Cameroon - Second Western Province Rural Development Project

Dment of Tle World Bank FOR OMCIL USE ONLY Repwt No. 12455 PROJECT COMPLETION REPORT CAMEROON SECOND WESTERN PROVINCE RURAL DEVELOPMENT PROJECT (LOAN 2406-CM) NOYEMBER 5, 1993 MICROGRAPHICS Report No: 12455 Type: PCR Agriculture Operations Division Occidental and Central Africa Department Africa Regional Office This document has a restricted distributon and may be used by recipients only in the performanoe of their official duties. Its conteots may not odwise be disclosed without World Bank authorization.  PROJECT COMPLETION REPORT CAMEROON SECOND WESTERN PROVINCE RURAL DEVELOPMENT PROJECT (Loan 2406-CM) CURRENCY EOUIVALENTS 1983 400 FCFA = US$ 1.00 1984 440 FCFA - US$ 1.00 1985 444 FCFA = US$ 1.00 1985 444 FCFA = USS 1.00 1986 334 FCFA = US$ 1.00 1987 303 FCFA = US$ 1.00 1988 305 FCFA = USS 1.00 1989 _i8 FCFA = USS 1.00 1990 359 FCFA - US$ 1.00 1991 298 FCFA - US$ 1.00 1992 240 FCFA = US$ 1.00 WEIGHTS AND MEASURES (Metric System) ABBREVIATIONS AND ACRONYMS BCU - Bottomlands Cultivation Unit (UCCAO) DEP - Studies and Projects Department (Ministry of Agriculture) DGRST = National Scientific and Technical Research Delegation DPA = Provincial Delegation of Agriculture PONADER National Rural Credit Fund Genie Rural - Rural Works Department of Ministry of Agriculture IRA R Agrucultural Research Inttitute IRD - Integrated Rural DeveloIment MINAGRI = Ministry of Agriculture ONCPB = Eiport Crop Price Stabilization Board PCC = Project Coordinat ang Committee PYC Project Year UCCAO = Central Agricultural Cooperative Union of the Western Province FISCA YEAR UCCAO: January 1 to December 31 (October 1 to September 30, as from 1983) Government: July 1 to June 30  FOR OMCLAL UOY THE WORLD BANK Washngton, D.C. 20433 U.S.A. Office of Olreotor-IeneraI Opewions Evaluaion November 5, 1993 MEMORANDUM TO THE lXCTIiVE DIREClR ORS AND THE PRES1DENT SUBJECT: Project Completion Report on Cameroon Second Western Province Rural Develo_mnent Prolect (Loan 2406.CM) Attached is the Project Completion Report on Cameroon - Second Wectem Province Rural Development ProJect (Loan 2406-CM). Parts I and iII of the PCR were prepared by the Africa Regional Office, while Part II was prepared by the Borrower. The Africa Regional Office has indicated that the cofinrncier (IFAD) concurs with the findings of the PCR. The project followed the Westem Highlands Rural Development Project (Credit 784- CM/PAR dated June 1990) with the objectives of consolidating and improving existing operations and extending them to the whole of the province. Main ccmponents were food crop production. quality improvement and marketing of coffee, strengthening of cooperatives and further integration of project services with routine provincial operations. Implementation was dogged by shortage of local funding, lack of staff skills to implement some components and poor relations between the project management and the provincial agencies. The project was restructured, but eventual results after a two-year extension of the Credit were dlsappointing even so. Coffee production fell rather than increased (because of reduced farmer interest as output prices felil, and food crop production and physical infrastructure results were well below targets. Typically for such integrated rural development approaches, the Govemment is unable to finance operations without further assistance and consequently sustain- ability of the project investments is rated as unlikely. The Govemment and the Bank have discarded the regional approach to rural development In favor of improving services to agriculture at the national level. Inadequate data did not permit re-estimation of the economic rate of return, but it would be significantly lower than the SAR's 30 percent. Overall performance of the project is rated as unsatisfactory, with institutional objectives being achieved only partially (mainly some good results with farmer cooperatives). The PCR provides an adequate account of the project experience with the following points of note: Part 11 (by the Borrower) states that the project achieved most of its objectives whereas Part I (by the Bank) says that the project largely failed to meet its objectives; both Parts I and 11 criticize Bank supervision early on as inadequate and inconsistent (priorities changed with frequent changes of Bank staff); and that the project design was flawed in not taking into account problems being experienced by the first project. An audit is planned. Attachment This docunent has a restricted distribudon and may be used by recpients ony In the pefonnance of their offici dutes. its contents mny not otherwise be disclosid wihout Word Bank authoization.  FOR OFmFCIAL USE ONLY PROJECT COMPLETION REPORT CAMEROON SECOND WESTERN PROVINO RURAL DEVELOPMENT PROJECT (LOAN 2406-CM) TABLE OF CONTENTS Page No. PREtACE . . .. . . . . . . . . . . . . . ... ....... ...................................1 EVALUATION SUNMARY . ii. . . . . . . . . . . . . . . . . . * . . . . . PART Is PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity . . . . . . . . . . . . . . . . . . . . 1 2. Background . . . . . . . . . . . . . . . . . . . . . . . 1 3. Project Objectives and Description . . . . . . . . . . . 1 4. Project Design and Organization . . . . . . . . . . . . 2 S. Project Implementation . . . . . . . . . . . . . . . . . 3 6. Project Results . .... . . - . 4 7. Project Sustainability . . . . . . . . . . . . . . . . . 5 83. Bank's Performance . . . . . . . . . . . . . . . . . . . 6 9. Borrower's Performance . . . . . . ... . . . *.. . . . 7 10 Project Relationships ..... . . . ............ .... 7 11. Consulting Services . . . . . . . . . . .. . . . ... 7 12. Project Documentation and Data . . . . . .... . . . . 7 PART IIs PROJECT REVIEW PROM BORROWER'S PERSPECTIVE 1. Bank's Performance . . . . . . . . . . . . . . . . . . . 9 2. Borrower Performance . . . . . . . . . . . . . . . . . . 9 3. Co-financier Performance . . . . . . . . . . . . . . . . 13 4. Lessons Learned . . . . . . . . . . . . . . . . . . . . . 13 PART IIIs STATISTICAL INFORMATION 1. Table 1: Related Bank Loans & Credits ... * . . . *. . 14 2. Table 2: Project Timetable . . . . . . . . . . . . . . 15 3. Table 3: Loan Disbursements . . . . . . . . . . . . . . 16 4. Table 4: Project Implementation . . . . . . . . . . . . 17 5. Table 5: Project Costs and Financing . . . . . . . . . . 18 6. Table 6: Project Results . . . . . . . . . . . . . 20 7. Table 7: Status of Covenants . . . . . . . . . . . . . 21 8. Table 8: Use of Bank Resources . . . . . . . . . . . . 22 This document has a resticted distribution and may be used by recipients onlY in the Performance of their official duties. Its contents may not otherwie be disclosed without World Bank authorization.  PROJECT CQMPLETION REPORT CAMEROON SECOND WESTERN PROVINCE RURAL DEVELOPMENT PROJECT (LOAN 2406-CM} PREFACE This is the Project Completion Report (PCR) for the Second Western Province Rural Development Project in Cameroon for which Loan 2406-CM, in the amount equivalent to USS 21.5 million was approved on April 17, 1984. The Loan Account was closed on April 30, 1993, about two and half years behind schedule. The Loan was fully disbursed. The last disbursement was made on March 30, 1993. IFAD co-financed the Project with a loan of US$ 14.5 million for a term of 20 years at an interest rate of 4%. The Preface, Evaluation Summary and Parts I and III of the PCR were prepared by the Agriculture Operations Division, Occidental and Central Africa Department, Africa Region. Part II was prepared by UCCAO on behalf of the Borrower. The PCR is based inter alia on the Staff Appraisal Report, the Loan Agreement, supervision reports, internal Bank memoranda, and correspondence between Bank and the borrower.  - iii - PROJECT COMPLETION REPORT CAMROON SECOND WESTERN PROVINCE RURAL DEVELOPMENT PROJECT (LOAN 2406-CM) EVALUATION SUMMARY Project Obiectives and Desian 1. The project aimed to expand ongoing operations under the first Western Highlands Rural Development Project (Cr. 784-CM) to the whole of the Western Province with the aim of reaching 85,000 farmers, or about 60% of the rural population. The project was in line with Government's policy, which aimed at modernizing agriculture, accelerating regional development, and improving the standard of living of the rura.l poor, while reducing income disparities. In support of the Government's program, the project was to provide an institutional framework in extension, training, provision of improved seeds, fertilizers, insecticides and credit to farmers. Also included were soil conservation, bottomlands development, village water supply, construction and maintenance of feeder roads, and processing of coffee. Imnlementation Exoerience. 2. The project was originally scheduled to be completed by December 31, 1990. However, due to substantial changes in the projzct design and the suspension of disbursements by IFAD since July 16, 1991, the closing date of the project was extended twice to December 31, 1992. In addition, lack of Government funding since 1988 led to several reallocations of the proceeds of the Loan. However, the shortage of counterpart funds should not necessarily be construed as lack of Government support to the project, since it resulted from economic constraints and affected several projects in a similar way. 3. Prior to 1988, frequent changes in Bank supervision personnel led to missions advocating different ideas and policies which confused the UCCAO personnel. However, this was ironed out by the appointment of an agricultural specialist in the resident mission in Yaounde in late 1987 which made it easier to maintain a regular dialogue with UCCAO management and establish better relations and understanding of the problems and issues involved. The improved relationship contributed to positive changes in project implementation. The frequency of the Bank missions did not increase but these became more consistent and regular. UCCAO's performance, in general, was satisfactory only for those components for which they had the necessary experience and technical competence; however, performance was poor for components such as, extension, training, applied research and was generally good. Proiect Results 4. The project largely failed to meet its objectives. The quantitative achievements of the project were poor: the actual annual production of coffee fell. The achievements related to the provision and sale of pesticides, enhancement of the quality of coffee beans through streamlined coffee processing, improved coffee marketing, strengthening of the organization and management of UCCAO's member cooperatives, and strengthening of the monitoring and evaluation unit at the central level in the Ministry of Agriculture. The production of vegetables in the bottomlands, a component  - iv - added during implementation, waS also successful. The infrastructure components of drinking water supply, the construction and maintenance of feeder roads, and soil conservation were considerably scaled down. After poor Implementation, agricultural training, extension and research were transferred to their line Ministries and integrated in the National Extension and Training Project when it became effective in 1991. 5. It is difficult to estimate the number of project beneficiaries. Nonietheless, there are indications that a large number of male and female farmers benefited directly or indirectly from project activities, especially through the program of diversification, provision of pesticides, and distribution of improved seeds to increase food production. A soil protection program initiated at the start of the project was later transferred to the ational Extension and Training Project. Lack of data prevented an estimation of the project's Economic Rate of Return (ERR), but low ceffee production and falling prices for coffee and several major food crops would all contribute to a lower economic rate of return than the 30% estimated at appraisal. Sustainabilitv 6. Financially, the project is unsustainable. Under the current financial situation and based on past experience, neither the Government nor UCCAO will be able to finance the project's activities. In fact, Government financing of the project stopped in 1987/88. Moreover, everyone came to realize that implementing rural development projects through regional entities was not technically or institutionally viable, since they had to rely for support services on their parent Ministries with whom they were competing for scarce financial resources. 7. On the other hand, UCCAO provided assistance to member cooperatives in financial management and training, and services of input supply and marketing. These components were very well implemented and should remain sustainable. UCCAO has also been instrumental in organizing bottomland farmers into small-holders' associations for the production and sale of agricultural products on both the local and export markets. It is too early to judge whether horticul4xtral exports will become a viable activity since much will depend on Cameroon's competitiveness in the world market, and on a favorable rate of exchange. Findinas and Lessons learned 8. The main lessons learned can be summarized as follows: (a) the project design did not take into account the lessons learned in the previous project and consequently perpetuated the failings of the previous project; (b) the lack of continuity in membership of supervision missions and inconsistency in the advice given to the implementing agency during the early years of the project, confused the staff of the implementing agency and resulted in a poor relationship between the Bank and implementing agency; (c) the level of Bank supervision was inadequate for a project in which many of the components were not being satisfactorily implemented; (d) cooperation and mutual assistance between the implementing agency and the line ministry was hindered by both competing for resources and was exacerbated by the lavish logistical support and perks given to the implementing agency;  (e) the implementing agency was unable to carry out functions for which it lacked the technical and organizational capacity and capability; (f) the implementation of this integrated rural development project through a regional entity was not financially, technically or institutionally viable or sustainable; (g) the production of coffee, the main crop being promoted, was influenced more by externalities than by factors within the domain of the project; and (h) the implementing agency did not provide, and the Bank did not insist upon, adequate monitoring and quantitative data collection.  PROJECT COMPLETION REPORT CAMEROON SECOND WESTERN PROVINCE RURAL DEVELOPMENT PROJECT (LOAN 2406-CM) PART I: PROJECT REI FROM BANK'S PERSPECTIVE 1. Proiect Identity Project Name Second Western Province Rural Development Project Loan No. 24QC-CM RVP Unit : Occidental and Central Africa Department Country Cameroon Sector Agriculture Sub-sector Rural Development 2. Backaround 2.01 Sector Development Obiectives. At the time of appraisal, Cameroon had experienced 15 years of economlc growth. Real GDP increased by an average of 4.2% per year during 1961-71 and rose to an estimated 9% per annum during 1971-81. The Cameroonian economy was also experiencing a rapid structural transformation due to the exploitation of oil. In 1977/78, agricultural commodities accounted for 72% of all export earnings, with cocoa and coffee alone accounting for 53%. By 1981/82 these had fallen to an estimated 28%, while oil had risen to some 63% of export earnings. However, Government expected that oil revenues would dwindle by the mid-1990s, at which time agriculture would once again have to become the main source of growth. Therefore, in the medium term, Government sought to pursue structural. changes in agriculture to eatablish a firm base fo. future growth. This included greater emphasis on improving social amenities in rural areas, and projects for raising the productivity of smallholders. Principal constraints to the implementation of these plans were inadequate extension services, weak institutions, inappropriate research, poor roads, and inefficient input supply and marketing arrangements. 2.02 Policy Context. Since the late 1970s, Government had pursued a policy of decentralization by creatinc specialized institutions for managing and implementing sub-sector and rural uevelopment projects. A majority of these institutions and regional development agencies operated as independent entities, leaving the ministry of Agriculture and other parent Ministries and Provincial delegations with only a supervisory role. Hence, vesting project execution powers in an existing regional agency, such as UCCAO, was consistent with GOC's rural development policy and continued the practice of the first project. At this time, the Bank was changing from a pro-IRD policy to sectoral approaches of discouragement of creating parallel services. 3. Proiect Obiectives and DescriRtions 3.01 Proiect Obiectives. The project aimed to consolidate and improve the existing operations under the first Western Highlands Rural Development Project (Cr. 784-CM), and to extend these to the whole of the Western Province. The focus was on promoting sound food crop husbandry, improving coffee quality and marketing, strengthening cooperatives, and further integrating project services with routine provincial operations.  3.02 Proiect Components. The above objectives were to be achieved through a five-year project which included the following components: (i) quantitative and qualitative improvement of coffee and food crop production by the provision of incremental fertilizers and pesticides; strengthening the organization of the crop protection service for coffee; and improvement in crop drying and storage techniques; (ii) expansion and streamlining of UCCAh 4. agricultural trairning and extension services to cover all six Jepartments of the Western Province, including the recruitment of extension agents and "intendants" to improve the planning and control of extension services and support the reorganization of cooperative service centers; and female extension agents to focus training and extension activities on food crop production for women; (iii) enhancing the organization and management capacity within UCCAO, particularly through strengthening its administration and financial management and affecting similar improvements in the operations ct cooperatives; revision of farmer credit operations and training all levels of cooperative staff; (1v) acceleration of soil conservation and reforestation measures, and drainage and cultivation of bottomlands; (v) adaptive research which would concentrate on improving on-farm technology and coffee processing, and increasing the supply of elite food crop seeds for multiplication; (vi) reorganization of the coffee seed nurseries and enlarging the seed farm to increase the supply of improved food crop seeds; 4vii) construction of 450 village water points to improve public health and to facilitate coffee washing operations, for which collective pulpers and drying trays would also be provided; (viii) reorganization and streamlining of coffee processing and marketing, including modernization of cooperatives, factories and construction and improvement of processing facilities for UCCAO; (ix) construction, upgrading and periodic maintenance of 500 km of category B feeder roads to facilitate delivery of inputs and evacuation of agricultural products; and (x) strengthening the existing monitoring and evaluation units at project and national levels; and development of MINAGRI's evaluation capacity in the Province. 4. Proiect Desian and Oraanization 4.01 Conceptual Foundation. The design of the Second Project was similar to that of the First Western Highlands Rural Development Project (Ln. 784-CM), which was appraised in May 1977 and closed in June 1984. The Second Project was to extend and consolidate operations in the entire Western Province. The project was in line with Government's policy of modernizing agriculture, accelerating regional development, expanding food crop production and improving the standard of living of the rural poor, while reducing income disparities. In support of the Government's program, the project was to provide farmers with extension, training, improved seeds, fertilizers, insecticides and credit. Also included were soil conservation, bottomlands development, village water supply, construction and maintenance of feeder roads and processinx