Upper Volta - Second Rural Development Fund Project

Report No. 108b-UV' Appraisal of Second Rural Development Fund Project Upper Volta May 24, 1976 Agriculture Projects Department FOF'IALOFKiSz 'e4 y Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS US$1.00 CFAF 225 CFAF 100 US$0.44 WEIGHTS AND MEASURES 1 metric ton 0.98 long ton (2,205 lb) 1 kilometer (km) 0.62 mile 1 hectare (ha) 2.47 acres ABBREVIATIONS AVV Volta Valleys Development Authority BADEA Arab Bank for Economic Development in Africa BND National Development Bank CCDR Coordinating Committee for Rural Development CESAO Centre d'Etudes Economiques et Sociales d'Afrique Occidentale CFDT Compagnie Francaise pour le Developpement des Fibres Textiles FAC Fbnds d'Aide et de Cooperation (French AID) FDR Rural Development Fund Management Unit FED European Development Fund HAER Rural Development Works Department HRAT Rural Engineering Division IRAT Institut de Recherches Agronomiques Tropicales et des Cultures Vivrieres OFNACER Office National des Cereales ORD Regional Development Organization ORSTOM Office pour la Recherche Scientifique et Technique Outre Mer PWD Public Works Department RDF I Rural Development Fund Project (Credit 317-UV) RDF II Second Rural Development Fund Project SERS Rural Road Unit (Service Entretien des Routes Secondaires) FISCAL YEAR January 1 - December 31 PROJECT YEAR July 1 - June 30  FOR OFFICIAL USE ONLY UPPER VOLTA SECOND RURAL DEVELOPMENT FUND PROJECT Table of Contents Page No. SUMMARY AND CONCLUSIONS ................................. i-v I. INTRODUCTION ............................................ 1 Il. BACKGROUND .............................................. 1 A Rural Economy .................................... 1 Agriculture ........................ 2 Rural Development Strategy ......................... 3 III. RURAL DEVELOPMENT FUND I ................................ 5 IV. THE PROJECT AREA ........................................ 8 Choice of the Project Area ..... ............ 8 Description of the Project Area .... ............ 8 V. THE PROJECT ............................................. 10 Background ......................................... 10 Summary Description ................................ 10 Detailed Features ............... .. ................. 12 VI. COST ESTIMATES AND FINANCIAL ARRANGEMENTS .... ........... 17 Project Costs ................... ................... 17 Financing Arrangements ............. .. .............. 19 Procurement ....... ............. .................... 20 Disbursement .................... ................... 21 Accounts and Audit ................. 22 VII. ORGANIZATION AND MANAGEMENT ............................. 22 VIII. FARMER BENEFITS AND FINANCIAL IMPLICATIONS FOR GOVERNMENT ........................... 26 Farmer Benefits from Productive Subprojects ........ 26 Financial Implications for Government ....... ....... 28 This report is based on the findings of an appraisal mission composed of Messrs. R. van der Lugt, J.L. Ginnsz (IDA), V. Fudzie (ADB), H. Wissink and B. Victor-Pujebet (Consultants). 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.  -2- Page No. IX. BENEFITS AND JUSTIFICATION .............................. 28 X. AGREEMENTS REACHEI) ...................................... 30 ANNEX 1 Agricultural Statistics Table 1 Land Use in Upper Volta Table 2 Cereal Donations and Imports 1971-73 Table 3 Agricultural Production Table 4 Indices of Agricultural Production 1967/68-1973/74 ANNEX 2 First Rural Development Fund Project A. Original Objectives B. Summary of Physical Achievements C. Performance of Participating Agencies D. Costs E. Undertaking under Credit 317-UV F. Conclusion Table 1 Works Carried out Under the First Project by ORD Table 2 Cash Flow of First Rural Development Fund Project Table 3 Receipts and Expenses of the Rural Development Fund Table 4 Disbursements under Credit 317-UV ANNEX 3 Project Area Statistics Table 1 Rainfall for Different Cities in Upper Volta Table 2 Rural Population, Area and Population Density Table 3 Population and Density by District in the Five ORDs of the Plateau Mossi Table 4 Cultivated Areas per Main Crop Table 5 Farm Sizes on the Mossi Plateau Table 6 Agricultural Production 1972/73 ANNEX 4 Land and Infrastructural Development Table 1 Bottomland Development, Unit Investment Cost Table 2 Improved Bottomlands: Investment Cost per ha Table 3 Small Irrigation Schemes: Investment Cost per ha Table 4 Erosion Control Works, Unit Investment Cost Table 5 Cost of Well Construction Table 6 Well Construction: Equipment List and Costs Table 7 Well Construction: Operating Costs Table 8 Well Construction: List of Personnel  - 3 - Table 9 Tubewell Construction Costs Table 10 Tubewell Construction: Personnel Costs Table 11 Tubewell Construction: Costs of Supplies and Operating Costs Table 12 Maintenance Brigade for Tubewells Table 13 Estimated Costs of Village Warehouses Table 14 Estimated Costs Village Centers Table 15 Land and Infrastructural Development Program ANNEX 5 Agricultural Credit Table 1 BND Summary of Balance Sheets Table 2 BND Lending Operations from 1961 to 1974 Table 3 BND Loan Portfolio-1971-72 to 1973-74 Table 4 BND Coi e Profit and Loss Accounts Table 5 ricultural Credit from 1966 to 1974 Table 6 Repayment of Short and Mledium-term Agricultural Credit by ORDs ANNEX 6 Studies for Economic Development of Areas Freed from Onchocerciasis A. Introduction B. The Proposed Technical Assistance Operation C. Execution of Technical Assistance Program D. Costs and Financing E. Justification Table 1 Summary of Costs of Onchocerciasis Study (Oncho Study) Table 2 Cost of Land Use Survey Table 3 Climatology, Surface and Groundwater Studies Table 4 Land Suitability Survey Table 5 Social and Economic Studies Table 6 Preparation Development Plan Table 7 Preparation Investment Projects Chart 15624 Operation Calendar for Studies for Economic Development of Areas Freed of Onchocerciasis ANNEX 7 Project Costs Table 1 Summary of Project Costs Table 2 Costs of Project Subcomponents Table 3 Supporting Services, Staff Table 4 Supporting Services, Equipment Table 5 Supporting Services, Operating Costs Table 6 Supporting Services Related to Wells and Tubewells Table 7 Summary of Costs of Tubewell Maintenance Brigade Table 8 Supporting Services, Training Table 9 Technical Assistance Table 10 Summary of Costs for Onchocerciasis Studies Table Il Contingency Calculations Table 12 Balance of Credit 317-UV  -4- ANNEX 8 Financing Plan Table 1 Summary of Financing Plan Table 2 Detailed Financing of Project Costs Table 3 Estimated Disbursements ANNEX 9 Organization and Management Table 1 Calculation of Extension Workers' Requirements Table 2 Schedule of Responsibilities in Subproject Cycle Table 3 Schedule of Responsibilities for Agricultural Credit ANNEX 10 Training ANNEX Il Farm Budgets Table 1 Illustrative Farm Budget (4 ha) - Rainfed Crops with Erosion Control Works Table 2 Illustrative Farm Budget (0.2 ha) - Paddy in Bottomlands and Improved Bottomlands Table 3 Illustrative Farm Budget (0.2 ha) - Paddy in Small Irrigation Scheme Table 4 Illustrative Farm Budget (6 ha) with Ox-Drawn Equipment ANNEX 12 Economic Benefits Table 1 Incremental Project Production Table 2 Economic Price of Cereals Table 3 Economic Price of Paddy Table 4 Economic Price of Groundnuts Table 5 Economic Price of Seed Cotton Table 6 Economic Rate of Return Calculations Table 7 Sensitivity Analysis Chart 16054 Ministry of Rural Development Chart 15429 Regional Development Organization Chart 15432 Rural Development Works Department Map IBRD 11592 - Second Rural Development Fund Project  UPPER VOLTA SECOND RURAL DEVELOPMENT FUND PROJECT SUMMARY AND CONCLUSIONS i. The Government of Upper Volta has requested IDA to continue its assistance in the financing of the Rural Development Fund. This report appraises the Second Rural Development Fund Project, a continuation of the project financed by Credit 317-UV, which has been successful in financing small agricultural and rural development subprojects. An IDA Credit of US$9.4 million is proposed. The project was prepared by RMWA in April 1975 and appraised by an IDA mission in October 1975. ii. Upper Volta is one of the least developed countries. It has a traditional and overwhelmingly rural economy. Farming is difficult due to erratic rainfall and a prolonged dry season, poor and shallow soils, and farming systems that generally have not evolved beyond shifting cul- tivation with little use of cash inputs. Consequently, productivity is very low, and while agriculture and livestock provide a living for 96% of the population, they generate less than 45% of GDP. Approximately 2.2 million hectares are under cultivation, and grains (the basic food crops are millet, sorghum and maize) represent 80% of agricultural production. The most striking feature is the sharp regional contrast. In the central and northern regions farming is at subsistence level due to high popula- tion, poor soils and irregular rainfall, and this is particularly so in the case of the Mossi plateau. Conversely, in the western and south- western regions, production is more diversified and market-oriented, as growing conditions and soils are more favorable and population density is lower. iii. The First Rural Development Fund Project (RDF I) was appraised in August 1971, signed in June 1972, and became effective in October 1972. Progress was slow through 1973 due to delays in the recruitment of staff, delays in Government arranging for prefinancing of project expenditures, and slow procurement of equipment. By 1974, however, the project gained momentum, which accelerated through 1975. Project funds have been depleted due to the dollar devaluation, which reduced IDA's contribution to an equiv- alent of about 86% of the original estimate, and inflation, which was much higher than est