Cameroon - Second Semry Rice Project

Docunent of The World Bank FOR OMCIAL USE ONLY Repoit Ne. 5156 AUDIT REPORT PROJECT PERFCRMANCE CAMEROONSEC(ND SEMRYRICE PROJECT (LOAN 1512Q-C/CREDIT 763-CM) June 25, 1984 Operations Evaluation Department This documenthas a restricteddisgibntim md my be used by recipient oudyi the pefonaume of their offwcia duis lls contents may not oderwise be disciemd withot World Bank thorlzation.  WEIGHTSAND MEASURES 1 hectare (ha) - 2.47 acres 1 kilometer (km) = 0.62 miles 1 square kilometer (km2 ) = 0.39 square miles 1 kilogram 2.2 pounds 1 metric ton = 2,205 pounds 1 liter = 1.057 U.S. quarts ABBREVIATIONS CAMDEV - Cameroon Development Corporation CCCE - Caisse Centrale de Cooperation Economique (French Development Bank) CTFT - Centre Technique Forestier Tropical pour la Peche et la Reforestation (Research Institute for Tropical Forestry and Fisheries) EDF - European Development Fund FAC - Fonds d'Aide et de Cooperation (French Aid Agency) FONADER - Fonds National de DeveloppementRural (National Rural Development Fund) CDP - Gross Domestic Product HEVECAM - Societe Hevea-Cameroun (Cameroon Rubber Corporation) ICB - InternationalCompetitive Bidding IRAF - Institut de Recherche Agronomique (Research Institute for Agriculture and Forestry) IEMVT - Institut d'Elevage et de Medecine Veterinaire des Pays Tropicaux (Research Institute for Livestock and Animal Health in the Tropics) OED - Operations Evaluation Department OMS - Operational Manual Statement ONAREST - Office National de la Recherche Scientifique et Technique (Nationale Office for Scientific Research) PCR - Project Completion Report PPAM - Project Performance Audit Memorandum PPAR - Project Performance Audit Report SEMRY - Societe d'Expansion et de Modernisation de la Riziculture de Yagoua (Company to expand and modernize rice production in Yagoua) SEMRYI - First SEMRYRice Project (Credit 302-CM) SEMRY II - Second SEMRY Rice Project (Loan 1512/Credit 763-CM) SOCAPALM - Societe Camerounaise de Palmeraies (Cameroon Oil Palm Plantation Company) COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) CFA Franc (CFAF) Exchange Rate: Appraisal Year Average US$1.00 = CFAF 245 Intervening Years' Average US$1.00 = CFAF 225 Completion Year Average US$1.00 = CFAF 270 FISCAL YEAR OF BORROWER July 1 - June 30  FOR OMCIL USE ONLY PROJECT PERFORMANCEAUDIT REPORT CAMEROONSECOND SENRY RICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) TABLE OF CONTENTS Page No. Preface ............................................................ 1 Basic Data Sheet ................................................... iji. Highlights ......................................................... v PROJECT PERFORMANCEAUDIT MEMORANDUM I. INTRODUCTION ............................................. 1 BankOperations in Cameroon ... ............... ... ... ...... 1 Economic Development and Setting ......................... 3 Agricultural Sector ...................................... 4 II. PROJECT SUMMARY .......................................... 5 Preceding Project ........................ 5 Project Formulation ....................... 5 Project Implementation and Impact ................ 7 Project Administration ............... .. .................. 10 III. MAIN ISSUES ........................................................... 12 A. Dike Repairs ......................................... 12 B. Bank and Borrower Performance ........................ 14 C. Rice Marketing ....................................... 15 D. Prospects for Future Development ..................... 19 Tables: 1. Planned Development of Cultivated Areas ....... .. .......... 23 2. Actual Loan/Credit Disbursements ........... .. ............. 24 3. Rice and Paddy Pricing ......... . .................... .. . 25 Annexes: 1. Audit Reports Issued on Cameroon Projects ...... .. ........ 27 2. Agricultural Operations in Cameroon ...................... 29 3. SENRY I, Project Summary .............. .. ................. 33 4. Legal Project Description ................................ 39 5. Graphical Presentation of SENRY ........... .. ............. 43 IThis document has a restricted distribution and may be used by reipients only in the performance of their official duties Its contents may not otherwise be disclosed without World Bank authorization. TABLE OF CONTENTS (cont.) Page No. Attachment 1. Coments from Consulting Engineers ....................... 49 2. Comments from Cofinancier (CCCE-Yaounde) ................. 63 3. Comments from Cofinancier (FAC) ..... ..................... 67 4. Comments from Cofinancier (FAC Mission) .................. 79 PROJECT COMPLETIONREPORT I. Introduction .83 II. The Sector .83 III. Project Formulation .84 IV. Project Implementation .89 V. Other Project Experience .107 VI. Project Justification .110 VII. Institutional Development .110 VIII. Borrower and Bank Performance .111 XI. Impact of the Project .111 X. Conclusions .112 Annex 1: Comparison of Achievements .114 Annex 2: Estimated and Actual Costs ..................... 115 Haps IBRD 18149 (PPA) Second SEHRY Project Area IBRD 18366 (PPA) Irrigation Projects Executed by SEMRY  AUDIT REPORT PROJECT PERFORMANCE CAMEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) PREFACE This is a performance audit of the Second SEMRY Rice Project, for which Loan L512-CM and Credit 763-CM, each for US$4.5 million equivalent, were approved on January 19, 1978. The project was cofinanced by the French bilateral aid agency--Fonds d'Aide et de Cooperation (FAC)-as was the suc- cessfully implemented First SEMRY Rice Project (Credit 302-CM). FAC provided a grant of US$4.0 million equivalent. Caisse Centrale de Cooperation Economique (CCCE) also cofinanced the project, with a loan of US$8.1 million equivalent. The project was expected to be completed by December 31, 1983 and the Loan and Credit accounts closed by September 30, 1984. Disbursements under the Credit were completed on December 10, 1979 and under the Loan on October 1, 1982. At the time of final disbursement, the bulk of the major civil works investments were completed, but half of the planned land area remained to be prepared for cultivation. The audit report consists of an audit memorandum prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) dated October 5, 1983. The PCR was prepared by the Western Africa Regional Office on the basis of a report prepared by the executing agency (Societe d'Expansion et de Modernisation de la Riziculture de Yagoua - SEMRY; 'Rapport d'Achavement du Projet SEMRY II", available in OED) and a country visit in May/June 1983. The audit report is based on a review of the Appraisal Report (1722a-CM) dated December 27, 1977, the President's Report (P-2151-CK) of January 5, 1978, the Loan, Credit and Project Agreements dated February 1, 1978, and the PCR. The PPAR on the first project (SEMRY I) was also con- sulted (OED Report No. 2054 dated May 12, 1978). Correspondence with the Borrower and internal Bank memoranda on project issues as contained in rele- vant Bank files have also been consulted, and Bank staff associated with the project have been interviewed. An OED mission visited Cameroon in October/November 1983. The mis- sion visited the project area and held discussions with Government and proj- ect executing agency officials, resident representativesof the bilateral aid agencies, and project beneficiaries. The information obtained during the mission was used to test the validity of the conclusions of the PCR. The audit finds that this excellent PCR comprehensively and accu- rately describes and analyzes project implementation and impact, and agrees with the PCR's conclusions and recommendations, especially regarding future outlook. The points discussed in the audit memorandum have been selected to highlight certain aspects which could be of importance for this and other Bank-supported projects.  - ii - A copy of the draft report was sent to the Borrower, the cofinan- ciers and the consulting engineers on April 6, 1983 for comments. Comnents received have been attached to the PPAM. The valuable assistance provided during the preparation of this report by officials of the Government of the Republic of Cameroon, the proj- ect executing agency, the cofinancing agencies as well as project bene- ficiaries, is gratefully acknowledged.  r~ tffiJIN ~ IIDr IU Dz PWSCT Pny0uWICH SDZT 3*32 HERA ATAL CANNIN SSCOll SM RIC RJC (LOAX1512- CDIT 763-C) RIIXC DATA 533?r Mr OROTDATA Armial Actual or Actua ems Z of batiate Zattated Actul Appralsal Katlate Project OCnato(S$ Sill..) 5545 75.0 (39.6)/a 135 (107) laaucredit Amot (15$ million) 1.511A.5 14.5114.5 100 Co-pinseciug (U15 millo equivalent) - Fred dald de Oprentou aet (Frane) 4.0 4.0 100 - Coiona Central de Coopwrtto4 comoque_ (Franca) 8.1 .1/b 100 Date Phtalcal Compen_te Comleted 12183 06/&O06183)L/c 142 (92)/d Proportis than completed (Z) -5 (11)5 Economic rat of return (Z) 15 20. 71. Inatitutional ?.fae good excellent/f Agronomic Performan good excellmnti Pinancial Prerfomace good fair/h Pad Production 47.400/1 53,A/ 113 haber of Dirct nmeficisrias (farm failie) 7.000 7A SOoN 107 CaMnAz DISSDRSEUE FM7 FM79 nitO nuI __l2 n13 Apprimt al atimata, (DS$ million) 3.4 12.5 19.0 21.6 2B.9 29.0 Actua USSmillion) 1.9 9.4 19.7 25.0 29.0 29.0 Actual -s of smpradl (1) 56 75 103 115 116 100 Date of noa Disbureeent: 12/10179 (Credit 763-0) 10/01/82 (loan 1512-at IRJECT BATES Original FPee Divlni Actual negotiations 11177 1Vl-407m oard Approval 01/19_78 Signing o02/nozp ffectiJ_ oni618/1 04/1478 Cl-lg ou9ioii&7s 09/30/IA/n 33XO0 DATA Nlotb/ No. of Haoday Specealiztion Perfor Type of laseion Sent by /o Y er Peraos In Field eperamted fp k r Trend /r Problem /a deutifitatinalt rSNIDWQ 10173 2 - AL. ,1 Preparaton ROIL 12/n3 2 46 A,? Idetifleation/t dAHQ 05/74 2 2' A, I Prearatin NI1 10/74 2 4 A,F Preparation/t RA/Q 11/74 2 18 F,1 Prepertioiil NIN 03n 5 2 5 A,F prmpareioar HQ/lDM 11/75 3 11 I,I.E Subtotal Preparation 108 PrappraeiV/v RQ 01-02M 4 15 *,Z.I,A Appraisal HQ 05-06/77 5 95 A. ,Z.F,A Sab-Total Appraiael 110 Sopervison I IV HQ 05378 3 36 I.I.F/f 1 2 none Supervimion 11 HQ 02-03/79 1 11 I 1 1 o/,, Supervddion III HQ 11-12/79 2 22 I.A 2 2 O.fi7F.T Etaaldnlz HQ 02/79 - - - - - Fild SWprdidion - /ea 02/n9 - - - - - Supervdimin IV HQ 05-06/80/bb 3 22 I. I.D/cc 2 2 T,P Supervlalm I HQ 12t8d 3 30 A. r.Z7ii 2 2 F.T.0/le Kid-Tare Ralvev - 1ff S-OS/Si - - - - Suprvitao VIn HQ 09/81 2 24 1.! 2 2 r,o/ Supervlsion VII HQ 03/82 1 12 I 2 2 P.oam Cmpletion HQ 06183 1 4 F (Comultet AM) Subtotal SuporwIslon 161 OTHERPiazzCT DATA lorrar Rapubllc of Ce_roon Excutilg Agey SociftG dtxpeunsm et d Hodernimtian de ls Rzicultur de lagov (SNIS Preceint Project Nam: Firt SIM iea Project/li Cradit Nuber 302-al Credit I US$3.7 million Date of Board Approwal 01/25/72 Folly-on Projct Eonejj Footeotem n followiu pag. /a Project as originally planned still in program although 1ank Loan and Credit are fully dlaburmed; at that tine total costs were eatimatad at US$59.6 Lillon for the 3 500 h perimeter. But the project will be completed to reach the originld objectLve of 7,000 ha; at completion by 1986/87 total cost might mount to US$75 million equvalelnt. /b In addition eupplemetary fianciAng was also provided by CCCZ to conaolidate the development of the initial 3,500 ha perimeter. CCCE al*o financed a parallel project (around US$2.0 iltlion) lnvolving support cemponents In project evaluation, agricultural research. livestock and fleherlee development. /c By the tlme the external funding was completely disbursed only 3,500 h had been developed, but SUlhY Is In the process of completLng the lrrigatlon perimeter to 7,000 ha duich Is expected to be completed by aid 1986. /d From date of signing. 7e- Without fishing benefits (not taken Into account in appraisal estimate), rate of return would hsve been 16Z (PCR par&. 6.01). tf An an implementing agency SFE11 has done excellent work. (PCR perae 7.01-7.02). 7j Technically the project has been a great uccees. Ylelds are higher than estimated at apprsial. Furthermore the project successfully Introduced double cropping and transplanting (rsther then broadcasting). lh Accumulated losses over the period 1977/78-1983/84 could reach CIA? 1.5 billon for all SUMRY projects combined. nost loesee caused by the SEURY III project. J1 Appraisal eetimte based on 4.0 tons/ba In the vet season and 4.7 ton in the dry season at full development with average cropping intensity of 1SZ. . Completion estimate bosed on 4.5 tone/ha ln the wet season and 5.5 tons in the dry season at full development with average cropping intenslty of 180S on a net area for rice growing of 6,000 ha. hk Based on 6,000 ha net area and 0.8 ha/famly. TM Loan Agreement Section 2.04, Credit Agreement Sectlon 2.04. Ti- As per Statement of Loans and Credits. In fact loan and credit accounts vere closed earlier as the dates of final disbursement mentloned above lndicate. /o Almost all missions were carrled out jointly with the cofinancing agencies. A - agronomist, I - irrigatlon engineer, F - financial analyst, E - economist. D - division chlef, P - Senlor Project Speciallst. /q 1 - problem free or minor problems; 2 - *oderate problems; and 3 - major problems. /r 1 - improving; 2 - stationary; and 3 - deteriorating. We F - fin ncial; H - managenerial; T - technical; and 0 - (explained In footnotes). 7F Combined with supervislon of SEfUY I. u MLsslon joined by programs division chief. 7v Combined with final supervision and completion mission for SEHlY I. 7v An environmental specialint joined the mission for a few days to review the health component. Tx Current Increase In the value of project costs by 8S is due solely to the Introduction of the current conversion rate of 220 CFAF to the USS In lieu of the 245 CQAF rate used at appraisal. There is presently no Increase in total CFAF costs. t Increase in dollar value of project costs due to exchange rate changes; there is hardly any Increase In CFAF costs. _z Short mlssion (February 9-13) by irrigation engineer to Cameroon nd to Paris to participate in a donor meeting regardlg project problems (February 15). i/ Resident representatives of IDA, and CCCE, Coveriment and Consultant nd contractor representatlves participated In a -dision to the project February 26-29, 1979. Covernment clearly regarded this as an official supervision misdlon; the Bank did not. /bb A donor meeting to discuss problems with the dike (wave eroslon and piping) took place in Paris on June 17, 1980. 7ii; Included projects Divslion Chief and OPS Irrigation Advisor. 7-I The program Divislon Chief also visited the project during thl supervlilon mission. 7;i Increase In dollar value by about 272 is due primarily to lower exchange rate; Increase of 112 In CFAY total coats Includes price escalations and the dike protectlon works. ff -This was a revlev mlsslon by lndependent consultants. 7g Cost overruns, but no additlonal Bank financing wvrranted. ;hh But It was a former experienced Bank staff. hi PPAR. OED Report No. 2054 dated May 12, 1978. 7j SDIY III is a mall perimeters Irrigation project, situated around Kousseri, financed by FZD. SE1RY IV Ls the development of a 600 ha bottom land financed from Cameroonian inventment budget resources. The completion of SUllY I1 to 7,000 ha Is also financed from Caoeroonian resources.  AUDIT REPORT PROJECT PERFORMANCE CAMEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) HIGHLIGHTS The Second SEMRY Rice Project was the Bank's eleventh operation for agriculture in the Republic of Cameroon. As of end FY83, Bank/IDA lending to Cameroon amounted to about US$800 million, with agriculture accounting for 40Z (US$312.6 million). The major emphasis in agricultural lending has been for treecrop development. Many projects were also of an estate/enclave type. Although its contributions to GDP and exports have been falling, diversified agriculture still remains an important part of Cameroon's economy. So far, however, progress in raising smallholder productivity has been slow. The First SEMRY Rice Project (Credit 302-CM) was implemented with only minor delays and a small cost overrun. It was one of the few irrigation schemes in Western Africa where double-cropping has been successfully intro- duced. Because of the expanded area, more land under double-cropping and higher yields, production reached double the level estimated at appraisal, and the reestimated rate of return of the first project was 231, compared to the 11 appraisal estimate (PPAR, OED Report No. 2054, 05/12/78). The SEMRY II project area is located 70 km downstream from the first project area. SEMRY II differs from SEMRY I not only in that it incorporatesa greater number of activities but also because it is based on a different irrigation concept: SEMRY II is a pond gravity irrigation scheme rather than a pumped water one (SEMRY I). SEMRY II provided for the construction of two dikes (48 km in total), intake structures, canals, irrigation and drainage systems and other civil works (headquarters, roads, storage facilities and a rice mill) and related equipment to provide for irrigation, and double-cropping on 7,000 ha. An additional 8,000 ha, protected from flooding, would be under traditional rainfed cultivation. The reservoir created by the project would have potential for fisheries development, and its fringes would provide pasture land throughout the dry season. The project got off to a quick start and generally proceeded on schedule during the first three years. However, two problems arose: the reservoir embankment dike experienced serious erosion and seepage problems, and an imbalance developed between land available for cultivation and actual land use. Regarding the latter, the Bank suggested that further land devel- opment be halted until the area already developed had been more fully utilized; regarding the former, after much debate, technical solutions were found and implemented by SEMRY on force account. However, by the time that both the land consolidation had successfully resulted in the occupancy of the 3,500 ha being developed and the dike rehabilitation was well underway, proj- ect funding had been depleted because of additional dike repair costs and  - vi - exchange rate fluctuations. The Bank did not provide any further financing, but the project is now being completed with Government funding and further support of the cofinanciers, and it is expected that the perimeter will be fully developed (about 6,700 ha) by 1985. This implies a completion delay for full development of about two to three years. Costs at completion are estimated to amount to US$75.0 million equivalent compared to the US$55.5 million appraisal estimate, a cost overrun of 35%. Project management and administration by SEMRY were excellent; however, Cameroonization has been much slower than expected. Given substan- tial accumulated losses, SENRY's financial situation gives rise to concern. In addition, marketing SEMRY's rice has posed serious problems during some years, and recently has led to a serious accumulation of stocks which are presently being disposed of with a Government subsidy of CFAF 25/kg. A major problem has been that as a high-cost producer, SEMRY rice is not always com- petitive with other domestic and imported rice in the major southern rice consumption market in Cameroon; exporting to the Nigerian market has proven feasible but erratic. Nevertheless, technically speaking, the project has been a great success. With transplanting generally accepted and new varieties having been introduced, yields are now expected to be higher than estimated at apprais- al. Paddy production at full development would reach about 53,000 tons compared to the appraisal estimate of 47,000 tons. Fishing in the lake has produced substantial additional benefits. The reestimated rate of return is 20%. For irrigated rice development alone, the reestimated rate of return is 161, close to the 15% appraisal estimate, with higher costs having been off- set by higher yields. The number of beneficiaries is slightly higher than estimated at appraisal, and the project's multiplier effects, although not quantified, are likely to be substantial. The major lesson of this project relates to the reasons for suc- cess; major factors were excellent management, adoption of the technical package and the enclave nature of the project. At the same time, however, it is recognized that the topic to address is the future of rice production in Cameroon. While continued technical excellence seems within reach, serious consideration needs to be given to issues related to output marketing, farmer participationand institutional efficiency (PPAM, paras. 48-55). Other points of interest are: - Partly due to cost-saving design changes and tight implementation timetables, serious erosion and seepage occurred at the embankment dike. Only after much debate were remedies accepted by all conr- cerned, but once agreed upon, they were effectively implemented (PPAM, paras. 31-36). - Bank technical supervision was excellent. Continuity was mainr tained throughout, probably to some extent at the expense of a balanced expertise mix (PPAM, paras. 37-40).  - vii - Furtherexpansionof rice productionin NorthernCameroondoes not seemwarranted(PPAM,para. 47), while thereare advantagesin con- solidating SEMRY's activities to those which are financially (PPAM,paras. 52-54). self-sustainable Given seriousrice marketingproblems,Governmentshould give more attention to an in-depth analysis of the rice subsector in Cameroon(PPAM,paras.41-47). To test the assessment an impactevalua- of projectsustainability, tion of the two SEMRY projectsis suggestedfor around 1990 (PPAM, para.55).  - 1 - PROJECT PERFORMANCE AUDIT MEMORANDUM CAMEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CMlCREDIT 763-CM) 1. INTRODUCTION Bank Operations In Cameroon 1. As of end FY83, Bank/IDA lending to Cameroon amounted to about US$800 millionl/ for 43 projects. To date, Project Performance Audit Reports (PPARs) have been issued for 18 projects (see Annex 1). Of the 43 projects, 18 -- listed in Table 1 below - were In support of agricultural development. Table 1: AGRICULTURAL LENDING (FY67-83) Board Approval Lending Audit Project Name (Abbreviated) Year Source Amount Status (completed) 1. CAMDEV (Rubber) I FY67 IBRD/1DA 18.00 yes 2. Oil Palm I FY69/78 IBRD 9.60 yes 3. SEMRY Rice FY72 IDA 3.70 yes 4. Livestock FY74 IBRD 11.70 yes 5. Cocoa FY75 IBRD 6.50 - /a 6. Niete Rubber FY75 IDA 16.00 yes 7. Plaine des M'Bo R.D. FY77 IDA 2.00 yes 8. SOCAPALM II FY77 IBRD/TW 25.00 - /b 9. Rural Development Fund FY77 IDA 7.00 - 10. CAMDEV (Rubber) II FY78 IBRD 15.00 - /c 11. SEMRY Rice II FY78 IBRD/IDA 29.00 - a 12. Zapi Integrated R.D. FY78 IDA 7.80 - 13. Western Highlands R.D. FY78 IDA 8.50 - 14. HEVECAM (Rubber) II FY80 IBRD/IDA 31.50 _ 15. Livestock II FY80 IDA 16.00 - 16. Northern Province R.D. FY81 IBRD/IDA 37.50 - 17. Forestry FY82 IBRD 17.00 - 18. Oil Palm/Rubber Cons. FY82 IBRD 50.80 - 312.60 /a Audit underway. T7 PCR being prepared by the Borrower. /c PCR received by OED. I/ IBRD-US$538.10 million and IDA-US$252.95 million, including US$22.50 million equivalent (at time of approval) in SDRs.  - 2 - 2. Agricultural lending over the period FY67-83 amounted to US$313 milUion, or 40% of total Bank/IDA lending to Cameroon. 2 / Table 2 below pro- vides a breakdown of agricultural lending by subsector. Table 2: LENDING BY SUBSECTOR(FY67-83) AGRICULTURAL Number of Total Amount Subsector Projects of Lending Z Treecrops 8 172.40 55 Rural Development 5 62.80 20 Rice 2 32.70 11 Livestock 2 27.70 9 Forestry 1 17.00 5 18 312.60 100 =~~ - 3. The major emphasis of agricultural lending in Cameroon has been for treecrop development (oil palm, rubber and cocoa, in particular). Many proj- ects, including those for rice development, supported estate/enclave type operations. Annex 2 provides details on implementation performance of the 18 agricultural projects supported by the Bank. In general, project performance in agriculture has been mixed. The First Livestock Project (Loan 938) failed to meet its production objectives, and the Second Livestock Project (Credit 1010) faced, until recently, substantial managerial and technical problems. The Cocoa Project (Loan 1039) was essentially completed at double the cost, but the targeted increase in yields was not achieved to any significant degree. 3 / Under the other treecrop development projects, physical targets were generally achieved (or were somewhat lower than estimated at appraisal) but with substantial cost overruns, while output, in most cases, was less than expected. However, many of the implementing agencies faced serious financial problems. The Bank and the Government are now jointly involved in a consolidation effort in the treecrop sector. 4 / After initial organiza- tional problems, the Western High]ands Project (Credit 784) is now achieving its objectives. Project execution under the Zapi Integrated Rural Develop- ment Project (Loan 776) has been poor, but a series of remedial measures have recently been identified. The Northern Province Rural Development Project, 2/ Transport lending (13 projects) over the same period amounted to 44X of total commitments. 3/ An audit of this project is currently under preparation. See PPAR, Cameroon Cocoa Project (Loan 1039-CM), OED Report under preparation. 4/ For SOCAPALMand CAMIDEV this is being done under the Oil Palm and Rubber Consolidation Project (Loan 2160). See also Staff Appraisal Report (SAR) No. 3713-CM dated May 5, 1982. The Niete Rubber Estate, supported under the HEVECAM I (Credit 574) and HEVECAM II Projects (Loan 1971/Credit 975) will be completed under a third project, recently appraised.  - 3 - (Loan 1919/Credit 1075), basically a cotton-based rural development project, is performing quite well.5/ In the meantime, the Bank's program for agri- cultural development has been reoriented towards consolidation of treecrop development and support for smallholder farming development. Four projects in support of this strategy have recently been appraised: Second Western Province Rural Development Project, 6 / Second Rural Development Fund Proj- ect,7 / Third Rubber Project 8 / and an Agricultural Research Project. 9/ Economic Development and Setting 10/ 4. The Republic of Cameroon is located on the Gulf of Guinea in Central Africa. It extends northward to the shores of Lake Chad and is bounded by Nigeria to the west, Chad and the Central African Republic to the East and Equatorial Guinea, Gabon and Congo to the south. Covering 475,000 km2 , the country embraces a wide range of climatic conditions, from Sahelian in the extreme north to tropical rain forest in the south, permitting a well- diversified agricultural sector and near self-sufficiency in food production. 5. Cameroon has a population of 9.1 million. Population growth (cur- rently 2.7%) is expected to accelerate, and Cameroon's population is estimated to reach 12 million by the end of the decade. Cameroon is becoming increasingly urban; at present about 3 million Cameroonians live in cities, with the heaviest concentration in Douala, the major port and industrial center, and Yaounde, the capital. If present trends continue, about 9 million Cameroonians will live in cities by the year 2,000. The challenge of job creation under these circumstances is enormous. Steady development of agriculture, from that point of view alone, is vital to absorb at least part of the incremental labor force. 5/ This seems to confirm earlier OED findings that cotton-based rural development has generally been successful in Western Africa. See PPAR, Ivory Coast Cotton Areas Rural Development Project (Loan 1077), OED Report No. 4568 dated June 20, 1983 and PPAR Togo Rural Development Project in Cotton Areas (Credit 741-TO), OED Report under preparation. 6/ Extension of development initiated under the first project, with parti- cular emphasis on improved farmers' cooperative organization and training, reaching a major part of the provincial population. 7/ To extend Government's efforts in strengthening institutions and imple- menting priority small-scale projects. 8/ Phase three of the Niete Rubber Plantation. 9/ Improving scope and application of national agricultural research through institution building, with particular emphasis on training, organization, evaluation and the building of pre-extension linkages to regional research and development. 10/ See SAR, Oil Palm and Rubber Consolidation Project, Report No. 3713-CM dated May 5, 1982 and President's Report for the Third Douala Port Project, Report No. P-3483-CM dated March 10, 1983. l  -4- 6. The last two decades have seen an era of sustained economic growth. Growth was slow in the sixties, at 3.7X, but accelerated to 6.3Z in the seventies and 8% in the early eighties. Per capita income rose between 1966 and 1980 at an annual rate of about 3.1%, and was estimated at US$880 in 1982. Economic growth has been based on the gradual easing of absorptive capacity constraints, increases in domestic savings and more recently the exploitation of oil resources. The balance of payments has not posed any particular problem; small current account deficits were easily offset by capital flows. Nevertheless, the debt service ratio remained low. 7. Oil production is having a significant impact on the Cameroonian economy. Historically, Cameroon has been dependent on the export of agricul- tural products for the bulk (72% in 1978) of its export earnings. Cocoa and coffee alone accounted for 53% of 1978 exports. However, oil exports, which represented about 1% of total exports in 1978, had risen to an estimated 63% in 1982, with agricultural products dropping to about 28Z percent. Exports of oil have continued to rise in 1983, further reducing the proportional importance of agricultural exports. The structure of output is also changing, with agricultural production falling from 32% to 26% and oil pro- duction rising from less than 0.5% to over 11% of GDP between 1978 and 1981. Agricultural Sector 8. Although its contributions have been falling, tne rural sector still accounts for about a quarter of total exports, a quarter of GDP, and employs about three-quarters of the labor force. Oil development, further- more, is expected to have a limited lifespan. Therefore, Cameroon's diversi- fied agricultural sector still remains the mainstay of its economy. One- third of the country's land area is classified as agricultural; however, the area actually under tillage is estimated to be about 2 million ha, or only 16% of the agricultural area. Smallholder farming predominates with about a million farm families contributing 93% of total agricultural production, while plantation agriculture makes up the remaining 7%. Despite these ratios, more investments have been directed towards state-owned agro- industrial corporations than towards smallholder development. 9. Overall, progress in raising smallholder productivity nas been slow, basically because of lack of extension services, weak institutions, inr- adequate research, generally bad road infrastructure and poor supply and marketing arrangements. There is also considerable concern about the accelerating rate of migration from rural areas to the towns, especially among the young, leading to rising urban unemployment and increasing labor shortages in the agricultural sector. Government places high priority on self-sufficiency in foodcrops. Thus, to meet growing urban demand, agricul- tural productivity will have to increase substantially.  -5- II. PROJECT SUMMARY Preceding Project 1L/ 10. Appraised in 1971, the SEMRY Rice Project (Credit 302-CM) was to improve rice cultivation on about 4,300 ha in northern Cameroon through the introduction of pump irrigation. This would increase yields and permit double-cropping, thus raising the incomes of some 2,800 farm families and reducing the country's dependence on rice imports. Because of good manage- ment, strong Government support at the national and local levels and the responsiveness of farmers, the project has achieved much better results than expected at appraisal. 11. The project was implemented with only minor delays, and no serious problems have arisen. Within the original contract price for the main civil works, it was possible not only to construct the primary and secondary net- works serving about 4,500 ha (against 4,300 ha estimated at appraisal) but also part of the network serving an additional polder of about 800 ha. On- farm development works, covering the entire project area of 5,300 ha instead of only 3,000 ha as foreseen at appraisal, were carried out by SENRY on force account. The amount of work completed by SEMRYeach dry season was consis- tently greater than appraisal estimates. 12. SEMRY I was implemented with only minor delays and a small cost overrun of 10%. It was one of the few irrigation schemes in Western Africa where double-cropping has been successfully introduced. Because of the expanded area, more land under double-cropping, and higher yields which were made possible by the general acceptance of transplanting over broadcasting, production levels reached double those estimated at appraisal. The rate of return at completion was reestimated at 23% compared with the appraisal esti- mate of 11%. For further details see Annex 3. Project Formulation 13. SEMRY II, situated around Maga, is located 70 km downstream of Yagoua, where SEMRY I is situated (see attached map). SEMRYII differs from SEMRY I not only in that it incorporates a greater number of activities but also because it is based on a different irrigation concept: SEMRY II is a pond gravity irrigation scheme rather than a pumped water one (SEMRY I). 14. During a joint supervision of the first project in October L973, the cofinanciers in principle agreed to a Government proposal for an exten- sion of the project. FAC financed the cost of the technical studies. The Ministry of Planning prepared the feasibility study on the basis of the tech- nical studies done by consultants. Throughout the preparation of the project, serious reservations were raised. As a result, FAC fin'-ced a rice 11/ Adapted from PPAR, Cameroon SEMRY Rice Project (Credit 302-CM), OED Report No. 2054 dated May 12, 1978. See also extract in Annex 3.  - 6 - marketing study, and the consultants prepared alternative development pro- posals, subsequently rejected as uneconomic during a preparation review in late 1975. However, the size and cost of the original proposal (basically the development of 7,000 ha) still caused serious concern, and further preparatory work was suggested on dike design and construction methods, live- stock and fisheries potential and rainfed cropping possibilities; the possi- bility of implementing the project in phases was also to be considered. Thus, while the original feasibility study was ready in early 1975, most of that year was spent developing alternative scenarios, and most of 1976 in reviewing the original project design. In the meantime, Government insisted that the project was ready for appraisal, and repeatedly requested the Bank to give early consideration to financing this important development project. However, the co-lenders maintained that the project was not yet ready. A pre-appraisal mission, in conjunction with the final supervision and comple- tion mission for SEMRY I, visited Cameroon in January/February 1977. That mission concluded that the redesign had resulted in cost savings, while the rice marketing situation, although still an issue, was considered less criti- cal than initially thought. 15. In the meantime, work continued on the pre-selection of contractors and the preparation of bidding documents. After further consultations with the Government, the Bank now accelerated processing of the project to allow construction to start during the next dry season (November 1977-June 1978). The project was appraised in May/June 1977. Negotiations took place in Washington from November 1-4, 1977. In the meantime, tenders for the main civil works contracts and heavy earth moving equipment had been issued. Bids were opened in September, evaluated in October and approved by the Bank in November, 1977. Contracts for the main civil works and the force account equipment were signed in December. Retroactive financing of the mobilization fee for the civil works contract (US$1.1 million), the downr-payment on the equipment contract (US$400,000), and engineering consultancy services (US$100,000) were included under the project. 16. As the Logone River forms the border with Chad, Cameroon informed Chad in 1975 of its intention to carry out the project, in accordance with the existing Logone Water Agreement between the two countries. In January 1976, both countries signed a document in which Chad gave its agreement, in principle, to the execution of the proposed project, and this agreement was confirmed in June 1977. 17. The Board approved the project on January 19, 1978 after having discussed settlement policies, the cost of expatriate technical assistance, Cameroonization, and procedures regarding retroactive financing and bid award. The Loan and Credit Agreements were signed on February 1, 1978, and the project was declared effective on April 14, 1978. 18. The project, as approved, would lead to the production of rice and other crops on 15,000 ha, which would be protected from flooding by the Logone River through the construction of two dikes. Of the 15,000 ha, 7,000 ha would be irrigated by gravity permitt½- two rice crops per year, and 8,000 ha would be under traditional rpiufed cultivation. Irrigation water would be provided by a reservoir covering a maximum of 38,000 ha. The  - 7 - reservoir would offer potential for fishery development, and its fringes would provide pasture land throughout the dry season. The project would be carried out over a six-year period (1977/78-1982/83) and would consist of (see also Annex 4): (a) constructing two dikes, totaling 48 km, with a main intake struc- ture, feeder canal, regulators, and drainage outfall; (b) constructing an irrigation and drainage system, including onr-farm works, and feeder roads serving an area of 7,000 ha; (c) constructing access roads linking, in particular, the main locali- ties in the project area, viz. Tekele, Pouss, Maga and Guirvidig, totaling 50 km; (d) constructing a headquarters and services complex, including staff housing, garages, warehouses, a rice mill, storage facilities and an airstrip; (e) providing heavy earth-moving and, agricultural equipment, and vehicles; Cf) staffing and equipping the project authority, training local staff, and conducting applied research and studies; (g) providing 7,000 participating farm families, half of whom would be resettled, with support services including credit; and Ch) providing a health program for the project area. Project Implementation and Impact 19. Due to effective management during the project design phase, the project got off to a quick start. Despite minor delays, project implementa- tion has generally proceeded on schedule until 1981. Quality of project execution was good; management was efficient and dealt adequately with prob- lems that developed. Full details on project implementation are very well presented in Chapter IV of the PCR and are, therefore, not repeated in the PPAM. 20. The 27 km-long reservoir embankment dike, however, experienced major erosion and seepage problems. Initially, it was thought that the erosion problem could only be resolved through stone facing of the reservoir side slope at an additional cost estimated at US$15-20 million. However, at Bank insistence, further study and trials were undertaken, and a far less costly solution was found and implemented consisting of changing the gradient of the reservoir side slope of the dike from 4:1 to 10:1 and providing a vegetative cover. This work was done by SEMRY on force account (PPAM, paras. 31-36 and PCR, paras. 4.22-4.29). 21. About 3,500 ha were developed in the first three years, more or less in the order planned, but a growing imbalance developed between land availability and land use as Table 3 shows.  Table 3: LAND USE AND LAND AVAILABILITY (ha) 1979/80 1980/81 1981/82 rainy dry rainy dry rainy season season season season season Area Developed 856 856 2,390 2,390 3,433 Area Distributed 692 692 2,070 2,070 3,122 Area Planted 692 353 1,561 1,033 1,886 This was mainly due to the fact that land allocation per family was lower than expected at appraisal, and that spontaneous migration did not take place to the extent expected (PCR, paras. 4.15-4.18). Initially, SEMRY's settle ment activities related only to relocating people affected by the project works; this program was well executed (PCR, paras. 4.30-4.32). Faced with this imbalance, the Bank suggested that further land development be halted until the area already developed was more fully utilized. SEMRYincreased its organized settlement efforts in 1981 and 1982, involving about 3,000 individuals, and by end 1982 all developed lots had been assigned. 1 2 ! 22. However, by that time, while consolidation had successfully resulted in full occupancy of the developed area and dike rehabilitation was well underway, project funding had been depleted because of additional costs for dike repairs and losses related to exchange rate fluctuations. It was estimated at that time that about US$15 million would be required to complete project development to the envisaged 7,000 ha. A mid-term review had been undertaken by outside consultants in 1981 to review the project and to assess the pros and cons of further development. Based upon this and other studies, the Bank concluded that completing rhe project as originally proposed would be more economic than limiting development to 3,500 ha (PCR, paras. 4.48- 4.50). Nevertheless, despite strong Government pressure that the Bank cow- tinue participating in the SEMRYventure in which, after all, it had been a partner for a decade, the Bank declined to do so (PPAM, para. 38). The proj- ect is, however, now being completed with Government financing. By June 1983, 840 ha had been prepared, and it is expected that around 1,200 ha will be developed both in 1984 and 1985. This implies a project completion delay of about 2-3 years. At completion, costs will likely amount to around US$75.0 million compared to the appraisal estimate of US$55.5 million, a cost overrun of 35%. 23. In the meantime, the cofinanciers continue to actively support SEMRY; FAC continues to provide technical assistance, and a consolidation 12/ Planted area rose to 2,055 ha in the 1981/82 dry season, 2,450 ha in the 1982/83 rainy season and 3,000 ha in the 1982/83 dry season.  -9- project has been approved by CCCE. 1 3 / 14/ This program would finance works and land rehabilitation,new storage, paddy collection and maintenance equip- ment, and agricultural research for SEMRY I; and completion of dike repair, population transfer, and some paddy collection equipment for SEMRY II. Completely in parallel, SEMRY III is being financed with support from the European Development Fund (EDF). This project supports irrigated rice development in small perimeters.l 5/ A first phase involving 600 ha in various small perimeters situated around Kousseri, has been completed. An interim phase is presently underway to evaluate results and prepare a second phase. Such a second phase might bring total area in small perimeters to 2,000 ha. In addition, with financing from the Cameroonian budget, a 600 ha bottomland is being improved (SEMRY IV). Although it is recognized that improved bottomland development will never result in water control similar to that in irrigation schemes, it is a trial wbich, if successful, could be replicated in many other bottomlands. 24. Major emphasis under SEMRY II was on construction of works and land development, but other related components were also efficiently executed by SEMRY. Rice mill and bulk storage facilities were constructed (PCR, para. 4.21) and an electric power plant established.(PCR, para. 4.20). A substanr- tial health program has been executed, with favorable results (PCR, para. 4.43). Applied research on irrigated crops has continued under SEMRY II. This has resulted in new varieties being introduced. Recent research has concentrated on improving cultivation methods including mechanization of har- vesting and threshing and bulk transport of paddy (PCR, paras. 4.38-4.39). In addition, applied research and other support in the fields of fisheries, livestock and forestry was also provided. At appraisal, it was also envisaged that 8,000 ha would be developed for rainfed crop cultivation. This component has received less attention, although SEMRY did provide land preparation services to settlers for their annual dry land cultivation. About 1,000 ha have been ploughed by SEMRY over the years. Aerial over- flights indicate that substantial cultivation takes place in the area pro- tected by the dikes, but exactly how much cultivation exists there is not known. 25. Technically, the project has been a great success. As discussed in the PPAR of the first project, 1 6 / transplanting was successfully intro- duced. With the spread of new varieties, yields are now expected to be 13/ Effectiveness of this program was made conditional upon rice marketing and SEMRY's financial situation being improved. 14/ Earlier, and in addition to its cofinancing of the SEMRY II Project, CCCE had financed a parallel project involving support components in project evaluation, agricultural research, livestock and fisheries development. 15/ Irrigation under this project is provided through pumping. 16/ PPAR, OED Report No. 2054 (05/12/78) op. cit. paras. 1.07-1.12.  - 10 - higher than those estimated at appraisal. 1 7/ At full development, paddy production under SEMRY II would reach about 53,000 tons compared to 47,000 tons estimated at appraisal. Fishing the lake has produced substantial addi- tional benefits. Although recognized at appraisal, such benefits had not been quantified at that stage. The reestimated rate of return for the proj- ect is 20Z, including fishing benefits. For irrigated rice development alone, the rate of return has been reestimated at 16%, close to the 15% appraisal estimate; higher costs having been offset by higher yields. The number of farming families directly benefiting from the project's irrigated rice development program is expected to be slightly higher than estimated at appraisal (see basic data sheet). Although not quantifi3d, the multiplier effects of the project are likely to be substantial. There is a notable improvement in the welfare of the resource-poor northern region of the country, a major project objective, as evidenced by increased mobility resulting from the project road system, new commercial centers and activi- ties, increased incomes, and superior social amenities, among others (PCR, paras. 6.01-6.03). Project Administration 26. The project was efficiently managed by SEMRY, the organization set up to implement the first project. SEMRYitself has delegated responsibility for project execution to the field level. Its organization now basically consists of three field management units, in Yagoua, Maga, and Kousseri, sup- ported by a headquarters staff, presently still located in Yagoua. Improve- ments in the organizational structure and administrative procedures continue to be made. While management and administration are excellent, Camerooniza- tion has been much slower than expected, and SEMRY's financial situation gives rise to concern (PCR, paras. 4.45-4.47 and 7.01-7.02). 27. Over the period 1977/78 to 1981/82, SEMRY accumulated losses of more than one billion CFAF1 8 / (at present exchange rates equivalent to about US$3.5 million). The prospects for 1982/83 and 1983/84 are not much better. While there are indications, as can be seen from Table 4 below, that SEMRY I has become profitable and that SEMRY II might become profitable in the near future, it is unlikely that SEMRYIII will ever become profitable. 17/ Appraisal estimates were 4 tons per ha in the rainy season and 4.7 tons in the dry season at full development. The PCR has reestimated these yields at 4.5 and 5.5 tons, respectively. Recent SEMRY documents indicate that even higher yields are possible, namely 5.5 tons in the rainy season and 6 tons in the dry season. However, it is uncertain whether such yield levels can be sustained over the assumed 35-year life of the project. In fact, so far, SEMRYhas been lucky that it has not faced any major problems with rice parasites or diseases. 18/ 1977/78 CFAF 173 million, 1978/79 CFAF 96 million, 1979/80 CFAF 247 million; 1980/81 CFAF 125 million, and 1981/82 CFAF 444 million.  - 11 - Table 4: SEMRY FINANCIAL PROFITS/LOSSES BY SUB-PROJECT (CFAF million) Year SENRY I SEMRY II SEMRY III Total 1981/82/a -107 -266 - 71 -444 1982/837-7 + 68 -209 - 51 -192 1983/84/b +214 - 23 -445 -254 /a Actual figures. 7b Budget figures. 28. Remedial measures are being pursued by SEMRYand the Government to rectify this situation. It is important that these efforts continue, not only through the transfer of additional financial resources but also through increased internal cash generation in SENRY by increasing efficiency. After all, a major project objective was that SENRY would become a self-sustaining, financially viable organization. 29. Cameroonization has not advanced as much as expected at appraisal, but targets were probably over-optimistic. However, some further remarks have to be made in this respect. Cameroonization has kept pace with SEMRY's growth. Furthermore, SEMRY has expanded in other fields, such as fisheries, livestock, etc., for which additional expertise has been recruited. SEMRY has also continued to improve its management control and administrative pro- cedures; the introduction of computerized accounting required additional expertise. Furthermore, expatriate assistance is heavily concentrated on the physical implementation of the project works. SEMRY I investments have been completed, and expatriates are no longer involved in the management of this project. Thus, once the investment phase of SEMRY II is completed, progress in Cameroonization of that field unit can be expected. Nevertheless, the audit agrees with the PCR (para. 7.02) that premature management appointments need to be avoided. Cameroonizationremains a major concern of SEKRY manage- ment and is vigorously being pursued. However, the efficiency of the organization should remain the overriding concern, and from that perspective it is likely that SEMRY will continue to need, albeit hopefully on a dimi- nishing basis, further expatriate assistance. 30. Institutional development and improvements to date have, in the audit's view, been good. It is in this field, however, that SEMRY faces sub- stantial challenges in the future tPPAM, paras. 48-55).  - 12 - III. MAIN ISSUES A. Dike Repairs 31. The history of the dike repairs is analyzed and described in detail in the PCR (paras. 4.22-4.29). In summary, the situation was as follows: as soon as the dike was constructed and the reservoir filled (during the 1979 rainy season), two serious problems were discovered which, if not properly handled, could have greatly endangered the resistance of the dike seepage and erosion of the upstream slope of the dike due to the effects of wave wash. While erosion seemed to be the more serious problem, as it is easier to see, in fact, seepage was the major danger for dike safety. This was recognized by all the engineers involved. Substantial input by Bank staff, supervising engineers, SEMRY and contractor staff, and representatives of the cofinanciers was devoted to finding solutions for these two problems. While the seepage problem was relatively easy to bring under control, there were substantial differences of opinion regarding a solution to the erosion problem, causing delay in implementation of the corrective measures. 32. Seepage was contained by emergency action undertaken by SEMRY and contractor forces. Major repairs, following draw-down of the reservoir, con- sisted of recompacting the upstream face of the dike. As constructed, the dike had a slope on the inland side of 2:1 and on the reservoir side of 4:1. The initially proposed solution to the erosion problem was to place a rock riprap on the upstream face of the dike. This solution was favored by the engineers because it would also substantially reduce annual maintenance re- quired from SEMRY thereafter. The Bank, however, was opposed to this solu- tion, mainly because of its high cost (at that time estimated at about US$15-20 million), but also because of certain technical aspects: first, high-cost works like riprap do not eliminate all maintenance; second, failure of riprap is possible if not well constructed; and third, installation of the proposed riprap protection would seriously interfere with the monitoring and detection of potential seepage and greatly increase cost of seepage correc- tion. The Bank suggested instead that economical means of minimizing wave erosion for the upstream dike face should be explored, the objective being to select a method or combination of methods which would minimize annual main- tenance costs, provide for adri.uate protection and dike safety, and require minimum capital investment costs. Alternative, lower cost protection methods, using vegetative cover, sand beaches and possibly soil cement mixtures, should, therefore, be investigated and tested on-site. One alter- native, a 10:1 dike slope on the upstream site with vegetative cover, was tested and proven to be very successful. While 14 km of dike was damaged by erosion after the rainy season in 1980,19/ the 200 m trial stretch remained 19/ As in 1979, 14 km was again eroded in 1980 but damage was greater in 1980 because the water level attained in the reservoir was higher than in 1979.  - 13 - undamaged.20/ After further debate, and much prodding by the Bank, it was finally decided in late 1980 to adopt this solution. Works were executed by SEMRY on force account. Tenders were prepared in late 1980 for the necessary equipment. In the meantime, the trial stretch would be extended to 1 km in 1981. Works were executed over the two-year period starting from December 1981. No serious problems have occurred since. 33. Thus, the problems were identified and effective remedies found and implemented, but all of the causes of these problems were never officially established. In any case, that would have required an independent investigation by a board of engineers. In the audit's view, emphasis was rightly placed on problem-solving rather than investigating. Nevertheless, during supervision, certain facts presented themselves which shed some light on the causes of these problems. 34. Factors responsible for seepage may include: quality of fill material, moisture content of the fill, compaction methods, and construction sequence, all highly technical matters subject to day-to-day decision-making at the site. (Additional information on this subject is provided by consulting engineers in Attachment 1, page 13.) Supervising engineers had earlier indicated that they would have preferred to complete the dike embankment as an integral unit across the natural Mayo-Vrik drain prior to construction of the concrete outlet there. However, to save overall construction time, the outlet structure was built first, and the embankment was constructed on both sides of the structure. This made it more difficult to properly compact the embankment. In fact, all but one of the seepage leaks in 1979 occurred in the vicinity of the Mayo-Vrik outlet.21/ 35. Regarding the problem of erosion, in retrospect, questions can be raised about the adequacy of the original design. Substantial changes were made in engineering design during preparation to reduce costs (PPAM, para. 14). Nevertheless, the design finally adopted included, as the supervising engineers had advised, a vegetative cover for the entire embankment, but this was never executed because it could not be completed prior to the first filling of the reservoir. 20/ Similarly, after the 1981 rainy season, the 1 km trial stretch was undamaged while 16 km of dike was heavily damaged by erosion, even though the slope was already partially changed (6:1). 21/ Again, in 1980, seepage occurred in the central, deeper portion of the reservoir on both sides of the outlet works at Mayo-Vrik, over a length of about 800 m. However, the number of leaks was reduced to 17 instead of 21, and they were easily controlled by the special site crew. More importantly, the leaks appeared after the reservoir level exceeded the 1979 watermark, which indicated that a kind of stability of the lower earth layer was achieved. In 1981, only one instance of seepage was reported.  - 14 - 36. Thus, in summary, the major reasons for these dike problems appear to have been design changes, in order to achieve cost savings, and time pres- sures, caused by a tight construction schedule. This experience is recorded here not so much to retrospectively assess errors, but because it might be helpful for the design of similar earthen dikes elsewhere (see also PCR, paras. 4.22-4.29). B. Bank and Borrower Performance 37. As indicated above, substantive Bank involvement resulted in the satisfactory solution of technical problems encountered during project imple- mentation. In the audit's view, Bank performance was very good throughout the project cycle. The Bank was closely involved in the preparation of the project; at that stage, major emphasis was placed on designing a cost- effective project. This caused some delays, and, in retrospect, dike design changes introduced at that stage might have contributed to the dike erosion problems. Technical supervision was also very good. While controversies regarding the correct remedial measures arose, ultimately they were satisfac- torily resolved. 38. More debatable is why the Bank decided not to continte its support for the completion of this project. Basically, the Bank used the lender of last resort reasoning for its decision. Since Government and bilateral resources were available, no further Bank lending to complete the project was judged necessary. Furthermore, at that time, the Bank was faced not only with consolidating its rice investments, but also with substantial consoli- dating of its investments in the treecrop sector. In the face of resource constraints and competing demands it decided to concentrate on the treecrop sector. The Oil Palm and Rubber/Consolidation Project (Loan 2160-CM for US$50.8 million) was approved on May 27, 1982.22/ However, by discontinuing its involvement in SEMRY, the Bank has undoubtedly lost an opportunity for a continued dialogue with regard to future institutional development of SEMRY. Both institutional development of SEMRY and marketing of rice in Cameroon are essential to sustain the development momentum of the First and Second SEMRY Rice Projects. The Bank has better opprotunities to continue its dialogue on rice marketing. First, the Bank is reviewing project proposals for an agri- cultural development project in the Littoral province which would involve rice production and therefore require resolving rice marketing issues. Secondly, the Bank has been asked to assist the Ministry of Agriculture in the preparation of terms of reference for a food strategy study. 39. A major explanatory factor for the good technical supervision effort by the Bank was continuity. In fact, the same senior irrigation engineer participated in all supervision missions; earlier he had been inr volved in the preparation efforts. Although he did not actually participate in the appraisal mission, there was overlap during the first supervision: both the senior irrigation engineer and the appraisal irrigation engineer 22/ See SAR, Oil Palm and Rubber Consolidation Project, Report No. 3713-CM dated May 5, 1982.  - 15 - participated in that mission. Bank management and senior advisors also sup- ported the supervision effort at crucial times. Both the projects division chief and the OPS irrigation advisor participated in supervision at the cru- cial point when decisions needed to be made regarding solutions to the dike erosion problem. Contact with the cofinanciers was maintained throughout supervision. Representatives of FAC and CCCE participated throughout. Hov2ver, the emphasis on technical excellence and continuity reduced avail- dbility of other expertise during supervision. An agronomist participated only in two supervision missions; similarly, an economist also only partici- pated twice; and a financial analyst participated only once in a supervision mission. As a result, institutional development and financial questions received limited attention. However, that did not pose any particular prob- lems, given the fact that SENRY had this reasonably well under control. Rice marketing was discussed during each supervision, but no specific expertise in this field was ever included. In retrospect, and given the substantial prob- lems that SEMRY faces in this field, a much more in-depth look at marketing aspects during supervision might well have had beneficial effects. Forming an adequate mix of expertise for supervisions, and at the same time achieving some staff continuity throughout project supervision, remain a challenge in Bank operational work. 40. As indicated in the PCR (para. 8.01), Borrower performance has also been very good: SEMRY's implementation of the project was outstanding, all loan covenants were adhered to, and Government fully supported the project. The only notable weakness was in the overall assessment of the rice subsec- tor in Cameroon. Partly for reasons of self-sufficiency, Government supported substantial rice production in the North, while major consumption took place in the South, and this has resulted in substantial rice marketing problems. In fact, there has always been a dichotomy between export and self-sufficiency objectives in relation to these rice production projects (PPAM, paras. 44-45 and PCR, paras. 10.03-10.06). More in-depth attention to these aspects will continue to be required. C. Rice Marketing 41. Most supervision missions commented on the marketing of rice. These comments can be summarized as follows: - SHEerision L7 8 ). I (05 No specificcomments. - Supervision II (02-03/79). Because of usually large rLce imports, SEMRY I domestic sales have slowed down, and unsold paddy stocks have piled up to 13,000 tons. Strong Government measures were to be taken to expedite SEMRY sales and regulate imports. - Supervision III (11-12/79). Continued slow sales of SEMRY I rice. Despite promises, there has been very little improvement, and stocks of paddy amounted to 8,000 tons. However, at the prevailing milling rate, paddy stocks could reach 16,000 tons by February 1980. The mission made strong representations about this to Government and indicated that if sales were not accelerated and a permanent solution found, the donors might have to re-evaluate con- tinued financing for further land development.  - 16 - - Supervision IV (05-06/80). Sales of SENRY rice following Govern- ment measures, and especially the opening of the Nigeria market, have resumed briskly, and all stocks have been disposed of. Insti- tutional measures to regulate marketing of domestic rice have not yet been taken by Governmeat. The mission insisted on such mea- sures being taken, and also recommended that a review be made of paddy prices paid to farmers and ex-mill prices allowed to SEMRY which, despite inflation, still remained at the 1977 level. - Supervision V (12/80). In late 1980, Government had decided to increase the paddy price by about 30X and the SENRY white rice price by about 202. - Supervision VI (09/81). A substantial analysis of prices and rice marketing was made in this supervision report. From that analysis it was clear that, since average reported prices of imported rice had substantially declined, SEMRY rice was no longer competitive in the Douala and Yaounde markets; however, it remained competitive in the other markets. The mission recommended a revision of paddy and rice prices to allow for differentation related to quality. - cSupervision VII (03/82). No specific references in the report but the mission recommended that a price study be undertaken2_Y/to support the introduction of price changes as recommended by the preceding supervision mission.2 4/ 42. Rice marketing problems have been a regular occurrence. As reported in the PPAR of the First SEMRY Rice Project, SENKY rice experienced no marketing problems, despite great distances from centers of consumption and the resulting high shipping costs (except in 1976 when low-priced rice imports forced SEMRY to suspend milling and sales for several months).25/ As a result of this experience, Government introduced the system of jumelage- under which traders have to buy certain amounts of local rice in order to obtain import licenses. 26 1 Problems occurred again in 1979 as a result of massive imports of Asiatic rice in 1978. Sales slowed down and stocks built up. By mid-1980, stocks had again been disposed of, mainly as a result of brisk trade with Nigeria (PCR, para. 5.01). From 1980 through 1982, no problems were encountered with rice marketing, but chaotic marketing problems occurred again in 1982 and 1983 (PCR, paras. 5.01-5.04). Sales dropped dramatically, and there was a build-up of stock. As of September 1983, SEMRY reported its stocks (from all SEMRY projects) to be rice: 11,000 23/ SEMRY subsequently completed this study in June 1982. 24/ Paddy and rice prices are given in Table 3. 25/ PPAR, OED Report No. 2054 (05/12/78) op. cit. para. 7.3. 26/ However, this system has not worked perfectly. In fact, as of Septem- ber 20, 1983, SEMRY reported that from two recent quota amounting to 17,900 tons, traders had taken devliery of only 9,800 tons.  - 17 - tons, and paddy: 25,000 tons. It is clear that such levels caused all sorts of technical, stock management, and qualty problems; tied up substantial amounts of capital; required substantial additional interest payments on stock financing; and resulted in substantial financial losses for the enter- prise. At the end of 1983, Government decided to introduce a temporary sub- sidy of CFAF 25 for each kg of rice sold ex-SENRY to facilitate the disposal of these stocks. In addition, it has requested SEMRYitself to become more active in the marketing of rice and not to depend solely on traders. This might result in a specific SEMRYmarketing presence in Yaounde and Douala, but the precise details of these arrangements are still under study. A his- torical review of the marketing conditions seems to indicate that each time the rice marketing problem became more serious and more costly to resolve. This is reason for serious concern. 43. The problem, to a certain extent, relates to the order of magnitude of rice production by SEMRY. As Table 5 below shows, marketable rice pro- duced by SEMRYcould easily, in a few years, reach about 65,000 tons. While these calculations are based on a rate of land intensity which might well be too optimistic, on the other hand, yields are lower than those used in the most recent SEMRYprojections (see charts in Annex 5). Table 5: (1987/88) SEMRYRICE PRODUCTIONAT FULL DEVELOPMENT Wet Season Dry Season Total Cropped Area (ha) /a SEMRYI 4,900 3,100 8,000 SEMRYII 6,300 6,300 12,600 SEHRf III 1,?75 1,305 2,680 12,575 10,705 (8,560)/b 23,280 Yields (ton/ha) 4.5 5.5 Paddy Production (tons) 56,600 58,900 (47,100) Home Requirements/c (tons) 11,320 11780 9,420) _ Paddy to be milled (tons) 45,280 47,120 (37,680) Milled rice for sale/d (tons) 31,470 32,750 (26,190) 64,220 (57,660) /a From Table 1. 7i? Parentheses - assuming 100% land utilisation, rather than 200X on SEMRY II. /c Assumed at 20X for seed requirements and home consumption. /d As per appraisal milling ratio of 69.5%.  - 18 - 44. Production of 65,000 tons of rice has to be placed in perspective by comparison with consumption figures. Rice consumption in Cameroon was estimated in 1980 at 60,000 tons, mostly concentrated in the Southern zone and especially in Douala and Yaounde. Rice consumption has risen rapidly from an estimated 15,000 tons in 1970, and is expected to continue to rise rapidly to a level of 200,000 tons in the year 2,000. While the absolute level of these projections might only be estimates, the trend is quite clear. Thus, at full development of SENRY rice production, Caneroonian con- sumptlon could be around 90,000 tons, a level in line with estimates made at appraisal. 27 / This shows, however, that in relation to domestic consump- tion, SEMRY is a predominant producer; even with consumption growth over time it will always be a large producer. Furthermore, it is also clear that a regional imbalance within Cameroon exists between the North and South in rice production and consumption. In addition, given the high costs and difficul- ties in transporting rice to Southern Cameroon, and given the often low prices on international markets sometimes caused by dumping or other promo- tional trade activities, SEMRY-produced rice is not always competitive in the South with imported rice.2 8 / 45. These facts were recognized at preparation and appraisal. It was envisaged at that time that rice production in Northern Cameroon would mainly serve consumption in that area and neighboring countries, while the Southsern market would be served by production from that region and imports. However, no detailed marketing investigation was made of the potential in the Nigerian market, neither was SEMRY equipped for export promotion. Furthermore, there ha* always remained somewhat of a contradiction between the -export orienta- tion of the project and the self-sufficiency- orientation of the Govern- ment's rice development policy. This contradiction has not yet been satis- factorily resolved. Furthermore, when problems arose in the marketing oi SEMRY rice, solutions were often found through absorption in the domestic market. As a production organization, SEMRY itself has not yet been given the necessary flexibility to engage directly in trading, which requires specialized expertise and a fine knowledge of markets. 46. Given past experience, there is, at this stage, no reason to believe that marketing problems will not recur, and if solutions similar to those used to resolve past crises will be required again, it is doubtful that SEMRY will ever be financially self-sustainable. Under these circumstances, rice marketing requires much more attention. In the audit's view, the following could be done immediately to contribute to a better understanding of this issue: (i) more detailed and regional-specific studies of rice supply and demand; 27/ Although at that time total SEMRY production of marketable rice was estimated to be lower at around 53,000 tons. 28/ By the same token, imported rice is hardly competitive in northern Cameroon.  - 19 - (ii) more detailed investigationsof the workings of national and regional rice trading; (iii) more detailed assessment of long-term export prospects in neigh- boring countries; and (iv) SEMRY should be allowed more flexibility 2 9/ in the field of rice trading. 47. In view of the uncertainties in the field of rice marketing, and taking into account SEMRY's already large share in rice production and the regional imbalance between production and consumption, further expansion of rice production, especially in the North, does not seem warranted at this stage. D. Prospects for Further Development 48. There is no doubt that this project has been successful so far. SEMRYhas now been in the rice development business for a decade, and its performanceduring that periodgives hope for a bright future. Nevertheless, these costly investmentshave long post-investment phases.30 / It is there- fore importantto analyze present success to determinefactors criticalin sustainingsuccess. 49. Technically, the project has been extremely successful (PPAM, para. 25). Yield levels have been much higher than originally expected, high levels of land utilization have been reached, and advanced cultivation tech- niques have been introduced and adopted. Technical problems, be they related to dike repair or land consolidation/settlement, have been effectively resolved. SEMRY continues to pursue technicalinvestigations and applied research. Continued technical excellence is, therefore, easily within reach. However, project successis not only measuredat the technical level; many factors interact with technical aspects to ensure overall success. Among the more important ones, in the audit's view, in this case are: (i) outputmarketing; and (ii) farmerparticipation; (iii) efficiency. institutional 50. Marketingproblemsencounteredso far have been illustratedabove (PPAM, paras. 41-47). This is a seriousissue. After all, it does not make much sense to produce something which cannot be sold at a remunerative price. Past performance in this field is not completely reassuring, and more active attention to this in needed, both at Government level and by SEMRY. Changes in world market prices, different from those used in the reestimated 291 For example, in price setting, discounting possibilities, the option to deal with markets directly itself rather than through traders, etc. 30/ Rate of return calculations use a 35-year project life.  - 20 - rate of return calculations, will also affect project performance. Fluctuations, however, will have to be very drastic before they will affect the long-term economic viability of the project (see PCR, para. 6.02; a 3CZ drop in the price of milled rice would lower the rate of return by 4 percent- age points). In the short term, however, price fluctuations h2ve immediate effects on the competitiveness of the rice produced by SEMRY. SEMRY, there- fore, needs the flexibility to respond to those changes. While world market price developments are beyond the control of SEHRY, marketing of its output is not; neither is cost-efficiency in production. In these two areas, improvements are required if the project is going to continue being success- ful. 51. Farmer participation has already been discussed in the PPAR of the first project. 3 L/ Most farmers participating in the project are settlers, who have come to the project either spontaneously or through organized efforts by SENRY. Many of them are relatively young, and this could affect the future of the settlement one way or another: will many of them, move to other areas after they'have earned some money, or will they stay and fos- ter continued expansion in the project area? These are interesting questions for which answers cannot easily be found, based on the relatively short his- tory of the development. 32/ SEMRY has been following settlement aspects closely, but it might well be worthwhile to make arrangements with available sociological expertise on a more or less permanent basis to continue follow- ing these aspects in detail. Project farmers are required to strictly adhere to the cultivation guidelines laid down by SEMRY; if not, they will be evicted from the perimeter. SENRY provides substantial services including input supply, extension and land preparation. Charges are levied for all these services, including cost recovery for irrigation, and are, at present, equivalent to the value of one ton of paddy per cropped hectare. Thus, SEMRY monitors field development and provides the farmer with all his development needs e-cept labor. In fact, the attitude of SEMRY towards the participating farmers is rather paternalistic, a phenomenon not unfamiliar in settlement projects.33 / Producer organizations have not yet been developed. Higher farmer involvement is being pursued as an objective, but the interpretation of this objective is not uniform. So far, in SEMRY, a more limited immediate objective is being pursued in this field. SEMRY would like farmers to take more immediate responsibility for limited aspects of field development, such 31/ PPAR, OED Report No. 2054 (05/12/78) op. cit. paras. 2.06-2.07, 2.12 and 2.20. 32/ FAC is undertaking an indepth ex-post evaluation of this project (report preparation underway). A sociologist participated in the evaluation mission. 33/ Reportedly, this is also true for the FELDA settlement organization in Malaysia. See for example, PPAR, Malaysia-Jengka Triangle Project I (Loan 533-MA), OED Report No. 2122 dated June 30, 1978; and PPAR, Malaysia-Johore Land Settlement Project (Loan 967-MA), OED Report No. 4221 dated December 13, 1982.  - 21 - as maintenance of tertiary canals and participating in nursery development. On the other hand, SEMRY is seriously considering introducing advanced mechanized harvesting, threshing and collection methods, partly to increase yields even further but also to guarantee that a larger portion of paddy production is captured for milling by SEMRY. 34 / This, in addition to all the other services provided by SEMRY, would make the farner not much more than a share-cropping laborer. Farmer participation should not be pursued as an ideological objective. Benevolent paternalism is not necessarily wrong, but it might be difficult to sustain in the long-term as the project becomes more settled and the pioneer mentality no longer prevails. Aspects of farmer participation will require continuous attention in the future. 52. Institutional Efficiency. So far, SEMRY has proven to be an effi- cient implementing agency. However, now that the implementing phase is coming to an end, it needs to become an organization capable of servicing the perimeters it has developed. There is no doubt that SEMRY can transform itself to that role, but certain aspects require attention. Substantial ex- patriate assistance during implementation has been a major factor in its success. This raises sensitive issues about replacing expatriates without losing the momentum gained. So far, Cameroonizationhas proven to be diffi- cult and certainly slower than expected (PPAM, para. 29). The field unit for SEMRY I has been completely Cameroonized, but it is somewhat difficult to draw definite conclusions from this experience for long-term institutional development, basically because SENRY headquarters, still with substantial expatriate support, is located close by in Yagoua. This, de facto, allows headquarters staff much closer control over SEMRY I and gives SEMRY I staff the opportunity for much more frequent consultation with headquarters. There is no reason why SEMRYheadquarters should remain in Yagoua; in fact, this is recognized by SEKRY senior staff. It would be much more advantageous if it were located closer to where other administrative authorities are located and with more ready access to the capital and commercial centers. A relocation of headquarters (to say Maroua) should be pursued. In the meantime, SEMRY is already in the process of establishing a physical presence in Yaound and Douala for rice marketing purposes. 53. Under the second project, SEMRY has substantially expanded in other activities, such as fisheries, livestock, forestry, etc. To a certain ex- tent, this is a reflection of SEHRY's desire to take care of all aspects of its farmers' development environment: if there is a lack of firewood some- thing should be done about it; if the livestock population increases, its development potential should be explored, etc. So far, SEMRY has undertaken these activities efficiently. However, it should be recognized that it is engaged in activities which are not properly its own; other agencies have responsibility for such activities. Furthermore, will SEMRY be able to conr- tinue supporting such activities after the implementation phase is completed, and should such activities continue to be paid for from its budget? These are difficult questions, and there is a dilemma between speedy and effective, but localized, improvements and slower but more long-term development. 34/ Paddy is also sold outside the perimeter, regarded as the black market by SEMRY, at prices higher than those paid by SEMRY, reportedly mostly for exporting to Nigeria.  - 22 - Basically, the question to be answered is: should SEMRY become a -micro" regional development agency, or should it remain a rice development enter- prise. In the audit's view, there are advantages in limiting SEMRY's role to that of a commercially and financially viable rice production enterprise; other functions presently also undertaken by SEMRY could then be absorbed by other existing national agencies. This rice production enterprise should be self-financing,efficiently managed and should be continuously on the outlook for ways of reducing overhead and other costs. In the end, it should even be possible for Government to dispose of part or all of its share capital in SEMRY to the private sector. 54. While the above are pertinent issues which will require continuous attention, the Bank, having withdrawn from the supplementary financing of SEMRY, has lost some, if not most, of its leverage to play an active role in helping shape the future of SEMRY. This might not be immediately required; on the other hand, decisions in this field will not only determine the future viability of SEMRY, and thus of Bank-supported investments, but also the shape of regional development in the North. The Bank continues to support the Northern Province Rural Development Project (Loan 1919/Credit 1075).35/ Any further assistance to SEMRY could usefully be supported under a second phase of the project. This would have the advantage of integrating SEMRY, even if it remains an enclave type of operation, much more closely within the overall objectives for regional development of the North. 55. In summary, this project has been successful. However, as the PCR rightly points out (PCR para. 10.05), and as is clear from the above discus- sion, the point to address is the future. It would, therefore, be very interesting and illustrative to verify project status at a future date. This is relatively easy given the enclave nature of this irrigation project. The audit, therefore, suggests that an impact evaluation be undertaken of this and the first project around 1990. This could be done jointly with the co- financiers, as has been done in another recently completed impact evalua- tion.3 6! Careful advance preparation and involvement of local research institutions in surveying would be useful. 35/ See SAR, Northern Province Rural Development Project, Report No. 3031-CM, October 7, 1980. 36/ See Impact Evaluation Report, Ivory Coast: Oil Palm and Coconut Projects, OED Report being completed.  - 23 - TABLE 1 AUDIT REPORT PROJECT PERFORMANCE CAMEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) Planned Development of Cultivated Areas (ha) 83-84 84-85 85-86 86-87 87-88 Rainy Season 4,380 4,800 4,900 4,900 4,900 Si Dry Season 3,000 3,300 3,100 3,100 3,100 SEMRYI TOTAL 7,380 7,800 8,000 8,000 8,000 Rainy Season 3,000 5,200 6,300 6,300 6,300 Dry Season 4,100 5,200 6,300 6,300 6,300 SEHRY II TOTAL 7,100 10,400 12,600 12,600 12,600 Rainy Season 700 900 1,100 1,300 1,375 S111 Dry Season 500 700 1,000 1,200 1,305 SEMRYIII TOTAL 1,200 1,600 2,100 2,500 2,680 Total Rainy Season 3,080 10,900 12,300 12,500 12,575 Total Dry Season 7,600 8,900 10,400 10,600 10,705 TOTAL GENERAL 15,680 19,800 22,100 23,100 23,280  - 24 - TABLE 2 PROJECT PERFORMANCE AUDIT REPORT CAMEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CH/CREDIT 763-CM) Actual Loan/Credit Disbursements /a Category Description Allocation /b Actual Disbursements /c 1 Civil Works $ 13,620,000.00 $ 19,022,786.84 2 Equipment and vehicles for Parts A through D and F of the Project, including a light plane 7,470,000.00 6,347,114.05 3 Equipment and fertilizer for Part E (iii) of the Project 960,000.00 - 0- 4 Engineering consultants' services 2,020,000.00 3,412,525.53 5 Other consultants' services 580,000.00 217,573.58 6 Unallocated 4,350,000.00 - 0 - TOTAL $ 29,000,000.00 $ 29,000,000.00 /a Loan 1512-CM for US$14.5 million; Credit 763-CM for US$14.5 million. lb Schedule 1 of Development Credit Agreement dated February 1, 1978. W Memo, Loan AdmiunistrationDepartment dated October 14, 1982. Disbursements under the Credit have been completed December 10, 1979 and under the Loan, October 1, 1982.  - 25 - TABLE 3 AUDIT REPORT PROJECT PERFORMANCE CAMEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) Rice and Paddy Pricing Year Paddy Price /a White Rice Price /b Cost Recovery CFAF/kg - (CFAF/ha/seascn)1/c 1976/77 35 90 1977/78 42.5 100 1978/79 42.5 100 - 1979/80 42.5 100 34,900 1980/81 55 120 55,000 1981182 55 120 55,000 1982/82 62 145 62,%)0O /a Paid to farmers. lb Ex-SEMRY. T/c Thus a farmer double cropping would pay this amount twice a year. >', VWf %4 _ 9 el  - 27 - ANNEX1 Page 1 AUDIT REPORT PROJECT PERFORMANCE CAMEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) Audit Reports Issued on Cameroonian Projects Report No. Date of Report Title/Loan No. Board Distribution Sec.Memo Date A. REPORTS ISSUED /a PROJECT PERFORNANCE 1350 11/12/76 Douala and Yaounde Water 76-761 11/12/76 Supply (Loan 604) 1574 04/29/77 First Highway (Loan 663/ 77-359 04/29/77 Credit 180) 1605 05/24/77 First Douala Port 77-447 05/24/77 (Credit 229) 1633 06/15/77 First Railway 77-507 06/15/77 (Loan 687) 1752 10/12/77 Cameroon Development 77-736 10/12/77 Corporation - CANDEV I and Cameroon Oil Palm - SOCAPALM (Credit 100/ Loans 490/593/886) 2054 05/12/78 SEMRY Rice (Credit 502) 78-430 05/15/78 2368 02/13/79 First Education (Credit 161) 79-87 02/12/79 3056 06/30/80 Second and Third Railways 80-528 06/30/80 (Loans 1038/5004) 3507 06/22/81 NiEte Rubber Estate 81-540 06/22/82 (Credit 574) 3934 05/24/82 Second and Third 82-555 06/21/82 Highways (Loans 935/ 1515/Credit 429) * Footnotes on followl.g page.  - 28 - ANNEX 1 Page 2 AUDIT REPORT PROJECT PERFORMANCE CAMEROON SECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) Audit Reports Issued on Cameroonian Projects (cont.) Report No. Date of Report Title/Loan No. Board Distribution Sec.Memo Date 4362/b 03/09/83 Plaine des M'Bo Rural 83-280 03/28/83 Development (Credit 672) 4556 06/16/83 Livestock Development 83-626 06/20/83 (Loan 983) 4900/b 01/20/84 Education II 84-89 Oi/31/84 (Credit 320) 4942/b 02/14/84 Douala Port II 84-163 02/24/84 (Loan 1377/Credit 847) 5040/b 04/12/84 First Small-Medium 84-314 04/12/84 Scale Enterprise B3 PROJECT PERFORMANCE REPORTS UNDER PREPARATION - Cocoa /c (Board distribution (Loan 1039) expected June 1984) - -- Second SEMRY Rice/d (This report) (Loan 1512/Credit 7763) C. PROJECT COMPLETIONREPORTS EXPECTED - - Second Oil Palm (PCR expected (Loans 1391-TW/1392) mid-1984) - Second CAtDEV (PCR received) (Loan 1508) /a Until end FY83 /b Pass-through PCR 7e Audit mission visited Cameroon In November 1983. /d Audit mission visited Cameroon in October/November 1983.  - 29 - 1 Cfo s. m UCm i5 AICLTL eNA& I11 C _WX 1. Cor- ee _vei t Corerati P et (fi 1) Cr- too-cia.. so-0 * US J.1l11. A- lareh 23. 1 A1 *ppniaal lpert TO-44b. 02/lf67 _nt Saurue s20.26 Slls a * - lch 2U. 1967 Pr_ t-data aspert "Do, 0/lltt67 * - July 07. 1967 p"i. On loport 1752. 10112/77 CL JJ.ne 30. 1972 o project coslad of the pinatlu ar replanting of app*riatly 7.,U6 hal *11 olpa. 2.50he hal rabber 1.000 ha at tu ae 72 ha of Puppet; tLh briuSleg iote pnduetio Of areouintely 425 ha of i _tet oil pan a_d 4.462 ho of immtere rubber; ad thb prmloU of thu macnury lnfrntruetera prceasiUm laItSa and thar relatud equipment. Ith prltuct lapety chiesed lts objective Of ot_rgibeing the finanial poutio of CUSS. NectMaru developed voG eneuhat alelr twe metimated at apr aal. wa , . n prct _no rtfit llaS ubu1 autlal caet lncrme have how stfet by c_ ty pgric tfocat lcreu 2. tat C e Oil rlo Prleuct (aC4161N 12 Lo. 59-a sumJO1 bille. A- Hurch 1S 1969 ppretlcl Report 70-SIn. 02/02s0 ant dluburcd .USg7.90 SltlSe *- Apt II15, 199 Presidentu iapri4 -l 0/0569 071 a - Anust 134. 1" "M. on Report 1752, 0112/77 CL- Dec_hr 31. 1976 La. SiU-C /c tooi 70 Slilce A - pebrery 13. 1973 Ippruleat leprt Ua-M, 01/22/73 _nt dlebureed Unlt70 Sle. S - April 09. 1975 Pr7eident's Reprt S-P-1175-0C. 01/26173 Z c Octaber 19. 1973 PPA, S Report 1752. 11312/77 CL- June 30 1979 Ao roappiraled. the project ceaiuta of the eetabiiu1uet of 8.524 ho of all pale n tee statoe (appaleul 9c000 bh); the ceoutructie. of a eII pal. MII 1 eac 1esta ate provtle. Of nec ary rodse. blidleo ad otbher lefrautruteve; aod the buldilg of a o_ ad offlte at Drala. Th prject objectiv of icrSearcsg estate predectio ef oil pal predbeto he. hn achvd- S_wlmt lcwr then expected atpatu a"d *ohtastial cet lecr_*a- hebw hue ofsfet by cormdity prices forecactad at substantially higher lvele tcho derlg appralsol 3 Sgm RICe Prolct Cr. 302-C dugl.70 Slilm A - Jaery 25. 1972 Appralat oprt 103. 12129171 ant diobured sU3.70 Stllle * S April 21. 3972 Pruld4 o aReport P-1015. 01112172 - - July 21. 1972 PM, on eprt 2054. 05)32/75 CL- Je 30 1976 the S*MU I SIeC project provided rna tfor Improved rSca celtlntien On abot 4.300 he throug thb Istrodctl-n ct p_q irriatles The VrOjuct. v- project. reCeiVIoM otroeg ceppor froa Governent asd beteittieg freeSood tnraga_t a iweltr_,_eni1 ca r*ce. *ucceod ia achieving better reunte thbe espectud at appraiea. 135t Sem of the few irrigatle cieme la Vest africs when deeba c opplaeg h hue ueccessfully Intreduced. th project we pWIsted with only uter delays aed cot e*_rruns (1S). It ye baa oceuoful Is -euahlibeshi an inetltutie which could dlapuoe eith esptriato eaeietao. 6. Livestock Imolwlepest Project La. 96i3-c z1Ui.GO 6d0illee A - north 26. 1974 Appraisal Import 295-c. O/06/74 an-t diehureed 5u11.53 Stile. S* may 34. 1974 Prelduot'e tAPart -1367-C17 01/13/74 a-nt caclind tIR; 0.07 edlile. - Supteehr 16. 1974 PM. eBr bRpert 435*. 06e36/53 CL - Jwn 30. 1950 The project no to ceolt the Caor_eout of Canon te the Is pl aetati of the flrec p- of Its llceutoch development pere.. It wevld ce--l= u tabtlehimg ea" eopretiug three 20,000 bh stat. rooche, twe ulaughter plaute u der oleai - butcher _hoa vloplel ltietoch prodctle. an I50 prlvste r_aebc e. fern. and aradicafleg toottee Mtn frm 600.000 he of good paa.*t lan. The project uccoep,iaud nt phy olal obhcticeu exept for the sleeghterhouseo uhch are celeted cedr thu follow-on project. lie thre CGvernet roochee have hue utablhlhod but tbhur floanca viaility la to drcbt in to in preducti_ Ce.! lcit no Lnt 500.000 he grelog bode hovehu b_ cleArd Ire. trt-. Isetredctin of ind f-rnsyg and _*l1 pricte rechaa hu hu_ osuccesufl. Overali pfrject I Iot a ns_*tial nt productloo was ie thee aepocteL The ecenmic rate of trecrs hu be recalclated at 42 cupore with tbh appriel aetimte of 121. S. Cocoa Proect La. 1039.06 .a06.50 dille A- Septeuber 05.1974 Ap aloalp Reprt 4632w- 10/011/74 ant di:ulred 06. 50 M." live. * - Suptnber 1s. 3974 Preuident' Bapom P-t1h5-CN 10/21/74 L - Pebrory 26. 1175 PtA? uder preparetles CL - Deeber 1. 1961 the project no aledA at rnb llitutlg 25.000 he of coca: ptootieS 1% OOO he 1tb high-yImIdieg hybrids; stresgtbening aS trelolog utan nl *arviec aSd oeplles farnre with 3npete am credit; traeinng cacoa tunrs aS emltin tg io th fattn mi* farnre nrkutlg n_ceatiooe; in 50 hu of i_ner roe; applied re_ocb n cocoa end oodcro; ead prepariug a ollnw-up Wroect- to project Weem t *_reetcuf. It owe notinlly comleued at alat doable the cat _etimted. bet tbe iereon Is toe rields tartd -w aot ebtated Isany alof*iteat _ee_. The primary cneo ime the evereptSalutac __eptln nd le project 4eelg0 c_ear-ndg thu lren * yield La ebtaleSd hich could be an nolbeAdr fern from the tiste Ie eppilcetal of f* qlcid to centrol tLu blak p Ingu. whicb 1. repoible far detroyins _ch of thu cocoa ceop to Croe. A eatud e.g te tore facts _a Sdl a elal.itratiue the gre ci thu pojc escutieg ageecy. Its wsoheee were pervasive. lti no coounded by Coermt u erratic politc with respect to creit _I tO pricegS ot eocoe coae leS_try ed ferm Inputs. 6. Niee Bt Pjet Cr- 574-l IVI-s00 S Mlal A- Jue 03. 1975 Apraoll Soport 716e-Ok 05/20/75 Ant diu-urae :0316-U Stlle. 5 - July 30. 1975 Preldeste lapert P-1615-0. OV21/75 * - Dec_br 01. 1975 PM. 0K APert 2567 06,221 1 CL - Jue 20. 151 Dh crdit _n gree to roprt tie *lrnt 3.00 ha tr_oh of eutebliehlag o 15.000 he rubbr ate i- ti anthaters ralSfeut are od Cmrcee e. La flouto tie proportin of a new pie. for the pnopee tdevelopmest of thu ectutro proviua of the cntry. Au tie am _o only sparsely SihbIad, homing as wlll a b*1lth canal ad social facilltles had to be provided an prt of th project- _ding to hV_- pt pric uetolen mod tethnital probleU_ that _celtated ly oIft ofvteetler _cl1cLe-. the org fade peritted only plating abet 4.2O he. or 725. of the arm plce_d. salth. cemn ad soctal itlii.tie nn preide osy for the ai pl_oce. lie 7taer pl_ n prupro Ie draft. A foln-u. projewt etl bring the _tate to 13.500 be. A tlrd project in eqs ted to f_m thle coladtia of tie eScire 15.00 he au the l-tes processng facilitiecs- he ectuenb rate of rutor of tie project - ettintad is 197S. to be elect lAX. ni prSont rnuti_tu. efwing for higwr ent_ hut ass uigaeficettSy highor price Cin real torts) of r t iu ant iS.  - 30 - A2 2 Pae 2 PRJE muPONWADTr REP r-A IS12-1CRDIr 763-C1) 4A1CL?MUL OPUATIs 13 CAMW 7. Plaim des No 1s- Dwelopm.t Project Cr_ 672-01 :II mllIa S2.D0 A - Deceaber 21, 1976 Appr1aia Report ne /d dahermed a_wt amount diSbusd 1SS2.0W mIllion :0S S-Pbury2,17 S-r F mry 2B. N77 Praeidences 1 a- Umport e 1-i9d97m F91 12/09/76 En K - August 29, 1977 PW.. oUD Report 4362. 03/19/83 CL - Jc1e 30. 196 ma project Inlude soil an_lmis and agronomic tclals; the settlmnt of fare on approximtely 300 ha to test differe type of aettloame and meheonizatina sibma; studis on te domeet.c _mecing of soya. bealth control measures and igratio problem; prepdaaton of the femiblicy study for the full-ecale developet of the Tlain. doe WSo. Olg to delays In startin the project, the 2977 *_amm ws slawed and it becam neeeery to ested the project for one year. ukich is financed by Government. This, toether with the sned to achleve meaninfl reeults from ther revisd trial program, coupld with the effects of inflation, resulted in a tteal coet overr of 38. No folo-on project wo epproved due to diffilcultSe in jutIfing economic development of the plain b large-sce mech_anzation or by settlnt. S. Second SOCAPALK Project Xm. 139 1-Of & 192-OC :15525.00 millio A- Batch 29. *1977 Apprati Report 1364-01. 03116177 mt dised :US$23.60 millio S - Augut 25. 1977 Presiden's Repwt t-'92-J2. 03116177 amount cancelled Clliam :1155 1.40 K - Noveubar 23. 1977 CL - Jam 30. 1982 Ove- a five-year period. the poject almd at establihing a 6,000 ba oil pa e stat. the firt phs of a procang plat and otber neceseay Infrastructure for an estate complez at Kike, an adItIonel 1.330 he at W ongo notate. providin for _mgemet an administration of Kleuke estate and part of adminitrative cotts of Z5_ka and H o_go. Iets-rl 2,000 he of cll pslm melboling. and conaructing and equipping a comes ervices complex in to.a15. The project ba been complaced. Inever, S50WAPALV fin-ancia situatio baa been procarie_ throughout the project period. Dher be been a lack of self-genereted fund am yieLds and eelling prices bave b loer tban expected; pcodouction hs also bean loser due to factory. breadowu and lw labor productivity (bigh turnoer and ab_enteeis). N1asures being teken to iprove tle situtio are consolidterd under a follow-up project. 9. Rhmd Rua De,lopment Project Cr. 723-C :1S18.50 lion A - June 30. 1977 Appraisal Report l479-1X. 05/26/77 -amnt disbureed (11183) :US$6.01 millio S - Aetust 04, 1977 President'. Report P-2052-I. 06/20/77 E - Januar 30. 1978 CL - December 31. 1983 The prject Is aimed at strengthening local intiutioas involved In rural developoet by establishment of oands Spdcial d'Act Rurals- under PONADER for creating seyste and ch_anelng fuds for executio of seove pilot subprojects. inluding rurl water supply (4). agriculturxl developent of bottomlands. and stall cattle fattenig sod market gaSdenin with associated credit sysres, the identifcatlom and execution of furer subprojects In the region, nd preparing a follow-up project- The project's orzanization aud progress he contimd to improv ed become consolidted; conetruction standardo of all bet oa sbprojwct ha been good, as are their planning, budgeting and accunting It Is ezpected that with the avalble funds albet 80t of overall objective wll be achiewed at completlon- CGovernan baa aked that the closing date be extended for en additional elz month to _me full we of the r _amingfund-. A folow-up project bhx been appraised. 10. Second CAKI Projerct Ln. 1509-01 :US$lS.00 dillic A - December 27. t977 Apprai Report 1676-0I. 120n9/77 amout disbused (11183) :15514_10 million S - February OL. t977 President's Report P-2150-QI. 121O0977 r - Jun 30, 1978 CL - Jue 30. 1963 Te project extends CAD 'a existing plantation, by planting 2.900 bh of rubber and 600 ha of oil palms; creatilg a new 5.000 ha rubber estate at ompiana; initiatin a smlibolder progr_ of 1,000 ha each rubber and oil palna; preparing the mext pbase of CAEW'T expansion snd crop diverslfication progran; and preparing a moater plan for the agriculotral development of the estern ceoaetal area. The Lae-omnt progr ben p lagued by delays and coat overrun. The meter plan vill not be mertaken as experiene has ebhn that isees-orSented etuli ar me usful tbn globcl plans; a veetable oil marketing study baa bee undertaken. INage_at effectivenese b Impeded by b_a and structural meeknes in the control procss. CNDEV'a overall financial poition has bean precarious. medial measures are being consolidated undr a folleop project. 11. Second SENRT Rice Project Ln. 1512-l Cr. 763-01 :9529.00 illion A - January 19. 1978 Appraisal Report 1722a-IM. 12/27/77 a_mt disbursed :95929.00 millio S - Pebruary 01. 1978 President's Report F-2151-CI. 01,05.78 - - April 14, 1978 P1AR, this report CL - September 30. 1984 - The project provided for co_truction of a reesrvoir and gravity irri4ate. and drainsg syst_ to serve 7.000 ha for double-cropplng of rice and flood protection works for 1.000 he under raifed f-ng; constructLon of a rice mill. store and administrative buldings, an-far . works; mangeme,. extesio and conultin engineering wervice to desi ad euperwis civil works; ad resettlamnt and. bslth progre_. The project _r successful. Targets for acreage placted ad cultivated. 3Ield and annul tornng wll be not. lbreover, a substatil fisbin indtry in the irrigatio reservor created baa bean tabli4had. ca completion, about 1986/87. thare will have been a subetanteel coat overrxn refleeting minly the coat of the reserwoir dike lmpzov-eats foud necessary, ad tbe extr costs Incurred to relocate the smellboldrs brought to the eSt-. Te extra cats wers offet by rbc z_what Improved yilds. and the bnefit, from the flslhg lndustry. resultig ln a soebet hgr eeconic rate of reatur the orLilly expeci.nf. The economic. maltipLir effect of the project is notable: there Is euhtautial Improvement of the wlfae of the resource-poor ortbhro rgegon of the emtry. a main project objective. m evidencd by increased mobility resulting fron the project road aystm, new comeortia centers and activitiss, increese Incomes and seor social smnities. swong others.  -31 - - - PueZCr wROME AM?r sZPO (MO N S2-0r/Z1I 763-00 Afc1aMAL aD M in QCuInow 12 ZP atelrated inae 3.eloyut Prject Cc. 776-06 :5BsS a1lle A - March 07. 1578 ApperaIsll aect 1737-CM. 0O17n8 -t dimburad (12183) .lot1 :UMSS6.O1 S - Aprl1 17. 1578 Promideat's Deot 2150-06. 07222/78 *- Occator 04. 1978 Q-J 30, 154 Me rojet eupporte ZUlu Islttit nae devaoe itroh imves.t of oegmout *a -*m*izatIos. sr if Id farue tralalog end soltarlng ad evaluation; alm_ at incrmmad faru Iese tcbhog crop dlw*=eIficte-no feadcrop reearcb, extemeson oeazvicm, a_d credit; Improves-ad expeWsc coffee processing cd coffee aod cocoa sitletiug, uprove,e aeclal Isrratcore thro.uh pclrSy belth ere end potble eSter Supplies. te11 rcetly. project _mucto be. e peer doe to over-_c_Sre cg complex derign. i_effdc.t sepprt from coerooc depertmenst. cu certaIn deaficiencies 1 mageent aod ea_*dfin. Oer the ast year, vry poietive devopla_ st have takes plce coo_rsieg zAP mAer a m projact _s r Measures takes by Gar;met cloWd at forwoig the flImed. aicestlce, eliminating redeed_et perecmel and marketing of _cccmlaced coffee acecka. Wrenver, Govert baa indictod Sra willingness to reorlent poetjct -ctlvitas toeerda the praductIve cempeese1-. *bodblle a recent sdpeiils dm_i ideotled a *resc of esues reuirdl c - cr_to Into a viabe Inietitutl that would eere the devlop_ent of the leaders provlnie. Prugree L. the Ie=lalm of thee Sssman Ill determine ceetl-efd Desk la_olvest ia tclh project and isn pceeblc follo-sp operatlom. 13. siesue, HihiaoU_ wa1 pseopeoet project Cr. 781-16 :3513.00 millIc A - Prch 21. 179 Appraisal upoert 1780-l 03/06/78 _eoO dtsbr_d (11/83) :5S11-30 a11llcn S - Arl 17. 1978 Prmldet's pt P-2195-0. 03/15/78 - Dcember 0. 1978 Q-De_er 31. 3153 7hie credt provided for itiatin of a regcal cora development project Involing creactee . prject authority withi. a provincial aeSp coapeate oreanlacles. respodibl for training acd imeticotiog extensao at the fareer lewl. with -accIted Support cor s f Znpsc Supply. esd prodectiose improwed cooperatUve evce rooter. farmr credt. Other composesta inclu_d vllg water epply. Coffee pr _ceeclo. boctt 4lande development. aud reforemtatioaroeie. cortro Prodrctles obectiL rolated tc increaclg productivitr fr of coffee feodcumps. The prject la schie.io ITS objections cod tech- l. and rineocia e-nagesen La god. physical ex_eCLts I.Mad beiJd appralsol echedules, 0elog to inital argealatieFmal probleva. omsever. the developnt of *at cempoomo Is S progrecln coll, co pro_11rm'. reportleg and accrmclcg procedures are god. cArnent. c- strIhstioo, to p_^ct finclag ceotis to be reglar. cod Xlq.dcy prblewo. do_ to de" In prepareton of wichdrawal appeatices b hae en partly rectifil. Cove_r_eet hm requested Bank ao ieca far a fe 11-u project appraled extAngr- coverage to the entirw Uetas Province. 14. SecoeA QtIN Rubber t-. 1751-QCr. 975-QI :05531-50 llio A- Jessery XS. 1580 appraseal eport 2661-01. 1211017 amit dlabeed C11/83) :U5519-t7 nillIo S - April 18. 1580 President' per P-2672-0t. 12/21/79 Z- September 16. 19BO CL - Derser 31. It63 (Credit)k CL - J 30. 1955 (lose) Ovr a f_ve-year *aed Vphma perIod, the project wouli etced the rubeer-plnced ares froz 4.200 to 13.500 ha cd the ae ClArend free 5.2D to 15.000 ha; provide msintenence of the robber plated op to the tIe of prodection. brilngng Into tpplag of the flmt 1.500 ha planted _odr the firot project; establish thu lefracroctere required. Incled-eg cootructios of the flrt pt e of a rubber procesing factory. trealm of 11YICAK stafd; coetlsu an o-s-ging program of applied research: cud establish en euperiesutal ruhber eIheldkr program of 250 he _d a fOOdcap eel:. As of Jee 30. 1563. tocal plcodtin amouted to 11.831 ha gWart as appraleal termpt of 11.e00 ha wich a coat overt., of 13 . salay de to hilaer th_ expected salar eas cod costa. -socLzd with socia prgr sot Isioded is 4gs-er project deosIn. Crovth ma upkeep are of acceptable- *cadadab; however. the plantaco euffers frm glocupeole. a leaf diaee. which cauld affect the oall yield. The _a.inst tme, Is good and _ IZCAm I imocia Siteation Is eo.d aed diabwo_eeote ae 975 of appraisal cetaistee. A joist co-domr's iaioe2 bar appreised a flo-op project. 15. Sacoo lives tock MOvOlOpSO PrOject Cr. 1010-Cal :SS16.00 sillieo A- April 22. 1950 Apprelal Depott 2650-Cl. 0311180 aemout dibureed (l1/83) :5O 4.97 d1llm S - Jue 20. 1Db0 presidents Report -V27AG-m. 04102180 C- Hay 12. 151 -l CL - December 31. 15 Th pVoject form port of the aecod phase of the uetienal plan Vlaode. TM eels comDpesta are: (a) livestock co agricultural crodit progrm vith 1.110 sugLoe to pig poultry and rattle prodwcwse tb) etreogtbeeig of SO50 to fi lab t ve lsoghtarbouees awd Improve productivity an three ranche; c) castoe fly eradication o the roislng 4.360 he2 of Imferted ano in the Ada a; and Cd) streugtbesles NIlU'Ie ve- INZY audvr * in the Ada_-e through pbovliee of eqeipment cod trainn. The projec fcee a he_r of eagrial end technital probl__s A recet review of pmraacstal rache bee detected considerable veabamees threatening tcb raches- flutncll viability. Ooly ae, of cme Saughterhoues how bege operatis. Maaement md technial probLee ceutioue to _}ke tbee e r fly eradicatin profes cs, than folly euceaful. Te credit clooent bee oat becm effetive oeing to dlfflcultcs is mklIg cefinescing effectiv. 7be restructuring of aule_l beatk cervces Is the Adooa Plateau Zoosee beee dayed becae, local fee have ee bee available to lascch the dcil works progrcs. Guoectlc soree are being dlic__d. 16. Pwrtbers pvInce Rwal Develmet project La. 15919-CCr. 1075-0 :15537.50 asios A- _oveber 18. 1950 Appraisal eport 30310,. 10107/80 m_nt dlabse (CI/83) :558 8.21 01110 S - _*nery 2?. 1953 preddentm- Ruport P-2589-0. 103t160 K - Jeee 01. 15S1 Q. - De_crer 31. 156 The proect ales to Itcroa Cottet and foodcrop productton eed farms lccome through Impeseut of resl infreacructure. Input eupply. credt. esiketlug. adaptive r*_eatch. eed prodectlos. cod rxte rdlos eno e and crabulg; trermoem S001001. the project *mootin agency cd tegomal planning sd development capecty. IncldIng project uliorIng ead valaetiOn. Dhu tc-uial. fi_ecial and admisiattive inngoot of 5fWT06 Is exemplary. Including om-the-job traimnlg of local staff, the project ceedlaotlo comtee pla" i7e rela efflclurly. d the projectanagemsoc at all leela Is copet_en. Cotcoe cultivtios Is est_ested at aebt 47.000 ba _d e d cotts pcdeccleae i- ezpected to reach 53.000 cte ts 1583 or 762 of appraIsal eati_ste. The eacheimotan imrvewd celtiilo_tof eOrmges ae Satisfactory uhile, Ioee of grosodatcarcm etll very low dte to the lack of Improved ond. The other compo=wt are carcied out Satisfactorily. except for tbe Setback esdr the s_lml traccLos progre. The only ejr ottentding iaoe corces the roesiad delay IS the recritmoet of a _aotoring aed eveleateom epecli-Xet to hed the Projecteboitotlog cud 1veloeti_ eit. ublch baa resouted it laited pcagree Is this ares ad abmeocr of reliable doet.  -32 - AX1 2 rag 4 nPOJECr ?1310eCA AUDIT EDOE CAwEROOSi,D SD RICE PROECr (LOAN 1S12-C/CRZDhr 763-CI) AGICPLTUAL OPERATIOS IN CAMOON ni. Forestry Ltn 2092-0f ms$ 17.00 willion A - February 16. 1982 Apprdi-al Report 3485-Cf. 12/22/11 aut disbursed (11183) 0- S - January 04, 1983 President' Report P-319S-CN. 01/11/82 E - aot yet effective CL - December 31. 2987 Ibe project provides for the etablsheet of about 11.000 ha of forest plantation to strengthen the forestry setor's contribution to the national economy; enhancing the capabilitea of the Govermet forestry egencies to m_intdin continuous regeneraton of the forests through improvemnt In thelr technical capaecties to excte reforestation and recovery of revenue from tames and royalties- As of end 1983. tbe loan 0s not yet effective, m_nly because of delays in the drafting and signature of thce cotract for the establishment of the Industrial forest plantation. wbich Is a condtion of effectiveness of the CDCloan for this component. In order to avoid delaying un tbe other co lecesarly vhch csa bhe ezecuted _poenta separately. the cofinanciere have recently proposed :o Coverwnt to wsive the ctose-effectivnss clense with CDCand to tranEorm the signctre of the contract Into a candition of disbursement for thts component. IS. Ol1 Palm and Rubber Conolidation Project InD 2160-OI :USs50a80 iliton A - May 27, 1982 Appraisal Report 3713-CI. 05105/82 amount disbursed (11183) :US$ 2.92 million S - July 26. 1982 PreSidents Report P-3305-Cf. 05/06/82 E - June 21 1983 CL - June 30D 1988 The project aim at consoldatiag investments nsde under previous Rank-assisted projects. It will help strengthen the flsn-.al situation of SOCAPALN and CaIDET and will sllow the structural improvements needed for oil palm and rubber development. The project also include provison for tethoical assistance, training and studies and continued support to mliolder schems. The loan became effective on June 21. 1983; ad diSbursements heve been initiated- la Inclues MA exchange adjustmnt of DSS3.26 million. lb A - approval; S - signing; E - effectivenes; CL - closing. c Suppleuentary loan to complete project. 7;r Technical Assistance Project. T Pass-through PCQ_ Tf 7hird window loan of 0S7-0 dliSon. 7- Credit aIready fully disbursed.  - 33 - ANNEX3 Page 1 AUDIT REPORT PROJECT PERFORMANCE CANEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) Project Summary First Se_rr Rice Project 1/ 1. As appraised in 1971, the SEMRY Rice Project (Credit 302-CM) was to improve rice cultivation on about 4,300 ha in northern Cameroon through the introduction of pump irrigation permitting yield increases and double cropping, with the twin aim of raising the incomes of some 2,800 farm families and reducing the country's dependence on rice imports. An expansion program, which IDA's co-lenders agreed to finance in 1976, is now being implemented. It will increase the project's irrigable area to about 5,300 ha and the number of benefiting families to about 3,400. In the recalculation of the project's financial and economic benefits at full development, the extension has been taken in account. 2. Becauze of good management, strong Government support at the national and the local level, and responsible farmers, the project has achieved much better results so far than expected at appraisal, and results at full development are expected to be correspondingly better. Not surprisingly, in view of the single-minded dedication of management to reach its main target promoting rice production other aspects received less attention. Accounting was not satisfactory until quite recently, and the hiring and training of Cameroonian counterparts lagged behind schedule. Also, the widening of the project's scope from the heavy emphasis on rice to a more integrated approach - desirable, but not foreseen at appraisal - had to await the launching of the expansion program. 3. Two important questions regarding the project's future cannot be answered at this stage, but it has been assumed in the revised projections that a satisfactory answer will be found for both. First, although the Cameroonian counterparts in place now perform well, their number is small and it remains to be seen whether a sufficiently strong team can be formed in time to ensure continuity after the present team has moved to the proposed SEMRY II Project, some 70 km to the north. The Government support SEHRY enjoys should prove especially valuable in this respect. The second question is whether it is technically possible to maintain the high average yields achieved over the past few seasons during the entire project life. Project Implementation 4. The project was implemented with only minor delays and no serious problems have arisen. Within the original contract price for the main civil works it was possible to construct not only the primary and secondary networks serving about 4,500 ha (against 4,300 ha estimated at appraisal), 1/ From PPAR, Cameroon Semry Rice Project (Credit 302-CM), OED Report No. 2054 dated Nay 12, 1978.  - 34 - ANNEX 3 Page 2 but also part of the networks serving an additional polder of about 800 ha (Gabareye polder, No. 8). Remaining works were done by SEMRY on lorce account. 5. On-farm development works, covering the entire project area instead of only 3,000 ha as foreseen at appraisal, were carried out by SEMRY on force account. The amount of work completed each dry season was consistently larger than appraisal estimates. By April 1976, 4,527 ha were fully developed, and with the completion -- under the extension program - of on-farm works on Polder 8, irrigable area will reach about 5,300 ha by mid-1977. 6. As the national power company offered to provide electric power, electric pumps were purchased instead of the diesel pumps originally planned, a possibility not foreseen at appraisal. This brought benefits in the form of greater simplicity of installation and reduced operating and maintenance cost. Agricultural Development 7. Actual paddy production has substantially exceeded appra'sal estimates, and production at full development is now expected to reach 35,000 tons with the expansion under way, twice the amount foreseen at appraisal. The chief reasons for this are: (1) the larger area that will be available; (2) the extension of on-farm works to the entire project area; (3) the higher yields made possible by the general acceptance of transplanting instead of broadcasting; and (4) the much larger area that is now expected to be double cropped. 8. In the early phase of the project, the possibility of increasing yield by transplanting was repeatedly discussed, but the outlook did not seem very promising. Through the 1973/74 dry season, broadcasting was the rule. In January 1974, exceptionally low temperatures put the crop into jeopardy, but SEMRY management succeeded in convincing farmers that they could still get a good crop: it immediately prepared seedbeds and received farmers' assurances that they would do the transplanting. The action was a success. The contrast between fields of farmers who had transplanted and of those who had not was so striking that SEMRY organized a series of visits for farmers expected to cultivate the polders next to be developed. As a result, broadcasting was abandoned ln the project area. 9. In view of their extremely poor harvest due to the Sahelian drought, farmers, in 1972/73, went eagerly for dry season cultivation under the project, and by 1975/76 dry season area reached 1,073 ha compared with 450 ha projected at appraisal. The 1976/77 area is estimated to be 1,350 ha. Within the limits of the Iogone Water Agreement between Cameroon and Chad, a maximum of 3,000 ha (net) will be available for double cropping, twice the area foreseen at appraisal. 10. Up to 1974, it was feared that the polders could not be cultiva-ed as quickly as they were developed. But once it had been shown that transplanting guaranteed consistently high yields, demand for land increased strongly: in June 1976, it exceeded land availability by 30%, and 2,700 applicants have been registered for Polder 8, while there is land for only  - 35 - ANNEX 3 Page 3 1,450. This permits management to be selective in accepting new applicants and to expel farmers who do not perform as expected. Project Cost and Financing 11. At CFAF 2,274 million, actual project cost (excluding the extension) is only about 10% higher than estimated at appraisal - 16% in current dollar terms. This small cost overrun is mainly due to three factors: (1) the main civil works contract was completed at a cost that was low by 1972 standards and could only be obtained then because the contractor had just finished work on the new Yaounde-Ngaoundere railroad and wanted to keep his personnel and equipment in Cameroon; (2) some of the 36% increase in construction cost, part of which resulted from the upgrading and expansion of the project, was compensated by savings on equipment and personnel; and (3) a large part of project cost was incurred early in its life when the impact of world inflation and rising oil prices was not yet fully felt. 12. Currency realignments between appraisal and Board presentation reduced the CFAF value of the proposed IDA credit, and the additional US$200,000 which IDA allocated were insufficient to maintain its original share in project financing. Although the Government repeatedly requested supplementary financing because exchange rate changes continued to erode the CFAF value of the credit, IDA did not provide any more funds, and at the 1975 Annual Meeting the Cameroonian representative agreed that his Government would no longer seek additional financing for SEMRY. The cost overrun was covered by the Government and FAC. As a result of the changes in project cost and financing, IDA's contribution was reduced from 46% at credit signing of less than 38%. The US$3.7 million credit, which was fully disbursed on June 24, 1976, represents the equivalent of CFAF 857 million against CFAF 947 million estimated in early 1972. Economic and Financial Aspects 13. In 1976, estimated rice consumption in Cameroon was 31,400 tons or about 5 kg per capita. About 70% of this total was consumed in towns, mainly in the south, where per capita consumption averaged 10 kg. Based on past development and expected population and income growth, rice consumption would be close to 70,000 tons in 1985, with per capita consumption reaching 8 kg overall and 13 kg in urban areas. SENRY's marketed rice production of about 21,000 tons would cover 30% of total demand. 14. Although its great distance (1,500 km) from the main consuming centers puts SEMRY at a disadvantage compared with imports, it experienced no marketing problems except in 1976, when low-priced imports forced the suspension of sales for several months. This problem should not return, however, since the Government later in 1976 introduced the system of "Jumelage' under which traders can only obtain import licenses if they agree to buy certain quantities of SEMRY rice. A number of other rice projects are now in various stages of preparation. Most of them are situated nearer the main consuming areas than SENRY. Evea if they develop more slowly than planned, SEMRY will face growing competition from domestic producers in the future. But SEMRY is well located to export rice to northern Nigeria or Chad and should be able to expand these markets as its domestic sales decline. Unofficial exports have in fact grown recently (mainly to Nigeria).  - 36 - ANNEX 3 Page 4 Moreover, the Government has decided to adopt a policy favoring rice exports. It can thus be assumed that all SEMRY rice will find a market. Based on present forecasts of world market prices for rice, SEMRY's economic ex-mill price for 1980 and later years (weighted average for all destinations) would be nearly CFAF 94,000 per ton, about 2.5 times the price ezpected at appraisal. 15. With a larger paddy area (because of the larger share of double cropping), substantially higher yield (because of on-farm works and transplanting) and paddy prices than expected at appraisal, the average farm family income is now estimated to reach CFAF 218,000 at full development (S$890 at CFAF 245 per US$), almost three times the appraisal estimate and almost six times the amount 'without the project". The project will also substantially increase the security of farm incomes. 16. SEMRY's actual operating results compare favorably with appraisal estimates. Because of the rice price increases authorized by the Government and considerable improvement in the collection rate of farmers' charges (to over 96X in 1975/76), proceeds from rice sales were higher and the cumulative deficit of the operating account was substantially lower than estimated at appraisal, and no subsidies have been needed since 1974/75. The cash surplus did not develop as favorably, mostly because of the involuntary stock build-up resulting from the cheap rice imports mentioned above (para. 1.14). Tentative estimates for the coming years, based on present price levels and farmers' charges, show that SEMRY should be able to generate an operating surplus from 1976/77 onward that is large enough to cover its debt service obligations -- CFAF 1.13 billion, including the extension program, at 3.5% interest - and to finance the replacement of equipment. 17. Although incremental production at full development is now projected to reach about 20,000 tons of rice (double the appraisal estimate), Cameroon would remain a net rice importer. Based on the expected ex-mill price of about CFAF 94,000 per ton (appraisal estimate: CFAF 37,600) and including the estimated cost of the expansion program, except items not directly related to SEMRY, the project's rate of return is 23% against the appraisal estimate of 11%. If benefits are reduced by 10% and 20%, the rate would be 19% and 15% respectively. The Weaker Points 18. At appraisal, it was agreed that (1) in addition to the foreign personnel employed at the time SEMRY would hire three more expatriates (four, including the agricultural engineer to replace the outgoing project director); (2) within three years, Cameroonians would be appointed to work with and be trained by the expatriates; (3) the expatriates would be replaced when this was justified by their counterparts'performance; and a schedule of projected personnel development was drawn up. Following recommendations of supervision missions, additional foreign experts were hired, and as early as May 1973, supervision staff also drew the Government's attention to the need for additional counterparts; but despite repeated reminders and no disagreement in principle, recruitment of counterparts was still unsatisfactory by the end of 1975, in part due to unattractive salary levels. The November 1975 supervisicn mission was assured that a considerable number of Cameroonians would be appointed within six months, and  - 37 - ANNEX 3 Page 5 SEMRY's Board of Directors approved a new competitive salary scale. Even so, it was clear that expatriate staff would have to be maintained beyond the mid-1976 project completion date to ensure continuity, and FAC agreed to provide financing, under the expansion program, for five management positions for an additional year. 19. At the end of 1976, 13 of the 34 management and middle level staff ("cadres-) were expatriates, including three middle level employees. Of the ten management staff, four had counterparts in place; no counterpart was foreseen for one of the remaining six (director of extension). The arrival of a physician in January 1977 raised the number of management level foreign staff to eleven. 20. Quite likely, an earlier revision of SENRY's salary structure would have produced a larger number of counterparts in time, although it could not be expected to overcome the sociological obstacles to attracting qualified candidates to the north. But the Government's insistence on quality performance deserves support, not only because it contributed to the success of the project, but also because it showed that this was of prime importance to it. 21. The rising volume of work soon made it clear that SEMRY needed a chief accountant besides the administrative and financial director. But, as often in other African countries, none could be found in Cameroon. As an intermediate solution, French national service volunteers were employed, supported by short-term missions of a CCCE financial expert; but in 1973/74 SENRY had not accountant for eleven months. Routine work suffered and the envisaged improvement of the accounting system could not be realized. Since June 1975, SEMRY has employed an expatriate chief accountant financed by FAC. His 1975176 work program focused on establishing an analytical accounting system which is now operational. It breaks up the general accounts into five cost centers which greatly improved the flow of base cost information to management and promises to ensure tighter cost control. 22. Applied research under the project had been entrusted to IRAT until February 1975, when its contract expired and a Cameroonian agronomist took over at the head of the Vounaloun research station. The program IRAT had established included varietal research and fertilizer trials. The 1975 supervision mission recommended to improve varietal research, expand fertilizer trials and introduce phytosanitary research. The mission also recommended to obtain technical assistance through regular visits of the specialist responsible for the national rice program. In this way, it was hoped that the Cameroonian agronomist could also be put in charge of seed multiplication and seedbed preparation without endangering the research program. Unfortunately, the 1977 supervision mission found that he had taken the place of the departed assistance technical director and research had come to a stand-still. The mission strongly recommended to restart the research program focusing on the areas suggested in November 1975. 23. The appraisal team included an environmental consultant to review the problem of bilharzia (schistosomiasis),the most damaging disease along the Logone rive, and it was agreed during negotiations that the Government's health services would study closely the development of the disease in the project area and adjacent areas and make periodic checks on the snail population. This obligation could not be kept and none of the supervision  - 38 - ANNEX 3 Page 6 missions that visited the project through 1976 discussed the matter. But this must be seen in the context of the general health situation in the area. Until 1975, over long periods of time there was no physician at all in the department of Yagoua. The situation has improved since, but is still inadequate considering the needs of the department's 180,000 inhabitants. Moreover, there is still no economically feasible way to eradicate bilharzia. Based on the few observations that could be made in the Yagoua hospital and dispensaries in the area, the incidence of the disease is estimated at around 90%, as at appraisal. The project thus does not seem to have adversely affected the situation. SEMRY's newly arrived physician will try to verify the estimated incidence of the disease, establish its geographical distribution, and also check on the geographical and seasonal distribution of the snail population. Government, SEMRY, Bank and Co-Lender Performance 24. The shortcomings mentioned above do not negate the overall conclusion that the Government, SEMRY, the Bank and the two co-lenders worked harmoniously and well together to achieve the generally successful project outcome. In project financing, the Bank acted strictly as a lender of last resort: the Government and French aid provided a total of US$9 million, including the expansion program, against IDA's US$3.7 million. The Government's strong interest in the project also showed in its regular participation in the joint supervision missions of the co-lenders. Project supervision was adequate and, regarding the Bank's share, executed with more than usual continuity in staffing. Follow-up action was taken with reasonable promptness. SEMRY's supervisory ministry on various occasions thanked the supervision teams for their work. Changes in a Second Project 25. The Government has asked the co-lenders to help finance a follow-up project - SEMRY II - and the Bank/IDA approved a Loan/Credit on February 1, 1978. The project includes the construction of dikes protecting about 15,000 ha against flooding and permitting the storage of water to irrigate two rice crops per year by gravity on about 7,000 ha. The project will also provide benefits from additional production of mouskouari (dry season sorghum) and sorghum in the area protected from flooding. The storage lake would be fished and, as it would shrink in the dry season, its fringes would provide grazing land for cattle. 26. From the outset, SENRY II should avoid the problems SEMRY I faced and is in part still facing. Its accounting system should be sufficiently strong to serve the needs of the project and the financing agencies. Hiring and training of Cameroonian counterparts should receive more attention than in the past. In view of the large expanse of water that would be created - 360 kmZ to 120 km2 - a health unit should be included to monitor the numerous endemic diseases and protect, to the extent possible, participating farmers and their families. Finally, applied research should be strengthened to help decide the crucial question whether yields can be maintained over an extended period of time at the high level achieved in the past.  ANNEX4 -39 - Page 1 AUIDITREPORT PROJECT PERFORM&NCE CAMEROONSECONDSEMRYRICE PROJECT (LIAN 1512-CM/CREDIT 763-CM LEGAL PRoJECT DESCRIPTION 2 SCHEDULE Description of the ProjecL The Project is designed to provide for flood protectlon of an area of about 15,000 ha on the Western baimk of the Lagone River about 70 km North of Yagoua and the development for irrigated rice cultivationof about 7,000 ha of this area, requiringthe crea- tion of a water reservoir with a maximum extension or about 38,000ha. The Projectconsistsof the following Parts: Part A: FloodProtection, Water Storageand Access Roads Construction of: (i) a reservoirdike of about 27 km between Pouss and Guirvidig; (ii) a flood protectiondike of about 21 km along the Westernbank of the LogoneRiver betweenPouss and TfkEle; (Mii) an Intakestructureon the Logone Rivernear Djafya and a feeder canal for the reservoirof about 11 km between the Logone River and the Mayo Burad; (iv) a weir up-streamfrom the Mayo Pouss and an outlet into the Mayo Vrik near Maga for the dischargeof and excess flood water from the re&arvoir; (v) two main access roads of an aggregate length of under about 50 km along the dikes to be constructed PartsA (i) and (ii) of the Project. Part B: Drainageand On-FarmDevelopment Irrigation, (i) Construction of primary irrigation canals and drains to serve an area of about 7,000ha. (ii) On-farm development of said area, including land clearing and levelling and construction of secondary and tertiary canals anddrains. Part C: FeederRoads Constructionof a feeder road networkalong the primary and secondaryirrigation canals and drains under Part B of the Project.  -40- ANNEX 4 Page 2 Part D: ProjectAdminlstration and Support (L) EstabiLshment, equlpinqg and staffing of the SENRY departmentresponsible for Projectexecution. (li) Corstructlon and equipping of Projectheadquarters at Naga, lncluding staff housing, machinery sheds, repairfacillties and utilities. (ill) Construction and equipping of a rice mill at Naga, consisting of two milling units vith a capacityof 5 tons per hour each, and of storage facilltles for about 26,000 tons of paddy and rice. (lv) Construction of an airstripat Naga. (v) Traintng of local staff, Lncluding scholarships for specialized traialng abroad, speclalized courses and on-the-job training. (vi) AppLied food crop research and studles on the development of livestock and other food resources in the Project Area. Part E: Settlement and Agricultural Credit Programs (i) SettLement of about 7,000 farm familles in the Project Area, Lncluding resettlementof about 1,350 farm families living In the area of the water reservolrto be created under Part A (1) of the Project, to cultivate the land to be developed under the Project. (ii) ProvLsion of infrastructure, such as enclosed drinking water wells and feeder roads, and tech- nical and extension services for farers In the Project Area. (i11) Provision of seedlings, fertilizer, equipmentand other agricultural inputs and of housing construc- tion materials, on credit, to SEMRY farmers. Part F: Health Program (i) Construction and equipping of a health center in Maga and three propharmacies ln Yagoua, Guirvidig  -41- ANNEX4 Page 3 and Nsga, and upgradingof the departmental center of preventive mediclieIn Yagoua and of the health centersIn Guirvidlg and Pouss. (iI) Tralning of medical personnel requlred for the facilitiesIncluded In Part F (1) of the Project and carrylngout of a program to improvemother- and-childcare and endemic disease control In the ProjectArea. (1ii) Surveys on the saniltary sltuatLon In the Project Area and monLtorLng of the health program. * * * The Project ls expected to be completed by December 31, 1983. %11 xJ  - 43 - ANNE 5 PROJECTPERFORMANCE AUDIT REPORT CANEROONSECOND SEMRY RICE PROJECT (LOAN1512-CK/CREDIT 763-CM) GraphicalPresentatlon of SEUY Chart 1 Cultivatedsurfaces. Chart 2 Paddy production. Chart 3 Past and futurecultivatedsurfaces. Chart 4 Past and futurepaddy production.  PROJECT PERFORMANCE AUDITREPORT CAMEROON SECOND SEMRY RICEPROJECT 763-CM)/ (Loon1i1 2-CM/Credlt RAPPORT RETROSPECTIVE D'EVALUATION CAMEROUNDEUXIEME RIZICOLE PROJET DELASEMRY (Pret451 763-CM) 2CM/CredHt CuINve CultivatedSufaces/Sufaces (ha) Sudoce 1.e9s A,oa Cuillivotod Sooson in FPoInV SufocoCullivooon SaivndosPIuIs 6.443 AraoCultivolodin DiySooson 1 6244 1LJO00 | | Sudoco Socho CultIoo on Soison 0 ~ 6.0D6 ~ ~ ~ I 5.WQ~ ~ ~ ~ ~ I04 5,000 2.650 4~~~~~,351 3.163 3.602,18 2.595' .. 79-80 80-81 81-82 82-83 83-84 79-80 80-81 81-82 82-83 83-84 79-80 80-81 81-82 82-83 83-84 79-80 8i-82 82483 83-84 86081 Semsy IIl Semry II Seme I Total WoodBonk- 26303  PROJECT PERFORMANCEAUDIT REPORT CAMEROON SECONDSEMRY RICEPROJECT 763-CM)/ (Loan16 2.CM/Credlt RAPPORT DEVALUAIION REIROSPECTIVE CAMEROUNDEUXIEME RIZICOLE PROJET DELASEMRY (Pret1512.CM/Credit 763-CM) PaddyProduction/Production Paddy Psoduclion(tons) 80.000 M0.000 I?olonoti by Farnom/ I pai losPaysans olorontion 60.000 U PhMikoledby SonQv/7 lonnagoCommorckialiso bx' ki Sonvy 810,000 30.000_ 20,000 ' i30,000I 3,000 ------ R ll> < 1.000 -- - 0 79.80 80-81 81-82 82-83 79.80 80-81 81-82 82-83 79-80 80-81 81-82 82-83 79-80 80-81 81-82 82-83 III Semry II Semry Semry I Total Woddonk - 26302  PROJECTPERFORMANCE AUDITREPORT CAMEROON SECONDSEMRYRICEPROJECT 763.CM)/ (Loon1512-CM/Credlt RAPPORT D'EVALUATION RETROSPECTIVE CAMEROUNDEUXIEME PROJET RIZICOLE DELASEMRY (Prot1512CM/CredH763.CM) Pastand FutureCultWted Sudaces/ SuitacesCultiees Passeet Futur 25.000 AreoCuIhsetBdInRninySeaosn I 22.700 23100 23,280 |Surface CuIteo an Salson desPfluls 1AeoCultioted In 1ivSoso SulocoCuliveoonSalson Seche! i9ao 20,000~ * Actual 9.0 I 10600 ¶~~~~~~~~~~~~~~~~~~~~ _5.704 1 8.900 115,000 1,8 13.958! 7.600 ... ......... * 10o234 6.443 I.I . xl i X 1 '% I 10.= *.~~~~~~~~~~I* 79 80 ~~8068 81e 82 83.~. 848 58 U.87e I3 ^ ~ ~ Acm/elG4if - ~~~~~~~~ lne/Peiln * -*----------cfuaI/Rea--satiorsa onnod/Prevldln2s ----- VAwodBak - 2630  PROJECT PERFORMANCE AUDIT REPORT CAMEROON SECONDSEMRY RICEPROJECT (Loan 1512CM/Credit763-CM)/ RAPPORT RETROSPECTIVE D'EVALUATION CAMEROUNDEUXIEME RIZICOLE PROJET DElA SEMRY (Pret1512CM/Credit 763CM) Pastand FuturePaddy ProductIon (tfn) Pioduclion 130.000 _- _ _ . _ _ _ -I2 110.000 c- W - ROtOno*d - byFo'mon/ sIbysan F-IRolntiondo PRd cty Wa - s- ' Ma&doto,bySov/ I . | LjI ,,',,# ~~~~i000CV o X -IWV 70.000 ~ -4~~~~~~~~~~~4 . 1 .... , 4,~I1-. 79-80 80-81 81-82 82-83 83-84 848 8846 8-7 87-88 - ~ Actuol/Roofisot.ons . W Oa* -26300 I I I  - 49 1 Page 1 AUDITMEMORANDDUM PROJECTPERFORMANCE CANMROONSECOND SEMRYRICE PROJECT (LOAN1512-CM/CREDIT 763-CM) FROM COMMENTS ENGINEERS CONSULTING Ingenieurs Conseils Translation from Freuch B.P. 172X 38042 Grenoble France April 24, 1984 IBRD Washington, D.C. Our reference: CBE/DAG/32 Attention: Mr. Shiv S. Kapur Director-General, Operations Evaluation RE: Project Performance Audit Report on SEMRY II Rice Project (Loan 1512-CMand Credit 763-CM), Cameroon Dear Sir: Thank you for forwardingthe PPAR on the SEMRYRice Project. We are most appreciativeof your intentionto reflectour comments in the final versionof the Report. We would like to congratulate the authorson the clarity,tae and -- in particular accuracy -- the objectivity of the Reportas a whole. We are preparinga memorandum containing comments and ideaswhich we believeworth mentioningor elaborating on, but we leave it to you to decide how appropriatetheir inclusionin the Reportmight be. As you know, SOGREAHis particularlyinvolvedin this Projectand we would hope to be invited,eitherofficiallyor unofficially,to participatein futuremissionsor discussions. In April 1981,we showed a SOGREARfilm about the execution of this Project to a group of World Bank experts in Washington, D.C. We would be happy to make it available to you on request. We enclose a copy of a recent article on the agricultural development components of the Project, together with a copy of a letter to the author containing our comments. Yours, etc. /s/ C. Beauchine Head, Department of Agricultural Planning  AITACEMET 1 -50 Page 2 SOGREAH March 16, 1984 Ing6nieurs Conseils B.P. 172 X 38042 Grenoble France Tr-anlation from French Mr. Christophe Naigeon Intertropiques Agricultures 27, rue Louis-Vicat 75015 Paris Our reference: CBE/DAG/32 Dear Sir: I foundyour article "SEMRY: A Self-Assessment" in issue no. 3 of extremely Intertropiques for its objectivity interesting and its conclusions. SOGREAH since and SOGETHAhave acted as the SEMRYprojectengineers the whole venture was launched in 1954. At that time a purely technicalapproachto problemswas adopted, with scant attention aspects. paid to the socioeconomic The firstfeasibility study on the developmentof rice productionin the area for which SEMRY is responsiblewas carriedout in 1971, and reflects the stillpredominantly technicalapproach. As a result,SEMRY projectswere not based on any regional agriculturalor economicdevelopmentplan, but on the opportunitiesfor improvingconditionsaffordedby the existing circumstances,which were quite exceptionalin Africa. The regioncomprisingthe yaeres (the areassubjectto flooding by the LogoneRiver)was uninhabited and used for pasturein the dry seasons after the floodshad subsided. The standard of living of people in the surrounding areaswas very low, but successive governments in Yaounde showed little interest in developing the zone. In other words, civilization had not reachedthis isolated -- but nevertheless strategic -- region. In spiteof the "misjudgments" you refer to, the projectshave met with a successwhich you yourselfsummarize as follows: "...fortunately... thousands of peasants have received considerable benefits." This is due, to a considerable degree, to the physical conditions of the location. The fishing resources in the Logone River are among the most abundant in Africa. In addition, the temperatures and amounts of sunshine normal in that area are particularly favorable for rice production. The earliest operations,from 1954 to 1960, consisted merely of constructing dikesaroundthe area of the ya4r6s to provide a rudimentary means of controlling the flow of water during periods of flooding. This system was modernized in 1972 by the addition of four pumping stations, allowing two rice harvests per year on 5,000 ha.  -51- ATTACHMENT 1 Page 3 The success of this degree of "development"was confirmed in 1977 by the study of the impact of SEMRY I on the socioeconomic environment,prompting the Government and aid donors to extend rice production still further. However, in the meanwhile an agreement between Chad and Cameroon on the use of the river water had forbidden pumping when levels were at their lowest. It was necessary, therefore, to devise a project which took account of this constraint. I The result was SEMRY II (Maga), a project which uses flow irrigation (and therefore consumes no energy) and has an investment figure per ha among the lowest in Africa. Unfortunately, such a combination of favorable physical factors (climate,hydrology, topography, availability of land, etc.) is very rare, or even unique, and there are few comparable locations in Africa. I think it only fair to take such technical aspects into account when judging SEMRY. If such operations were not undertaken, there would be no problems and no initial misjudgments,but there would also be no benefits. Yours, etc. /s/ C. Beauchene Head, Department of Agricultural Planning  - 52 - ATTACHMENT 1 Page 4 Translation frr,m Pre>h STUDY SEMRY: A SELF-ASSESSMENT A Self-MonitoringRice Project Rice irrigation projects are beginning to proliferate. Many are difficult to get under way, others do not achieve their aims and others collapse because they are not properly managed. By now there are countless "rehabilitation"projects which only serve to paper over the cracks because they do not tackle the basic problem. However, some of these are sufficiently advanced for an assessment to be made which does not merely amount to a record of failure. This is particularly true of SEMRY, in northern Cameroon. Many studies have been made of this Project, and it provides a fascinating laboratory for observing the development of the rural environment and the consequences of radically transforming it through the large- scale introduction of an almost completely new activity. In principle, the SEMRY project in Yagoua, in northern Cameroon, is no different from most such operations carried out in tropical areas in previous decades. The aims of this Program (initiated in 1950) were to "totally eliminate all danger of famine in the area at risk, prevent the exhaustion of food stocks during the so-called "hungry seasons" between harvests, increase the peasants' income and satisfy the domestic demand for rice." This initial project enabled the water to be partly controlled for irrigating rice-producing areas, but continuing dependence on rainfall limited output to about 1 ton per ha. However, the "real" SEMRYProject began in 1972 with a complete replanning of the irrigation system and the installationof electric pumping stations along the Logone River, which marks the frontier with Chad. As a result, 5,500 ha could be permanently irrigated. The introductionof high-yield varieties of rice raised output to 4 tons per ha in 1975. This success encouraged the Cameroonian Government to try to replicate the operation by launching another rice project near Maga, to the north of the first. In this case, a total of 12,000 ha were to be cultivated, with 7,000 ha irrigated. To provide the large volume of water necessary, a reservoir was constructed having an extension of 35,000 ha. This was bordered by an earth dike 27 km long and the water was supplied from the Logone River through a feeder canal. The landscape was completely transformed. Where formerly there had been an arid zone of the Sahel type, occasionally broken by the muddy river water, there is now a lake, looking rather like a mirage and shallow enough for the tops of the half-submerged trees to appear above the surface.  53 - Page 5 However, other deeper and less evident changes have affected the whole region and the approximately65,000 people who live there. Naturally, such projects are likely to have considerable social and economic repercussions,but their promoters seldom decide at the outset to make a systematic study of the scope of their impact. Nevertheless, since 1977 teams have been deployed on site to carry out long-term studies and produce regular economic, social and health-related assessments of the SEMRY operations. The bulk of the work has been entrusted to the team headed by Prof. Brunet-Jaillyof the School of Economics, Aix-en-Provence. The result of these long-term efforts -- carried out in direct contact with the operations -- has been a number of extremely detailed reports which have the advantage, among others, of providing a more original viewpoint than the conventional "evaluation reports" routinely produced by aid donors. These unpublished documents, and a visit to the area in 1982 for the purpose of gathering material, provided the basis for the conclusions contained in this study for IntertropiquesAgricultures. Fish versus Rice The first thing that strikes a visitor traveling along the dirt road bordering the river between Yagoua (the site of SEMRYI) and Maga (the site of SEMRYII) is the considerable fishing activity on the expanses of water artificially created by the Project. Cast nets are used upstream of the weirs, and traditional nets on the reservoir itself. Canoes are drawn up on the shores near makeshift huts built by the fishermen to store their equipment. Preliminary studies had assumed that fish would be plentiful in the lake, but these resources are far more abundant than expected. The miscalculation was considerable, because catches are ten times larger than predicted. In 1982, Martine Audibert, who has been responsible for most of the studies, wrote: "In contrast to rice production, fishing provides an immediate source of income which may be higher than that to be derived from irrigated rice production until the peasant learns the necessary techniques. In Maga, 62% of the men are fishermen ... The population of Maga seems less motivated by rice production than fishing, and the cropping rate on this block was low until the Toupouri arrived. In contrast, canoes and fishermen have become so abundant on the shores of the lake that fishing has had to be regulated in order to protect the rice growers' right to benefit from the lake's resources." Regulation was indeed used, as was coercion to enforce it. The measures adopted for stemming the flow of people away from the rice fields included confiscation of nets and canoes and the destruction of huts, and the local police force played its part in getting the Maga peasants to resume rice production. Leaving aside anecdotes, the events were symptomatic of the keen competition which arises between an immediately profitable low-cost activity calling for a low investment in human resources, and a painstaking process of cultivation requiring a comparatively advanced level of technology and considerable financing.  54 1 ATTACMENT Page 6 However, the origins of the problems faced by SEMRYin inducing peasants to take up rice production are even more remote. As Martine Audibert points out, SEMRY had difficulty in fiiding workers for the rice fields partly because immigration was much lower than initially expected. These difficulties were so serious that, in 1981, it had to recruit farmers from outside the project area in the form of 1,000 members of the Toupouri tribe from Ziam, located to the north of Maga. They began cultivating rice in the first rainy season. In addition to the problems arising because irrigated rice production with two crops per year demands considerabletraining and care Cso that only well motivated growers can successfullyundertake this activity), a number of strictly practical factors militated against this form of cultivation. One of these was the distance from the villages to the rice fields. Some peasants had to make a round trip of 24 km, and the men from certain villages which had not been relocated had to stay away from them for a month at a time when the period for transplanting arrived. Some growers finally let their fields lie fallow for several consecutive seasons, and these periods often coincided with the increased demand for labor entailed in the conversion from direct drilling-in of seeds to transplantingof seedlings. The establishmentof new rice fields close to certain distant villages brought a renewal of interest, but the percentages of rice growers in the villages of Bourmi and Dandalang -- which are about 12 km from their fields -- are only 15Z and 2.5% respectively. It should also be noted that, although the standard of living of those peasants who went in for rice production rose considerably,SEMRY II almost had disastrous consequences for the farmers' income. Originally, millet and sorghum provided the foundation for economic activity in the area. Rice was a supplementaryfoodstuff, and was cultivated only in the region of Pouss on underdeveloped land. The introduction of rice did not alter these proportions in the villagers' daily diet, and the two traditional cereals continued to predominate. Rice Follows Millet The study by the School of Economics of Aix-en-Provencereports: "Although the number of millet fields allocated to the inhabitants of each village within the development area changed little from March 1979 to November 1981, it declined considerably in the case of villages within the area surrounding the reservoir, the inhabitantsof which were relocated in June 1979 and June 1980. These lai'ter village communities began rice cultivation, but had not cultivated the millet fields in 1980, because they were expBcting SEMRY to do it. The population, therefore, had to buy grains, usir.gthe income from rice production to feed itself. Since the income from the first harvest was low, it was feared in 1980 that, far from making the peasants financially independent,SEMRY II would have disastrous consequences for their standard of living. However (at least for certain of these village  Page 7 communities), this situation existed only for the period necessary for them to adapt to their new environment. At the end of 1981 and in 1982, hundreds of hectares of millet were planted and cultivated. The peasants were once again self-sufficient in food and not forced to spend the income earned from rice production." Other signs of affluence catch the visitor's eye. First of all, in Yagoua (the site of SEMRY I) it is evident that the peasants' standard of living is higher than that of most village communities in the Sahel. The shops, restaurants, radios, mopeds and tin roofs are indicationsof their comparative prosperity. When I went to Maga in 1982, I could see for myself that the villages in the SEMRY II area were following the same path. The socioeconomic impact study by Martine Audibert provides details to confirm the impressions I gathered as an outsider. From 1980 to 1982, average income rose from CFAF 23,300 to CFAF 53,000, in spite of disparities from village to village and season to season. Income is generally higher in the dry season, and it is an interesting fact that peasants producing two harvests per year increase their income by only 30% and not by 50% as might be expected. Overall, the lowest income levels are about CFAF 20,000 and the highest exceed CFAF 160,000, whereas average income in villages not touched by the Project is about CFAF 5,000. Villages which cultivated rice by traditional methods before being incorporated into SEMRY II achieve higher levels of output and income. First, rice growers in Pouss using direct drilling with a total control of water supply obtain yields of at least 3.5 tons per ha and a net income exceeding CFAF 49,000. Their rentals are about 50% of their gross income. Five Seasons At Least Next in order are the Maga village communities which have a rice-growing tradition and nowadays use transplantingmethods. They ob-ain yields of 2.5-3.2 tons per ha and net incomes of CFAF 20,000-40,000,paying rentals to SEMRY of 60%-80% of their gross income. Finally, there are two villages -- Manaka and Godjo -- where the growers' incomes do not cover their rentals. Rice growing is a new activity for them and the techniques, particularly transplanting, take a long time to learn. This explains why it is so long before the activity becomes profitable. "Apparently, five harvests at least are necessary before the rice growers gradually master the technique of irrigated cultivation,which is new to some of them," says Martine Audibert, who points out that the learning period is shorter in the case of the Toupouri people, since their yields exceed 5 tons per ha from the second secson ,f cultivation. This is not only because of their particular aptitude, resulting from their ethnic traditions; to a large extent it is a matter of personal motivation. As voluntary migrants, the Toupouri have a much more dynamic  ATTACHMENT 1 -56 - Page 8 attitude to the Project than other groups, for example the inhabitants of Godjo, one of the villages which do not cover their rental costs. Here, the peasants have adopted a passive attitude toward SEMRY, largely because they were forced to migrate. The final reason for these disparities lies in the varieties cultivated. The Toupouri alone have used the IRI 46 varieties, which are highly productive in the rainy season. Normally each grower cultivates one half-hectare. For its part, SEMRY provides a number of services: plowing, fertilizers, irrigation and supervision. The rice grower has to construct dowels, transplant the rice on his plot, weed, control irrigation, spread fertilizer, and cut, winnow and bag the rice. SEMRY then buys the crop, except for a few sacks which serve during the period between harvests as a reserve stock for the peasants, who still prefer "poor" grains. In exchange for its services, SEMRY charges a rental. In 1980 this was CFAF 45,000 for fields with direct drilling and CFAF 55,000 for transplanted fields. As transplantingbecame more common, rentals became uniform and have remained unchanged. In 1980, the price of paddy was CFAF 55 per kg, rising to CFAF 62 in 1982. At this price, the break-even point for output is 1.7 tons per ha, above which the grower begins to earn a financial surplus. Most other difficulties arise downstream of the Project. The first concerns the sale of SEMRY rice. At the time of my visit, the Yagoua storage facilities were full to overflowing and Mr. Buchmann, the SEMRY Director seconded from SCETAGRI in Paris, was acutely concerned about the commercial future for the output from Yagoua and Maga, because the rice produced there was more expensive on the Yaound6 and Douala markets than the cheaply imported rice from Pakistan. The crops from previous harvests had been sold thanks to the problems faced by the neighboring countries close to the area of production. The refugee problem in Chad and the disastrous harvests in Nigeria had provided growers with unanticipated markets. This, however, did not constitute a long-term solution, and it was the responsibilityof the Cameroonian Government to find one. According to the latest information,the situation for SEMRY rice on the domestic market had improved, and stocks were selling normally. It was quite by chance that I stumbled across the other downstream problem, which is a direct consequence of the sudden sharp increase in local income. On our return to Yagoua, our Moslem chauffeur had stopped the car one evening so that he could say his prayers, and I caught sight of a number of peasants on bicycles who were zigzagging and wobbling more than was usually necessary even on such a poor road. The chauffeur explained contemptuously that, for them, the taste for alcohol had overcome the prohibitions of Islam. Mr. Buchmann confirmed this. In the very first year, a shopkeeper with a keen eye for business had set up a makeshift bar in Maga. Within just a few days, and even before the bar had been completed, the first truckload of beer had been sold out. Not having any other amusements or more useful ways to spend their money, the men had bought whatever was offered by the sharpest operators. There were suggestions, too, that some drug traffic was beginning, but I was unable to check the facts.  ATTACHMENT 1 - 57 - Page 9 Although these phenomena may be significant, they must not be exaggerated. Yagoua and Maga have not turned into Sodom and Gomorrah, or even anything resembling the towns in the Wild West, whatever their appearance might suggest. The fact is -- and it should be remembered in other projects -- that nothing has been done to channel the farmers' spending toward purchases which would raise their standard of living, such as a more varied diet, medicines, construction materials, clothing and blankets for the cold nights, and other articles likely to make their lives more "modern" and healthy. As Mr. Buchmann acknowledges, "We were taken rather unawares by this jump in purchasing power. What we should have done immediatelywas to set up cooperative outlets and create a need for goods that would contribute to development." These factors are all the more significant as the bealth of the people along the river has not improved in proportion to their standard of living. There have certainly been project achievements in this sphere -- for ins:ance, the almost total eradication of diseases due to malnutrition;as the Report states, "cases of kwashiorkor and marasmus are rare, and anhropometric measurements are satisfactory." The death rate has probably fallen, too, as far as can be currently ascertained, and the population is younger. The prevalence of schistosomiasiswas estimated at 90% in the study preceding the Project; it is now 15% overall. The availability of water in the area throughout the year, and the consequent permanent presence of malaria-bearingmosquitoes, keeps the body's immune system at an adequate level and should reduce health risks, even though these were considerably underestimated at the beginning. Nevertheless, an increase in the incidence of cases of temporary incapacity is expected. The negative health aspects of the Project are seen in the high incidence of diarrhea caused by the poor quality of drinking water (resulting from the failure to dig wells during project execution) and in the respiratory diseases attributable to the inadequate protection against the winter cold afforded by local housing. These afflictions could have been averted at the outset with a few straightforwardmeasures and supplementary investments. The miscalculations on health matters (for worse, as well as better) dating from the original Project can give the peasants little confidence in the future activities of SEMRY, although a large-scale health project is taking shape and may succeed in closing the health-care gap in future years. The weak points in SEMRY II have arisen from initial misjudgments, problems arising from the recruitment of the rice growers, disparities among the growers, and questions of how the crop was to be sold and the peasants' income used. Nevertheless, this Project has two great merits. First, it did attain the stage of having to face problems "downstream,"whereas so many others never reach fruition. Second, it has shown a rare honesty in engaging upon a process of permanent self-criticism and self-correction. Yagoua and Maga are permanent subjects of study and genuine lab ratories for specialists in the socioeconomic aspects of agriculture. Fortunately, they are also two places in which thousands of peasants have received considerablebenefits. Christophe Naigeon  -58- A-TAAKEET 1 Page 10 Translation from Prench SOGREAH Consulting Engineers Our Ref.: CBE/DAG/32 Echirolles, May 17, 1984 IBRD Washington, D.C. 20433 Attention: Mr. Shiv S. Kapur and Mr. Christian Polti Subject: Project Performance Audit Report: Cameroon Second SEMRYRice Project (Loan [1]512-CM/Credit 763-CM) Gentlemen: 1/ In reply to your letters of April 6 and May 1, please find attached a brief note in French commenting on the above report, as indicated in our letter of April 24, 1984. We hope to be in a position to forward the English version of this memorandum before the end of the month. In our comments, we have tried to be equally objective. We would, however, ask you to consider deleting the sentence ralating to "mauvaise supervision technique," p. 24 of the French text and p. 20 of the English text ("poor engineering supervision").A This remark would seem to us particularly unjustified, as we attempt to demonstrate in the last paragraph of our comments. In our opinion, it reflects a negative attitude that is out of keeping with the rest of the report. We thank you for giving us the opportunity to comment on this report, and remain Yours, etc. /s/ C. Beauchene of Head, Department Agricultural Planning Audit Notes 1/ SOGRM-H subsequently, on May 28, 1984, submitted the English version of this note, now attachedto this letter. 2/ Appropriate text changeshave been made in PPAM, para. 34.  59 _1 May 1984 Author: C. 3EA="%NE COHHETS ON THE RETROSPECTIVE REPORT: EVALUATION SECOND RICE-GROWING PROJECT OF SENRY(CAIEROUN) DEVELOPMENT (LOAN1512/CREDIT763-Of) The main factor conditioning the success of this project was the total determination and commitment of the Cameroun Government in undertaking the preliminary operations, the field development works, the settlement of the rice-growers and the agricultural supervision of development work. 1. Exceptional physical situation and human environment The technical success of the project is largely related to the favourable combination of several physical factors, especially the climate, hydrology, topography and availability of land suitable for rice-growing. However, another reason for the excellent results obtained is to be sought in the motivation of the people settled on the land developed under the project, most of whom previously lived a precarious existence and were attracted by the prospect of a fundamental change in their living conditions.- This was without doubt a rare development opportunity in Africa, which had to be seized. Even the initial conception of the hydraulic system was by no means obvious, from straightforward examination of the flooded areas. 2. Economical and unsophisticated character of the scheme The overall cost of the development works (including buildings, machinery, technical assistance, consulting engineer's services, etc) should, on completion of development of the 6500 hectares, amount to about 6000 dollars per hectare, which is a relatively low invest- ment compared to that for other African projects. Furthermore, irrigation is effected by gravity only, so that there is no expenditure on energy for pumping.  -60- ATTACDMENT1 Page 12 These relatively low costs are to be explained on the one band by the unsophisticated design of the hydraulic infrastructure and on the other hand by the use of direct labour under the SEMRY organisation for all the works on the distribution networks. Unsophisticated design of hydraulic infrastructure in this case means unlined earth canals, prefabricated distribution structures, grassed earth embankmentslopes, an unlined earth diversion canal, etc. These simple and relatively inexpensive development,works were more or less imposed at the outset in order to minmise the investment costs and to maximse the rate of return on the project. However, there is of course a snag in the adoption of these unsophisticated designs, in that the works thus built require much more intensive maintenance and supervision: Maintenance for weed removal from canals, silt and weed removal from the diversion canal, consolidation of the dyke and main embankment slopes, possible resetting of the small prefabricated structures, etc. Supervision of the dykes and main embankment, of sandbanks which might obstruct the river offtake, of the control gates, of floating vegetation in the reservoir, etc. Analysis of the retrospective evaluation of the project should log-ically take into account these operating costs which, although difficult to evaluate precisely at this early stage, would neverthe- less seem to be underestimated in the project operating budgets. 3. Comments on the impounding embankment The report explains well the financial constraints and the time required for construction of the impounding embankment. The design was revised several times in order to arrive at a cost acceptable to the Cameroun authorities and to the financing agencies. The erosion and piping phenomena observed on initial impounding gave rise to a thorough investigation of possible solutions; this was particularly positive for the project itself but especially for the design of other development projects to be studied in Africa, thanks to the objective attitude of the specialists of various nationalities participating in this research. Apart from this fundamental aspect of design of a simple and relatively economical scheme, the senior irrigation expert of the World Bank has rightly remarked that it was possible not only to minimi-e part of the investment required for protection of the embankment slope but also to defer this investment by two years, with obvious economic benefits for the project.  -61- hTt&CHHENT 1 Page 13 4. Proposed modifications and corrections to the text of the report Highli.ghts, page v; Page V - last paragraph PPAM, para. 13 The SEnRY II project is located 70 kn downstream from the first project area (instead of 90 km upstream). Page VI - 2nd paragraph Highlights, page v, The reservoir embankment dike experienced serious erosion and last para. seepage (instead of 'major'). Page 18 - Ist paragraph PPAH, Two seriohs problems were discovered which, if not properly handled, para. 31 could have... (instead of 'potentially'). Page 20 - Ist line PPA_, ... on problem-solving rather than investigating responsibilities if para. 33 any (instead of 'assessing blame'). Page 20 - line 34 PPA- , Factors responsible for seepage ay include... para. 34 Page 20 SOGREAR requests deletion of the sentence: 'Therefore, the causes of PPAM, seepage encountered under the project relate to poor engineering para. 34 supervision during construction and/or poor construction.' Indeed, supervision of works on the embankment involved 4400 determinations of moisture for 2 million cubic metres of fill and 600 reference Proctor tests, with a 2Z refusal rate. Supervision of the incriminated section had been doubled on account of proximity of the structure. Several expert appraisals have .been performed by specialists unconnected with the project, but none gives fully satisfactory explanations. SOGREAR's experts today believe, although this opinion is given with all due reserve, that the problems may have been a consequence of the sodium content and heterogeneity of the soils in the borrow area close to Mayo Vrick. Audit Note 1/ All appropriate modifications and corrections have been made. - -9  - 63 - 2 ATTACHMENT Page 1 AUDIT MEMORANDUM PROJECT PERFORMANCE CAMEROONSECONDSEMRY RICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) FROMCOFINANCIER COMMENTS (CCCE - YAOUNDE) Translationfrom French Caisse Centrale de Cooperation Ecnoamique (CCCE) Cameroon Office Mr. Cooper World Bank Resident Representative No. 688/D Pad/MB May 18, 1984 Subject: SEMRYII Project Performance Audit Report Letter of May 1 from Operations Evaluation Department Dear Mr. Cooper: We have studied the referenced report with interest. As requested in the covering letter signed A. Polti, I give my comments on this document below. I generally share the opinions expressed by the authors, in particular as reg,ards the remarkable technical success of the project and the exemplary character of the relationships established during the period of the project among the parties involved (Governaent, executing agency, and lenders). I shall pass rapidly over points of detail in order to focus more on basic points: (1) Points of detail PPAM, para. 13 - Page 10, para. 13, line 1 (French text): Semry lies north, i.e. downstream from Yagoua along the Logone River. PPAM, - Page 23, penultimate line (French text): "insistance" is surely para. 32 intended here, rather than "instance." PPAM, - Page 34, .para. 48, line 2 (Frenchtext): "La SEMRY" was established in 1971 and "le SEMRY"that preceded it (which was also engaged in rice para. 48 growing) in 1954. PPAM, - Page 40, line 2 (French text): "confiner" is surely intended here, para. 53 rather than "confier." - Table 1, column 84-85: "3,000" instead of "3,300." PPAR Commients All detailed coments incorporatedin the French text, and where needed, also in the English text.  ATTACUUM 2 - ~~~~~~~~~~rage Z - Table 3, footnote b: specify that this figure is exclusive of taxes - Table 3, third cola: the fees mentioned relate to plots "piquets" of 1/2 hectare. - Table 3, third column: the figure shown for 1979/80 is incomplete in that, in addition to this figure, the rice growers paid an indirect levy of CFAF 5/kg piddy sold. 2. CoGments 2.1 Note g, page vi French text [page iv English text]: Yearly double cropping and transplanting (generalized in SENRYI even before 1977) had been widely tried out by the time SENRYII was being appraised, and the yield assumptions used for the project did in fact take account of double cropping Basic Data Sheet. (intensity 158S, cf. footnote i) and general use of transplanting (easier to accept for farmers who had had no previous contact of any kind with rice cultivation). 2.2 Note j, page vi French text [page iv English text]: How can the Basic Data Sheet. PCR estimate completion report assume the development of 6,000 net hectares with a cropping based on full developeunt, not intensity of 1801,since at the time of writing only 4,000 hectares had been achievements in year of final developed and a cropping intensity of 1801 was still far from having been disbursement. achieved? 2.3 Page x, line 19 French text [page vi, line 13 English text]: The CFAF 25 per kg subsidy for white products (rice and broken rice) was quickly uighvlights, raised to CFAF 35. In addition, the Government has agreed to bear the cost of page vi. transporting SEMRY rice to consumption centers. 2.4 Page xiii French Text [page vii English text]: A SCET-AGRIteam Already mentioned in Preface with support from independent consultants conducted a study of the impact of and Conclusions are reproduced SENRY, encompassing its four current units, at the end of 1983. in Attachment 3. 2.5 Page 9 French text [page 5 English text], para. 11: It should perhaps be mentioned that the development of an additional 800 ha of SEMRY I PPM, para. 11. ("casier 8") was carried out in 1977 with tripartite financing (Republic of Cameroon, FAC, and CCCE). PPnc, para. 50. The economic 2.6 Page 36, line 1 French text [page 20, line 4 English text]: Which rate of return calculated on rate of return is meant here? It cannot be the economic IRR as this is product vales based on either insensitive to any change in the price of rice ex SEMRY (and the completion input substitution or export report does seem to be talking about the ERR). parity is, of course, dependent on vafiations in external factors. SENRY'sfinancial equilibrium at present is, however, such that it would certainly be unable to continue to operate in the black after a 301 drop Financial viablilty is not in its selling prices C- CFAF 44/kg for commerical grade rice). This being necessarily identcal to econoic the case, bow can one speak of only a 4% drop in the IRR? rate of return calculations. 2.7 Page 40 French text (page 22 English text], end of para. 53: EWRY is not an agro-industrial corporation working as a government agency. The PPAp. para. 53. most profitable and least risky part of its business relates to paddy rice  - 65 - 65 ATJ?ACUNDT 2 Page 3 production. This has been wnll understood by some individuals from Mayo Dansi, including members of the SEMRY team, who make use of sharecroppers (stratmen) for plots that may exceed 100 ha. SEMRY's "service" activities (extension, farmer support, overall guidance), which ought to be paid for out of levies collected from the farmers and the rice milling differential, are barely covered even if one assumes normal product marketing. I fail to see how private investors could be interested in such an operation. Kslunderatood. The audit does not 2.8 Page 50 [TN: page 40 Is intended] French text [page 22 English Imply execution of SODECOTON; rather, text], para. 54: I see political difficulties in considering financial such a project could have a parallel support for SEMRY through the Center North Project (Phase 2) with IBRID SERY support component which, of financing and SODECOTON as executing agency. coune, would be executed by SEMRY. I should be grateful if you could send a copy of this letter to Washington if you feel this would be appropriate. Yours, etc. /s/ J.-Charpentier cc: CCCE Paris.  \9llJ \ G  AIIACHMENT3 - 67 - Page 1 PROJECT PERFORMANCE AUDIT MEMORANDUM CAMERDONSECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) FROM COFINANCIER CONMENTS (FAC) Translation from French French Republic Ministry of Foreign Affairs Cooperation and Development Directorate of Development Policy Sub-Directorate of Development Studies Evaluation Mission No. 409 DPL/SED/EV Paris, June 4, 1984 Mr - Kapur Director, Operations Evaluation Department The World Bank Washington, D.C. Subject: Evaluation Report on Second SEMRYRice Project Ref.: Your letter of April 6, 1984 Dear Mr. Kapur: I have the honor to send you herewith the conclusions of the SENRY evaluation report prepared following a mission financed by the Ministry of Cooperation which visited Cameroon in November 1983. These conclusions reflect the views of our Ministry. Yours etc., /s/ Claude Freud Encl.  ATT1ACHM 3 Page 2 - 68 - EVALUATIONMISSION SOCIOECONOMIC EVALUATION OF THE SEMRYPROJECT IN CAMEROON CONCLUSIONS November 1983 Claude Arditi, SEDES Pierre Baris, IRAN Michel Bamnaud, IRAN  AITACHHENT 3 Page 3 - 69 - Ever since the drought of 1970-73, Cameroon has been pursuing a policy that seeks to make the country self-sufficient in rice. A number of rice projects have been developed as a result, chief among which is the SEHRY project. SENRYis one of the most important agro-industrial projects undertaken in Cameroon. Since the project's inception in 1972, a total of more than CFAF 19 billionhas been invested, or CFAF 26 billion in terms of constant1983 francs. with the objectives The cost of the projectis not out of proportion the CameroonianGovernment had set: - make the entirecountryself-sufficient in rice production; - strengthenthe trade balancethrougha projectthat would replace rice imports; - create additionalnational value added and promote the development of the Yagoua region,a particularlybackwardarea. In 1982/83,SEMRY produced74,000tons of paddy, 60,000tons of which was processedinto 36,000tons of rice. Placingthe projectwithinan overalleconomic policy framework is relevant here, since -- as we shall see -- certain project targets have been achieved without fullymeetirgthe economic policy goals that justified the project. For example, the percentage of rice requirements coveredby local production can be said to have risen from 25% in 1972 to 60% in 1982,despite a substantial increasein domestic demand (morethan 5% a year). Thus the first goal would seem to have been achieved. However,this is only potentially true, becausethe bulk of the rice producedby SENRY (80%) is in fact exported to Nigeria ratherthan consumedin Cameroon. This situationgives rise to a numberof questions. How did what as an importsubstitution was conceived projectbecome an exportproject? Can SEMRY'sproductionbe redirected to the domesticmarket and at what cost? Similarly, the objective of strengtheningthe balanceof payments can be said to have been achieved, inasmuchas the bulk of production is exported, but one can ask what benefitwould have resultedin the alternative case of substitution of rice imports for local consumption. Finally,the projecthas incontestably createdconsiderable local value addedbenefiting tens of thousands of individuals.Nonetheless, we maust computethis additional wealth in relation to the situationthat would have obtained withoutthe projectand determine which economic agentshave benefited from the project. We must also ask at what cost this additional value added h.,s been obtained (i.e. the ccst to the community and to the nation),and whetherthe sums invested could not have been allocated to some other type of projectthat would have brought greaterbenefitto the community.  3 AI~TACEMBNT Page 4 - 70 - This evaluation has more than just retrospective value,because it providespartialanswersto a numberof questions that arose in connection with the SEMRY projectin 1983. During the firsthalf of the past year, SEMRY was unable to sell its production eitherabroador on the domestic market. This broughtabout a crisissituation(cashflow difficulties, operating subsidies, lower sellingprices,government intervention on importflows),and raised a numberof questions that are, unfortunately, askedonly when things go wrong; namely,how reliable is the Nigerian market,how competitive is SEMRY rice,what are the costsof production and, hence,what is the economic rate of returnon the operation? The economicresultspresented this situation. below illustrate The SEMRY projectyields a numberof products (rice,fish, food products),whose economicimpactcan be evaluated in terms of productgroups by followingthe variousstageseach of these productspassesthroughfrom the producerto the consumer,or as far as the nationalfrontierin the case of exportproduuts. priced at the finalstage, In 1983,the value of SEMRY production, amountedto more than CFAF 10 billion. Destination of Production Value X On-farmconsumption 1,068 10.10 Rice (domesticmarket) 1,318 12.46 Rice (export) 6,000 56.74 Paddy (domesticmarket) 63 0.59 Paddy (export) 995 9.40 Fish (domesticmarket) 370 3.49 Fish (export) 640 6.05 Livestock market) and other (domestic 120 1.13 Total 10,574 100 points: the following We would emphasize (a) Exportsamountedto 72% of the total: CFAF 6 billionfor rice, almostCFAF 1 billionfor paddy,and CFAF 640 millionfor fish. Thus the domesticmarket absorbsonly 28% of totaloutput,or close to CFAF 3 billion: 10' consumed on the farm by SEMRY growers, 12% for rice sold in northern Cameroon and 6% for fish and livestock products. Thus the SEMRYprojectis primarily an export project and not one directed toward meeting domestic demand. (b) Rice production, representing 70% of total output in terms of value, is by far the most important project component. The paddy component (13% for the parallel market and on-farm consumption together) remains limited but can be expanded depending on the degree of supervision exerted by SEMRY and the price differential between paddy bought by SEMRY and prices on the parallel market. At 10%, fish production is by no means negligible; independent of SEMRY,it provides area farmers and Nigerian fishermen with sizable income.  ATTACHMENT 3 71~. - Page 5 The competition of rice with traditional production activities is reflected in the 7% share for food crop production and livestock raising. On-farm consumption represents only lOX of the total value of production. The project is extensively integrated into the cash economy. The other side of the coin, however, is that the farmers have to purchase a sizable proportion of their food needs from outside. The respective weight of these various components shows that the project is above all an agro-industrial rice project. Net Impact of Project The net impact of the project is determined by comparing the situation "without the project" and the current situation "with the project." If the demand for rice products is regarded as the same as in 1982/83, the reference situation implies rice imports needed to meet an equivalent level of domestic demand. This takes account of the fact that the farmers working within SEMRY would have produced rice for on-farm consumption in the traditional way. On this basis, the project resulted in the creation of CFAF 7.2 billion in additional added value for the year 1982/83. The supplementary income distributed amounted to CFAF 8.3 billion. The principal beneficiary is SEMRY (CFAF 3.9 billion), followed by the farmers, whose income has gone up by CFAF 2.8 billion (2,255 million for the SEMIRY farmers, 580 million for agricultural wage-earners). The project also created CFAF 1.5 billion in income for traders. Supplementary Income Distributed by Each of the Agents Farmers SEMRY Traders Traders Total _ .(Domestic) (Export) Wages (local staff) 580 1,453 - 48 + 200 2,185 Wages (expatriates) 0 229 - 1 + 2 230 Financing costs 1 359 - 13 + 41 388 Agricultural income 2,255 0 0 0 2,255 Other income 8 104 16 + 1,133 1,251 Depreciation 18 1,768 - 64 + 249 1,971 Total 2,862 3,913 -110 1,625 8,290 Net Effect on Trade Balance As rice imports have declined only slightly, the trade balance is in deficit by CFAF 500 million: imports of intermediary goods - 1,008 rice substitution (6,000 tons x CFAF 85,000/ton) + 510 - 500  3 ATTACHMENT Page 6 - 72 - On the other hand, if the rice were exported through legal channels and paid for in convertible currency, the trade balance would show a surplus of CFAF 6.5 billion, which is not the case. Similarly,if the rice produced by SEHMY were to replace imported rice entirely, the trade balance would show a CFAF 2 billion surplus. The financial loss to the Government is sizable, since on the one hand the Government collected a smaller amount in import taxes on imported rice while at the same time it has to subsidize SEMRY, giving a net loss of CFAF I billion. Government Account Revenue Expenditure Taxes (direct effect) 406 Direct subsidies 1,477 Taxes (indirect effect) 163 Indirect subsidies 108 Total 569 1,585 Balance - 1,016 In short, five types of problems emerge from the analysis: (a) Marketing; (b) Distribution of income generated by the project; (c) Project deficit to be borne by the Government; (d) Weaknesses inherent in the production systems; *e) Farmers' lack of control over production functions. Marketing The dual approach institutedby the Cameroonianauthorities, under which traders are obliged to purchase locally grown rice in order to obtain rice import licenses, in turn requiring the traders to strike a balance between the price of imported rice and the price of locally grown rice, has not been respected in practice. This explains the problems SEMRY had in 1983 in marketing its production. SEMRYrice is thus in competition with imported rice, which reaches northern Cameroon at a cost price of between CFAF 150 and CFAF 155, while SEMRYrice is sold at a price of CFAF 165 ex works at Yagoua. Furthermore, the closer one gets to the major consumption centers of Yaounde and Douala, the greater the price differential (lower transportation costs for imported rice and higher transportation costs for locally grown rice). Under the situation that obtained prior to 1982, when the government subsidy was larger, the ex works price of rice was competitive with that of imported rice, and as a result traders bought rice for export. This caused some people to say that the SEMRY project had become an export project. It should be noted, however, that these exports have never figured in the official trade balance, and no information is available on the subject. Be this as it may, the project in fact creates a shortfall of CV.AF500 million in the trade balance.  3 ATTACHMENT Page 7 - 73 - Distribution of Income Generated by the Project The farmers generate 46X of the value added but receive only 34X of the income distributed. The major beneficiaries of the project are SENRY, which receives almost 50% of the distributed income, and the traders, who receive 18X. Wage-earners also receive a larger share of income (CFAF 2,435 million) than the farmers (CFAF 2,255 million). Thus we are dealing here with an agro-industrial project rather than a rural development project. Project Deficit to be Borne by the Government (The subsidies contributed to the project whether by the Cameroonian Government or by international assistance agencies are shown under "Government," since the Cameroonian Government will in any event have to repay the incernational loans.) The deficit is linked with the cost of production of the rice. According to our calculations, the cost of production in 1982/83 can be broken down as follows: Farmer"s remuneration CFAF 41.7 Cost of production services CFAF 35.5 Cost of paddy CFAF 77.2 Losses before milling CFAF 7.7 Cost of paddy before milling CFAF 84.9 Cost of paddy needed to produce one kg of rice CFAF 132.2 Cost of processing CFAF 53.2 Cost of one kg of rice CFAF 185.4 It should be noted that, since rice is sold at CFAF 150 excluding taxes, the subsidy amounts to CFAF 35 per kg. It should be possible for SElRY to reduce the cost of the rice ex works, particularly by increasing milling yields (a CFAF 15 improvement in costs could be achieved by restoring yields to their 1977 level). The deficit, which is covered by a government subsidy, may be justified in light oi a policy of food self-sufficiency;this rationale is, however, lost entirely if the output is exported, as this amounts to subsidizing foreign consumers. Weaknesses Inherent in the Production Systems The potential weaknesses of the production systems established within SEMRYdiffer between SEMRYI and SEMRYII. It is, however, true to say that the Massa and Mousgoum production systems prior to the introduction of irrigated rice cultivation were characterized by a fairly well balanced combination of activities (food crops, stock raising and fishing).  ATTACHHEET3 Page 8 - 74 - This diversification represented a sound adaptation to an environment characterized by highly variable climatic factors, and resulted in a likewise relatively well balanced food supply. With the introduction of irrigated rice cultivation in two yearly cycles,the balance among these various activities was shattered, with paddy production taking absolute pride of place. In SEMRY I, the Massa population affected by the project lost sizable tracts of land that had previously been used for growing food crops and raising livestock; this land was converted into rice fields governed by a system of allocation over which the farmers had practically no control. The family production units responded to this new situation in very different ways. Family units with a sizable labor force (generally the families of polygamous males) were able to manage both irrigated rice cultivation and traditional food crop production. Those with a small familylabor force,on the other hand, were unable to handle both activities and thus had to abandon rice growing for a while. After a few years, the situation was thus that part of the irrigated area could be cultivated only by officials or merchants from Yagoua taking over from the farmers. These social groups employing agricultural wage-earners for the production of paddy are exerting a growing influence over the rice-growing area, to the detriment of the farmers, helping to push the latter out of the mainstream of development. Thus a shift has occurred as regards the project objectives, since the farmers whose land was affected by beneficiaries schemeought to have been the principal the irrigation of the project. Farmersunableto obtaina plot of land on which to cultivate rice becauseof growingurban demandhave no alternativebut to become paid labor within the project area. This change, which is attested to by a number of sources, runs counter to the objective of stabilizing the Massa farmers, and of establishing a "stabilized" production system. Where double cropping has in fact been introduced within SEMRYI, this is either because the family producticn units have sufficient manpower, or becausenon-farmer groups able to pay regularwages have taken possession of a sizablepart of the total irrigated area. These developments have attracted little attention so far since the main concern was production. We type of project are thus faced more and more with an agro-industrial in which the farmer no longer has any control over the land, over cultural practices, or over the irrigation of the plots. His situation is close to that of a wage-earner whose remuneration depends on the results achieved, but who has only minimal control over the factors that determine those results. In SEMRY TI, due to the unexpecteddefection of a sizableproportion of the local Mousgoum people,it became essential to bring in Toupouriworkers from outsideto developthe irrigated plots; in any event,this area will not be fully developed until 1986. The creationof a lake 35,000hectaresin extent enabledthe Housgoum people,for whom fishingwas alreadyan important economicactivity, to earn sizableadditional cash income. The Toupouri farmersbrought into the SEMRY II area following recruitment campaignsin  3 ATTACHMENT Page 9 - 75 - their village adapted rapidly to irrigated rice cultivation, and have benefited from the income that it provides. They are, however, experiencing considerable difficulties in growing food crops and in raising animals because of the lack of space needed for those activities. The decision centers for these family production units continue to be located in their villages of origin. The Toupouri workers present in SEHRY II are characterizedby their youthfulness -- and hence by their desire to amass cash for dowries. For a variety of reasons, their continued presence in SEMRYII is far from assured. Whether in discussing SEMRYI or SENRY II, the views expressed regarding the Massa, Mousgoum and Toupouri systems of production reduce all of these to a variety of medium-scale holdings with the same type of reaction to irrigated rice farming. Our analysis, however, has stressed the diversity of family production units in terms of labor availability. This has given rise to very different reactions to rice growing, reflected in very different levels of commitment to the project. Farmers' Lack of Control over Production Functions At the functional level, responsibility for rice cultivation rests with the SEMRY organization from the pre-production stage (actual production being done by the farmers) to wholesale marketing (done by private traders). As a result, there is little room for farmer initiative. SEMRY is thus responsible for a large number of functions, which can be grouped in four major categories: (a) Provision of irrigation infrastructure to the plot boundaries, plus maintenance of this infrastructure, which is actually carried out to a greater or lesser extent depending on circumstances. SEHRY's involvement extends even to plot allocation. (b) Production functions proper, following the principle of control, wherever possible direct, over application of the main factors of production. Thus SEMRY manages the flow of water to the plot boundaries (unequal quality of service), supplies the farmers with seedlings (setting a final date for replanting and destroying the seedlings if this deadline is missed), supplies and distributes inputs in connection with a form of credit, machine plows the fields (this has technical drawbacks, as the machines produce large clods), and provides extension, supervision and monitoring services. The supervision function predominates within the last-mentioned group of services, due to application of a procedure which requires the farmers to follow precisely a highly demanding schedule (supervision of performance of steps in the correct order and observance of timetables). (c) Post-production functions, involving purchase of paddy from the farmers (who are permitted to keep only 1OX of what they grow), followed by storage and processing of paddy into rice (where there are capacity problems with the rice mills as well as yield problems).  3 ATTACHMENT Page 10 - 76 - (d) General functions, such as overall direction of the operation, and financial management (which is rather confused). It should be noted that the medium-term direction of such an activity cannot be effective and realistic unless it is continually receiving data derived from monitoring and evaluation based on full knowledge and understanding of the landholding system as it evolves within the irrigation scheme and the growers' production systems and economic results. To run this very cumbersome machinery, SENRY requires a sizable body of costly expatriates, which it will hardly be able to do without. The table shows a highly centralized, highly capital-intensive production system. While it functions well in technical terms, the cost is high, as is evident in the levy of 4 tons/hectare for two crops of paddy a year that the farmers are required to pay. This system depends on intensive cultivation, and even under these circumstances maintenance of the infrastructure is not really guaranteed, which will in the long run make it a candidate for "rehabilitation." The counterpoint of this is that we have a group of farmers totally without control over the basic elements required for their production system: land, labor, and cultivation techniques. They are masters -- under supervision, of course -- only over that part of the work that cannot be done by a machine, such as transplanting, weeding, and harvesting (until such time as this too is mechanized). The system that has been set up, in relation to its productivity goals, is totally under the control of the technostructure;the farmer does not really have a production function, just a work function. However, compared with the situation he would have if he were a wage-earner, he bears the risks, since his remuneration is what remains after he has paid the levy and any seasonal workers he hires. It should be noted that the absence of any system for monitoring and evaluating the condition and behavior of the "producer" units makes it impossible at present to know what their strategies are with regard to SEMRY. What stability is there in their association with SEMRY? How much is provisional and opportunistic (remuneration of labor force on a medium-sized plot), which will cease when another more attractive opportunity arises elsewhere? It is obvious that the current situation has not given rise to a true settled farming population. Nor would such a settled population be created through the artifice of organizing these worker-farmers in "groups" without doing anything to remedy their lack of control over land, labor and technology. What Strategy to Adopt Reduce SEMRY's Selling Prices for Rice At present, any reduction in SEMRY's selling prices for rice would result in additional operating losses for the enterprise and necessitate higher operating subsidies that would have to be provided by the Government.  3 ATTACHMENT Page 11 - 77 - This would be equivalent to increasing the subsidy on local rice production. This solution can only be a temporary one, as it will be very costly. Moreover, decisions on changing prices would have to be taken speedily to adjust to changing market situations. Change the Cost Price of Imported Rice by Adjusting Import Taxes To do this, all that would be needed would be to adjust the equalization levy or raise customs duties on bulk rice (these duties are currently zero for imports in this category). Domestic rice could be protected in this way and income would flow into the Government's coffers which could be used to subsidize domestic production. For rice in transit, these taxes would be reimbursed after the rice had crossed the frontier, so as to prevent it being sold free of tax on the domestic market. In the event of shortages on the domestic market, this rice could be sold inclusive of all taxes on Cameroon territory. These measures would raise the price of rice for consumers, as the taxes are passed on in retail prices. The next question is what would be the extent of these repercussions and what would represent acceptable limits for such retail price increases in terms of the purchasing power of the Cameroonian people. Theoretically, the price of rice is fixed on the basis of set margins for wholesale and retail trade. The cost of transportationfrom Douala, which varies from consumption center to consumption center, is then added. For a c.i.f. price of CFAF 85,000 per ton, the retail selling price in the Douala market ought to be CFAF 139 per kg. In 1983, however, the actual retail price recorded by the Statistics Service was CFAF 165 in Douala. We must therefore conclude that the regulations are not being applied in practice. It should thus be possible to increase the import levies without raising retail prices pro rata. Furthermore, longer-term statistics show that the price of rice has remained relatively low in comparison with other food products. This policy of low rice prices has an effect on other domestic food crops. As a result of demand substitution (consumption diverted from such traditional products as plantain and cassava to imported rice and wheat), local production of food crops is penalized and Cameroon's food dependence on other countries is increased. These substitution effects, due in part to lower relative prices for imported foodstuffs, work very rapidly (per capita rice consumption has been increasing by almost 5% per annum). The proceeds from the import levy could be used to subsidize the price of rice ex SEMRY, thus making it competitive with imported rice.  3 ATTACHMENT Page 12 - 78 - Chaime SEURY's Production System We have seen that the production system is potentially very unstable from the tecinical, so-!Ial and financial points of view, since it is based on a technostructure requiring a highly intensive and hence high-risk model, which can only succeed by always operating at maximum level, and cannot permit itself any slackening. To do this, a highly interventionist system has been set up, requiring considerable technical assistance, which minimizes technical risk by also minimizing the role of the producer. But what would happen if the pressure exertedby the systemwere to be reducedor if the farmerwere to lose interest in cooperating with this model? Would it not be better to help establish a settled farming population, in control of the factors of production involved in their operations, which would obviously require changes in the underlying technical model.  - 79- ATTACHMENT 4 PROJECT PERFORMANCE AUDIT MEMORANDUM CAMEROONSECONDSEMRYRICE PROJECT (LOAN 1512-CM/CREDIT 763-CM) COMMENTSFROM COFINANCIER (PAC MISSION) WORLD BANK Letter re-typed c/o Resident Representative in Cameroon Yaounde, 5th June, 1984 Dear Sir, You kindly sent, for reading and con=ents, the English text of the Project Perfoxmance Audit Report on the Second SEMRYRice Project. While thinking this report through, an account of an outstanding achievement, I'll venture to present a few objections. - on pages v and 8: SEMRYII is said to be either 90 or 70 km Highlights, "-upstream" of SEMRYI. If anything I would say, SEMRYII is p. v; rather downstream on the Logone, which flows in a northerly PPAM, direction. para. 13 - page 4: "Cameroonian population is expected to reach 15 million by the end of the decade." I hope not. By the end of the PPAM, century will be appalling enough. para. 5 - page vi: "an additional 8000 ha protected by flooding." I Highlights, think "from" rather than "by" is meant. p. v - page 31: "equivalent to the value of one ton of paddy sold PPAM, to SEMRY." True, provided two precautions: para. 5 - one ton per half hectare. - one ton per crop. Sincerely yours, /s/ J. Longeulnas [Mission d'Aide et de Cooperation (French Aid Mission)]  - 7-z ;pw -:;  - .81- CAXEROOI PROJECT COMPLETIONREPORT SECONDSEMRY RICE PROJECT LOAN 1512/CREDIT 763-CM October 5, 1983 West African Project Department Agriculture Division D  -9- g2 - 7cS~ o"I;xr 4 09o-k wi  - 83 - CAMEROON REPORT PROJECTCOMPLETION SERBYRICE PROJECT SECOND Loan 1512/Credit 763-CM I. INTRODUCTION 1.01 The project was the Bank Group's ninth lending operation in the agriculture sector and the second for rice development in Cameroon. The SENRY Rice project, Cr. 302-CA (US$3.2 million) in 1972 had been highly successful and the subject project marked the continuation of the irrigated rice development program in northern Cameroon which it initiated. 1.02 Agriculture provides a livelihood for about 75% of Cameroon's population. When the projectwas prepared in 1975, agriculture accounted for 35% of GDP and 70% of the value of exports. Both rice projects were of a plantation enclave nature and addressed the development of the poor, semi- desertic northern area of the country and the establishment of rice as food crop to meet the growing demand there for rice, and to exploit the export potential. 1.03 The Project Completion Report (PCR) follows standard practice in its exposition except that the chapter on "Project Implementation" is, except for editing and the exclusion of less important detail, largely taken from the "Rapport d'Achevement du Projet SENRYII" dated December 1982, prepared by the Soci-et' d'Expansion et de Modernisation de la Riziculture de Yagoua (SE3RY), the executing authority. Occasionally there will be found some inconsistency in the statistics as SENRY's report reflects the experience up to mid-1982, whereas Sections V-I of the PCR take into account the results of the 1982-83 crop year. II. THE SECTOR 2.01 Although Cameroon is largely self-sufficient in foodstuffs, imports of wheat and rice rose sharply in the early zeventies, otherwise there was a relative stagnation in the output of traditional food staples. Farm income was marked by regional disparities, as low as US$70 per capita in the north and about US$150 in the south, the cocoa and coffee producing area. Thus in the Fourth Plan, 1977-81, Government intended to emphasize the expansion of plantation agriculture, including smallholder schemes, in addition to the further development of traditional agriculture, with about 25% of the resources dedicated to the former and the balance to the latter, with due emphasis on the development of the more poorly endowed regions. The program  - 84 - financed by the Bank Group in this period largely covered the spectrum of agriculture development, including livestock and cocoa projects (1974), rubber (1975) and a rural development project (1977). The SEMRY II project itself embraced the objectives implicit in the Plan: increasing the productivity of the poor rural areas, improving the country's foreign exchange earnings and developing sector policies and institutional capabilities. 2.02 The continuing success of the SEMRY I project clearly raised the of SEMRY II as a good vehicle possibility for furthering the achievements of these objectives in the North. Completed in 1975, SEMRY I comprised irriga- tion works of 5,300 ha benefitting 3,400 families, 600 more than originally planned. By 1977, paddy production substantiallyexceeded the appraisal estimate and now, in 1983 at full development, annual production exceeds 40,000 tons, twice the amount estimated at appraisal. This is the result of developing a larger area than originally planned, the adoption of transplant- ing instead of broadcasting, double cropping of a larger hectarage than foreseen and a yield of over 5 tons per ha from each crop. Moreover, the project was done at approximately estimated cost and on schedule. 2.03 This was reflected in the financial and economic results of SEKRY I, an ERR of 22X versus 11% at appraisal, and a farm income of nearly US$900, almosL 3 times appraisal estimate and 6 times the 'without project" sum. 2.04 SEMRY II, the project, differs from SEMRY I in that it is a storage pond gravity irrigation scheme rather than a pumped water one. It therefore, entailed major storage works. As the second major rice project it raised significant issues which had been of little consequence in SEMRY I, that is, whether rice demand would be sufficient to absorb the increased production, and whether there would be enough farmers to cultivate the new acreage developed. 2.05 For the purpose of the initial rice development a semi-autonomous orgnaization, SEMRY, had been created to execute and, subsequently,operate the scheme and this system was continued for SEMRY II. SEHRY was responsible for all aspects of project execution including resettlement,selection of smallholders to farm the irrigated plots, extension services, ploughing and preparation of the plots prior to seeding, collection of paddy, payment and the provision of credit to farmers, milling and sale of rice to the traders in this commodity. Thus, the smallholder was relieved of a function which often proves to be a problem, timely and adequate land preparation. The project was tailored to exercise a strict plantation discipline over a large number of smallholders farming rice over a highly centralized area amenable to close supervision. III. PROJECT FORMUTLATION History 3.01 The project is located 70 km downstream of SEMRY I in the plain on the left bank of the Logone river, which is traditionally inundated during  - 85 - July-December while the river is in flood. It was determined as far back as 1951 that soils in the floodedarea were suitable for rice cultivation. By 1974 about 3,000 ha of the area was under rice cultivation, protected by limited earth works which required frequent remedial measures. Between the effects of the flood and the limited extent of the remedial efforts, the results were poor and the yield averagedless than 1.3 tons/ha. Project Components 3.02 In view of this poor state of affairs Government, with the support of the agencieswhich had co-financed SEMRY I, commissioned a study in 1974 of the feasibility of irrigated rice on the plain by a consulting firm. The study was financedby Fonds d'Aideet de Cooperation (FAC)and proposedthe gravityirrigation of 7,000 ha, with two rice crops per year. It also envi- saged the development of a fishingindustryin the reservoir and the settlement of up to 8,000 ha along the shore of the reservoir for food crops. In additionto the reservoir works it providedfor the main irrigation infra- structureand on-farmworks. 3.03 A 27 km dike across the plain backed-upthe water floodingthe plain to create a reservoir of 32,000ha in area when full. Below the dike were locatedthe rice irrigation perimeters, protectedfrom floodingby the adjacent Logone river by a seconddike runningparallelto the river for 22 k*n. This constituted a ma4or civil works construction,which is describedin some detail in paras. 4.0'-4.09. The projectprovidedsupportservices including a 50 km networkof access roads linkingthe main localities in the area, rice mill, rice storagefacilities, headquartersbuildings, housingand electricpower generating facility. It providedvehiclesand equipment for on-farmworks and agricultural services. A training programfor local staff and applied research activ't'es were includedin the project. Resettlement 3.04 About 7,000farm families were expectedto participate,half of whom were alreadyliving in the area. The other half were expectedto migratefrom north of the projectarea or from the more distantwesternuplands. The herdingpractices of some cattle raisingtranshumant familieswere affected. A comprehensive resettlement programwas organized under the responsibilityof the extension services coordinator. HealthProgram 3.05 Becauseof the possibleincidenceof diseasefrom the starage reservoir, an elaboratehealth schemewas devised. It includedtlhe provision of a health centerand three pharmacies,upgradingof the three existing villagepharmacies, construction of encloseddrinkingwater wells, trainingof medicalpersonneland endemicdisease control. Certainhealth studieswere also to be undertaken.  - 86 - Organisation 3.06 The SERRY II organization was essentially the same as that for SER!R I. Under the head were the senior staff heading the various departments, and the administrative and technical staff groups. There was a station chief in charge of each of the four irrigation blocks which, at full development, would require 15 zone chiefs and 85 extension agents. Of them, the 70 agents for irrigated rice activity were responsible for informing the smallholders of rice cultivation practices, allocation and distribution of the water for irrigation, the provision of farm inputs, collection of credit and organiza- tion of the harvest. All told, project personnel was expected to reach 750- 800. Credit 3.07 Fonds National de Developpement Rural (FONADER), the Government institution responsible for agricultural credit, was to procure and pay for fertilizer and farm equipment in the quantities requested by SENRY, which provided land preparation, ploughing, farm equipment and other farm inputs to the smallholders an credit. Except fcr equipment, which required a 20% down payment and full repayment within three years, seasonal credit had to be repaid by the farmers at harvest time as a deduction against the purchase price of paddy. In principle, the amount repaid was "full-cost", based on the farmers purchases of inputs plus share of a gross fee for extension, water, irrigation network maintenance and project amortization. Bank Reservations about the Project 3-08 While the feasibility study for SEERY II was ready by the end of 1976, the project was not appraised by the Bank until 1977, a delay due in part to Bank concerns, and those of the co-financing agencies, about the size and cost of the project, whether it was the most economic means of producing rice in the area and the market for rice. A study made of Cameroon's rice market was not foun-I to contribute much to the establishment of demand projections. A Bank re-examination of the situation in 1977 found that the cost of the project had been lowered somewhat and that rice marketing no longer appeared a vital issue. Whereas the national rice production in 1985 was estimated at 85,000 tons of which SEMRY development would amount to 57,000 tons, the domestic market by then was expected to be about 60,000 tons, and it seemed likely that the 25,000 ton difference could be exported, mainly to Nigeria. Internal consumption in Cameroon was 31,000 tons in 1976. 3.09 In 1977, the Government position, adopted by the co-financiers, was that on a long-term basis rice production in northern Cameroon should mainly supply that area as well as the nearby export markets in Nigeria and Chad, but that in the short-term a share of SENRY rice should be sold in the southern Cameroon as indications were that it was easier to develop rice production in the north. To this effect, Government said it would adopt a policy to develop rice exports and to favor internal consumption by keeping retail prices as low as possible. Narketing mechanisms in Cameroon are discussed in paras 5.02 - 5.03.  - 87 - Project Cost 3.10 The project cost was estimated at US $55.5 million, including indirect taxes, but not duties, which were exempted, of which the foreign exchange cost was US $41.2 million or 74%. Physical contingencies of 20% for main civil works, 15% for irrigation facilities and 10% for buildings, were provided, as well as price contingencies averaging 8.5% for i978/79 and 7.5% thereafter. Financial Plan 3.11 FAC and Caisse Centrale de Cooperation Economique (CCCE) co-financed the project together with the Bank to cover the foreign exchange cost, as follows: Bank/IDA FAC CCCE GOVT. TOTAL US$ Million Civil Works 16.0 - 4.5 3.6 24.1 Equipment 9.7 - 2.7 2.2 14.6 OPM _- - 3.2 3.2 Personnel 2.6 4.0 0.7 5.2 12.5 Studies 0-7 - 0.2 0.2 1.1 TOTAL 29.0 4.0 8.1 14.4 55.5 Net of Taxes 29.0 4.0 8.1 9.9 51.0 Share % (57) (8) (16) (19) (100) The Bank Group provided financing of US$29 million, Bank, USS14.5 million and IDA, US$14.5 million. FAC financing was in grant form and that of CCCE on standard loan terms. One third of Bank Group funds was conveyed by the Borrower to SEHRMas a grant and two thirds as a long term loan at 5.5% interest. 3.12 Procurement and Disbursements Contracts were awarded for the civil works and for heavy earth moving equipment following International Competitive Bidding (ICB) prior to Board approval, with the agreement of the Bank. Other goods were likewise purchased under ICB except contracts of less than US$100,000 where local competitive bidding was followed. Specific awards are discussed in Section IV. No signi- ficant procurement problems arose, except for the electricity plant (para. 4.20). Retroactive financing aggregating US$2.1 million was provided by the Bank Group on behalf of the contracts for earth moving equipment, mobilization payment for civil works and consulting services.  - 88 - SENRY Finances 3.13 As a semi-autonomous agency SENRYwas provided with an initial capitalization when constituted in 1971 which, following periodic augmenta- tion, reached CFAF 4,580 million, or some USS20 million, by 1978. On completion of SENRY I, SFMRYhad an operating surplus as the spread between the paddy price and sales price was adequate to enable this. At full development SEHRY had expected an annual net revenue of about US$650,000, the situation at the outset of SRERY II. A cash flow statement developed for SERMYII, independent of SENRY I, showed that it would be able to meet its obligations until it was well into the development stage, and subsequently s'how a sizeable surplus after debt payment, amounting to perhaps US$5 million by PY15. Accounts were and are maintained to reflect the financial situation of SEMRY, and sub-accounts maintained for the individual projects, SENRY I, SERY II and, subsequently,SEHRY III. Goals and Targets 3.14 The broad objectives of the project were to develop northern Cameroon, which was relatively poor, through irrigation fed rice, and raise the incomes of a substaatial amount of its population, in the process increasing foreign exchange earnings through rice exports and developing institutional capabilities in the region. The program was particularly attractive in that it would become self-financing over time. At full developlent the production of about 26,000 tons of rice annually from a yield of 47,000 tons of paddy, 10,000 of which for home consumption, and gross revenue of about US$12 million were anticipated. Yields were expected to average about 4.5 tons/ha in each of the two seasons and net family income to increase from CFAF 54,000 (without project) to CFAU 183,000, a gain of over 200%. The net return per man-day expectation was CFAF 560 versus CFAF 320. Expected and actual yields and other results are detailed in Annex 1. Loan Negotiation 3-15 The loan negotiations were held in November 1977. No issues of important consequence arose. Covenants 3.16 The covenants in the loan documents largely reflected the agreements and practices established in conjunction with SEMRY1. Under the project all covenants were met. 3.17 The Loan and Credit were approved by the Board on January 19, 1978 and became effective April 14, 1978.  - 89 - IV. PROJECT IMPLEHENTATION11 4.01 The SEflY II Project differed from the first project at Yagoua, SEKRY I, in that it incorporated a greater number of activities, designed to bring out the potential of the Pouss-Guirvidig region, recognized as much less developed than the rest of northern Cameroon. The second project provided for irrigation of 7,000 ha of land bordering the left bank of the Logone River. Irrigation water would be provided year round from a reservoir with a capacity of 600 million m3 and covering a maximum of 38,000 ha. Flood protection structures were to permit rainfed farming of a further 8,000 ha. Storage Dam and Road 4.02 An earthen dam would be built perpendicular to the Logone River,east- west from Pouss to Guirridig, 27 km long. It would have a maximum height of 7 m, a crest width of 3.5 m and sideslopes of 4:1 and 1.75:1 on the reservoir and inland sides respectively. A storage reservoir would thus be created covering a total of 32,000 ha at overflow level (elevation: 312.19) and 12,000 ha at minimum reservoir level (elevation: 310.80), leaving useful storage capacity of 330 million m3. Two structures for the evacuation of surplus water from the reservoir would be provided: A drainage outlet, equipped with sliding gates would be constructed in the body of the dam immediately west of Naga for the evacuation of overflow at a maximum rate of 100 m3/sec into the Mayo Vrik drainage channel; and a weir on the Logone dike immediately upstream of the dam for the purpose of regulating the level of the reservoir either by spilling overflows into the Logone once elevation of 312.19 m is reached or by allowing inflow into the reservoir from the Logone up to a maximum elevation of 312.73 m. A road would be built on the inland side of the dam -- 27 km long, 8 m wide and raised an average of 0.4 m -- to connect the main centers affected by the project, Pouss, Maga and Guirvidig. Five bridges would also be built, one over the Mayo Vrik channel and the others over the four water conveyance canals. Dead-head canal and intake structure 4-03 A dead-head canal would be constructed from Djafga on the Logone River to the Mayo Burad, a tributary of the Mayo Guerleo, at the upstream end of the reservoir. It would be 11 km long, 13 m wide, of variable depth, allow ma-imum flow of 30 m3/sec. An intake structure would be constructed in the Logone dike at Djafga and equipped with four sliding gates. Logone dike and road 4-04 The existing dike running a distance of 21.5 km along the left bank of the Logone River between Pouss and Tekele would be reinforced. Its height 1/ This Chapter has been taken from the report prepared by SEKRY "Rapport dAch5vement du Projet SEMRY II" of December 1982. Excisions of detail have been made for brevity' s sake.  - 90 - would be increased to a maximum of 2.9 a above natural ground, and it would be provided with a crest width of 3.5 m and slopes of 1.75:1 on both sides. The free-board allowance would be 0.7 m. A road located at the foot of the logone dike, 23 km long, 8 a wide and raised 0.4 a above the natural ground level would provide access to the Poauss irrigation block and connect Pouss to the northern part of the plain. Nain drain 4.05 The Mayo Vrik channel would be used as the gravity outlet for over- flow from the proposed reservoir and the main project drains. It would be regulated for this purpose over a length of 400 a. Hydraulic calculations supported by available records of Mayo Vrik levels during actual floods indicate that, with the reservoir acting as a buffer, its capacity to drain the project area would be more than sufficient. A head gate structure capacity of 2.5 m 3 /sec) would be built at the head of each of the four primary canals. These structures would be equipped with two sliding gates for inflow control and two sliding gates to maintain constant canal levels irrespective of downstream use. Construction of irrigation and drainage network (7,000 ha) 4.06 Project works would include the construction of open primary end secondary canals and drains, together with necessary water control structures, turnouts, culverts and farm roads. Secondary canals would be equipped with fixed discharge gates, combined with duck-bill weirs in the primary canals where necessary. Turnouts to tertiary canals would be provided for water deliveries at 120 1/sec to areas irrigated on a rotating basis. Turnouts would be provided for each 3.5 ha unit; from them, farm ditches would convey the water directly to each 0.5 ha plot. Farm drains would convey excess water from each 3.5 ha unit to the secondary and main,outlet drains, which in turn would join the main project drain. Part of the main drainage outlets would be newly excavated and part would incorporate existizg natural channels, tributa- ries of the Mayo Vrik, which would be deepened and regulated. Canals would be unlined since infiltration rates are low throughout the project zone. Unsurfaced operation and maintenance roads would be constructed on the canal banks. Primary and secondary canals would be provided with a roadway 3.5 a wide on each bank. Farm roads -- also serving for farm-to-market purposes -- would be constructed along the drains, using excavation materials. Built 0.4 m above ground level, they would be 6 m wide along primary and secondary drains and 4 m along tertiary drains. Housing and office facilities 4.07 SEMRY's main office and the Director-General'sresidence would be built at Yagoua. Maga, however, would be the location for SEMRY II project headquarters and for staff housing, the latter consisting of a total of 20 three, two or one-room furnished bungalows. Project headquarters would consist of offices, a garage and machine park, machinery sheds, a workshop and spare parts storage, water-supply works including a 10 m water tower plus a tubewell equipped with a diesel electric pump, and health facilities. In addition, the local airstrip was to be improved.  - 91 - Rice mill and storage facilities 4.08 A rice mill would be built and equipped with two milling units as well as paddy and rice storage facilities. The first unit, with a capacity of 5 tons/hour, would be installed in time for the PY 3 crop and the second in time for the PY 5 crop, bringing total mill capacity to 10 tons/hour. Paddy and rice warehouses would be constructed over P1 3-6, gradually increasing storage capacity from 9,500 to 26,000 tons. 4.09 SEMRY, the executing agency,was represented by its Director-General in Yagoua and by a Works Managerat the Naga site. For execution of the projectworks,SEIMN relied on contractors for the large-scale civil engineer- ing works; force account for the development of 7,000 ha irrigated farm land and construction of the SEMRYII facilities at Maga; and consultants for engineering advisory and supervisory services in connection with contract works and to provide assistance with works undertaken on force account by SERMY itself. Consulting Services 4.10 The consulting firm responsible for the design and supervision of SENRYI was a natural choice to provide consulting services on SEMRY II and undertook to direct and supervise works executed by the contractors and to assist SEHRY in carryingout all force accountworks,and to providethe following services; to provideengineering designsfor contract works and force account works; to direct and supervise all contract works and provide assistance with force account works; and to provide extension personnel, a mechanic for the maintenance of motor vehicles and machinery, and help in the preparation of reports on project construction. EXECUTIONOF PROJECTWORKS 4.13 The followingconstruction was done under contract: (i) the storage dam, the drainageoutlet into the Mayo Vrik channeland the turnoutsfor the primary irrigation canals, (ii) building work on the Logone dike, (iii) the weir on the Logone dike, the dead-head canal and its intake structure on the Logone, and the earth road betweenGuirvidig and Tekele via Maga and Pouss. Following international competitive bidding, the award was made to the contractor who lodged the lowest evaluated bid of CFAF 2,124 million. Work was begun in January 1978. A comparison of estimated and actual quantities and costs for contract works, shows:  - 92 - - earthnoving -- 15% above estimated quantity. - concreting -- 38% above estimated quantity. Final cost of works -- CFAF 2,589 Million (US$11 Million) from which must be deducted items -- CFAF 83 million not included in contract price (US$0.3 million) Actual cost of contract works CTAF 2,506 Million (US$10.7 million) (a figure 16% less than the IBRD appraisal estimate, CFAF 2,993 million, though 16% more than the contract amount). 4.14 Problems Encountered in Construction. (i) Earthmoving: presence of sandy lenticles along the dam alignment and thick strata ;,fsand along the course originally proposed for the dead-head canal which therefore had to be realigned, (ii) presenceof subsurface water in the excavations for the intake control structure, (iii) flooding of work sites by drainage from SEKRr I. To make up for time lost during the course of the construction program (mainly delays due dyke problems), the contractors had to strengthen their resources. SERRY had to resort to the contractors for reinforcement of the dyke wall (para 4.22), otherwisethe problemswere solved without undue disruption. In any event, in accordancewith the contract, certain works were. handed over in July, 1979. Other works proceededas scheduledand were completedby March 1980. 4.15 Force Account Works. The irrigationand drainagenetworks and service roads were performedunder the supervisionof the ccasultants with materials, equipment and personnel provided by SEMRY. Of the 7,000 ha. earmarkedfor development,only 6,641 ha could be used for rice-growing. The remainingareas were either eliminatedbecause of their relief characteristics or soil composition, or reserved for roads, drains and canals as follows: Area Available Area Prepared Area Remaining Location For Cultivation For Cultivation To Be Prepared POUSS 961 961 - KAGAVEST 2,330 1,930 400 NAGA EAST 2,500 _ 2,500 GUIRVIDIG 850 594 - 256 6,641 3.485 1/ 3,156 1/ Area under active cultivation at this time was 1,885 ha.  - 93 - The 3,485 ha prepared for cultivation was carrried out in the three seasons between January, 1978 and June 30, 1981, more or less in the order planned. Unfortunately, there were interruptions because some developed plots were left unoccupied, earthmoving equipment was redeployed to the works for reinforce- ment of the dyke wall, and additional financing became necessary. 4.16 The failure to farm all the developed plots as they became available caused surprise, for several reasons. At Naga, like Pouss, there were groups of potential rice growers who might have occupied the newly developed plots in 1981. A large proportion of the Naga population, however, had begun fishing when the lake started yielding unexpectedly large quantities of fish, so there were many defections. As far as the inhabitants of the Pouss area were concerned,Maga West, the only irrigation block then available to them, was too far from their dwellings, especially in the wet season. For them, too, fishing was a very tempting alternative. It is clear that if a part of the Naga East sector had been developed during the second season instead of Naga West, things would have been different, although this should not be interpreted as meaning that it would not be necessary to bring in population groups from other adjacent districts. 4.17 The project had been partially based on expected spontaneous migra- tion, which, however, did not take place in this period. Fortunately, during the last two seasons (1980/81 and 1981/82), it was demonstrated that organized migration was entirely feasible. It has become equally clear that income obtained from reservoir fishing, the diversion of a considerable volume of paddy for sale at higher prices than SENRY offers and the fatigue factor (rice-growing, food crops, fishing) went a long way toward reducing the number of potential rice farmers, but also to attracting migrants from outside project. Plans had also been based on the allocation of 1 ha of cropland per family. Experience has shown, however, that this was too large an area, especially the first years. It has therefore been cut back provisionally to 0.5 ha per family, whence the need for more farmers. From 1984/85, it will probably be raised again to 1 ha or more per family, which should then reduce the number of farmers needed. 4.18 Additional funding was needed since proceeds of loans and subsidies had been eaten into by the cost of reinforcementwork on the dam and the cost of supplementary works made necessary by changing circumstances. One result of this combination of events was that the Bank supervision mission in September 1981 and the Government requested that SENRY suspend all work in preparing new areas for cultivation and irrigation works therefor, until a balance was restored between progress with on-farm development and settlement of new smallholder families. This would give SEIRY time to find occupants for all the developed sectors of the project zone, complete reinforcement of the dam, and think out its problems of management, which, given the growing complexity of the project, had taken on new dimensions. The cost of preparing new land (surveying, eartbmoving and structures) from 1977-81 was CFAF 351 million (US$1,500) per ha. Other Infrastructure 4.19 Given the fact that Maga was difficult to get to at the best of times, and inaccessible in the wet season, until November 1980 (when extensive upgrading of the Maroua-Maga road was completed), work on the SENRY II station  - 94 - was delayed owing to the difficulties therefor affecting deliveries of materials and equipment. Another factor in the delay was that SENRY was placed at a permanent disadvantage by the shortage of qualified counterpart personnel in north Cameroon, since personnel residing in the south balked at the difficult living conditions. Force account works at the headquarters site involved living quarters, offices and workshops, water supply and electric power plant, telephone facilities, sanitation, access and internal roads (for both the SERMU station and Maga township) and facilities for new settlers. The appraisal report underestimated this item, since SEKRY was obliged to go to considerable lengths to create an environment and provide facilities on the SEMRY II station and make Naga township attractive enough to keep personnel on the job. Original plans did not include an electric power plant, as it was expected at that stage to hook the whole station into the national network. Electric power plant 4.20 Since the National Electricity Corporation was unable to supply SEMRY, it was forced to make its own power arrangements. Initially, a temporary power plant equipped with three generators was set up, which would subsequently be used simply for back-up purposes. Following Bank procedures tenders for a power station with boilers operating on paddy chaff were called. One bid proposed a different solution, to use two dual-fuel generator groups (600 kW each), functioning 90% on poor gas 1/ and 10% on diesel oil, the gas generators to operate on paddy chaff formed under pressure into log shapes. This proposal was selected, at a cost of US$1.7 million equivalent. As the manufacturer was unable to meet its obligations as regards functioning of the gas-generator units, addendums which altered the contract in view of the difficulties with the gasification equipment were signed subsequently, reducing the contract price to US$1.04 million equivalent. In the end, the two dual-fuel groups were retained, as was the press for the manufacture of paddy-chaff logs, which were to be available to the population to alleviate the shortage of firewood in the area 2/. Subsequently,the latter was found not to be workable. It should be noted here that the provision of electric power involved SENRY agency in the expenditure of an additional CFAF 247,500,000 (US$1.1 million) of its own funds to provide a distribution network. Rice mill and bulk storage 4.21 In February, 1979, a firm was awarded the contract for CFAF 433,016,88 (US$1.8 million), comprising rice mill with minimum capacity of 10 t/hour, weighbridge, and equipent for receiving paddy. Although reception dates had been scheduled for 1980 spare parts and additional equipment were not delivered until November 1981 and April 1982 respectively,due technical problems and damage in transit. After a contractual trial run, when 2,000 metric tons of paddy were processed, the mill was accepted provisionally but with numerous reservations, since certain components of the system had 1/ Gaz pauvre. 2/ However, it was only the diesel-electricunit itself, burning fuel oil, which was operated thereafter.  - 95 - functioned poorly. Final acceptance took place only in April 1982, after many overtures and sometimes strained discussions. At the present time, following assistance obtained in June/July 1982 from a highly qualified specialist, the situation can be considered normal. It is of interest to note that the SENRY I rice mill was also fitted out by the same supplier. The resulting inter- changeability of parts is a great advantage. The dykes and their problems 4.22 The dam (long dyke), designed to impound water for irrigation of the ricefields, is a structure of compacted earth (26,860 m long) with an eleva- tion of 314.23 m at crest height. The dam has a trapezoidal profile, being 3.5 m wide at the crest and its height varying between 2.50 m and 4.88 m. At the time of acceptance of the works the slope on the inland side was 2:1 and on the reservoir side 4:1. As soon as the reservoir first filled, during the 1979 wet season, two important developments were noted as endangering the resistance of the dam wall: the phenomenon of piping, seen in downstream leakages from the dam wall and potentially capable of breaching the wall unless appropriate measures are taken quickly. The fact piping occurs can be ascribed to the choice of materials for the dam wall. They are very heterogeneous and contain sand mixed with clays. On becoming wet when the reservoir first filled, differential swelling of the clays tended to create hydraulic conduits of this type; under water pressure, they can extend through to the downstream side of the dam wall. The second problem was erosion of the upstream slope of the dyke under the effects of wave wash, mostly during the rainy season when high winds were blowing from the north, which eats away the dike at water level, possibly leading -- if maintenance is neglected -- to cave in of the fill and escape of water over the dike. Faced with perennial problems of this magnitude, SEMRY became involved in a complete series of engineering studies and works. It appears that since the project as initially designed was thought too expensive it was modified; one of the changes was to reduce the protection against the effects of wave motion, which seemed on the face of it not to be strictly necessary but could be provided later if necessary. The decision to adopt this solution was ratified de facto by all parties concerned in executing the project, and therefore the damage caused every year after the reservoir first filled cannot reasonably be imputed either to design faults or errors in the execution process. 4.23 At the end of the 1979 wet season, the following damage to the dike was noted: 21 ins'tances of piping, repaired; and 14,000 m of the dike eroded by wave wash. The consultants were asked to come up with a solution. Opinions were also obtained from a firm of specialists, and another prominent consult- ing group, with special expertize in dams. Initially (March 1980), the solution favored was rip-rap but, as estimates put the cost at CFAF 3.2 billion (US$ 14 million), additional studies were thought necessary. In the meantime, and prior to the 1980 wet season, it was decided to "reinforce" the upstream slope with compacted earth forming a modified profile (in width) so as to offset the effects of erosion and approximate the original profile. With the consent of the lending agencies, the contractor was commissioned (Addendum No. 1 to the original contract) to carry out the works, which consisted in placing 55,000 m of earth fill between March 20 and June 15, 1980, to initially repair the most important damage. The cost was CFAF 150 million (US$640,000).  - 96 - 4.24 Subsequently in June 1980, after completion of the further studies mentioned and closer examination of the problems, rip-rap no longer appeared the best solution or the most economical. At the last moment June 1980, just before the 1980 rains began, SEMRY, with the consent of the lending agencies, decided to instruct the contractors to conduct trials with a slope of 10:1 over a 200 m stretch of dam wall where piping was occurring, in preparation for a full-scale trial, to be supplemented by use of a grass cover on the slope. Simultaneously,planting of such a cover on the upstream slope was made the subject of close study. Surveillance of the dike during the rainy season was carried out by an expert in Boil mechanics who was responsible for monitoring the progress of the expected erosion and taking remedial action should piping occur. He provided an end-of-mission report, which helped clarify the problems and select the correct remedial action. 4.25 On termination of the 1980 rains, the situation was as follows: 11 instances of piping, repaired, and 14,000 m of the dam eroded, badly enough at some points to cause serious concern, additional protection being provided where essential by laying sandbags. Erosion was clearly worse in 1980 than 1979; however there was, very notably, resistance to wave-wash erosion in the grass-sown trial zone with gradient of 10:1. On the basis of these findings, the following decisions were made: Agreement among all concerned on the choice of technical solution, namely reinforcement of the dam with non-compacted earth, the upstream slope to have a gradient of 10:1 and to be sown with a grass cover. For reasons of economy, the work was to be spread over two seasons and carried out by SEMRY on force account. Competitive bidding procedures were launched as quickly as possible for the procurement of eartlhmoving equipment. Since the work could not be started before the 1981 wet season, SEMRY, by force account, was to carry out some provisional rein- forcement work in non-compacted earth on the areas eroded during the 1980 wet season; the gradient was to be 6:1, except for one 1,000-meter stretch, which was to be 10:1 in order to confirm the findings obtained during the previous season and allow study of the degree of resistance to piping provided by a 10:1 gradient. The works for provisional reinforcementbefore commencement of the wet season were well in line with estimates and completed on schedule: 90,000 m of fill material distributed over 13,500 m, at a cost of CEAF 106,800,000 (US$450,000). The trials with supplementary protection in the form of vegetable ground cover were to continue. A specialist from the Soil Conservation Service of the U.S. Department of Agriculture was sent out on mission to supervise the planting on site and in nurseries of reedgrasses (Phragmites), reputed to be adapted to the conditions in question; the results were satisfactory. 4.26 The additional equipment required for reinforcementof the upstream slope to gradient of 10:1, scheduled for 1981/1982 and 1982/83 cost CFAF 400,000,000 (US$1.8 Million). The total cost of the definitive reinforce- ment work itself, carried out on force account, has been estimated at CPAF 600,000,000 (US$2.5 million). The cost of these works themselves and the equipment purchased was charged against the project loans and credits with the consent of the lending agencies. 4.27 An expert in soil mechanics was responsible for monitoring the state of the dam during the 1981 wet season. On termination of this the situation was as follows: only one instance of piping, but virtually catastrophic wave erosion over 16,000 m of the dam with gradient 6:1. The small area of slope at  - 97 - 10:1 was in very satisfactory condition, confirming the earlier findings, and there were, after three wet seasons, signs of signifi- cant rainwater erosion, mainly at the ends of the dam. It was thus confirmed that the best and most economical means of protection against wave erosion is afforded by slopes with a gradient of 10:1. In November 1981, dam reinforce- ment works were begun, in day and night shifts, with the equipment then on hand, augmented as new equipment arrived. By June 1982, approximately 80% (667,000 m3) of the estimated works had been completed. The trials with ground covers and Phragaites were continued, with by no means encouraging results, although the need for them was no longer so pressing. Some promise that natural cover might take hold led to deferral of costly attempts to introduce it artifically. 4.28 Reinforcement of the upstream slope of the dam wall by providing a gradient of 10:1 gave effective overall protection against wave erosion during the 1982 rains. There are, nevertheless, some points at which minor remedial work is required. No instance of piping was observed. The works remaining to be carried out were virtually finished by the end of 1982/3, including 3,000 m to be reinforced to 10:1, strengtheningof the ends of the dam wall, damaged by rainwater erosion and protection of intake structures with sacks of lean- mixed concrete. Approximately 200,000 m 3 of reinforcing material were put in place. The total cost of the dyke repairs and association reinforcementworks was as follows: - Earthworks for strengthening purposes (contract) CFAF 150,000,000 (US$650,000) - Protection of structures (force account) 57,767,000 (US$250,000) - Reinforcement of the dam 405,435.000 (US$1.7 million) SUB-TOTAL, as at June 30, 1982 613,202,000 ((US$2.6 million) - Provision for force-account works to be undertaken in 1982/1983 90,000,000 (US$400,000) TOTAL 703,202,000 (US$3.0 million) The full cost of these works is likely to be CFAF 1 billionCabout US$ 4.2 million) if allowance is made for purchase of the civil engineering equip- ment required for the force account component, the salvage value of which equipment will be amortized in remaining development works. 4.29 Since October 1981, the problems experienced with the dam, originally regarded as very worrying because of their implications for the future of the project, have appeared in a quite different light since discovery of a techni- cal solution that could be implemented at a cost of CFAF 3 billion (US$12 million) less than rip-rap, which was on the verge of being approved in June 1980 at a cost of the order of US$15 million. By 1983 it was evident that dyke conditions were stabilized and erosion and piping no longer a problem. However, there was some erosion of the downstresm face due rainfall which required maintenan- ce, and the attempt to cover the banks with vegetation appeared to be meeting with only limited success. It was clear that the dykes  - 98 - would require periodic inspection and annual maintenance for the foreseeable future. Resettlement 4.30 This projectcomponentinvolvedtwo separate operations; evacuation of the groups already occupying the areas to be developed, and transferof groups from neighboring districts to the SEMRY II site so as to ensure occupation of all the developed plots. Evacuation involved moving inhabitants out of areas where project infrastructure was to be located. Those living in the area to be submerged under the future reservoir were resettled near the irrigation blocks in the seven satellite villagesset up for the purpose, and were paid compensation for loss of assets. Those livingon the sites of future canals,drains or dikes were simply relocated to an adjacentpart of the projectzone and compensated.BetweenNovember1977 and 1982,a total of 7,496 individuals were affected,5,956 of them being moved into the project zone and 1,540merely relocated within it. The supervision mission of November26, 1979 reported"that this operation was very well organizedand was viewed favorably by the local population " 4.31 Realizing in 1981 that the localpopulation was not large enough to ensure full occupation of the parts of the projectzone alreadydeveloped, SEIRY began to bring in familiesfrom neighboring districts to fill the gap. Until this was done, it could not think of going ahead with new components of the planned development, which were postponedto a laterdate. Given the scale of such transfers and the uncertainties associated with them, a techni- cal and sociological study was undertaken during the third quarter of 1981 to facilitate the operation. The first transfers were begun in March 1981, with groups of Toupouri from southwest of Yagoua. A total of 958 persons were resettled in villages set up for the purpose in close proximity to the irriga- tion blocks. A second operation of the same type took place in February 1982. Brought in from neighboring districts, 1,906 individuals were resettled in new villages. Over and above the families moved in the course of these two operations, more than 1,000 individuals settled spontaneously within the project zone, attracted by the possibilities for rice-growing and fishingand the socialamenities offeredby the project. 4.32 As of the end of 1982, approximately 3,000 developed lots have been assigned. The remainder of the now developed land is reserved for nurseries and researchpurposes. In theory,a total area of 6,641 ha shouldhave been developedby the time the projectis completed. Since approximately 3,000ha have now been occupiedand 641 ha set aside for seed beds and researchexperi- ments, another3,000 ha remainsto be developed and assignedin the next few years. It shouldbe borne in mind that once the resettled families have become sure of themselves as rice-growers and appropriate techniques such as mechanized threshing have lightened the present burden of raising two cropsa year, they will most probably be willing to take on 0.75 or 1 ha as initially allowed for in project planning, instead of (present) 0.5 ha. Taking 0.75 ha, as a realistic family plot size of both newcomers and those already in residence, another3,000 families, or roughly15,000 individuals. will be needed to occupy the whole projectzone. Judgingby the resultsof the resettlement effortso far, surveyfindingsand the income possibilities affordedby rice-growing and fishing,that would seem to be an attainable objective. The cost of resettlement operations was as follows:  - 99 - OPERATIONS C7AF Evacuation Indemnities 143,683,959 (USS600,000) Land Development Costs 20,235,496 (US$100,000) TOTAL 163,919,445 (Us$700,000) Cost per Person 21,868 (US$94) Transferred from other Districts Transfer Costs 59,303,967 (USS250,000) Land Development Costs 38,036,895 (US$150,000) TOTAL 97,340,862 (Us$400,000) Cost per Person 33,988 (USS145) OPERATION RESULTS Anticipated And Actual Results 1/ 4.33 Although the appraisal forecasts of SEIRY I finally proved to have been well below the actual figures the same was not true of the SEERYII appraisal, which made exaggeratedly optimistic forecasts of production figures, no doubt under the influence of the very promising results from SEERY I at the very time the appraisal was being conducted. The comparison between anticipated and actual figures on areas cultivated and yields obtained leads to the following reflections. On the rate of usage of land: given the principal of annual double cropping, projections for the usage rate of the land were 200%, after allowing for the area reserved for nursery purposes. In the present circumstances, that figure will not be attainable (varieties with too long a growing cycle, land preparation impossible prior to the wet season, overlap of growing seasons) for the first four years of crop-growing. When the project zone has settled down to a normal rhythm of life, allowing for necessary maintenance of the irrigation blocks, a 150% usage rate may be achieved, and even that figure seems high, although adoption of more appro- priate techniques will probably make it possible (e g. mechanized threshing, shorter-cycle varieties, very strict adherence to crop schedules). For the first three years of crop-growing the actual land usage rate has been above 110%, and approached 150% in 1982/1983, though not without certain risks: an early 1983 wet season could not only jeopardize the 1982/ 1983 dry-season harvest but also prevent tilling for the 1983/1984 wet season. Use of shorter cycle varieties and the introduction of mechanized threshing would certainly 1/ Details are given in Annex 1.  - 100 - enable SEY to count on a 150% rate and even 180%-without as much risk. Research now underway indicates that those targets will probably be reached in the fairly near futtre. 4.34 Projections on crop yields for the early years of the project were high, 3.8 metric tons/ha wet season and 4.5 t/ha dry season, or a general average of 4.15 t/ha. In project year 5, the figures were expected to increase to 4.5 t/ha and 4.7 tfha respectively, or an average of 4.6 t/ha. If those figures seem fairly reasonable for a normal operating year, they are high for the initial years of the project, especially as most of these farmers hare never grown rice before; also, technical considerations dictate that all newly developed rice land should be sown the first time by direct seeding, which gives significantly lower yields than transplanting. These two factors explain the low initial yields, without forgetting that the figures given are not highly reliable; in fact, they are probably below the actual levels, since for the moment nothing can be done to prevent considerable volumes of paddy being diverted for sale in Nigeria and Chad at prices SENRY cannot match. Although 20-25% is the figure usually assumed to cover producer-family con- sumption and diversion of paddy, there is reason to believe it may sometimes reach 40% and that it varies from one season to another according to demand from Nigeria and the yields obtained on traditional food crops. Despite the difficulty of preventing diversions of paddy, current results indicate that the yield has increased steadily since the project began (three years of crops) and is now in the vicinity of 4 t/ha wet season and 5 t/ha dry season. It is very unlikely these figures would not increase to 4.5 t/ha and 5.5 t/ha respectively once the new rice-growers are used to the techniques involved and the expected results of current research have made themselves felt. When planned development of the entire 6,641 ha, is completed, a total of 6.000 ha will be used for full-scale rice-growing. Assuming minimum land sage rate of 150%, production would total 43,500 tons of paddy a year; if the rate were the more likely 180%, that figure would be 53,400 tons. Production 4.35 If the yields obtained the first years were lover than expected, this can be traced, as already indicated, to the inexperience of most growers, direct seeding of the first crop on newly-developed land and grower time spent on the other activities (for example, fishing), at the expense of the rice crop. Production potential of the SENRY II is at least as good as, if not better than, that of SENRY I. In order to take advantage of that potential, SEMRY has to provide enough settlers, regulate reservoir fishing, remove farmers who are not growing rice from the zone, obtain a higher paddy price, increase the productivity of the varieties grown and conduct extension cam- paigns to familiarize farmers with the appropriate cultivation techniques, one of them being adherence to the right growing schedule (among people whose concepts of time and delay are not the same as SEMRY's). The moving in of new settlers is going ahead successfully and on schedule. Regulations on fishing have been promulgated but are hardly enforced so far; this will be done in time, by SEMRYand the authorities. The authorities are working with SENRY to remove (or convert) inhabitants of the project zone not engaged in rice- growing and after great difficulty, SENRYhas succeeded in getting a higler price for rice. In particular, the introduction of the new variety IR 46 has shortened both wet and dry season growth cycles by 20-25 days and so increased the land usage rate. The yield it gives is also higher, by 1 t/ha. Year by  - 101 - year there is an improveaent in grower's timetables, while the right crop- growing methods are assimilated and put into practice better. This is especially true of the newest settlers, who are Toupouri. Usually not at all or not much given to fishing, they are very disciplined and organized, so that their results from rice-growing are excellent from the start; there is a not insignificant demonstration effect on the other groups settled in the project zone. SENRYhas reason to congratulate itself on the fact that rice parasites and diseases have hardly touched these two projects. Ducks and one or two kinds of bird can be a nuisance, particularly in the nurseries, but they are generally kept down by hunters. Fishing 4.36 Since the first filling of the reservoir in 1979/1980, its stock of fish would prove a not insignificant resource. However, with so many other project activities, exploitation of this potential was postponed, and more especially as the population saw it was likely to increase greatly and almost immediately. Since it was also quickly realized that fishing could parallel rice-growing as a major activity, SERRY and the local authorities have taken steps to organize the way this reservoir resource is utilized by the various interested parties and claimants. Two groups need to be borne in mind. North of the reservoir, where the project zone is located, there are rice growers who have been assigned developed farm lots but also expect to draw some income from fishing. South of the -reservoir, the population, which has received no developed farm lots, claims a larger share of the potential income from fishing. Introduction of the proposed regulations will present extensive problems, so it is likely to be some years before everyone is satisfied. According to conservative estimates, yet to be confirmed, annual production from the lake would be at least 100 kg/ha of fresh fish for an average surface area of 20,000 ha. On average, then, 2,000 metric tons of fish would be sold lakeside annually at CFAF 200-250/kg (about US$ 1.00), producing a total of CFAF400-500 million (US$1.7 Million) every year, and probably more over the longer term. Research 4.37 SENRYhas requested assistance with its research and experimentation program from the following specialized organizations: Institut de Recherches Agronomique et Forestiare (ONAREST/IRAF Agreement); Centre Technique Forestier Tropical pour la Peche et la Reforestation (CTFT), Delwall Report on forestry and de Kimpe Report on fish-farming; and Institut d'Elevage et de Nedecine Veterinaire des Pays Tropicaux (IEMVT). Crop Research 4.38 This is the responsibility of a Cameroonian agronomist, which has the support of IRAF. Given the many components of SENRYII all in the course of implementation and the shortage of qualified staff the first years, crop research was conducted at SEJ5Y I's Vounaloum station. Research work began on SERRYII only in the 1981/1982 season, when a plot of 48 ha was made ready and a Crop Techniques Research Service set up. Two qualified (expatriate) staff were brought in to expand the SENRYI team. The program is designed to confirm findings on: (i) selection of good-quality, high-yielding shorter- season varieties well adapted to local conditions; (ii) improved crop-growing  - 102 - practices, with trials of new materials for soil preparation, bulk harvesting, etc.; (iii) crop diversification so that there would be an opportunity to assess the adaptive potential of food crops other than rice; (iv) millet, wheat, etc. within the SEMRY projectzone; this would be a means of supple- menting the needs of population groups moved into the area in the future, especially as there could well be a local shortage of millet, given the heavy soils and poor rainfall in the region and (v) production of basic seed so as to restore and keep up varietal purity. 4.39 One of the chief results of the research program has been spread of the use of variety IR 46 within the SEMRY zone, replacing IR 24. While retaining the valuable quantities of IR 24, the new variety also gives a higher yield (an extra 1 t/ha) and, more importantly, a growing season some 15 to 20 days shorter; the latter is an essential factor in achieving maximum land usage through two annual crops. Transplanting allows less of a time margin, which is actually an advantage, since it forces the rice grower to follow a necessarily stricter cultivation schedule if he is to harvest two crops a year. Testing of other varieties being pushed ahead gives some promise that SEMRY may be able to achieve still better results. Crop diversification measures, still only at the early stages give the impression that major difficulties will have to be overcome in varieties and cultivation techniques. For the last two years, particular emphasis has been placed on improving cultivation techniques through study of threshing methods, bulk harvesting, soil preparation, methods of reducing the cost of seedbeds, and purchase of quality paddy. Basic seed production is already well advanced. Seed distributed during the 1983/1984 season will be of considerably higher qualitythan what is now in use, which, until 1982, had simplybeen the production from previousyears Livestockresearch 4.40 Apart from a cattle-fattening trial using by-products from the rice mill supplemented with fodder,which confirmed findingsobtained by SENRY I, therehas been very littleSEMRY II researchactivityin this spherebeyond some work on localvegetationthat might serve as cattle feed. However,an IEMVT veterinarian and Cameroonian technician were recently assigned to SERMY II to study the problemsthat are specificto this project.Given the size of the cattleherd, which is growingfrom day to day as more and more income from rice-growing is investedin it, their research will focus on identifying grazing areas where improvedstock-raising methods that fit in with local traditional care of the herd can be instituted; it is important to respond to the needs createdby this type of investment, which followsonly farmingin importance. Development so far of the land areas bordering the reservoir seems to indicate they could be used for grazing purposes. The possibility is to be studied, and to that end an area has been enclosed so that its grazing can be protected and rationally exploited for experimental purposes. A polder has also been created at the edge of the reservoir to providean environment for study of the same problemsin association with that of water management. Fishery research 4.41 Since technicians with particular expertise in inland fishing have not been available, SEMRY has been unable to study the questionof exploiting  - 103 - the reservoir as a fishing ground. CTFT support missions, however, helped design a method of conducting such a study, which got under way during the 1982/1983 season. Forestry research 4.42 In 1978, CTFT assisted with design of a program, implemented, with support from TRAP, at Naga, the SEMRY II area. In 1981/82, after three years of plantings, SEMRY reviewed the findings. There appeared to be three major problems: (i) the choice of species, given soil composition and climate, was still not clear; (ii) planting and maintenance techniques needed perfecting, those in current use being viewed with some caution; and (ili) areas to be re-timbered should be chosen so as not to compete with livestock or crop- growing activities. In short, problems serious enough to mean that SERMY will have to continue its studies before it can commit investment funds wisely and with hope of success in a production venture vital to household economy in the region. By the end of 1982, 120 ha have been reforested, some with a view to firewood production and the rest as environmental plantings at the SEKRY station, Naga township and certain adjacent villages. The results are arguable and several more seasons of research are necessary before the target can be reached. Health 4.43 SENRY enteredinto an agreement with the Ministryof PublicHealth vhich sets out an action program. Achievements have been notableand the health-care situation in the zone is regarded as satisfactory.An expatriate physician is responsible for medical services, under the authority of the Chief Departmental Medical Officer in Yagoua, pending appointment of a Cameroonian national. Numerous survey teams and missions have worked on the major endemic diseases. There is some possibility of encouraging results for schistosomiasis, but in the case of malaria, for instance, there seems to be small chanceof directaction in the projectzone, given its very high cost and uncertainoutcome. A study to assess the impact of the projecton the regionas a whole includedexamination of its health,nutrition and economic status beforeand after the launching of land development operations and the introduction of rice-growing. Survey work went on from March 1979 till 1981 in two sessions annually and was carried out in conjunction with the Universi- ty of Aix-Marseille, France; it produced a body of very interesting findings on the zone as it existed initially and on the earliest effects of the hydro and agricultural developments carried out. In order to ensure that the results of this work are of real significance, it will continue until 1986. ENVIRONMENT 4.44 The project has contributed greatly to the opening up of this region, previously flooded for up to six months of the year; what few means of commu- nication existed were by river. Now SEXRY,together with Government, has created a road system in excellent repair between Naga and Maroua, although the Maga-Yagoua stretch is impassable for about four months of the wet season. Plans exist for a 22 km all-weather dike road. The township of Naga has experienced a boom: since 1977 the number of inhabitants has increased from relatively few to over 4,000, and many amenities have materialized either through SENRYor the authorities. Although now a sub-prefecture possessing  - 104 - some advanced infrastructure, Naga still awaits major infrastructure, water supply (at the study stage), electrification, a sewerage and drainage system (risk of grouniwater pollution) and telephone service. In addition to the sub- prefecture building, there is a police-station, veterinary facility, farm-services facility, school, dispensary and hospital. The residential zone already boasts ten or so substantial private houses. The Naga market is turning into a major commercial center, despite the pro-imity of the Pouss and Guirvidig markets, which have grown steadily owing to the increasing fish trade. The villages in the vicinity of Maga are experiencing their own small boom, given the new resources and variety of production within their reach. ANDORGANIZATION MANAGEMENT 4.45 While the number of expatriates has not increased since the early days, it has not fallen as projected. As things stand the Directorate-General could not function with only the two expatriate supervisory staff (Director- General and Executive Director). For one thing, qualified Cameroonian personnel are in short supply, and for another many complex problems in management and coordination remainto be solved (management controlto be instituted, coordination and launchingof necessary new measures,Camerooni- zationof supervisory staff, training). Projections as to the overallsize of staff of SEMRY II have been exceededby a wide margin,althoughthe proportion between Cameroonians and expatriates has been respected. This illustrates the number and importance of the tasks the Unit has had to take on. Over and above projections, arrangements had to be made to: - split force account activities into two divisions, Irrigation and Building, each headed by an expatriate and with a team of specialist technician ; - increase the number of specialists in earthmoving works (1 expa- triate,2 Cameroonian civil engineering technicians) and eliminate the post of soil scientist; - intensifyresearch on cultivation techniques and crop diversification (2 expatriates, 1 Cameroonian technician) and set up a forestry services unit (1 Cameroonian forestrygraduate, 1 expatriate) and a fishery services unit (1 expatriate, 1 Cameroonian technician); - set up a preventive medicine service (1 expatriate, 3 Cameroonian trainees). The total number of SEMRY II staff from January 1978 to June 1982 fluctuated between 638 and 884 white- and blue-collar (excluding casual personnel) per month for the annual period October 15 - June 30; contracts were suspended during the annualwet season. As to June 1982 there were only 78 permanentemployees, workingmainly in production and administration.At the same date, there were 39 supervisory staff, consisting of 19 expatriates and 20 Cameroonians and recruitment was under way for three of these posts. Since the beginning, SEMRYhas had difficultyrecruiting skilledworkers, whom it has tried to attractfrom the south;even the specialpremiumsofferedhave not brought recruits in the desired numbers or with very high skill levels. Obviously, there has been a significant effect on payroll costs.  - 105 - Cameroonizationof Nanagement/SupervisoryStaff 4.46 Despite the good will of the Government and all of the Directorate- General(especially over the last two years),Cameroonization continues to prove difficult. Since the job market in the South absorbsmost experienced managerial personnel, SEMRY concentrates its recruiting effort on young university graduates. However, the questions Southerners face of social and cultural adaption in the North, the not particularly good salaries and the uninviting living conditions make the task correspondingly more difficult; and it is certainly not simplified by knowing the Government attaches great importance to the quality of the Cameroonization effort, which is expected to guarantee the successful continuation of the project. In the circumstances, since various steps taken by the Government (assignment of civil servants) and SEMRY (advertising in Cameroon through the press as w-hll as personal and professional contacts) have not had the anticipated effect, parts of the investment program therefore going over schedule, FAC has agreed to some extension of its technical arrangements. Nevertheless, a sizeable recruiting and training effort needs to be set up without delay. Organization 4.47 The growth of SEMRY as an institution, its size, its activities, its role on both the regional and national planes are all factors which, since inception of the SEMRY II Project, have made increasingly strict but flexible management a necessity. In a period, like the present, when large-scale investments are being made and there is heavy demand on technical and manage- rial capacities, there have been noted at times a certainirresolutionin the management of the agency,which has been obligedto limit itself to the most pressingmatters,postponing any redefinitionof whateverprocedures it is aware of and on which it dependsat the moment. However,the following significant improvements have been made: - the accountingsystem is better organized,so that monitoringof the agency'sfinancialpositionis more accurate; nonetheless,further improvementis needed stillif the data collectedis to be more refined; - mechanization of payrolling procedures has been extended throughout the agency; - external management auditors monitor agency performance; - expert advice obtained on the training of managerial/supervisory personnel has resulted in the formation of a training unit within the Directorate-General; - three Cameroonian staff were sent to CCCEto train in agricultural project management; - the rice pricing policy has improved considerably (linked price system, monitoring of price movements) since the Government began to pay closerattention to it (rice pricing situation in 1983 is discussedin para 5.01);  - 106 - - the internal management audit unit which came into operation in November 1982 should be able to give very full descriptions of problems so far merely perceived but not examined; - creation of a Disputed Claims Office should be of value to management. Outlook for SEMRY II 4.48 The expenditures on SENRY II exceeded the funds made available by the co-financing agencies. Moreover the dollar exchange rate reduced available financing by CFAF 542.5 million (US$2.3 million). Other factors contributed to this including inflation and additional works not envisaged when the project was designed. The Mid-Project Study in July 1981 requested by the lenders and the Government, demonstrated that extra funding of about CFAF 4,313 million (US$18 million) would be needed to complete the program. Further study in July 1981 of the SEKRX? II Investment Program, which presented an objective analysis of the situation at the time funds were depleted and gave estimates as to what supplementary and complementary funding would be needed to complete the project, demonstrated that extension of the developed farming area to 6,641 ha would be more economical than limiting it to its current 3,485 ha. 4.49 The works required to bring the project to completion, aside from on-farm works, entailed reinforcement of the dam wall, completion of central infrastructure as originally planned and transfer of as many settlers as necessary to the 3,485 ha of farmland developed first. Utilizing the remain- der of the original funds and the proceeds of a supplementary financing arrangement with CCCE, this work was virtually completed in June 1983. 4.50 As to continuation of farmland development works until the total area reaches the 6,641 ha originally planned for, this component has always depended on successful resettlement of new areas as they were developed and since everything had been brought up to expectations in this regard by March 1982, work on this component was taken up again at that time and will be completed in stages lasting until 1986. By June 1983, 840 ha had been prepared for cropping, and it is planned to complete 1,200 ha in the 1983/4 season and 1,200 ha in 1984/5 virtually completing the project as planned. Consolidstion and land preparation altogether have and will entail expenditure of:  - 107 - Consolidation 1/ CPAF 2,278 million (US$6.5 zillion) Completion of land development 3,027 " (US$8.6 million) 5,305 n (US$15 million) 2/ In addition, SENRY plans to put under rice cultivation another 500 ha., irrigated perimeter. This would increase the total project development to about 7,500 ha. This would be done in 1985/86. V. OTHERPROJECT EXPERIENCE Rice Pricing and Trading 5.01 Difficulty in marketing SEKRY rice was experienced when a massive amount of Asiatic rice was imported in 1978. Representations were made to Government by two supervision missions in 1979 regarding unsold paddy stocks of 8,000 tons, Government being advised that if a solution were not found, continued development of new rice perimeters would be affected. By mid-1980 rice stocks had been disposed of as the result of increased exports to Nigeria. All of SENRY's production was sold in the following years but in 1982-3, difficulty was experienced once again. 5.02 Marketing of both imported and domestic rice is almost entirely in the hands of eight large traders. At regular semi-annual meetings of Govern- ment, traders and domestic producers the level of imports, given domestic production and demand, is decided as is the official rice price. Importers are compelled to purchase a quantity of domestic rice that corresponds with a specified fraction of their import quota, 13% in June-December 1980. This system of rice marketing and the semi-annual process of awarding quotas to rice traders has political connotations. The Bank did propose an analysis and a study of the pricing system in 1979 but nothing came of it. SEMRYmanage- ment is now highly active in pressing Government to stabilize rice trading activity and it appears it will likely prevail and attain a more assured market for its sales in the aftermath of the chaotic condition of the rice market that existed in 1982-3 described below. 1/ Comprises, for SEMRYII, completion of dyke repair, further population transfer and some paddy collection equipment. 2/ Vhereas for costs up to and including 1982 an average exchange rate of CFAF 235 equals US$1.00 is used, for subsequent and future work CFAF 350 is used.  - 108 - 5.03 In that period there was a bottleneck in the port of Lagos and 75,000 tons of rice were diverted to Douala and shipped through Cameroon to northern Nigeria by the large Cameroonian traders. It is believed that a substantial - but unknown - amount of the rice may not have reached Nigeria but was sold in Cameroon, displacing the sale of SENRY rice. If so, this would have contribu- ted to the 5,000 tons of rice, and some paddy, which SEMRY has had to store for lack of sales in 1982-3. Apparently the purchase of the rice in US$ dollars, its sale for Naira, overvalued about 100%, but the reimbursementof the proceeds in consumer goods - a barter arrangement - and the weakness of the French franc and ClAF, combined to result in the prospect and/or realization of a substantial loss, some of which could be avoided by sales in Cameroon. During this period, the Government did not convene the semi-annual meeting in November 1982 to set rice import quotas and rice prices. Aside from the foregoing, overvaluation of the Naira is in any case making imports to Nigeria from Cameroon more expensive. 5.04 SENRYmanagement has made representations to the highest levels of Government,towhich it has ready access, and it appears likely that a suitable accomodation will be made so that SEMRY exports will not be interfered with. SEJRY has also prepared terms of reference for a study of the rice market which it has asked Government to undertake. This is expected to be carried out during 1983. The study should assist in devising improved administration of rice marketing including imports and pricing, in the interest of equity and the regularization of the activities of the traders and producers. Food Crops 5.05 In 1982 SENRY II began to experience problems arising from the large and growing body of people - farmers, families, fisherman and others - living at the project. The most important was the need to grow traditional crops to which the smallholderswere accustomed, particularly millet, a crop that is cultivated with difficulty in the hostile climate. Accordingly SEMRY has prepared a large block of land nearby SEMRYII village which is to be partially irrigated for the purpose of growing such food crops to make the smallholders largely self-sufficient. In the mean time the smallholdersbuy millet, or trade paddy for it, this being satisfactory as long as there is a reasonable price parity but which might provoke a serious situation if, for example, either commodity experienced a very bad crop year and prices became distorted. Cattle 5.06 An important problem is the increasing number of cattle which the smallholders are acquiring with their new-found wealth (para 4.40). The cattle are grazing on marginal areas and on some areas bared as the reservoir recedes, and which over time may not be able to support them. SENRY is considering possible additional pastures and other outlets for farmers' investment. Financial Problems 5.07 The financial performance of SENRY I was satisfactory and the expectation had been that this would continue. However, with the growth of SENRY, by 1982 it comprised SEKRY I, II and III, SENRY's financial position  - 109 - baa become less secure. Under SEERY I and SEERY II, SEERY provided free some services of a public nature which were properly charges against Govern- ment, for example, maintenance of roads linking the area. While SEERY I and II are in theory viable commercial projects, SEMERY III, involving the provision of a number of small rice irrigation perimeters, aggregating about 800 ha, spread over a wide area, is not and SEMRY's finances have been adversely affected by it 1/. Further, the price spread between what SEYR! pays smallholders for paddy and what it receives for milled rice from traders has been little more than adequate. 5.08 SENRY's 1983-4 budget thus projects an overall loss of CFAF 254 million (US$700,000). Of this SEERY II shows a small profit, SEERY I a sizeable one, but SENRY III a loss of US$1.4 million, offsetting the others. This budget forecast is probably optimistic, and the loss will likely be about US$1.5, on gross income approaching US$50 million. SEERY is seeking an addition to its capital from Government, which is necessary from time to time if it is to undertake financially non-viable projects on behalf of Government. Project Cost 5.09 The project cost is given in CFAF as the bulk of the expenditures were made in that currency or in French francs. On the last Bank supervision mission in March 1982 the cost indicated was CFAF 15,480 million. This was on the basis of the approximately 3,500 ha then completed. The appraisal esti- mate, modified to reflect that 3,500 ha rather than 7,000 ha were prepared for cultivation, was CFAF 14,000 million. A direct comparison of costs is not possible, however, given the additional works carried out, to make repairs and build-up the dykes and the provision of an electricity distribution system that cost CFAF 247 million. With the omission of the extra costs, actual costs would not be much different from estimate. Details of actual and estimated costs are given in Annex 2. 5.10 However, the project development is still underway (para 4.50) and if the plans as of mid-1983 are followed, should be completed and fully cultiva- ted by 1985/86. The cost of the project will continue to mount but relatively modestly, as the capital expenses to be incurred are for the provision of irrigation, drainage, on-farm works and the settlement of new farmers only, for the remaining 3,500 ha, the massive investments for dykes having already been made. It would be premature to estimate the final cost in the circums- tances, however, it is likely to be of the order of ClAF 19,000 million including the consolidated costs. 1/ SENRY III, provided with funds by FED, may be economically justified by the benefits provided the small scattered population in the vicinity of Ndajema Lake Chad.  - 110 - VI PROJBCT JUSTIFICATION 6.01 The project is now able to cultivate 3,156 ha yielding 4.5 ton per ha in the rainy season and 5.0 ton per ha in the dry season. Land use is presently 150% and is expected to increase to 180%. Tlhe project is expected to increase by 840 ha in 1983/4, 1,200 ha in 1984/5 and 1,200 ha in 1985/6, thereby achieving the appraisal target of 7,000 ha. The ERR has been recalculated on this basis. The project has to incur the additional cost of land development, operating expenses and the cost of resettlement of farm families. Under the assumptions the ERR is 19.6%. This compares with the appraisal estimate of 14.7%. However, it includes the benefits from fishing, in themselves about 4%, which were not estimated or included in the appraisal calculation. Taking this into account the ERR is only slightly higher than at appraisal, higher yield levels offsetting cost overruns. 6.02 While it appears likely that the project will be completed as planned there is always the possibility of delays for example, slower resettlement,or other problems. The former would not change the ERR significantly but a substantial drop in productivity and intensity would; if land use remained at the 150% level there would be a drop of 4% in the ERR, which would also occur if there were a 30% drop in the price of milled rice. Regardless, it appears likely that the ERR, even in the face of unforseen but possible difficulties, would be in the range of 15-20%. 6.03 This result does not include the unquantifiable benefits, which are clearly substantial. The impetus the project has given to development of the northern region of the country through increased population, greater trade, improved mobility resulting from project induced roads, new markets, a better health system and, of course, the improvement in the income and living standards of the very large number immediately affected by the project, is much in evidence throughout the area. The SENRY projects have been a great boon to it. VII. lNSTITUTIONAL DEVELOPMENT 7.01 SEWRYII staff averaged about 750 in numbers, the training of which was a major activity. Half the 40-man supervisory staff was Cameroonian. Given the attractiveness of jobs in the south to skilled workers and technical and managerial personnel SENRY did a solid recruiting and training job. Aside from personnel development, the project saw institutional improvements in the accounting and payroll functions, monitoring, internal auditing and, to an extent, pricing. SENRY itself was modified somewhat to enable it to manage properly the enlarged organization. The management combatted the serious problems encountered with the dyke system, settlement and pricing, as well as administering the project construction extremely well.  - 111 - 7.02 All told SENRY became a highly efficient organization with an adequate operating management and well trained staff. Part of this was attributable to the improvements noted and to gradually improved training and reasonable incentives. While Cameroonization was not advanced as much as had been hoped, it nevertheless kept pace with SEMRY's growth and, most important- ly is being regulated at a pace which avoids premature managerial appoint- ments - a frequent failing - thereby ensuring that when nationals are appointed to management posts, they are likely to be better prepared to assume their duties. Nonetheless it is apparent that SEHRY will need expatriate assistance on a continuing if possibly diminishing basis, this given the scale and complexity of its operations, and that it is essential to run it with maximum efficiency and the ability to respond quickly to problems and changing conditions as they occur. VIII. BORROWER ADD BANKS PERFORMANCE 8.01 The Borrower's performance was generally good. As one indication, all loan covenants were met. Full cooperation was forthcoming, adequate Government funds were provided SEMXY and Government responded to Bank interventions, for example, discontinuing the irrigation works on the second 3,500 ha. SEXiY's implementation of the project itself, is outstanding. However, the Government has not properly administered or policed rice marketing and its attention to this matter is of some urgency. 8.02 The Bank's supervision of the project was competent. It provided important advice and help on some of the main problems, notably the dyke and the inability to mobilize sufficient smallholders. IX. IMPACT OP THE PROJECT 9.01 At this juncture it is difficult to assess the ultimate impact of the project but, as observed it is already very great, having considerably increased the wealth and well being of the smallholders settled in the project area, as well as that of the northern part of the country in general. It has demonstrated that it is possible to run a large agro-industryproject in which smallholders play a major role in a remote hostile climate in West Africa with high efficiency, given proper design, first class management, adequate funding and Government interest and cooperation. 9.02 It has taught the lesson, if it needed to be taught, that size creates its own special problems. In this case, increased farmer wealth lead to the problem of cattle and their grazing needs, and the migration of families to the area the need to provide the means to enable them to grow traditional food crops.  - 112 - 9.03 It has also brought home the necessity of Government providing more equitable, predictable and stable mechanisms to administer the rice market. While there have been some problems ever since Cameroon began to grow rice in large amounts, the scale of present SENRY operations is now so large as to dictate such Government action, otherwise Government could experience massive financial losses in the rice subsector. 9.04 The project also demonstrates the difficulty of being both a com- mercial enterprise and a development agency. The latter tends to overwhelm the former in the long run. Ideally SEKRY could on paper be split into two entities, run by a common staff. The first, a commercially operated corporation, aimed at making a profit, comprising the financially viable operations SEMRY I and II, which over the long term could be self-financing. The second, a development corporation, comprising SERRY III, and other predominantly social development projects, whose inevitable financial losses would be met by periodic Government subventions. X. CONCLUSIONS 10.01 The project was a qualified success. The establishment of an annual water storage system to irrigate an area of 7,000 ha for rice production was fully successful despite problems, which were remedied, of erosion and leakage of the dykes. While only half of the 7,000 ha were prepared initially for smallholder farming due to inability to find sufficient smallholders to farm the land prepared, this difficulty has been overcome. An additional 840 ha have been prepared and will be cultivated in 1984, and it is likely that the balance of 2,400 ha will likewise be brought into production in another three years, and that a market for its sale will exist. The reevaluated ERR, prepared on this basis, is 19.6% compared with the 14.7% estimated at appraisal. The project objectives of improving the income and well being of the mnallholders in the resource deficit-poor region in the north of the country, and the welfare of the region itself have been largely achieved. 10.02 Other components, peripheral or related to rice development, were likewise successful. The catch of fish from the reservoir has been greater than expected, in effect creating a second industry in the area. The road access system is proving hiighly valuable and will help open up the area. Villages and secondary activities, services for example, are springing up spontaneously. The health program is progressing well. The research program was both well conducted and fruitful. 10.03 SEER! continues to be a permanent and highly efficient organization, responsible for the continued operation of the rice complex comprising SENRY I, II and III projects, and prospectively for others under consideration. Problems remain for the future: the farmning of traditional food crops for smallholders consumption, control of cattle and grazing, and the equitable control and stabilization of the rice market, mainly exports to the northern region of Nigeria. The first two are within SEERY control and will likely be remedied. The rice market is predominantly a 'overnment matter. Government is to have a study made of marketing factors. SERRr is at the same time  - 113 - pressing for Government action, which appears likely. In due course this situation should, therefore, be resolved as well, but there is no certainty. 10.04 There is an element of ambivalence in Bank staff attitudes about SEMRY II however. Some feel the project demonstrated that northern rice is not really a food supply crop because imports in the south, the primary area of consumption, are cheaper; and that the economic worthiness of the project is uncertain from an export standpoint in view of the difficulties sometimes experienced with the Nigerian market. In fact, the sectoral context in which the project was envisaged is as given in para 2.01. SEMRY II was not appraised as a national food crop project but as an export cum foreign exchange earning one with the possibility of some domestic sales. Nost importantly, it was considered as a vehicle to improve the lot of the north, which it did successfully. With the exception of 1983, there appears to have been no difficulty disposing of SEMRY rice, mainly to northern Nigeria, and the export market appears adequate to absorb SEMRY production when the project is completed, provided the Government takes appropriate action concerning the internal marketing structure. 10.05 Rather, the point to address is the future. SEMRY, and Government, are thinking of another rice development of SERRY II size in the northern area, along with one or more small scale SENRY III variety projects. Before committing themselves they should obviously investigate the marketing, organi- zation and economic aspects, as well as priorities. They no doubt will, but the danger is that the investigation would not be in sufficient depth. To a degree, such a study might well be conducted in conjunction with the examination of the problems and future of the massive agro-industry projects in palm oil and rubber, which the Bank helped finance and which now are experiencing difficulties not unlike those SEMRY might come to face if it further expands. The Bank is in a good position to help in charting the future course of these agro-industries as there is a Bank financed oil palm - rubber project underway. Unfortunately, however, there is less leverage in the case of SEMBY, as the Bank's involvement, which commenced with SEMRY I and continued with SEMRY II, was for practical purposes discontinued with its intervention in 1981 to suspend land preparation. Nevertheless, a Bank association with the rice sector would be helpful in the right circumstances. 10.06 The Bank could play a constructive role in assessing the future rice market in northern Nigeria and Chad as well as within Cameroon: without this information it is not possible to estimate the long term market for SEHRY. Indeed the size of the export market may well be large enough to support further major SENMYexpansion, as is being thought about, Nigeria imported 1 million tons of rice in 1982, and imports are increasing on average substan- tially. However, there is also the question of priorities: export earnings versus food crops to be addressed.  CAMEROON PROJECTCOMPLETIONREPORT SECONDMEURY RICE PROJECT Loan 1512/Credit763 COMPARISONOF ACHIEVEMENTS 1079/80 19_/81 / _ _ 82 1q82 i"3 - 983 84 1984/85_ 85N86 b b ~~~~ b Areapreparud - ha 800 845 2,300 2,385 3,800 3,485 5,400 3,485, 7,000 4,325 7,O0(0 5,525 7,000 6,728 Areaundorcultivat2on: (v&tt und Dryscason) - ha 1,440 940 4,140 2,595 6,840 3,940 9,72'0 5,19 11,025 7,785 11,025 9,945 11,025 12,110 S Intensity of Land Use 180 111 180 109 10 130 iso 161 158 180 158 180 15d 180 juction (Paddy Pr' - ton) 5,976 2,134 17,469 10,763 29,214 18.155 41,706 25,949 46,832 36,510 47,408 46,742 47.408 56,919 Cton/ha) YelJd 4.15 2.3 4.2 4.1 4.3 4.6 4,3 4.6 4.3 4,7 4,3 4.7 4,3 4.7 Price/kg Paddy 43 55 55 62 prlie/kg Rice 100 120 120 145 1/ Estimatedactual using a) 840, 1200, 1200 ha of land which are plannedto be preparedin 83/84 and 85/86 respectively; b) landuse intensity of 1802;c) yieldis expected to increase due to use of variety 1R46. I0  -115 - AlNNEX2 CAXROON PROJECTCOMPLETIONl REPORT SECOiD SENRI RICE PROJECT Loan 1512/Credit 763 ESTIPLTEDANDACTUAL COSTS (As of June, 1982) (Nilon s CFAF) Increase % kpraisal 1/ 5 -imate 2/ Actual over Actual Estinate Dike 3,000 3,780 26 Irrlgatiou Yorks 1,340 1,2;10 N.A. Buidings 1,500 1,870 25 (Total Civil Wor3s) (5,840) 6,860 N.A Population Transfer 2/ 140 420 N.A NateriaUg/Equipuent 3,320 3,000 (10) Fam Inuts 4/ 440 Engineering 1,600 1,450 (9 Co sultanus'Studies 340 290 6 Agricultural Research 70 150 120 Health Program 160 190 18 Technical As3istance 920 1,280 39 Local Personnel 970 1,210 25 itnaince 5/ 500 - Small Irrigation 'aorks6/ 100 80 (20) Stocks _ 550 _ TOTAL: 14,400 15,480 N.A. 7/ 1/ Contingencies included. :E/ Including CFAF 500 million cost of CCCEcomplementary progra-. 3/ Estimate based on cost of 3,500 ha. prepared for irrigation. W/ Kainly fertilizer, cost recovered from families. 5/ Included in investment co3ts. / Small works near Kousseri, financed by CCCE. 7/ Due extra work (dykes) but onl7 50% land preparation for irrigation, comparison of cost figures is not very meaningful.  tair Chad rho NW 1w, Wm owltww.J or IUW t on's IAtIIftIiGMI 1~I, baada.Ia C ftAW V # ai..v AN .g &ih ft #*~wq of I?wVj "A Ax 41#.ci.,* ft ft mW Mw/T t&mdkti 1 MI., fmwo a MN FMi wi hrd ftk&nJuuI h Amai X=... I X .* MmIk P.ft p. ft P. , t H.,idww C.pa AnpmanosU AJ0 o . I , ,t b UPAOfbO WAXY a & mhLV I. &VWMW di MAM.Wh,vl CHA A__X NIGERIoA@FRCA / ,, -~P >g TEKELE t am 0 CA M'E ROON ~CFNIRAI 'K AFICAN ,,d 1 Al t0Q/O8|f^)GAIION COG CoNGC r)\\\ Kt f Republic AI' *"< ~ ~~~ ~ ~~of / , ,,,. // / / ~~~~~~~~~~,/j ~~~Katoo P.~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~ i  CAMEROON * a PROJECT RICE SEMRY SECOND PROJECr WORKS: 3* 'teodg1osItuclutes(I-4)1 ~'~T'NlMin litigaton e eh~ drainS alWn area Irrigated Rooft J; j uidouong' Q\ i over Road diS. Overpass E Rice miii () [ Nevrv~iiaqes _ Setflameni village$ r ''opoledreservoir PROJECTSrAGES: 978 9 jaj jfi4N -7 845!ha 97-01,5 40 h~a 11980*811 100 ha o % t7 r EISTINGFEATURES: Moinlowns I 2 J 4 f C Village$ '-- *0 Motroable rVoWd KllOMEIE115 \ Modolom **%q / saed :: RIrvertvarh bats 1 _ - -. - In aoundaries ternotional - MltE5 I \ S I ' ha n *~~~~~~Dous:u, 1  MALI ) - . -- NIGER , - CHAD k ~~~~~~~~~SLSUDAN -* 1. NIGERIA C .- -, 0- Gw- - E,TZALIRENAJJ CJ AF , HN ,,- -CA. g 'I *NJMAE N w AEMRYESEM Fof * Id.\ -I 2 SEMRY fWe m-LP 3 " ' IRRIGATON POET EEUE CAMEROONCAM * ~ cSERZAsE IsRE l -H .) r SE BYSElY y o R J ) -. Inbetondl Boundons sC, \ 2<Gijbe KILOMETERtS. 'g 200/Jo/ 2 0IILS SD lOD ( W - 'Mmq t>VENDA v t o ' ~~~~~~~C EN T R i _ <= < ~~~~~~~~~R EPUB31 tOLUATORIAL -. GUINEA §w/{ f / wMm m D IRRIGATIONPROECT NDE E PEOLES REB * A H2' t SEMEY Locatis R) IH O  IBRD 18366 (PPA) 1. :SEMRYI 0 E 1q5 9"', SEMRY 3 ,E ,i1DJAMENA 7 b.. ) i kC H A D L CHAD - F A CTE N JLIR SE AC R C U L TIV A T WF J /ME 3O E LIN D 10 234 )MRY (LIA SEMRYII SE9 8 300 8~~~~~~~~~36 , b tR, a 116 4 f3w Ma.o..a I - - <RSEMRY 37 0 SEMRY W-V Yaco208 5 185 ~ F.a~~~~,.I 7.-. ~ ~~~ ~~~~~- 1296\\ TOTAL AREA548 A. j~ SURFACEUNDER CULTVATION UA /RAINY SEASON5486 "A. DRYSEASON 3000 HA. @PUMPING STATIONS - IRRIGATIONCANALS -- DRJMNAGE CMANALSf uidi bn DOUBLE AREA CROPPED FT1AREA SINGLECROPPIED Kobce . ~ ~ B '-'l 0 o x A Per.me,e,s- P1.CaHsA -tgttl = 3? / C E) N T N A L loon ~~~~~~~~~Bici< R Nb" N~~~~~~~~~~~~~MIa j PEOPLE'S~~~~A REUBI I CIO A 2 D 10 20 2t0o i~~~~~~~ t . * ~~~~~~~~~~~~Permmetews Toa 80rH - P*ose Xfl0 IAw.tmtn CONG EF,H BL I \ \. ~~~~~~~~~~~~~~Torol 1500 bkH, o og L~~~~~~~~~~~~NIERA n .o. REPUBLIC * PEOPLE'S C ~ ~ ~ Primtes Pas I POFPLES CONGOLI KILCMETERS0 10 20 30O U ~~~~~~~~~~~16*