Cameroon - Second Western Province Rural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE Cor Li Report No. P-3758-CM REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$21.5 MILLION TO THE UNITED REPUBLIC OF CAMEROON FOR A SECOND WESTERN PROVINCE RURAL DEVELOPMENT PROJECT March 29, 1984 FILE COPY This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS US$1 = CFAF 392 CFAF 1,000 = US$2.6 CFAF 1,000,000 = US$2,550 ABBREVIATIONS DEP - Direction des Etudes et Projets - Ministry of Agriculture FONADER - Fonds National de Developpement Rural Genie Rural - Rural Works Department of the Western Province - Ministry of Agriculture ICO - International Coffee Organization IFAD - International Fund for Agricultural Development I&E - Monitoring and Evaluation RCF - Revolving Credit Fund UCCAO - Union Centrale des Cooperatives Agricoles de l'Ouest FISCAL YEAR UCCAO - October 1 to September 30 Government - July 1 to June 30  FOR OFFICIAL USE ONLY UNITED REPUBLIC OF CAMEROON SECOND WESTERN PROVINCE RURAL DEVELOPMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: United Republic of Cameroon Beneficiary: Union Centrale des Cooperatives Agricoles de l'Ouest (UCCAO) Amount: US$21.5 million equivalent, including the capitalized front- end fee. Terms: 20 years, including 5 years grace at the standard variable interest rates. Cofinancing: IFAD: US$14.5 million equivalent Flow of Loan Proceeds: - US$12.9 million as loan to UCCAO for onlending to cooperatives and farmers at 11.25 % in PYl. - US$8.2 million as grant to UCCAO. - US$0.3 million for the Ministry of Agriculture. Project Description: The five-year project would extend and consolidate opera- tions on-going under the Western Highlands Rural Development Project (Cr. 784-CM) to the whole Western Province, while improving the relevance of the technical package to farmers' needs. The focus would be on increased food crop production and improvements in coffee yields and quality. The project would include: (a) expansion and streamlining of UCCAO's services, strengthening of cooperatives, modernization of coffee processing and marketing facilities; (b) provision of incremental inputs; and (c) supporting activities, including applied research, village water supply, feeder roads, soil conservation, reafforestation, bottomlands development, monitoring and evaluation; technical assistance, fellowships and studies would also be provided. Benefits and Risks: The project would support several key Government objectives: (i) reducing rural-urban income disparities and slowing down urban migration by raising smallholder produc- tivity and improving rural living conditions; (ii) promoting national food self-sufficiency and generating additional export earnings; and (iii) decentralizing development by strengthening regional institutions. It would also promote a gradual rationalization of fundamental policies in input supply, commodity pricing, and interest rates. I This document has a restricted distribution and may be used by recipients only in the Performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  The project faces three risks. The management risk is not considered high, as the proposed activities would rely on existing structures and systems, whose effectiveness would be strengthened through improved procedures and controls, combined with training. Reorganization of input supply would reduce the risk of untimely and inadequate delivery of fertilizers and pesticides to farmers. Financial weaknesses of robusta cooperatives would be remedied through improve- ments in the pricing system for coffee and in the management and accounting procedures of the cooperatives. Estimated Project Costs Local Foreign Total