40.0 Others 4.2 0.4 24.8 1.9 47.0 FFAP 158.2 190.7 271.1 257.6 275.0 Subtotal 173.3 14.1 219.3 13.8 361.0 14.5 284.0 10.9 362.0 8.8 d. External Funds 44.1 3.6 34.2 2.1 51.5 2.1 41.4 1.5 71.0 1.7 Total Income 1,224.9 100.0 1,592.0 100.0 2,490.6 100.0 2,612.9 100.0 4,132.7 100.00 I '0 Expenditure a. Personal Expenditures Salaries 499.6 612.9 771.5 1,020.4 Other emoluments 288.8 379.9 480.9 648.7 Transfers 120.8 _ 182.1 _ 198.9 279.4 Subtotal 909.2 70.8 1,174.9 71.3 1,451.3 67.8 1,948.5 69.5 b. Operating Expenses and Marketing 301.6 23.5 370.0 22.5 497.6 23.2 646.7 23.1 c. Financial Changes and Depreciation 72.7 5.7 103.2 6.2 192.8 9.0 208.5 7.4 Total Expenditure 1,238.5 100.0 1,648.1 100.0 2,141.7 100.0 2,803.7 100.0 of which Research Department 431.9 33.7 555.5 33.7 670.3 31.3 928.5 33.1 Expenditure Ratios a. Operating x of salaries 60.4 60.4 64.5 63.4 b. Operating % of salaries plus emoluments 38.3 37.3 39.7 38.7 c. Operating % of all personnel expenditures 33.2 31.5 34.3 33.2 Source: Mission. May 12, 1983  OX~TA ACRICJLIURA. RRAR" AND) EXTSI03 PROJFCT I Training ard o,sultaot Service Reqs.ronents by Work Undts PhD or Equiva- t level 5 r Aivent level Short Coorses Coosiiltwts IC& D1EP0ARTCEP= DOUInSON WC UIT FPisting ie. Total at the To he traited Painting Total at the Tn rolomhia Overseas erd of Project (overseas) erd of P-olet lnwlemenoation Tmple,eotation Staff ______________________________________ 16.. Ph. No._ 6No. rn-nth ND. _ No. No. rnnn-Vth N6. nwr-ronth 14). tronth No. wr-snonth RESEARCHI Maite and irghm 1 4 5 2 72 0 12 6 144 0 0 2 4 0 0 Rice l 2 3 1 36 2 5 1 24 5 120 6 12 0 0 Mtnor Cereals 1 2 3 2 72 4 5 2 48 0 0 0 0 0 0 Orait Legmes 0 2 2 2 72 3 7 9 216 0 0 0 0 0 0 Cotton 0 1 1 1 36 2 6 4 96 0 0 0 0 0 0 PerenSal Otl Crops 0 2 2 1 36 3 7 4 96 1 24 2 4 0 0 Pnot amd 3ber crop. I l 2 l 36 4 7 4