Mali - National Agricultural Research Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 12190-ULI STAFF APPRAISAL REPORT NALI NATIONAL AGRICULTURAL RESEARCH PROJECT NOVEMBER 9, 1993 MICROGRAPHICS Report No: 12190 MLI Type: SAR Agriculture Operations Division Sahel Department Africa R-f4- This document has a resticded distibution and may be usd by recpinb oly in the perfonmance of their oficJi duties. Its contents ay not o6terwise be disdosed without Wodd Bank authooriaton.  CURRENCY EQUIVALENTS Currency Unit = CFA Franc US$1 = CFAF 270 CFAF 1 = US$0.0037 (as of Jur.e 1, 1993) WEIGHTS AND MEASURES Metric System FISCAl YEAR Government January 1 - December 31 IER January 1 - December 31 ABBREVIATIONS AND ACRONYMS CABO Centrum voor Agrobiologisch Onderzoek (Center for Agro-Biological Research) CGIAR Consultative Group for International Agricultural Research CILSS Comite permanent inter-Etats de Lutte contre la S6cheresse dans le Sahel (Inter-State Committee for Drought Control in the Sahel) CIRAD Centre de Cooperation Internationale en Recherche Agronomique pour le Developpement (Center for Intemational Cooperation in Agricultural Research for Development) CMDT Compagnie Malienne pour Ic Ddveloppement des Fibres Textiles (Malian Cotton Development Company) FFA Framework For Action FRC Financial Resources Committee tAPSO Inter-Agency Procurement Service Office of the UNDP ICRISAT International Crops Research Institute for the Semi-Arid Tropics IEMVT Institut d'Elevage et de Medecine Veterinaire pour les Pays Tropicaux (Animal Production and Veterinary Medecine Research Institute) IER Institut d'Economie Rurale (National Agricultural Research Institute) IFDC International Fertilizer Development Center ILCA Intemational Livestock Center for Africa INRZFH Institut National de la Recherche Zootechnique, Forestiere et Hydrobiologique (National Institute for Animal Husbandry, Forestry and Fisheries Research) INSAH Institut du Sahel (Regional Research Institute of CILSS countries) ISNAR International Service for National Agricultural Research KIT Koninklijk Instituut voor de Tropen (Royal Institute for the Tropics) NARC National Agricultural Research Council ON Office du Niger OPAM Office des Produits Agricoles du Mali (National Office for Agricultural Products) ORSTOM Office de Recherche Scientifique et Technique d'Outre-Mer (Scientific and Technical Research Institute for the Tropics) PES Permanent Executive Secretariat SC Scientific Committee SPAAR Special Program for African Agricultural Research SPARC Supporting Research Planning and Research on Commodities Project UC Users Committee USAID United States Agency for International Development 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 OFFICAL USE ONLY MALI NATIONAL AGRICULTURAL RESEARCH PROJECT STAFF APPRAISAL REPORT Table of Contents Credit and Proiect Summary ....................iv.................. .... .... iv Selected Data and Documents available in the Project File .................................... vii 1. BACKGROUN. I A. Project Background. I B. Economic Resources and Management . C. The Agricultural Sector. 3 Sector Profile ......... 3 Govemment Sector Policy Objectives and Strategy. 4 Bank Group Invo!vement in Agriculture. 5 IDA Lending Strategy for Agriculture. 6 11. AGRICULTURAL RESEARCH. 6 A. Organization and Funding of Agriulural Research. 6 B. Past Research Results and Impact ....... .................. ................... S C. The National Strategic Plan for Agricultural Research ............................. 9 D. The Regional Agricultural Research Strategy of the CILSS countries ....................... 10 E. Current Issues of Agricultural Research ......................................... 11 111. THE PROJECT .......................................................... 14 A. Project Objectives .............. ............... 14 B. Summary Projeci Description ............................................... 1I C. Project Detailed Features .................................................. 16 Institutional Development .... I ................... I ...................... 16 Technology Transfer and User Participation ..................................... 18 Research Program Implementation and Management . . ............................... 20 Programming, Review and Evaluation .................................... 21 Documentation and Publication of Research Results .. . .......................... 21 Participation in Collaborative Regional Research Programs ....................... 22 Resource Development and Management ....................................... 23 Technical Support Services ..... ..................................... 23 Financial Resource Management ................ .... ................. 24 Human Resources Development and Management .... .. ...................... 25 Physical Plant and Equipment Rehabilitation and Development ..................... 27 IV. PROJECT COSTS AND FINANCING ............................................ 28 A. Cost Estimates ........... ........... 28 B. Financing ........................................................... 29 C. Govemment Budget Impact ............................................... 30 D. Procurement ............ 30 E. Disbursement ......................................................... 33 F. Accounting, Finance, Administration and Audit .................................... 35 This report is based on the findings of a World Bank appraisal mission which visited Mali in April 193. The mission consisted of: MmscsMeas. 1. Weijesberg (pnnecipal agriculturist and mission leader), M-H. Collion (agricultural economist and deputy mission leader), PJ. Masteron (operations analyst), World Bank staff members: andMiesMesrs. H. Bruncau (finacial analyst of ISNAR). D. Belmans (aretiplaer),I. Brouier (agricultural economist of INRA). M. Kooyman (agronomist of KIT), J. Lefort (farming sysems research specialist of CItAD), H. Muhtr (experiment station management specialist), coasultants. The following made contributions: MmceMessr. M. Toure tExecutive Secretaty of SPAAR), C. Dejou (agricultural economist), A. Pritchard (agricultural research lead advisor), and W.D. Donovan (principal agricultural economist) who reviewed the project deiga. Ms. K. Pariadhaven, P. Mora, and 0. Taylor provided secretarial support. M4s. K. Marshall and Mr. S. Darghouth are the Deparment Director and the managing Division Chicf respectively for the operation. This document has a restricted distribution and may be used by reciptents 0,.iy in the performance of their official duties. Its contents may not otherwise be disclosed wittiv,t Wforld Bank authorization.  - iii Table of Contents (cont'd) V. ORGANIZATION AND MANAGEMENT .......................................... 36 A. Institutional Reform ..................................................... 36 The National Agricultural Research Counc (NARC) ................. ............. 36 The National Agricultural Research Institute (IER) ................................ 39 B. Research Management ................................................... 40 The Planning Process .................................................. 40 Research Proposal Preparation .................... , .. 40 C. Training Program ...................................................... 41 Training in Participatory Research Methodologies ................................. 41 D. Impact Monitoring and Evaluation ............................................ 42 E. Key Implementation Progress Indicators ......................................... 42 F. Infrastructure Rehabilitation .................... ........................... 42 0. Project Implementation and Supervision ......................................... 43 Supervision Plan ..................................................... 43 VI. BENEFITS AND JUSTIFICATION .............................................. 43 A. Anticipated Project Benefits ................................................ 43 B. Employment and Poverty Impact .......................... 44 C. Environmental Impact .................................................... 44 D. Project Risks ......................................................... 45 VII. SUMMARY CON ITIONS AND RECOMMENDATIONS ............................... 45 TABLES IN MAIN TEXT 4.1 Project Cost Surdmary ................................................... 29 4.2 Financing Plan ........................................................ 30 4.3 Summary of Proposed Procurement Arrangements .................................. 31 4.4 Disbursement Categories .................................................. 34 SUPPORTING ANNEXES. TABLES. CHARTS AND MAPS Annex 1: Ongoing Donor-Funded Research Projects ................................. 49 Annex 2: Appendix 1: Research Organization and Management ................................. 51 Appendix 2: Research Impact Evaluations ........................................ 52 Appendix 3: Research Programming and Review Cycle ............................... 53 Appendix 4: Experiment Station Management ..................................... 56 Appendix 5: Experiment Station Work Programming and Review ....................... .. 57 Annex 3: TerTns of Reference of Key Staff .58 Annex 4: Research Themes for Agricultural Commodity and Fisheries Research Programs .60 Annex 5: Manning Table .61 Annex 6: IER Research Facilities .62 Annex 7: Training Program .63 Annex 8: Project Cost Summary .64 Annex 9: Other Donor Funding .70 Annex 10: Estimated Schedule of Disbursements of the IDA credit. 75 Annex 1;: Composition of NARC and IER Board of Directors ............................ 76 Annex 12: Implementation Progress Indicators .78 Annex 13: Project Supervision Plan .79 Chart 1: NARC Organization .81 Chart 2: IER Organization .82 Chart 3: Research Programming Cycle .................... .................. 83 Chart 4: Project Procurement and Implementation Schedule .84 Map: IBRD NO 24964  - iv - MALI NATIONAL AGRICULTURAL RESEARCH PROJECT STAFF APPRAISAL REPORT Credit and Proiect Summary BorroKer: Republic of Mali Beneficiary : Institut d'Economie Rurale (IER) Amount : SDR 14.2 million (US$ 20.0 million equivalent) Terms : Standard with 40 years maturity Onlendin2 Terrns : Proceeds of the Credit would be passed on as a grant to IER Economic Rate of Return Not Applicable Proiect Description The objective of the project is to implement the first 6-year phase of the Strategic Plan for National Agricultural Research. The principal objective of this Plan is to ensure that adequate technology will become available to farmers as a means to increase agricultural growth and to reverse the decline in the productive capacity of the natural resource base. The proposed project will therefore aim at improving the performance of the national agricultural research system, by improving research coWterence, quality, relevance aad accountability for results through: Institutional Development: (a) transform the National Agricultural Research Council (NARC) into an entity which integrates user representatives, and through which all official funding for agricultural research is coordinated and screened; (b) support the transformation of IER into an autonomous institution with an independent Board of Directors, and reorganize and strengthen it; (c) regionalize research to bring it closer to its users; Technology Transfer and User Participation: (a) develop interactive processes between farmers, extension agents and researchers through farmer participation in setting research objectIves and evaluating its results, to ensure research relevance and to accelerate the dissemination of research results;  v (b) create a pilot research fund through which research users (farmers and processors) will contract for specific research topics of interest to them; Research Program Implementation: (a) improve research quality and relevance through improved research programming, monitoring and evaluation methods and procedures characterized by users's participation; tb) provide operating funds and introduce research contracting .or the implementation of the research programs on: millet, sorghum, maize, cowpeas, cotton, groundnuts, bottom-land rice, irrigated rice, cattle, small ruminants, poultry, production systems, natural resource management, fisheries, forestry, vegetables and fruits, and the economics of commodity production, processing and marketing (&conomie des fi1hWres); (c) develop a scientific information, publication and documentation unit at IER; (d) strengthen external linkages and support the participation of Malian institutions and scientists in regional and international collaborative research programs; Resource Development and Management: (a) improve and strengthen experiment station development and management; (b) design and implement a management information, accounting and cost accounting system; (c) strengthen human resources developinent and management, provide in-country and overseas training, consulting services and short-term technical assistance; and (d) rehabilitate and renew research experiment station and equipment. Benefits and Risks Benefits: Long-term benefits are expected from: (i) accelerated and sustained agricultural productivity; (ii) higher returns to farmers; (iii) improved and sustained management of Mali's natural resources; and (iv) increased foreign exchange earnings.  - vi - Risks: The principal risks of the project are: (i) implementation delays as a result of profound institutional reforms envisaged under the project; (ii) slowness in changing scientist attitudes towards participatory research and collaboration with extension services; (iii) weak research management: and (iv) possible Government reluctance to rely on regional collaboration. The design of the project includes measures to reduce such risks. Estimated Costs: l ________________________________ ____________ U S$ m illion r______________________________ Local Foreign Total A. NARC 1.1 1.4 2.5 B. IER/Management 7.6 17.5 25.1 C. Research Programs 20.2 14.7 34.9 D. Experiment Stations & Laboratories 22.0 19.9 41.9 Total Base Costs 51,0 53.5 104.5 Physical contingencies 0.6 0.6 1.2 Price contingencies 3.4 2.6 6.0 Total Project Costs 55.0 56.7 111.7 Financing Plan: (US$ million) |____ _ Local Foreign Total % Total Government 17.9 0 17.9 16 IER 0.8 0 0.8 1 Other Donors 21.8 46.3 68.1 61 Private Sector 2.4 2.5 4.9 4 IDA 12.1 7.9 20.0 18 TOTAL 55.0 56.7 111.7 100 Estimated IDA Disbursements: IDA Fiscal Year (US$ million equivalent) nnua . 1994 1995 1996 1997 1998 1999 2000 2001 Annual 0.7 2.1 5.6 4.0 4.0 2.4 0.8 0.4 Cumulative 0.7 2.8 8.4 12.4 16.4 18.8 19.6 20.0 Map : IBRD No. 24964  - vii - MALI NATIONAL AGRICULTURAL RESEARCH PROJ.ECT STAFF APPRAISAL REPORT Selected D*ita and Documents Available in the Project File 1. Analyse du systemn national de recherche agronomique du Mall, ISNAR, January 1990 2. Miss;on Reports (Oct. 17 - Nov. 7, 1991): - Reseaux des stations et bdtiments de recherche (programme des infrastructures) - Dirk Belmans. - Qualite du programme de recherche de lIER (besoins en matiere de: biomgtrie, gestion des bases des donnees scientifiques, formation aux mOthodes statistiques et a l'utilisation des logiciels) - Maria Cristina Amezquita. - Experiment Station Support Services (experiment station support services and Management, training needs in station management, immediate needs for station rehabilitation) - Hannibal Muhtar. - A Propos du Developpement des Ressources Humainew a l'IER (Mali) - Jacques Brossier. 3. Mission Reports SPARC Project (USAID). 4. Other Donor Reports. 5. Strategic Plan for Agricultural Research. 6. Etude pour la definition d'un statut de lI'nstitut d'Economie Rurale (IER) et d'un statut du personnel de la recherche. 7. Appraisal Mission Aide-Memoire 8. IER Work Group Reports: - Institutional Development - Human Resources Development - Research Programming and Management - Farming Systems Research and Participatory Research - Experiment Station Operations and Infrastructure Rehabilitation - Accounting and Financial Management 9. Revitalizing Agricultural Research in the Sahel, A Proposed Framework for Action, Institut du Sahel/SPAAR, December 1992.  MALI NATIONAL AGRICULTURAL RESEARCH PROJECT STAFF APPRAISAL REPORT L. BACKGROUND A. ProJect Background 1.01 Since 1971, IDA has been assisting the Government of Meli in the development of its agricultural sector. Support to agricultural research was initially made through components in agricultural development projects. In 1987 Government recognized that success in this field requires a clear overall strategy and a long-term commitment. Following a first analysis by the International Service for National Agricultural Research (ISNAR), the Institut d'Economie Rurale (IER) embarked on the preparation of its Strategic Plan for Agricultural Research with ISNAR assistance, partly funded by United States Agency for International Development (USAID). In October 1992, the Government presented its strategy to a donor round table. In parallel, the Inst itm du Sahel (INSAH) and the Special Program for African Agricultural Research (SPAAR), prepared with the national agricultural research institutions of the CILSS' countries a strategic Framework for Action (FFA) to revitalize agricultural research in the Sahel. During the SPAAR membership meeting in May 1991 in Abidjan, Mali and Tanzania were selected as pilot countries for the implementation of FFA recommendations. Subsequently, an IDA identification/preparation mission visited Mali in October 1991. In February 1992, Mali obtained PPF financing of US$750,000 for the preparation of the proposed project by IER. In September 1993, a supplemental PPF of US$750,000 was granted. An appraisal mission took place in April 1993. B. Economic Resources and Management 1.02 With a per capita income of US$280 (1991), Mali is one of the poorest countries in the world. Social indicators, such as life expectancy, primary school enrollment rates and access to basic health services are among the lowest. Population, estimated at 8.5 million in 1990, is growing at the estimated net rate of 2.5% a year. Eighty percent of the inhabitants live in rural areas, with population density ranging from 22 inhabitants per km2 in Segou to I inhabitant per km2 in the Tombouctou and Gao regions. A large area (140,000 km2 in the south of the country), previously affected by onchocerciasis, has been partially cleared of this disease by a campaign launched in 1974, and is now being intensively developed for cotton production. 1.03 Meager resources, the poor condition of the infrastructure, a low literacy rate (only 17% of the population is literate) and a highly variable climate severely hinder Mali's economic performance. Real growth has averaged about 3.4% per annum since 1985, most of it absorbed by population increase. The average GDP also masks large interannual variations which are directly linked to climatic conditions and Mali's heavy dependence on agriculture. This sector generates just under half of Mali's GDP, with cereals and livestock production alone contributing more than one third of the total value added. Growth in the agricultural sector is conditioned by low rainfall, fragile soils, and low-productivity, traditional technologies. 1/ Comite Inter-Etats pour la Lutte contre la Secheresse dans le Sahel - Inter-State Committee for Drought Control in the Sahel.  1.04 The adjustment and stabilization efforts pursued by the Government since 1982 have contributed to improved macroeconomic management. For the past four years. a sustained adjustment program has received the support of the Bank, the Fund and major donors. Macro-economic targets agreed under the first PFP (1988-90) were largely met, and a second PFP for 1990-92 was approved in early 1990. Major structural reforms have been implemented over the period, in particular on the regulatory framework, the tax system, foreign trade, the public enterprise sector, and the agricultural sector. Prices have been fully liberalized, and export and most import monopolies have been eliminated. Quantitative restrictions have been removed and import taxation greatly simplified. Export taxation has also been abolished. A value-added tax has been introduced, and new investment, commercial and labor codes have been adopted. 1.05 Economic performance was weakened in 1991 by politicai unrest. After the overthrow of the former Government, the transition Government agreed with the Bank and the i7und on a revised macroeconomic framework for 1991, which was implemented satisfactorily. In July 1992, negotiations of a new PFP were finalized with the new Government and the PFP was approved by the Bank and the Fund in late August 1992. Overall progress on structural reforms continued to be satisfactory in 1992. However, there were severe slippages on the financial program due to extra-budgetary outlays (notably related to public works), and malversation by the Treasury, under the transition Government. Although the new Government took quick and decisive actions to end the illegal activities and recover part of the losses, further significant slippages in revenue mobilization occurred in the last quarter of 1992 due to the impact of fiscal concessions granted to various private sector interest groups under the transition Government, and increased resistance from the population at large towards fulfilling their tax obligations. The Government has identified measures in the 1993 budget to address this shortfall in budgetary revenues. 1.06 The policies implemented since 1988, combined with relatively favorable weather conditions, led to average annual real GDP growth of 3.9% per annum over the last four years. This growth was achieved in spite of weaker macroeconomic performance in 1991, as a result of lower rainfall that year and the disruption of productive activities due to social unrest. Fiscal management has improved, with the overall budget deficit (excluding grants) falling steadily from its peak of 13.9% of GDP in 1985 to 7.7 in 1990, although it deteriorated to 11.7% in 1991 due to the disruption of economic activities. It improved marginally to 11.3% of GDP in 1992. The current account deficit fell from 28.5% of GDP in 1985, to 13.7% in 1991, but increased to 14.7% of GDP in 1992, due largely to the sharp drop in world cotton prices. Capital inflows, largely to finance the public investment program, have increased steadily since the mid-1980's, and the balance of payments has recorded surpluses since 1988, after more than a decade of consecutive deficits. 1.07 The public enterprise sector, which despite its small contribution to GDP used to incur annual losses of about US$30 million, was largely restructured: this included the privatization of the main development bank and postal checking system, the liquidation of the largest unprofitable enterprises and the divestiture of others. In the agricultural sector, cereals pricing and marketing were liberalized, and in the cotton subsector, institutional, pricing and tax reforms were undertaken to increase efficiency and thus maintain its international competitiveness. As part of this restructuring, a performance contract is being implemented between the Government and the cotton company (Compagnie Malienne de Developpement de Textiles, CMDT) as well as with the cerealR marketing agency (Office des Produits Agricoles du Mali, OPAM). To improve revenue collection and management of public expenditure, measures were also undertaken to strengthen investment budgeting. Continued reduction in the number of government employees wiil reduce the weight of the wage bill and increase that of spending in priority areas.  - 3 - C. The Agricultural Sector Sector _Proflel 1.08 Only about a quarter of Mali's 1.2 million km2 are arable. Climatic factors account for the extreme ecological diversity characterizing the country's vegetation and agricultural potential. Agroclimatic zones range from Saharan to Guinean (Map 24964). The Saharan zone in thie north covers about 50% of Mali's total area; it receives less than 150 mm of rainfall, and supplies less than 10% of the total grazing biomass. The Sahelian zone covers about 20% of Malian territory and receives between 200 and 600 mm of rainfall. lThe Sudanian savannah covers 25% of the country and receives good rainfall (600-900 mm per annum), while the Sudano-Guinean zone (5% of total area) with 900-1200 mm of rainfall has the highest agricultural potential of the country and the highest population density. 1.09 The Malian economy is based to a considerable, but declining, extent on the primary sector, whose shf re of GDP dropped from 58% in 1981 to 46% in 1990. Since this falling-off was larger than the decrease in the active population employed in agriculture, the result has been a decline in agricultural income for the rural population as a whole. Livestock production contributes approximately half of the agricultural GDP, and food crops another 30%. 1.10 Agriculture is based primarily on rainfed cultivation, although major irrigation schemes exist. Cereals, mostly sorg..um/millet and maize, are the most important food crops. They are grown by 90% of farmers and contribute about 25% of GDP. Cereals are primarily cultivated for home consumption; only about 20% of total production is marketed. They are often intercropped with a legume, either groundnuts or cowpeas. Rice is also a major item of consumption, but mostly in urban areas. It is grown in large-scale irrigation schemes (mainly the Office du Niger, Operation Riz Mopti and Operation Riz Segou) and in lowland plantations (particularly Mali-Sud Region). Cotton, the most important cash crop, is also Mali's major export crop, representing 45 to 50% of foreign exchange earnings. 1.11 Livestock is the second most important agricultural export, accounting for about 30% of total exports, and represents a large component of all agricultural production systems. The Touareg and some Peul tribesmen in the north of the country are pure pastoralists, while farmers in the central and southern part of the country integrate livestock and crop production. Livestock production in Mali is basically a low-input/low-output system, primarily depending on extensive grazing of the natural pasture. There are only a few large-scale, intensive commercial dairy and poultry farms, and these are located outside Bamako and other urban centers. Traditional transhumant grazing systems are encountering major difficulties due to the shrinkage of rangeland areas and competition with crops. This has resulted in the drift of herds from the Sahelian to the Sudanian zone, the transfer of stock ownership from herders to farmers and traders, and the progressive collapse of traditional transhumant production systems. 1.12 The recent increase in sorghum and millet production (from an average of 763,000 tons in 1980-82 to 1,420,000 tons in 1989-91) is primarily due to increases in the cultivated area (from an average of 1,411,000 ha in 1980-82 to 1,940,000 ha in 1988-89) and to improvements in yields (from 540 to 730 kg/ha), in part due to the higher fertility of new lands put under cultivation. Whether productivity is improving on a sustainable basis is difficult to infer, given the fact that yields are so very rainfall dependant. During the same period, cotton production increased from 104,000 to 249,000 tons, an increase due to area expansion (from 98,000 to 193,000 ha) as well as yield improvements (from 1,060 to 1,290 kg/ha).  - 4 - 1.13 A crucial issue regarding Mali's luture developmetit is the on-going degradation of its natural resources, characterized by: (i) mamsive erosion of agrivultural soils by wind and water, leading to decline in soil fertility: (ii) accelerated degradation of forests due to overexploitation of t'uelwood; (iii) overall degradation of rangeland due to overgrazing; (iv) soil salinization and acidification; (v) lowering of the groundwater table; (vi) a declire in fish catches in the Niger; and (vii) accelerated loss of biodiversity. 1.14 The major constraints affecting the management of soil, water, vegetation and biodiversity in Mali are: (i) the population increase, which has resulted in unsustainable pressure on agricultural and non-agricultural land (forest, rangeland, bush fallow) and pushed agricultural production into marginal and fragile areas previotusly devoted to grazing; (ii) the coexistence of traditional land tenure arrangements and of Government regulations which havejeopardized traditional practices, without leading to the establishment of a reliable modern system; (iii) difficulties in marketing cattle which have led to the accumulation of large numbers of underproductive stock; and (iv) certain production practices, such as slashing and burning natural vegetation, which may have been relevant in the past, but have proven to be ineffective and highly destructive of the resource base. Government Sector Policy Obiectives and Strategy 1.15 In 1992, the Government prepared a Rural Development Master Plan that clearly sets agriculture as the engine for growth. The strategy for the development of the sector is based upon: (i) improved natural resource management to promote sustainable growth; (ii) the creation of a more favorable socio-economic environment; (iii) further redistribution of responsibilities away from the public towards the private sector and the rural communities; (iv) the restructuring of the public sector to increase its efficiency and relevance. 1.16 Favorable socio-egonomic environment. Price liberalization is in effect since January 1991. The Government will encourage contracts between producers and economic operators as in the case of cotton. Agricultural inputs and equipment will benefit from import tax exemption. Investment laws and regulations will he revised to promote the creation of rural enterprises. Public services management will be streamlined and the share of public expenditures going to investment in infrastructure and equipment will be increased. The policy of decentralization of public services will be pursued and major efforts will be made to develop services, in particular health and education in small rural towns. 1.17 Sustainable development. Realizing the threat natural resource degradation poses for long- term growth, the Government has shown a serious commitment to tackling the problem. Having prepared a plan for desertification control in the late 1980s (Plan National de Lutte contre la Desertification), the Government is now preparing an integrated resource management program for the agricultural, pastoral and forestry sector. As part of this effort, the newly created research program on natural resource management will use a multidisciplinary approach to tackle these problems in the three subsectors and will aim at developing commmunity-based technologies using a participatory approach. T'he legal codes for water, forests, rangelands, fisheries as well as the land tenure code, now in preparation will provide the legal framework necessary for pronoting improved natural resource management. In particular, laws governing land tenure and local aulholities will he instrumental to allow local communities t) manage their own resources (gestion cles ierroirw v'illageoix). 1. 18 Relistribution of respOnsibilities away_rom the public sector. Most parastatal organizations involved in productioni will be privatized. In additioni, the idea is to transfer development responsibilities to grassroots organizations. 'o this el'fect, the Government will promote and empower village communities or rural associations so that they can take on some of the activities performed in the past  - 5 - by the public sector. The Malian government also recognizes that the greater participation of farmers, especially women, and village associations in decisions regarding agricultural production and in the design and implementation of agricultural policies is likely to be a key factor to promote rural development and bring about further economic growth. This in turn will require better information, training, and extension, as well as changes in land tenure legislation. The Government has already started to include farmers directly in negotiations with the cotton company and the major rice producing parastatal, Office du Niger (ON). 1.19 Streamlining of the public sector. In addition, the Government seeks to increase efficiency in the agricultural sector by improving the management of public resources through streamlining services provided by rural governmental organizations while increasing the share of investments in equipment and infrastructure. The Office du Niger will remain a parastatal organization but will be given autonomy, restructured and managed according to private sector rules. The irrigation network will be maintained and re~habilitated rather than extended. Bank Group Involvement in Agriculture 1.20 Past IDA assistance. IDA assistance to Mali became increasingly policy oriented over the 1980's, first through the inclusion of reform measures in investment projects and, since 1988, through two adjustment operations in agriculture and education. At the same time, IDA continued to finance investment operations, in support of the major sectors, in particular agriculture and human resources. Out of the 12 projects currently under implementation, 4 are in agriculture, representing US$146.6 million or 39% of the lending portfolio. 1.21 Performance evaluation. PCRs have been produced for nine projects in the agriculture sector. Five of these have been the subject of a PPAR. Out of the nine projects, four had an unsatisfactory rating. Some of the lessons learned from the success of the Second Mali-Sud Rural Development Project (Cr-1415-MLI) are relevant to the proposed project. Success factors worthy of note were in particular: (i) a profitable crop, cotton, and a strong institution, CMDT, which the project contributed to reinforce; (ii) the fact that research responded directly to development needs as iinplemented, under contracts between [ER and CMDT; (iii) the scientific back up that IER received through its collaboration with the French cotton research institute; (iv) the trust developed between farmers and CMDT which allowed for rapid adoption of technical packages; (v) the development of self- managed farmers' associations which were able to take on tasks previously at Government's charge. 1.22 Research components in other agricultural development projects were mostly unsuccessful. The ODIPAC Technical Assistance Project (Cr. 1174-MLI) demonstrated that research results could not be expected in the very short life of the project period (3 years). It also showed that crop development and related research endeavors should be considered within the framework of a sector-wide agricultural context. A number of projects revealed that farmers' attitudes towards technical packages were dictated more by agroecological constraints and the prevailing socio-economic environment than by ignorance or irrationality. This suggests that constraint diagnostic and potential solution identification, the basis for sound research programming, may not have been carried out in collaboration with farmers. In addition, low f?rm-gate prices, to be expected in surplus years and especially in remote areas stood in the way of farmers' adoption, highlighting the need for ex ante socio-economic evaluation of research proposals. 1.23 Priorities for IDA. The overriding objective of IDA's strategy in Mali is the alleviation of poverty through growth in per capita income and improvement in social services. Given Mali's progress in short-term economic management over the past few years, IDA's strategy is now to focus on key issues for long-term economic development: (i) foster private sector growth; (ii) improve public sector  management; (iii) alleviate long-term physical and human resource constraints to growth, with the ultimate objective to alleviate poverty and improve the standard of living. Two issues that cut across all sectors and operations and are key to capacity building will receive particular attention in IDA's future lending operations and sector work: (i) the promotion of women's activities; and (ii) capacity building and greater focus on information, education and communication. 1.24 The policies pronoted through IDA operations in the agricultural sector, including research and extension services that better serve the needs of the farmers, promote agricultural diversification and provide incentives for farmers to increase agricultural production, should have a direct effect on food security and rural income. The reorganization of extension and research services is taking place through an on-going hybrid sector adjustment/investment operation and the proposed National Agricultural Research Project; the promotion of private irrigation schemes through a planned Irrigation Promotion Project; the development of the agro-industrial sector through a study of the agro-processing potential and a planned future project. The multi-sectoral Natural Resource Management Project will introduce a rational land use system with the aim of halting and then ieversing the process of degradation of the natural resource base. IDA Lending Strategy for Agriculture 1.25 The agricultural sector remains a priority. The operations under preparation include: the proposed National Agricultural Research Proiect which aims at increasing agricultural productivity by improving the responsiveness of research to farmers' and herders' needs, conserving the natural resource base and establishing a more effective linkage with farmer organizations, Non-Governmental Organizations, the extension services, agro-industries and the private sector. Given Mali's large irrigation potential, a second operation in this area (after the FY88 Office du Niger Consolidation Project), the Irrigation Promotion Project, would aim at exploiting this potential more fully by promoting the development of small-scale private irrigation schemes. An agro-processing operation would enccurage private investment in this most important part of Mali's small agro-industrial sector and at the same time increase the value of agricultural production. Finally, a second agricultural services project would extend the program started under the first project which became effective in 1991 and has already demonstrated its positive effect on agricultural yields. 11. AGRICULTURAL RESEARCH A. Organization and Funding of Agricultural Research 2.01 Agricultural research has existed in Mali since the end of the nineteenth century when the first ad hoc cotton experiments were conducted. It was formalized with the creation of the agricultural research farm in Sotuba in 1927, and a few years later with a rice research station for the Office du Niger. After the Second World War, the French research institutes developed a systematic network of stations for cotton (Kogoni and N'Tarla) and for livestock (Sotuba). Most agricultural research in Mali is now carried out by the Institut d'Economie Rurale (IER). There are, however, a few other institutions, with a multiple mandate, with research being one of them: the Agricultural Mechanization Division (DMA) of the Ministry of Rural Development, the Central Veterinary Laboratory (LCV), the Malian Cattle and Meat board (OMBEVI), as well as some applied research being done under  - 7 - development projects. However, the new IER represents about 90% of national agricultural research resources, with the other organizations contributing approximately 10% in very specific domains, not covered by IER. 2.02 The Institut d'Economie Rurale (IER) was created in 1960 as part of the Ministry of Agriculture. The mandate of this first structure was more to organize agricultural research than to actually conduct it. It also had many other responsibilities, including economic studies, training, crop protection, and control over agricultural processing. In 1968, its mandate was redefined to include the conduct of agricultural research. In 1975, the Institute also became responsible for the planning and evaluation of the Ministry's projects and programs. And, in 1979, the creation of the farming systems research department gave a research-development focus to the Institute's mandate. 2.03 In 1981, following the creation of a Ministry of Natural Resources and Livestock, livestock, fisheries and forestry research activities were transferred to a new research institute: the Institut National de la Recherche Zootechnique, ForestiWre et Hydrobiologique (INRZFH). At the same time, the statute of the new institutes (TER and INRZFH) was defined for the first time as that of a service rattachO, but, in practice there was no difference with the previous situation or that of any other Directorate of the Ministry. 2.04 The split soon proved to be rather inefficient and as early as 1987, discussions began to regroup agricultural research activities under one single institute. To prepare for the merging, the Malian government asked the International Service for National Agricultural Research (ISNAR) to provide a background analysis of its agricultural research system. The study took place in 1988. A new IER, merging the previous IER and INRZFH, was created by law No. 90-99/AN-RM (26 September 1990), mirroring the reunification of the two ministries. Still a service rattachM, its organization was defined in the decree 90-432/P-RM of 31 October 1990. 2.05 Human resources. According to 1993 records, there are 260 scientists at IER, including the managers; 240 are nationals and 20 are expatriates. In addition, 28 researchers are undergoing training. Qualification levels are the following: * PhDIDoctorat 55 * DEA/Master US 59 * BSc/Engineering Diploma 126 A qualitative analysis carried out for the Strategic Plan (para. 2.28) enables to distinguish between senior researchers, researchers, junior researchers, and interns. The first group (50 scientists) have Ph.Ds and doctorates. They can be research project' leaders and be responsible for providing supervision and guidance to junior researchers. In the second group (36) are scientists who can be responsible for carrying out their own research but need some guidance3. The third group (107) are agricultural engineers with a BSc. level of education whose work needs close supervision and most of whom should be classified as technicians. The fourth group are mostly young agricultural engineers with a BSc level 2/ Research programs are made up of research projects; a research project is defined as a set of research objectives, all necessary to solve a development problem - a research project has expected output(s), duration, a location and scientific resources needed by discipline and scientist-year. 3/ They usually have a DEA, a master or a maitrise, or else an engineering diploma with 15 years of experience in research.  - 8 - of education undergoing an internship at IER (47). According to the criteria used in this initial evaluation, IER could rely on 124 qualified national scientists (the first two groups and some of the third group). 2.06 Research station network. In 1992, 36 research experiment sites were listed ranging from full-fledged stations with resident scientists to experimental sites, more than TER can manage adequately given the level of resources. Because resources, scientists in particular, are dispersed over too many research sites, providing adequate support services to them is not cost effective. 2.07 Research funding. Over the three-year period 1988-90, agricultural research funding represented an average of CFAF 2,244 million (approximately US$8.3 million) per annum, out of which: * National Budget CFAF 866 million (US$3.2 million) * Direct Donor Contribution CFAF 1,293 million (US$4.8 million) * Expatriate Researchers CFAF 85 million (US$0.3 million) Funding from the national budget represented therefore 39% of total funding, covering mainly salaries. In the period 1991-93, public funding for operating expenditures decreased slightly (CFAF 825 million or US$3.05 million), but in addition, public funding was available for infastructure building in the regions, following the Government decision to decentralize. This level of funding corresponds to approximately 0.3% of AgGDP. which is reasonable in comparison with other countries in Africa and elsewhere. 2.08 Ongoing donor-funded research proiects. The most important externally financed ongoing research activities are presented in Annex 1. Available funding is in Annex 9. The present project is designed in close collaboration with USAID and the Dutch Cooperation: in particular, the USAID-funded Supporting Research Planning and Research on Commodities Project (SPARC), and the Dutch funded Regional Farming Systems Research Project (DRSPR) in Sikasso. The former has a strong institutional development component and the latter has a 15-year experience in participatory and on-farm research. The present project is designed to dovetail with these ongoing activities. B. Past Research Results and Impact 2.09 Notable achievements in cotton research include the successful introduction of normal and glandless varieties, though the main problem remains their susceptibility to bacteriosis and in addition, for the glandless varieties, their poor fiber quality. Major achievements have been obtained in weed and pest control. Soil preparation techniques to improve water and soil management have been studied but work still remains to be done to adapt them to various agroecological zones. Norms for inorganic fertilizer and dates of application have long been introduced. However, the formula (complexe coton) remains to be adapted to each agroecological zone. Soil acidification, as a result of repeated fertilizer use could become a serious problem, that research needs to address urgently. Performance of various rotation alternatives for each agroecological zone have been determined, but there is a need to introduce other crops for diversification purposes. 2.10 In irrigated rice research, three improved varieties, responsive to fertilizer, are presently recommended with short cycle and short stems: Dourado precoce, Gambiaka and BG 90-2. Agronomic practices, in particular planting, spacing, and dates are also well known. Fertilizer application -100 kg/ha of P and 50 kg/ha of N- is recommended at two stages of plant development: planting and weeding. For  maize, introductions of varieties from IRAT, HITA and CIMMYT have enabled to propose more than ten improved varieties, with various cycles. One of these, short cycle and resistant to bacteriosis, is recommended in the CMDT zone. 2.11 Breeding of millet and sorghum has for a long time been a major focus of IER. However, results so far have been disappointing. Three improved varieties from the local cultivars have been transferred but their adoption is extremely low (less than I % of the area). Seed treatment has been well researched. Though recommendations for herbicides are known, they are rarely adopted by farmers. 2.12 Most recommendations in animal production deal with animal feed production and management for fattening and animal traction. Forage crops (dolique, stylosantes, leucaena and cowpea in sole crops) are also part of the extension package. Little work has been done on animal production systems which should become a major focus in the future. 2.13 IER has been most successful in the implementation of a farming systems program and the development of participatory research methods, involving both farmers and extension agents. The adoption of these research methods has enabled IER and CMDT to reach a close collaboration and disseminate successful technologies in the Southern zone. These technologies deal mainly with cotton and maize in rotation, livestock (animal traction and fattening) and soil fertility management using compost and manure, combined with anti-erosion measures. 2.14 The farming system research program has extended its work to natural resource management techniques and is now implementing a program of gestion des terroirs villageols in collaboration with rural populations. Techniques which are being tested and recommended in collaboration with CMDT include: anti-erosion bunds, either with stones or planted (Andropogon); live hedges with jatropha and wind breaks with eucalyptus, Gmelina and Neem. For water harvesting, recommended techniques are closed bunds, semi-circle catchments and dry land soil preparation. C. The National Strategic Plan for Agricultu-ral Research 2.15 While the merging of the two institutes and the definition of a structure for the new IER were underway, work for the elaboration of the Strategic Plan began in 1989 with ISNAR support. Of paramount importance for planning and organizing research programs, was the decision to decentralize research and to create regional research centers (Centres RNgionaux de Recherches Agronomiques, CRRA) in each agroecological zone. The decision, enacted with the 1990 Decree responds to a concern for establishing more effective and permanent relations with regional development agencies and improving research efficiency by bringing together a critical mass of scientists. The regional center directors are responsible for programming, coordinating and supervising all research activities and managing the resources of the Institute in the area covered by the center. 2.16 The Strategic Plan provides the overall orientation and priorities for the evolution of agricultural research in Mali over the long term (12 years), in terms of research content as well as resources required. The implementation of the Strategic Plan is proposed to take place in two phases of six years each. The Plan envisioned the implementation of seven research programs: cereals and legumes, industrial crops, fruits and vegetables, animal production, forestry and fisheries, agricultural production systems, and natural resource management. Each program was divided into sub-programs by commodity.  - 10- 2.17 It was estimated that the implementation of the Strategic Plan would require CFAF 2,353 million (US$8.7 million) in constant 1990 terms, during the first year, a level of funding which would follow the planned increase in scientific staff, to reach 2,686 million CFAF (US$10.0 million) in year six. These estimates are based on a norm of CFAF 18.5 million (US$69,000) per scientist per year4. 2.18 During the first six year phase, only four out of the six regional centers would become operational: Sotuba, Sikasso, Niono and Mopti. Sotuba would absorb approximately 38% of the resources, Sikasso 32%, Niono 20% and Mopti 10%. The distribution of resources by program would be as follows: * Animal Production 23.4% * Cereal and Legume Crops 20.5% * Production Systems 16.2% * Industrial Crops 13.5% * Vegetable and Fruit Crops 10.6% * Natural Resources Management 9.8% * Forestry and Fisheries 6.1%. 2.19 Under the selected scenario, research would be carried out on cotton in the industrial crop program (dah, tobacco, sugar cane and tea are suppressed). In the cereal and leguminous crop program, the commodities selected were irrigated and floating rice, millet, sorghum, maize, cowpeas for the first phase of the Plan. Groundnuts, bottom-land rice, wheat and flood recession sorghum would be added during the second phase. Under the horticulture and fruit program, only research on vegetables, citrus, and mango (processing) would be undertaken during the first phase. Root crops, banana and dates were to be added during the second phase. For animal production, the first phase of the Plan focuses on cattle, sma" ruminants and poultry. The second phase adds research on pigs and camels. For forestry and fisheries, most projects are under the first phase and deal with wood products, arabic gum, shea butter, honey and fisheries in the Mopti area. In natural resource management, all projects are under the first phase, except for a dune fixation project. They include rangeland management, water and soil conservation techniques in various agroecological zones, soil fertility management techniques, irrigated perimeter rehabilitation (salinization and alkalinization), natural forest reserve management, and conservation of phytogenetic resources. Finally, under the first phase, farming systems research would be conducted only in the four established regional centers. D. The Regional Agricultural Research Strategv of the CILSS Countries 2.20 In May 1990 the members of the Special Program for African Agricultural Research (SPAAR) decided to sponsor the preparation of regional action programs to revitalize national agricultural research in Sub-Saharan Africa. Through a series of workshops, jointly organized by SPAAR and the Institut du Sahel (INSAH), the research leaders of the CILSS countries prepared a program which was endorsed by the CILSS Council of Ministers and the SPAAR membership and published under the title "Framework for Action (FFA) to revitalize Agricultural Research in the Sahel". In consultation with the 4/ The norm was established, taking as a basis research projects or programs considered to be adequately funded. However, it seriously under-estimates experiment station operating and maintenance costs, and general overheads. Also, the norm does not take into account the effect on the payroll of an improved incentive system.  - I1 - Sahelian research leaders, the SPAAR membership designated Mali as one of two pilot countries (together with Tanzania) to implement the FFA recommendations. These recommendations can be summarized as follows: (a) establishing regional collaborative research programs on millet, sorghum, maize, groundnuts, cowpeas, vegetables, small ruminants and natural resource management (including genetic resource conservation), to be implemented by lead national agricultural research systems ("research poles") coordinated by INSAH; (b) revitalizing the national agricultural research systems through institutional reforms that should: (i) strengthen the capability of governments to define agricultural research policy and improve donor coordination through the introduction of consolidated funding mechanisms; (ii) make national agricultural research institutions more dynanmic and accountable for results by granting them financial and administrative management autonomy; and (iii) promote greater institutional diversity and include the private sector, farmer organizations, educational institutions and NGOs in the overall research effort. 2.21 During their meeting in Ouagadougou in July 1991, the directors of the national agricultural research institutions decided that IER would become the lead institution for sorghum research. Together with Senegal (lead institution), Chad and Niger, IER would participate in a collaborative program on small ruminant productivity improvement and pathology; and together with Burkina Faso (lead institution) and Senegal, IER would participate in a natural resource conservation and management program (soil fertility management, soil and water conservation, village land resource management). These collaborative programs would be designed in such a manner that individual national institutions would implement an agreed component of the program, which at the same time would constitute its national program, thereby avoiding costly duplication of effort. The present project intends to support IER's participation in these regional collaborative programs and to adapt the institutional reforms recommended by the FFA to conditions in Mali and implement them, including the introduction of a consolidated funding mechanism to strengthen donor coordination under Government leadership. E. Current Issues of Agricultural Research 2.22 The National Agricultural Research Council (NARC). Under the 1990 Decree, a National Agricultural Research Council, with two committees (one for resources and one for programs), formulates agricultural research policy and strategy. It decides on research priorities; it reviews and approves research programs and budgets; reviews research results and decides on their diffusion; monitors the use of resources and establishes linkages between research and external research organizations as well as, within the country, with development agencies. Under the direction of the IER Director, the Permanent Secretary of NARC has responsibility to implement NARC's decisions. 2.23 While the idea is an excellent one, at present, the way NARC functions represents a series of cumbersome and inefficient procedures. The representation is much too large and the mode of representativity Cex officio) inappropriate for providing an adequate forum for informed discussions and decision-making. In addition, each year, NARC is expected to review all the activities of the Institute, much too large an agenda for adequate review of proposals and research results. Finally, it is not a forum where the users of research (farmers and processors) can actively participate. 2.24 IER statutes. Under the 1990 law and decree, the new [ER remained as it was before, a service of the Ministry of Rural Development, without administrative and financial autonomy. In practice, it means that IER cannot open its own bank account and that it is subject to a priori control of  - 12 - its expenditures. Its accounting system records only approximately 5% of total available funds, i.e., the part of Government funding destined for operating expenditures. Civil servant salaries are directly paid by the Public Administration, and the approximately 60% funded by external sources are recorded by separate "project" accounting systems, or directly paid for by donor agencies. These "project accounts' are audited by the donors according to thei. individual regulations. IER's accounts are kept by the Ministry of Rural Development and are audited according to civil service regulations customary in Mali. The Institute has never been audited by independent auditors. 2.25 JER organization and management. While there should be a clear distinction between the scientific management of research content (i.e., the programs) and the management of research installations and resources to carry out research (i.e., the experiment stations), the situation is presently confusing as far as the prerogatives of each are concerned. The situation is further complicated by the fact that the Strategic Plan envisions management of research by program while the 1990 Decree instituted scientific departments. This has created a redundancy between research programs and departments. Some departments already correspond to programs, others do not, thereby creating confusion and inefficient bureaucratic overlays. The existing IER structure needs to be reviewed to provide for a coherent management of research content on the one hand, and the management of resources on the other, together with a mechanism to resolve unavoidable conflicts between the two. 2.26 Financial resources. At present, Malian agricultural research is highly dependent on outside funding (para. 2.07). This dependence may not appear high when looking solely at the level of national funding (39%). It is quite high however, when one considers that very little of these funds (15%) are earmarked for operating expenditures and none for investments. External funding, on the other hand, is mostly destined for directly identifiable research operating expenditures, technical assistance and directly related investments. The result has been that for many years indirect research operating expenditures, operation and maintenance of research installations, equipment renewal and general overheads have been severely underfunded. Thus, the problem is not the level of government funding, which is quite reasonable (para. 2.07), nor its stability. The problem is the enclave approach in funding agricultural research, as practiced by the donors. De facto, government funding is in support of donor activities by paying all local staff salaries, rather than the reverse. When government funds continue to be earmarked for one category of expenditures across the board (i.e. salaries), it will be difficult to spearhead the system by earmarking government funds for priority core research activities in accordance with its own policies. The only way out of this dilemma is for government to change the system of funding and better coordinate external funding. 2.27 Human resources management. There are a number of difficult issues that remain to be resolved: (a) civil service regulations presently apply, whether for staff recruitment and transfer, incentives schemes or lay off. These regulations are in general not compatible with the performance requirements of a research institution, which requires flexibility in recruiting and deploying staff as well as an incentive system that promotes and rewards excellence, nor does it provide the grade and pay scales adequate for a scientific career path; (b) IER is faced with a difficult staffing situation. Almost half of the staff under the researcher category have not been trained as scientists (para. 2.05), they only have BSc. level education and many of them would not qualify for higher level training. At the same time, a number of well-trained scientists will be returning from overseas. IER should be able to offer them a position in the Institute, provided it has not already filled all its scientific slots;  - 13 - (c) within the context of the civil service reform and its streamlining under the ongoing Agricultural SECAL (Cr. 2163-MLI), IER has been working on a cadre organique to reduce its excess staff. However, none of this was based on well thought through position profiles combined with objective staff evaluations. To improve efficiency, there remains a need to reduce staff, whose qualifications no longer correspond to IER needs. (d) from its creation, a special unit within IER had a mandate for the planning and evaluation of agricultural development programs and projects and for carrying out any special studies as requested by the Ministry. This explains the relatively large number of social scientists in the Institute, who are nct participating in research per se. 2.28 The selected scenario of the Strategic Plan (para. 2.19) requires 122 fully qualified scientists during the first year. The number of scientists is proposed to increase to 140 by year 6. At present, IER employs approximately 20 expatriate scientists. Even taking these into account, the available skills mix is not compatible with the requirements of the Strategic Plan. The following disciplines are under represented or not available at all: agroforestry, range management, bioclimatology, biometry, rural engineering, weed science, forestry, and meat and milk processing. To correct this situation, which will take time, the selected scenario provides for overseas training of about 50 scientists over the first six years, including the requirements for the second phase of six years. However, this will need to be reviewed when the Strategic Plan is going to be updated, three years hence (para. 3.04). The scenario also recommends to regrade the large number of agricultural engineers who cannot be retained as qualified scientists, as technicians, in order to augment the present limited number of support staff (only 0.7 technicians per scientist). 2.29 Accounting system. Under the USAID-funded SPARC project (para. 3.36), IER has recently completed the design of a new budgeting and accounting system. Unfortunately, this system meets the requirements for the accounting of a 'project", not for a whole institute with financial autonomy and apparented to a commercial firm. An accounting system that meets the requirements of the new IER will have to be designed, implemented, and professional accountants recruited and trained to run it. 2.30 Evaluation of past research results. For the elaboration of the Strategic Plan, an inventory of past research results was made. However, it consisted of on-station research results. A list of technologies presently recommended by various development organizations (CMDT, Ministry's services, OHV, ON, etc.) was also elaborated. There are discrepancies between the two, and above all, except for few ad hoc studies, these technologies have not been evaluated as to their adoption rate and impact. In addition, past research results are often not well documented or accessible. There is a need therefore to take stock and evaluate all past research results so as to constitute a data base to better design research and extension activities. 2.31 The Strategic Plan represents a major step forward in defining research programs. It has the merit of establishing priorities and defining a scope for research in line with the resources available or likely to become available. In addition, because of their intensive participation, IER scientists are fully committed to it. However, some programs need to be further thought out. Such is the case of the programs on animal production, forestry and agro-forestry, natural resource management, and the economics of commodity production, processing and marketing (economie de filleres). The research approach in animal production and forestry has not been adjusted sufficiently to reflect the new conditions of the country, in particular the degradation of the natural resource base, the evolving needs of the rural populations and the changing market conditions. Nor does it take into account the lessons learned from  - 14 - past research experiences in these areas, as far as user adoption is concerned. For the &conomie des flWihres, a new program, the methodology and research approach need to be defined carefully, as well as the relationship with other programs, i.e. the commodity programs and the production systems program. 2.32 Another problem of the Strategic Plan is the unrealistic scop- of the research ervisioned for the second phase. It is not compatible with the country's and IER resources and management capabilities. It would lead to over-investment in training, equipment and infrastructure, which would have to take place during the first phase in preparation for the second one. However, more realistic investment estimates have been developed during the course of project preparation with PPF funding and a revised training and infrastructure investment plan was discussed during appraisal. At negotiations it was agreed that a formal revision of the Strategic Plan would be comrleted in 1997 prior to the mid-term review of the proposed project. 2.33 The research programming, monitoring and evaluation system within IER is presently extremely weak. A process linking the short-term research activities proposed by individual scientists to the Strategic Plan needs to be put in place. Independent external evaluations ('scientific audits') of research projects under implementation and upon their completion are presently undertaken only within the context of individual donor projects. The USAID funded SPARC project is providing technical assistance to assist IER in the design of a research programming, monitoring and evaluation system. 2.34 Physical infrastructure. In general, there is sufficient land and buildings. However, in addition to problems due to delayed maintenance, the present lay-out of the buildings and their internal organization, is inefficient, and experimental land is poorly managed. 2.35 Experiment station management. Most experiment stations have farm managers who are reasonably capable, but the station managers are often scientists with little professional knowledge of farming operations. Serious under-funding of station operations and maintenance, and a lack of forward planning, have led to practices that are detrimental to the quality of field experimentation. Major problems are in the areas of: soil and seedbed preparation, equipment maintenance and calibration, a lack of proper recording of field operations (plot history), and, most seriously, often forgotten soil homogenization measures (cultivated fallow). To overcome these problems will require a professional approach to station management, training, work programming, and better budgeting of station operations and maintenance. Training has already started with PPF funding and will be further pursued under the project. III. THE PROIECT A. Project Obiectives 3.01 The objective of the project is to implement the first six-year phase of the Strategic Plan for National Agricultural Research (Chapter II.C). The principal objective of this Plan is to ensure that adequate technology will become available to farmers as a means to increase agricultural growth and to reverse the decline in the productive capacity of the natural resource base. The proposed project will therefore aim at improving the performance of the national agricultural research system, by improving research coherence, quality, relevance and accountability for results through institutional reforms.  - 15 - 3.02 In view of persistent limitations in the availability of resources, the proposed project will help in focussing the national research effort on the priorities set forth in the Strategic Plan for Agricultural Research. In doing so, the proposed project will emphasize: (a) the testing of technologies developed elsewhere (to the extent possible, minimizing fundamental research); (b) expanding farmer- participatory research and moving faster towards on-farm testing (strengthening internal linkages); and (c) seeking regional collaboration in adapting promising technologies to local circumstances (strengthening external linkages), thereby avoiding expensive duplication of effort and seeking economies of scale through collaborative research. This is the broad outline of Government's agricultural research policy and the yardstick for the approval of research proposals. B. Summary Project Description 3.03 To meet these objectives, the project includes the following components: (a) Institutional Development: (i) transform the National Agricultural Research Council (NARC) into an entity, which integrates user representatives and through which all official funding for agricultural research is coordinated and screened; (ii) support the transformation of IER into an autonomous institution with an independent Board of Directors, and reorganize and strengthen it; and (iii) regionalize research to bring it closer to its users; (b) Technology Transfer and User Participation: (i) develop interactive processes between farmers, extension agents and researchers through farmer participation in setting research objectives and evaluating its results, to ensure research relevance and to accelerate the dissemination of research results; (ii) create a pilot User Research Fund through which research users (farmers and processors) will contract for specific research topics of interest to them; (c) Research Program Implementation and Management: (i) improve research quality and relevance through improved research programming, monitoring and evaluation methods and procedures, characterized by users' participation; (ii) provide research operating funds and introduce research contracting for the implementation of the research programs; (iii) develop a scientific information, publication and documentation unit at IER; and (iv) strengthen external linkages and support the participation of Malian institutions and scientists in regional and international collaborative research programs;  - 16 - (d) Resource Development and Management: (i) improve and strengthen experiment station development and management; (ii) design and implement a management information, accounting and cost accounting system; (iii) strengthen human resources development and management, provide in-country and overseas training, consulting services and short-term technical assistance; and (iv) rehabilitate and renew research experiment station and equipment. C. JraQt Detailed Features Institutional Development 3.04 The National Agricultural Research Council (NARC) was transformed by Decree No. 93 384/P-RM of October 14, 1993 into a body in which Government, together with the users and the major sources of Official Development Assistance (ODA) for agricultural research, will collaborate to implement its national agricultural research policy. NARC has ultimate responsibility for defining agricultural research strategy and consolidating all ODA and Government funding for agricultural research. NARC provides the forum for Government and donors to reach agreement on agricultural research policy and is their joint instrument to oversee its implementation. NARC's mandate includes the regular updating of the Strategic Plan. At negotiations. it was agreed that the first such update will be undertaken before December 31, 1997, as an input into the mid-term review (paras. 2.32 and 7.01 (a) and (b)). 3.05 Ultimately, NARC will only operate through the contracting out of research in line with the priorities defined in the Strategic Plan (para. 2.19). However, the new system will be put in place progressively, and therefore, until December 31, 1997, NARC will coordinate funding for IER in accordance with annually agreed research programs, budgets and work plans. At negotiations. it was agreed that thereafter. IER will be funded solely through contractual arrangements for individual research proposals (para. 7.01 (c)). 3.06 NARC reviews all research proposals and mandates ioint independent financial and scientific audits, i.e. for all donors, including Government. To execute its mandate in overseeing the national agricultural research system and to administer its funding, NARC has three committees and a small Permanent Executive Secretariat (PES), as follows (Chart l): (a) the Scientific Committee (SC) which reviews annually all new research proposals and propose impact evaluations, mandates regular independent external reviews of ongoing research programs, and subsequently reviews proposed adjustments; (b) the Financial Resources Committee (FRC) which reviews annually all budgets, their funding and the external financial audits;  - 17 - (c) the Users CgmMit (UC) consists of representatives of direct beneficiaries of research results - herders, farmers and processors. It deliberates in local language, administer the pilot User Research Fund and delegates representatives to NARC, the Scientific Committee and IER's Board of Directors; and (d) the Permanent Executive Secretariat (PES), consisting of a highly qualified Research Manager and a Finance Officer, supported by two secretarial/accounting staff. At negotiations, it was aereed that the SC would mandate annually the external review of five research programs. lt was also agreed that by June 30, 1997, all IER research programs would have been revigewd (para. 7.01 (d)). 3.07 The approbation of the rules of procedures and the organization of NARC, acceptable to IDA is a condition of Credit effectiveness (para. 7.02 (a)). It will include an implementation time schedule for external reviews, research contracting arrangements (para. 3.09) and arrangements for the channeling through NARC of Government funds destined for research. The nomination of the Research Manae and Finance Officer in PES. with terms of reference. gualifications and experience acceptable to IDA. is also a condition of Credit effectiveness (para. 7.02 (b)). 3.08 The National Agricultural Research Institute (IER) has been transformed by law from a service in the Ministry of Rural Development (servlce rauach6) into a parastatal institution with full financial and personnel management autonomy. The law established the Institute as an Etablissement public a caractare abninistrartf (EPA), with an independent Board of Directors and a Director General. IER's new organizational structure is presented in Chart 2. The Institution is managed by three Directors and five Regional Center Directors, as follows: (a) the Scientific Director, together with four research coordinators, responsible for the implementation of the research programs (paras. 3.18 and 3.20), each with a Program Head; (b) the Director of Technical Support Services5, responsible for operating central laboratory services in Sotuba, eight lead experiment stations and 13 substations, assisted by five Regional Center Directors for Sotuba, Sikasso, Mopti, Niono and Kayes; and (c) The Director of Financial Resources, responsible for accounting, finance and the payroll. The nomination of the Director General of IER and the three above Directors by the new Board of IER, with terms of reference. qualifications and experience acceptable to IDA. is a condition of Credit effectiveness (para. 7.02 (b)). Key to the success of IER's reorganization is the improvement of accountability through delegation of authority. Administrative management is decentralized and streamlined with direct responsibility for budget execution to be given to Program Heads and Experiment Station Managers. 51 The Director will combine this function with that of Deputv Director General.  - 18 - 3.09 Research conventions. A research convention commits IER to provide results according to an agreed time schedule, taking into account available resources. Such conventions will be concluded between IER and NARC for all Official Development Aid and Government funds. All conventions with the private sector or with public enterprises will be concluded directly with IER. The progressive introduction of research conventions serves three objectives: (a) to make the Institute and its scientists accountable fw results, the last payment on a convention would only be made upon publication of the research results; (b) to progressively constitute a permanent working capital for IER through initial advances paid prior to convention implementation; the level of IER's working capital would thus be determined by its portfolio of conventions; (c) to improve management efficiency and avoid the scattering of resources: the funds can only be used for specific research objectives; they are made available according to the terms of the convention through invoicing for services rendered, rather than being reimbursed for individual items. All new research proposals will be managed on the basis of research conventions. Upon the completion of the external review of each research program, its individual components ("research projects") will be redefined in line with the recommendations of the review and will become the subject of research conventions. A research convention comprises all direct research operating expenditures, indirect expenditures for station operation and maintenance, personnel expenditures and a reasonable share of IER's general overhead. IER will present prior to Credit effectiveness draft model research conventions acceptable to IDA and approved by the Financial Resources Committee and NARC (para. 7.02 (c)). 3.10 Given the present situation of the Institution, where the full implementation of a performing budgeting, budget control and accounting system is not expected before July 1, 1994, (para. 3.35), the introduction of research contracting should be done gradually. Its completion is expected by December 31, 1997, when all research programs will have been the subject of an external evaluation (para. 3.05). Government funding (through NARC) will be guided by a Performance Contract between the Government and IER which will contain the scope of Government's contribution and key implementation progress indicators (para. 5.19). Signatureg of this Contract is a condition of Credit effectiveness (para. 7.02 (d)). Technology Transfer and User Partidpation 3.11 To ensure that the technologies developed respond to farmers' constraints and potential and therefore stand a better chance of being adopted, well functioning linkages should be established between the four main actors of the research and technology transfer system: the users and their organizations, the extension agents, the production system scientists and, the commodity scientists. During appraisal, IER scientists and extension agents from various development agencies met for a two-day workshop to discuss technology transfer issues and linkages between research and extension. 3.12 The project will assist in the implementation of the workshop recommendations through research contracting (para. 3.09) and improving scientist-farmer-extension agent linkages. The project specifically provides for:  - 19 - (a) the implementation of a programming, monitoring and evaluation process that starts at the grassroots level and involves the above four actors (Annex 2, Appendix 3); (b) the implementation of joint scientist-farmer-extension agent activities and events, such as planned joint field days and experimental station visits; (c) the introduction of participatory research methodologies on a systematic basis, not only for the production system program, but for all the commodity programs; inherent in these methodologies are the joint conduct ar.J supervision of on-farm experimentation; (d) the additional costs of carrying out on-farm research for commodity scientists presently working solely on-station (mainly for increasing mobility); (e) the technical training of agricultural extension subject matter specialists by scientists at their regular meetings; (f) the training of subject matter specialists and scientists in communication techniques and team work; (g) the implementation of an incentive system that rewards scientists for their work with farmers and extension agents and for publications intended for the latter; and (h) the introduction of a joint research/extension impact evaluation system (para. 5.18). 3.13 Successful introduction of new technologies depends crucially on close interaction with the users at all stages of technology development and in particular at a much earlier stage than the usual ultimate one of technology testing and adapting. Participatory research methods are bringing all four actors into play to ensure earlier farmer input. Farmers enter the decision-making process for: (a) constraint analysis; (b) identification of potential solutions including farmers' indigenous knowledge; (c) on-station technology evaluation; (d) on-farm testing and evaluation; and (e) technology diffusion. The project will provide for training of commodity scientists, extension agents, farmers' representatives in these methods and cover the costs associated with their implementation (paras. 5.15 and 5.16). 3.14 User research fund. Participatory research methods are a necessary condition for fostering client-oriented research, equally important is the influence that the users are able to exert through their participation in the NARC and its Scientific Committee. But these are not enough. Farmers should have an additional way to access research, through their being able to contract for specific topics of interest to them directly. To this effect, the User Committee of the NARC will manage a pilot research fund made available to farmer or processor organizations. The idea is that farmer organizations, with sufficiently developed managerial and technical skills represent a potential for bringing research closer to its users, if they have financial muscle to exert more leverage over research priorities and portfolios. The proposals financed through the user fund should not be redundant with the ones identified though the regular programming procedures and participatory methodologies. This fund should be considered as seed money to promote farmers' ideas and innovations. Research proposals, developed either by farmers' organizations or through a collaboration between them and the scientists will be screened and selected by the User Committee with the same rigor as research proposals presented by scientists. In particular they will be reviewed by the Scientific Committee which will provide the User Committee with a technical opinion. All expenditures including overhead will be covered through the User Fund as for any other research convention (para. 3.09). The PES will manage the user fund according to the User  - 20 - Committee's decisions. The user fund will be considered as a pilot fund, initially a small one (US$0.4 million) and its functioning will be closely monitored and reviewed at mid-term evaluation before it may be replenished through a re-allocation of funds. 3.15 In order for users' representatives to be better prepared as research partners, training will be provided for members of the User Committee as well as other farmer organizations' representatives interested in collaborating with research. Training will include problem diagnosis, participatory research methods, problem definition and identification of possible solutions based on indigenous knowledge. The Permanent Executive Secretariat will manage the training funds and organize training events through collaboration between service NGOs and IER production systems scientists. Research Progrum Implementation and Management 3.16 Changes from the scenario adopted under the Strategic Plan. The research programs, made up of projects and activities included in the first phase of the Strategic Plan will be implemented under the project. A few adjustments to the Strategic Plan were agreed at the time of appraisal (para. 2.19): groundnut and bottom-land rice research that had been placed under the second phase of the Plan were brought forward; vice versa for research on floating rice. Another adjustment was the decision to open the fifth regional center (Kayes) as early as the first phase of the plan to continue groundnut research located solely in Kayes) and transfer small ruminant research away from Sotuba. These adjustments were made for equity reasons. Lowland rice and groundnut cultivation are basically women's activities. Kayes is a poor enclave region with agricultural potential, which has received little attention so far. Finally, there is a need to further decentralize research activities away from Sotuba. 3.17 Termination of research activities. According to the Strategic Plan and the above adjustments, a number of research programs and activities will be terminated immediately: research on tea, tobacco, dah, sugar cane, flood recession crops, wheat, floating rice and all horticulture and fruit crops other than vegetables, citrus, and mangoes. Scientists who have been working on these commodities will prepare a full write-up of their results before being redeployed, by April of 1994. 3.18 Research programs and themes. All research programs to be implemented under the project were reviewed during appraisal. Full agreement was reached on the objectives of all the crop research programs and the fisheries program. However, it was agreed that the following programs would need to be further developed or revised: cattle, small ruminants, poultry, production systems, natural resource management, forestry, and Oconomie des ftihres (para. 2.31). It was agreed during appraisal that these programs will be redefined before Credit effectiveness (para. 7.02 (e)). The agreed commodity and fisheries research programs include cotton, millet, sorghum, maize, cowpea, groundnut, irrigated rice, bottom-land rice, vegetables and fruits and fisheries. Details on individual research topics within these programs are presented in Annex 4. No details are provided on programs that will be redefined prior to Credit effectiveness. 3.19 Preliminary annual operating budgets for direct expenditures for each of the programs were reviewed during appraisal. A tentative composition of the teams of scientists and technicians, by program, discipline and station is presented in Annex 5. Programming. Review and Evaluation 3.20 Effective research programs, that will produce replicable results, relevant for the users require methods and proceaures tor research programming, review, and evaluation intended to improve research quality and relevance. This will include:  - 21 - (a) setting in place programming and review mechanisms that involve research users at the local and regional level (Annex 2, Appendix 3) up to the NARC level (paras. 3.06 and 5.08); (b) training of scientists in: proposal preparation (paras. 5.12 and 5.13); research methodology design and statistical analysis (Annex 2, Appendix 1); and, participatory research methodologies (paras. 5.15 and S.16); (c) regular impact evaluation carried out jointly with extension services and external/independent program review (para. 5.18 and Annex 2, Appendix 2). Documentation and Publication of Research Results 3.21 Inventory and evaluation of past research results. Past research results will be inventoried and the documentation only available outside Mali will be repatriated. Existing results will be evaluated as to their adoption rate and their impact on farmers' fields. The inventory will include a complete bibliography for future referral by scientists and will become the basis for the building of a scientific data base. The final document will serve as a reference for extension staff and for scientists to build upon existing knowledge. This is a massive but necessary undertaking, which will require the support of the CIRAD institutes and the participation of expatriate scientists who worked in Mali along with IER researchers. Therefore, it was agreed at negotiations that the inventory and evaluation of past resear!h results would be published by December 31. 1996 (para. 7.01 (e)). Mimeographed interim publications by sector and discipline will be made available to scientists and extension staff upon completion. One of the Research Coordinators will have specific responsibility for coordinating the preparation of the inventory and getting it published. 3.22 Periodic highlights. IER will have a small publication service under the responsibility of a scientific editor. He will be in charge of publishing the research highlights of the Institute in an annual report. The report will include knowledge valuable for other scientists and extension staff, and only the research results that have been sufficiently tested and evaluated on-farm to be recommended for technology transfer. During negotiations, it was agreed that the first Annual Highlights will record the results of the 1994 season and be Dublished by May 31. 1995 (para. 7.01 (f)). 3.23 Working paper series. Once the annual report publication is well etablished, IER will undertake the publication of a numbered Working Paper Series, the purpose of which will be to enable scientists to make their work known to the scientific community both inside and otutside Mali. Such a publication will not replace publication in international scientific journals, but should be considered as a first step towards it. It is aimed at helping scientists who experience difficulties in publishing in international journals. The Series will come out only when there is matter for it. During negotiations. it was agreed that a first publication would be expected by May 31. 1996 (para. 7.01 (g)). The scientific editor will be responsible for organizing a series of courses on writing skills and scientific publication. 3.24 Publication for extension services and policy makers. Training of scientists will also be necessary in oral and written communication intended for extension agents and policy-makers. Brochures on specific themes for these audiences will be published by the scientific editor in collaboration with the scientists concerned and with the extension services. At present, IER does not have a scientific editor, and when hired, he will need at least two years of training. To avoid delaying the training of scientists, the inventory and other scientific publications, IER will seek bilateral funding for long term (3 years) technical assistance (para. 3.45). Assurances were obtained at negotiations that the editor would be in place by May 31. 1994 (para. 7.01 (h)).  - 22 - 3.25 Documentation. The documentation system will be developed into an integrated scientific information system and consist of one center at IER's headquarters and secondary centers at the lead experiment stations. IER will recruit specialized services to define the operation of the system, in particular the role of headquarters vis a vis the secondary centers, and advise on the requirements for equipment and training of staff as well as the purchasing of scientific publications, books and periodicals. During negotiations. it was agreed that [ER will conclude by May 31. 1994, a turn-key contract with a specialized institution, which will include all the above listed services (para. 7.01 (i)). Participation in Collaborative Regional Research Programs (paras. 2.20 and 2.21) 3.26 NARC and TER will actively seek out scientific partners to collaborate on adaptive research programs, to build upon a larger pool of scientific resources, and to benefit from economies of scale. The collaborative programs should be acceptable to NARC (i.e. in accordance with the national Strategic Plan). The components of the program to be implemented by other partners should be fully subscribed. Malian scientists may be seconded to the country or a regional/international institution where the collaborative program is being implemented. Alternatively, the program component may be suitable for execution in Mali, in which case there is no need for such a secondment. 3.27 [ER participates in the first three regional collaborative programs to be constituted, i.e. sorghum, small ruminant production and pathology, and natural resource conservation and management. At present, the design of the regional sorghum program is the most advanced. IER presented the concept of the program at the 13th SPAAR Plenary in the Hague in December 1992, where it was well received. In the mean time, IER, INSAH and the ICRISAT Sahelian Center have agreed on a mode of collaboration for the start-up of the program, which should ultimately also integrate the research activities on sorghum executed by ICRISAT at its experiment station at Samanko. For the other two regional programs, IER will invite scientists from Senegal and Burkina Faso, the lead countries for these programs, to participate in the reformulation of its own national programs (para. 2.21) to ensure that they will be coherent with the future regional concept. 3.28 Under the project, funding has been included for Mali's participation in regional collaborative research programs. For the components to be implemented by IER, the costs are included in the research and station budgets, but not separately identified, since these are the normal costs of the national programs. Additional costs consist of the participation of Malian scientists in regional program workshops, which are included under training as scientist participation in scientific conferences and seminars (para. 3.43). The costs of regional program workshops, to be organized by Mali for the sorghum program, are included under in-country training (para. 3.43). This does not cover the costs of scientist participation from other countries, for which USAID has in principle agreed to make funds available, which will be administered jointly by INSAH and the ICRISAT Sahelian Center until IER has a performing accounting system, two years hence. Resource Development and Management Technical Support Services 3.29 The Director of Technical Support Services, together with the five Regional Center Directors, will be responsible for the management of the physical resources of the Institute, investments and purchasing. All infrastructure investments (experiment station rehabilitation, new infrastructure and land development) will be the responsibility of a Technical Coordination Unit under the Director of Technical Support Services. The design and supervision of works will be contracted out to architects and  - 23 - engineering firms. The Technical Support services will also include a Central Purchasing Unit, which will handle all international procurement of equipment and supplies and the procurement and distribution of goods that can not be purchased locally at the location of the experiment stations. 3.30 Regional center and experiment station management. The existing 32 experiment stations and permanent research sites have been reduced to 8 lead experiment stations and 13 substations. Their distribution over the 5 regional centers is presented in Annex 6. Stations not retained in the negotiation list will be closed. evidence of which will be presented prior to Credit effectiveness (para. 7.02 (f)) in the context of the establishment of IER's initial balance sheet (para. 3.36). Further reduction of substations will be considered on the basis of the results of an on-going agro-pedological survey. Substations are generally within a radius of 50 kilometers of a lead station. Scientists will reside on the lead research stations or in nearby towns, whereas on the substations only one technician will be resident. 3.31 Central service laboratories. The laboratories at Sotuba, which serve all the research programs and also provide paid services for outside institutions, will be rationalized and re-grouped as follows: (a) one laboratory for water, soil, and plant relationships (supported by KIT, Annex 9), which will also include the animal nutrition laboratory and the dOsert4fication laboratory'; (b) the food technology laboratory (supported by the SPARC Project) (Annex 9); (c) the seed certification laboratory; and (d) the fruits and vegetables post harvest technology laboratory (to be moved from its existing location near Bamako because of road construction). 3.32 The Heads of the central service laboratories will report directly to the Director of Technical Support Services. They will have separate budgets for their operating expenditures. Outside income will be allocated to these budgets, as is presently the case for the soils laboratory. Under the project, a charge-back system will be introduced. The field laboratories located at the lead experiment stations will be managed by the scientists concerned with services to be provided by the Station Manager. Their operating budgets are included in the research program budgets. 3.33 Cost recovery. Research and station budgets do not include the costs of seed production, nor do the laboratory budgets include the costs of analyses for third parties. The budgets do include the costs of germplasm maintenance. During negotiations. it was agreed that seed production and other commercial activities for third parties (including Government services) will only be undertaken under contract on the basis of full cost recovery, including a reasonable share of indirect production costs and overheads (para. 7.01 (j)). Productive activities will be under the direct responsibility of the Experiment Station Managers. They will present separate budgets for these activities and TER will only undertake such activities on the basis of firm commitments. The accounting system will provide for separate accounting of productive activities. 6/ These laboratories used to be separate before the merging of the two Institutes (para. 2.04). The dAsertification laboratory used to be with the former Forestry Research Department and was part of a now completed project.  - 24 - Flnancial Resource Management 3.34 The Director of Financial Resources will be responsible for the management of the Institute's finances. IER will have a consolidated accounting system. At IER Headquarters, the central accounting services under the Director of Financial Resources will consist of: a general accounting unit; a budget coordination and monitoring unit; a finances and billing unit; an inventory accounting unit; and a cash management and pay-roll unit. 3.35 IER will recruit an experienced international accounting firm with terms of reference acceptable to IDA, which will design and implement an integrated and computerized accounting, cost- accounting and financial information system for both NARC and IER. The firm will also prepare IER intial balance sheet. The firm should start its work by January 1994 and present a comprehensive system by the end of March 1994 for review. The proposed accounting system, revised as need be, will be introduced as of July 1, 1994. It will operate in parallel with the existing systems of individual donor- funded projects within IER. Only after the new consolidated system has proven its value will the existing systems be abandoned. Therefore, the new system should allow for the tracing of expenditures by individual source of funds. The accounting firm will be responsible for the evaluation and training of existing staff and the recruitment under contract of additional staff. It will have full responsibility for presenting the financial statements of NARC and IER at the end of the 1994 fiscal year. The firm will be released from this responsibility once these statements have been audited and the recommendations of the independent auditor have been implemented. Thereafter, if needed, the firm may be requested to continue its support in providing training and other services. Initial funds until Credit effectiveness will be provided under PPF. 3.36 Under the USAID-funded SPARC Project, the University of Texas A&M is providing long term technical assistance to assist IER in the implementation of the new accounting system. The SPARC Project will also provide soft-ware and computers for the introduction of the system. Furthermore, Texas A&M staff will assist the Director General and the future Director of Financial Resources in supervising the implementation of the contract with the accounting firm. International recruitment of an independent auditing firm and presentation of an audited initial balance sheet and the manual of accounting procedures. ready for immediate implementation and acceptable to IDA will be a condition of Credit effectiveness (para. 7.02 (t). 3.37 Internal audit. IER will have four essential operating manuals that will need to be formally adopted by its Board of Directors: * the internal organization manual; * the personnel management manual; * the manual of accounting procedures; and * the procurement manual. Other manuals, such as a station operations manual or laboratory manuals, that do not require Board of Directors approval, may be added at a later stage. An internal organization manual, a draft of which was reviewed at negotiations, will describe IER's internal organization, including terms of reference and responsibilities for key management positions. It will also include the programming, review and budgeting procedures, as well as the procedures for the participation of farmers and the extension services in this process. Prior to its adoption by IER's Board, the internal organization manual will be presented to the Scientific and Financial Resources Committee for comments. The accounting procedures and procurement manuals will also be presented for comments to the donors represented in the Financial  - 25 - Resources Committee. Adoption by IER's Board of the first three manuals acceptable to IDA is a condition of Credit effectiveness (para. 7.02 (g)). During negotiations, it was agreed that the procurement manual. acceptable to IDA, will be adopted by June 30. 1995 (para. 7.01 (k)). 3.38 An internal audit unit will be created, ;irectly under the authority of the Director General, and IER will recruit prior to Credit effectiveness an internal auditor with terms of reference and qualifications acceptable to IDA (para. 7.02 (f)) who will have two assistants. The Internal Auditor will be responsible for implementation control of the procedures described in the four manuals adopted by IER's Board and present, when needed, proposals for their improvement. Human Resources Development and Management 3.39 Under the Director General, the three Directors will have joint responsibility for human resources management and development, supported by a Human Resources Management Unit. This unit will have overall responsibility for personnel management. This includes: constituting and updating staff records, organizing the annual staff evaluation, staff and consultant recruitment, and organizing training. The recruitment of the Unit Head is a condition of Credit effectiveness (para. 7.02 (b)). 3.40 As of December 31, 1996, all IER staff will be employed under contract (either permanent or temporary). Civil service staff for whom there will be no position in the new organization will remain with the Ministry of Rural Development as civil servants. Scientific staff will be managed under a separate statute, the first draft of which has been reviewed. This statute defines career paths and the salary structure, as well as the evaluation procedures for grade changes. Non-scientific staff in managerial positions with MSc. level academic credentials (directors, experiment station and laboratory managers and a few accounting staff) will follow the same classification as the researchers. The adoption of this statute, which will provide for salary levels above civil service salaries, is a condition of Credit effectiveness (para. 7.02 (h)). The career paths and salary levels of permanent non-scientific technical and administrative staff will be defined in the personnel management manual (para. 3.37), which will also include the general employment conditions for all staff, i.e. housing allocation and allowances, vehicle allocation, transport allowances and per diem, etc.. A first draft of this manual was reviewed prior to negotiations. 3.41 Initial staff evaluation. All permanent staff will be subject to an initial evaluation to determine their new grades and where they fit in the new salariy structure. Scientific staff (paras. 2.05, 2.27 and 2.28) will be evaluated by an initial evaluation committee of independent external scientists7 on the basis of a dossier (extended curriculum vitae and publications) to be prepared by each scientist, and an interview. Prior to negotiations. initial training was provided by a human resources development specialist for scientists to prepare their dossiers. Initial evaluation criteria will be the following: academic credentials, seniority, scientific accomplishments, relations with farmers and extension services, and services rendered to IER or other institutions (teaching and training assignments, other responsibilities). Research staff with a BSc. will only be considered for a scientist position if they have a minimum of 10 years research experience. The initial evaluation committee will present recommendations as to the adequacy of the education and experience for the research program to which the scientist is or will be assigned and additional long and short term training needs. The initial evaluation committee may recommend to re-assign staff outside IER. At negotiations. it was agreed that JER will limit recruitment 7/ Including Malian scientists outside IER, scientists from neighboring countries and independent international scientists. The initial evaluation committee will consist of 15 persons. Five sub-committees will be created of three evaluators each by broad disciplinary area of expertise.  - 26 - so that the total number of scientists will not exceed 140 by December 31. 2000. in accordance with the Strategic Plan (para. 7.01 (1)). 3.42 The initial evaluation of technicians will be done by an ad hoc committee of IER scientists and managers. Their total number is expected to reach 170 by December 31, 1999, of which 130 would be assigned to the research programs and 40 to experiment station operations. This could absorb all technical staff not classified as scientists following their initial evaluation. Accounting staff will be evaluated by the accounting firm (para. 3.35) and other support staff will be initially evaluated by their immediate managers and recommendations will be formulated by an ad hoc committee of managers. The procedures for regular annual evaluations of all staff will be included in the personnel management manual. 3.43 Training. An initial training plan based on a survey of IER scientists was reviewed during appraisal. This plan was based on personal appreciation and did not take into account the requirements of the Institute. A comprehensive plan for long and short-term training will be presented following the initial evaluation. Preliminary estimates of training costs for scientists to be funded under the Credit are based on the first survey and include eight 2-year overseas scholarships for MSC. and PhD. education, and twenty 3-month overseas courses, including PhD training, based on research undertaken in Mali, with short-term course requirements abroad. Additional funds for overseas training are available from bilateral donors and are included in the project costs. Also included are ten 2-week and thirty 1-week in-country training seminars for groups of scientists on specific subjects, such as: research proposal presentation, scientific publication and post-academic training by foreign scientists and participation in scientific conferences and seminars. 3.44 On-the-job training for accounting staff is included in the contract with the accounting firm (para. 3.35). A special training plan was prepared during appraisal for station management staff and technicians, including nine 2-year scholarships for MSc. training at the University of Arkansas. Also included are ten 2-week in-country training courses for station operation staff and technicians. A first course took place in 1992 with PPF funding. A second course is being organized for January 1994 to be funded under the SPARC project. In the future, these courses will be organized under a partnership agreement with the University of Arkansas. It is expected that in three years time the conduct of these courses will be taken over by IER staff. Laboratory technicians, tractor drivers, equipment operators and workshop staff will be tested to determine on-the-job training needs. Special training will be provided for the members of the Users Committee (para. 3.15) and the training of commodity scientists, extension agents and farmer representatives in participatory research methodologies. Also included are thirty 2-day training seminars for subject matter specialists in the extension services. A preliminary training plan is presented in Annex 7. The personnel management manual (para. 3.37) will stipulate that staff benefiting from long term training will be required to stay with the Institution for at least five years after successfully completing their studies. 3.45 Technical assistance. Long term technical assistance to TER is expected to be provided by bilateral donors. Specifically, the USAID funded SPARC project will support research programming, monitoring, evaluation, budgeting, accounting and financial management. Other long term technical assistance provided by bilateral donors (mainly USAID, The Netherlands and France) includes the posting of scientists under partnership arrangements with foreign universities and other institutions (KIT, CIRAD, ORSTOM, etc.). IER will seek bilateral funding for the recruitment of a scientific editor for a period of three years (para. 3.24). IDA funding will focus on short term assistance (both local and foreign) for: the independent external research program reviews organized by NARC; the initial evaluation of IER  - 27 - scientists; the in-country training in experiment station management; and the design and supervision of experiment station rehabilitation. Some specific areas, that are complementary to bilateral technical assistance, will also be eligible for short term support, such as: support for the biometry function (experimental design, data analysis and data storage and dissemination), the in-country training in research proposal presentation and scientific publication, and the training on participatory research methodologies. For a number of these areas of support, partnership arrangements will be sought with foreign institutions to ensure continuity. IER will enter into contracts with an institution specialized in scientific information documentation and dissemination, an auditing firm, an international accounting firm and local architectural and engineering firms for the rehabilitation of its research installations. Physical Plant and Equipment Rehabilitation and Development 3.46 Capital investments to be funded under the project will include: (a) the rehabilitation of IER's headquarters in Bamako, experiment stations (buildings and grounds) and laboratories to be retained in the system (para. 3.30), and (b) laboratory, agricultural and computing equipment; vehicles; and publications, library and communication equipment. 3.47 IER's headquarters in Bamako will be modernized, in particular to make adjustments to allow for modern communications and the installation of computer equipment. Other investments will include the establishment of a research information system, which will involve bringing under a single improved management system the documentation, library, databases and publication facilities. Investments will include neceseary adaptations in IER's Headquarters, the purchase of scientific publications, software, improved communications and computer network systems, and better coordination and communication with existing documentation centers within Mali and elsewhere. 3.48 A detailed inventory was undertaken during project preparation and funded under PPF. Rehabilitation of remaining installations will focus on internal coherence of existing buildings and making them functional. Limited additional construction for office space and laboratories will be undertaken only to facilitate regionalization, i.e., moving scientists to lead experiment stations, away from Bamako and Sotuba. Houses on the lead experiment stations will be rehabilitated but no new housing will be provided since the lead experiment stations are all within commuting distance from an urban center. Rehabilitation of substations will not be undertaken during the first part of the project (until mid-term review). The need to continue operating the substations will be carefully evaluated at the mid-term review. Rehabilitation of the remaining substations will be envisioned during the second phase of the project, based upon the evaluation. It will be limited to operational buildings (equipment sheds, grain stores and drying floors) and the technician's house, if needed. No disbursements will be made for rehabilitation of substations until the mid-term review of the project (para. 7.03 (a)). 3.49 Experimental fields will be rehabilitated on lead experiment stations and, during the second phase of the project, on the substations retained after mid-term review. The purpose is to provide for a better lay-out of experimental plots; erosion control, land leveling, drainage and, where necessary, irrigation; internal communications (field roads); and fencing. Before the preparation of architectural and engineering designs for experiment station rehabilitation, IER will prepare Experiment Station Development Plans. Such plans will indicate the future use of buildings and grounds, including: proposed building occupation and working relationships, intemal communications, perimeter fencing, experimental field lay-out (based on soils and topographical data, crop rotation, regeneration requirements, etc.), and staff housing. The rationalization and modernization of the central service  - 28 - laboratories will be preceded by a laboratory study, including number and type of analyses per year and equipment requirements. No disbursements for civil works and land improvement will be made under the Credit at any given location until IER has prepared an Experiment Station Development Plan acceptable to IDA. the land has been officially transferred to [ER, and excess land and buildings have been leased or sold (para. 7.03 (b)). 3.50 Most of the equipment to be bought under the project will be for renewal or modernization. In the case of agricultural, library, communication and computing equipment, additional equipment is included to improve the quality (e.g. soil preparation equipment) or efficiency (e.g. CDROM equipment) of the operations. Field operations will be mechanized to the extent possible to improve research quality and timeliness. This will require the procurement of 26 tractors (including renewal). To facilitate commuting, 10 buses are to be procured. Under the project approximately 123 vehicles will be renewed. The presentation of an Agricultural Equipment Profile for each of the 8 lead experiment stations and surrounding substations. of a Laboratory Study (para. 3.49), and of a Computerization Plan. will be a condition of disbursement for equipment (para. 7.03 (c)). IER has retained the services of a consultant to assist in preparing the Agricultural Equipment Profiles. The Computerization Plan will be prepared following the completion of the design of the accounting system (para. 3.35), and will also include scientific, station, laboratories, documentation and publication requirements. IV. PROJECT COSTS AND FINANCING A. Cost Estimates 4.01 The overall agricultural research activities have been considered as a capital good and consequently project costs have been calculated to include both ongoing and new research activities, irrespective of the financing source. Costs also include preparation and start-up activities financed under PPF. 4.02 The total base cost of the project, net of taxes and duties, is estimated at 28.2 billion CFAF (US$104.5 million equivalent). Base cost estimates reflect April 1993 prices. Physical contingencies amounting to US$1.2 million are estimated to be 10-15% of civil works, depending on the site, and their total amounts to 1% of base cost. (Physical contingencies were applied only to civil works and not to other investment costs, where quantities have been clearly identified at appraisal). Price contingencies amounting to US$6.0 million, representing about 6% of base cost and 5% of total cost are based on average annual forecasts of international inflation for foreign supplied goods (2.8% per annum), and on estimated annual inflation in Mali for local costs (2.5% per annum). The foreign exchange portion of the total project cost is 51 %. A summary of total project cost of US$111.7 million equivalent is given in Table 4.1. A detailed breakdown by year and component is given in Annex 8.  - 29 - Table 4.1: PROJECT COST SUMMARY CPAY '000 USS million Foreign Total 1 ~~~~~~Base Local I:orcign Total Lacal Foreign Total Exchange Cost A. NARC 310,015.5 378,003.9 6S8.019.4 1.1 1,4 2.5 55 2 B. IBR/Managencnt 2,054,509.0 4,7212068.0 6.776,577.0 7.6 17.5 25 1 70 24 C. Research Programs 5.451,297.0 3,959,943.0 9,411,240.0 20.2 14.7 34.9 42 33 D. Experiment StaiDonsaad Laboratories 5,942,070.0 S,391,172.0 11,333,242.0 22.0 19.9 41.9 48 40 Total BaSe Costs 13.757.891.0 14.451,187.0 28,209,078.0 51.0 53.5 104.5 51 100 PhysiclConting. 160,716.6 150,416.6 311,133.2 3.6 0.6 12 48 1 Prioe Conting. 931,061.0 706,887.7 1 ,637,949.0 3.4 2.6 6.0 43 6 Toud Project Cost 14.849,669.0 15,308,491.0 30,158,160.0 55.0 56.7 111.7 51 107 Note: Numbers may not add due to rounding. B. Financing 4.03 The proposed IDA credit of US$20.0 million equivalent would finance 18% of project costs, net of taxes and duties. Financing would cover: civil works (new construction, rehabilitation of existing facilities and on-station development), vehicles and equipment, training, technical assistance and consultant services, and operating costs (both existing and incremental). Incremental and non-incremental operating expenditures have been considered a capital good and therefore eligible for IDA financing. 4.04 The Malian Government would finance 16% of total project costs (US$17.9 million equivalent). IER would contribute US$0.8 million from its earnings from sales of produce. Government funding would cover 26% of total research operating expenditures. 4.05 Expected donor financing, based on present commitments, would total US$47.8 million equivalent. The financing gap of US$25.2 million, represents other donor funding that is expected to contirue beyond the individual project periods of the various donors, which has not yet been committed but is assumed to continue. The financing plan is summarized in table 4.2 below, and financing by individual donor is detailed at Annex 9.  30o- Table 4.2: FINANCING PLAN (US$ Million) Other Donors IDA Govcrnment IER Committed Sought Total Investment Costs Civil works 4.6 0.8 1.7 2.4 9.5 Vehicles & Equip. 6.0 - 1.8 6.3 14.1 Uscr Research Fund 0.4 .- 0.4 Consultants Services 2.0 10.4 2.0 14.4 Training 1.0 5.0 2.1 8.1 Sub-total 14.0 0.8 - 18.9 1'.8 46.5 Recurrent Costs Operating Costs 3.0 17.1 0.8 24.9 12.4 65.2 Research 3.0 - - a/ - Conventions 6.0 17.1 0.8 4.0 12.4 65.2 Sub-total 28.9 l TOTAL 2 20.0 17.9 0.8 47.8 25.2 111.7 a/ Included under the committed funding are the operating expenditures beyond the duration of the projects of individual donors under the expectation that these costs will continue to be funded by donors under follow -,; projects. C. Government Budget Impact 4.06 The 1991-93 Government budgetary allocation for IER operating expenditures stands on the average at CFAF 825 million per annum (US$3.05 million equivalent). Government has been supporting agricultural research regularly. Over the project period, Government is expected to continue to support research at the same level, adjusted for the estimated local inflation rate. During the 6 year project period, Government's contribution net of taxes and duties would represent CFAF 4.8 billion (US$17.9 million equivalent), with each annual contribution estimated to increase by 2.5% (the average estimated local inflation rate). This represents 16% of total project costs. D. Procurement 4.07 The table below summar-'es the project elements and their estimated costs and proposed methods of procurement. Figures are, however, indicative, as the objects of IDA financing will be set each year in the light of the annual work program and other available funding.  - 31 - Table 4.3: SUMMARY OF PROPOSED PROCUREMENT ARRANGEMENTS (US$ Million Equivalent) Procurement L__________ Method ____. Project Element ICB LIB LCB OTHER NIF f TOTAL COST 1. Works 1.1 New Construction 1.5 1.7 3.2 (1.5) (1.5) 1.2 Rehabilitation/Renovation 1.3 1.4 2.7 (1.3) (1.3) 1.3 Land Development 1.8 1.8 3.6 2. Goods 2.1 Equipment, Vehicles 4.7 1.0 0.3 8.1 14.1 Purniture, Materials (4.7) (1.0) (0.3) (6.0) 3. Consultancies 3.1 Policy Support 0.6 0.6 1.2 (0.6) (0.6) 3.2 Project Preparation 0.9 6.0 6.9 + implementation Support (0.9) (0.9) 3.3 Institutional Development 0.5 5.8 6.3 ___________________ _______________ ___ _______ _ _ _ _ _ _ _ _ _ _ (0 .5) _ _ _ _ _ _(0 .5) 4. Miscellaneous 4.1 Training 1.0 7.1 8.1 (1.0) (1.0) 4.2 Recurrent Costs & 6.0 59.2 65.2 Research Conventions (6.0) (6.0) 4.3 User Research Fund 0.4 0.4 ______________ ______________ ____ _________ _ ____________(0 .4) (0 .4) TOTAL 4.7 1.0 4.6 9.7 91.7 111.7 (of which IDA) (4.7) (1.0) (4.6) (9.7) (20.0) Note: Figures in parentheses are the respective amounts financed by the IDA credit. NIF = Not IDA Financed. al Procurement financed by other donors will be donr according to their own procedures. 4.08 The Institut d 'Economie Rurale (TER) is the principal implementing agency responsible for carrying out the project, including all procurement of works and goods. The NARC, starting in the fourth year of the project, will be responsible for administering all research conventions as detailed in paragraph 3.09. This is the first IDA project in Mali using IER as principal implementing agency. For this reason, a procurement procedures manual will be adopted by June 30, 1995 (para. 3.37). During appraisal, Standard Bidding Documents for Goods and for Works (Smaller Contracts) and Letter of Invitation and Sample Form of Contract for Consultants' Services were discussed with IER staff. During negotiations. it was aereed that the use of IDA's Sample Bidding Documents. modified to suit the project requirements. will be mandatory for all procurement financed by IDA.  - 32 - It was also agreed that for fixed-price contracts. the invitations to bid will include price adjustment provisions in case the award is delayed beyond the bid validity period specified in the bidding document (para. 7.01(n)). 4.09 The legal framework for public sector procurement in Mali consists of: (a) Law No. 90-06/AN-RM of February 19, 1990, creating the Directorate General of Public Sector Procurement (Direction G6n6raIe des March/s Publics); (b) Decree No. 90-030/P-RM of even date establishing the organization and functions of the above-mentioned Directorate; and (c) Decree No. 92-059/P-CTSP of February 14, 1992, establishing in detail the responsibilities of all entities concerned with public sector procurement. The local competitive bidding procedures provided by the latter Decree are acceptable to IDA. 4.10 Civil works contracts to be financed by IDA (US$4.6 million) would be procured under local competitive bidding. This procurement procedure is warranted by the dispersed nature of the works over 25 geographically widely dispersed sites, which makes packaging of the bids in large lots impossible. The works involve construction and renovation of building and laboratory facilities at IER headquarters and at 8 experiment stations and the substations retained after the mid-term review (para. 3.48), and on-station development (irrigation networks, access roads, etc.) at experiment stations and substations. 4.11 Goods financed by IDA would include vehicles, furniture, office equipment, laboratory equipment, agricultural equipment, scientific equipment, audio-visual equipment, materials, spare parts and training materials, and would be packaged in lots of US$200,000 or more and procured using international competitive bidding in accordance with IDA's Guidelines for Procurement under IBRD Loans and IDA Credits (May 1992). Contracts for goods procured under international competitive bidding would total US$4.7 million. In the case of specialized scientific and agricultural equipment, where only a limited number of suppliers exist that can meet product specifications, procurement would follow limited international bidding procedures (US$ 1.0 million); prior agreement from IDA would be needed on the justification for limited international bidding and on the list of potential suppliers. The purchase of minor spare parts and replacement of small quantities of vehicles and equipment, estimated to cost less than US$50,000 per package, with an aggregate limit of US$300,000, would be procured using local and international shopping procedures (minimum three quotations), or IAPSO (Inter-Agency Procurement Service of the United Nations Development Program). 4.12 Consultant contracts financed by IDA would be procured on a competitive basis in conformity with World Bank Guidelines: Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency (August 1981). Prior IDA review would not apply to consultant contracts estimated to cost less than US$100,000 equivalent. However, this estception would not apply to the terms of reference for such contracts, to the employment of individuals, to single-source selection or continuation, and to assignments of critical nature, as well as to amendments raising the contract value to US$100,000 equivalent or above. Until December 1996, the project will finance research activities as IER operating costs. After that date, research activities will be carried out under contractual arrangements between IER and NARC, with IER using its in- house capacity (para. 3.09). 4.13 During the first year of the project, IDA financed works contracts above a threshold of US$200,000, and goods contracts above US$100,000 would be subject to IDA's prior review. Thereafter, and subject to review of IER's ability to handle procurement satisfactorily, the threshold will be increased to US$500,000 and US$200,000 respectively. Assurances were obtained at  - 33 - negotiations that such a review will be undertaken after the first year of implementation. The review process is expected to cover about 80% of the value of works and goods contracts, and 90% of contracts for consultant services. The Project Procurement and Implementation Schedule is outlined at Chart 4. 4.14 During negotiations, it was agreed that procurement information will be collected and recorded as follows (para. 7.01 (n)): (a) prompt reporting of contract award by borrower; and (b) comprehensive 6-monthly reports by NARC and IER to IDA indicating: (i) revised timing of procurement actions, including advertising, bidding, contract award, and completion time for individual contracts; and (ii) compliance with aggregate limits on specified methods of procurement. Procurement relating to co-donors' financed components will be carried out according to their own procedures. E. Disbursement 4.15 A schedule of disbursements is at Annex 10. The actual distribution of the proceeds of the IDA Credit will be done on the basis of annual work programs. Hence, the allocation of disbursement categories (Table 4.4) is only indicative. All categories will finance 100% of eligible expenditures, except for civil works, where 100% of foreign expenditures and 95% of local expenditures will be financed. All disbursements will be net of taxes and duties. IDA financing is shown at 100% because other donors and government will provide parallel financing for similar expenditures. The expected closing date is December 31, 2001.  - 34 - 4.16 The IDA credit would be disbursed on the basis of the categories shown in Table 4.4: Table 4.4: DISBURSEMENT CATEGORIES Category of Expenditure Proposed IDA Allocation (USS % of Expenditures Financed by IDA ______________________________million)_________________ NARC 1. Vehiclcs, Equip. and Materials 0.1 100% 2. Consultant Services 1.2 100% 3. Research User Fund 0.4 100% 4. Operating Costs 2 0.8 100% 5. Research Conventions 2.7 100% IER 6. Civil Works 4.0 100% of foreign expenditures 95% of local expenditures 7. Vehicles, Equip. and Materials 5.4 100% 8. Consultants Services 0.7 100% 9. Operating Costs e 1.4 100% 10. Refinancing PPF 0.5 Unallocated 1.8 TOTAL 20.0 A/ The term 'operating costs' means operating costs for contractual staff, travel allowances, operating and mnaintenance costs of vehicles, equipment and buildings, utilities, communications, insurance, office supplies, research and laboratory supplies. 4.17 To expedite disbursements and ensure that funds for the project are available when needed, Government would open two Special Accounts: Special Account A, operated by the NARC, and Special Account B, operated by IER. Upon -fTectiveness, IDA would advance US$250,000 in Special Account A, and US$500,000 in Speci-. Account B, representing about four months' expenditures. IDA would replenish the Special secounts upon receipt of satisfactory proof of incurred expenditures and evidence that such expenditures were eligible for financing. Monthly bank statements and reconciliation of the Special Account statements would accompany replenishment requests. 4.18 Disbursements of the IDA credit would be fully documented except for incremental operating costs and contracts valued at less than US$20,000, which would be against Statements of Expenditure (SOEs). Documentation for withdrawals under SOEs would be retained at NARC and IER for review by IDA staff during supervision missions and for regular annual audits. 4.19 Research conventions (para. 3.09) will be progressively introduced. As from January 1, 1997, all research and station operating expenditures and overheads will be disbursed through research conventions. At that time, disbursement for operating expenditures directly to IER will cease. No investment in civil works, equipment, training and consulting services will be included under these conventions. NARC will administer the research conventions and make payments as agreed under the terms of the convention. Draft standard research conventions will be presented to IDA for approval prior to Credit effectiveness (para. 7.02 (c)).  - 35 - 4.20 During negotiations, it was agreed that IER's research programs and annual budgets will be submitted for IDA's approval by December 15th of each year. after having been agreed upon by N_ARC (para. 7.01(o)). 4.21 No disbursement for rehabilitation of substations will be made prior to the mid- term review (para. 7.03 (a)). 4.22 No disbursement for civil works and land improvement will be made under the proposed Credit at any given location until the land has been ofricially transferred to IER at that location, IER has presented an Experiment Station Development Plan acceptable to IDA. and excess land and buildings have been transferred to the Ministry of Rural Development, leased or sold (para. 7.03 (b)). 4.23 No disbursement for equipment will be made before IER has presented: (i) an Agricultural Equipment Profile for each of the 8 lead experiment stations and surrounding substations. (ii) a Laboratory Study, and (iiiO a computerization Plan (para. 7.03 (c)). F. Accounting. Finance. Administration and Audit 4.24 Separate accounting of project expenditures would be kept. IER would keep accounts relating to the components under its management, and NARC for its own expenditures and those related to research conventions. An experienced international accounting firm with terms of reference acceptable to IDA, will be recruited with PPF financing to design and implement an integrated, computerized accounting, cost-accounting and financial information system for both NARC and IER (para. 3.35). Accounts would be kept according to internationally accepted accounting standards to cover as a minimum all expenditures, reimbursements received, commitments and donor funds position. 4.25 To ensure timely availability of counterpart funds, IER and NARC will each establish, not later than September 30 of each year, their quarterly budget funding requirements. Government will confirm its budgetary commitment by December 31 and will deposit, in advance, its annual budgetary contributions, in quarterly tranches, into NARC and IER accounts at a commercial bank acceptable to IDA. Agreement to this effect was obtained during negotiations (para. 7.01 (p)). It was also agreed that Government will channel its funds directly to IER, except for funds destined to finance research conventions, which will be channeled through NARC. Assurances were obtained at negotiations that as from December 31. 1996. all Government funds will be channeled through NARC (para. 7.01 (q)). 4.26 The NARC and IER accounts, project accounts and Special Accounts would be audited annually by independent auditors acceptable to IDA. The audit reports would be submitted to IDA within six months of the end of br- IER fiscal year; these reports would be of such scope and in such detail as IDA may reasonably request, including a statement on the adequacy or otherwise of the accounting systems and internal controls, the reliability of statements of expenditures as a basis for loan disbursements, the operation and use of the Special Accounts, compliance with financial covenants, and whether or not IDA funds have been used for their intended purpose. The above was agreed upon during negotiations (para. 7.01 (r)). The recruitment of the auditors on a three-year renewable contract is a condition of credit effectiveness (para. 7.02 (f)).  - 36 - 4.27 During negotiations, it was agreed that Government would prepare a project completion report within six months of the Credit closing date (para. 7.01 (s)). V. ORGANIZATION AND MANAGEMENT A. Institutional Reform The National Agricultural Research Council (NARC) 5.01 The membership in NARC's Committees and IER's Board of Directors provides for a balance between fl officio and non- officio members. The non-_ officio members will be selected for their professional expertise. To build confidence in the system, it is important that the selection procedure be transparent. During appraisal it was agreed that all non-ex officio members, with the exception of the members of the Users Committee, will be selected by an ad hoc Search and Selection Committees. Staff of IER cannot be on a Search and Selection Committee. Terms of reference for a Search and Selection Committee will be issued by the Council, which will also decide on its composition (generally not more than three). The detailed composition of NARC, its Committees and IER's Board of Directors is in Annex 11. 5.02 Membership and meetings of NARC. NARC will have 9 voting members including the president, who will be a renowned scientist. The Sector Directors of the Ministries of Rural Development and the Environment, and the Director General will participate in NARC meetings as non-voting members. There will be one mandatory meeting of the Council in November of each year. Under specific circumstances, an additional meeting can be held. Such will be the case to deliberate on the national agricultural research policy, and in particular to decide on changes in the Strategic Plan, which will be updated before December 31, 1997, prior to the mid-term review of the project (para. 3.04). 5.03 Functions of NARC. Under the authority of the Minister of Rural Development, NARC will be responsible for the preparation of the national agricultural research policy and strategy and will supervise its implementation. It will also provide a forum for the dialogue and coordination between the different parties interested in research, in particular, the donors and the beneficiaries of research results. NARC will have the following functions: a) periodically update the strategic plan for agricultural research; b) prepare the terms of reference for external scientific evaluations, examine the results of these evaluations, and propose the implementation of those which recommendations deemed relevant; c) examine the scientific quality and the relevance of new research proposals and propose the implementation of those retained by the Scientific Committee;  - 37 - d) propose a financing plan for all agricultural research upon recommendation by the Financial Resource Committee, taking into account the financial implications of new research proposals and external scientific evaluations; e) propose terms of reference for joint external financial audits, acceptable to all donors, including the Government, who make up the Financial Resource Committee and examine the results to verify that the funds have been used as planned under the agreed upon research programs; f) examine and approve the research conventions with TER or any other entity carrying out research in the field of agriculture. 5.04 Functions of the Scientific Committee (SC). The SC will have 11 members, including the chairman, who will be a renowned scientist. There will be one mandatory meeting in October of each year to: (a) review all new research proposals; (b) prepare terms of reference for and propose the composition of the independent program review teams (generally not more than three members); (c) review the recommendations of the independent review teams and subsequent program adjustments proposed by IER; and (d) review the terms of reference and the proposed methodology for the technology impact evaluations, and formulate recommendations based on their results (Annex 2, Appendix 2). Recommendations of the Committee are presented to the Financial Resources Committee (FRC) and NARC. Additional meetings will be called to deliberate on the Strategic Plan's update. 5.05 With respect to the definition of the national agricultural research policy, and in particular the regular updating of the Strategic Plan, the SC will propose terms of reference for review by the FRC and adoption by NARC. These terms of reference will include national agriculture sector priorities to which research should respond, resources allocated to those, the mandate of each research institution, the relations with regional and international research, and propose the process to be followed by the Permanent Executive Secretariat and IER to update the Strategic Plan. The process will describe the roles of IER's Program Committee and Regional Technical Committees, as well as the involvement of the extension services and the users. Once the update is completed, the SC will review the results and present these with its recommendations to the FRC and NARC for adoption. 5.06 Functions of the Financial Resources Committee (FRC). The FRC will be chaired by a high level civil servant the Ministry of Finance and include representatives of all the donors funding agricultural research in Mali (Annex 9). There will be one mandatory meeting in October/November of each year, preferably immediately following and partly coinciding with the SC meeting, to: (a) analyze the financial implications of the recommendations of the Scientific Committee;  - 38 - (b) review funding arrangements for all agricultural research and coordinate between different sources of funds; (c) monitor the introduction of research contracting arrangements (para. 3.10) and review the annual report and operations of the Permanent Executive Secretariat (PES); and (d) decide on joint donor participation in and funding of external scientific reviews and financial audits. Additional meetings will be called to review SC recommendations on changes in the Strategic Plan. The FRC will present its views on SC recommendations and funding arrangements to NARC for adoption. 5.07 Composition and functions of the Users Committee (UC). Constituting the UC presents some specific difficulties. There are many organized rural associations. Some are very specialized and do not necessarily represent the interests of a large percentage of the rural population. The representation of their leaders could also be questionable, as well as the strength of their managerial and organizational skills. Hence, few may have the potential to become research partners. There is therefore a need to investigate existing organizations to identify potential partners. Another aspect of the issue is the nation-wide effort to transfer some of the responsibilities presently carried out by government and public agencies to organized rural groups. The Government established a special commission (Mission sur la D&centralisation) to determine how this transfer could be done. The efforts to build upon farmer organizations under the present project will be linked to this undertaking. The composition of the first Users Committee and procedures to replace its members, including criteria for selection, will be determined through a local consultation with PPF financing. 5.08 The UC will have two functions: (a) through the operation of the pilot User Research Fund (para. 3.14) let research conventions that are of immediate interest to farmer organizations; and (b) through the delegation of one of its members to NARC, and two to the SC and IER's Board of Directors influence agricultural research policy, decisions on the research agenda, and improve transparency in decision making. 5.09 Composition and functions of the Permanent Executive Secretariat (PES). The PES will consist of a Research Manager, a Finance Officer and two secretarial/accounting staff. The Secretariat will be responsible for day-to-day implementation of policy decisions and have the following tasks: (a) to organize with IER the preparation and regular updating of the Strategic Plan according to terms of reference prepared by the SC and adopted by NARC; (b) to prepare guidelines for research proposal presentation (in collaboration with IER (para. 5.12)), progress reporting, financial accountability, and the preparation of standard research conventions (para. 3.09);  - 39 - (c) to act as a secretariat to the NARC, SC and FRC, organize their meetings, disseminate their reports and organize the recruitment of the non-a officio members through the ad bD& Search and Appointment Committees (para. 5.01); (d) to act as a secretariat to the UC, organize their meetings and follow up on the implementation of research conventions let by the UC; and (e) to ensure the appropriate and timely mobilization and administration of funding from national and external sources, including the administration of the User Research Fund. The Permanent Executive Secretary (the Research Manager) will be proposed by a selection committee consisting of three NARC members, designated by the chairman, and the Director General of IER. The composition of NARC, the SC, and the FRC is stipulated in the Decree creating NARC. Their renewal procedures and modus operandi will be specified in NARC's procedures manual, a draft of which was reviewed at negotiations (para. 3.07). The National Agricultural Research Institute (IER) 5.10 Functions of IER's Board of Directors. IER's Board of Directors will consist of 9 voting members including the president who will be the Minister of Rural Development. Whereas NARC and its Committees will provide for joint (Government and donors) and independent scientific oversight and coordination of funding, IER's Board will provide for management oversight. Its functions will specifically include: (a) monitor the implementation of NARC's decisions affecting IER; (b) propose the appointment of the Director General and define his/her mandate (five years, once renewable)8; (c) appoint the Scientific Director, the Director of the Technical Support Services, and the five Regional Center Directors upon recommendation of the Director General; (d) decide on management policy by adopting the four management operation manuals (para. 3.37) and deciding on their modification upon recommendation of the Director General; and (e) approve the annual budget and financing plan, verify implementation of audite recommendations and approve the annual accounts. The statutes of IER will provide for two mandatory Board meetings each year: once before the end of the fiscal year and following NARC's meeting in November to approve the budget and financing plan, and secondly, following the annual audit to formally approve JER's accounts. 8/ The Director General will be selected by an ad hoc Search and Selection Committee under terms of reference issued by the Board. His nomination will be confirmed by Decree of the Minister of Rural Development. 2/ IER's statutes will provide for the nomination by the Board of an independent auditor.  - 40 - B. Research Management The Planning Process 5.11 Planning and programming of agricultural research in Mali recognizes three levels: (a) strategic planning. NARC is responsible for the preparation, regular review and updating of the National Strategic Plan for Agricultural Research (para. 3.04). External program evaluations, every three years, are one of the inputs for the strategic planning exercise. The Strategic Plan provides broad guidelines and only identifies research themes, their priorities for the long term and an envelope of resources. (b) research proposal preparation. The scientists, in liaison with extension agents and the users, must then develop these themes into full-fledged research proposals. NARC reviews and approves a proposal with its budget, which implies that the resources necessary for its implementation have been committed for the duration of the research project, unless the external review of the program to which the project belongs calls for adjustments. (c) annual review, programming and budgeting. Though activities and resources have been a freed upon at research project approval stage, they have to be adjusted annually in lig it of previous year results. A detailed annual budget also needs to be prepared. A detailed description of the research programming and review cycle is presented in Annex 2, Appendix 3, and Chart 3. Research Proposal Preparation 5.12 The Scientific Director of IER will prepare in close collaboration with the PES detailed guidelines for research proposal preparation and presentation and will provide Program Heads and scientists with regular training in their use. The first such training will take place prior to the start of the 1994 programming and review process, that is before March 1994. In principle a research proposal should always include the following elements: * a constraints analysis * problem definition * a "state-of-the-art" of research results, not only in-country but including a review of on-going research in neighboring countries as well as results from international research) * definition of research objectives * description of individual research activities, corresponding to the objectives * selection and justification of research methodology * proposed experimental design and methodology for statistical analysis * key indicators (bench marks) for the monitoring of progress and evaluating impact * a budget. 5.13 Research proposal guidelines will include mandatory provisions for economic justification. A description of how extension agents and users have been involved in project preparation and how they will continue to be involved in project implementation will be an integral  - 41 - part of all research proposals. In so far as many research results users are women, proposals will take into account the specific role played by them and their particular needs and constraints in production and processing. Finally, the proposal will indicate how the research project is integrated into the regional context (coherence and complementarity with neighboring countries and international centers initiatives in the area). The guidelines. acceptable to IDA. will be reviewed by the SC and adopted by NARC prior to Credit effectiveness (para. 7.02 (c)). C. Training Program 5.14 The project includes an extensive training program (paras. 3.43 to 3.45) which was discussed in detail during appraisal. A summary is provided in Annex 7. It is important that IER will develop a training culture. That is why the directors will have first-line responsibility for training, each in his domain. The Scientific Director will be responsible for overseas and in-country training of scientists, as well as for training provided by IER scientists. One of the Research Coordinators will have specific responsibility for training, including identifying convenient universities for overseas training, identifying technical assistance for grouped in-country training of scientists, and organizing and developing course material for training provided by IER scientists. A second Research Coordinator will be responsible for the planning and development of course material, with the extension services, for training to be provided by IER scientists for subject matter specialists; and for organizing the training in participatory research methodologies (para. 5.15). The Director of Technical Support Services will be responsible for training of station management and operating staff, also including on-the-job training to be provided by laboratory, station and farm managers. The Financial Resources Director will be responsible for the training of accounting staff and monitor the training to be provided by the accounting firm (para. 3.35). Training in Participatory Research Methodologies 5.15 This training is intended for scientists (both commodity and production system scientists), extension agents and other research partners. It is hoped that if research users and extension agents understand the research methodologies used, they will be able to better participate in the various stages of technology development and will become more effective research partners. Particular attention will be given to the training of scientists and extension staff in taking into account the specific needs and potentials of women users of research results. The techniques and approaches in participatory research are gender specific. 5.16 The training will be based upon the Dutch financed farming systems research program in Sikasso. This project, which is now at the beginning of its sixth phase, has accumulated a considerable amount of experience in participatory research methods. The Dutch Cooperation agreed to use its technical experts to capitalize upon the Sikasso experience and provide training to IER scientists from other regions and programs. Training of farmers will also build upon the Sikasso experience, but will be carried out in local languages, by Malian NGOs. There are NGOs in Mali who are already providing village associations training in rapid rural appraisal techniques and other aspects of participatory research methodologies. Under the project, additional train-the-trainers courses will be provided with the assistance of a specialized institution. In addition to the short term training, the Dutch team will continue to provide back-up and technical support to scientists in the four regional centers (other than Sikasso) through regular visits to ensure proper implementation of the methodologies. This additional back-up is expected to last for two years.  - 42 - 5.17 The Human Resources Management Unit will be responsible for providing logistic support for IER's training program, including the organization and administration of both overseas and in-country training, the recruitment of external trainers, course and trainer evaluation, and keeping records of training received by IER staff. D. Impact Monitoring and Evaluation 5.18 The Malian agricultural research system recognizes three distinct evaluations of the (possible) impact of research, as follows: (a) the x_ a_te evaluation, i.e. the mandatory economic justification accompanying new research proposals (para. 5.12), based on expected results; (b) the a posl evaluation, i.e. the expected impact of new technology upon its release for dissemination, i.e. the actual performance of the technology in on-farm testing; and (c) the impact evaluation, i.e. impact on production as measured by farmer adoption rate of new technology and productivity increase. T-he e