Upper Volta - West Volta Agricultural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 5175 PROJECT COMPLETION REPORT UPPER VOLTA WEST VOLTA AGRICULTURAL DEVELOPMENT PROJECT (Credit 706-LW; Special Action Credit 49-LW) June 20, 1984 Agriculture Projects Division C West Africa Regional Office This document has a resticted distibution and may be used by recipients only in the performance of their officiad duties. Its contents may not otherwise be disclosed without World Bank authorzabon.  ABBREVIATIONS ADF African Development Fund BND Banque Nationale de Developpement CCCE Central Agency for Economic Cooperation (France) CCDR Comite de Coordination du Developpement Rural CE Conseil de l'Entente CIDA Canadian International Development Agency CILLS Comite Permanent Interetats de Lutte contre la Secheresse dans le Sahel CNCA Caisse Nationale de Credit Agricole CFDT Compagnie Frangaise pour le Developpement de Fibres Textiles CNRA Centre National de Recherche Agronomique de Bambey-Senegal Bambey CSPPA Fund for Price Stabilization for Agricultural Products EAEW Equal Access to Education for Women EEC European Economic Community FAC Fund for Aid and Cooperation (France) FAO Food and Agricultural Organization FAU Financial and Administrative Unit GDP Gross Domestic Product ,]RD Ministry of Rural Development OFNACER Office National des Cereales ONBI Office National des Barrages et Irrigation ORD Organisme Regional de Developpement PPAR Project Performance Audit Report PPF Project Preparation Facility SAFGRAD Semi-Arid Food Grain Research and Development SERS Service d'Entretien des Routes Secondaires SOFITEX Societe Voltaique des Fibres Textiles SOVOLCOM Societe Voltaique de Commercialisation Sis Service National des Semences SP/CCDR Secretariat Permanent du Comite de Coordination du Developpement Rural T & V Training and Visit System USAID U. S. Agency for International Development WVADP West Volta Agricultural Development Project  FOR OMCIAL USE ONLY TABLE OF CONTENTS Preface ........................................................... i Basic Data Sheet . ................................. . .. 1i Mission Data ................... ................. ...... iii Other Project Data ............................... De .............. iv Highlights ...................... ........*.**********.......... v Su1mmary ....................................... .....*........ 1 I. Background .......... .......... ......*................ 4 Sector Background ......................................... 4 Sector Strategy and Bank Group Lending ............. ....... 4 Project Background ........... ..................... 5 II. Project Formulsation and Appraisal . ......................... 6 Preparation ........................................................... 6 Project Design ................ *......... .............. 7 Negotiations .......................................................... 8 III. Cost and Financial Arrangements ..................... 8 Auditing .................................................. 12 IV. Implementation ............ ....... ................... ..... 12 Effectiveness and Start-Up ...... .......................... 12 Physical Implementation .................... ............... 13 General ................................. ................ 13 Summary of Project Performance ............. ...... ....... 13 Technical Assistance to MRD ...... ...................... 13 Agricultural Development Program ....................... 13 Civil Works ............................................ 17 Settlement Component .............................. 18 Women's Component ...................................... 18 Other Project-Related Developments .. ................... 19 V. Agricultural Impact. . . .... 20 Incremental Output . .. .20 Cotton Production........ 21 Cereals Production. .......... 23 Technological Change ...... 24 VI. Economic Evaluation .... ......................... 26 Thui document has a restricted distribution and may be used by recpients only in the perfonrmnce of thi offic dute Its contents may not otherwe be discosed without World Bank authonzatin.  Page VII. Institutional Performance ................................. 28 Organization and Management ............................... 28 Extension Method ......... ................................. 29 Staffing ............ ................................. 29 Farmers' Response and the Role of the Extension Agent 30 Technical Recommendations and Research/Extension Linkages 31 Training ...... 33 Accounting and Reporting .................................. 33 VIII. Bank Performance .......................................... 34 Preparation and Appraisal ................................. 34 Supervision ............................................... 35 IX. Conclusions and Lessons Learnt ............................ 36 Conclusions ............................................... 36 Lessons Learnt ............................................ 36 ANNEXES Annex I - Table I: Comparison between Appraisal Estimates and Actual Costs 38 - Table 2: Financing of Project Components 39 Annex 2 - Table I: Breakdown of the Training Courses 40 Annex 3 - Table .: Agricultural Inputs: Animal Traction Use 41 - Table 2: Agricultural Inputs: A Comparison between Appraisal 42 Estimates and Actual Distribution on Cotton - Table 3: Agricultural Inputs: Use of Fertilizers on Cereals 43 Annex 4 - Table I: Comparison between Appraisal Estimates and Actual 44 Production - Table 2: Estimated Additional Cereal Production 45 - Table 3: Comparison between Appraisal Estimates and Estimated 46 Incremental Production Annex 5 - Table 1: Key Indicators in Project Year 5 (1980/81) 47 ANNEX 6 - Table 1: Economic Costs and Benefits 48 - Table 2: Economic Costs and Benefits (Adjusted Benefits) 49 - Table 3: Export Parity Prices - Cotton 50 - Table 4: Export Parity Prices - MiIlet/Sorthom 51 - Table 5: Fertilizer Price 52  i UPPER VOLTA WEST VOLTA AGRICULTURAL DEVELOPMENT PROJECT (Credit 706-IW; Special Action Credit 49-UV) Preface This is the Project Completion Report (PCR) of the West Volta Agricultural Development Project, for which Credit 706-UV was approved in December 1977 in the amount of US$ 3.6 million. Total project cost was estimated at US$ 18.9 million. An EEC Special Action Credit, amounting to US$ 3.0 million equivalent which was declared effective in September 1980, made possible a one-year extension of the project to June 1983. The Credit was closed in June 1983. The PCR was prepared by the West Africa Projects Department, based on the Government Project Completion Report which was developed in part with the help of a Bank mission in May 1982. This project has not been the subject of an audit by the Operations Evaluation Department. The draft PCR was sent to the Government of Upper Volta for comments in March 1984. However, no comments have been received. The valuable assistance provided by the Government of Upper Volta and by the project staff met during the PCR mission is gratefully acknowledged.  - ii - UPPER VOLTA WEST VOLTA AGRICULTURAL DEVELOPMENT PROJECT PROJECT COMPLETION REPORT Basic Data Sheet Appraisal Actual as Z Estimate Actual of Appr. estimate Total Project Cost (US $ million) 18.9 21.9 116 IDA Credit Amount 3.6 3.6 100 Project Co-financers: CIDA (administered by IDA) 2.9 2.9 100 ADF 5.5 5.5 100 Swiss Aid 3.6 3.6 100 EEC Special Action Credit - 2.5 Date Board Approval 5/23/77 Date Effectiveness 12/28/77 Date Physical Components Completed 12/30/81 12/30/82 Proportion then completed (Z): - Dryland Agriculture 145,560 t 132,130 t 91 - Irrigation Schemes 1,120 ha 180 ha 16 - Ginnery 1 1 100 - Village Store 75 72 96 - Training Center 1 1 0o - Spontaneous Settlement 0 - Women's activities 75 Closing Date 6/30/82 6/30/83 Economic Rate of Return Z 32 33 103 Institutional Performance 85 Agronomic Performance 90 Number of Direct Beneficiaries 46,500 42,000 90 Number of Indirect Beneficiaries - 27,000 - Cumulative Disbursements Credit 706.UV (US $ million) FY77 FY78 FY79 FY80 FY81 FY82 FY83 up to May 31,83 App. Estimates 0.3 1.0 1.6 2.3 2.9 3.6 3.6 Actual - 1.0 1.3 2.1 3.1 3.35 3.55 Actual as Z of Estimate 0 100 81 91 107 93 99 Date of Final Disbursement March 1983 P*rincipal Repaid None EEC Special Action Credit 49-DV 12/31/80 1981 1982 1983 Cumulative disbursement (US $ million) 0.97 1.38 2.44 2.48 (fully disbursed)  IUII'EIi VOLTA WEST VOI.TA AGRICULTJLRAL DEVEI.OPMENT PROJECT Mission Data Mission Date Nb. of Man-days Specialization Performance Trend Type of Date of persons represented I/ rating 2/ 3/ problems report IDA Cons Tot. Tor. Ili Field _ Pre appraisal 5/76 3 3 6 190 120 F, F, A, Ext Appraisal up 10/76 to NGb througl 2 2 430 30 A 4/77 _ ___ Subtotal 670 150 Supervision 1 10/77 2 2 14 F, A I _ _ 11/07/77 Supervision 2 2/78 1 1 5 A I I F, M 03/31/78 Supervision 3 9/78 2 2 14 t, A 2 2 F, H 11/14/78 Supervision 4 3/79 2 2 I 24 F, A 2 2 F, M 04/17/79 Supervision S 10/79 2 2 499 6 F, A 2 2 F, M 02/14/80 Supervision 6 5/80 1 2 3 30 F, A, M&E 2 2 7, H 06/24/80 Supervision 7 3/81 3 3 24 P, A, A 2 1 F, H 03/24/81 Supervision 8 10/81 2 2 20 1, A 2 1 F 01/19/82 Supervision 9 5/82 1 1 2 24 F, A 2 2 F, 0 07/08/82 Supervision 10 1/83 _ 1 13 A 2 2 F 03/16/83 Subtotal 499 174 I E a Economist; F - Financial Analyst; A - Agriculturist; Ext = Extension Specialist; M&E = Monitoring and Evaluation Specialist. 21 1 Problem Free; 2 = Moderate Problems; 3 - Major Problems. I/ 1 Improvinig; 2 = Stationary; 3 = Deteriorating. 4/ F * Financial; H - Managerial; 0 - Other.  - iv - Other Project Data Borrower Republic of Upper Volta Executing Agency Hauts-Bassins and Volta Noire ORDs Fiscal year April-March Name of Currency (abbreviation) CFAF Currency Exchange Rate - Appraisal year average US $1.00 - CFAF 245.00 - Intervening year average US $1.00 - CFAF 230.00 - Completion year average US $1.00 - CFAF 329.00 Follow-up Project Name Loan/Credit Loan/Credit Date Board Number Amount Approval (US $ million) Hauts-Bassins Agricultural Development Project Cr. 1285-UV SDR 4.2 million 8/26/82 (US $4.7 million equivalent) Volta Noire Agricultural Cr. 1284-UV Development Project SDR 6.1 million 8/26/82 (US $ 6.8 million equivalent)  v UPPER VOLTA WEST VOLTA AGRICULTURA. DEVELOPMENT PROJECT (Credit 706-UV; Special Action Credit 49-UV) Highlights This Project succeeded the Bank's first agricultural project in Upper Volta, the Cotton Project (Cr. 225-UV) and was the seventh Bank operation supporting the rural sector in Upper Volta. The project's main objective was to improve rural living standards by promoting more productive farming systems and better cultivation techniques for the area's main dryland crops, cereals and cotton. Credit effectiveness was delayed twice, for administrative reasons, with the project finally becoming effective in December 1977, five months after the original date. The project was successful in extending the work of the preceding Cotton Project to stimulate more general agricultural development in the area. The agricultural impact of the project was significant in that some 42,500 farm families participated directly in the project, together with 27,500 who benefited indirectly. Most of the physical targets were met, with a total incremental production of 62,000 tons of cotton (11% above appraisal) and 70,000 tons of cereals (22% below appraisal) (para. V A-B), as well as construction of a new 20,000-ton ginnery at Dedougou (para. 4.11), 72 grain stores in 75 villages (para. 4.12), and a training center at Bobo-Dioulasso (para. 4.13). Components not directly under the control of the two ORD's (Organisme Regional de Developpement) were less successful, however, with only 13% of the irrigation component met, reflecting organizational problems (para. 4.10). The support to the Ministry of Rural Development (MRD) (para. 4.05) and the pilot settlement project (para. 4.14) were not implemented. The project's major institutional achievements have been to organize and train the extension staff under the Training and Visit System and to separate commercial functions from extension (para. VII B). The total project costs for the six-year period amount to 5,239 millions CFAF (16% above appraisal estimate), of which IDA-CIDA (International Development Association - Canadian International Development Agency) provided 27%, Abu Dhabi Fund (ADF) 25%, the Government of Upper Volta 25%, EEC 12%, and Swiss Aid 11% (Table 3.3). There was a cost overrun of about 28% in the construction of the ginnery, while the total cost for input supplies was about double the appraisal estimate. Otherwise, expenditures remained in line with appraisal estimate. The overall economic rate of return is estimated at 33% which compares closely with the original estimate of 32% (para. VI).  - vi - Some important lessons can be drawn from the project, including the need to: - conduct a baseline survey and develop a strong monitoring and evaluation unit (paras. 5.03, 5.08, and 5.14); - reinforce the links between farmers, extension and research (paras. 7.07 and 7.08); - carefully place increased emphasis on the integration of livestock and agriculture (para. 7.08); - develop fertilizer formulations suitable for cereals (para. 5.14); - foster village group development (paras. 4.15 to 4.18). In sumaary, the project, as a major effort at integrated agricultural development, has been successful in effecting improvements in the agriculture of the project area and has provided considerable experience in design and implementation of services to promote rural development. This approach can be replicated, if suitably trained and experienced senior staff are available.  UPPER VOLTA WEST VOLTA AGRICULTURAL DEVELOPMENT PROJECT (Credit 706-UV) PROJECT COMPLETION REPORT SUMMARY (i) The West Volta Agricultural Development Project (WVADP) followed up the Bank's first agricultural project in Upper Volta, the Cotton Project (Credit 225-UV), which provided finance to expand the area and to improve the yield of cotton, Upper Volta's most important export crop. The narrow nature of that project was criticized and the WADP was designed to correct this and to encourage more widespread agricultural development. (ii) The Government of Upper Volta commissioned a consultant firm to prepare the project using funds provided under the previous project. After an in-depth pre-appraisal mission in May 1976, WVADP was appraised in October 1976. The main elements of the project, as finally appraised, were provision for: (a) strengthening the Permanent Secretariat of the Coordinating Committee for Rural Development (SP/CCDR) within the Ministry of Rural Development with a technical assistant and creation of a Financial and Administrative Unit (FAU); (b) staff, equipment and vehicles for the two implementing Regional Development Organizations (ORDs); (c) extension, agricultural credit and inputs to increase cotton and fooderops production; (d) construction of small-scale irrigation schemes; (e) building a 22,000-ton ginnery and 75 village grain stores; (f) creation of a training center; (g) improving women's livelihood; and (h) studies and surveys followed by pilot projects to help new settlers. The project was to be carried out over five years, from 1977/78 to 1981/82, and the total cost was estimated at CFAF 4,633.3 million (US$18.9 million). Financing was to be provided by: IDA, US$3.6 million (19%); IDA-administered Canadian grant, US$2.9 equivalent (15%); African Development Fund (ADF), US$5.5 million (29%); Swiss Aid, US$3.6 million equivalent (.19X); and Government of Upper Volta, US$3.3 million (.18%). (iii) Effectiveness was delayed twice, with the project finally becoming effective on December 28, 1977. Project lending moved very quickly during the first two years, and at midterm of project implementation it became clear that the project would need additional financing to cover: (a) cost overruns in the construction of the ginnery; (b) the need for agricultural credit; and (c) the shortfall due to currency realignment. At the same time, progress in the processing of the follow-up projects indicated that new funds would not be made available until several months after completion of the ongoing project. To cover these additional financing needs and to finance the additional interim period before the start of the follow-up projects, an European Economic Commanity (EEC) Special Action Credit was signed on February 8, 1980 and declared effective on September 4, 1980. These additional funds, coupled with the appreciation of the US dollar, have enabled a one-year extension to project credits to June 30, 1983. The physical components were completed end  -2- of 1982. The two follow-up projects, Hauts-Bassins (Credit 1285-UV) and Volta Noire (Credit 1284-UV) were approved on August 26, 1982 but are not yet effective. (iv) The WVADP has been successful in extending the work of the previous project to stimulate more general agricultural development in the area. The project's major institutional achievements have been to organize and train tl'e extension staff under the Training and Visit System, to separate commercial functions from extension and to continue to see that annual inputs have been made available; these elements have combined to bring about the successful meeting of production goals. One of the major features of that extension system has been the ability to take into account the socio-cultural characteristics of local communities and to build upon extension activities in the existing traditional village groups. At the same time, the ORDs have undertaken successful initiatives in promoting those village groups which are now participating in marketing, input and credit administration. The number of participants was 10% below estimates, some 42,500 farm families or 40% of the total farm population having been directly reached by the extension system whilst 27,000 families benefited indirectly. (v) Most of the physical targets of the project have been met with a total incremental production of 62,000 tons of cotton (111% of appraisal estimates) and 70,000 tons of cereals (78% of appraisal estimates), and the construction of 72 village grain stores (96% of appraisal estimates), a training center at Bobo-Diooulasso and a new 20,000 ton ginnery at Dedougou. However, two out of the three components financed directly by the Swiss Cooperation Funds and not directly under the control of the two ORDs, were less successful, with only about 13% of the irrigation component met, reflecting organizational problems; mixed results achieved by the women's component; whilst the settlement pilot project was not implemented as detailed terms of reference were not agreed upon between Government and the Swiss Aid. Finally, the strengthening of the SP/CCDR within the Ministry of Rural Development got nowhere as no request was ever forthcoming for the technical assistance and the component never started. (vi) Total cost for the five years (1977/78 to 1981/82) was CFAF 4,664 million compared to CFAF 4,633 million at appraisal. Two components were not implemented - assistance to the Ministry and studies and surveys. On the other hand, there was a cost overrun in the erection of the ginnery of about CFAF 220 million or 28%, and the total cost for inputs supplied was about double the appraisal estimates. Inputs were to be financed entirely by Government. Otherwise, expenditures remained in line with appraisal estimates. Financing for an interim period -o bridge the gap before the follow-up project, was obtained through an EE' Special Action Credit of US$3.0 equivalent. The total project costs for the six-year period amount to 5,239 CFAF million, of which IDA-CIDA represent 27%; ADF, 25%; Government of Upper Volta, 25%; EEC, 12%; and Swiss Aid, 11%. (vii) The overall rate of return, using the appraisal opportunity cost of labor, is estimated at 33% after actual cotton production figures have been adjusted downwards to offset favorable climatic and other factors which boosted production in the early years of the project. This compares closely with the original estimate of 32%. It was the purely agricultural elements which were implemented most successfully, and it is these elements which enter  -3- into the economic rate of return. The components which were disappointing or not implemented are generally the peripheral components. (viii) The follow-up projects reflect the lessons learnt from the WADP. Particaular attention has been given to the need for agricultural development projects to recover their ongoing costs. The separation of the input distribution system from extension activities has been complemented by the introdu^,tion of a cost recovery margin on inputs. Village groups' responsibility will be fostered, integration of livestock and agriculture promoted, and a program of adaptive research set up. The ORD menitoring unit will also be reinforced and a more comprehensive baseline survey will be undertaken. Finally, the fertilizer subsidy issue, including the search for alternative and/or cheaper fertilizer formulations, will be further addressed under the forthcoming Food and Fertilizer Project.  -4- I. BACKGROUND Sector Background 1.01 Economic growth in Upper Volta is necessarily closely linked to progress in the agricultural sector. which employs 80-90% of the population and comprises almost 40% of Gross Domestic Product (GDP) and almost all experts. However, soils are poor, rainfall is low and uncertain, and the potential for irrigation is economically limited, requiring costly investments to development. Improving agricultural productivity is necessary for maintaining food secu-ity and increasing national income and is thus a challenging task. 1.02 Although the country is relatively flat, there are pronounced regional differences in climate and soils. The low and erratic rainfall (600 mm) in the north results in unreliable harvests and greater reliance on livestock for survival, and consequently low population densities. On the central plateau, crop farming is at a subsistence level because of population pressure, over-exploited soils and unreliable rainfall. In the southwest, soil and rainfall conditions (reaching 1,200 mm) are more favorable, population density lower, and production more market-oriented. 1.03 Agricultural production over 1961-79 has performed as well as could have been expected, given the severe constraints. Fooderop areas, which account for almost 90% of cultivated land, have increased less than the net annual growth in rural population. In contrast to most other foodcrops, sorghum production has grown more rapidly than population, reflecting in part the residual effects of cotton fertilizer in crop rotation, as well as direct fertilization. Overall, the country has continued to satisfy all but a small share (5%) of its consumption of fooderops from local production in years of normal rainfall. But this has only been achieved through increasing dependence on the southwest as a source of food surplus, which tends to limit the resources available in that region for gr3wing the country's major export crop, cotton. This dependence must continue, however, in the short term, whilst adaptive research attempts to develop improved approaches for increasing productivity over wide areas of the center. 1.04 Cotton yields have risen markedly in the last decade and output rose from 36,000 tons in 1970 (from yields of about 380 kg/ha) to over 78,000 tons (from yields of about 960 kg/ha) by 1979, due to cultivation shifting to more fertile areas and to the use of fertilizers and insecticides, coupled with extension programs. Since 1979, cotton area has fallen, indicating that close atention needs to be paid to the relationship of cotton and cereals prices, including reviewing whether current taxes on cotton, which are not high, should, nevertheless, be reduced. Sector Strategy and Bank Group Lending 1.05 The Government's strategy in agriculture has given priority to: (a) improving the productivity of rainfed agriculture; (b) promoting migration from the densely populated and relatively infertile central nlateani ta tbe more fertile and less densely populated areas in the southwest; (c) expanding irrigaLion and swampland production scilemes; .=d (d) ensuring nationaL food security. In line with this strategy, Bank Group lending for Upper Volta has emphasized development of rainfed agriculture for food and cash crops in the southwest, small-scale land development schemes to expand the agriz^ltural  -5- production base in the central plateau, and testing a larger scale swampland production scheme in the southwest. 1.06 Since 1970, IDA has financed eleven projects in the rural sector, of which five have been completed. The Cotton Project (Cr. 225-WV), US$6.2 million, 1970) demonstrated that an improved technology, within the means of small farmers, could be spread widely and rapidly. The project's Audit Report noted substantial improvements in farming practices and yields. The First Bougouriba Agricultural Development Project (Cr. 496-UV, US$8.0 million, 1974) the Drought Relief Project (Cr. 442-UV, US$2.0 million, 1973) and the First and Second Rural Development Fund (RDF) Projects (Cr. 317-UV, US$2.2 million, 1972, and Cr. 640-UV, US$9.4 million, 1976) aimed at financing small discrete works with community participation. The project audits described the Drought Relief and First RDF projects as highly innovative and successful in implementing diversified and scattered subprojects. The second RDF project, completed in December 1981, continued the development of bottomlands, wells and anti-erosion works on the central plateau. A third RDF project was approved by the Board on March 30, 1982, while the two Volta Noire and Hauts- Bassins Agricultural Development Prcjects (follow-up to the ongoing WVADP) were approved by the Board on August 26, 1982. 1.07 The ongoing IDA-assisted agricultural projects are: the Livestock Development Project (Cr. 557-UV, USS6.0 million, 1975); the Forestry Project (Cr. 982-UT, US$14.5 million, 1980); the Niena Dionkele Rice Development Project (Cr. 1013-UV, USS6.5 million, 1980); and the Second Bougouriba Agricultural Development Project (Cr. 1097-UT, US$16.0 million equivalent, 1981). They are being implemented satisfactorily, although the swamp drainage Niena Dionkele Pilot Project had at the onset technical problems of water availability and rice varieties, and the Livestock Project had difficulties wilth its group ranch component, ivich neceseitated a redesign and a reduction in the credit by US$3.0 million. Project Background 1.08 WVTADP was a follow-up project which succeeded the Bank's first agricultural project in Upper Volta, the Cotton Project (Cr. 225-UV). The latter, which achieved a rate of return of 37%, limited its objective to promoting cotton production, and its narrow nature was criticized in the PPAR. Moreover, the emphasis on supply and collection services tended 'o divert the project field service from extension work proper. The WVADP was designed to correct this and to encourage more widespread agricultural development. 1.09 WVADP was appraised in October 1976, Credit 706-UV was negotiated in April 1977 and approved by the Board on May 3, 1977, with retroactive financing to January 1, 1977. The Credit was signed on May 23, 1977 and declared effective on December 28, 1977. An EEC Special Action Credit was sianed on February 8, 1980 and declared effective on September 4, 1980. The project was closed on June 30, 1983. 1.10 This Project Completion Report was prepared from several sources of information: project files, the Staff Appraisal Report, Development Credit Agreement, supervision mission reports, project quarterly reports, correspondence file, interviews with past and present project staff, working papers on the Hauts-Bassins and Volta Noire Agricultural Development Projeote,  -6- produced as part of the preparation of the follow-up project, and the Government Project Completion Report elaborated in part with the help of a Bank mission in Nay 1982. II. PROJECT FORMULATION AND APPRAISAL 2.01 Preparation. The Government of Upper Volta commissioned a consultant firm to assess the accomplishments of the West Volta Cotton Project (Cr. 225- UV) and to prepare a follow-up project. The preparation report was financed by funds provided under the West Volta Cotton Project. The consultants' preliminary findings were presented in September/October 1975, and were discussed with Bank representatives and Government. It was recommended that the follow-up project include: - integrated agricultural development; - strengthening of the management at the two ORDs; - strengthening the Permanent Secretariat of the Ministry of Rural Development by establishing an autonomous unit to supervise financial and administrative matters; and - a uniform accounting system to be set up for both ORDs and clear guidelines established for preparing applications for reimbursement. 2.02 A preappraisal mission comprising six persons, including three Bank staff, one consultant and two ADF members, visited Upper Volta from May 3 to June 1, 1976 and was able to substantially appraise the project. The project was to continue to support activities introduced under the West Volta Cotton Project and to increase the efficiency of the extension workers, whose responsibilities will include cereals and other foodcrops. Cotton pilot schemes for irrigation and settlements of spontaneous immigrants were to be included and managerial capacity and 'echnical knowledge of the MDR and of the ORDs strengthened. The project was formally appraised in October 1976 and the mission reaffirmed the findings of the preappraisal mission. 2.03 Project Area. Centered in southwest Upper Volta, the project area would coincide with that of the Cotton Project covering the two ORDs of Volta Noire and Hauts-Bassins. It is bordered by Mali to the west, Banfora ORD to the south, Bougouriba to the southeast, Central West ORD to the east and Ouahigouha ORD to the north. The project area would cover some 58,000 km2, about 20% of the country's total, and contain about 1.0 million inhabitants, 16% of the country's total, representing about 88,000 family units. The average population pressure is low a. about 20 persons/ha. The project area has a Sudanian climate and average rainfall varies from about 800 mm in the north to 1,200 mm in the south. The two ORDs can be divided into four soils and rainfall regions: north, central north, central south, and south. The north and the south are essentially cereal areas, while 95% of all cotton is grown in the central north and central south.  -7- 2.04 Project Design. The project was conceived to improve rural living standards by promoting more productive farming systems and better cultivation techniques for the area's main dryland crops, cereals and cotton. By actions to improve the situation of women, it would also help to develop the irrigation potential through small-scale simple water control schemes. The project would finance the following over a five-year period from 1977-81: (a) strengthening the Permanent Secretariat of the Coordinating Committee for Rural Development (SP/CCDR) in the Ministry of Rural Development with a technical assistant and support staff for the coordination and planning of agricultural projects, and through the creation of a Financial and Administrative Uni. (FAU) to establish and maintain an accounting system, and to monitor the project's progress; (b) providing the ORDs of Bobo-Dioulasso and Dedougou with the staff, equipment and transportation necessary to implement an agricultural development program; Cc) providing incremental seasonal inputs such as fertilizers, pesticides, insecticides and seeds; (d) constructing small-scale irrigation schemes totalling 1,120 ha; (e) building a 22,000 ton ginnery together with storage; (f) building some 75 small village grain stores; (g) creating a training center for project staff and farmers, which would also serve the Livestock Project at Samorogouan (Cr. 557- UV); (h) carrying out studies and surveys, followed by pilot projects to help new settlers; and (i) carrying out a pilot scheme to improve the situation of women in about 40 villages: In order to reach more farmers under the proposed project than under the previous one, and at the same time raise the quality of extension work, a fundamental reorganization of the ORDs and a full retraining of the extension service is essential. 2.05 Project Execution. The overall responsibility for the project would rest with MRD. The existing "Comite de Coordination du Developpment Rural" CCDR, which includes representatives of all ministries involved in rural development, would coordinate and oversee, through its Permanent Secretariat, project activities at the ministerial level, and a qualified technical assistant would assist the planning section of the Permanent Secretariat of the CCDR. In the field, five agencies would be responsible for project implementation: the two ORDs for providing inputs and extension services, Office National des Barrages et Irrigation (ONBI) for the irrigation work, Service d'entretien des Routes Secondaires (SERS) for the road construction  program, and the Equal Acces to Education for Women (EAEW) for promoting women's activities. 2.06 Negotiations were held from February 28 to March 7, 1977. During negotiations, two major issues were raised: (i) Government explained that farm inputs for cotton growing (seeds and fertilizers) were being financed through the rediscount facility at the Central Bank and that it would be best to continue with present arrangements which worked smoothly. Thus, the provision of short-term credit, as proposed under the project, would not be necessary; IDA's contribution was reduced by US$700,000 and Government's contribution was increased by this same amount; and (ii) Government also asked the Association to provide a revolving fund to be used to help pre-finance project costs; the Association agreed to an advance to this revolving fund of US$400,000. The project was approved by the Board on May 3, 1977 and the IDA and Canadian Credits were signed on May 23, 1977. The Swiss Senate approved the financial aid for Upper Volta of SF 9.5 million on June 13 and the House of Representatives passed this legislation on June 20, 1977. ADF credit became effective on November 10, 1977. III. COST AND FINANCIAL ARRANGEMENTS 3.01 Total costs at appraisal had been estimated at CFAF 4,633.3 million (US$18.9 million equivalent at the exchange rate of US$1 = 245), including contingencies. Foreign exchange costs represented 47% of the total (US$8.9 millicn). Financing was to be provided by: IDA, US$3.6 million (19%); IDA- administered Canadian grant, US$2.9 equivalent (15%); ADF, US$5.5 million (29%); Swiss Aid, US$3.6 million equivalent (19%); and Government of Upper Volta, US$3.3 million (18%). 3.02 The Canadian grant was to be administered by IDA whilst other cofinancing was to be on a parallel basis: ADF was to contribute to strengthening ORD headquarters, extension services, and the training program and constructing the ginnery, and Swiss Aid was to finance motorcycles for Bobo-Dioulasso ORD extension agents, production inputs for the 1,120 ha irrigated area, village grain storage, women's activities, irrigation schemes, and studies and surveys for spontaneous settlement. Government's share is equivalent to the estimated taxes which are US$1.7 million, plus the incremental costs on fertilizers and insecticides estimated at US$1.6 million. 3.03 Annex 1, Table 1, shows a comparison between appraisal estimates and actual expenditure, on a yearly basis, and the totals for the five-year project are summarized below.  -9- Table 3.1: COMPARISON BETWEEN APPRAISAL ESTIMATES AND ACTUAL EXPENDITURE (in CFAF million) AppraisaL Actual Actal as % of Estimates Ependiture est. hstituticns 1. Ministry of Rlba Developnert 1C9 451 - 2. Fvinacial and Administrative Unit 216 918 206 15 35 3. Volta Noire ORD (Dedouga) 949 404 959 651 101 4. Hauts-Rssins 0ID (Obo-iou1aEssO) 8Z7 F 86 860 1(7 5. Training 34899 233195 67 ,%b-total 2 451 941 2 287 861 93 6. Inpts 469012 916 665 195 7. Gimery 785 352 1 005 446 128 8. Cereal Storge Facilities 163 T77 100 352 61 9. IrXigatio 351 CED 20B S 59 10. ealtVE&icatimn 286 gl 145 959 78 n. Studies and Sarveys 225 202 - TOTL, 4 63 23B 4 664 440 lli.sceflaleous 6 467 ricultura1 Credit 10B 260 TOM!AL Actuai pemditAm 4 779 167  - 10 - 3.04 Two components were not implemented - assistance to the Ministry of Rural Development (item 1 in para 3.03 above) and Studies and Surveys (item 11 above), the latter being a Swiss Aid component. On the other hand, there was a cost overrun in the erection of the ginnery of about CFAF 220 million (item 7 above), and the total cost for inputs supplied was about double the appraisal estimates. Inputs were to be financed entirely by Government. Otherwise, expenditures remained in line with appraisal estimates. 3.05 The technical assistance to the Ministry was supposed to be a continuation of a similar component under the First Bougouriba Agricultural Development Project (Cr. 496-Uv) 1/; before any disbursements could be made by the project under review, it became obvious that the effort under Bougouriba I was getting nowhere. Providing adequate technical assistance to a Government, at the right level, in sufficient strength and with a clear understanding of purposes and results expected, is one of the most difficult exercises, and we still have a long way to go. 3.06 At midterm of project implementation, it became clear that the project would need additional financing to cover: (a) cost overruns on the construction of the ginnery; (b) need for agricultural credit for oxen and equipment to meet the high demand occasioned by the project's success; and (c) the shortfall due to currency realignment (the average exchange rate during the first three years of the project was CFAF 220 for the US dollar, against CFAF 245 at appraisal). At the same time, progress in the processing of the follow-up project indicated that new funds would not be made available until several months after completion of the ongoing project. To cover these additional needs, and to finance the additional interim period before the start of the follow-up project, a special credit of US$3.0 equivalent from EEC funds was processed (Special Action Credit No. 49, January 31, 1980). 3.07 Because of the expanded need for inputs (total costs for the project life reached CFAF 917 million, against appraisal estimates of CFAF 469 million), which the Government had to finance, and the additional interim period, the total Government contribution to project costs reached CFAF 1,306 million instead of the appraisal estimates of CFAF 818 million. Hereunder is a table showing the total costs of the project, including the interim period (January to July 1982). 1/ See Bougouriba Agricultural Development Project PCR of July 8, 1982 (para 7.02).  - 1 1 - Table 3.2: TOTAL COSTS FOR THE EXTENDED PROJECT (in CFAF million) 5-yr.Project Total Actual Interim Project Expenditure Period Costs Institutions 1. Ministry of Rural Development - - 2. Financial and Admin. Unit 206 155 66 662 272 817 3. Volta Noire ORD (Dedougou) 959 651 140 582 1 000 233 4. Hauts-Bassins ORD (Bobo) 888 860 143 835 1 032 695 5. Training 233 195 25 479 258 674 Sub-total 2 287 861 376 558 2 664 419 6. Inputs 916 665 1 960 918 625 7. Ginnery 1 005 446 - 1 005 446 8. Cereal Storage Facilities 100 352 16 093 116 445 9. Irrigation 208 157 39 730 247 887 10. Health/Education 145 959 26 682 472 641 11. Studies and Surveys - - - Others: including Agric. Credit 114 727 1 181 115 908 TOTAL 4 779 167 462 204 5 241 371 3.08 The total project costs for the six-year period were financed as follows: Table 3.3: PROJECT FINANCING Lender or Donor Original estimates Actual total Actual as US $ million In CFAF at Project Costa % of CFAF=US $1.0 (CFAF million) original (in million) IDA-CIDA 6.5 1531 1403 88 ADF 5.5 1345 1282 95 Swiss Aid 3.6 880 594 68 Upper Volta Government 3.3 817 1310 160 EEC Special Credit - - 650 Total 18.9 4633 5239 1/ 1/ Totals do not agree because of rounding; details are in Annex 1, Table 2.  - 12 - The lower figures disbursed by IDA-CIDA and ADF as compared to those in Table 3.04 reflect the lower exchange rate that prevailed for the CFAF in relation to the US dollar during the first three years of project implementation. Although it picked up from April 1981, the average disbursement rate has been 220 CFAF to the US dollar against CFAF 245 = US$1.0 at appraisal and the Canadian dollar even lower. The lower figure for Swiss Aid disbursements is mainly due to the fact that the studies and surveys (CFAF 225 million entirely financed by the Swiss) were never carried out. 3.09 Auditing was carried out regularly by a firm which was originally retained as a consultant for setting up the accounts and procedures of the Financial and Administrative Unit of the project. In their final report on Cr. 706-UV, they state that: (a) withdrawal requests had been established as per IDA guidelines; (b) goods and services covered by these requests originate from countries members of IDA and Switzerland; (c) such goods had been received and services actually rendered; and (d) all goods and services (including on-force account) financed by IDA have been used within the project framework. IV. IMPLEMENTATION A. Effectiveness and Start-Up 4.01 The Credit Agreement included three conditions of effectiveness: (a) that the Association has been informed by the African Development Fund that all conditions precedent to initial disbursement of its loan to the Borrower for the project, except the effectiveness of the Development Credit Agreement, have been fulfilled; (b) that all conditions of effectiveness of the Canadian Credit Agreement, except the effectiveness of the Agreement, have been fulfilled; and (c) that the Special Account has been opened. 4.02 The original date of effectiveness was postponed twice from the original date of August 29, 1977 to October 31, 1977, then to December 31, 1977. The reasons were twofold:  - 13 - (i) There were delays in publishing the "Journal Officiel", document authorizing and ratifying the Credit Agreement and its legal binding upon the Borrower; end (ii) conditions of initial disbursement under the ADF loan were not totally satisfactory. To avoid further delays in making the Credit effective, this last ADF condition, namely, the sending of the bidding documents for the cotton ginnery, was waived and the Credit became effective on December 28, 1977. B. Physical Implementation General 4.03 The WVADP has been successful in extending the work of the previous Cotton Project to stimulate more general agricultural development in the area. It has successfully established a well-trained and enthusiastic extension service. Most of the physical targets of the project have been met with a total incremental production of 62,000 tons of cotton (111% of appraisal estimates) and 70,000 tons of cereals (78% of appraisal estimates) and the construction of 72 village stores, a training center at Bobo-Dioulasso and a new 20,000-ton ginnery at Dedougou. However, the irrigation component, not directly under the control of the two ORDs, was not successful, while the support of the MRD and the settlement pilot project were not implemented. Summary of Project Performance 4.04 Table 4.1 below summarizes the project's cumulative results when compared with appraisal estimates for the five years of the project. Details are given at Annexes 4, Tables 1, 2 and 3. Technical Assistance to the Ministry of Rural Development 4.05 It was intended to provide support to the Ministry of Rural Development and the CCDR through technical assistance and support. Despite frequent reminders, no request was ever forthcoming for this assistance and the component never got started. Early in 1981, the Ministry indicated that they would not be submitting a request during the life of the project, and requested reallocation of the unallocated amount in the IDA credit to meet the expected overruns on other categories and especially on Civil Works (ginnery) which was not included in the EEC Credit. The funds were reallocated and have enabled the other components to continue until September 30, 1982. The FAU, however, was set up in Bobo-Dioulasso, and has achieved mixed results (para 7.10). Since the beginning of 1980, it has functioned more or less successfully, and, in particular, is has been able to produce good information on the financial situation of the project and on budgets. Agricultural Development Program 4.06 Agricultural Extension. During the project, the extension service was successfully reorganized in line with the Training & Visit System, which emphasized regularity of visits to farmers' groups and separation of the extension function from the supply and service function. This is generally  - 14 - agreed to have increased extension agents' efficiency, in terms of the number of farmers reached, and also efficacy, in terms of the success in transmitting the extension message. This, in turn, has been reflected in good production figures, which are generally in line with the appraisal estimates. By PY5, some 42,000 farmers were estimated to have benefited directly from the extension services, or 90% of appraisal estimates (see Section VII), whilst 27,000 families benefited indirectly (para 7.07). 4.07 Medium-Term Agricultural Credit. Under the Cotton Project, a revolving credit fund was established at the National Bank for Development (BND) to provide seasonal and medium-term credit to farmers in the project area. Upon completion of the Cotton Project, funds from BND's revolving credit fund and from other potential sources were estimated to be sufficient to meet increases in demand for medium-term credit under the present project. These assumptions were not holding true. In 1977, BND withdrew from financing agricultural credit because it was dissatisfied with the level of repayments it was receiving from the ORDs throughout the country, a situation which reflected the slowness of the ORDs to pay over credit recoveries to the BND as well as slowness of beneficiaries to repay. A limited amount of medium-term credit funds (US $400,000 over three years) was then provided to the project area ORDs by the Economic Community but these have been insufficient to meet demand. Farmers repayments of these loans have been about 80 percent, which is considered satisfactory and which reflects slow rather than non-payment. With additional funds from the EEC Special Action Account supplementing the Economic Community funds, about 1,000 sets of oxen and equipment were financed under strict control. To upgrade the established control systems for agricultural credit funds, separate account were kept by the ORDs for the credit component and the accounts were supervised by the FAU. To facilitate recovery, credit to purchase oxen and equipment were made available to members of village groups, upon the recommendation of the group. Credit recovery then became very successful (see table 4.4). End of 1980, terms and conditions of all agricultural credit in the country were harmonized by the Caisse Nationale de Credit Agricole (CNCA) that was es'-ablished on August 21, 1980. Animal traction cultivation was one of the technological improvements encouraged by the project with a medium-term credit. Table 4.2 below and Annex 3, Table 1, indicate the evolution under the project and show the increasing interest in adopting animal traction.  - 15 - Table 4.2: ANIMAL TRACTION - USE Pairs of Oxen and Plows Carts pyl 1,838 PY2 2,486 245 PY3 1,812 632 PY4 3,477 947 PY5 1,900 1,221 Total incremental 11,513 3,045 Animal traction credit funds provided under the project are summarized in Table 4.3, but there were no projections for this type of credit in the appraisal report. However, the project has reached a stage where the demand for medium-term credit to purchase animal-drawn equipment exceeds supply possibilities. Table 4.3: ANIMAL TRACTION CREDIT Cost of Campaign Donor Equipment Interest Rate (CFAF million) PY1 1977/78 CE 8.9 5.5 PY2 1978/79 CE 31.4 5.5 USAID-SP/CCDR 11.4 5.5 PY3 1979/80 CE 26.8 5.5 PY4 1980/81 - - PY5 1981/82 CNCA 147.9 9.0 From statistics collected by the project, the collection rate is estimated to be as follows starting in 1978/79. Table 4.4: ANL