Niger - Irrigation Project

Report No. 1682-NIR3 1 b/; 1? 5 Appraisal of an Irrigation Project Niger Septemnber 11, 1978 FILE COPY Agriculture Projects Department Western Africa Regional Office FOR OFFICIAL USE ONLY Dom^S--ivnt 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 Currency Unit = CFAF Franc US$1 = CFAF 245 CFAF 1 = US$0.00408 WEIGHTS AND MEASURES 1 kilometer (km) = 0.6215 mile I centimeter (cm) = 0.033 feet 1 hectare (ha) 2.47 acres 1 metric ton (t) = 2,207 lbs 1 kilogram (kg) = 2.207 lbs ABBREVIATIONS ADF African Development Fund BADEA Banque.Arabe pour le Developpement en Afrique CNCA Caisse National de Credit Agricole FAC Fonds d'Aide et de Cooperation FNT Fonds National d'Investissement GR Service du Genie Rural IRAT Institut de Recherches d'Agriculture Tropicale MRD Ministry of Rural Development ONAHA Office National des Amenagements Hydroagricoles OM Operation and Maintenance OPVN Office des Produits Vivriers du Niger SOGREAH Societe Grenobloise d'Hydraulique Agricole UNCC Union Nigerienne de Credit et de Cooperation  FOR OFFICIAL USE ONLY NIGER IRRIGATION PROJECT APPRAISAL REPORT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ...... ...................i - iii I. INTRODUCTION ..................... ..................... II. BACKGROUND ...................... ...................... A. General .......................................... I B. The Agricultural Sector .......................... 2 III. THE PROJECT AREA ...................... 4 IV. THE PROJECT .......................................... 5 A. Objectives and Components ........................ 5 B. Detailed Features .... .......... 6 V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS .10 A. Project Costs ..10 B. Proposed Financing . .11 C. Procurement ..12 D. Disbursements ..13 E. Accounts and Audit . .14 VI. ORGANIZATION AND MANAGEMENT .14 A. Organization ...14 B. Staffing ...15 C. Training.. 16 D. Farmers' Settlement and Organization ... 17 VII. YIELDS AND PRODUCTION, DEMAND, PRICES, MARKETING ARRANGEMENTS, FARMERS' BENEFITS AND COST RECOVERY ... 18 A. Yields and Production . .18 B. Demand, Prices and Marketing Arrangements . .18 C. Farmers' Benefits.... 19 D. Cost Recovery and Impact on Government Revenues 20 VIII. ECONOMIC BENEFITS AND JUSTIFICATION .. ........ 20 IX. RECOMMENDATIONS . 22 This document has a restricted distribution and may be used by recipients only in the performance of their oMcial duties. Its contents may not otherwise be disclosed without World Bank authorization.  TABLE OF CONTENTS (Continued) Page No. ANNEXES Annex 1 - IDA Financed Projects in the Agricultural Sector, 25 Niger's Food Self-sufficiency and the Irrigated Sector 26 Table I - Main Crops 29 Table 2 - Forecast of Food Supply and Demand 30 Table 3 - Maximum Area to be Irrigated Under Double Cropping Without Regulation of the Niger River 31 Annex 2 - Irrigation Schemes Present Organization 32 Annex 3 - Summary Description of Existing Schemes and Schemes to be Built in the "Arrondissements" of Tillabery and Tera 36 Annex 4 - Climate and Hydrology of the Niger River 38 Annex 5 - Population 42 Table 1 - Composition of Farming Unit 45 Annex 6 - Agricultural Development 46 Table 1 - Area Under Cultivation in 11 Villages of the TillaLbery Area 59 Table 2 - Project Area 60 Table 3 - Monthly Allocation of Time Requirements 61 Table 4 - Timing of Cultivation 62 Table 5 - Area Cultivated and Production on Schemes in the Project Area 63 Table 6 - Agricultural Production with Project 64 Table 7 - Farm Budget A Without Project 65 Table 8 - Farm Budget B Rice Cultivation 66 Table 9 - Farm 'Budget C Mixed Cropping 67 Table 10 - Farm Budget D Wood Plantations 68 Table 11 - Farm Budget E Rainfed Development 69 Table 12 - Farm Budget F Livestock Sub-project 70 Annex 7 - Namarigoungou Irrigation Works 71 Table I - Quantities of Main Works 76 Annex 8 - Water Demand 77 Table 1 - Water Demand 78 Annex 9 - Project Costs 79 Table 1 - Project Cost and Financing 80 Table 2 - Namarigoungou Irrigation Works Construction 81 Table 3 - Staff Costs 82 Table 4 - Construction 83 Table 5 - Equipment 84  TABLE OF CONTENTS (Continued) Page No. ANNEXES Table 6 - Vehicles 85 Table 7 - Administrative and Indirect Expenses 86 Table 8 - Agricultural Equipment and Incremental Inputs 87 Table 9 - Training Program, Audit, Visiting Consultants 88 Table 10 - IDA Disbursement Schedule 89 ANNEX 10 - Construction of Irrigation Works By Force Account 90 Annex 11 - Organization and Training 93 Appendix I - Terms of Reference for Engineering Consultant Firm 98 Appendix 2 - Organization Chart Annex 12 - Prices and Impact on Government Finances 107 Table I - Prices for Paddy and Rice 107 Table 2 - Rent and Recovery Indices 108 Table 3 - Prices and Impact on Government Finances 109 Annex 13 - Economic Calculations 110 Table 1 - Rate of Return Calculations 113 Annex 14 - Implementation Schedule 114 MAPS   NIGER IRRIGATION PROJECT SUMMARY AND CONCLUSIONS (i) The Government of Niger has asked IDA to help finance the develop- ment of the country's irrigation subsector. A major component of the project would be the development of a 1,550 ha scheme at Namarigoungou. The project is based on a feasibility study by SOGREAH, and on the findings of an ap- praisal mission which visited Niger in February 1977. (ii) Because of the increasing demand for food the country is no longer self-sufficient, even in normal years, and is unlikely to become so in the next decade, even assuming that all planned rainfed improvement projects and all irrigation projects (some 1,300 ha annually) for the period 1977-1983 are realized. While rainfed projects are necessary to help the great majority of the rural community, Government believes that equal priority should be given to investments in irrigation schemes. IDA endorses Government's policy of a balanced development of the agricultural sector. IDA is financing a producti- vity improvement project for the Department of Maradi; is assisting in the preparation of another productivity improvement project for the Department of Dosso; and considers financing a forestry and a livestock project. The pro- posed irrigation project would be the first major irrigation project. In ad- dition to its objective of food production, it would assist Government in its goal of creating the necessary institutional framework to build and develop some 1,300 ha of irrigated schemes annually through the creation of the "Office National des Amenagements Hydroagricoles" (ONAHA). (iii) The relatively high cost of the project, estimated at US$6,300/ha for investment (in constant terms) and at US$500/ha/year for annual develop- ment expenses during the development period, is due (a) to the fact that the country is landlocked which increases the cost of imported goods; (b) the lack of local expertise; and (c) the absence of effective competition in the con- tracting and supply industries. (iv) The project would comprise (a) constructing the Namarigoungou polder; 1/ (b) providing services to the farmers who would take up cultiva- tion at Namarigoungou and to the farmers already cultivating on the schemes presently under irrigation; (c) improving health services; (d) training farmers in modern agricultural techniques; and (e) preparing a feasibility study for a nearby Dolder north of Namarigoungou. 1/ Polders are land reclaimed from the sea or any other body of water by constructing dikes and drying out the land so empoldered. Thereafter, the water runoff is controlled by sluicing or pumping. A "cuvette" is part of the food plain of the Niger River and is usually submerged at the time of the high flood level.  - ii - (v) Project costs are estimated to total CFAF 5.1 billion (US$21 million) of which the foreign exchange component would be US$14.8 million, or 70%. Principal components are irrigation works construction (US$8.6 million); management of the project and administrative and financial services (US$2.6 million); agricultural development services and support unit (US$2.5 million); other (US$1.8 million); and contingencies (US$5.5 million). Other costs include the financing over a three year period of a financial coordinator for the IDA-financed agricultural projects (US$0.3 million). Except for the financial coordinator, who would be financed 100% by IDA, all other project items would be financed jointly by IDA and Kreditanstalt fur Wiederaufbau (KFW). It is proposed that IDA make a credit of US$15.0 million. KFW would make a credit of DM 12.5 million (US$6.0 million). The IDA credit and the KFW credit would be disbursed on a pari-passu basis (70% for IDA; 30% for KFW). (vi) Analysis of the construction costs for several irrigation schemes in Niger indicates that contractor costs are unusually high reflecting partly a lack of effective competition. To stimulate competition, it is necessary to build up the capabilities of the smaller local contractors and to develop Government capability to construct the irrigation schemes by force account. The project would give ONAHA the capability to construct the Namarigoungou works by force account. This would result in cost savings of some 40% com- pared to contractor costs and give practical training to a number of local technicians and engineers.* Another advantage of the force account approach would be the greater flex:ibility in project implementation. The only civil works to be built by contractor (US$0.5 million) would be the pumping sta- tions. (vii) Thd following procurement procedures would be used: Orders or contracts for equipment, vehicles, the electrical line from Tillabery to Namarigoungou, supplies for construction, agricultural equipment and inputs with a value of more than US$50,000 would be through international competitive bidding (ICB), in accordance with IDA guidelines. Such procurement is esti- mated to have a value of US$4.0 million. Contracts of less than US$50,000, and construction of the civil works for the Namarigoungou pumping stations, of houses, storage areas and offices, which are too small to attract foreign contractors, would be procured on the basis of competitive bidding adver- tised locally and in accordance with local procedures satisfactory to IDA. However items of less than US$15,000 each could be purchased directly from local suppliers. Contracts procured under local competitive bidding would not exceed US$1.5 million. Consultants would be recruited according to IDA guidelines (US$4.3 million). Some US$5.3 million would be for operating expenses and local staff salaries. (viii) The project would be carried out by ONAHA, which would be establi- shed prior to presentation of the Credit to the Executive Directors. The organization of ONAHA would be based on the recommendations of consultants financed through a project preparation facility of US$8,500. The Regional Director of ONAHA at Tillabery would be responsible for day-to-day implemen- tation of the project.  - iii - (ix) Organization of farmers on the schemes would evolve, with ONAHA's directive involvement being progressively replaced by farmers' cooperatives. Until such time as the latter are ready to assume management activities, ONAHA would assure farmers supply of water and basic services. Farmers would be organized into the smallest groups compatible with management of the schemes, comprising about 10 farming units. The group would establish the basis for financial solidarity for credit repayment. (x) The procedures for land allocation in the irrigation schemes have been proven through past testing along the Niger River and are known to be acceptable to the present land owners and to the new settlers. Under the project land would be allocated on the basis of no more than I ha per farming unit. (xi) Project induced annual production would be as follows: In the Namarigoungou polder under irrigation: 12,500 tons of rice paddy, 400 tons of sorghum and 950 tons of various vegetables; on the rainfed holdings of the Namarigoungou farmers: 1,600 tons of cereals. Production increases on the existing schemes are estimated at 900 tons for rice paddy in the polders, and 700 tons for cereals under rainfed cultivation. (xii) Without the project the farmer taking up cultivation on the Namarigoungou polder would continue to have an annual net income of about CFAF 115,900 (US$473). With the project and assuming that he is given 0.5 ha to cultivate, his net income would increase to CFAF 251,600 (US$1,027). His per capita net income would increase from US$90 to US$197. At the proposed level of water charges, Government's cost recovery index from farmers would be about 37%. (xiii) The project's direct benefits would be the increased production it would generate for the 3,000 farming units (16,000 people) who would take up cultivation on the Namarigoungou polder. The economic rate of return is estimated at 12.5% for the project components whose benefits have been quanti- fied. The project would have a number of secondary benefits not included in the rate of return calculations, namely: (a) increase in the agricultural production of farmers cultivating in other schemes in the project area; (b) creation of farm employment (some 400,000 man-days), 70% of which for the riparian populations. (xiv) The risks attached to the project have been considered from several angles: financial, technical, institutional and social. The financial risk has been reduced by having the detailed engineering study completed prior to this draft green cover report. The technical risk is mainly in the achieve- ment of the production increases contemplated. The sensitivity analysis indicates that even if the production of paddy were 25% lower, the rate of return would still be acceptable, at 8%. The institutional risk will be overcome through the creation of ONAHA, which would be adequately staffed and equipped to carry out the project. The social risk inivolved in land alloca- tion will be reduced by the use of well-established land allocation procedures. (xv) On the basis of the assurances set out in Chapter IX, the project is suitable for an IDA credit of US$15 million.   NIGER IRRIGATION PROJECT I. INTRODUCTION 1.01 The Republic of Niger has asked IDA for assistance in financing the development of the country's irrigation subsector mainly in the "Arron- dissements" of Tillabery and Tera. A major component of the project would be the development of a 1,550 ha scheme at Namarigoungou. A feasibility study of the Namarigoungou scheme was prepared by Consultants SOGREAH in 1974. This report is based on the findings of an IDA appraisal mission which visited Niger in February 1977. The appraisal mission consisted of Messrs. Ropiteau and Park (IDA), Boumendil, Chateau, and Reynders (Consultants). 1.02 The proposed project would be the fifth in Niger's agricultural sector to be financed by IDA. Summary statements on the implementation of the other projects are in Annex 1, including that on the Agricultural Credit Project (Credit 207-NIR) for which a completion report and an audit report are being circulated to Government for comments. II. BACKGROUND A. General 2.01 Niger is one ot the largest landlocked countries in Africa, cover- ing about 1.3 million km , between latitudes 100 and 250 (map). Rainfall decreases from between 700 and 800 mm annually in the south, to less than 350 mm 150-200 km further north. About 10% of the area is suitable for crop production, but of very low potential. About 2% of the land area is culti- vated. Drought to one degree or other is a common occurrence and in 1968-1973 drought reached catastrophic proportions. 2.02 About half of the country's some 4.7 million people live between the southern border pnd the 500 mm isohyet, where population pressure averages only about 20/km , although in valleys it may be as high as 100 km . Popula- tion growth rate is high at 2.7% per annum. 2.03 The per capita GNP increased between 1972-75 to US$130, owing to greater mining activities. Uranium mining began in 1971. The present production of 1,600 tons should increase to 3,500-4,000 tons in 1979, making Niger the fourth largest producer of uranium in the world. The earnings resulting from increased uranium production and quadrupling of its price make it possible for Government to allocate greater local resources for productive investments. The "Fonds National d'Investissement" (FNI) is the vehicle for such investments. Government's allocation to the FNI was CFAF 10 billion in 1976/77 (US$40 million) compared to CFAF 4.5 billion in 1975/76.  -2- B. The Agricultural Sector 2.04 The agricultural sector directly supports about 90% of Niger's population. It contributes about 47% to GDP. Prior to 1973 Niger used to be self-sufficient in food, but it was obliged to import some 500,000 tons of cereals over the period 1973-1975. Because of the increasing demand for food the country is no longer self-sufficient, even in normal years, and is unlikely to become so in the next decade, even assuming that all planned rainfed improvement projects and all irrigation projects (some 1,300 ha annually) are realized. 2.05 As far as rainfed farming is concerned, there is a limit to the level of increases that productivity improvement projects can generate. Income levels in the rainfed areas of Niger are less than US$70 per capita and with present technology these can be increased by perhaps 50%, but the beneficiaries of such pro;jects will continue to remain very poor, and the food base of the country will continue to depend upon unreliable rainfall which from time to time fails catastrophically. Nevertheless, Government intends to improve productivity and farm incomes as much as economically justified. It intends to develop the general use of farm inputs through the development of agricultural credit and the strengthening of agricultural extension services; and over the next few years plans productivity improve- ment projects throughout the southern tier of the country where rainfed cultivation is possible. 2.06 While rainfed projects are necessary to help the great majority of the rural community, Government correctly believes that equal priority should be given to investments in irrigation schemes. At present, some 8,000 ha of modern irrigation schemes have been developed: 3,700 ha along the Niger river valley. This compares to a total irrigation potential of about 200,000 ha (Annex 1): 100,000 ha along the Niger River. The latter, however, cannot be fully developed for double cropping irrigation until the flow of the Niger River is regulated by a dam to be built at the site of Kandadji (1985). Still, there are some 16,000 ha that could be developed for double cropping irrigaltion along the Niger River prior to the construc- tion of the dam. At the present rhythm of development of 1,300 ha per year, this would take more than 10 years. 2.07 IDA endorses Government's policy of a balanced development of the agricultural sector: IDA is financing a productivity improvement project for the Department of Maradi whose content and organization is intended as a model for future similar projects, and is assisting in the preparation of another productivity improvement project for the Department of Dosso. The two Departments comprise about one-third the area of the southern tier of Niger. IDA also intends to finance a pilot forestry project and a livestock project which would include 30% of all cattle in Niger.  -3- 2.08 The proposed irrigation project is a necessary complement to these various projects. It would be the first major irrigation project in Niger, and in addition to its objective of food production, it would have a number of other benefits: (a) It would assist Government in its goal of creating the necessary institutional framework to build and develop some 1,300 ha of irrigated schemes annually, through the creation of the "Office National des Amenagements Hydroagricoles" (ONAHA), which would integrate and strengthen the activities of construction and manage- ment of the irrigation schemes hitherto carried out by the "Service du Genie Rural" (GR) and the "Union Nigerienne de Credit et de Cooperation" (UNCC), res- pectively. (b) It would not only produce rice, which is increasingly becoming a staple food for the populations along the Niger River and the city dwellers, but also a variety of vegetables, and it would provide the means for a better utilization of the local livestock resources. Irrigated fodder and crop by-products and residues would be used for finishing stock for sale, and this would help reduce the long cattle migrations, often to Nigeria, during the dry season. (c) It would allow the use of modern agricultural tech- nology on the schemes, and to some extent, the use of improved methods on the rainfed holdings of project participants. 2.09 The relatively high cost of the project, estimated at US$6,300/ha for investment (in constant terms) and at US$500/ha/year for annual devel- opment expenses during the development period, is due to a number of fac- tors, including (a) the fact that the country is landlocked which increases the cost of imported goods, (b) the lack of local expertise, (c) the small scale of the project and (d) the absence of effective competition in the contracting and supply industries. Cheaper alternatives to the proposed technical design (full water control) were studied and rejected because they were less economical or impractical, namely: improved flood recession, which will no longer be possible once the Kandadji dam is built (para 2.06), limited water control, which is less economical, and development through wells, which is impossible. The project would be built by force account, which would result in savings of about 40% compared to the contractor costs, would make possible a transfer of expertise in the construction of irrigation works to the local technicians, and would introduce some competition in the contract- ing and supply industries.  III. THE PROJECT AREA 3.01 Location. The project area is the "Arrondisements" of Tillabery and Tera (see map). There are a number of existing irrigation schemes (1,200 ha) described in Annex 3, and one new scheme to be built in 1978, Lossa third phase (162 ha), with financing from Fonds d'Aide et de Coopera- tion (FAC). 3.02 Access. The major town in the project area is Tillabery, 130 km northwest of Niamey (see map) by tar-surfaced road. The Namarigoungou scheme would be linked by a 30 km dirt road to Tillabery, and the other schemes are within a 60 kin radius of Tillabery. 3.03 Climate. The climate is Sahelian, characterized by high day time temperatures, sharp intra--day variations, and a long dry season, from October through June. Average annual rainfall is about 430 mm (Annex 4), which is only adequate for the production of low yielding crops of drought resistant plants such as millet. 3.04 Hydrology. The discharge of the Niger River is monitored through 5 water gauges a ong the 550 km of the Niger River. The average flow in Niamey is 985 m /sec. Highest floods occur in the period September through March, and lowest floods in June. Considering the period of seference as 1964-1974, the dry season monthly discharge would exceed 15 m /sec nine years out of ten. This figure limits double cropping irrigation from the Niger River north of the town of Say to around 12,000 ha (Annex 1, Table 3). South of the town of Say the river benefits fsom a number of tributaries and the dry season flow is rarely below 50-60 m /sec. 3.05 Soils. The soils of the polders along the Niger River are usually clay and are suitable for rice cultivation. The soils classification map for the Namarigoungou polder (scale 1/10,000) and the soils analyses indicate that soils are clay (60%) and sandy/silty soils (10%) and that the remaining 30% are unsuitable for cultivation. Double cropping of rice is possible on the clay soils, and double cropping of sorghum and vegetables on the sandy/silty soils. 3.06 Population. The main beneficiaries of the project would be the 3,000 farming units (16,000 people), who would take up cultivation on the Namarigoungou polder. Other beneficiaries would include the 2,200 farming units already cultivating on the existing schemes. At least 75% of partici- pants would belong to the Wogo tribe, who are traditionally good at farming. The rest would belong to the Kado tribe. (Annex 5). The average farming unit size of about 5.25, with 1.50 male adults, is the same for both ethnic groups. Ihe present per capita income of farmers likely to participate in the project is about US$79, or some 25% above the absolute per capita poverty level of US$63 for Niger. 3.07 Farm Size and Land Tenure. Socio-economic surveys conducted during project preparation indicate that the average Wogo farm comprises  - 5 - 4.10 ha under cultivation: millet and cowpeas (rainfed, 2.60 ha); rice (traditional irrigation, 1.15 ha); sorghum (flood recession, 0.15 ha); tobacco and gardens (0.20 ha) (Annex 6); the study also showed that farmers do not give up traditional cultivation when they participate in modern irrigation schemes. The Wogos rent about 20% of the land they cultivate from the Kados. The land in the schemes becomes property of the nation, and previous owners are given priority for land allocation. 3.08 Health. There are no reliable statistics on the health situation in the area. Waterborne diseases (malaria and bilharzia) are the most frequent, especially affecting the young children, but the proposed project would not exacerbate the present situation, and it includes a limited health component (para 4.22). IV. THE PROJECT A. Objectives and Components 4.01 The project (1978-1982) would seek (i) to increase Niger's produc- tion of rice through the development of irrigated agriculture and (ii) to improve the income of participating farmers from their holdings in the irri- gation schemes and in rainfed areas. The project would comprise: (a) Constructing the Namarigoungou polder (dike, irrigation and drainage systems and on-farm works); (b) Providing services to the farmers who would take up cultivation on the Namarigoungou polder (1,550 ha of net area) and on the Lossa III scheme (162 ha of net area); and to the farmers already cultivating on 1,215 ha presently under irrigation development. Such services would include: delivery of irrigation water, assistance in organi- zation, extension, applied research and seed multiplication, pro- curement of inputs, agricultural credit and crop marketing; (c) Improving health services; (d) Training project staff, farmers and artisans; (e) Providing the necessary physical infrastructure and equip- ment to carry out project activities; and (f) Preparing the feasibility study for a nearby polder (3,300 ha net area) north of Namarigoungou. The project would be carried out by ONAHA (para 2.08).  -6- B. Detailed Features Development of the Namarigoungou Polder 4.02 Works to be built in the Namarigoungou polder include (Annex 7): (i) a dike some 12 km long and 3.0 m high to protect the polder against the maximum flood levels occurring in a one to one hundred year frequency; (ii) two pumping stations, each serving a separate district, designed to allow gravity irrigation as often as possible, with the lowest pumping station serving during floods to drain water back to the river. The pumps would be vertical axial flow type, and the power would be supplied by a 20 KV power line drawn from Tillabery. (iii) an irrigation network, including some 30 km of primary and 40 km of secondary canals, and a tertiary network; and (iv) a drainage network, using as much as possible the existing streams. 4.03 Concrete Lining of Canals. The cost and financing plan of the project are based on the assumptions that primary and secondary canals would be concrete lined. Since concrete lining cannot always be economically justified, assurances were obtained at negotiations that this would be done when criteria agreed upon between Government and the Association are met. The criteria proposed by the Association were that the canals be lined where (i) the soil permeability imeasured in situ was equal to or greater than 0.4 m/day, and (ii) necessary as protection upstream and downstream of canal structures and connections. Additional criteria could be submitted by the Borrower for the co-lenders' review and acceptance no later than one month prior to the commencement of canal construction. 4.04 Namarigoungou Irrigation System Design and Capacity. The capacity of the main canals is designed for 2.8 1/s/ha (Annex 8). Farmers would irrigate 16 hours per day. The secondary canals irrigating mixed cropping areas are designed for 2 1/s/ha. The perimeter would be divided into two irrigation units. Based on a discharge for the tertiaries designed at between 20 1/sec and 40 1/sec, the size of the irrigation blocks would vary between 7 and 14 ha. The average size of the individual farms would be 0.5 ha. They would be irrigated by rotation. 4.05 Namarigoungou Drainage System Design and Capacity. Drains would have a design capacity of 1.2 1/s/ha. During the normal flows of the river drainage would be assured by gravity through flap gates at the southernmost tip of the scheme; during the flood season drainage waters would be pumped out at the pumping station SP2'  -7- 4.06 Water Demand and Supply. At full development (by year 1982) total yearly requirements ior the Namarigoungou scheme (1,550 ha of net area) would be some 48 million m at the source, based on requirements on the existing irrigation schemes. Its requirements in June when the water level is lowest in the Niger River would amount to 16% of the minimum flow occurring in a one to ten year frequency (Annexes 1 and 2). 4.07 Water Quality. The waters of the Niger River are excellent for irrigation and can be classified CI SI on the USBR classification. 4.08 Status of Engineering. Maps of the Namarigoungou polder (scale 1:2,000) and semi-detailed soil classification (scale 1:10,000) have been completed. The detailed design of the works and the update of the costs as well as the bidding documents for procurement were terminated in February 1978. This was done by SOGREAH under Government financing. The project would be executed with the assistance of consultants to be retained under the procedure described in para 6.04. 4.09 The construction schedule (Annex 14) shows procurement of equip- ment in 1978, and the works starting in February 1979 with the construction of the dike, being completed by mid-year 1981. Provision of Services to Farmers 4.10 Beneficiaries. The project would finance the provision of services to all farmers cultivating on the irrigation schemes in the "Arrondissements" of Tillabery and Tera, including the existing schemes where the services are presently inadequate (Annex 2). 4.11 Until such time as farmers are ready to assume management activities (para 6.08), ONAHA would manage the main infrastructures, provide irrigation water, assist in the creation of farmers' cooperatives, evaluate farmers' equipment requirements, organize the provision of agricultural credit for equipment and improved seeds, and importantly, provide them with effective extension advice for their holdings in the irrigation schemes and in the rainfed areas. A number of blocks in the Namarigoungou polder would be used for applied research tests and seed multiplication. Assurances were obtained at negotiations that the design of the research trials and the seed multipli- cation program would be acceptable to IDA. 4.12 Details of the production packages are given in Annex 6. The tech- niques advocated for rice cultivation and mixed cropping under irrigation are proven through past testing in the project area and known to be accept- able to reasonably receptive farmers. They include: ox-drawn plowing, transplanting, fertilizer applications, proper weeding, hand harvesting and threshing using a thresher with paddles. There is no evidence that the improved measures advocated for rainfed cultivation have been thoroughly tested in the project area under farmers' conditions (new varieties, pure stand planting, fertilizer applications). There is some indication, however, that increases in yields are possible. In any case, improved techniques would be introduced progressively, and it is not assumed that the complete package would be adopted by more than 10% of all farmers.  - 8 - 4.13 The area under cultivation in the Namarigoungou scheme would be divided according to soil suitability between: rice (1,350 ha), mixed crop- ping (150 ha) and fodder crops (25 ha); in addition 25 ha of eucalyptus would be planted. Double cropping would be practiced for all annual crops. Mixed cropping would consist of one crop of sorghum during the rainy season and a variety of vegetables during the dry season. The fodder crops would enable some 500 head of cattle to be fattened annually. The eucalyptus would be cut every 3 years. In addition, project services would be extended to the 9,000 ha that Namarigoungou farmers would continue to cultivate under rainfed conditions. 4.14 The area under cultivation in the other schemes (1,180 ha total net area) would comprise 740 ha of rice in double cropping, 140 ha of rice single cropping and 300 ha of mixed cropping. In addition, project ser- vices would be extended to the 5,000 ha cultivated under rainfed condi- tions by the farmers participating in these other schemes. 4.15 Farm Inputs and Equipment, Procurement and Credit Procedures. Assurances were obtained at negotiations that the project would be granted a license to import inputs and agricultural equipment. Although the local manufacturer of agricultural equipment, SONIFAME, has recently received a line of credit to expand its facilities, it may not be able to meet the emerging demand for agricultural equipment in the country. Some 500 sets of agricul- tural equipment, comprising a plow and a hoe, would be financed under the project. 4.16 Caisse Nationale de Credit Agricole (CNCA) has been vested with overall responsibility for agricultural credit in the country, and all project funds for credit as well as for other costs would be channelled through CNCA. However day-to-day administration of farmers credit under the project would be carried out by the project staff. Farmers would be eligible for seasonal credit for fertilizer, insecticides and livestock to be fattened under the livestock subproject; and for medium term credit (3 years) for agricultural equipment, oxen and carts; blacksmiths, for 5 years' equipment credit. Prices for inputs include interest at the rate prevailing for agricultural credit; this rate is currently 8%. FParmers' and blacksmiths' repayments would be kept in a revolving fund administered by CNCA for the sole use of project partici- pants. This fund would be established no later than 1979. 4.17 Niger follows a policy of subsidization of agricultural equipment and inputs: agricultural equipment (between 32% and 73%), insecticides (25%), and fertilizers (43%). For fertilizer the policy is consistent with existing agreements in the Maradi Rural Development Project that subsidies be reduced to 50% of cost by year-end 1977. This policy is justified at the present time by the low use of equipment and inputs; but it should be recon- sidered when that use increases. Assurances were obtained at negotiations that government policy regarding subsidies for agricultural equipment and inputs would be discussed annually by Government and IDA.  - 9- Improvement in Health Services 4.18 The project would finance a health training program, to be carried out under the supervision of the Ministry of Health (MOH). Assurances were obtained at negotiations that MOH would organize this training component, including post-training supervision and refresher courses; in addition, volunteer first aid assistants would be selected from among project farmers for training in basic skills. A total of some 80 first aid assistants would be trained under the program. Each person trained would be provided with a basic kit financed under the project. Renewal of the kit would be paid for by the community. The project would also provide proper water supply facilities for the two villages to be established around the Namarigoungou scheme. Assurances were obtained that Government would conduct a limited epi- demiological desk study of the area and that the results of the study would be reviewed by Government and IDA to determine whether an additional epi- demiological field survey to collect basic health information is warranted. Training Programs 4.19 The project would provide for the training of its own extension staff (about 30) and for farmer leaders, blacksmiths and other artisans (paras 6.07-6.10 and Annex 11). The project includes the subsistence costs of the trainees, the teaching equipment and the rehabilitation of a vocational school in Tillabery. Physical Infrastructure and Vehicles 4.20 The project includes the construction in Tillabery of 8 senior staff ho ses, project offices, a garage, and in Namarigoungou, 2 stores (1,000 m total area). The capacity of the Tillabery rice mill would be doubled to 10,000 tons. A total of 9 light vehicles and 3 trucks would be purchased, in addition to the heavy vehicles required for construction of the works. Feasibility Study for a Future Irrigation Project 4.21 The project would finance the preparation of the feasibility study for the Gabou-Bonfeba polder (3,300 ha), which is adjacent to Namarigoungou and shows good potential. Assurances were obtained at negotiations that the consultants to carry out the study would have qualifications and experience satisfactory to IDA, and that they would be employed under terms and condi- tions satisfactory to IDA. The Project's Impact on Ecology 4.22 It is unlikely that the project would have any undue adverse impact upon the ecology and the health of the population, since, except in the dry season, no additional area would be permanently under water. On the contrary, the concrete lining of primary and secondary canals of the Namarigoungou  - 10 - scheme would increase the speed of the flow, thereby reducing the snail population, which is the vector of schistosomiasis. The project also in- cludes a limited health improvement component. V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS A. Project Costs 5.01 Project costs are estimated to Total CFAF 5.1 billion (US$21 mil- lion), of which the foreign exchange component would be US$14.8 million or 70%. 5.02 Government will exempt the project from import duties and direct taxes. Project costs are therefore net of duties and taxes. They are detailed in Annex 9 and summarized below: Local Foreign Local Foreign % Foreign Cost Exchange Total Cost Exchange Total Exchange CFAF Million -- -- US$ Thousand ---- Irrigation Works Construction 419 1,677 2,096 1,710 6,840 8,550 80% Direction "Office National des Amenagements Hydroagricoles" 101 100 201 410 410 820 50% Administrative and Financial Services 266 178 444 1,090 720 1,810 40% Agricultural Develop- ment Services 178 179 357 720 730 1,450 50% Support Unit 103 155 258 420 640 1,060 60% Health Component and Training 9 22 31 40 90 130 70% Agricultural Equipment and Incremental Inputs 34 137 171 140 560 700 80% Other - 221 221 - 900 900 100% Base Cost Estimate 1,110 2,669 3,779 4,530 10,890 15,420 70% Physical Contingencies 145 337 482 590 1,380 1,970 70% Price Increases 267 617 884 1,090 2,520 3,610 70% Total Expected Cost of Project 1,522 3,623 5,145 6,210 14,790 21,000 70% 5.03 The cost of the project is based on the detailed engineering study carried out by SOGREAH. Expatriate staff salaries would be equivalent to those  - 11 - paid in other projects in Niger. Technical assistance for the construction of the Namarigoungou works would amount to 15 1/2 man-years over the period 1978-1981 for a total cost of CFAF 356 million (US$1.5 million), averaging US$97,000 per man-year. Technical assistance for ONAHA management and agricultural development would amount to 22 man-years over the period 1978-1982 for a total cost of CFAF 506 million (US$2.1 million), averaging US$95,000 per man-year. Salaries would account for about 50% of the total expatriate costs. Project costs include a physical contingency of 15% of the cost of the irrigation works and of 10% on all other items, and in addition a contingency to cover expected inflation amounting to 25% of base costs over the disbursement period. 5.04 Other costs comprise the feasibility study of the Gabou-Bonfeba polder and the financing over a three year period of a financial coordinator for the IDA-financed agricultural projects. The financial coordinator would: provide technical assistance to the various projects in accounting and finan- cial management, coordinate processing of disbursement applications and monitor financial reporting and auditing. B. Proposed Financing 5.05 It is proposed that IDA make a credit of US$15 million. Kreditan- stalt fur Wiederaufbau (KFW) would make a credit of DM 12.5 million (US$6.0 million). 1/ Except for the financial coordinator (para 5.04), who would be financed 100% by IDA, 100% of the other project expenditures would be financed jointly by IDA and KFW. The IDA and the KFW credits would be disbursed on a pari-passu basis. The financing plan is summarized below: IDA KFW Total %