Madagascar - Agriculture and rural development sector memorandum

Document oL The World Bank FOR OFFICIAL USE ONLY f// Report No. 4209-MAG MADAGASCAR AGRICULTURE AND RURAL DEVELOPMENT SECTOR MEMORANDUM March 29, 1983 Eaten fic Poecs earmetFILE CO PY Central Agriculture Division Eastern Africa Projects Department 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 = Malagasy Francs (FMG) (Yearly Average) = FMG I US$ = FMG = 100 FMG =US$ 1975 214.32 0.47 1976 238.98 0.42 1977 245.67 0.41 1978 225.64 0.44 1979 212.72 0.47 1980 211.30 0.47 1981 271.73 0.37 1982 (after 345.00 1! 0.29 April) 1983 (March) 390.00 0.26 WEIGHTS AND MEASURES Metric British/US Equivalents 1 are (a) = 0.0247 acres 1 hectare (ha) = 2.47 acres 1 kilometer (km) = 0.62 miles 1 square kilometer (km2) = 0.39 square miles 1 kilogram (kg) = 2.20 pounds 1 liter (1) = 0.26 US gallon = 0.22 Imperial gallon 1 tonne (t) = 2,204 pounds ABBREVIATIONS AND GLOSSARY BTM = Rural Development Bank of Madagascar CCCE = French Development Fund (Caisse Centrale de Cooperation Economique) DGP = Direction Generale de la Planification (General Planning Directorate) DEP = Directorate for Studies and Planning of MPARA FAC = French Technical Assistance Agency (Fonds d'Aide et de Cooperation) FAO = Food and Agriculture Organization FED = European Development Fund (Fonds Europeen de Developpement) FNDE = National Capital Investment Budget (Fonds National de D6veloppement Economique) 1/ Exchange rate used in report unless otherwise noted.  FOR OFFICIAL USE ONLY FNUP = Fonds National Unique de P6requation FOFIFA National Center for Applied Research on Rural Development (formerly CENRADERU) IFAD = International Fund for Agricultural Development IRRI International Rice Research Institute MIC = Ministry of Industry and Commerce MPARA = Ministry of Agricultural Production and Agrarian Reform ODRI = Operation de Developpement Rural Integre MPT = Ministry of Public Works SINPA = State Marketing Company for Agricultural Commodities (Socigtg d'Intgret National des Produits Agricoles) tanety = Non-irrigated slopes above rice paddies on which rainfed food crops are cultivated. Appendix 2 lists acronyms and full titles of parastatal agencies operating in the agricultural sector. GOVERNMENT ADMINISTRATION Fokonolona Territorial Divisions Fokontany = group of villages (about 11,400 total) Firaisam-pokontany group of Fokontany (or Firaisana) = (former canton) (about 1,250 total) Fivondronam-pokontany = group of Firaisana (or Fivondronana) = (former sub-prefecture) (about 115 total) Faritany = group of Fivondronana (former province) (six) FISCAL YEAR Government of Madagascar and Most Public Institutions = January 1 - December 31 PADDY: RICE CONVERSION One ton of paddy gives about 670 kg rice; one ton of rice is made from about 1.5 ton of paddy. Thiis 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.   MADAGASCAR AGRICULTURE AND RURAL DEVELOPMENT SECTOR MEMORANDUM Table of Contents Page No. EXECUTIVE SUMMARY . ............. . ....... * ***- --i-xiii - I. INTRODUCTION .....1............. II. THE AGRICULTURAL SECTOR - RECENT PERFORMANCE AND DEVELOPMENT POLICIESOS.. ..... 3 A. Role of Agriculture and Recent Performance . . 3 B. Agricultural Development Poi cies.. 9 III. AGRICULTURAL RESOURCES AND PRODUCTION SYSTEMS ............... 13 IV. AGRICULTURAL PRODUCTION - SUB-SECTOR ISSUES ................. 24 A. Gn r l................................................. 24............................................ A. Ceneral.,.,24 B. Rice. . 24 C. Other Food Crops ...................... ... 30 D. Industrial Crops ...................... 31 E. Export Crops . .................... 36 F. Livestock . .... 39 G. Fisheries .. ................... 42 H. Forestry ..................... 43 V. PLANNING AND FINANCE FOR AGRICULTURE PUBLIC RESOURCE MANAGEMENT ...... ..................... ....... 43 A. Planning for Agricultural Development .................. 43 B. Resource Allocation for the Agricultural Sector ......... 45 C. Agricultural Development Projects and External Assistance 51 D. Foreign Exchange Allocations ............................. 54 E. Cost Recovery ........................................... 55 VI. INSTITUTIONAL ISSUES AND KEY PRODUCTION SERVICES .... ........ 57 A. Policy Formulation and Coordination .... ................. 58 B. The Ministry of Agricultural Production and Agrarian Reform ..................................... 60 C. Public Enterprises for Agriculture ................... ... 62 D. Issues for Decentralization ............................. 64 E. Key Production Services ................................. 66 F. Broader Public Administration Issues ................. ... 77  VII. ISSUES FOR MARKETING AND PRICING POLICY .* ......... .......... 80 A. General ............................................... 80 B. Overall Policies and Framework for Agricultural Pricing and Marketing ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 C. Key Sub-Sectors . ........................ 89 VIII. CONCLUSIONS - RECENT ACTION AND PROGRAM FOR THE FUTURE .............................................................. 95 TABLE 1: Summary of Policy Issues and Future Actions APPENDICES 1: Summary of Recommendations for Action and Further Review and Study 2: Agricultural Parastatals by Legal Category ANNEX 1 - Agricultural Resources and Production ANNEX 2 - Institutions for the Agricultural Sector ANNEX 3 - On-going Agricultural Projects ANNEX 4 - Agricultural Input Supply Systems and Research ANNEX 5 - Agricultural Credit ANNEX 6 - Resource Allocation and Budget for Agriculture ANNEX 7 - Tendering Procedures CHART The Ministry of Agricultural Production and Agrarian Reform MAP S 1 Relief, Water Courses, and Rainfall - IBRD 16926 2 Climatic Zones and Land Potential - IBRD 16927 3 Principal Cash Crops and Transport Network - IBRD 16925 4 Areas of Cotton Production - IBRD 15921 5 Major Region Specific Agricultural Projects - IBRD 16924  MADAGASCAR AGRICULTURAL SECTOR MEMORANDUM List of Text Tables and Annexes TEX'T TABLES 2.1 Agricultural GDP 2.2 Agricultural Production and Growth Rates 2.3 Major Agricultural Exports: Growth Rates and Share of Agricultural Exports 2.4 Major Agricultural Exports: Values and Quantities 2.5 Average Export Prices 7.1. Summary Pricing and Marketing Systems for Major Agricultural Sub-Sectors ANNEX 1: AGRICULTURAL RESOURCES AND PRODUCTION I. GEOGRAPHY AND CLIMATE II. LAND RESOURCES III. FARMING SYSTEMS IV. KEY AGRICULTURAL SUBSECTORS A. Rice B. Other Food Crops C. Industrial Crops D. Export Crops E. Livestock F. Fisheries G. Forestry TABLES 1 Land Use and Cropping Patterns 2 Foodcrop Production and Selected Producer Prices, 1972-1981 3 Paddy and Rice Price Structure 4 Paddy Production by Major Production Region 4a Projection for Rice Import Needs 1982-92 and Per Capita Availability 4b Paddy Marketed by Parastatals 4c Estimated Total Rice Availability 1960 - 1982 4d Estimated Import Parity Price of Rice  5 Seed Cotton Production and Area 1965 to 1982 6 Use of Farm Inputs for Cotton Production, 1973-1981 7 Cotton Price Structure, Import Substitution and Export Parity Prices 8 Industrial Crop Production, Processing and Imports, 1972-1981 9 Sugar Cane Acreages, Yields and Production (1980) 10 Selected Data of Major Food Processing Industries (1979) 11 Value and Share of Export Crops in Total Merchandise Exports, 1972-1980 12 Coffee Production, Prices and Exports, 1976-1981 13 Clove Production, Prices and Exports, 1976-1981 14 Pepper Production, Prices and Exports, 1976-1981 15 Vanilla Production, Prices and Exports, 1976-1981 16 Cocoa, Tung Oil and Sisal Production, Prices and Exports, 1976-80 17 Livestock Herd Numbers and Production 1974-1980 18 Production, Consumption and Trade in Wood and Wood Products 1972, 1976 and 1980 19 Official Producer Prices for Selected Crops and Farm Input Prices 20 u-