Malawi - Lilongwe Land Development (Phase Three) Project

Report No. 652-MAI FIL COPY Appraisal of the Lilongwe Land Development Program - Phase Ill Malawi February 28, 1975 Eastern Africa Projects Department General Agriculture Projects Division Not for Public Use Document of the Intemational Bank for Reconstruction and Development International Development Association This report was prepared for offcial use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibitity for the accuracy or completeness of the report.  CURRENCY EQUIVALENTS Currency Unit = Malawi Kwacha (MK) MK1 = US$1.2 = f Sterling 0.5010 US$1 = NKO.83 = 83 tambala (t) NOTE: Above exchange rates are as of July 15, 1974., at which date the Malawi Kwacha was floating with the f Sterling. WEIGHTS AND NEASURES -:lb. = 0.453 kg 1 short ton = 2,000 lb = 0.9072 metric ton 1 acre = o.4o5 ha 1 sq mile = 2.59 sq km ABBREVIATIONS LIDP = Lilongwe Iand Development Program MANR = Ministry of Agriculture and Natural Resources ADMARC = Agricultural Developm<ent and Marketing Corporation CSC = Cold Storage Company Limited WHO = World Health Organization Malawi Government and IDP Fiscal Year April 1 to March 31  MALAWI LILONGWE LAND DEVELOPMENT PROGRAM - PHASE III TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ....................... i - iii I. INTRODUCTION ................. ................. II. BACKGROUND .................................... 3 A. General .................................. 3 B. The Agricultural Sector .... .............. 3 C. Agricultural Services ..... ............... 4 II. THE LILONGWE LAND DEVELOPMENT PROGRAM ......... 6 A. The Program Area ......................... 6 B. Achievements under Phases I and II of this Program ................................ 8 IV. TIIE PROJECT ................................... 10 A. General Description ...................... 10 B. Project Cost Estimates ..... ............... 14 C. Financing ................................ 16 D. Procurement .............................. 17 E. Disbursement ............................. 17 F. Accounts and Audit ....................... 18 V. ORGANIZATION AND MANAGEMENT .... ............... 19 VI. PRODUCTION, MARKETING, FARMERS' BENEFITS AND EFFECTS ON GOVERNMENT BUDGETS .... ............. 21 A. Yields and Production ..... ............... 21 B. Markets and Prices ..... .................. 22 C. Farmers' Benefits ..... ................... 22 D. Effects on Government Budget .... ......... 23 VII. ECONOMIC BENEFITS AND JUSTIFICATION .... ....... 24 VIII. RECOMMENDATIONS ............................... 25  ANNEXES 1. The Lilongwe Land Development Program Table 1 - Rainfall Data - Lilongwe Airport Table 2 - Projected Crop Areas Table 3 - Projected Input Requirements for Maize, Groundnuts and Tobacco 2. Planning, Construction and Conservation 3. Land Demarcation and Registration 4. Agricultural Extension and Training 5. Agricultural Credit Table 1 - Seasonal Credit Packages: 1973/74 Table 2 - Requirements for Sundry Medium Term Credit Table 3 - Cash Flow Statement of Medium Term Credit Table 4 - Total Credit Cash Flow 6. Livestock Development Table 1 - Beef Production from Village Cattle Table 2 - Dzalanyama Ranch: Herd Projections and Technical Coefficients Table 3 - Dzalanyama Ranch: Beef Production from Ranch and Ranch-Supplied Steers Table 4 - Dzalanyama Ranch: Ranch Income and Expenditure Table 5 - Stall Feeder Budgets 7. Health Facilities 8. Project Cost Estimates  Table 1 - Summary of Development Costs Table 2 - Project Headquarters Table 3 - Conservation and Planning Table 4 - Surveys Table 5 - Markets and Input Stores Table 6 - Marketing Table 7 - Land Allocation Table 8 - Extension Table 9 - Training Table 10- Credit Fund and Credit Administration Table 11- Health Table 12- Dzalanyama Ranch Table 13- Livestock Table 14- Dairying and Poultry Table 15- Evaluation Table 16- Project Preparation (NRDP) 9. Estimated Schedule of Disbursements 10. Administration of LLDP After the Project Table 1 - LLDP Units by Year of Reversion to the Regional Agricultural Office 11. Smallholder Crop Marketing and Prices Table 1 - FMB/ADMARC Crop Trading Accounts, 1966 to 1972/73 Table 2 - FMB/ADMARC Accounting Ratios 1966 to March 31, 1973 Table 3 - ADMARC Profit and Loss Account for the Year Ended March 31, 1973 Table 4 - ADMARC Balance Sheet as at March 31, 1973 Table 5 - ADMARC Comparison of 1973 Prices with Prices as at September 30, 1974  Table 6 - Export of Maize by Country of Destination, 1966-72 Table 7 - Export of Groundnuts by Country of Destination, 1966-72 Table 8 - Exports of Unmnanufactured Tobacco, 1970 - 72 12. Beef, Milk and Egg Marketing and Prices Table 1 - CSC Profit and Loss Account for the Year Ended December 31, 1973 Table 2 - CSC Balance Sheet as at December 31, 1973 13. Farm Budgets Table 1 - Margins per Acre for LLDP Crops Table 2 - Margins per Acre with Decreasing Costs of Fertilizer Table 3 - Farm Budget for a Typical 4.5 Acre Farm Without Tobacco Table 4 - Farm Budget for a Typical 4.5 Acre Farm with Tobacco Table 5 - Farm Budget for a Typical 8 Acre Farm Table 6 - Farm Budget for a Typical 2.5 Acre Farm Table 7 - Actual and Estimated Adoption Rates by LLDP Farmers 14. Government Cash Flow for the Project Table 1 - Cash Flow for Phase III Table 2 - Cash Flow for Phases I, II and III 15. Economic Costs and Benefits Table 1 - Encremental Economic Costs for Phase III Alone Table 2 - Incremental Economic Benefits for Phase III Alone Table 3 - Internal Economic Return of the Ranch and Stalifeedar: Prograri Table 4 - Incremental Economic Costs - All Phases of Program Table 5 - Incremental Economic Benefits - All Phases of Progr.un  Table 6 - Incremental Maize Production Table 7 - Incremental Production of Groundnuts and Tobacco Table 8 - Poultry: Incremental Costs and Benefits Table 9 - Dairying: Incremental Costs and Benefits FROGRAM ORGANIZATION CHART MAP   LILONGWE LAND D-EVE