Senegal - Agricultural Research Project

Document of The World Bank FOR OMCIAL USE ONLY fiLE cupjI Report No. P-2955-SE REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF SENEGAL FOR AN AGRICULTURAL RESEARCH PROWECT August 19, 1981 'Mis docmt hus a restrie distribution an may be used by recipients only In the performnce of t oeir odcal dtes. Ihs coutets mny not otherwise be disclosed witbout World Dak auhoriatIon.  CURRENCY EQUIVALENTS Currency Unit: CFA franc (CFAF) US$1.00 = CFAF 270 CFAF 1 million = US$3,700 SYSTEM OF WEIGHTS AND MEASURES: METRIC ABBREVIATIONS AND ACRONYMS BNDS Banque Nationale de Developpement du Senegal CILSS Comite Inter-Etat de Lutte Contre la Secheresse Sahelienne FAO Food and Agriculture Organization IADS International Agricultural Development Service ICRISAT International Crops Research Institute for the Semi-Arid Tropics ISRA Institut Senegalais de Recherches Agricoles ITA Food Technology Institute SERST Secretariat d'Etat a la Recherche Scientifique et Technique UNIFSTD United Nations Interim Fund on Science and Technology for Development USAID United States Agency for International Development WARDA West African Rice Development Association FISCAL YEAR Government of Senegal July 1 - June 30 ISRA (until end of calendar year 1981) July 1 - June 30 (beginning calendar year 1982) January 1 - December 31  FOR OFFICIAL USE ONLY REPUBLIC OF SENEGAL AGRICULTURAL RESEARCH PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Senegal Amount: SDR 17.0 million (US$19.5 million equivalent) Terms: Standard Project Description: The proposed project would be the six-year first phase of a long-term program to improve the relevance and impact of Senegal's national research effort in crop and livestock development and to strengthen the linkage between research, extension and agricultural activity in Senegal. Making agri- cultural research more relevant to production needs is an important element in the Government's plans for improving overall performance in the sector as part of its ongoing structural adjustment program. Specifically, the project provides for: (i) introducing mixed agriculture/livestock production systems research programs in five priority regions; (ii) establishing nationally-coordinated multi-disciplinary research teams for six priority foodgrain and cash crop com- modities; (iii) reorganizing and strengthening the operations of the Institut Senegalais de Recherches Agricoles (ISRA), the implementing agency; (iv) establishing long-term manpower planning and training for professional and technical staff, and improving personnel management policies and procedures; (v) strengthening research on production economics, marketing, and human resources; (vi) strengthening capabilities for evaluation and application of new technologies, and more effective links with extension services; and (vii) strengthening linkages with external technical assistance agencies, including international agricultural research centers. The proposed investment in problem-oriented research would help assure much needed improvements in quantity and quality of cash crop and livestock production and higher farmer adoption rates, and is therefore important to achieving growth in the agricul- tural sector. One major project objective would be to address directly the needs and problems of farmers through improved communication between research workers and extension personnel. A number of problems (participation of several external donors in a tightly coordinated program, availability of qualified expatriate staff and trained local personnel, and effectiveness of the extension system) may contribute to delays in achieve- ment and dissemination of research results. The project includes appropriate measures to reduce these risks to the minimum. 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.  - ii - Estimated Project Cost: Total project costs (net of identifiable taxes and import duties from which the project would be exempt) are estimated at US$106.1 million equivalent. The following is a summary table of cost estimates. Local Foreign Total -----(US$ million)----- Capital Costs Civil Works and Site Development 7.3 3.9 11.2 Vehicles and Equipment 0.5 4.3 4.8 Other Capital Costs 0.9 1.1 2.0 Subtotal 8.7 9.3 18.0 Research Staff Expenditures Senegalese Scientists and Technicians 8.2 -- 8.2 Expatriate Scientists 5.0 18.9 23.9 Subtotal 13.2 18.9 32.1 Operating Costs Support Staff 9.3 1.9 11.2 Training Costs 0.6 2.4 3.0 Other Operating Costs 2.2 6.0 8.2 Subtotal 12.1 10.3 22.4 Refunding PPA 0.6 0.4 1.0 Base Cost 34.6 38.9 73.5 Contingencies - Physical 1.5 1.5 3.0 - Prices 14.8 14.8 29.6 Total Project Costs 50.9 55.2 106.1  - iii - Financing Plan: The project financing plan takes account of current and planned participation of the Senegalese Government and several external sources in the overall six-year research effort as follows: US$ million Percent IDA 19.5 19 France 35.3 33 USAID 12.8 12 FAO/CILSS 3.5 3 ICRISAT/WARDA 1.1 1 UNIFSTD 1.0 1 Government 32.9 31 106.1 100 Estimated Disbursements: FY82 FY83 FY84 FY85 FY86 FY87 Annual 3.2 7.3 5.5 1.9 0.9 0.7 Cumulative 3.2 10.5 16.0 17.9 18.8 19.5 Staff Appraisal Report: Report No. 3073-SE dated July 24, 1981 Map: IBRD 14941   INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF SENEGAL FOR AN AGRICULTURAL RESEARCH PROJECT 1. I submit the following report and recommendation on a proposed Development Credit to the Republic of Senegal for SDR 17.0 million (US$19.5 million) to help finance an Agricultural Research Project. The Credit would be on standard IDA terms. External financing for the proposed project would be provided in the form of grants and technical assistance from several donors through their ongoing or proposed funding of research activities in Senegal as follows: France, US$35.3 million equivalent; United States Agency for Inter- national Development (USAID), US$12.8 million equivalent; Comite Inter-Etat de Lutte Contre la Secheresse Sahelienne (CILSS), in cooperation with the Food and Agriculture Organization (FAO), US$3.5 million equivalent; International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) and the West African Rice Development Association (WARDA), US$1.1 million equivalent; and the United Nations Interim Fund on Science and Technology for Development (UNIFSTD), US$1.0 million equivalent. PART I - THE ECONOMY 2. A report entitled "The Economic Trends and Prospects of Senegal" (1720a-SE) was distributed to the Executive Directors on March 10, 1980, followed by a president-s report for a structural adjustment loan/credit (P-2869a-SE) dated November 26, 1980, containing an expanded section on the economic situation. The following paragraphs reflect the conclusions of these reports. Country data appear in Annex I. Economic Structure and Past Developments 3. Three-quarters of Senegal's territory lies in the Sahel zone, which suffers from low rainfall and periodic droughts. The mainstay of the tradi- tional economy is millet cultivation and nomadic cattle-raising for domestic consumption, and groundnut cultivation for exports. Soils are generally poor, and periodically food shortages occur in the months between the sowing and harvesting of the next crop. The large river basins--some of them fed in the tropical rain zone--have so far been exploited only marginally. Land distribution is fairly even. In the western part of the country arable land is becoming scarce, but in the extreme southeast some good land is still available. The modern sector of the economy is concentrated in Dakar, the capital, a city of about one million inhabitants, the economic base of which consists of excellent port facilities, an important industrial sector, and a small but fast-growing tourism industry. With a population of 5.5 million, Senegal's per capita GNP for 1980 was estimated at US$450.  - 2 - 4. During the 1960s, the Senegalese economy experienced virtual stagnation as real output increased at a rate estimated at 2.7 percent per annum, hardly more than the population. Two factors were responsible for this situation. Firstly, with independence, Senegal lost its privileged position as the center of Freach we<, Africa, and &,ubsequcit1l- had to adapt to its reduced economic, adminisi:r.stive, ar-d political position. Secon;lly, in the latter part of the decade, productioni of groundnuts (iLS pritLcipal export) fell, due to unfavorable weather and declining export prices. 5. In the 1970s, Senegal's narrow-based export sector was hit by sharp fluctuations in volumes and prices, and even with the achievement of higher rates of both private and public investment, average annual growth was not raised above the earlier 10 years level. Output and incomes were depressed in 1972 and 1973 by the Sahel's most severe drought in over a century, which brought a decline in real national income. Thereafter, when weather condi- tions improved, the purchasing power of the rural population was substantially restored and both agricultural and industrial production increased markedly. However, the late 1970s saw another series of bad crops, which have adversely and increasingly affected the economy since 1978. The magnitude of these downswings is reflected in the variations in groundnut crops; from a historical record of 1.45 million tons in 1975/76, output fell to less than 0.6 million tons in 1977/78; it recovered to about 1.0 million tons in 1978/79, but fell again, to less than 0.8 million tons in 1979/80 and to a new low of about 0.5 million tons in 1980/81. Industrial output (excluding groundnut processing) did grow at a fairly even rate of about 5 percent a year. After recovery from the earlier droughts, real GDP increased at about 5 percent between 1973 and 1977, but in 1978 it is estimated to have declined by 9 percent reflecting the effect of the 1977/78 drought; similarlyi due to the mediocre crops in 1979/80, it remained below its 1977 level in 1980. 6. The large fluctuations in physical production were aggravated by the price movements of Senegal