Senegal - Second Agricultural Research Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-5064-SE MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 14.0 MILLION TO THE RE7UBLIC OF SENEGAL FOR THE SECOND AGRICULTURAL RESEARCH PROJECT FEBRUARY 26, 1990 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 Currency unitt CFA Franc (CPAF) 1 US$ - CFAP 324 (as of December, 1989) 1 SDR - US$ 1.32 WIGHTS AND MEASURES Metric system ABBREVIATIONS ISRA - Institut Sdndgalais de Recherche Agricole (The Senegalese Agricultural Research Institute) FISCAL YEAR Governmentt July 1 - June 30 ISRA: January 1 - December 31 FOR OFFICIAL US9 ONLY SENEGAL SECOND AGRICULTURAL RESEARCH PROJECT Credit and Project Suwmary * Borrower: Republic of Senegal Beneficiary: Institut Senegalais de Recherches Agricoles (ISRA) Amount: SDR 14.0 million (US$ 18.5 million) Terms: Standard, with 40 years maturity Onlendiny Terms: Proceeds of the Credit would be passed on in grant form to ISRA. Financing Plan: Government US$ 20.4 million IDA US$ 18.5 million TOTAL US$ 38.9 million Economic Rate of Return:Not applicable Staff Appraisal Report: Report No. 7675-SE Mal): IBRD 21318 credit.pre/SAR2 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. MEHORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EECUTIVE DIRECTORS ON A PROPOSED CREDIT TO SENEGAL FOR A SECOND AGRICULTURAL ZESEARCH PROJECT 1. The following memorandum and recommendation on a proposed development credit to Senegal for SDR 14 million (US$ 18.5 million equivalent) is submitted for approval. The proposed credit would be on standard IDA terms with 40 years maturity and help finance a second agricultural research project. The project represents 562 of the total research program in the next five years, to which France, USAID and Canada will also be-major contributors. 2. Background. Agriculture in Senegal accounts for only 20% of GDP and 20% of exports but is still the main or only source of livelihood for 70% of the people. Agriculture grew at only 1% per year between 1960 and 1988, but with considerable inter-annual fluctuations due to rainfall variability. While improved performance in agriculture will not be critical for future growth, it will be crucial for employment and income for a majority of the population for a long time to come. Starting in 1985, under SALs II and III, real farm prices were brought up to or even above border parities, most input subsidies were eliminated and input distribution has been largely privatized. The priority needs for further policy reform are to seek economies in crop collection, prccassing and marketing, and greater flexibility in setting producer prices for groundnuts, cotton and rice; actions in there directions will constitute the key features of the Agricultural Sector Loan that is under preparation. Meantime, public investment planning is being improved, and annual reviews have led to improved design and a significant switch from irrigation to rainfed farming. Area development projects are being phased out in favor of national programs in support services and environmental management. The proposed project has been prepared by ISRA and is a part of ISRA's Five Year Research Program. 3. Rationale for IDA Involvement. The project forms an integral part of IDA's sector development strategy and is in full agreement with the Government's priorities for sectoral development. The first agricultural research project (Cr. 1176-SE) considerably expanded the regional coverage of the research service, comprehensively re-equipped the research stations * and their laboratories, quadrupled the number of Senegalese research scientietq (from 30 to 110) in six years, and initiated farming systems research work. The second project would build on the strong * infrastructural and human resources base now in place, with emphasis on research programs expected to yield results in the short term. 4. Project Objectives. The broad objec:ive of the project is to generate adequate lower risk technology for improving farmers' and herders' incomes in a sustainable manner. The specific objectives are to undertake - 2 - priority research programs in the Research Institute's (ISRA) Five-year Research Program, to continue to improve ISRA's programming and budgeting, and personnel and financial management, and to get the researchers out of their stations and into farmers' fields. 5. Project Description. The project, to be implemented over five years, would focus on: (a) adaptive research involving the testing, within the farming environment, of the technologies developed during the first project; (b) applied research targeted at major technical problems in the priority agricultural zones; (c) development of an applied research program of natural resources management; (d) strengthening of the linkages between research, extension, development agencies and the farming community; (e) strengthening of administrative and financial management of ISRA; (f) providing of financial support for ISRA's research support services and for establishment of a commercial production company to manage revenue-earnirg activities; and (g) establishing an unallocated Research Reserve Fund to enable tirgent research work identified at the yearly research reviews to be financed without delay. The project provides funds for civil works including central headquarters of ISRA in Dakar, vehicles, equipment, local training, Technical Assistance to ISRA's administration and financial management (two years residence plus short term missions) and incremental operating costs. The total cost of the project is estimated at US$ 38.9 million equivalent with a foreign exchange component of US$ 10.5 million (27Z). A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and of disbursements and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank Group operations in Senegal are given in Schedule C and D respectively. A map (IBRD 21318) and the Staff Appraisal Report No. 7675-SE dated February 1, 1990 is attached. 6. Agreed Actions. The Government has agreed on the following actions: (a) as conditions of effectiveness: (i) signature and promulgation of ISRA's Organizational Decree; (ii) employment by ISRA of a Secretary General acceptable to the Association; and (iii) employment by ISRA of a Management Controller and a financial analyst/accountant for an initial period of two years; (b) as dated covenants: (i) ISRA would prepare for review and approval by IDA a proposal and action plan for the establishment of an independent company to manage its revenue earning activities by January 1, 1991; (ii) National and regional research Technical Committees would be set up by April 30, 1990; and (c) as yearly disbursement conditions: ISRA would submit to the Association for comment and approval by end of October 31 each year a detailed work plan, budget and financing plan for the next fiscal year. 7. Benefits. The closer integration of research on crops, livestock and forestry will contribute to the development of sustainable farming systems that will assist with the restoration and conservation of soil fertility and so with crop productivity. An increased emphasis on adaptive research, with the extension service and the farming community participating in the research process, will assist with the adaption of technical advances made during the first project to the needs of the farming community. This will be further strengthened through the close coordination of this project with that proposed for agricultur&! extension. Both the long-term needs of the environment and the most immediate technical problems of farmers will thus receive high priority and compartmentalized scientific research will be diminished. 8. Risks. Possible risks include a program segmentation because of a multiplicity of cofinanciers of research, slowness of ISRA's management in achieving the shift in emphasis from the thematic research to multi- disciplinary problem oriented research, and ineffective feed-back from the production systems research teams and from the extension services. The major general risk is, as was the case for the first project, that the need to solve immediate specific problems will prevent management from concentrating sufficient supervision and resources to the more conceptual necessity of a reorientation of the research program. The annual reviews of the on-going and planned research would address these risks. 9. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit. Barber B. Conable President Attachments Washington, D.C. February 26, 1990 Schedule A SENEGAL SECOND AGRI.ULTURAL RESEARCH PROJECT Estimated Costs and Financins Plan Estimated Costs a/ Local Foreign Tota ----------US$ million-------- Civil Works 0.8 1.1 1.9 Equipment 0.3 2.7 3.0 Vehicles 0.1 1.1 1.2 Operating Cost Research 14.9 2.5 17.4 Operating Cost Administration 6.2 0.9 7.1 Consultants, Audit, Training 0.8 0.2 1.0 Reserve Research Fund 0.1 0.9 1.0 Base Cost 23.2 9.4 32.6 Physical Contingencies 0.1 0.5 0.6 Price Contingencies 4.3 1.4 5.7 Total Project Cost 27.6 11.3 38.9 al Exclusive of taxes and duties. Financing Plan Local Foreign Total ---------(US$ million)------- Government 19.5 0.9 20.4 IDA 8.1 10.4 18.5 Total 27.6 11.3 38.9 schede.pre SAR2 Schedule B Page 1 of 2 SENEGAL SECOND AGRICULTURAL RESEARCH PROJECT Procurement Method and Disbursements Procurement Methods - ----- Total Items to be procured ICB LCB Other N.A. Cost (US$ Million) Civil Works 2.3 2.3 (2.3) (2.3) Office Equipment, Computer Equipment 2.7 1.0 3.7 Ag. Equip, Laborator7 Equipment (2.7) (1.0) (3.7) Vehicles .1.2 0.2 0.1 1.5 (1.2) (0.2) (0.1) (1.5) Consulting Services, Audit, Training 1.0 1.0 (1.0) (1.0) Direct Research Costs 3.2 1.5 0.5 15.6 20.8 (3.2) (1.5) (0.5) (3.6) (8.8) Administration, Maintenance 8.4 8.4 Reserve Research Fund 1.2 1.2 (1.2) (1.2) TOTAL 7.1 5.0 1.6 25.2 38.9 (7.1) (5.) (1.6) (4.8) (18.5) Note: Figures in parenthesis are the respective amounts financed by the Association Procure.wkl SAR2 -6- Schedule B Page 2 of 2 SENEGAL SECOND AGRICULTURAL RESEARCH PROJECT Disbursements Amount of Estimated Cost Credit Allocated To be financed Category US$.000 SDR.000 (% of Expenditures) ----------------------------- w--------------------------- 1 Civil Works 2,100 1,600 100 2 Equipment 3.170 2,300 100 3 Vehicles 1,300 1,000 100 4 Consulting Services, Antidt, Traift 830 645 100 5 Research Program Operating Costs 7,350 5,585 100 (excluding salaries) 6 Research Reserve Fund 1,000 800 100 7 Refunding of PPF Advance 800 600 8 Unallocated 1,950 1,470 - 18,500 14,000 Estimated IDA Disbursements (US$ million) FY91 FY92 FY93 FY94 FY95 FY96 Annual 3.0 4.5 4.5 3.0 2.0 1.5 Cumulative 3.0 7.5 12.0 15.0 17.0 18.5 DisburF-e.vkl SAR2 -7- Schedule C SENEGAL SECOND AURICULTUAL RESEARCR PROJECT Timetable of Rey Proiect ProcessinR Events (a) Time taken to prepare% one year (b) Prepared byi ISRA with assistance from ISNAR and IDA (c) First IDA mission: February 1988 (d) Appraisal adssion departure: October 15, 1988 (e) Negotiations: January 16-18, 1990 (f) Planned effectiveness: July 1990 (g) Relevant PCRs and PPARs: NIA ScheC.pre SAR2 Schedule D - 8 - Page 1 of 2 Status 0 Bank group Operations In SENESAL PFDOR25 - Summary Statement Of Loans and ID4 Credits (LOA data as of 1130190 - HIS data as o4 0/27/90) Amount in US$ till.on (less cancellations) Loan or Fiscal Undis- lising Credit No. Year Borrower Purpose 3ank IDA tursed late ------------------- ------- ---- --- ---------- - Credits 40 Credits(s) closed 440.07 C11030-SEN 1981 SENEGAL FORESTRY 9.30 2.:? 12/ l I89(R) C13100-SEN 1983 SENEGAL RURAL HEALTH 15.00 3.30 "23o/90(q) CF0130-SEN 1984 SENEGAL T.A. URBAN IOT & RE 2.95 .17 '2,31/89 4 C13900-SEN 1984 SENEGAL PARAPULIC II TA. 11.00 .7 1!!!!9R) C14060-SEN 1984 SENEGAL EASTERN SENEGAL RURA 16.10 4.35 06/30/90R) C14590-SEN 1984 SENEGAL AKAR PORT III 2.65 .34 06130/911R) C15540-SEN 1985 SENEGAL WATER SUPPLY II 24.00 1.15 06/30/93 C17100-SEN 1986 SENEGAL ENERGY SECTOR REHA. 20.00 9.95 06/30/91 C17140-SEN 1986 SENEGAL TELECOS II 17.69 12.76 06130193 C17350-SEN 1987 SENEGAL PRIIARY EDUC DEV 12.00 7.71 06/30/95 C18550-SEN 1988 SENEGAL IRRIGATION IV 33.60 29.64 06/30/94 018680-SEN 1988 SENEGAL INDUSTRY SECTOR 33.00 30,00 06030/8 C18840-SEN 1988 SENEGAL MUNICIPAL HOUSING DE 46.00 40.93 03/31/95 C19100-SEN 1988 SENEGAL TA DEVT IMHT 17,00 14.14 0A!!04 C18021-SEN 1989 SENEGAL SAL III 5.50 .00 02/28190 C19920-SEN 1989 SENEGAL SHALL RURAL PS. II 16.10 13.95 06/30/98 I M20730-SEN 1990 SENEAL PUBLIC MiRK ; EMPLOY 20.00 2.4X U!31/i 9 C20770-SEN 1990 SENEGAL BANKING/FINANCIAL SE 45.00 34.16 06130191 C20900-SEN 1990 SENEGAL SAL IV 80.00 80.00 TOTAL number Credits u 19 426.99 307.34 Loins 20 Loans(s) closed 129.33 All closed for SENEGAL OTAL number Loans ' 0 TOTAL*# 129.33 366.96 of which repaid 56.18 15.60 TOTAL neld by 2ank & IDA 73.15 851.36 AMount sold 5.75 of uhich repaid 3.26 TOTAL undisbursed 307.44 Notes: * Not yet effective a Not yet signed If Total Approved, Repayments, and Outstanding balance represent both ictive and inactive L.oans and Credits. R) indicates formally revise. Closing Date. The Net Approved and Bank Repaysents are historical value, all others are market value. The Siqning, Effective, and Closing datef are based upon the Loan Department offical data and ire not taken fros the a Sudget -ile. - 9 -Schedule D Page 2 of 2 22. Statem.ersi e PC Zavstaesea (eto Septmber 81, 199) Afeunt la US* al l lion quilty Flesl Year Obllgor Type of oumae Loen Invetmenl Tøt*I 1967 Seelete Indu*triel lo d'aroi Føelt e P .41 1.81 8.46 du Senegal (SlEu) 1972-74 B ~ ienegal Vegetable Expert - 9.94 9.94 1974 S0FISEIT FevIl.pment Finane Co. . 84 9.34 1989 Banque do i*smøbltat da seegal ney & Cspital Market - 9.6 9.48 190 Seletm otellere du s*rachele Teuriles 3.9 - 3.90 1982 lduetls Chialques du Senegl FortlIlser Plast ».0 - 25.00 1984 AftrIan Seafoed Plab Procesolng Plent 8.29 L.9 4.20 1986 ~TIA-NPAFRIC Pri6 Menaeaturleg 8.20 • 8.29 1981 Induetrles Chialque du Forti llaer Pleat 12.M 6.16 12.16 s1gel II .- - Total *roff C~asital 48.94 3.71 62.9s Lees Caneollatlone, Termaløns, Rey~nte Ue*s and L m 82.34 1.8 84.19 1.8 1.h8el6.40 T~i. c~i.te bold by ZFC - -- 方