Morocco - Fes - Karia - Tissa Agriculture Project

Document rf The World Bank FOR OFFICIAL USE ONLY Report No. 10808 PROJECT COMILETION REPORT MOROCCO FES-KARIA-TlSSA AGRICULTURE PROJECT (LOAN 1602-MOR) JUNE 30, 1992 Agricultural Operations Division Country Department I Middle East and North Africa Regional Offi:e 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 Unit - Dirham (DH) Appraisal year average US$1.00 - DH 4.5 Implementation average US$1.00 - DH 7.3 Completion year, average US$1.00 - DH 8.30 WEIGHTS AND MEASURES Metric System GLOSSARY OF ABBREVIATIONS ASAL Agriculture Sector Adjustment Loan CLCA Local Agricultural Credit Bank CNCA National Agricultural Credit Bank CRED Regional Commitment and Expenses Comptroller DE Directorate of Livestock DPA Provincial Directorate of Agriculture DPAE Directorate of Planning and Economiz Affairs DPV Directorate of Crop Production ERR Economic Rate of Return FA0/CP Food and Agriculture Organisation/Cooperative Programme FKT Fes-Karia-Tissa Agriculture Project IAV Agronomic and Veterinary Institute Hassan II IBRD International Bank for Reconstruction and Development INRA National Institute for Agronomic Research MARA Ministry of Agriculture M&E Monitoring & Evaluation MTSAP Medium Term Agricultural Sector Adjustment Program ONEP National Bureau for Potable Water PCR Project Completion Report SAP Special Action Program SAR Staff Appraisal Report T&V Training and Visit UNDP United Nations Development Programme FISCAL YEAR OF BORROWER January 1 - December 31 THE WORLD BANK FOR OFFICIAL USE ONLY Washington, D.C 20433 U.SA mco of Directo-Genal Operatrmns EvaluatHor June 30, 1992 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on MOROCCO Fes-Karia-Tissa Agriculture Project (Loan 1602-MOR) Attached, for information, is a copy of a report entitled "Project Completion Report on Morocco - Fes-Karia-Tissa Agriculture Projdct (Loan 1602- MOR)" prepared by the Middle East and North Africa Regional Office. Attachment 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. FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT MOROCCO FES-KARIA-TISSA AGRICULTURE PROJECT (LOAN 1602-MOR) TABLE OF CONTENTS Pate No. PREFACE . . . . . . . . * * * * * * * * * * * * * * * * * * * i EVALUATION SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . iii PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE . . . . . . . . 1 1. Project Identity . . . . . . . . . . . . . . . . . . . 1 2. Background . . . . . . . . . . . . . . . . . . . . . . . . 1 3. Project Objectives and Description . . . . . . . . . . . . 2 4. Project Design and Organization . . . . . . . . . . . . . . 3 5. Project Implementation I . . . . . . . . . . . . . . . . . 4 6. Project Results and Impact ... . . . . . ....... 6 7. Sustainability . . . . . . . . . 11 8. Bank Performance . . . . . . . . . . . . . . . . . . 11 9. Borrower Performance . . . . . . . . . . . . . . . . 13 10. Project Relationship . . . . . . . . . . . . . . . . 13 11. Consultancy Services . . . . . . . . . 0 . . . . . . 14 12. Project Documentation and Data . . . . ... . . . . . . . 14 PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE . . . . . . . . 15 A. Confirmatio-- of Factual Data Contained in Parts I and III, Remarks on Analysis Contained in Part I . . . . . . . . . 15 B. Bank Performance . . . . . . . . . . . . . . . * * * * . 16 C. Borrower Performance . . . . . . .** *** 16 D. Project Relationship . . . . . . * * * * * * * * * . 17 PART III: STATISTICAL INFORMATION . . . . . . . . . . * * * * * * * 19 Tables 1. Related Bank Loans . . . . . . . . . . . . . ..... 19 2. Project Timetable . . . . . . . . . . . *... 20 3. Loan Disbursements . . . . . . . * * * * * * * * * * . 21 4. Project Implementation: Project Implementation Ratios . 23 5. Project Costs and Financing . . . . . . . . . . . . . . 25 6. Project Results . . . . . . . * .** . * * . * * 27 7. Status of Major Covenants . . * . . * * . . * . 29 8. Use of Bank Resources . . . . . * . * * * * * . * * * 30 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. PROJECT COMPLETION REPORT MOROCCO FES-KARIA-TISSA AGRICULTURE PROJECT (Loan 1602-MOR) PREFACE This is the Project Completion Report (PCR) for the Fes-Karia-Tissa Agriculture Project for which Loan 1602-MOR for an amount of US$65 million was approved in June 1978. The loan became effective in February 1979. Originally expected to be implemented over a six-year period, the loan was actually closed with e four-year delay in June 1990, efter three extensions had been granted. Actual disbursements totalled US$36.3 million or 56 percent of the originally approved loan amount. This PCR (Parts I and III) was prepared by staff of the FAO/IBRD Cooperative Programme (FAO/CP), who visited Morocco from February 6 to 22, 1991. Part II was prepared by the Borrower. The PCR is based on a draft document prepared by the Government of the Kingdom of Morocco, as well as on project documentation such as the Appraisal Report, Loan Agreement, project correspondence, supervision reports, etc. - iii - PROJECT COMPLETION REPORT MOROCCO FES-KARIA-TISSA AGRICULTJRE PROJECT (LOAN 1602-MOR) EVALbATION SUMMARY Background 1. Throughout the 1970's, the Bank pursued a policy dialogue with the Government with regard to the rainfed agricultural sector. This effort led to the conclusion that the sector warranted a higher priority in the investment program and subsequently led to the adoption, in the mid-1980's, of the Medium Term Agricultural Sector Adjustment Program (MTSAP). The Fes-Karia-Tissa Agriculture Project (FKT) was the first of a series of four rural development projects each specifically designed to de-elop and test options for stimulating growth and increasing production in various environments representative of Morocco's rainfed areas. 2. The latter part of the implementation period of the project coincided with a singularly difficult per cd for Morocco's economy during which the financial and budgetary situation deteriorated increasingly. This prompted the Government to impose exceptional financial restrictions and undertake a range of adjustment policies. The FKT project was seriously affected by these restrictions. The first five years of the project implementation period also saw the US$ exchange rate appreciate dramatically against most other currencies and in particular against the Dirham. The exchange rate evolved from around Dh 4.30/US$ at the time of appraisal to around Dh 10/US$ in 1985. 3. The project implementation period furthermore witnessed some of the worst possible climatic conditions. This obviously affected the agricultural component. The actual results achieved are all the more remarkable as they were accomplished under these adverse climatic conditions. Project Objectives and Description 4. The primary objective of the project was to improve the living stande-ds of some 34,000 farm families who cultivated 256,000 ha or 96% of the arable land in the project area. This was to be achieved principally through increasing agricultural production and farm incomes. Improved living standards would furthermore be pursued by complementing increased farm incomes by a series of infrastructural investments. - iv - 5. In order to attain its objectives the project would consist of three main components. Firstly, an agricultural development component which included the reorganization and strengthening of the extension services, through the provision of housing, equipment, farm management training, incren-ental short-term credit ar.d improvements in the supply of farm inputs. Secondly, soil and water conservation measures on a trial basis and, thirdly, an infrastructural development component including the construction of roads, two potable water supply systems as well as primary ,chool classrooms and some health facilities. Implementation Experience 6. The project suffered serious implementation delays due to the difficult budgetary situation. The project was completed with a five-year delay in 1990. However, most of the delays concerned the infrastructural component, while most of the core agricultural development component had been completed by FY87. The project cost was L15!aily estimated it around Dh 694.5 million (US$161.5 million) in nominal values. The actual cost is estimated at around Dh 597.7 million or around US$86.75 million. This difference in US$ cost is mainly due to the US$/DH appreciation. 7. In 1987, it was decided to undertake a Special Action Program (SAP) aimed at lessening the effects of the budgetary difficulties and US$ appreciation. The basic features of the SAP were an increas. in the Bank disbursement percentages and a general down-scaling of a number of infrastructural investments. The SAP had a beneficial impact on project imolementation as it allowed to adjust the scope of the project to the budgetary realities. 8. The project benefitted perhaps most from a competent and constant project management which resulted in a good understanding of the project's goals and objectives. Another factor that greatly benefitted implementation was the fact that the basic project implementacin procedures were generally well designed and were wholly grafted onto existing institutional arrangements. Project Results 9. The project established an improved extension system in the project area. Over the years, the agricultural centers strengthened by the project came to function as a genuine nucleus of the basic support services available to farmers in the area. The ser-ices include farm input supply stores, credit counters and farm machinery shops, in addition to the "classical" extension services. The ratio of extension agents was considerably improved from the 1 to 1200 farmers at the start of the project to around 1 to 350 presently. 10. The innovative agricultural credit lending criteria which were introduced in the project area resulted in a rapid increase in lending volume from a total short-term portfolio of around Dh 2.2 million to 2,383 -v - farmers in 1979/80 to Dh 22 million to 11,090 farmers in 1982. There is no doubt that this rapid increase in short-term credit contributed substr-itially to the rapid uptake of the improved packages promoted by the exten.ion service. It is also obvious, however, that this sizable increase occurred too rapidly to be handled efficiently by the local banks' existing infrastructure. 11. As a result of the above activities and notwithstanding the long drought period, productivity and agricultural production have increased. Input supply and improved seed use expanded significantly. Yields of durum wheat increased from around 1.0 ton/ha to around 1.5 con/ha and those of bread wheat from 1.7 ton/ha to around 2.3 ton/ha at present. These yield increases are not entirely as anticipated by the SAR, but this should be seen in the light of the prolonged drought period and the rather high SAR projections. The project was also successful in establishing a cover of tree crops - mostly olives - on 14,000 ha or 6,000 ha more t1an foreseen in the SAR. Afforestation and the establiishment of a vegetative cover on waste land prone to erosion was less :uccessful, mostly due to constraints of a socio-economic nazure. 12. The project constructed 252 km of tertiary roads. This programme had a noticeable positive impact on the project area. It is reported that the all-year, all-weather accessibility of the area resulted in an active private trade in basic agricultural inputs such as fertilizers and provided a ready market for agricultural produce. Also, 68 primary school classrooms were constructed as well as 22 dining halls and 140 teacher houses. All educational facilities have been put in operation and it is reported that primary school attendance has increased by 12% in the project area as a result of these investments. The health component was only partially completed. 13. With respect to the two rural drinking water supply systems, both systems are essentially completed. Neither system has, however, so far benefitted the population, due to delays in decision regarding the management of the system. There is no doubt, however, that once the system is put in operation, the entire population of the 280 communities involved will benefit greatly from the system. 14. Notwithstanding the near absence of reliable data on project impact, an indicative economic analysis was carried out on the agricultural component. The analysis results in an ERR of 9%. This compares to 21% estimated at the time of appraisal. This result shows that the component was relatively successful, but that the return on investment suffered from the longer than anticipated implementation period as a result of local funding difficulties. - vi - 16. One of the most interesting aspects of the project has been the testing of innovative approaches to rainfed agriculLural development. A n-..ber of these reatures have been found useful, and have, albeit somewhat altered, been adopted in other programs and dev%lopment activities. The first, and possibly the most important, feature has been the innovative approach to short-term credit to small-holders. The project abandoned the practice of determining credit levels on the basis of the "fiscal income' and adopted the principle of allowing credit on the basis of the real credit needs and repayment capacity of the individual. Although the system was altered on several occasions, the principle has been adopted in all other projects supported by the Bank. 17. The second important innovative feature of the project concerned the extension approach. Based on the I&V approach, the system was found to be a big improvement on the more lax approach used heretofore and the principle has been generally adopted. The syb.em is presently being implemented in the Bank-assistea "Ai-Lcultura2 Extensior, snd Research project". Regarding the conservation components, it was mound that the farmers'participation approach proved essential for the component's success. Sustainability 15. The sustainability issue of FKT may be examined from at least two points of view; firstly, the sustainability of the activities in the project area, pursuing the increased welfare of the population and, secondly, the adoption and replication of pilot project activities elsewhere in Morocco. Regarding the activities in the project area, the ,extension and infrastructural developments (roads, research and educational facilities) were constructed within the existing Government structure and they have been fully assimilated in the operating budget. It is therefore expected that they will continue to be maintained and to generate benefits. 18. Lessons learned. The experience with this project shows that: (i) essential studies such as for the rural drinking water supply system, which turned out to be a large and complex infrastructural investment, should be carried out at the project design stage. Also, the project would have benefitted from earlier"'hiring of consultants. (ii) the type of long-term development effort which is required for rainfed agricultural development may be more suitably implemented in the form of a time-slice of a longer-term development programme; (iii) a well-designed and simple-to-use M&E component is essential as a management and, even more*so, as an evaluation tcol. This is especially the case in a complex project with a number of pilot features, which needed to be evaluated before being applied elsewhere. It should be in place before project implementation begins (say by loan effectiveness); - vii - (iv) continuity of capable project management, together with government support, are crucial factors to project success. Key posts should be filled by competent staff befure Sank loans are made effective; (v) the expansion of credit operations must be accompanied by an adequate reinfcrcement and expansion of the credit instituticn's infrastructure and staff; (vi) where national agencies (in this case ONEP) are involved in the provision of services under agricultural projects, they should be on board by loan effectiveness or committed by a dated covenant; (vii) integration of social infrastructural components (water supply schemes, roads, schools) with agriculture davelopment has a significant impact on improving the well-being of rural populations as they increase farmers' motivation. However, this integration complicates design and, with the need to coordinate different ministries, makes implementation more difficult. (viii) five years is too short an implementation period for projects of this type and complexity. Project duration should be fixed according to disbursement profiles established on the basis of experience. PROJECT COMPLETIQN REPORT MOROCCO FES-KARIA-TISSA AGRICULTURE PROJECT (MOAN 1602-MOR) PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE 1. Project Identity Project Name: Fes-Karia-Tissa Agriculture Project Credit No.: Loan 1602-MOR RVP Unit: MENA Region Country: Morocco Sector: Agriculture Sub-sectors: Rainfed Agriculture 2. Background 2.1 oltcy Context. Throughout the 1970's, the Government of the Kingdom of Morocco pursued agricultural development policies which were characterized by a high level of price and market interventionism and a policy preference for the irrigated sector. Investment and support services available to rainfed agricultural production lagged markedly behind. Parallel to supporting the ongoing investment in irrigated agriculture, the Bank had pursued policy work and entertained a policy dialogue with the Government with regard to the rainfed agricultural sector' . This effort led to the conclusion that the rainfed agricultural sector warranted a higher priority in the investment programme and, subsequently, to the adoption in the mid-1980's of the Medium Term Agricultural Sector Adjustment Programme (MTSAP), This programme was supported by the Bank through two subsequent sector adjustment loans (ASAL). 2.2 The Fes-Karia-Tissa Agriculture Project (FKT) was the first of a series of four rural development prc aCtS21 , each specifically designed to develop and test options for stimula 1 g growth and increasing production in various environments representative of Morocco's rainfed areas. FKT was specifically "....conceived to serve as a model for the development of high potential cereal rowing areas and encompassea a number of innovative approaches to agricult zal development, which would be carried out on a trial basis"31. 2.3 Macro-economic Condit-ons during Proiect implementation. The latter part of the implementation period of the project coincided with a singularly difficult period for Morocco's economy during which the financial 11 A more extensive description of the major policy issues and che Bank's involvement is given in paras 2 to 6 of the Loukkos Rural Development Project PCR which was recently prepared by the Bank. 2/ FKT (FY78); Loukkos (FY80); Middle Atlas (FY82); and Oulmes-Rommani (FY83). 31 Source: para. 36 of the "Report and Recommendation of the President to the Executive Directors", Report No. P-2340-MOR, dated June 14, 1978. -2- and budgetary situation increasingly deteriorated. This prompted the Government to impose financial restrictions and undertake a range of adjustment policies. By 1989, substantial improvements had been achieved albeit at the cost of drastic reductions in public investments and operating budgets. These measures essEntially affected all Government operations, including most of the Bank-supported investment projects. The FKT project was no exception. 2.4 In addition, the first five years of the project implementation iariod saw the US$ exchange rate appreciate dramatically against most other currencies and in particular against the Dirham. The exchange rate evolved from Dh 4.30/US$ at the time of appraisal to around Dh 10/US$ in 1985 and around Dh 8/US$ at present. This resulted in effectively halving Bank disbursements, from the Moroccan point of view. 3. Project Objectives and Description 3.1 Project Objectives. The primary objective of the project was to impro-e the living standards of some 34,000 farm families who cultivated 256,000 ha or 96% of the arable land in the project areal . This was to be achieved principally through increasing agricultural production and farm incomes. The basic strategy of the agricultural component was to improve crop yields by increasing the availability of inputs in the rural area and by providing improved input packages to farmers, Improved living standards would furthermore be pursued by complementing increased farm incomes with a series of infrastructural investments, such as roads, education, health and potable water supply facilities. 3.2 Proiect Description. The project would consist of three main components: (a) Agricultural Development which included: (i) the reorganization and strengthening of the extension services, including the construction of facilities, the piovision of equipment and training; (ii) agricultural credit to cover project needs for incremental short- term credits, the introduction of new lending criteria, and the provision of supporting infrastructure and equipment; and (iii) improvements in the supply of farm inputs, including construction of distribution centers and machinery repair shops; (b) Soil and Water Conservation measures on a trial basis, including programmes for hillside farming and wasteland improvement, supported by an adaptive research and demonstration programme; and (c) Infrastructural Development which would consist of the (i) rehabilitation and construction of 414 km of secondary roads and strengthening of road maintenance service; (ii) the construction of two water supply systems serving about 176 villages; (iii) the J. Fes-Karia and Tissa are three counties north of the city of Fes. -3- construction of 68 classrooms, teacher housing units and related infrastructure; and (iv) the construction of 4 rural health centers and one rural dispensary. (d) In addition, a Monitoring and Evaluation (M&E) component was propos,ed and two feasibility studies were to be undertaken.l/ 4. Proiect Design and Organization 4.1 Proiect processing. The project had originally been identified by a mission of the aO/IBRD Cooperative Programme (FAO/CP) in 1976. Subsequently, GOM undertook the preparation, assisted by several FAO/CP and Bank missions. The project was submitted to the Bank in 1979 for appraisal. This rather drawn-out preparation process permitted the consideration of the conclusions reached at the ongoing policy discussions between the Government and the Bank. Moreover, as some key staff, responsible for project implementation, were actively involved in the preparation process, the long and participatory preparation process allcwed a good general understanding of the project's objectives and complex set of activities. Likewise, the participatory preparation brought about a clear conceptual foundation: envisaging, on the one hand, to undertake an integrated rural development effort in a specific area and, on the other hand, to test a number of development options to promote small-holder production and conservational aspects of rainfed agricultural development. 4.2 Design and Level of Preparation. The core agricultural component (including extension, research and training) was well prepared, as were most of the infrastructure components. The major exception was the rural drinking water component. At the time of appraisal, only a preliminary design study had been undertaken. During implementation it became clear that both scale and costs were seriously under-estimated. In addition, it was confirmed that (i) full treatment of the water was required instead of simple filtering; and that (ii) the distribution network required two pressure level- instead of one. 4.3 During project implementatioii it was decided to combine the two independently designed conservation components: hillside farming and wasteland improvement. It was considered that a distinction between the two components was somewhat artificial as both components ultimately pursued the same objective and were implemented in the same watersheds. An integrated approach was therefore adopted. 4.4 Credit. The credit component was by far the most innovative aspect of the project design. The project introduced an entirely new concept of credit lending; one which was based on actual input costs which were assessed on the basis of farm-size, cropping pattern and technical package determined in i One for the Loukkos project which was under preparation and one for a follow- tup second-phase FKT project, . 4 - cooperation with the extension agents, rather than the previously used "fiscal income system". Short-term credit was to be limited to 50% of the farmer's potential gross income. When these new criteria were applied, many farmers saw their credit limits increase greatly, while many others could for the 'first time qualify for credit. To cope with the expected rapid increase in credit applications, the SAR foresaw a doubling of the existing credit institution's staff. 4.5 During project implementation a number of modifications to the original design had to be made. Firstly, it proved impossible to organize informal farmer groups and therefore this approach was abandoned almost immediately. Secondly, it was found that credit limits were somewhat too generous, especially in the light of the limited institutional capacity of the local banks to supervise loan applications. Although the cooperation between the extension service and the local banks was excellent, the basic institutional technical weaknesses of the local banks could not be entirely compensated by the extension agents. The situation was aggravated by the fact that the Agricultural Credit Bank (CNCA) only partially implemented the staff and facilities strengthening measures that were proposed. At the time of PCI preparation, no information had been provided by CNCA on the number of beneficiaries or nature of the investment. CNCA is now undergoing a full reorganization supported by the seventh agricultural credit (Ln. 3088-MOR), and in future such data should be readily available. 5. Proiect Implementation 5.1 Implementation Period. The project was approved in June 1978, but it took until February 1979 for the project to become effective. The project had originally been expected to be implemented over a 6-year period, with completion planned for June 1986. Notwithstanding a particularly good start in project activities, three extensions were granted and the loan was closed only in June 1990 (Table 2 of Part III). The main reasons for this long delay were the extremely difficult budgetary situation, which affected the project especially from 1984 onwards, and the difficulties that were encountered with the drinking water component. 5.2 The budgetary difficulties caused excessive delays in project activities in a number of ways. First, funds were not available as had been projected in the SAR; this caused project activities not to be undertaken at the foreseen scale and caused, in particular, delays for infrastructural works. In such a complex project, this had implications on many key activities like extension, whose success depended on the completion of other activities such as the construction of housing and the arrival of equipment. 5.3 In addition to a general shortage of funds, the situation was exacerbated by the long and slow budgetary procedures to which the project was submitted. For example, funds for an infrastructural investment would be approved, in principle, for a certain fiscal year, but on condition that only a certain percentage could actually be paid during that year and that the payment of the balance would have to be paid in successive years without a definite timetable. As most of the infrastructural works were carried out by -5- private enterprises on a contract basis, this system caused serious financial difficulties to many contractors and a high percentage of contracts were abandoned after work initiation. In those cases, first the contract had to be canceled and, then, a new bid had to be organized. In many cases these protracted procedures caused long delays. 5.4 However, delays did not affect all project components in the same way. As a matter of fact, most of the agricultural development component which required less incremental funding, and most of its related key infrastructural investments which did not involve a lot of detailed engineering, had been completed by FY87. 5.5 The project cost was originally estimated at around Dh 694.5 million (US$ 161.5 million) in nominal values. The actual cost is estimated at around Dh 597.7 million (US$ 86.75 million) (see Table 5 of Part III)" . The large difference in US$ cost is primarily due to the appreciation of the US$ versus the,Dirham. The second reason is the down-scaling of the project during the project restructuring in 1987. 5.6 In 1987, at the time of approval of the first extension of the closing date, it was decided to undertake a Special Action Program (SAP) for the project. The basic features of the SAP were an increase of the Bank disbursement percentages and a general down-scaling of a number of infrastructural investments (see Table 4 of Part III). It was furthermore decided to cancel US$ 15 million from the original US$ 65 million loan. The SAP had a favorable impact on project implementation as it allowed the scope of the project to be adjusted to the budgetary realities, which allowed project management to scale down activities accordingly. Yet, due to the slow and cumbersome administrative financial procedures, these measures eased the project's financial difficulties only to a limited extent. 5.7 M&E component. The M&E component was fairly well prepared. It had furthermore been foreseen that detailed preparation would be carried out by a local consultancy firm in close consultation with the DPA offices. During implementation, it appeared, however, that the component suffered from a general lack of comprehension about the real objectives sought and the means of achieving them. After serious delays had occurred, the mid-term review mission concludec in 1985 that the problem was common to all four rural development projects. The mission therefore proposed to organize overseas training in M&E for staff of those four projects. This training would be followed by practical training in Morocco. It was also proposed to employ additional consultancy support. Although the training took place, it was probably too late to generate a noticeable impact on the execution of the component. * The actual cost was estimated on the basis of MARA figures for the agricultural and some of the infrastructural components. As it is certain that criteria, somewhat different from those assumed in the SAR, were used in establishing these costs, it is not possible to entirely reconcile the two estimates. In addition, a number of operating costs, most notably some staff costs, are not shown in the actual cost estimates. - 6 - 5.8 Risk assessment. The SAR accurately identified the main risks which could affect successful project implementation as (i) adverse climatic conditions; (ii) inadequate Government funding for project activities as a result of an increasing tightness of the public finance situation; (iii) poor farmer participation; and (iv) excessive delay in implementation due to administrative inertia and coordination difficulties. 5.9 In actual fact, the project was affected by all these risks with the possible exception, of "poor farmer participation", although no sufficient data are available to assess farmers' participation accurately. With regard to the climatic conditions, the SAR assumed one drought year every five years. Unfortunately, actual rainfall was much worse than anticipated in the SAR and it can be said that during the decade of the project's implementation there were, at most, three of what could be qualified as years with more or less normal rainfall and distribution. This affected the agricultural component, as farmers' risk aversion under such conditions rendered them less likely to adopt new technologies, the successive years of low income weakened their financial stamina and therefore their ability to invest in new technology. The actual results achieved are the more remarkable as they were accomplished under these adverse climatic conditions. 5.10 Project management. The most positive aspect of project implementation has been that project management has been competent and constant during its implementation. This induced a good understanding of the project's goals and objectives, which, in turn, contributed, notwithstanding the multiple difficulties, to achieving most of its objectives. 5.11 Another factor that greatly benefitted implementation was the fact that the basic project implementation procedures were well designed, as they were wholly grafted onto existing institutional arrangements. The arrangements whereby the project director was the provincial director of agriculture in Fes, while a separate project manager, directly attached to the DPA, managed day-to-day operations, were satisfactory for the agricultural components and those infrastructural investments for which the DPA office was responsible. As management of most components (agricultural, roads until 1985/6, drinking water supply, construction) was concentrated in one DPA office (Fes), this furthermore minimized coordination difficulties. Such difficulties were encountered, however, with respect to components not under the direct responsibility of the DPA, in particular, the small health component. 6. Proiect Results and Impact 6.1 This chapter first discusses the main physical project achievements and then reviews project impact. Tables 4 and 6 of Part III summarize both achievements and results. 6.2 Agricultural Development. The agricultural development component consisted essentially of the strengthening of the agricultural support services (extension, training and some applied research). This strengthening was to be complemented by an improved availability of inputs and credit. The -7- project constructed or expanded 18 agricultural centers to which a total of 76 extension agents were appointed; only slightly less than planned. Over the years, the centers came to function as a genuine nucleus of the basic support services available to farmers in the area. The services include farm input supply stores, credit counters and farm machinery shops, in addition to the "classical" extension services. The ratio of extension agents was considerably improved from the 1 to 1200 farmers at the start of the project to around 1 to 350 presently. The extension service was strengthened by equipping agents with transport and housing and professionally supporting them with a multi-disciplinary team of subject matter specialists and an audio- visual support team. 6.3 Training of Extension agents. The training of extension agents took place at the Sahel Bouattar agricultural school following the upgrading of its infrastructure and teaching curriculum by the project. Classrooms, laboratories and housing were constructed and the school farm and laboratories were equipped. Project staff participated in dispensing courses and a third year was added to the training cycle to enable the future project extensionists to practise crop production and conduct demonstrations on the school's farm land. Between 1982 and 1986, a total of 132 extensionists were trained, 76 of them specifically for the FKT project, the rest were assigned to other areas of Morocco. In addition to the training of extension agents, thirteen project staff of different levels received training abroad, nine trained in hillside farming, one each in the use of annual medicagos and range management and three in farm management. The improvements in the teaching curriculum coupled with the extra year of practical training and the participation of project staff in teaching all resulted in producing high quality extensionists experienced in field operations and ready for immediate interaction with farmers. The practical training plots, established by the extensionist trainees at the school during their final year, were successfully used to demonstrate improved production techniques and played an important role in extending knowledge particularly to neighbouring farmers. Improvements in curriculum and the added practical training year have been adopted by similar schools in Morocco. The Sahel Bouattar school will continue to be supported by the regular budget provided by MARA. 6.4 Applied Research component. An agricultural experimental station was established and staffed by the project in 1980 on 70 ha near Karia Ba Mohamed. Since 1980, two types of research/demonstration programmes were undertaken. The first was implemented in collaboration with the National Institute for Agronomic Research (INRA) and concerned varietal cereal improvement and adoption and testing of crop production techniques for cereal and industrial crops, fruit trees and forage crops. The second was oriented more toward applied research and was designed and conducted by project staff to demonstrate crop production techniques including crop rotations and the use of annual Medicago to improve forage production on fallow lands. In addition to the small experimental plots, comprehensive demonstrations were set up by the project on farmers' fields with their collaboration and participation. Both type x of research and demonstration works presently conducted at the station will continue to operate with the support and collaboration of the DPA's of Fes and Taounate and INRA. - 8 - 6.5 The introduction of annual Medicago for the establishment of self regenerating legume pastures started with the project. In 1981/82 610 ha were established and by 1987/88, 1930 ha were put in place; since then, however, the areas newly seeded to medicago in the project zone started to decline. In addition, and because of the lack of proper management, i.e. - continuous grazing and deep ploughing - practically no self regenerated stands could be found 4here medicago were previously seeded. In 1985/86 a first year. 50 ha stand of medicago (cv snail and cv jamelong) is reported to have yielded 11.7 T/ha of green fodder, other small trials showed that yields of up to 30 T/ha of green fodder can be reached. Farmers did not adopt the Australian techniques for cultivating alfalfa as they had inadequate ancillary equipment and wrong tilling practices. In addition, overgrazing by the farmers was another factor. A few farmers, however, encouraged by the relatively moderate cost of the subsidized medicago seeds, have opted for the reseeding of their lands every year in rotation with fallow. 6.6 Credit. In order to permit farmers to finance their additional farm input needs, a substantial increase in the amount of short term credit had to be made available. To that end, more liberal lending criteria were introduced (see para 4.4, 4.5). As a result, short-term lending increased rapidly in the project area from a total short-term portfolio of around Dh 2.2 million involving 2,383 farmers in 1979/80 to a portfolio of about Dh 22 million involving 11,090 farmers in 1982. There is no doubt that this rapid increase in short term credit contributed substantially to the rapid uptake of the improved production packages promoted by the extension service. 6.7 The sizable increase in credit activity occurred too rapidly for the local banks to handle it efficiently with their existing staff and infrastructure. In addition, at that time, the country had been hit by a serious drought which was reflected in the low repayment percentages of about 50% registered in those years. CNCA concluded that the lending criteria had been established somewhat too generously and consequently modified its lending arrangements on several occasions. Collective loans to farmer groups were abandoned early in the project life and were followed by a reduction of lending ceilings. Notwithstanding these reductions, the local banks in the project area provided credit to about 6,000 farmers in 1989 (DH 21 million) compared to 2,383 farmers in 1979/80. 6.8 Conservation Component. The project was highly successful in introducing on-farm erosion control measures through the planting of fruit trees - mostly olives - on 14,000 ha; 6,000 ha more than foreseen in the SAR. The establishment of a vegetative cover with forest trees on waste land prone to erosion was successfully undertaken on only about 3,000 ha, as compared to a total of 8,500 ha envisaged in the SAR. Major difficulties were mostly of a socio-economic nature. Many farmers were not interested in applying soil conservation practices as it put some of their land out of grazing for some years. However, wherever these activities were undertaken with the - 9 - participation of farmers, the rate of success was relatively high. The component proved more successful in the northern part of the project area because alternative land use is more limited and because it is adjacent to a large area where similar development activities had been undertakenl during the past decade. This had caused the population of the northern parts to be more motivated than those in the south. 6.9 Infrastructural Development. The project constructed 252 km of permanently accessible tertiary roads. Also, 68 primary school classrooms as well as 22 dining halls and 140 teacher houses were constructed. The health component was only partially completed and it is reported that at present only one rural health center was completed (Mikkes). It has not been equipped so far. Two other health centers are still under construction. Their completion is not guaranteed due to technical difficulties. The construction of a fourth center had not gotten underway at the time of loan closure. 6.10 With respect to the two rural drinking water supply systems, the M'Kansa system, catering for 92 communities, was essentially completed in 1988. The Ain Gdah system, catering for 186 communities, was completed during 1991. Neither system has, however, so far benefitted the population, due to delays in the decision regarding the management of the system. ONEP finally accepted the management of these systems in early 1991 following agreement that it would be recompensed for the high cost of operation of these two schemes. 6.11 Project Impact. The question of whether the project has attained its principal objectives has to be judged in the light of the rather poor quantification of project objectives in the SAR and the near-absence of monitoring activities of project results. Notwithstanding the long drought period, there is no doubt, however, that productivity and agricultural production have increased in the area. Input supply and improved seed use increased significantly. This is most clearly shown in the increase in yields. Yields of durum wheat increased from around 1 ton/ha in 1979 to 1.5 ton/ha in 1989 and yields of bread wheat are reported to have increased from around 1.7 ton to 2.3 ton/ha over the same period. These yields are not quite as high as envisaged by the SAR but this should be seen in the light of the prolonged drought period and the rather high SAR projections.2' 6.12 The SAR envisaged an increase of bread wheat at the expense of durum wheat cultivation. This development did indeed occur, but it is impossible to ascertain to what extent this was due to the project's activities, as a similar development took place elsewhere in Morocco under influence of other governmental programmes and pricing policies. Yet, the area under bread wheat increased from 20,750 ha in 1980 to around 80,000 in 1989, while the durum wheat area declined from 104,000 to 50,000 ha. 1/ Western Rif Development Project which benefitted from FAO/UNDP technical assistance. 2/ The SAR expected bread wheat yields to *-crease to 2.6 ton/ha and barley yields to 2.0 ton/ha. - 10 - 6.13 The waste land improvement component was successful in improving at least 14,000 ha, mostly with highly productive olive groves. Likewise, the afforestation and vegetative cover on 3,000 ha will have a positive ecological impact on the grassed water ways and steep hill sides where they have been established. The hillside farming component, on the other hand, had a very limited impact as farmers found it difficult to adopt mechanized contour ploughing, for example. 6.14 Other indicators of project impact. As the project sought to increase the total welfare of the population in the area, other indicators are at least as important as increases in production. The tertiary road improvement programme, albeit reduced, had a noticeable positive impact on the project area. It is reported that the year round, all-weather accessibility of the area, has resulted in an active private trade at competitive prices in basic agricultural inputs such as fertilizers and a ready market for agricultural produce. Under the Project, it was envisaged that responsibility for supplying agricultural inputs and for providing repair services for agifcultural machinery would be shifted from the Government extension centers to private and public sector suppliers and service cooperatives who would lease from the Government the farm input supply stores and repair shops which would be constructed in the 18 agricultural centers. Fertilizer and improved seed sales of the agricultural centers constructed under the project have diminish:d following the privatization policy pursued by the Government and the improved road system has physically allowed the private sector to undertake this task. It is also reported, however, that the sales of inputs from the agricultural centers continues to be important, as it compels the private sector to adhere to certain quality and price levels. All the above, plus the increased credit availability, had a very positive impact on private sector development. The rural drinking water supply systems will, once put in operation, change the lives of at least 56,000 habitants, in that they will, for the first time, have a safe and reliable drinking water source in their immediate proximity. The education facilities have all been put in operation and it is reported that primary school attendance has increased by 12% in the project area as a result of these inveqtments. 6.15 Results of the Economic Analysis. Notwithstanding the near absence of reliable data on project impact, an indicative economic analysis was carried out on the agricultural component." The analysis results in an ERR of 9%. This compares to 21% estimated at the time of appraisal. The 9% ERR indicates that the agricultural component was successful, but that the delays in project implementation and slower than projected materialization of benefits, significantly lowered the return on investments.2/ 1 Basic assumptions, methodology and results are discussed in a separate working paper. The results are summarized in Table 6 of Part III. 2/ The SAR estimated that a one year lag in benefits would reduce the ERR from 21 to 14%. - 11 - 7. Sustainability 7.1 The sustainability issue of FKT may be examined from at least two points of view; firstly, the sustainability of the activities in the project area pursuing the increased welfare of the population and, secondly, the adoption and replication of pilot project activities elsewhere in Morocco. Regarding the activities in the project area, the infrastructural development (roads, extension, research and educational) facilities were constructed within the existing Government structure and have been fully assimilated in the operating budget. It is therefore expected that they will continue to be maintained and to generate continued benefits for the population. A possible exception might have been the drinking water supply system arising from the long delay in deciding on the agency management. However, now that ONEP has agreed to take su on its operation and maintenance, sustainability should be assured. 7.2 The extension service has, in a way, profited from the delayed project, implementation by benefitting from some additional years of funding. The service is well integrated in the existing agricultural development services of the project area. As the extension system relies heavily on continued operational funding, the ending of the project and the present budgetary contraints may pose serious problems for the future effectiveness of the service. It has been decided, however, that the project area will continue to benefit from some operational funding from the ongoing Bank-assisted "Agricultural Extension and Research Project". 7.3 Replication of innovative proiect features. One of the most interesting aspects of the project has been the testing of innovative approaches to rainfed agricultural development. A number of these features have been found useful, and have, albeit somewhat altered, been adopted in other programmes and development activities. The main innovative feature of the project concerns the short-term credit to small-holders. The project abandoned the practice of determining credit levels on the basis of "fiscal income" and adopted the principle of granting credit on the basis of the real credit needs and repayment capacity of the individual. The project also supported the opening of "credit guichets" at the agricultural centers, which greatly facilitated the procedures for farmers to obtain credit. This system has, although modified, been adopted in principle in all the other Bank supported projects which include a credit component. 7.4 The second important innovative feature of the project concerned the extension system. Based on the T&V approach, the system was adopted and found to work well. The system is presently being implemented in the Bank-assisted "Agricultural Extension and Research project". The M&E component proved to be unsustainable. The envisaged functional and simple M&E system was never developed nor fully integrated in the existing organization. 8. Bank Performance 8.1 The project benefitted from the fact that it was prepared at a time when the Bank was fully aware of the need for testing rainfed agriculture development alternatives in Morocco parallel to, and in support of, the policy - 12 - dialogue with the Moroccan authorities. The Bank clearly supported the project's implementation with this prime objective in mind. This was especially clear from the supervision effort (See Table 8 of Part III). Supervision missions were frequent with good staff continuity. They were also well staffed from a technical point of view, especially during the first few years when it was most important. Furthermore, the supervision staff stayed sufficiently long in the project area to acquire a good understanding of the project's implementation problems. This was highly appreciated by project staff and allowed them to inter,-ne effectively to overcome some of the most salient implementation difficulties. 8.2 The Bank proved responsive and flexible in modifying p-oject design and reducing project scope in the light of implementation experience and the budgetary constraints, by uLdertaking a SAP and canceling a total of US$ 25 million from the original loan. The Bank could have reacted somewhat swifter in recognizing the budgetary difficulties by approving the SAP in 1985, when the ,need was recognized. Also, the Bank should perhaps have insisted more on the timely hiring of consultants. 8.3 Lessons learned. The experience with this project shows that: (i) essential studies such as for the rural drinking water supply system (which turned out to be a large and complex infrastructural investment) should be carried out at the project design stage. Also, the project would have b,nefitted from earlier hiring of consulants; (i) the type of long-term development effort which is required for rainfed agricultural development may be more suitably implemented in the form of a time-slice of a longer-term development programme; (iii) a well-designed and simple-to-use M&E component is essential as a management and, even more so, as an evaluation tool. This is especially the case in a complex project with a number of pilot features, which needed to be evaluated before being applied elsewhere. It should be in place before project implementation begins (say by loan effectiveness); (iv) continuity of capable project management, together with Government support, are crucial factors to project success. Key posts should be filled by competent staff before Bank loans are made effective; (v) the expansion of credit operations must be accompanied by an adequate reinforcement and expansion of the credit institution's infrastructure and staff; (vi) where national agencies (in this case ONEP) are involved in the provision of services under agricultural projects they should be on board by loan effectiveness or committed by a dated covenant; 13 - (vii) integration of infrastructural components (water supply schemes, roads, schools) with agriculture development greatly improves the well-being of rural populations thereby increasing farmers' motivation and cooperation in project activities. However, this integration complicates design and, with the need to coordinate different ministries, makes implementation most difficult. (viii) five years is too short an implementation period for projects of this type and complexity. Project duration should be fixed according to disbursement profiles established on the basis of experience. 9. Borrower Performance 9.1 It should be recognized that the Government pursued the project's objqctives with as much resolution as the Bank. This included a commitment to the project's main objectives and the willingness to apply positive experiences, obtained during the project's implementation, elsewhere. This commitment was furthermore confirmed by the enbured continuity of project maniagement which, as has 'been said earlier, contributed perhaps more than any other factor, to the project's success. 9.2 On the negative side, the Government did not make adequate funds available to the project to ensure a high rate of implementation during some crucial years of the project. This fact should obviously be seen in the light of the general and rather severe public finance situation of Morocco in those years. It would, however, have been more beneficial to the project if at an early date a firm decision had been made to scale the project down to allow adequate funding for the core agricultural and conservation components rather than slowing down the entire implementation process. The practice of allocating a certain budget amount but without committing the required funds to the project every year to cover expenditures, had perhaps a more negative impact on project implementation than the general low funding, as it led in many instances to the abandonment of project works by the contractors. 9.3 It is regrettable that it took until 1991 to find a solution to the management of the potable water schemes. This i.ssue was first brought up early in the 1980's and supervision missions continued to press for a decisio-t. Generally speaking, Loan covenants were implemented as foreseen (See Table 7 of Part III). Notable exceptions were local funding and the management and cost recovery of the rural drinking water system. 10. Project Relationship 10.1 The relationship between the Bank and the Moroccan authorities was excellent at various levels. By conducting frequent supervision missions, which concentrated on technical issues, the relationship between Bank staff and project staff was very good indeed. The relationship with higher level authorities was also sound and was greatly assisted by the staff continuity on the Bank's side and the continued interest of both parties in rainfed agriculture problems in the form of a policy dialogue, which culminated in the adoption of the Medium Term Agricultural Sector Adjustment Programme. - 14 - 11. Consultancy Services 11.1 The project used the services of LWO types of consultants: private individuals to work on technical implementation issues and firms for design work. The SAR had foreseen a total of 57 man-,.onths of consultancy services, of which 22 man-months for two studies which were not undertaken" . A total of around 130 mm of internationally recruited consultants had been anticipated. In actual fact, only 82 mm were actually employed in the fields of extension training (46mm), Medicago research (24mm) and hillside farming (12mm). The performance of the consultants was generally satisfactory. Project management was of the opinion that additional consultancy services were not required. This may have been true for some components, but it would seem that relevant short-term, but sustained, consultancy services in the fields of M&E would have benefitted the project. 11.2 The project also used the services of two firms for the design of the drinking water supply system and one for the design of the M&E system. Little information is available regarding the performance of the firms responsible for the drinking water component. Although there were some considerable delays, the general design appears satisfactory. Regardi'ng the M&E system, the complete M&E system that was conceived proved far too complex to operate and the agricultural staff, the intended users, were insufficiently involved. 12. Project Documentation and Data 12.1 The appraisal report, and especially its project file, proved a useful guide throughout the implementation of the project. The involvement of the project authorities in the project's preparation and the fact that the general principles of the project and its objectives were well understood by everybody concerned, g: atly contributed to the understanding of the appraisal document and therefore increased its usefulness. As part of the M&E component, the project carried out a sample survey of 800 farms in 1981 and 1983. The results of 1983 were never analyzed due to difficulties with the central data processing facilities on which the project had to rely. For this reason, the idea to carry out a similar survey in 1988 was abandoned. For the PCR, GOM collected satisfactory information on the physical implementation of the project. Only very limited information was available on the credit component, implemented by CNCA. Due to the poor performance of the M&E component, insufficient reliable data is available to allow for an accurate project impact analysis. 1 For the Loukkos project and a second phase FKT project. PART II: PROJECT REVIEW UOM BORROWER'S PERSPECTIVE A. CONFIRMATION OF FACTUAL DATA CONTAINED IN PARTS I AND III, REMARKS ON ANALYSIS CONTAINED IN PART I. 1) Data contained in Parts I and III are in accordance with data available at Project management, with the exception of the- figures appearing in the Evaluation Summary, para. 4, concerning the land area cultivated in the project area, i.e. 266,000 ha instead of 256,000 ha. 2) Remarks on the Analysis Page 6. para. 7 Concerning the M&E component, all project staff are convinced of its importance. The project has in fact given due importance to this component which, through regular monitoring of activities, provides important feedback to management concerning results and impact of the project. However, given the complexity of the project, combining as it does a number of activities in different sectors, the M&E system could not be established as foreseen because it advocated perfection. On the other hand, this did not prevent regular monitoring of project execution. Page 8, para. 6.14 This paragraph should mention that an agricultural experimental station was created in 1990 under the Fes-Karia-Tissa Project. Page 10, para. 6.12 The program for intensification of bread wheat at the expense of durum wheat envisaged by the Project started long before the national program. Page 11: Sustainability The extension approach adopted by the Project (T & V) has been extended and improved under the Extension Master Plan, to the benefit of the CTs of the Fes-Karia-Tissa Project area. - 16 - A maintenance fund was set up by MARA (DPV) long before Project completion, which facilitates Project continuity. - Some infrastructural facilities are being managed by cooperatives or private enterprises (repair shops, input supply centers). - The water supply system is under the responsibility of the Regional Commissariats and ONEP, which has taken over its operation and maintenance. - The beneficiaries also contribute to the maintenance of tree plantations. B. BANK PERFORMANCE The Bank actively participated in the removal of several conrtraints during project execution, thanks to the great number of it.; supervision missions. The major constraint removed by the Bank was the one caused by the budgetary situation. This constraint could, however, have been removed earlier by approving the SAP in 1985 instead of two years later. C. BORROWER PERFORMANCE The Government has given great importance to the execution of the project in view of its originality and its importance for the development of rainfed agriculture. The Government's efforts can be summariznd as follows: - mobilization of maximum of funds available despite the budgetary restrictions imposed by the country during the project execution period; - assignment of competent professional staff from various disciplines ar. staff in sufficient number; - organization of project management; - creation of a coordination structure (commissions) composed of the various participants and project beneficiaries (regional and managing commissions); - promulgation of legislation governing the establishment of anti- erosion control stru:tures, and interventions in hillside farming areas; - reorganization of the CTs in the project area, integrating all agricultural skills; - 17 - - incentive measures have been taken to stimulate farmers to participate in certain project activities; - organization of farmers' groups and agricultural cooperatives to participate in and benefit from project activities. D. PROJECT RELATIONSHIP The relationship between the Bank and the Moroccan authorities has been excellent at various levels, and this has facilitated project execution. - 19 - PART III: STATISTICAL INFOR'ATION Table 1. Related Bank Loans Lasa/CredLt Tid Purpose Ytars of Appro,al Stans Lan 2590-MOR. Support the fit phase C.' implementation at the FY 85 Closed June 24 Aicultur SaectorAdiutment Govement's progamme of adjustmeniz in the 1967 apicultural sector. The prnåcipar objectiva of rhe ector adjustment prograne are to imp~ove the grwh rate in agricuture wiithin the overall wonstraints in public resources. L~ 285-MOR 5 ng Support the serond phue of implementatioo a FY 89 Thirt Tranche AMricultural SectorAdisment the Covernnent's medium-term agrcultural Relased _g__ setor adjustment programme within the frmework of a general macreconomic restructuring programme. The essenttal objectives arm to (reter offictent agricultural growth and ta contribute to the redution of budgetary and current account defiits to manageable tevels. n .1602-MOA PKar-T a improcral income and aocial well-being of FY 7 C~sd6/309 Aricult rm ro3390 £arm familics in the project aLa through (a) improvements to the aaarnh and wtaasion Or snal dsing öervices, (b) 1cased credit availabiliry, (c) dato 06/30/96 mproved inpur supply, (d) eroaion coarmt, (e) wasteland rehabilitation and (t inestments in nfmrsteture äuch as roads, schoLs, health facilitics, and water supply. Loan 2217-MOR OyJgme lmprove the living standaras of the FY 83 Under supevisin Rmmani AMicultura prodomiantly rural population ling^tlin the Develoement Proi projet area through development of agricutrure, Orinal closing livestock and forestry and trugh provision of date 12/31/89 better a1cial and agricultum services. Current 64ing date 06/30/92 Jaan 1848-MOR Lowitog Rurel improve the agriultrural systems prevaing in FY 80 Oriinal closiog Devlomen,t Protoct Loukkos watershed nto sustainable systems by date 6/1987 alleviating the destnueuve effecu of soil erosion and wceming agicultural productivity and Effecte cloelng inc~mes of por (armern. Project activins wert data 12/1988 to serve as a model for wider replication in the Rif regi n. 1an 1704. fouthArlr 'be projecr aims at increasuig Morocco FY 79 Csed 6/30/83 rCdi Pr2c .Agrcultunl production thesby ip;vicg the - standard of livn~g of about 475,000 ot Moroco's tatm familes. The projec will cover mst of the Caisse Nationale de Crddit (CNCA) mediuirn- and long-term lndingprogramme and farm invstment programme through August I98 Co- financing of US$75 million is provided by 1FAD and KfW. Disbursements are on schedule. To aleviare CNCA's short-term Uquidity problems due to the recen[ drought, åts lendets, including the Bank, have incranövd thetr disburetnent percentagea under their respective koant. Lm 36-MOR Raaing of adii of F8 C0uad /17/8 fl atCd M C~-1W/I1bP P Asc~e e t OCA 1~386 TMMW s ffS1 iffion fned by aK, FADEM BAJD aud MW. SahAfrfktealQe CNCA 197-19M Towa cms iJS101 ilion co-financed by BM and KIW. - 20 - Table 2 - Project Timetable Item Date Planned Date Revised Date Actual Identification May 1976 (Executive Project Sumnmary) Preparation Oct. 1976 May 1977 May 1977 Pre-appraisal Appraisal mission Oct. 1977 Oct. 1977 Loan/Negotiations May 1978 May 1978 Board Approval June 1978 June 1978 Loan/Signature Sept. 1978 Sept. 1978 Loan/Effectiveness Dec. 1978 Feb. 1979 Loan/CLosing June 1986 June 1990 June 1990 - 21 - TabLe 3 - Loan Disbursements A. Cumutative Estimated and ActuaL Disbursements IBRD Fiscal Year Appraisal Adjusted Estimate Actual % of Z of Semester Ending Estimate Appraisal Adjusted I I Estimate Estimate .....SS...... (US million)................ FY 80 December 31, 1979 1.0 - - 0 0 June 30, 1980 3.0 1,6 1.6 0 100 FY 81 December 31, 1980 5.0 2.2 2.0 0 91 June 30, 1981 10.0 2.3 2.3 0 100 FY 82 December 31, 1981 16.0 3.7 3.7 23 100 June 30, 1982 22.0 5.5 5.5 25 100 FY 83 December 31, 1982 28.0 6.3 6.3 23 100 June 30, 1983 36.0 9.6 9.6 27 100 FY 84 December 31, 1983 42.0 10.4 10.4 25 100 June 30, 1984 48.0 12.1 12.0 25 99 FY 85 December 31, 1984 54.0 13.0 13.0 24 99 June 30, 1985 58.0 14.8 14.7 26 100 FY 86 December 31, 1985 62.0 15.5 15.5 25 100 June 30, 1986 65.0 18.6 18.6 29 100 FY 87 December 31. 1986 - 22.4 20.9 32 93 June 30, 1957 27.5 22.6 35 82 FY 88 December 31, 1987 33.5 25.1 39 75 June 3C, 1988 40.0 26.2 40 66 FY 89 December 31, 1988 - 27.2 43 69 June 30, 1989 - 30.6 47 77 FY 90 December 31, 1989 32.5 50 81 June 30, 1990 34.1 53 85 FY 91 December 31, 1990 36.3 56 91 a/ Based on revision of April 1987 when project scope was reduced. 1) Cancellation of USS 15 million effective 19 November 1984. )) Cancellation of USS 10 million effective 5 June 1986. 3) Cancellation of USS 3,7 million effective 13 November 1990. Total - US$ 28.7 million. B. Planned and Actual Disbursements by Category Catcgory Pannec RevisedJ Actuaised Actual/Revised . .... .U s $ m i o ....,......... % o houses andI buddngsfor hea n SeducatOn, adm nistrativ~ and 5.5 3.5 2.8 80% marketi,ng facities. 2. C cvi wrks focr t reads, 24.5 7,3 6.2 89% 3, Cv works for tre vasuppoy systems. 4.5 16.0 16.9 106% r. rment an( 'en!cies 3.0 2 01.4 70% ncluding fertizers. a),ta o12. 12 55 4.6 84% H , ý- de tarn,, na --nd npr vemen. 4C.5 - 3.3 132% m es for Par2 . (0 an d ) and D. 4.0 1.5 1.2 80% ___na__cated 5.0 2.0_____ 0___0_ TOT,AL 65.0 40,0 36.3 91% a , Loan agreement of September 1978. Total loan amount US$ 65 million. Based on total ioan amount of USS 40 mi1ion after several cancellations and project restructurng of April 1987. Last d:sbjrsement was made on November 13, 1990 at which time the can cccint was clo.sed anc the rema:ning balance of $3,7 million was canceled. Table 4 - Project Implementation: Project Implementation Ratios Components Unt Projected Revised Acta1 Ac o AGRICULTURE SERVICES I- Extension Construction of: Agricultural Centres (including input supplies and repair shops) Unk 18 121 100 Housing Unit 87 - 70 81 Vehicles UniL 41 Hangars Unit 3 New exension Staff 48 - 76 0/a agents" IT- Livestock Dips Units 8 - 8 Housing, vet. posts Units 4 3 3 75 Housing and insemination centres 0 4 Milk couection Units 5 1 2 40 Centres II- Training Training of Staff 30 106 13,-, extensionists Overseas training Staff 30 14 14 47 Coastruction oE Housing Units 9 - 11 CLasrooms Units - 20 Laborarory Units - 1 1C Hangar & equipment Units 1 - 1 0 Dormitory Units 1 TA training specialist M/m 36 48 t 2 TV - Resec Est. of Research Station 11 1 0 Station Housing Units 4 4 Hangars Units - 1 1/0 Medic Ha 1,500 ,530 Demonstrations 1/ Projected is incremental; actua! is total. - 24 - Components Unit Projected Revised Actual Act/proj.% Overseas training Staff 3 -. 33 Technical Assistance m/m 24 24 100 V - Hillside Farminn Conservation farming Ha 6,500 3,500 322 5 Overseas training starff s 9 60 Technical assistance n/mn 44 12 2 27 VI - Wasteland Improvement Olive tree planting Hs 8,00 13,000 14,173 177 Afforestation Ha 3,000 3,500 2,08Z 69 Revegetation Ha 2,000 934 47 Gully control Ha 3,500 5,998 171 Range improvement Ha 1,500 880 59 Forest access roads Km SO 30 60 Overseas training (range + farm mgt) Staff 9 4 44 Housing Units na .31 n/a Nurseries Units 2 2 100 Hangars Units na 2 n/a VII - CREDIT Number of beneficiaries (short term.) at full development Farmers 23,600 58,092 n/a Mobile CLCA trucks 6 1 1 17 CLCA salsonal Window Units 0 10 n/a INFRASTRUCTURE V ai Km 414 265 252.2 61 IX - Water Sunnly M'Kansa system Unit 1 1 1 100 (85 villages) (92 villages) (92 villages) Ain Gdah Unit 1 1 I nearly 100 outabonaban (91 villages) (186 villages) completed Surface wells Units n/a 6 6 n/a '/ Total number short-term credit beneficiaries from 1981/82 to 1988/89 as compared to incremental SAR estimates. - 25 - Table 5 - Project Costs and Financing A. Project Costs 1. Estimated at Actual Costs Item SAR Estimate (mDh) Actual(mDh)o/ A. Agriculture Mon. and Evaluation 1.75 5.87 Extension 47.84 29.91 Wasteland Improved 81.15 55.67 Training 12.14 6.05 Livestock Develop. 5.87 4.10 Socio-cconomic lnrr. 82.22 255.32 Hillside Farming 6.60 11.16 Rcscarch 13.66 21.75 Subtotal 12.05 5.63 268.23 395.46 H. Infrastructure Roads 251.65 76.56 Education 46.20 31.80 Hcalth 12.10 3.24 Subtoral 309.95 111.60 C. Credith/ 109.03 90.60 est. D. Feasibility Studies 12.18 0 Total Project Cost 694.54 597.66 Total Cost - US$1 161.50 86.75 Note: Insufficient data is available to distinguish between foreign exchange and local costs. SAR estimated a total FE component of 40%. a/ Soumes: *appon d'achiWment du Projct FKT prmpaed by Ministry of Agrculturm, b/ No daa on actual Cedit costs WIM made availabIG so that the SAR estimatons were maintained. " Using atual USS/Dh exchange rate (see Table 5 and Table I of Working paper). - 26 - B. Project Financing (US$ million) Source Planned Actual Loan _ Agreement IBRD 65.0 36.3 Governmental 85.9 45.5 CNCA credit 8.4 5.0 contribution"' Farmer's contribution 2.2 n.a TOTAL 161.5 86.8 Estimated as balance of total project cost minus ISPD's and CNCA's estimated contribution. bi Estimated as 40% of estimated credit component cost i.e. USS - 27 - Table 6 - Project Results A. Direct Results 1. Cropping Pattern, Yields and Production. crops Situation at Apprilslia/ Projected Situationa/ Actual Situation (1989)b/ Area Yield Production Area Yield Production Area Yield Production (000 ha) QX/ha (000ha) Qx/hac/ (000 1) Durui Wheat 107.1 9 96.4 59.4 15 89.1 50 15 75 Bread Wheat 33.5 17 56.9 72.5 26 188.5 80 23 184 naricy 13.6 9 12.2 17.4 20 34.8 9 15 14 Pulses 75.8 7 53.1 64.0 12 76.8 67 10 67 Oai/vcich SO Iorage 7.3 28 20.4 23.3 S9 137.5 10 so Olivcs 18.4 17 31.3 22 27 59.4 32.5 25 81 Other Crops '0.8 7.9 18.0d/ n/a 'OTAL. 266.5 266.5 266.5 2. Beneficiaries Benefts Situation at Projcctcd Situation Actual 1989 Appraisal Number of farmers contacLed by extension na na 62,588 Benefited from water supply schemes: - Number of 0 176 278 villages - Number of 0 46,000 55,700 inhabitants Bene ited from education 12% increase in enrolment *' Source SAR b/ Source RAP MARA */ Average of 1987/88 and 88/89 yields of RAP (MARA) adjusted for farmers declarations d/ of which 8,500 ha of sunflower - 28 - B. Economic Impact Estimate Apprisal PCR ERR Agriculture Component 24% 9%o Note: see Working Paper ror assuiptions. C. Studies Studies Purpose as defined by Status SAR LOUKKOS study World Bank to provide financing through FKT project for a complementary feasibility study of the Loukkos Rural Development Project FKT Project - 2nd not conducted phase Conducting a feasibility study for a second phase agricultural project in the FES-KARIA-TISSA Region not conducted although that it is not excluded that some disbursements were made for the fiancing of some aspects of the Loukkos preparation - 29 - Table 7 - Status of Major Covenants, (Loan No. 1602 - MOR) Section of Loan Short Description Compliance Agreement 3.01 (a) Appointment of one Adjoint in compliance Technique to each Work Centre 3.02 (a) Employment of engineering in compliance consultants for road and water supply infrastructure components 3.04 (c) Borrower and CNCA to prepare partial compliance project completion report CNCA's report not received 3.04 (d) Borrower to devise M&E System Partial compliance 4.03 2 road-maintenance brigades to in compliance be established Sch2 Part.C (b) Input centres repair shops to be in compliance leased to private suppliers/ distributors or farmers 4.02 (c) Audit of project accounts to be in compliance prepared and sent to Bank 3.04 (b) Quantity and annual reports in compliance 2.03 Procurement according to in compliance guidelines and schedule 4 of loan Agreement 3.02 (b) Employment of consultants for Partial compliance research, hillside farming and MSE 3.06 Collect water charges 100% under discussion Operation and Maintenance (Mgt management study of System to be ONEP carried out responsability) 3.07 Borrower to enter into convention in compliance of work with farmers for soil conservaton works. Schedule 2.B Subloans by CNCA in accordance in compliance with defined lending policies -30- A. Staff Inputs (Staff Weeks) TO TASK PY82 FY83 FY84 FY85 FY86 FY87 FY88 FY69 FY90 FY91 FY92 Total Preparation 42.6 - 4- - 2.6 Appraisal 128.6 - - - - - - 128.6 NeSotiations/Board 5.9 - - - - - - - 5.9 Loan Processing (LOP) 24.1 - - - - - 24.1 Sub-total 201.2 - - - - - - - - - - 201.2 Supervision 42.2 9.5 10.6 10.6 19.1 4.8 5.4 5.0 3.5 1.0 - 111.7 Annual Implementation - - - 0.4 - - - - - - 0.4 Review Project Administration 0.8 - - - - - - 0.1 - * 0.9 Project Completion - - - - - - - - 18.5 1.1 17.6 Report Sub-total 43.0 9.5 10.6 10.6 19.5 4.8 5.4 5.0 3.6 17.5 1.1 130.6 TOTAL 244.2 9.5 10.6 10.6 19.5 4.8 5.4 5.0 3.6 17.5 1.1 331.8 M:\KENNEDY\PCRTABLE.PRN/ch (Page 3) - 31 - B. Supervision Missions Stage of Project Montb/Year No. of Days in Specialization2/ Performance Cycle Persons countryl/ rating of project3/ Identification4/ 5/76 n/a Preparation 5/77 n/a Appraisal 10/77 7 21 E(2) n/a IEn A Con(2) Lo Appraisal Follow-up 2/78 5 12 E(2) n/a A IEn Lo Supervision 1 10/78 2 8/2 A,Le 2/F 2 4/79 4/a 8/ n/a n/a 3 10/79 1 22/ A 1/- 4 6/80 1 13/ A 1/F 5 11/80 2 17/ A,C 2/M,F 6 6/81 3 20/ C,A, 1/m 7 1/82 2 7/2 A,E 1/m 8 7/82 3 17/5 A,E,ME 1/m 9 1/83 2 16/ A,E 2/m 10 10/83 2 6/ A,E 2/F,M 11 7/84 2 5 A,E 2/F 12 10/84 1 5/2 A na 135/ 7/85 5 6 A,T.,E 2/F 14 2/86 1 3/3 A 2/F 15 11/87 1 3/3 A 2/F 166/ 2/88 1 2 I n/a 17 4/88 1 n/a I 1/a 18 10/88 1 1 A 2/F 19 5/89 1 1 A 2 20 6/89 1 2 I n/a 21 12/89 1 1 A 2 21 6/90 1 1 A n/a 22 2/91 2 7 A,E n/a 1/ Figure after dash (/) indicate actual days spent on supervision (if available). 2/ A - Agricultural; E Economist; C - Credit Specialist: Con - Consultants; IEn - Irrigation Engineer; L - Livestock Specialist; Le = Legal Specialist; Lo - Loan Officer; ME - Monitoring and Evaluation Specialist; En - Engineer. 3/ 1 - Improving; 2 * Stationary; 3 = Deterioration: M - Managerial; F - Financial. 4/ Project preparation was essentially undertaken by Moroccan staff with the assistance of FAD/CP. Several FAD/CP missions took place between 5/76 and 5/77 for reconnaissance, pre-ident-fication and preparation. Manpower details are not available. 5/ Mid-term review, 6/ Partial Supervision of Rural Watersupply Schemes only. Some staff paid a visit in July 1988.