Tanzania - Tabora Rural Development Project

Report No. 1360-TA FILE COPY Tanzania: Appraisal of the Tabora Rural Development Project April 8, 1977 Eastern Africa Regional Office General Agriculture Division FOR OFFICIAL USE ONLY 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 1/ SDR 1.00 Tanzania Shillings (TSh) 9.66 US$1.00 = Tanzania Shillings (TSh) 8.30 TSh 1.00 = US$0.12 El 1.00 = US$1.65 GOVERNMENT AND PARASTATALS FISCAL YEAR July 1 - June 30 WEIGHT AND MEASURES 2 1 hectare (ha) = 10,000 m = 2.47 acres I kilometer (km) = 0.62 miles 2 1 sq. kilometer (km ) = 0.39 sq. miles = 100 ha. 1 kilogram (kg) = 2.20 pounds 1 liter (1) = 0.26 U.S. gallons 1,000 kg = 1 metric ton = 0.98 long tons 1/ The Tanzania Shilling is officially valued at a fixed rate of 9.66 TSh to the SDR. The US Dollar/Tanzania Shilling exchange rate is therefore subject to change. Conversions in this report were made at US$1.00 to TSh 8.30 which is close to the recent average exchange rate.  C-OR OFFICIAL USE ONLY ABBREVIATIONS ADS - Agricultural Development Serwice of the World Bank AFO = Assistant Field Officer CBPP = Contagious Bovine Pleuropneumonia CCM = Chama cha Mapinduzi (the sole political party of Tanzania) 1/ Comworks - Ministry of Works DDC = District Development Corporations DDD - District Development Director DFO - District Forest Officer FD Forest Division FTX = Farmer's Training Centers GAPEX - General Agriculture Products Export Corporation Kilimo Ministry of Agriculture and Cooperatives LRD - Land Resources Division (of UK Ministry of Overseas Development) Maji = Ministry of Water, Energy and Minerals miombo - Woodland of Brachystegia and Julbernadia spp. NBC = National Bank of Commerce NMC = National Milling Corporation ODM - Ministry of Overseas Development PMO - Prime Ministers Office RADO - Regional Agricultural Development Officer RDD - Regional Development Director RE Regional Engineer RPO Regional Planning Officer RTC Regional Trading Company RWD - Regional Water Department SFOs - Senior Field Officers TARECU - Tabora Region Cooperative Union TAT - Tobacco Authority of Tanzania TCA = Tanzania Cotton Authority TU4C = Tauzania Livestock Marketing Company TPL - Tanganyika Packers Limited TRCU = Tabora Region Cooperative Union TRDB = Tanzania Rural Development Bank TTG = Tabora Tobacco Grower's Cooperative Society ULV = Ultra low volume VIC = Veterinary Investigation Center VPD = Village Production Committee vpd = Vehicles per day WMP = Water Master Plans 1/ The Tanganyika African National Union (TANU), the former party of the mainland, was merged with the Afro-Shirazi Party in February, 1977 to form CCM. This document hu a fetricted distribution U my be ud by recipients only in the perfonmanse of their official dutis. Its contents may not otherwise be disclosed without World Bank authoriatlon.  I  TANZANIA TABORA RURAL DEVELOPMENT PROJECT TABLE OF CONTENTS Paxe No. SUMMARY AND CONCLUSIONS . ............... . * ** *..*.*.. i-iii 1. INTRODUCTION ......................*s..............****... I II. BACKGROUND ............ . .. .. . ...................................... 3 The Economy of Tanzania ...... .... .................. . 3 The Rural and Agricultural Sector ..... ................... 3 Regional Government and Administration .............. 4 Villagization and Cooperatives ............. ...... .... 5 Infrastructure and Services ................. **... *....S.* 6 Project Implementation Capacity .......................... 8 III. THE PROJECT AREA ............................................ .......... .* 9 Location, Ecology & Economy ..............o....... ....o 9 Administration, Infrastructure and Services ...o........... 10 IV. THE PROJECT ....... o ............................. .... 12 Ao Brief Description ................. o- .... ..o. .. ...... . 12 B. Detailed Features .....o..... o ..... *....... *..*... 13 Crop Development ... ...... .. . -. . . ... ................ ..... O... . 13 Livestock Development . ..o... ... . . . . . . . ............ ...... . 14 Water Supply and Planning ........... ................... 14 Road Maintenance and Reconstruction ... ...... .... 15 Reafforestation *......**.**....* . ... .. ...... ...*... ....... 16 Land-Use Planning ...... ........... . .... . . . . . . .............. . . . 16 Project Implementation, Evaluation and Regional Planning .. ...... ....... ..... o..... 17 This report is based on the findings of two appraisal missions to Tanzania. The first mission, in November 1975, comprised: J.H. Cleave (Chief of Mission), D. Bovet (Roads), P. Tamboli (Agriculture), Mrs. J. Curling (Financial Analyst) (IDA), H. Kelly (Livestock) (Consultant) and was accompanied in part by Ms. T. Sato (Loan Officer). The second mission, in March 1976, comprised J.H. Cleave (Chief of Mission), H. Kaneda (Small Industry), J. Kozel (Water) (IDA); and P. Wood (Forestry) (Consultant). The Fuelwood model (Annex 7) was prepared by G. Kutcher (IDA). Mrs. C. Summers assisted in processing and checking the report at all stages.  -2- Page No. C. Project Costs ....... ................................... 17 D, Financing .... ................................. a * * **....... 20 E. Procure lent .... ......... ...... .... ..... . ........... 21 F. Disbursement .................... ................. 22 G. Accounts and Audits ...... . . .. ............... , 22 V. ORGANIZATION AND IMPLEMENTATION ..... ...................... 23 Project Coordination, Monitoring, and Evaluation .... ...... 23 Project Implementation ........................................ 24 Village Participation .......................... ........... 26 VI. PRODUCTION, OTHER BENEFITS, AND IMPACT .................... 26 Crop Agriculture and Livestock ........... * ... .............. 26 Fuelwood .................................................. 28 Roads ............ ...................................... 28 Water Supplies ......................................... 29 Overall Project Benefits ....................... . .......... 29 Government Cash Flow ............................ . ... 29 Ecological Effects ..... ..... .... . .* ........... .... 30 VII. ECONOMIC ANALYSIS .... ................. ...... 30 Economic and Social Rate of Return ...... .................. 30 Sensitivity Analysis .. . ........................................ 31 Employment and Distribution of Benefits ............. ..... 31 VIII. AGREEMENTS REACHED AND RECOMMENDATIONS ................. ... 32  ANNEXES 1. Tabora - Background, Agriculture and Agricultural Organization 2. Crop Development 3. Livestock Development Appendix 1: Ministry of Agriculture - Veterinary Division: Regional Staff Appendix 2: Village Livestock Farms - Mixed Farming Areas (Nzega and Igunga) Appendix 3: Village Livestock Farms - New Developments (Miombo Zone) 4. Rural Water Supply Component Appendix 1: Population Projections, Tabora Region Appendix 2: Regional Water Department Tabora - Organization Chart, WB 16561 Appendix 3: Water Master Plan Draft Terms of Reference Appendix 4: Village Population to be Supplied with Water, 1975-80 and Unit Costs Appendix 5: Village Water Supplies - Estimate of Annual Operation and Maintenance Expenses Appendix 6: Tentative Time Schedule for Water Supply Component Appendix 7: Projection of Village Population without Water Supply Appendix 8: Estimate of Capital Cost for Rural Water Supplies in Period 1980-1990 5. Roads Component Appendix 1: Organization of Roads Services and Road Conditions, Chart, WB 16309 Appendix 2: Draft Terms of Reference for Technical Assistance For Roads Maintenance & Improvement Appendix 3: Road Component Personnel and Equipment Appendix 4: Proposed Tabora Region Roads Organization, Chart WB 16310 Appendix 5: Road Design Standard Appendix 6: Road Betterment Unit Capacities Appendix 7: Road Betterment Unit Development  -2- Appendix 8: Road Component: Benefits Appendix 9: Summary of Costs Appendix 10: Roads Component Implementation Schedule 6. Fuelwood Production Appendix 1: Areas of Forest in the Tabora Block (From Schultz Inventory, 1973) Appendix 2: Growth Rates in Simbo and Urumwa Trial Plots Appendix 3: Estimates of Village Wood Demand and Supply Appendix 4: Organization of Fuelwood Planting Appendix 5: Recommended Procedure for Measuring Fuel Consumption in Tobacco Curing Barns 7. Fuelwood Production: A Model of the Timber Investment Decision 8. Terms of Reference for Preparation of a Regional Land-Use and Capability Master Plan Appendix 1: Implementation Schedule and Disbursement Schedule 9. Project Organization, Monitoring, and Evaluation Appendix 1: Project Headquarters Staff Qualifications and Terms of Reference Appendix 2: Monitoring and Evaluation: Work Schedule Appendix 3: Project Implementation Schedule 10. Project Cost Estimates Table 1: Summary by Component Table 2: Project Secretariat Table 3: Agricultural Development Component Table 4: Livestock Table 4a: Ministry of Agriculture - Veterinary Division - Tsetse Survey & Control Table 4b: Ministry of Agriculture - Veterinary Division - Regional Livestock Development Services Table 5: Water Supply  -3- Table 6: Roads Component Table 7: Forestry Table 8: Summary by Type of Investment Table 9: Vehicle Costs (excluding Roads) Table 10: Equipment Costs (excluding Roads component) Table 11: Buildings & Civil Works Table 12: Technical Assistance Cost Table 13: Local Salaries Table 14: Vehicle & Equipment Costs: Roads Component 11. Schedule of Estimated Disbursement of IDA Funds 12. Government Cash Flow 13. Economic Costs and Benefits and Sensitivity Analysis MAP: Administrative Divisions - Roads - Population - IBRD 12307 Major Crops - Agro-Economic Zones - Rainfall - IBRD 12308R Livestock and Tsetse Infested Areas - IBRD 12309 Forest Reserves - IBRD 12516   TANZANIA TABORA RURAL DEVELOPMENT PROJECT SUMMARY AND CONCLUSIONS i. Tanzania's development strategy puts emphasis on increased agri- cultural production by smallholders in villages, and seeks to encourage local involvement in planning and implementation. In its approach to these objectives, Government has decentralized its organization, giving the 20 Regions powers to plan and carry out development programs and allowing con- siderable autonomy in administration. The Regional structure is now fairly well established, although still understaffed and typically short of funds. However, many villages have only recently been formed and are inadequately planned, and, although given strong legal powers, are largely untried as the focus of development. Moreover, Government is in the process of instituting major organizational changes effecting marketing, crop-financing, input supply and credit channels, extension services, training and education, and it will require time to carry these changes through to a settled stage. ii. The aim of the proposed Project is to initiate a new rural-develop- ment program in the largest Region in the country, Tabora, utilizing and strengthening the Regional structure, but adopting a pilot approach to most of its components. It would establish pilot agricultural, livestock, and fuel- wood development programs based on villages, and would provide infrastructure and planning which would establish a basis for the Region to handle later investments routed either through another Regional project or through compo- nents of national programs. The Project would involve direct agricultural investments in only some 42 villages (with some 75,000 people) mostly in the more densely populated NE Districts of the Region where control of grazing is an urgent necessity and intensification of crop production is needed. It would, however, supplement and complement ongoing Projects in the Region (which are partly IDA-financed) so that, in combination, IDA Projects would directly involve some one-third of the Region's 380 villages whilst the Project's water, and road investments, and planning activities, would affect the whole Region. iii. The Project would provide (a) pilot approaches to intensified crop and livestock production including new inputs, revamped extension services, storage, cattle-dips and training; (b) a pilot reafforestation program to provide fuel especially for tobacco-curing; (c) a start on a low-cost village water supply program; (d) capacity to maintain and improve both network and village access roads; (e) a Land Use/Capability Plan, a Water Master Plan, a tsetse-fly survey, and a strengthening of the village land planning unit, to provide a framework for Project and future investment in the Region; and (f) specialist personnel and radio communications to strengthen Regional capacity to implement the Project, and staff, equipment and funds to monitor Project progress and evaluate impact, and to assist in the planning of further developments in the Region.  - ii - iv. The Project would be integrated into the existing Regional organi- zation and mostly would be-carried out by the Regional functional units, suitably strengthened. It would be under the direction of the Regional Planning Officer operating through, and with the guidance of, a Project secretariat comprising a Project Coordinator, a Financial Controller and an Evaluation Officer and their staff appointed under the Project. A Project Expeditor in Dar es Salaam would improve liaison and assist procurement. Overall responsibility for policy decisions would rest with the Regional Development Committee chaired by the Regional Development Director. v. The total Project cost over 5 years is estimated to be US$23.5 mil- lion. A grant from the United Kingdom Overseas Development Programme equiva- lent to about US$5.6 million would be applied to the road maintenance and reconstruction component, and to the land-use survey, to cover 76% of the cost of these components. An IDA Credit of US$7.2 million and a Canadian credit of Can $5.0 million are proposed to cover 74% of the total costs of the remainder of the Project. These would meet the foreign exchange costs and 25% of local currency costs. The Canadian Credit would be administered by IDA. The proposed Credits would be on standard IDA terms to Government. The remaining US$5.9 million (25%) of the Project would be met by the Govern- ment of Tanzania and by villagers. Key conditions of the IDA Credit include the continuation of adequate budgetary allocations to ongoing operations in Tabora; satisfactory arrangements for the staffing and supervision of audits of village cooperatives; and agreement on the qualifications and experience of Project Secretariat staff prior to their appointment, which would also be a condition of Credit effectiveness. vi. Procurement under the IDA and Canadian Credits of vehicles and spares (US$1.0 million), farm inputs (US$1.9 million), materials for water supplies (US$2.5 million), and radio and other equipment (US$0.5 million), would be by international competitive bidding (ICB). Civil works (US$1.2 million) would be by contractors following ICB, with a 7-1/2% preference on local bids. The design and construction of water supplies (US$2.5 million) would be by force account. The Water Master Plan would be carried out by consultants selected in accordance with the Bank Group's guidelines. In order to ensure full operation of the Project in the 1977/78 crop season, Government has been encouraged to prepare contracts for key staff, some vehicles, and housing in advance of Board presentation. If necessary, the Association will consider authorizing award of contracts and retroactive financing on these items. Procurement for the roads component would be in accordance with UK guidelines and the Land-Use Planning would be carried out by the Land Resources Division of the UK Ministry of Overseas Development. vii. The Project would increase production of cotton, groundnuts, grains and beef in the affected villages and would, consequently, enhance incomes and nutrition. It would result in reduction of fuel costs in tobacco-cur- ing; in savings in vehicle operating costs, reduced crop spoilage and direct production benefits from road improvement; and in health and production benefits from improved water supplies. Benefits to the ecology are to be expected from grazing control, reafforestation and land planning under the Project. However, the greatest returns are probably those which would accrue  - iii - to future investments supported by the technical, planning and organizational experience of the Project and the enhanced implementation capacity of the Region. An IER in the range 10-20% over 20 years is estimated for the com- bined components for which benefits can be quantified. The Project is sen- sitive to slow implementation and if benefits occurred 2 years later than expected but costs arose as scheduled, an IER of 17% (the point estimate) would fall to 10%. In its short-term perspective, the Project has, there- fore, some risks, and sound management, for which provision is made, is the key to its success. viii. Bank Group assistance to the agricultural sector in Tanzania has included IDA Credits totalling US$117.1 million and IBRD Loans for US$30 million for eleven agricultural Projects and one Regional Rural Development Project -- this in Kigoma Region, adjacent to Tabora. Agricultural Projects have included cotton, tobacco, tea, maize and beef production, and cashew, tobacco and sugar processing. Lack of experienced management and limited planning capacity, as well as procurement problems and the effects of the accelerated villagization program and other changes in the institutional environment have been major problems leading to slow implementation. Gov- ernment is addressing these problems which have also been taken into account in the design of this Project. ix. The Project is suitable for an IDA Credit of US$7.2 million to the Government of Tanzania.   TANZANIA TABORA RURAL DEVELOPMENT PROJECT I. INTRODUCTION 1.01 Tanzania has made the development of its rural sector the corner- stone of its overall development strategy, and in its approach to this objective, Government has decentralized the administrative organization into 20 Regions and has undertaken a program to move the entire rural population into villages. The Villagization Program, seen as a step towards fully collec- tivised ujamaa villages which are the ultimate objective, was accelerated in 1974/75 creating considerable problems which will need close planning attention to solve. In the longer run, however, villages are expected to provide economies of scale in delivering inputs and social services and to increase the participation of the rural people in the development process. Both the Region and the village are central to the implementation of any Project in rural Tanzania for which two routes are currently being pursued: the one, the multi-sectoral development of the entire Region and the other using the Region as the implementing entity for components of nation-wide agricultural development programs. 1.02 The aim of this Project is to initiate a Region-wide rural devel- opment program with emphasis on production. It is oriented both to sup- plement and complement ongoing developments in the Region (which are partly IDA funded), and to develop the capacity of the Region to handle further investments routed either through a further Regional project or through components of national programs. The Project period will allow time for the area to settle down following villagization and the upheaval of anti- cipated changes in the cooperative organization. It makes provision for infrastructure the need for which, in part, arises from the villagization program, and provides a planning and pilot development program needed as a basis for future investments. The aim would be to start to put Tabora in a position that in about a decade all villages would be engaged in cash crop production with water, access roads, storage, village management, a cooperative structure, and agricultural extension services all in place and with development on both the intensive and extensive margins proceeding against the background of sound land-use and water development plans. 1.03 Tabora Region comprises four Districts: two are relatively densely populated and the inhabitants are principally cattle keepers but are also engaged in a variety of crop production; the other two Districts are little developed because of tsetse infestation and in these settlement is confined to the lines of communication. The Bank Group already has investments in tobacco (since 1970) and maize (just effective) in these last two Districts: the focus of village development under this Project would be in the two heavily populated Districts.  - 2 - 1.04 Previous Bank Group assistance to the agricultural sector in Tanzania has included IDA credits totalling US$117.1 million and IBRD loans for US$30 million for eleven agricultural and one Rural Develop- ment Project. Agricultural projects comprise one for agricultural credit, three for livestock and one each for tobacco, tea, coffee, sugar, cashew nuts and maize, and a tobacco processing project which became effective in February, 1977. The Rural Development Project is for the Kigoma Region to the west of and adjacent to Tabora: it became effective in 1974. Credits have also been provided for agricultural training (1971), feeder road devel- opment (1972) and highway maintenance (1974). 1.05 Project implementation has generally tended to make a slow start. Particular problems have been the dearth of experienced management and limited planning capacity; frequent and inadequately planned changes in the institu- tional structure; a shortage of immediately available trained technical manpower; and procurement problems with spare parts, cement and imported equipment. All the smallholder Projects (cotton, tobacco, tea and the Kigoma Rural Development Project) have been affected by the accelerated villagiza- tion program. Although the first Livestock Project was reasonably success- ful, the second is progressing slowly. The Tea Project has encountered serious difficulties with inadequate and high-cost services and lack of management control while weak management coupled with technical problems due to villagization and a change in relative crop prices is adversely affecting the Geita Cotton Project which is being reviewed. The Kilombero Sugar Project and the Cashew Project are progressing well and are expected to be completed on time. The Kigoma Rural Development Project is behind schedule due to delays in recruiting senior staff, problems with procurement of materials and implementation of civil works, and slow village planning (para. 2.23). Effec- tiveness of the National Maize Project was delayed by problems in coordinating co-financing. 1.06 The proposed Project arose from a request by Government following preparation of the Kigoma Project and was prepared by the Government with the assistance of the Bank's Resident Mission in East Africa (RMEA).1/ This report is based on the findings of an appraisal mission to Tanzania in November 1975 consisting of Messrs. J.H. Cleave, D. Bovet, P. Tamboli, Mrs. J. Curling (IDA), and H. Kelly (Consultant), in part accompanied by Ms. T. Sato (Loan Officer), and a follow-up mission in March 1976 consist- ing of Messrs. J.H. Cleave, H. Kaneda, J. Kozel (IDA) and P. Wood (Consultant). 1/ A small-scale farm implements production component was included in the request, and was appraised but has been omitted from the Project. Investment in this area is possibly justified, but needs further investigation particularly of the market potential and the appropriate ownership/management structure. It is therefore proposed that it be reconsidered as part of the Small-Scale Industry Development program under the Second National Sites and Services Project, which includes Tabora town. The project is expected to be ready for Board presentation about mid-1977.  II. BACKGROUND The Economy of Tanzania 2.01 Tanzania has a total population of about 15.3 million (mid-1976) which is increasing at about 2.8% a year. The country has a land area of about 880,900 km and thus has a low average population density of a little over 17 km . Average per capita GNP for 1974 is estimated at US$130 p.a., but in some rural areas, the per capita income does not exceed US$50/year. The real growth rate of the economy was about 4-1/2% p.a. between 1969 and 1974, lagging behind the targets for the second five-year plan for that period mainly due to the failure of the main agricultural crops to reach planned projections. Tanzania has been badly hit by the recent dramatic increase in oil prices although export prices for a range of agricultural crops have recently improved. The Rural and Agricultural Sector 2.02 About 94% of the population live in rural areas and 90% of the economically active population is engaged in agriculture, which contributes roughly 40% of Tanzania's GNP, half accounted for by subsistence production. Some 80% of exports are from agriculture, mainly cotton, coffee, sisal and cashew. Sisal is grown on estates; the rest are smallholder crops, as are tobacco, maize and rice. 2.03 Until the villagization program, most production was concentrated on scattered family smallholdings, cultivated by hand, and producing both family subsistence and cash crops. Census data suggest that over 80% of holdings were less than 2 ha although this figure is believed to be low. Plots were small and irregular, but, in general, fragmentation was not a problem. The objectives of villagization are political, social and produc- tive: to improve local participation in government, to facilitate provi- sion of social and economic services and to aid the introduction of new techniques and the distribution of modern inputs into agriculture. Ulti- mately, in a fully developed "ujamaa" village, it is intended that cultiva- tion will be collective. However, a satisfactory incentive system still has to be developed for such collective farming and currently individual smallholders may cultivate their own plots side-by-side ("shoulder to shoulder" is the Tanzanian expression) within village blocks. It is estimated that some 75% of the rural population are now settled in villages averaging between 350-400 families. 2.04 There have been several recent important developments affecting the rural sector. In 1972, the Regional and District administrations in Tanzania were reorganized and strengthened, principally to improve the im- plementation of rural development programs and to increase local involve- ment. Under this decentralized system, the Regions were authorized to plan  - 4- and implement their own development programs and were allowed a high degree of autonomy in administration. Then, in 1974, a new boost was given to the creation of villages, whilst under the Villages and Ujamaa Villages Act of 1975, the elected village council has been given substantial powers to direct and control local development (see para. 2.10), and the village now provides the basic framework for agricultural production and marketing. Par- allel with these developments, the principles of an approach to agricultural and rural development proposed by the Bank's Agricultural sector study were accepted by Government. This envisages the nation-wide development of a technical base for agricultural and rural improvements and the continuous upgrading of support services for sub-projects which would be implemented and planned in the Regions but given technical direction and coordinated in both time and sequence from the center. Regional Government and Administration 2.05 The regional political head is the Regional Commissioner who has the rank of Cabinet Minister. He is a member of the National Assembly and of the National Executive Committee of the party, Chama cha Mapinduzi (CCM). His counterpart at the District level is the Area Commissioner who is the CCM District Secretary, Chairman of the District Development and Planning Committee, and a member of the District Development Council. All Commis- sioners are appointed by the President. 2.06 The head of the regional civil service is the Regional Development Director (RDD) who has the equivalent rank of a Principal Secretary in a Central Ministry. He is assisted by a Regional Planning Officer (RPO) and the heads of the 10 regional functional departments. The District adminis- tration is headed by a District Development Director (DDD) assisted by a District Planning Officer and the District functional managers. All impor- tant decisions are made by a District Development and Planning Committee, chaired by the Area Commissioner, and have to be approved by the District Development Council chaired by the CCM District Chairman. All civil ser- vants in the Region are, in principle, responsible to the RDD and not the central ministries in Dar es Salaam whose principle function is to provide technical advice and services to the Regions, including research and staff training. Staff, once appointed to a Region, can only be transferred to another Region with the agreement of the RDD. 2.07 Villagers play a role in the development process through the basic CCM unit, the 10 family cell; the Village Council; and the various committees created by the Village Act, 1975. 2.08 These administrative arrangements help interaction between the political structure and the Civil Service and provide a line of communication from central Government through the Region to the District and village. However, several problems exist. Planned staff strengths have not been achieved, particularly at the lowest level, and staff quality remains low. Project implementation capacity is uneven and there has been varying interpretation by regional officials of the emphasis to be given to aspects of national policy. These problems are currently aggravated by uncertainties  -5- as to the future of the cooperative organization and of rural wholesaling and retailing, and therefore of channels for village credit, input delivery, and marketing. Villagization and Cooperatives 2.09 The Arusha Declaration of 1967 and the TANU Guidelines of 1971 identified the ujamaa village as the goal for effecting self-reliance and a community approach to development. However, when progress proved slow, emphasis was shifted to the formation of planned or development villages as an intermediate step towards full ujamaa status. In these, production could take place on an individual family basis with the family retaining rights in the produce from the land which they worked. The speed with which the move to villages has taken place is remarkable and appears to have been achieved without serious trouble although considerable compul- sion was used. The target for completion of the villagization program was set for the end of 1976. The precise pattern of development within each village has been left to the villagers and regional authorities to decide. 2.10 This considerable local autonomy has now been spelled out in the Villages and Ujamaa Villages (Registration, Designation and Administration) Act of 1975 (see Annex 1, paras 35-39). Under the Act and the Rules made under it, the RDD is empowered to register any village of not less than 250 "kaya" (family units) which has clearly defined boundaries. Each such village is to perform its functions as if it were a multi-purpose coopera- tive society. Each is required to have a Village Council of not more than 25 people whose principal functions are to plan and coordinate the agricul- tural and other activities of the village operating through five or more committees to which it may delegate responsibilities. The Village Council has power to allocate land and control its use; it owns all heavy agricul- tural machinery and other capital goods (except for livestock and small farm tools which remain the property of individuals); it can borrow and is required to establish a capital fund, a reserve fund, and a disposable fund; and it may be granted wide judicial and administrative powers for the politi- cal, economic or social development of the village. Thus the Village Council which is elected by the Village Assembly is expected to have com- plete control over the operation of a village. 2.11 Adoption of the Villages Act implies major changes in the coopera- tive marketing organization. Instead of primary societies having a voluntary membership with no firm geographical boundaries, membership is now exclusive to the registered village, and the cooperative becomes the sole routing for inputs and crop sales. The District and Regional Unions have been dismantled, and the parastatals responsible for specific crops will deal directly with individual villages. As a matter of expediency, however, cooperation between groups of neighboring villages is generally anticipated, and a period of trial and error in the new supply and marketing structure is to be expected.  -6- Infrastructure and Services 2.12 Agricultural Services. The Agricultural Extension Service is organized regionally and coordinated and provided technical guidance by the Ministry of Agriculture (Kilimo) in Dar es Salaam. Most extension personnel are employed by Kilimo but in areas dominated by a major crop may be staff of the relevant parastatal (para. 2.15). About 2,500 field staff are engaged in crop work and a further 800 in animal husbandry and animal health programs. At present, an assistant field officer (AFO) is responsible at ward level, for supervision of agricultural services to about 1,000 farmers (3 villages): he is answerable to the District Agricultural Development Officer, normally controlling three or four wards. 2.13 The extension services have generally been ineffective in intro- ducing improved techniques to farmers due partly to pricing policies and high-cost services which reduced farm-gate prices and thus, incentives, but also to lack of adequate staff, a lack of proven technical packages, inade- quate training and poor management, the latter reflected in little work programming, limited logistic support, frequent transfers and administrative problems. Refresher courses are infrequent, an average extension worker receiving additional training only once during his service. 2.14 Long-, medium- and short-term agricultural credit to farmers is provided by the Tanzania Rural Development Bank (TRDB) through cooperative societies. TRDB administers special funds on behalf of Government and has been supported by the Bank Group as the main credit channel for IDA funds. The standard rates of interest charged by TRDB are 8-1/2% on short-term loans and 7-1/2% on medium- and long-term loans. Cooperative societies onlend to members at the same rates. 2.15 Forest Management. Overall responsibility for forest policy, and for sector planning rests with the Forest Division (FD) of the Ministry of Natural Resources and Tourism. Responsibility for the management of Regional reserves and reafforestation has been decentralized and is carried out by FD staff under Regional and District Natural Resources Officers. The FD em- ploys about 5,000 people including 20 professional foresters, and 70 techni- cal foresters holding diplomas in forestry. Technical training is carried out in the Faculty of Agriculture and Forestry in Morogoro and other local and foreign training centers and it is anticipated that a current shortage of trained staff will be overcome by about 1980. 2.16 Parastatal Organizations. During the 1970's, a number of Govern- ment owned, but fairly autonomous organizations have been given increas- ingly wider powers over the production, collection, processing and market- ing of major crops, their functions cutting across those previously exercised by Government departments or the cooperative unions. Important among these are the Tanzania Cotton Authority (TCA), the Tobacco Authority of Tanzania (TAT), and the National Milling Corporation (NMC), the latter responsible  -7- for grain crops. Recently Regional marketing and distribution responsibili- ties were allocated to specified parastatals: the functioning of this new approach remains to be seen. The parastatals may carry out crop research, employ extension staff, and provide inputs on which they may pay subsidies derived from surpluses on crop operations. They are required to operate on a commercial basis, but do not pay corporate tax. However, the responsible Minister is empowered to set prices and rates and under the Parastatal Organi- zations (Financial Supervision and Control) Act, 1975, may direct the transfer of surpluses. Thus he has considerable control over the parastatals' opera- tions. 2.17 Rural Water Supplies. Universal rural water supply is a declared goal of Government, targetted for 1991. Recently an intermediate target was set of at least one water source in every village by 1980 -- in part because of the need arising from accelerated villagization. However, the water supply program has been constrained by lack of technical and skilled manpower for planning and execution and by its capital and recurrent finance requirements. Government is supporting a least-cost approach to water supplies (although this has to be tempered by considerations of local needs) which requires good information on the underlying hydrogeology of the country. This is being obtained by a series of Regional Water Master Plans, of which those for 5 Regions are finished or nearing completion, and another 6 are under prepara- tion. Most are done by consultants financed by bilateral aid. Government has for sometime accepted the principle of cost recovery in urban water supplies and is reviewing its policy on this issue with respect to rural water facilities. The review is expected to be completed by the end of 1977. Also, a program to train selected villagers to operate and maintain water supply systems is being formulated. It is anticipated that such oper- ators would be supported by their respective villages. 2.18 Water supplies are the responsibility of the Ministry of Water, Energy and Minerals (Maji) but project implementation rests with the Regions. The Regional Water Engineer (RWE) has direct control over the design, con- struction, operation, and maintenance of rural water supplies, but the Ministry reserves powers to check the design of difficult projects, assists the Regions in procurement, provides advice on standardization of designs and equipment, trains sub-professional staff, and operates construction and drilling teams which it hires to the Regions. 2.19 Road Construction and Maintenance. Of some 33,000 km of roads in Tanzania, nearly 30,000 km are unengineered earth and gravel roads suit- able only for dry-weather movements. Primary roads -- some 7,000 km of trunk and territorial main roads linking the regional capitals with each other and neighboring countries -- are the responsibility of the Ministry of Communications and Works (Comworks), whilst the planning, budgetary con- trol and execution of work on local main roads (9,000 km) and tertiary roads (17,000 km) devolves on the Regional Engineer (RE) and his staff, subject only to technical guidance and assistance from Comworks. In practice, the RE frequently also acts as executing agent for Comworks on maintenance of the primary network.  -8- 2.20 Highways are expected to account for a significant proportion of the total budget under Tanzania's third Five-Year Development Plan (nominally for 1975/80 but delayed in preparation) with emphasis including the improve- ment of roads to serve agriculture and the improvement of highway mainte- nance. A major constraint in the program is lack of qualified personnel, a shortage which has been partially responsible for a major deterioration in road maintenance since 1970. Shortages exist in the professional and tech- nician grades, but a center for training foremen, inspectors and mechanics has recently opened and is beginning to turn out staff at this level. Project Implementation Capacity 2.21 Problems have occurred in all areas of project implementation in the agricultural and rural sector in Tanzania except for turnkey construc- tion work. In particular, delays in start-up have occured in most projects, and these have arisen from delays in procurement and minor construction work, delays in staff recruitment often associated with poor management, shortage of extension staff and accountants, problems with the management of parastatal bodies directly concerned in implementation, and changing price policies of inputs and commodities. The Bank is assisting implementation of agricul- tural Projects by seconding of two officers to Kilimo, to assist in procure- ment, project implementation, and financial control. More assistance in implementation will be needed as the range of Project investment expands (see para. 4.15). 2.22 To be successful, any Regional Development Project must focus on strengthening Regional institutions and cover not only directly project related institutions but also those related to non-project activities in the area. An unknown is the implementation capacity of the Village Councils, newly created under the Village Act. These problems point to a need for a simple administrative structure, a carefully developed project implementation schedule, simple investment components, adequate technical assistance, and a cautious pilot approach to development within villages. 2.23 The Kigoma Rural Development Project. Lessons being learned in the Kigoma Project, the first Regional rural development project in Tanzania, should be particularly closely followed. After 2 of the scheduled 5 years of operations, disbursements on this project were under 30% of appraisal expecta- tions, with delays particularly attributed to bottlenecks in the delivery of critical supplies and inputs, and to Government's limited inplementation capacity, especially in the water supply sector. Initial adoption rates in agriculture were high, and more recently there has been impressive progress with construction of village infrastructure (mostly classrooms and godowns) and with villager's self-help contributions, and the Project is clearly making a positive impact on the Region. However, responses to the projects' agricultural packages remain uncertain and proposed village-level trials have not yet begun. Little progress has been made with the smaller project components, including feeder roads and livestock development; agricultural credit recovery is running at only 35% of loans; the quality of village book- keeping is unsatisfactory; and no audit of project accounts has yet taken  place. In the face of these problems, it is proposed to consolidate imple- mentation in FY78 on the 50 (out of a target of 135) villages so far incor- porated in the project, and it is expected that the Association's heavy supervision input (averaging about 35 man weeks a year) will be continued. The Project brings out the crucial need for a pilot period in the development of technical packages at village level; for strong, imaginative, management supported as necessary by considerable in-depth implementation assistance by the Association; the need to tackle bottlenecks outside the Region; and a gradual build-up of project implementation. III. THE PROJECT AREA Location, Ecology & Economy 2 3.01 Tabora Region, covering some 70,000 km or 9% of the land area of mainland Tanzania, is the largest Region in the country. It lies 4