Tanzania - Participatory Agricultural Development and Empowerment Project

Page 1 Document of The World Bank Report No: 25792 PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 41.5 MILLION (US$56.58 MILLION EQUIVALENT) TO THE UNITED REPUBLIC OF TANZANIA FOR A PARTICIPATORY AGRICULTURAL DEVELOPMENT AND EMPOWERMENT PROJECT April 28, 2003 Eastern and Southern Africa Country Department 4 Africa Regional Office Rural Development Operations Page 2 CURRENCY EQUIVALENTS (Exchange Rate Effective April 28,2003) Currency Unit = Tanzania Shillings (TZS) USSl = TZS 1037.5 AMSDP ASDP ASDS APL CAS CDD CDO CIS CMDO DADPs DALDO DDP DED DFID DMT EAC EL4 EMP ESRF FA0 FGIS FREM HIV/AIDS = ZAPS0 = IDA - IFAD - IFMS - IFPRI - IPM IPNS - JICA - LGRP = MAFS = MANREC = MASAF = MCM - MIS - MOF - MWLD = - - - - - - - - - - - FISCAL YEAR July 1 -- June 30 ABBREVIATIONS AND ACRONYMS Agricultural Marketing Systems Development Program Agricultural Sector Development Program Agricultural Sector Development Strategy Adaptable Program Lending Country Assistance Strategy Community Driven Development Community Development Officer Community Investment Subprojects Community and Marketing Development Officer District Agricultural Development Plans Districts Agricultural and Livestock Development Officer District Development Plans District Executive Director Department for International Development, UK District Management Team East African Community Environmental Impact Assessment Environmental Management Plan Economic and Social Research Foundation Food and Agriculture Organization of the United Nations Farmer Group Investment Subprojects Farmer-Research-Extension-Marketing Human Immunodeficiency Virus/ Acquired Immunodeficiency Syndrome Inter-Agency Procurement Services Officer of the United Nations International Development Association International Fund for Agricultural Development Integrated Financial Management System International Food Policy Research Institute Integrated Pest Management International Plant Nutrition TechniquedStrategies Japan International Cooperation Agency. Local Government Reform Program Ministry of Agriculture and Food Security Ministry of Agriculture and Natural Resources, and Cooperatives Malawi Social Action Fund Ministry of Cooperatives and Marketing Management Information Systems Ministry of Finance Ministry of Water and Livestock Development Page 3 NAEP = NARS = NPSC - NTSC = OED - PADEP = PCU - PM&E = PMMP = PMO - PMR - PO-RALG = PRA PRS - PRSC - PRSP - RAS RBMSIIP = RDS - SACCO = SADC = SGR - SIA - SIDA - SIL - TADREG = TARPII = TASAF = TIC - WFP - ZPSC - ZTSC - ZRELO = - - - - - - - - - - - - - - - - - - - - - National Agricultural Extension Project National Agricultural Research System National Project Steering Committee National Technical Steering Committee Operations Evaluation Department, The World Bank Participatory Agricultural Development and Empowerment Project Project Coordination Unit Participatory Monitoring and Evaluation Poverty Monitoring Master Plan Prime Minister's Office Project Management Reports President's Office - Regional Administration and Local Government Participatory Rural Appraisals Poverty Reduction Strategy Poverty Reduction Support Credit Poverty Reduction Strategy Paper Regional Administrative Secretaries River Basin Management Rural Development Strategy Savings and Credit Cooperative Southern Africa Development Commission Strategic Grain Reserves Social Impact Assessment Swedish International Development Agency Specific Investment Loan Tanzania Development Research Group Tanzania Agricultural Research Project Tanzania Social Action Fund Tanzania Investment Center World Food Program Zanzibar Project Steering Committee Zanzibar Project Technical Committee Zonal Research and Extension Liaison Officer Vice President: Callisto Madavo Country Director: Judy M. O'Connor Sector Manager: Karen Mcconnell Brooks Task Team Leader: Ladisy Chengula Page 4 Page 5 TANZANIA PARTICIPATORY AGRICULTURAL DEVELOPMENT AND EMPOWERMENT PROJECT CONTENTS A. Project Development Objective 1. Project development objective 2. Key performance indicators B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2. Main sector issues and Government strategy 3. Sector issues to be addressed by the project and strategic choices C. Project Description Summary 1. Project components 2. Key policy and institutional reforms supported by the project 3. Benefits and target population 4. Institutional and implementation arrangements D. Project Rationale 1, Project alternatives considered and reasons for rejection 2. Major related projects financed by the Bank and/or other development agencies 3. Lessons learned and reflected in the project design 4. Indications of borrower commitment and ownership 5. Value added of Bank support in this project E. Summary Project Analysis 1. Economic 2. Financial 3. Technical 4. Institutional 5. Environmental 6. Social 7. Safeguard Policies Page 2 2 2 3 5 7 10 11 12 18 19 20 21 21 22 23 23 25 28 31 32 Page 6 F. Sustainability and Risks 1. Sustainability 2. Critical risks 3. Possible controversial aspects G. Main Credit Conditions 1. Effectiveness Condition 2. Other H. Readiness for Implementation I. Compliance with Bank Policies Annexes Annex 1 : Project Design Summary Annex 2: Detailed Project Description Annex 3: Estimated Project Costs Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary Annex 6: Procurement and Disbursement Arrangements Annex 7: Project Processing Schedule Annex 8: Documents in the Project File Annex 9: Statement of Loans and Credits Annex 10: Country at a Glance Annex 11: Summary of Environmental Assessment 32 34 36 36 36 37 38 39 43 49 50 61 62 75 77 78 80 82 MAP( S) Map of Tanzania Page 7 TANZANIA Participatory Agricultural Development and Empowerment Project Project Appraisal Document Africa Regional Office AFTRl Date: April 28,2003 Sector ManagedDirector: Karen Mcconnell Brooks Country ManagedDirector: Judy M. O'Connor Project ID: PO67103 Lending Instrument: Specific Investment Loan (SIL) Team Leader: Ladisy Komba Chengula Sector(s): General agriculture, fishing and forestry sector (70%), Sub-national government administration (30%) Theme(s): Rural services and infrastructure (P), Other rural development (p) [ ]Loan [XI Credit [ ]Grant [ ]Guarantee [ ]Other: For LoanslCreditdOthers: Amount (US$m): 56.58 Proposed Terms (IDA): Standard Credit Grace period (years): 10 Years to maturity: 40 LOCAL COMMUNITIES 11.83 I 0.00 ~ 11.83 I ~ I ~- Borrower: GOVERNMENT OF TANZANIA Responsible agency: MINISTRY OF AGRICULTURE AND FOOD SECURITY Address: Kilimo 111, P.O. Box 13798, Dares Salaam, Tanzania Contact Person: Simon Muro, Project Coordinator Tel: (255-22) 286-2595 Fax: (255-22) 286-1936 Email: simonmuro@raha.com Other Agency(ies): Rural communities, farmers' groups, participating districts, commercial banks rotal: Estimated Disbursements ( Bank FY/US$m): 67.52 I 2.48 I 69.99 Cumulative I 6.30 I 15.80 I 31.20 I 45.28 56.58 I I I Project implementation period: 5 years Expected effectiveness date: 0710 1/2003 Expected closing date: 06/30/2008 Page 8 A. Project Development Objective 1. Project development objective: (see Annex 1) households and groups in about 840 villages in a sustainable manner through the implementation of small agricultural development subprojects planned and managed by community members and farmers' groups. This objective will be achieved by: (i) empowering self-selected rural communities and farmers' groups to make decisions regarding choice of sustainable and remunerative productive technology; (ii) sharing of costs by the public sector and participants, and hence sharing the risk of adoption of improved technologies, again for self-selected participants; (iii) enhancing demand for products and services provided by the private sector in rural areas by increasing the purchasing power of participating groups and encouraging the growth of savings; (iv) promoting improved land and crop husbandry practices by participants; (v) supporting the ongoing decentralization process at the district level; and (vi) partially financing maintenance and/or construction of roads, bridges, and other small subprojects to improve access to markets. The project seeks to raise the production of food, incomes, and assets of participating 2. Key performance indicators: (see Annex 1) districts and villages: (i) increases in rural incomes, assets and liquidity of participating farmers, compared to control groups and pre-project levels; (ii) increases in agricultural productivity of participating farms; (iii) improvement in management and maintenance of agricultural and rural infrastructure financed by the project; and (iv) volume of private trade in agricultural inputs, marketed output and services provision in participating communities and districts. Performance of the project will be monitored through the following indicators in participating B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 20426 Date of latest CAS discussion: 06/15/00 Tanzania has undertaken ambitious reforms and the economy is growing and responding positively. Smallholders in the agricultural sector, however, have not been able to benefit appreciably from the improved economic environment. The smallholder agricultural sector is a large share of the overall economy, and poor performance constrains aggregate growth and impedes reduction of poverty. The poor performance, in turn, derives in large part from inability of smallholders to adopt technologies that are available, known to the scientific community, and are sound from both economic and environmental perspectives. Adoption of technology is constrained by several factors. Many smallholders are not fully aware of the options available to them. When aware, they may be unable to purchase even the modest array of inputs required to adopt the technologies. When neither cash nor knowledge constrains choice, some producers are unwilling to assume the full risk of adopting new approaches. This project seeks to provide improved opportunities to smallholders to make better use of existing technologies and to adopt improved ones. The project is fully consistent with the strategy outlined in the CAS and PRSP progress report discussed at the Board November 27,2001 (IDA/SecM2001-0643), which recognizes that poverty in Tanzania is largely rural, and that lack of opportunities for poor people to improve their incomes is at the root of problem. The rural poor earn their livelihoods primarily from agriculture. The CAS also recognizes protection of biodiversity and forests as important objectives, and these can be addressed by enhancing the ability of smallholders to make more sustainable use of the land presently under cultivation and to minimize risks of crop failure, thereby reducing expansion of production onto more -2- Page 9 fragile lands or inappropriate exploitation of forests to generate income. The CAS specifically recommends an IDA-supported operation to improve agricultural productivity for smallholders. This project is prepared to respond to that mandate. 2. Main sector issues and Government strategy: approximately 80% of the country