Papua New Guinea - Agricultural Support Services Project

Document of The World Bank FOR OFFICIAL USE ONLY -- Report No. 4243-PNG STAFF APPRAISAL REPORT PAPUA NEW GUINEA AGRICULTURAL SUPPORT SERVICES PROJECT April 8, 1983 Projects Department East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the pertormance of their officiai duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit - Kina (K) K 1 = US$1.30 US$1 = K 0.77 WEIGHTS AND MEASURES 1 kilogram (kg) = 2.20 pounds 1 metric ton (t) = 2,205 pounds 1 kilometer (km) = 0.62 miles I square kilometer (sq km) = 0.39 square miles 1 hectare (ha) = 2.47 acres GLOSSARY OF ABBREVIATIONS ADB - Asian Development Bank CC1, etc. - Clerk Class 1, etc. CDC - Commonwealth Development Corporation CSIRO - Commonwealth Scientific and Industrial Research Organization DPI - Department of Primary Industry IFAD - International Fund for Agricultural Development ISNAR - International Service for National Agricultural Research KBO - Key Board Operator LAES - Lowland Agricultural Experiment Station, Keravat NPEP - National Public Expenditure Plan NPO - National Planning Office PEM - Planning, Economics and Marketing Branch (DPI) PMTP - Plantation Management Training Program PNG - Papua New Guinea PNGDB - Papua New Guinea Development Bank PRC - Policy, Review and Coordination Branch (DPI) PSC - Public Service Commission RDA - Rural Development Assistant RDO - Rural Development Officer RDT - Rural Development Technician SO - Scientific Officer GOVERNMENT OF PAPUA NFW GUINEA FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY PAPUA NEW GUINEA AGRICULTURAL SUPPORT SERVICES PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I. BACKGROUND .... . . . . . . . . . . . . . . . . . . . . . 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . 1 Agriculture in PNG. 1 Development Issues, Objectives and Strategy . . . . . . . 3 The Bank's Role . . . . . . . . . . . . . . . . . . . . . 4 II. AGRICULTURAL SUPPORT SERVICES IN PNG . . . . . . . . . . . . 5 General . . . . . . . . . . . . . . . . . . . . . . . . . 5 Crop Research . . . . . . . . . . . . . . . . . . . . . . 9 Agricultural Education and Training . . . . . . . . . . . 16 Planning and Economics .18 Agricultural Extension Support .19 Land Utilization Services .21 Agricultural Project Development . . . . . . . . . . . . . 22 Livestock Services . . . . . . . . . . . . . . . . . . . . 22 Quarantine Services .... . . . . . . . . . . . . . . . 25 Plantation Management Training ... . . . . . . . . . . . 25 III. THE PROJECT .... . . . . . . . . . . . . . . . . . . . . 26 Project Formulation .... . . . . . . . . . . . . . . . 26 Project Description .... . . . . . . . . . . . . . . . 28 Project Components .... . . . . . . . . . . . . . . . . 29 Crop Research . . . . . . . . . . . . . . . . . . . . . 29 Agricultural Education and Training .31 Planning and Economics .32 Agricultural Extension Support .33 Land Utilization Services .34 Agricultural Project Development .34 Livestock Services . . . . . . . . . . . . . . . . . . . 35 Quarantine Services .35 Plantation Management Training .36 Transit Staff Housing .36 Monitoring and Evaluation .36 Fellowships . . . . . . . . . . . . . . . . . . . . . . 37 Consultancies . . . . . . . . . . . . . . . . . . . . . 38 Implementation Schedule .38 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.  - i~i - Page No. IV. PROJECT COST AND FINANCING . . . . . . . . . . . . . . . . . 40 Project Cost .... . . . . . . . . . . . . . . . . . . . 40 Financing . . . . . . . . . . . . . . . . . . . . . . . . 40 Procurement .... . . . . . . . . . . . . . . . . . . . 40 Disbursement .... . . . . . . . . . . . . . . . . . . . 42 Accounting and Auditing . . . . . . . . . . . . . . . . . 42 V. PROJECT IMPLEMENTATION .43 Implementation Responsibilities . . . . . . . . . . . . . 43 Reorganization of DPI ... . . . . . . . . . . . . . . . 43 Early Recruitments ... . . . . . . . . . . . . . . . . . 43 Recruitment Procedures . . . . . . . . . . . . . . . . . . 44 Reporting . . . . . . . . . . . . . . . . . . . . . . . . 44 Operation and Maintenance ... . . . . . . . . . . . . . 45 VI. BENEFITS, JUSTIFICATION AND RISKS . . . . . . . . . . . . . 45 Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 45 Justification ... . . . . . . . . . . . . . . . . . . . 46 Environmental Considerations . . . . . . . . . . . . . . . 46 Risks ......................... . 46 VII. AGREEMENTS REACHED AND RECOMMENDATIONS . . . . . . . . . . . 47 TABLES IN THE TEXT Table 2.1: Distribution of National and Provincial DPI Staff by Service, 1981 . . . . . . . . . . . . . . . . . . . 7 Table 2.2: Department of Primary Industry, 1981, Staff Numbers, by level of Qualification . . . . . . . . . . . . . . 8 Table 2.3: Time Allocation of Agricultural Research Staff by Major Research Groups and Activities, 1981 . . . . . . . . . 14 Table 2.4: Proposed Time Allocation of Agricultural Research Staff by Major Research Groups and Activities. . . . . . . . 15 Table 2.5: DPI-Colleges; Enrollments/Graduations, 1977-81; Staff, by Nationality, 1981 ... . . . . . . . . . . . . . . . 17 Table 2.6: Distribution of Provincial DPI Extension Staff, 1981 20 Table 2.7: Existing Agricultural Development Projects as of July 1982 ... . . . . . . . . . . . . . . . . . . . 23 Table 2.8: Proposed Agricultural Development Projects, July 1982 ... . . . . . . . . . . . . . . . . . . . 24 Table 2.9: PMTP Training Activities, 1976-82 . . . . . . . . . . 27 Table 3.1: Proposed Implementation Schedule - Four and a Half Year Project Period, July 1983 - December 1987 39 Table 4.1: Project Cost Summary . . . . . . . . . . . . . . . . . 41  - iii - Page No. ANNEXES Annex 1: Tables to the Main Report Table 1: Project Cost Estimates . . . . . . . . . . . . . . . 50 Table 2: Incremental Staff Requirements by Project Component, Qualification and Nationality . . . . . 53 Table 3: Breakdown of Consultant Cost Per Man-month .54 Table 4: Estimated Schedule of Disbursement . . . . . . . . . 55 Table 5: Proposed Allocation of Loan Funds. . . . . . . . . . 56 Annex 2: Related Documents in Project File . . . . . . . . . . 57 Chart: Organization of DPI . . . . . . . . . . . . . . . . 58 Map: Location of Agricultural Support Services Facilities .... . . . . . . . . . . . . . . . . 59  l~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~  I. BACKGROUND Introduction 1.01 The Government of Papua New Guinea (PNG) has requested Bank assistance for a project to strengthen the country's agricultural support services, principally those administered by the Department of Primary Industry (DPI), the main Government agency responsible for agriculture. The project was identified by the Government with Bank assistance in November 1981 and prepared by an FAO/CP mission in May 1982./l Preparatory work for specific components was undertaken by a group of consultants (education and training, extension support)/2 and by ISNAR (agricultural research)./3 This report is based on information contained in these sources and on the findings of an appraisal mission consisting of Messrs. H.H. Thias, K. Sengupta (Bank) and R.G. Spinks (FAO/CP) who visited Papua New Guinea in July 1982 and a post appraisal mission consisting of Ms. C. Subido, Mr. M Altaf liussain (Bank) and R.G. Spinks (FAO/CP) in November 1982. Mr. Saddington (Bank) reviewed the final report. Agriculture in PNG 1.62 With a land area of 500,000 square kilometers and a 1980 popula- tion of 3 million growing at about 2% p.a., PNG is sparsely populated and the considerable agricultural potential only partly utilized. The 1980 per capita GDP of US$780 is largely attributable to the Bougainville copper mine; average farm incomes are probably not much above US$200. 1.03 While agriculture contributes about one third to the country's GDP and roughly 40% to its exports, most of the country s rural population /4 depend on agriculture for their livelihood. The dominant role of this sector as employer and source of income for the great majority of the people is unlikely to be challenged in the foreseeable future. /1 Papua New C-uinea, Agricultural Support Service Project, Preparation Report (2 vols.), Konedobu, May 1982. /2 Mc Killop Williamson & Associates Pty. Ltd. in association with Sloane Cook & King Pty. Ltd: DPI Manpower and Training Review; Final Report to the Government of Papua New Guinea (3 vols.), February 1982. /3 ISNAR, The Crops Research Program and Organization in Papua New Guinea (Draft); The Hague, June 1982. /4 The 1980 Population Census established that 87% of the country-s people lived in rural areas.  1.04 Papua New Guinea's diverse topography has resulted in the forma- tion of numerous isolated environments, particularly in the Highlands region, each with its own set of climatic, soil and other natural condi- tions, and with a matching multitude of plant varieties. The geographic fragmentation has also given rise to the development of numerous isolated communities which are separated from one another by physical as well as linguistic and cultural barriers. This natural and human diversity poses considerable problems for administration in general and specific functions such as agricultural research and extension in particular. 1.05 Agriculture follows three modes of production: the plantations (numbering about 900), originally foreign owned and managed but now increasingly in Papua New Guinean hands, smallholder cash cropping and subsistence production from shifting cultivation, with considerable overlap among the last two. 1.06 The major cash crop production in PNG during 1981 is shown below: PNG 1981 Production from Major Cash Crops Tons Weight Value Total Value Crop 000 % US$/ton US$ ton x Coffee 49.0 17 2,830 138.7 45 Cocoa 31.9 11 2,080 66.4 22 Copra 141.9 50 379 53.8 18 Palm oil 39.7 14 571 22.7 7 Palm Kernels 7.9 3 317 2.5 1 Tea 7.8 3 2,020 15.8 5 Rubber 4.2 1 1,250 5.2 2 Total 282.4 100 - 305.1 100 1.07 Over the last ten years the estate sector, with the important exception of oil palm and coffee, has declined while smallholder production, except for copra, has followed an upward trend. However, this progress in smallholder cash cropping was accompanied by an increase in foodstuff imports in excess of the growth of urban populations due to higher purchas- ing power of rural consumers. Imports supply about one quarter of the country's food requirements and claim significant amounts of foreign exchange, particularly rice of which about 100,000 t are imported annually.  - 3 - 1.08 The increase in consumption of imported rice in place of locally grown foods is due to (i) farmer's better storage and transport qualities and greater convenience; and (ii) decline in garden productivity where lands have been diverted to cash cropping. Increasing population is also creating land pressures in some localities, putting the traditional shifting cultiva- tion systems under severe stress. Malnutrition is widespread, especially amongst small children in less developed areas. However there is conflict- ing evidence on the relationship between cash cropping and a change in nutritional status. The need to improve nutrition and local food supplies is therefore a multi-faceted problem requiring major inputs of both research and extension activities. 1.09 The estate sector has stagnated mainly because of the uncertainty about land ownership and land use rights which has kept many expatriate planters from investing in the sector for much-needed rehabilitation. Other difficulties are the lack of managerial and financial expertise in cases where plantations have reverted to national management, agricultural wages that are high in comparison with competing countries, and an unfavorable world market situation. Development Issues, Objectives and Strategy 1.10 Development Issues. The Government is faced with four broad issues in agricultural development: (a) the adaptation of traditional village structures (including land tenure systems) to the needs of a market economy; (b) the effective participation and cooperation in the development process of the many diverse and often antagonistic clan groups; (c) the steady transfer of plantation lands from expatriate to national ownership/management without severe adverse effects on productivity; and (d) the formation and mobilization of the necessary trained manpower particularly in the Government-s agricultural services. 1.11 Development Objectives. The main goals of agricultural development in PNG are: in the short run to reduce food imports and to broaden agricultural exports; and in the long run to improve the livelihood of rural families. 1.12 Development Strategy. In the last decade the Government-s agricultural and rural development efforts have centered around the following principles: (a) an open economy with emphasis on a strong private sector supported by agricultural credit and export crop stabilization funds;  - 4 - (b) the support of clans and other traditional groups as recognized legal entities while acknowledging individual land rights in clan lands as a basis for long-term farm improvements; (c) the delegation of major development responsibilities to the provincial level; (d) financial and management assistance to nationals to enable them to assune responsibility for plantations formerly owned and managed by expatriates; and (e) expansion of specialized agricultural training (Agricultural Colleges and other vocational schools) and improvements in the remuneration and working conditions of agricultural support staff. 1.13 Only recently has there been a renewed awareness within the Government that agriculture will remain the mainstay of Papua New Guinea's economy for many years. This recognition of the importance of agriculture is manifest in a wide area: in the greater flexibility of Government on expatriate ownership and management of plantations, in the formulation of a national food and nutrition policy recognizing the important role of traditional agriculture and in the explicit realization that for agriculture to advance on a broad front, an improvement in the Government's agricultural support services is imperative. The Bank's Role 1.14 Since the country's independence in 1975 the World Bank has supported agricultural development in PNG through four projects: (a) Popendetta Smallholder Oil Palm Development Project - (LN 1333-PNG of US$12 million, effective January 6, 1977), (b) Southern Highlands Rural Development (Cr 841-PNG of US$20 million, effective February 26, 1979) (c) Enga Provincial Development Project (Ln 2125/Cr 1227-PNG of US$6 mil- lion, 2 million, effective September 16, 1982) and (d) Second Agricultural Credit Project - Cr 1149-PNG of US$15 million, effective May 26, 1982). The first assists in the development of 4 ha oil palm blocks for 1,400 small- holders, together with investments in infrastructure, extension and inspection services and a transport company for the smallholder production. 1.15 The second assists an integrated rural development effort in the Southern Highlands Province, one of PNG-s least developed areas. The project includes infrastructure investments (roads, health and education facilities), cash crop development (coffee, tea, cardamom, silk), health training, adult education and extension and an integrated research program in subsistence food production, nutrition and health. While the infrastructure components have been largely completed and already show an impact on the local economy,  the software components experienced delays due to uncertainties in the national health training policy and recruitment difficulties. However, recent developments suggest that bottlenecks in staffing are being overcome and that the health staff training component is now moving ahead. 1.16 The third constitutes a time slice of a phased multisectoral rural development project. It covers provincial institution building, a variety of agricultural, forestry and livestock developments, investments in infrastructure and health, education and community development components. 1.17 The fourth assists the efforts of Papua New Guinea Development Bank (PNGDB) to finance tree crop development and pig and poultry raising and to strengthen its development and extension efforts for cocoa, coffee and coconuts. At the time of the last supervision (November 1982) PNGDB had already approved almost 1,062 subloan applications totalling US$18 million equivalent (corresponding roughly to the relevant Schedule I allocation), but disbursements of loans are lagging, due to lack of properly trained staff and other organizational constraints. 1.18 The Bank's future support of agricultural development in PNG will move along two paths, one aiming at rehabilitation and diversification of the tree crop sector through loans to Papua New Guinea Development Bank and through larger nucleus estate projects to assist smallholders, the other at replications of rural development projects of the Enga type. The inherent risks and difficulties are well recognized: adverse world market prospects for several of PNG's traditional export crops (coffee, cocoa, copra), the administrative, legal and technical complexities of a nucleus estate project in oil palm or rubber, and the lack of experience with the new type of provincial development effort as represented by the Enga Project. Both types of projects however would require a strengthening of PNG's agricultural support services. II. AGRICULTURAL SUPPORT SERVICES IN PNG /1 General 2.01 Agricultural support services in PNG are provided by a number of Government and nongovernmental agencies, with the largest and most important contribution coming from the Department of Primary Industry (DPI). DPI is headed by a Minister and a Secretary (who is also administratively /1 This Chapter focuses on those support services that are to be assisted under the proposed project. A more comprehensive analysis is contained in the 1981 Bank Review (IBRD: Country Sector Report - Papua New Guinea: Agricultural'Services Review, Washington, D.C., 1981).  - 6 - responsible for an Office of Forestry under a separate Minister) and consists of the following Branches: Planning, Economics and Marketing (PEM); Policy, Review and Coordination (PRC); and Fisheries /1 reporting directly to the Secretary; and Management Services; Agriculture; Livestock; and Education and Training reporting through a Deputy Secretary (See Chart). The latest available data on staff of the various Branches is given in Table 2.1. 2.02 The main DPI staff categories and corresponding levels of qualifications are as follows: (a) Scientific Officer (SO) - 5 grades, recruitment normally /2 from among university graduates in agriculture, science or other tech- nical subjects; (b) Rural Development Officer (RDO) - 5 grades, recruitment normally from among Agricultural College Diploma holders (3 year course) following 10 years of general education; (c) Rural Development Technicians (RDT) - 6 grades; recruitment normally from among Agricultural College Certificate holders (2 year course); and (d) Rural Development Assistant (RDA) - 3 grades; this category does not require any formal qualification and is being phased out. The composition of DPI staff by level of qualification is given in Table 2.2. 2.03 The devolution of administrative responsibilities to the 19 pro- vinces brought about a reorganization of DPI, with about two thirds of the staff being transferred to the provinces. The most important function yielded to the provincial DPI's /3 was agricultural extension, and the great majority of provincial agricultural staff serve in this area (Table 2.1). Important functions retained by the central DPI were usually those where economies of scale militated against provincialization (such as agricultural research) or where a national interest was perceived (such as in quality control for export crops or quarantine services). /1 For historical reasons, Fisheries constitutes a Division headed by a Director, whereas the Branches have Assistant Secretaries. /2 Promotion into this and other categories of staff without this formal qualification is possible after a certain period of service and in- service upgrading training. /3 The term "provIncial DPI" is used for convenience. The provincial agri- cultural services have adopted various names, such as Division of Rural Development, Division of Primary Industry, etc.  Table 2.1: DISTRIBUTION OF NATIONAL AND PROVINCIAL DPI STAFF BY SERVICE, 1981 National Provincial DPI DPI Agriculture 406 1,126/a Agricultural education and training 260 - Livestock 216 128 Fisheries 163 148 Management services 128 180/b Planning, economics and marketing 96 Policy review and coordination 80 - Total 1,349 1,630 (Forestry) (192) (279) /a General extension staff. /b Includes provincial headquarters staff. Source: DPI Manpower and Training Review, 1982.  - 8 - Table 2.2: DEPARTMENT OF PRIMARY INDUSTRY, 1981 STAFF NUMBERS, BY LEVEL OF QUALIFICATION Designation Provincial National Total R.D.O. 305 233 538 R.D.T. 546 282 828 R.D.A. 699 173 872 Forester 98 38 136 Asst. Forester 173 29 202 Artisan & Artisan Asst. 35 76 111 Scientific Officer 33 274 307 Technical Officer 7 64 71 Seaman 4 43 47 Marine Eng. Oper. 6 10 16 Instructor 1 - 1 Drafting Asst. 3 - 3 Sr. Comm. D.O. 1 - 1 Total 1,911 1,222 3,133 Note: Clerical and administrative positions are not included.  - 9 - 2.04 The dismemberment of the old DPI meant a serious weakening of the country-s agricultural support services as the central organization was drastically reduced without creating an equivalent structure at the provirr- cial level. In a number of cases, provincial agricultural services were too small to permit the aggregation of a sufficient body of expertise, and the fiscal basis of the provinces was seldom sufficient to support an adequate development of its agricultural services. The difficulties stemming from the process of administrative devolution were compounded by the simultaneous (and still ongoing) departure of experienced expatriate officers, by a slow decrease in the quality of general and agricultural education, and by per- sistent staff shortages (at present about 600 positions are filled on an acting basis). As a result, today's DPI (the combined national and provincial services) is, by common consent, weaker than its unified predecessor. Crop Research 2.05 While livestock and fisheries research are integrated in the respective Branch/Division to assure a close contact with the other technical personnel in these subsectors, crop research is spread over six sections of the Agriculture Branch: Hlorticulture (i.e., foodcrops), Agronomy, Agricultural Chemistry, Land Utilization, Plant Pathology, and Entomology. 2.06 Crop research in PNG is also carried out by other Government Departments such as Mines and Energy, by Industry Boards for cocoa, coffee and oil palm, by the University of Papua New Guinea, the University of Technology and other bodies. 2.07 DPI Research Stations. There are five main stations serving major agro-climatic zones and crops, and two smaller stations serving particular crops as shown below: (a) Lowland Agricultural Experiment Station (LAES), Keravat, East New Britain (Cocoa, coconut, staple foods, spices, and leafy vegetables); (b) Agricultural Research Station, Bubia, Morobe (Rice, pulses and coarse grains), (c) Highland Agricultural Experiment Station, Aiyura, Eastern High- lands (Coffee, staple foods and farming systems); (d) Kuk Agricultural Research Station, Mt. Hagen, Western Highlands (Tea, staple foods, vegetables);  - 10 - (e) Horticultural Research Station, Laloki, Central (Vegetables, staple foods); (f) High Altitude Experiment Station, Tambul, Western Highlands (Pyrethrum); and (g) Rubber Center, Bisianumu, Central (Rubber). 2.08 Industry Based Research. New Britain Palm Oil Development, jointly owned by the Government of PNG and Harrison and Crossfield, estab- lished Dami Oil Palm Research Station when oil palm development began in the 1960s, and initially Government provided the research scientist in charge. Oil palm research is now solely industry financed from a production levy, except for the salary of one seconded DPI entomologist. 2.09 The Cocoa Industry Board, from a levy of K 20 per ton of cocoa exports, has earmarked K 13 for research and hired a plant breeder and a plant pathologist who use the facilities of the LAES at Keravat. A nearby plantation at Tavilo has been purchased by the Board and is being developed partly as an experiment station and partly for production of planting material for commercial distribution. 2.10 The Coffee Industry Board, from a levy of K 10 per ton on coffee exports, funds an expatriate coffee specialist and a national agronomist who are developing research programs. Both are currently based at Highland Agricultural Experiment Station, Aiyura, but the Board is considering possible development of an industry-owned research station along the lines of oil palm research. Government control of industry-based research is limited to representation on the respective Boards of Directors, and participation by the Chief Agronomist in research advisory committees for oil palm and coffee. 2.11 University Research. The Faculty of Agriculture of the Univer- sity of P pua New Guinea was established in 1975. Its research programs are modest an focus on winged bean, taro, erosion control, local foodstuff for livestock and marketing. Recently steps have been taken to set up a joint committee by DPI and the University for coordinating research. 2.12 The University of Technology at Lae has a 17 ha farm for teaching and research. Its Department of Chemical Technology and DPI have jointly established a food storage research unit on campus, but beyond this linkage, there is no formal arrangement for coordinating agricultural research. Within their financial constraints the universities provide useful contributions to crop research. 2.13 Past crop research efforts. Major emphasis in early years was on tree crops and great advances were made in the major export crops like coffee, cocoa, coconut and oil palm. As in most tropical developing countries with an economy dominated by agriculture, PNG has emphasized  - 11 - research on cash crops for export, while tending to neglect the food crops produced and consumed locally. However, following independence government policy has required greater support to be given to food production and to research on staple crops and farming system. Rice, the country-s main agricultural import, has commanded research attention intermittently for over 50 years, but this effort has failed to lead to an increase in produc- tion./l Research on other food crops, especially traditional root crops, is more recent and has been intensified after recognition of appreciable malnutrition in some areas of the country. The research program for food crops was reinforced after the declaration of the Food and Nutrition Policy for Papua New Guinea in February 1978./l 2.14 Currently the policy for increasing food production is not very clear, which has caused difficulties in formulating a well-defined research program. However, the Horticulture Section stresses research on staple food crop production and the sweet potato research program has more time allo- cated to it than any other food crop program. Much of the farming systems research program is also devoted to sweet potato based systems, and several rural development projects are allocating research resources to understand- ing and improving sweet potato cultivation. 2.15 There is ample justification for this emphasis in addition to that of improving the nation's nutrition. Subsistence agriculture forms the largest sector of agriculture and is based largely on root crops and bananas. By developing a more efficient food crop production system, more land and especially labor would be available for increasing cash crop production. Improvement of traditional staple food production would also decrease rice imports and increase self-reliance. 2.16 Financing of Agricultural Research. The estimate for total expenditure on crop research in 1981 by Government was about K 3.1 million whereas the total levy from the industrial sector for cash crops research was about K 0.9 million, although the latter amount was not being fully utilized. The budget allocation for crop research was about 0.2% of GDP, and 0.8% of the Gross Agricultural Domestic Product. Including the /1 Previous biases in food crop research are strikingly illustrated by the following numbers: up to 1978, 229 agronomic field trials had been conducted for rice and 47 for taro, yams and cassava, the respective national production figures being less than 1,000 tons and about 1 million tons. Similar discrepancies between research efforts for a crop and its economic importance in PNG existed for traditional vs. introduced vegetables and fruits and for sweet potatoes vs. Irish potatoes. However it is relevant to note that in the same period, 80,000 tons of rice (equivalent in food value to 250,000 tons of root crops) and large quantities of Irish potatoes were imported. Research on these crops was motivated by import substitution.  - 12 - potential contribution from the private sector, the total effort in PNG for agricultural research would be about 1% of the Gross Agricultural Domestic Project which is modest for a country whose population depends heavily on agriculture. It is well below the 2% level tentatively recomnended in the World Bank Sector Policy Paper on Agricultural Research./l 2.17 Staff. Numbers and qualifications of staff occupying research scientist positions are tabulated below: Ph.D/ M.Sc. or B.Sc./ D.Sc. equivalent B. Agric. Diploma Totals National staff - - 27 1 28 Expatriate staff 8 11 18 4 41 Totals 8 11 45 5 69 2.18 There are numerous vacancies in the research establishment. Currently 60% of the positions of scientific officers, 40% of RDOs, 30% of RDTs and 25% of RDAs are filled. Recent Government cuts in staff ceilings have reduced permitted staffing for the Agriculture Branch to only 50% of the established positions. DPI is examining the staffing strength by category to highlight areas of strength and weakness. There is shortfall in the proportion of technical support staff needed in relation to the number of research scientists. About 60 field scientists are supported by only 96 RDOs and RDTs. The research section establishment contains 61 RDO, 95 RDT and 170 RDA positions. The number of RDA positions is excessive and, in any case, the policy is to phase out this staff category. A desirable support ratio would be I RDO and 1.5 RDT per research scientist, with skilled laborers providing many of the routine services for which RDAs were used in the past. 2.19 Manpower and Training. A research system needs appropriately and adequately trained manpower with sufficient experience to carry out its programs. The average length of research experience in the crop research services has declined seriously: in 1973, 58 research staff had an average research experience of 9.4 years; in 1980, 56 research staff averaged only 6.4 years. None of the national officers has a post-graduate degree, nor is there a systematic program for formal training to upgrade their qualifica- tions for research. Today agricultural research personnel need formal /1 World Bank: Agricultural Research - Sector Policy Paper. Washington, June 1981.  training not only in the basic and applied scientific disciplines but also in research and agricultural experimentation methodology. This almost invariably means formal training at least to the Masters and, in some cases, to the Ph.D. level. 2.20 A second major gap is the lack of suitably trained and experienced research support staff. Hitherto no consistent attempt has been made to provide and train adequate numbers of support staff who could enhance the productivity of the research scientists by providing assistance in field and laboratory work. 2.21 Organization of Crop Research. The Agricultural Branch, consisting of the crop research sections and the agricultural development and quarantine sections is headed by an Assistant Secretary who does not have any research background. The existing structure of several separate disciplinary sections of crop research militates against cooperation between colleagues and the development of interdisciplinary teams. 2.22 The crop research and quarantine sections should be converted into a Crop Research Division to become the principal generator of new agricultural technology. It is necessary that the Crop Research Division be led by a technical Director of Research who would provide the technical leadership to the various sections and would present broadly based expert view to policy and planning authorities. Problems in crop research seldom occur within a single discipline, they more often have facets that require a balanced interdisciplinary outlook. A unified Crop Research Division under a technically qualified Director would provide a guiding overview in identi- fying such problems and their solutions. 2.23 Research Program Planning. The research activities extend from farming systems to crop improvement and crop protection and relate to a wide range of disciplines and commodities. The existing manpower situation and organization of research make it difficult to concentrate critical masses of manpower on either the important commodities or systems of production in both lowland and highland agricultural situations (Table 2.3). It has therefore been difficult for research to generate and adapt appropriate crop production technologies that would have an impact on increasing the produc- tivity of both cash and food crops. In the short run such a complex situation can only be dealt with by a careful examination of the priority of the various research activities and the concentration of available manpower in Government and private industry on the most important areas while the training and expansion of the manpower base takes place. 2.24 ISNAR have made tentative proposals for a reallocation of crop research activities which would (i) aim at maintaining a sufficient research capability for the most important cash crops (mainly through larger industry contributions); and (ii) endeavor to strengthen and focus food crop research. DPI is at present considering these proposals (Table 2.4).  - 14 - Table 2.3: TIME ALLOCATION OF AGRICULTURAL RESEARCH STAFF, BY MAJOR RESEARCH GROUPS AND ACTIVITIES, 1981 (man-years) Agriculture Other research Activity branch DPI groups Total Cocoa 5.50 2.50 8.00 Coffee 1.50 2.75 4.25 Coconut 1.25 - 1.25 Oil palm 1.00 5.25 6.25 Tea 2.25 - 2.25 Rubber 0.25 0.50 0.75 Pyrethrum 1.25 - 1.25 Subtotal 13.00 11.00 24.00 Sweet potato 4.67 2.00 6.67 Taro (aroids) and yams 0.50 2.00 2.50 Vegetables 4.25 0.25 4.50 Rice 2.00 - 2.00 Pulses 0.50 0.25 0.75 Bananas/cassava 0.83 0.83 Feed 0.50 0.50 Fruit nuts, spices 3.75 - 3.75 Sugar 0.25 2.00 2.25 Flowers 2.00 - 2.00 Farming systems 2.17 4.83 7.00 Subtotal 21.42 11.33 32.75 Storage/p ocessing 2.00 - 2.00 Pathology services 3.75 0.25 4.00 Entomology services 1.00 - 1.00 Soil and plant analysis 5.67 - 5.67 Land use services 7.50 3.0 10.50 Biometrics 2.00 - 2.00 Subtotal 21.92 3.25 25.17 Extension/liaison 5.00 - 5.00 Administration 7.50 7.50 Subtotal 12.50 - 12.50 Total 68.84 25.58 94.42 Source: ISNAR  - 15 - Table 2.4: PROPOSED TIME ALLOCATION OF AGRICULTURAL RESEARCH STAPF, BY MAJOR RESEARCH GROUPS AND ACTIVITIES (man-years) Crop Research Industry Other Research Division Boards Groups Total Cocoa 1.50 4.50 0.70 6.70 Coffee 1.50 4.50 0.70 6.70 Coconut 1.30 1.30 Oil Palm 1.50 4.50 2.70 8.70 Tea 1.30 1.30 Rubber 1.30 0.50 1.80 Pyrethrum 1.60 0.60 Subtotal 9.00 13.50 4.60 27.10 Sweet potato 5.40 2.00 7.40 Taro (aroids) and yams 3.80 2.00 5.80 Vegetables 2.30 0.25 2.55 Rice 1.60 1.60 Pulses 1.00 0.25 1,25 Bananas/cassava 2.10 2.10 Feed 0.40 0.40 Fruit/nuts, spices 0.80 0.80 Sugar 2.00 2.00 Flowers 0.20 0.20 Farming systems 5.60 4.83 10.43 Subtotal 23.20 11.33 34.53 Storage/Processing 2.70 2.70 Pathology services 0.30 0.25 0.55 Entomology services 0.30 0.30 Soil and plant analysis 4.00 4.00 Land use services 6.50 3.00 9.50 Biometrics 2.60 2.60 Subtotal 16.40 3.25 19.65 Extension/liaison 4.10 2.00 (.) 6.10 Administration 16.30 2.50 (.) 18.80 Subtotal 20.40 4.50 ( ) 24.90 Total 69.00 18.00 19.18 106.18 Source: ISNAR  - 16 - 2.25 Research-Extension Linkages. Linkages between the research and extension services are weak. In pre-independence times, research had a plantation bias and extension service a smallholder orientation. This led to differences in outlook and interest, and the communications gap was widened by the administrative separation of the two services and the recent decentralization of extension. Agricultural Education and Training 2.26 The training of agricultural staff is the responsibility of DPI's Education and Training Branch./l It supervises the National Fisheries College at Kavieng (New Ireland) and four Agricultural Colleges proper, at Popondetta (Oro), Vudal (East New Britain), Mt. Hagen (Western Highlands) and Maprik (East Sepik). Total staff in 1982 and enrollments and graduations for the period 1977-81 are given in Table 2.5. 2.27 Recruitment into the Agricultural Colleges comes after 10 years of general education, and after 2 years of training and a final examination the students graduate with a Certificate in agriculture and usually enter DPI service as RDTs. Following several years of service, the better RDTs can go through a one-year upgrading course leading to a Diploma and subsequent promotion to RDO. 2.28 This system is of recent origin, following the recommendations of a Government commission in 1975. However, this two-tiered system of training has not worked well, mainly because of the deterioration of standards in the general education system which required agricultural training at both Certificate and Diploma levels to take on more elements of general education than had orginally been envisaged. In 1982 DPI decided to return to a three-year pre-service Diploma course, starting in January 1983 at Vudal, for students with better educational achievement than the Certificate students. This is to be combined with a narrowing and stronger focussing of Certificate curricula to avoid an overloading with nonessential yet demanding subjects. 2.29 To bring the bulk of provincial and central DPI staff to an acceptable technical level and to provide them with knowledge and skills which they presently do not acquire at the colleges, Government plans to expand substantially its in-service training and to devote one college (Mt. Hagen) exclusively to that purpose. /1 Training for the livestock services comes under the responsibility of the Livestock Branch. It takes mostly the form of short introduction and upgrading courses organized at the Branch's training center near Lae.  - 17 - Table 2.5: DPI - COLLEGES; ENROLLMENTS/GRADUATIONS, 1977-81; STAFF, 1982 Staff (1982) Expa- College 1977 1978 1979 1980 1981 National triate Total Vudal Year I - - 100 70 52 15 3 18 Year 2 - - 65 65 64 Year 3 19 19 19 15 19 Popondetta Year 1 109 104 77 73 56 15 5 20 Year 2 87 86 88/a 76 52 Year 3 - - - - 18 Highlands (Mt. Hagen) Year 1 98 86 81 75 65 13 5 18 Year 2 30 62 60 65 68 Year 3 - - 16 - - Sepil (Maprik) Year I - - - 57 58 10 7 17 Year 2 - - - - 44 Fisheries (Kavieng) Year I - 34 28 37 24 5 5 10 Year 2 - - 30 20 26 Total 343 391 564 553 546 58/b 25 83 Note: Year 1 = entrance enrollments, Year 2 = number of graduates (Certifi- cate), Year 3 = number of graduates (Diploma) /a Refers to enrollments, not graduates. /b Not including six staff presently on overseas training. Source: DPI.  - 18 - Planning and Economics 2.30 DPI's planning and economic functions are presently undertaken by two Branches, Planning, Economics and Marketing (PEMI) and Policy Review and Coordination (PRC). Planning work within PEM has two major orientations, provincial and national. Provincial planning work consists of assisting, advising and training on the Job provincial staff and of ensuring consistency of provincial and national planning work. This includes a monitoring and evaluation function vis-a-vis provincial agricultural development projects. 2.31 National planning efforts aim at the formulation of nationwide development plans in the field of agriculture, the provision of sectoral inputs into the National Public Expenditure Plan (NPEP), liaison with other relevant Government agencies and the monitoring and evaluation of national agricultural programs and projects. 2.32 The economics work consists of research into the structure, pro- duction relationships, costs, returns and prospects of specific agricultural activities; research on village farming systems; compilation of relevant statistics and the carrying out of agro-economic surveys. 2.33 The marketing work refers to the administration of the relevant legislation, the rendering of marketing services to smallholders, and the provision of marketing intelligence to other branches of DPI as well as out- side bodies. 2.34 Before the advent of decentralization, PEM's work had a strong field orientation, so that the present scope of work is in many respects a continuation of well-established activities. So far it has assisted nine provincial governments in formulating provincial development plans, and it intends to build up its staff to a point where all 19 provinces may be similarly assisted. 2.35 The performance of the economic and planning services is con- strained, as is the case for all other DPI services, by a shortage of pro- perly trained and experienced personnel, and by specific shortcomings in the fields of sectoral planning, monitoring and evaluation, and farm systems analysis. 2.36 A second difficulty concerns the organization of economic and planning work in two branches, leading to a somewhat artificial separation of planning, policy and economic data collection and analysis functions. Following suggestions by the 1981 Bank Review, Government plans to combine the marketing functions of PEM and the Agricultural Development Section of  - 19 - the Agriculture Branch to form a Development and Marketing Branch, and to combine all other economic functions in a new Policy Planning and Coordination Branch. Details of the new administrative structure are still pending. 2.37 The Policy Planning and Coordination branch would also serve as Secretariat for the National Agricultural Council (consisting of the National DPI Minister as Chairman and his provincial counterparts); the National Agricultural Advisory Committee (consisting of the lPI Secretary and the Assistant Secretaries of provincial primary industry departments); and the DPI Policy Group (consisting of the DPI Secretary as Chairman, Deputy Secretary and the branch Assistant Secretaries). So far their work has been hampered by the absence of an appropriate base of technical support. The designation of the new Branch as Secretariat would ensure the support. Agricultural Extension Support 2.38 The primary responsibility for agricultural extension has been transferred to the provinces (para. 2.03). However, important assistance functions such as linkage with agricultural research, advice to provincial extension services, staff upgrading, information and publication are located in the Education and Training Branch of the Central DPI. 2.39 Each provincial extension service is headed by the Provincial Rural Development Officer who is supervising a number of District Rural Develop- ment Officers who in turn are responsible for several Subdistrict Rural Development Officers. The subdistrict is the administrative level where most extension staff are located and deployed. 2.40 Depending on farm population densities, quality of communications and availability of transport, extension staff work in two modes: (i) one day visits to villages in the immediate neighborhood of the administrative center and (ii) extended field tours (patrols) of up to two weeks covering several isolated villages at a time which requires camping out and a well- planned transport schedule for the extension teams. 2.41 In a narrow quantitative sense PNG's extension service compares well with those of other countries at a comparable stage of development (Table 2.6). However, the figures have to be read with three provisos in mind: (i) the widely scattered population and the great geographic fragmentation and resulting logistic difficulties; (ii) the low qualifications of a great portion of the staff, particularly the RDAs; and (iii) the lack of adequate and appropriate extension packages, especially for food crops. Because of different channels of responsibilities these problems call for a coordinated effort of provincial and central governments.  - 20 - Table 2.6: DISTRIBUTION OF PROVINCIAL DPI EXTENSION STAFF, 1981 Number FF /e JTO of farm /JTO + fami- STO JTO RDA + FF/ RDA/ Province lies /a /b /c /d RDA JTO STO Fly River 9,898 4 27 37 155 366 16.0 Gulf 8,277 5 27 22 176 307 9.4 Central 16,136 11 32 54 192 504 7.8 Milne Bay 17,363 11 37 53 209 469 8.2 Oro 10,133 7 24 36 169 422 8.6 Southern Highlands 32,744 9 34 42 431 963 8.4 Eastern Highlands 36,128 13 37 32 539 976 5.1 Simbu 24,778 10 35 14 506 708 4.9 Western Highlands 35,360 11 26 21 752 1,360 4.3 Enga 23,156 9 28 26 429 827 6.0 Sandaun 15,333 10 34 25 260 451 5.9 East Sepik 28,195 9 50 50 285 564 11.1 Madang 26,944 10 42 49 329 642 9.1 Morobe 3,588 11 48 84 254 698 12.0 West New Britain 11,886 5 32 13 264 371 9.0 East New Britain 16,495 14 35 23 300 471 4.1 New Ireland 8,627 12 39 14 163 221 4.4 North Solomons 15,094 10 39 35 204 387 7.4 Manus 2,939 5 14 13 109 210 5.4 Total/Averages 343,074 176 640 643 291 853 7.0 /a 1980 Census rural population divided by 7. /b STO - Senior Technical Officer (SO 2+, RDO 3+, C12+). 7c JTO - Junior Technical Officer (RDT, RDO 1-2, SO1). 7d RDA - Rural Development Assistant. /e FF - farm families. Source: DPI Manpower and Training Review, 1982.  - 21 - 2.42 The Role of Women. In traditional agriculture in Papua New Guinea most cultivation tasks, except for the initial land clearing, are undertaken by women. While this has been known by the Government for a long time, it has found it very difficult to increase the percentage of female extension officers appreciably. 2.43 The reasons for this are numerous but can be reduced to three main factors: (a) in the traditional farm society, economic decisions are made almost exclusively by men and they are usually the only ones in contact with the world outside the village and its represen- tatives (such as extension agents); (b) within the service itself there is widespread resistance to a larger role for female officers, although female field workers have been accepted and perform well; (c) the very limited number of female DPI staff (an estimated 5% of the total number many of whom work in specialized branches outside general extension) limits, in the short run, the number of female extension workers. The Government has set aside an Agricultural College enrollment quota of about 20% (and the necessary separate boarding facilities) for female students, but only half of this quota is being used, rural parents being reluctant to send their daughters to boarding schools. While Government explicitly recognizes the important role of women in the country-s agriculture and supports the continuous training and upgrading of female agricultural services staff, it also realizes its limitations in radically changing deep-seated societal behavior patterns. Land Utilization Services 2.44 The Land Utilization Section of the Agriculture Branch undertakes investigations and cataloguing/mapping of PNG-s physical resources, with emphasis on soils, landforms, climate and vegetation. Its role is that of a service and development unit, supporting other Departments and provincial governments as well as potential investors. 2.45 For many years land utilization work in PNG has received valuable assistance from the Commonwealth Scientific and Industrial Research Organization (CSIRO) of Australia. At the end of World War II this group was contracted to undertake a series of regional resource surveys. This work was concluded in 1970 at a total cost of some US$18 million (in 1980  - 22 - prices). This was followed by a systematic inventory of existing knowledge of PNG's natural resources in the 1970s at the cost of another US$2.3 mil- lion. The first phase resulted in 15 publications containing resource surveys for about 50% of the country and the second led to four volumes on the soils, climate, landforms and vegetation of PNG. 2.46 In the late 1970s plans were prepared to extend the natural resource survey to the entire country. This work was to proceed in three phases: (a) natural resource surveys and inventory, (b) development of appropriate methods to assess PNG's land use potential and (c) formulation of actual resource assessments. Funding from CSIRO began in 1981, with a scheduled completion date for the first two phases in March 1983. The third phase which would be the logical conclusion of more than 30 years of work will be financed under the proposed project. Agricultural Project Development 2.47 The Agricultural Development Section of the Agriculture Branch is responsible for national export crop development projects. It is involved in the following aspects of project planning and implementation: identifi- cation of suitable areas and crops; physical design; legal preparations; co-financing arrangements and project promotion within the country and abroad; physical implementation, including selection and guidance of smallholders through extension; and project monitoring and evaluation. 2.48 So far the Section has prepared five major projects, and six additional areas have been identified as suitable for large-scale nucleus estate development (Tables 2.7 and 2.8). In accordance with recommendations in the 1981 Bank Review, DPI wishes to increase its project planning and implementation capacity to a level where it could initiate one to two new projects per year. Livestock Services 2.49 DlI's Livestock Branch consists of three sections: Veterinary Services; Veterinary Research; and In-Service Training. A Livestock Development Corporation has been recently incorporated to take over commer- cial activities in livestock development and production, e.g., abattoirs, cattle ranches. The slowdown in the development of PNG's beef cattle industry and the devolution of Government functions from the center to the provinces have affected the orientation and effectiveness of the service as well as a measure of uncertainty about the exact demarcation of national and provincial responsibilities. Existing legislation may contain conflicting provisions and DPI plans to employ a consultant to examine these questions and to suggest any necessary modifications in the relevant laws and regulations. 2.50 Important control and support functions which remain with the central DPI are animal disease and pest surveillance and control, laboratory services and livestock research. The first two functions, supplementary to  - 23 - Table 2.7: EXISTING AGRICULTURAL DEVELOPMENT PROJECTS AS OF JULY 182 Area (ha) Land Year Small- settle- Stage of Location started Type Crop Estate holders ment Total development Hoskins 1967 Nucleus Oil 3,000 800 6,240 10,040 Fully estate palm developed Popondetta 1977 Nucleus Oil 4,200 2,400 3,200 9,800 To be estate palm expanded Bialla 1977 Nucleus Oil 2,000 2,000 2,000 6,000 To be estate palm completed Ramu 1979 Estate Sugar 6,000 - - 6,000 Started production in 1982 Cape 1982 Nucleus Rubber 5,000 4,000 - 9,000 Land nego- Rodney estate Cocoa tiation is complete. Implemen- tation is expected to start in 1983 Total 20,200 9,200 11,640 40,840 Source: DPI.  - 24 - Table 2.8: PROPOSED AGRICULTURAL DEVELOPMENT PROJECTS, JULY 1982 Area (ha) Smallholder and/or Status of Location Type Crop Estate settlement Total project Milne Bay Nucleus Oil palm 4,000 2,000 6,000 Preparation estate Cocoa commenced Galley To be Rubber 6,000 4,000 10,000 To be pre- Reach decided Cocoa pared Wanigela To be Cocoa - } - 10,000 Soil survey decided Oil palm } commenced } New Redevelop- Cocoa - } - 10,000 To be pre- Ireland ment Coconuts } pared Province } /a New West To be Cocoa - } - 18,000/b To be pre- Britain decided Oil palm } pared province } } Madang Customary Oil palm - } - 6,000 Feasibility land and Cocoa study rehabili- tation Mamba Plantation Rubber Preparation Redevelop- and other underway ment and crops smallholders Total (10,000) (6,000) 60,000 /a Distribution by mode of holding not yet known. /b Three blocs of 6,000 ha. Source: DPI.  - 25 - one another, are gaining in importance as PNG, traditionally free from a number of serious animal diseases is increasingly at risk because of the growing volume of international travel and large-scale development projects in the border areas. Livestock research is focussing on problems of poor growth performance and low fertility of ruminants which are thought to have their origin in nutritional deficiencies. Quarantine Services 2.51 Of the agricultural support services in PNG, the least appreciated in terms of its national importance is the quarantine inspectorate. Its status within the Government service can be gleaned from its drastic under- staffing and underfunding and from the fact that it does not even have a proper career structure. Yet the potential damage arising out of short- comings of this service is obviously much larger than for any of the other services. 2.52 The Quarantine Section forms part of the Agriculture Branch, but can also draw support from the two Branches it is serving, Agriculture and Livestock. The main quarantine facilities are located near Port Moresby, with an additional animal station outside Lae. Ten small animal quarantine stations throughout the country are mainly concerned with internal livestock movements and lack any specialized equipment. 2.53 Quarantine inspectors are graduates of the two-year Certificate course of the Agricultural Colleges. Apart from a two weeks pre-service course for animal quarantine personnel at Lae, qualifications, renumeration and career prospects are undistinguishable from the other RDOs/RDTs./I A recent conference of senior quarantine staff decided to introduce in 1983 special quarantine in-service courses covering both animal and plant quarantine aspects. 2.54 With its present staff and facilities, the inspectorate is unable to carry out its responsibilities. Only some of the country-s 12 shipping ports and 3 international airports are staffed and equipped to undertake quarantine work. Government plans to establish new facilities in four locations while strengthening staff and facilities at five existing stations to cope with the most urgent quarantine needs. Plantation Management Training 2.55 There is a considerable demand for training of managers of small or medium-sized agricultural enterprises. The return to national ownership /1 However, the Livestock Branch runs in-service courses for its staff which cover aspects of animal disease recognition and control including quarantine.  - 26 - and management of many plantations has revealed a serious shortage of national expertise, in all aspects of technical, commercial and financial operation. The Plantation Management Training Program (PMTP) has been established to meet this demand. It includes training facilities at Laloki (near Port Moresby), Rabaul (East New Britain), and Mt. Hagen (Western Highlands). Formerly under the supervision of the Department of Commerce which has been recently abolished, it is now under the Department of Primary Industry. 2.56 In the seven years of its existence, the Program has trained about 1,100 persons (Table 2.9) through four types of courses: Operational Skills Courses, Management Skills Courses, Mini-Management Development Courses (short-term modular) and Director/Board Member Training Courses. An important part of the training is on-the-job follow-up work. Entry require- ments, course content and duration and fees (to be paid by the sponsoring enterprise) vary with the type of course. Usually previous relevant experience and sponsoring by a company or business group is required. On request, custom-made courses are also undertaken at a customers seat of business. 2.57 In the coming years, considerable estate development/rehabilitation is expected in the southern part of Central Province, Milne Bay Province and possibly Oro Province. Ir, anticipation of the resulting demand for planta- tion management expertise, PMTP is planning to start a training center at Milne Bay. III. THE PROJECT Project Formrulation 3.01 The proposed project is the result of Government's realization that agriculture 4int PNG will remain a key sector for many years to come and that a revitalization of this sector reou4,es a strengthening of its support services. This argument has been m-ade in agricultural sector reviews undertaken by FAO,/l International Fund for Agricultural Development (IFAD) /2 and the Bank./3 XI FAO/CP: Draft Report of the Papua New Guinea Agricultural Reconnaissance Mission, Rome, July 19780 /2 IFAD: Report of the Special Programming Mission to Papua New Guinea, Rome, Septemxber 1980. /3 IBRD: Country Sector Report - Papua New Guinea: Agricultural Services Review, Washington, DC, 1981.  - 27 - PAPUA NEW GUINEA AGRICULTURAL SUPPORT SERVICES PROJECT Table 2.9: PMTP TRAINING ACTIVITIES 1976-82: NUMBER OF PARTICIPANTS Year Type of Course 1976 1977 1978 1979 1980 1981 1982 Totals Operational Skills Course Cocoa/Coconuts 19 18 20 - 13 22 - 92 Coffee - - - 15 - - 23 38 Management Skills Course - 6 13 16 15 17 40 107 Mini-Management Development Courses Coffee Records - - - - 9 16 - 25 Coffee Growing - - - - - 9 - 9 Director Training - 12 144 24 98 54 124 456 Cocoa Fermentary Operators Course - 204 - - 62 - - 266 Plantation Appreciation Course - - - - - 17 21 38 Other Courses /a - - - - - - - 45 Totals 19 204 177 55 197 135 208 1076 Source: PMTP /a Years not recorded.  - 28 - To meet the identif.ied needs, the Bank recommended and assisted in the devel- opment of an Agri ^ultural Support Service-s Project withl the major components irn agricultural research, education ard training, extension support, economics and planning, agricultural project development and regulatory services. 3.02 The project is essentialV a "software project" w'hich would lead to significant staff ircreases in DPI (136 national and 24 expatriate staff) and about US$3.0 -million, an 183'% ncrease to DPI's annual recurrent budget. The additional staff represents about 10% of the National DPI staff and 5% of the total DPI staff at the national and provincial levels. The project would have a long gestation period anrd many of its expected benefits would be either of a general (suatcr h as the increase in the competence and efficiency or DPIF staf or gwould come in the form of avoided losses the likelihood and extent of wThfch are difficult to assess. Never- theless the proposed proj4ect is justif-ied on the following grounds: fa) Over the last decade PNG's agriculture sector and related support services have suffered from. comparative neglect. and the devolu- tion of some agricultural services to the erovinces and the departure of many qualified and experienced expatriate staff have worsened the situation. Onl-' -.ecently has agriculture been recognized as tce key sector for che country-s long-term aevelopment. The proposed project would improve the institutional basis for this new emphasis. (b) The long gestation period for projects that focus on institutional and manpower development require corrective action as early as possible. As the country continues to lose long-serving expa- triate personnel, any further delays in replacing these personnel and strengthening DPI would only multiply future difficulties. (c) Without staff upgrading and assistance from the center, most pro- vincial agricultural services seen unable to carry out effectively the functions transferred to themn. With its present manpower and budget allotments, DPI can only give very limited help, and delays in stepping up assistance to the provinces would result in a serious decline of administrative and technical standards which would unavoidably affect development. (d) The proposed project wouk 5 bring about u-rgently needed and overdue institutional and organrzational chan-ges within DPI. Project Description 3.03 The project w'o0uld encc-,pass expenditures for civil works; equip- ment, furniture and vehicwes. salaries oF expatriate and national staff; travel and subsistence expertses; other operaLional expenses such as materials and supplies, utilities and rental and operation of vehicles; consultancies; and fellowships. It wouLld consist of the following components: (a) Crop research; (b) agricultural education and training;  - 29 (c) planning and economics; (d) agricultural extension support; (e) land utilization services; (f) agricultural project development; (g) livestock services; (h) quarantine services; (i) plantation management training; (j) transit staff housing; (k) monitoring and evaluation; (1) fellowships; and (m) consultancies. Project Components Crop Research (US$4.8 million) /1 3.04 The component would have four distinct elements: the creation of a Crop Research Division; the improvement of central research support (laboratory services); the strengthening of DPI's research and experiment stations; and a post-graduate training program for national scientific officers to staff the research organization. 3.05 Crop Research Division. The establishment of a separate Crop Research Division would consolidate activities now undertaken by six sections within the Agriculture Branch provide all crop research with a superstructure and expedite implementation of the other subcomponents. The new Division would be headed by a Research Director(E) /2 with the rank of Assistant Secretary, aided by a Deputy Director and an Executive Officer (E) with administrative responsibilities. The duty statement of the Research Director should include and give priority to the formulation of a comprehen- sive crop research program over a medium- and long-term horizon, the publi- cation by March 31, 1984 of two summary reports covering crop research activities during the periods 1973-77 and 1978-82 respectively, and the preparation by June 30 of each year (starting in 1984) of an Annual Crop Research report for the previous calendar year. An administrative cell headed by a senior administrative officer (CC 9) and comprising two clerks and one secretary would provide the administrative support structure and free the Research Director and his associates for work on research policies and programs. Except for the positions of Deputy Director and head of the administrative cell (CC 9), these posts would be incremental./3 Apart from the salaries for the above staff, the proposed project would finance office furniture and equipment, travel and subsistence and other operational expenses. /1 Unless otherwise indicated, the cost figures in this Chapter refer to base cost in March 1983 prices, the date of negotiations. Annex 1, Table 1 contains a summary of project costs; further details of costing are given in the Working Papers. /2 (E) denotes an expatriate officer. /3 A roster of new positions to be created under the project, disaggregated by project component, level of qualification and nationality, is given in Annex 1, Table 2.  - 30 - 3.06 Central Research Support. This subcomponent would assure an adequate back-up of field work in the areas of: analysis; data processing and storage; statistical analysis; identification of insect pests and diseases; and expertise in post-harvest handling of perishable foods and in food processing. It would comprise the following incremental positions: three scientific officers (E), seven technical officers grade 1, one clerical and one secretarial staff. An urgently needed insect store is proposed to accommodate the Department's virtually irreplacable collection of insect pests and plant diseases material. It is presently housed in timber-frame buildings threatened both by fire and termites. Other items are office furniture and equipment, laboratory and field equipment, travel and subsistence, and other operational expenses. 3.07 Research and Experiment Stations. The subcomponent would support the concentration of research programs and available staff on the most important cash crops and food systems (cocoa/coconut, coffee/tea, lowland food crops, highland food crops). Two additional scientific officers (E) would be hired to develop programs concerning food crops. 3.08 More importantly, the project would include additional support staff (at RDO and RDT levels) to achieve a desirable support staff/scientist ratio of 2.5 to 1 (instead of the present ratio of 1.6 to 1), thus freeing the scientists from many low-level routine jobs and permitting them to focus on their proper functions. The total number of support positions to be created would be 13 RDO and 13 RDT. Further items under this subcomponent would be staff housing for the additional personnel and for officers being transferred to new positions, the upgrading of offices and laboratories, related furniture and equipment (laboratory and field), travel and subsis- tence and other operational expenses. 3.09 Government has investigated the suitability of different stations and has selected following stations for the location of specific crop research: Cocoa and Coconut Research - Keravat and/or Tavilo Coffee and Tea Research - Kuk Highland Food Crop Research - Aiyura Rhinoceros Beetle remains a problem for coconut cultivation at Keravat and Tavilo but recent research indicates that the damage can be kept to a tolerable level. The earlier concern expressed about the suitability of Kuk soils for coffee research does not appear to be justified. 3.10 The location of lowland food crop research has not yet been finally decided. There is no scope for acquiring further land or reclaiming the swamp at Bubia. DPI is therefore exploring the possibility of sharing the facilities for research with the University of Technology, Lae if the Faculty of Agriculture of the University of Papua New Guinea, Port Moresby is relocated there, failing which the research has to be located at Keravat  - 31 - or Laloki. Government would inform the Bank by December 31, 1983 of the status of the proposed arrangement with the University of Technology. 3.11 The desirability of sharing the research efforts on cash crops between DPI and the private sector has been emphasized by the ISNAR Report and accepted in principle. DPI is presently engaged in discussions with the Coffee and Cocoa Industry Boards on several alternative proposals to develop joint work programs which would specify the directions of research and inputs of personnel, land, facilities and equipment and would also address questions of finance, organization and management. Government will continue to discuss further developments with the Bank in the process of reaching a final decision. 3.12 Research Scientist Training. The project would provide for post- graduate training to permit an eventual staffing by national officers of PNG-s crop research service. This program would be the beginning of long-term staff development and would include 21 scientific officers already employed by DPI. An Officer-in-charge of Research Training (E) would be responsible for selection of candidates and suitable places for them to undertake studies and would later on also address other aspects of research staff development, such as in-service training for support staff. 3.13 Apart from this officer, the project would provide for the recruitment of seven new national graduates to carry on the work of the officers seconded for training. Since the present annual output of univer- sity graduates in agriculture is 15-20, this should not pose any problems on the supply side. The subcomponent would also include a amall amount for office furniture, travel and subsistence and other operational expenses. The fellowship program proper is dealt with in a separate section below (paras. 3.42-3.44). Agricultural Education and Training (US$2.4 million) 3.14 This component encompasses pre-service education at Certificate and Diploma levels and in-service training of central and provincial DPI staff as a follow-up of the first Bank-assisted Education Project (Cr. 661-PNG). The pre-service portion is comparatively small and aims at minor improvements of the existing Colleges. It includes the conversion of a dormitory into a laboratory at Popondetta, scientific equipment, office equipment, teaching aids and library subscriptions for Vudal, Sepik and Popondetta, three additional staff (one curriculum officer, one education officer and one secretary) and related travel and subsistence expenses. 3.15 The bulk of assistance to this component would refer to in- service training. Government plans to convert the Highlands Agricultural College at Mt. Hagen (Western Highlands) to an in-service training facility. This would include the construction of some new and upgrading of existing facilities, vehicles, furniture, library subscription and other operational  - 32 - expenses. Incremental staff financed under the project would consist of two Education Oficers at So 4 level (E) supported by 3 technical (RDO/RDT) and 2 clerical (CC) staff. Travel and subsistence costs of the technical staff and of trainees would also be met. Candidates for training would be selected on the basis of their performance in the field for a few years. 3.16 While the general scope and content of the various training activities (Certificate and Diploma courses; in-service training) is already known, specifics of the respective curricula and trainee numbers are still being finalized. 3.17 DPI's original proposal for in-service training included technical as well as management training. It was felt that a number of the envisaged general management courses could be carried out by the Administrative College which has a long experience in conducting this type of training. However, it seems doubtful whether they would be able to accommodate the number of additional trainees, given their present staff constraints./l 3.18 DPI has examineed jointly with the Administrative College the staff implication of delegating part of the in-service training program to the latter. Necessary staff increases would be sought for the Administrative College under the 1984 NIPEP. If funding under the NPEP is not forthcoming for the additional staff, a modified program will be discussed and agreed with the Bank. Planning and Economics (US$2.4 million) 3.19 The project would assist the Planning, Economics and Statistical Sections of PEM. The Planning Section staff would be upgraded and streng- thened to enable it to help provincial planning efforts and other parts of the national DPI. Two additional expatriate scientific officers would be supported by four technician level (RDO) staff. About half of the addi- tional staff would assist with the coordination and monitoring of sectoral planning, while the others would strengthen the Section's provincial planning support to enable it to address over a 2-3 year period the initial planning needs of the ten provinces which have not yet received central DPI assistance for their planning work, and thereafter to repeat the planning exercise - with widening scope and increasing depth for all provinces in a five-year cycle. The project would also provide for office equipment and furniture, travel and subsistence and other operational expenses. /1 DPI's in-service training plans call for an intake of 300 technical trainees in year 2, increasing to almost 500 in year 5; and for a start of management training with 68 trainees in year 3, rising to 109 in year 5.  3.20 The Economic Section would be strengthened to enable it to carry out production and marketing research and industry evaluation for policy formulation and planning purposes. Four graduate economists (E) and three national officers would be recruited, two to work on farm systems research, the other to address questions of production and marketing for major cash and food crops. These economists would form part of the multidisciplinary technology validation and introduction teams which are a central feature of the envisaged research/ extension linkage. 3.21 The Statistical Section would be expanded by four clerical positions. The coverage of non-staff expenses would be similar to that for the other Sections, with an additional allowance for the hire and operation of two vehicles. Agricultural Extension Support (US$1.8 million) 3.22 The proposed project would strengthen the four Units (Extension Advisory, Publications, Radio Broadcast and Libraries) constituting the Information Section of DPI's Education and Training Branch by assigning three Scientific Officers, two technicians (RDO) and one secretary to the first Unit; four officers would be located in each of the country's major regions, and two of the RDO's would be recruited as trainees. 3.23 The Publications Unit would be increased by two Scientific Officers (E), namely a scientific editor and an information/communications specialist, one more Scientific Officer and two RDOs who would work as trainees with the expatriate specialists. The existing printshop personnel would be increased by seven staff including an illustrator and a photographer. Two clerical and secretarial staff would also be added to the Unit. The Radio Broadcast Unit would add a technical officer to assist in the preparation of extension-oriented radio broadcasts. Also included would be equipment for the Extension Advisory, Publications and Libraries Units, as well as books and journals for the latter, travel and subsistence costs for the Extension Advisory and Publications Units and other operating expenses. 3.24 The proposed project would provide extension advisory services to provinces and aim at creating institutional linkages between agricultural research and extension through establishment of a more widespread network of testing stations on farmer's field in close collaboration and consulta- tion between research staff and provincial extension staff. The success would to a large measure depend on the active cooperation of the provincial DPIs. While individual perceptions of the respective roles of central and provincial agricultural services and of possible forms of assistance and cooperation obviously differ widely, the general reaction of provincial governments is favorable. 3.25 In view of manpower and budget constraints and because of various degrees of acceptance and of absorptive capacity, the establishment of testing stations would be geared for an initial assistance, over its four- and-a-half-year implementation period, to four to six provinces. This would  - 34 - give the DPI teams an opportunity to modify and improve their approach and would also permit a demonstration effect to develop which in time would convince the other provinces of the advantages of availing themselves of this service. Land Utilization Services (US$1.4 million) 3.26 This component would include assistance for three activities: soil erosion studies; a land capability survey of alienated land; and a land evaluation for subsistence and cash cropping. The first would determine soil losses and run-off in six provinces to help develop a suit able package of soil conservation measures under various agro-ecological conditions. The subcomponent would include hiring of one additional SO 1 and one RDO 1, equipment, travel and subsistence and other operating expenses. 3.27 The land capability survey for alienated land would cover 200,000 ha of unused privately or Government-held lands. It would evaluate the land-s development potential as a basis for subsequent programs to develop or rehabilitate it. The subcomponent would require hiring of two expatriate and two national Scientific Officers and of fourteen technician level support staff. It would also include office furniture and equipment, scientific equipment, travel and subsistence and other operating expenses. 3.28 The land evaluation for subsistence and cash cropping would constitute the last phase of CSIRO's work in Papua New Guinea, its end-product being an overall resource inventory and assessment of land potential (para. 2.46). In addition to the funding of the consultancy for CSIRO, the subcomponent would provide two additional RDOs and funds for travel and subsistence and other operating expenses. Agricultural Project Development (US$1.1 million) 3.29 Under the proposed project, the Agricultural Development Section would be strengthened by the addition of five Scientific Officers (three E) two clerical officers and one secretary and supplemented by funds for office equipment and furniture; travel and subsistence; and vehicle rental. This would enable the Section to step up its activities to a level of 1-2 pro- jects per year. In order to meet peak manpower demands and to provide specific technical expertise not available in the Section, an amount of K 190,000 (about US$270,000) has been added for consultancies; this would correspond to an input of approximately 32 m/m. 3.30 The original project proposal contained an Alienated Land Use Survey to be undertaken by the Department of Lands. This proposal was not sufficiently developed at appraisal time and could not be considered for inclusion in the proposed project. Ilowever, since the Department provides an important input into the work of the Agricultural Development Section, through land survey, lease processing, and inspection, it has been recom- mended to Government that the Department of Lands should make an assessment  - 35 - of the additional staff requirement for funding under the 1984 NTPEP. At negotiations Government informed that the Department of Lands is in the process of preparing an 1984 NPEP submission for these additional posts. Livestock Services (US$0.9 million) 3.31 The proposed component would strengthen the animal disease and pest surveillance program throughout the country; provide funds for essen- tial facilities and equipment at the central veterinary laboratory and support a survey of the mineral status of ruminants. 3.32 The disease and pest surveillance program would be increased by nine gazetted stock inspectors (RDO 3), three of them to be posted along the land border with Indonesia, the other six in provinces with significant livestock development (Morobe, Oro, Eastern Highlands, Western Highlands, East New Britain, North Solomons). They would be provided with transport (seven 4WD pick-up trucks and two boats). Because of their beinIg posted outside urban centers, these officers would also require housing, and they would be provided with camping gear and basic equipment. 3.33 In order to ensure that this important support becomes the unequi- vocal responsibility of the national DPI, it appears that some changes in the relevant legislation will have to be made so that the existing stock inspectors could be degazetted and new ones regazetted as national DPI staff. DPI hired a consultant to examine the legal aspects of the existing quarantine and animal disease legislation and to develop recommendations for its clarification and simplification but the consultant failed to produce a report. The Government will, therefore, request the New Zealand Government to carry out the study. 3.34 The Central Veterinary Laboratory would be improved to achieve a high level of work security. This would include construction of a fireproof store for toxic materials and dangerous chemicals and of five special kennels for animals suspected of rabies. Additional funds would be made available for equipment and stand-by generators. The staff would be strengthened through recruitment of an expatriate veterinary officer, a pathologist with expertise in poultry. Support to the survey of the nutritional status of ruminants would be limited to minor purchases of supplies (specimen sample bottles), the costs of travel and subsistence and of laboratory analyses of specimens. Quarantine Services (US$0.7 million) 3.35 The proposed project would build up the quarantine inspectorate to a level where it could cope with the greatly expanded workload deriving from PNG's increased contacts with foreign countries. Twelve additional quarantine inspectors would be hired , to be stationed in six existing quarantine centers and four new ones. The administrative staff in Port Moresby would be strengthened by one secretary (KBO 2). Other items to be  - 36 - included in this component would be essential quarantine equipment, includ- ing three fumigation chambers, office furniture and equipment, travel and subsistence, vehicles (two motorcycles and five 4WD pick-up trucks), and other operational expenses. 3.36 At present PNG quarantine certificates are not recognized by Australia which means reexamination in Australian ports of PNG exports which adds appreciably to their costs. DPI plans to upgrade its inspection stand- ards to a point where reexamination would not be necessary and to establish container export ports for the main export crops. This would, however, require a previous review and overhaul of all aspects of the quarantine service, including procedures and legislation. The New Zealand Government examining the country s quarantine and animal disease legislation (para. 3.33) would also address questions of improvements in quarantine standards. Because of the importance of this service for PNG's agriculture, an assurance has been obtained that the Government would inform the Bank by July 31, 1983 of the findings and of relevant follow-up action. Plantation Management Training (US$0.4 million) 3.37 The assistance under the proposed project is limited to the upgrading of a classroom and a dormitory at the planned new training facility at Milne Bay, the purchase of three 4 WD vehicles, of furniture and equipment, plus other operational expenses. 3.38 While the staff expansion to be financed under the 1983 NPEP would be sufficient to start training at the new center, another three staff posi- tions would be needed to carry out the full training program as envisaged by PMTP. At negotiations Government agreed to seek 1984 NPEP funding for these positions. Transit Staff Housing (US$0.1 million) 3.39 The availability of staff housing in Port Moresby has declined sharply as a result of Government's recent move to sell its stock of housing (usually to the present occupants) and to cease the policy of guaranteed housing for national staff moving to Port Moresby. In order to facilitate the transfer of national officers to project components located in the capital and thus to assure timely implementation of these components and the ultimate success of the project, the construction is proposed on DPI land, of three low-cost transit housing units. Monitoring and Evaluation (US$0.2 million) 3.40 The Planning Section within the Planning, Economic and Marketing Branch of DPI would be responsible for the continuous monitoring of project implementation; the necessary staff would be available for this task. Following normal procedures for NPEP projects, these officers would also  - 37 -- prepare quarterly progress reports for review by National Planning Office (NPO) and the Department of Finance. In addition, the proposed project would provide funds for three evaluation exercises by external consultants at the start, near midpoint and towards the end of project implementation. An initial baseline survey would be conducted. 3.41 An important element of the initial baseline survey for crop research would be two summary reports covering crop research activities during the periods 1973-77 and 1978-82 respectively. The absence of such an account has been a serious drawback for formulating a comprehensive crop research program, given recent staff turnover and the dispersal of individ- ual research results over the country. The availability of such concise source reference books would be an invaluable aid for crop researchers starting their DPI career or entering a new assignment. The preparation of these reports will be one of the primary responsibilities of the Research Director. Fellowships (US$1.4 million) 3.42 In addition to the post-graduate training in crop research mentioned in the relevant section above, the proposed project would provide for training at various levels and for durations ranging from short-term courses to one year of formal education in support of the following project components: (a) Crop Research: 21 staff for a total of 648 months of training; (b) Agricultural Education and Training: 16 staff for 192 months; (c) Agricultural Extension Support: 8 Staff for 46 months; (d) Agricultural Project Development: 4 staff for 30 months; and (e) Quarantine Services: 9 staff for 27 months. Total: 58 staff for 943 months. 3.43 This training component would upgrade DPI staff in specific areas where training is not available locally. It would increase the competence and efficiency of their respective services and facilitate the eventual national staffing of positions presently held by expatriate officers. 3.44 UNDP indicated that about US$500,000 may be available for fellow- ships under the proposed project in its 1983-86 Country Program for PNG. At negotiation Government informed the Bank that the UNDP fund would not be available for this purpose. The Bank will therefore finance the total amount required for fellowships.  - 38 - Consultancies (US$1.2 million) 3.45 Under the proposed project, 69 man-months of expatriate technical assistance would be provided to DPI for the following components: (a) Policy and Planning (6 man-months) to assist in the development of data system and the coordination of national and provincial planning; (b) Agricultural Project Development (32 man-months) to help identify and prepare agricultural projects; (c) In-Service Training (4 man-months) to assist in the development of training materials for in-service training courses and in the delivery of short-term courses; (d) Unspecified (27 man-months). (e) CSIRO program: US$0.7 million 3.46 The consultancies, most of them short-term assignments,/l have been costed at K 5,850 (about US$8,200)/month (Annex 1, Table 3). This figure would cover salaries and travel to/from the duty station. At the time of project appraisal billing rates for experienced consultants averaged about US$4,300 depending on such factors as nationality, area of specialization, age. Implementation Schedule 3.47 The project would be implemented from mid-1983 to the end of 1987. An implementation schedule is given in Table 3.1. In the second semester of 1983, eight staff will be recruited and hired including the Research Director, Officer-in-Charge of Research Training, Land Development Officer, Information and Communications Specialist and four Quarantine Officers. About seven staff will be selected to go on the long-term fellowship program (12-30 months). Recruitment of expatriate staff will extend up to 1985 (15 in 1984 and 5 in 1985) while additional national officers will be recruited up to 1987 (68 in 1984, 37 in 1985, 13 in 1986, 14 in 1987). Most of the civil works, e.g. insect store, transit staff houses, covenant /1 For longer-term assignments Government usually prefers the mode of con- tract employment in the public service for a standard period of three years. This arrangement has the advantages of a more economical basic rate (about US$3,480 equivalent per month for officers at the top of the scale and with maximum gratuity for long service), of lower overheads and of better administrative control.  - 39 - Table 3.1: PROPOSED IMPLEMENTATION SCHEDULE - FOUR AND A HALF YEAR PROJECT PERIOD, JULY 1983 - DECEMBER 1987 2nd Semester 1983 1984 1985 1986 1987 Recruitment and Hiring of Staff (No. of staff) Expatriate 4 15 5 - - National 4 68 37 13 14 Civil Works (No. of units) Cropping Research Insect Store - 1 - High Covenant Houses - 3 3 1 Medium Covenant Houses - - - 6 Low Covenant liouses - 8 15 15 Agriculture Education and Training Conversion of Dormitory to Laboratory - 1 - - Dormitory - 1 - - Ablution Block - 1 - - Upgrading Existing Dormitory - 1 - - Office - 1 - - Livestock Services Central Veterinary Lab - 1 - - Low Covenant Houses for Annual Diseases - - - - Surveillance - 3 4 2 Transit Staff Housing - 3 - - Consultancies (man-month) - 40 60 55 (including CSIRO program) Fellowships (No. of fellows) Short Term Courses (3-8 mths) - 10 11 - Long Term Courses (12-30 mths 7 15 15 Crop Research Reports Summary Reports on Crop Research Activities for periods 1973-77 and 1978-82 March 31 Annual Report June 30 June 30 June 30 June 30  - 40 - houses, dormitory and laboratory will be undertaken in 1984 and 1985. Consultants will be engaged starting in 1984 for policy and planning, agricultural project development and in-service training. About 51 fellow- ships will be granted in 1984 and 1985 for short term and long term courses. IV. PROJECT COST AND FINANCING Project Cost 4.01 Total project cost over the four and a half years of project implementation amount to US$24.3 million of which US$14.0 million (58%) is the foreign exchange component. Base cost estimates are expressed in March 1983 prices and includes about US$1.1 million in taxes and duties. Unit prices for housing, subsistence and car rental follow the relevant Government standards; for staff salaries the DPI salary scales were used. Consultant service costs are based on recent cost quotations of the National Planning Office. 4.02 Physical contingencies of 10% were applied for all items except staff salaries and consultancies. The cost estimates also include allow- ances for annual price escalation during implementation based on: 6% for 1983, 7.5% for 1984, 7% for 1985, and 6% for 1986 and 1987 for local and foreign costs alike. They total 21% of base costs plus physical contin- gencies. Project costs by components are summarized in Table 4.1. Financing (excluding front-end fee) 4.03 The Bank would finance US$14.0 million of the total project costs, equivalent to the foreign exchange component of 58%. The Government would finance US$10.3 million (42%). Procurement 4.04 Because of their overall small size (not likely to exceed US$200,000 equivalent for any given location and year) and spread over several provinces, project components and years, civil works are unlikely to attract foreign bidders and would be carried out following local competitive bidding in line with national bidding procedures which have been found satisfactory. In some isolated locations where suitable contractors would be unavailable construction under force account by the Department of Works and Supply would be acceptable. 4.05 Purchases of vehicles, furniture and equipment totalling US$1.3 million would be similarly fragmented and rather small, with only 20 equipment items (totalling less than US$300,000) having unit costs in excess of US$5,000 and no single contract expected to reach US$100,000 equivalent.  - 41 - Table 4.1: PROJECT COST SUMMARY /a F.E. Local Foreign Total Local Foreign Total Costs -- (K Million) --- -- (US$ Million) -- (%) Crop Research 1.8 1.8 3.7 2.4 2.4 4.8 50 Agricultural Education and Training 1.1 0.9 1.9 1.3 1.1 2.4 47 Planning and Economics 0.7 1.1 1.8 0.9 1.5 2.4 63 Agricultural Extension Support 0.7 0.6 1.4 1.0 0.8 1.8 47 Land Utilization Services 0.6 0.5 1.1 0.8 0.6 1.4 44 Agricultural Project Development 0.4 0.5 0.8 0.5 0.6 1.1 56 Livestock Services 0.4 0.4 0.7 0.5 0.5 0.9 57 Quarantine Services 0.4 0.1 0.5 0.5 0.2 0.7 22 Plantation Management and Training 0.2 0.1 0.3 0.2 0.2 0.4 48 Transit Staff Housing 0.1 - 0.1 0.1 0.1 0.1 40 Monitoring and Evaluation 0.1 0.1 0.2 0.1 0.1 0.2 50 Fellowships - 1.1 1.1 - 1.4 1.4 100 Consultancies - 0.9 0.9 - 1.2 1.2 100 Base Cost 6.4 8.1 14.5 8.2 10.6 18.8 56 Physical contingencies 0.3 0.7 1.0 0.4 0.9 1.3 69 Price contingencies 1.3 1.9 3.2 1.7 2.5 4.2 60 Total Project Cost 7.9 10.8 18.7 10.3 14.0 24.3 58 Front-End Fee on Bank loan - 0.1 0.1 - 0.1 0.1 - Total financing required /b 7.9 10.9 18.8 10.3 14.1 24.4 /a Identifiable taxes and duties are about K 0.9 million (US$1.1 million equivalent) and the total project cost net of taxes is K 17.5 million (US$22.8 million equivalent). /b Bank loan assumed at US$14.0. Actual front end fee is US$35,162.  - 42 - In addition, a sufficient number of foreign suppliers are represented in PNG to assure a degree of competition and satisfactory maintenance and repair services. For these reasons, the application of local competitive bidding procedures or for small items where government regulations permit prudent shopping would be justified. 4.06 Civil works and furniture contracts in excess of US$100,000 and US$50,000 equivalent, respectively, expected to cover about 55% and 60% res- pectively of purchases in the two categories, would be subject to Bank review of bidding documents prior to bidding and of winning bids prior to award. 4.07 Except for the special case of the CSIRO contract, consultant services in the amount of US$0.7 million would be contracted in accordance with the Bank's Guidelines for the Use of Consultants. Disbursement 4.08 Disbursements from the proposed loan would cover: (a) 60% of total expenditures for civil works,, (b) 100% of foreign and 80% of local expenditures for equipment, vehicles and furniture; (c) 100% of total expenditures for expatriate salaries, consultants' services and fellowships and 60% of total expenditures for staff travel and subsistence and monitoring and evaluation. 4.09 Disbursements will be fully documented except those relating to local expenditures for civil works by force account, local expenditures for civil works under contracts of less than kina 30,000, and for the local component of expatriate salaries. Disbursements for these items will be made against statements of expenditure certified by the Project Coordinator and made available for review by Bank supervision missions. For equipment, vehicles and furniture procured through government stores, the ILPOC (Integrated Local Purchase Order Claim) form will be sufficient documenta- tion. A schedule of disbursements for the four-and-a-half years implementa- tion period (envisaged to extend from July 1983 through December 1987) is given in Annex 1, Table 4 and a draft Schedule I (Proposed allocation of Loan Proceeds) in Annex 1, Table 5. Because of the unique character of the proposed project being largely a "software" project, neither the sectoral disbursements profile for PNG nor the aggregated agricultural projects disbursement profile for the East Asia and Pacific Region were considered suitable comparators. 4.10 Accounting and Auditing. The Departmental Accountants in DPI would have responsibility for the maintenance of separate accounts for the individual project components in accordance with sound accounting practices,  - 43 - and would ensure that an annual auditing of these accounts by independent auditors acceptable to the Bank would take place before June 30 of the following year (i.e., six months after the close of PNG-s fiscal year). Certified copies of the audits and the auditor's report would be forwarded to the Bank by September 30. The audit reports would certify that funds disbursed against statement of expenditures had been used for the purposes for which they were provided. 4.11 The work of the Department Accountants should be greatly facili- tated by the introduction, in early 1984, of a comprehensive computer program (the Standardized Government Accounting Package) to which all Departments could access through individual terminals. Government informed the Bank at negotiations on the progress in the preparation of this system. V. PROJECT IMPLEMENTATION Implementation Responsibilities 5.01 The main responsibility for physical project implementation would be with the DPI The relevant DPI Branches would be in charge of the day-to- day implementation of the individual project components, and in each participating Branch, one staff would act as Component Manager. DPI has appointed the Component lIanagers and the Project Coordinator who would assure proper linkages between the various components and who would be the main point of contact with the Bank. In the case of any subsequent new appointments the Bank would be given an opportunity to comment on the suitability of the candidates. Reorganization of DPI 5.02 Government, in response to proposals in the 1981 Bank Review, is considering further modifications in the DPI structure to improve its efficiency. These changes have been discussed in detail within DPI but are still subject to modifications and would furthermore need the concurrence of other Government agencies (Public Service Commission (PSC) and Department of Finance). While they are considered important, they are not deemed essen- tial for the success of the project. At negotiations Government informed the Bank that the Crop Research Division is expected to be established by March 31, 1984 and the reorganization of the entire DPI is expected to be implemented by June 30, 1984. Early Recruitments 5.03 For a number of new positions, early recruitment is essential either to assure a timely start of major project components or to address critical shortcomings in a vital national support service (quarantine). Government had been requested to assure the funding of these key posts for  - 44 - 1983 and an early posting. At negotiation Government informed the Bank that the following key positions are expected to be filled and appointees in place by October 1, 1983: four Quarantine Officers, Research Director, Officer-in-charge of Research Training, Land Development Officer and Information and Communications Specialist. Recruitment Procedures 5.04 The identification and appointment of the incremental staff (136 national and 24 expatriate officers) will put a heavy administrative burden on the relevant Government agencies, particularly DPI and the Public Service Commission (PSC). In order to facilitate the search for expatriate staff, PSC has agreed to consider enlisting the services of specialized recruitment agencies. As a possible alternative the Bank has suggested that Government avail itself of the assistance of FAO's Agricultural Operations Division. PSC will examine incentives on individual basis to attract some highly qualified foreign personnel. Finally, they will assign a few of their staff to assist DPI with the preparation of the necessary staff submissions. A duty statement will be prepared for each expatriate post specifying the required qualifications, detailed work responsibilities and outputs of the officer. The employment of the expatriate staff will be governed by the set of Terms and Conditions of Service issued by PSC under authority derived from the Public Employment (non-Citizens) Act. The supply of manpower for the national staff is not expected to be a problem in view of the adequate number of graduates from the local agricultural schools and universities. At negotiation Government informed the Bank that ISNAR has been requested to suggest a suitable person for the post of Research Director. If ISNAR fails other suitable agencies including FAO would be approached. Reporting 5.05 Based on the quarterly progress reports to NPO/ Department of Finance (para. 3.40) the Component Managers would prepare semi-annual status reports to be aggregated by the Project Coordinator and submitted to the Bank before the end of the quarter following the reporting period, the first being due March 31, 1984. The initial status reports would pay particular attention to the following: staffing situation; crop research; extension support including research/extension linkages; and in-service training. 5.06 In addition to the two summary reports on crop research during the period 1973-82 (para. 3.41), the Crop Research Division would issue, not later than six months after the end of the reporting period (calendar year), Annual Crop Research Reports outlining the major research activities and results and to the extent feasible, relevant development in industry- sponsored crop research. The first such report would be due in June 1984.  - 45 - 5.07 At the end of project implementation, the Project Coordinator would assemble a Project Completion Report from individual Component Completion Reports prepared by the Component Managers. This report would be submitted to the Bank not later than six months after project completion. Operation and Maintenance 5.08 The success of the project would ultimately depend on the con- tinued commitment of adequate manpower and physical resources after the period of project implementation. By the end of project implementation, revenues from new mining ventures should ease the resource constraints of Government and enable it to finance the expanded and improved agricultural support service (para. 3.02) from its regular budget without undue strain. The expatriate staff would be gradually replaced by the national staff who will either be understudies of the expatriate staff and/or outputs of the fellowship program of the project. After project implementation, 50% of the expatriate posts (1 S04, 1 S03, and 2 S02) in the Crop Research component will be localized. National Staff would also take over the functions of two expatriate officers (S04) in Agricultural Education and Training, and two officers (SO3) in Agricultural Extension and Support. In the Agricultural Project Development Section, two (S04) out of three expatriate positions allotted for in the prject will be occupied by local people while in the PEM, four (2 ECO2, 1 ECO3, and 1 S02) out of six project expatriate posts will be phased out. Thus, in the first year after project implemen- tation, 55% of the total expatriate staff will be localized and the remainder when suitable replacements have been found and or trained. VI. BENEFITS, JUSTIFICATION AND RISKS Benefits 6.01 The main benefits expected from the project would be the follow- ing: an increased or more cost-efficient production in all three segments of PNG's agriculture, that is, in smallholder cash cropping, subsistence agri- culture and estate production; the avoidance of possible economic losses from the strengthening of the quarantine and animal disease control services; and an increase in the general administrative efficiency and technical expertise of DPI staff. 6.02 These benefits are difficult to quantify. However, findings from other developing countries suggest that specific improvements in agricul- tural support services can lead to impressive results: the introduction of the T&V extension system in Turkey and India led to substantial yield increases for cotton, paddy and wheat often without a significant increase  - 46 - in other inputs./l Similarly, research on a number of crops in Brazil, Colombia and Mexico yielded annual internal rates of return between 35 and 96%./2 Investment in quarantine and animal disease control should be seen as a prudent insurance policy: to quote just one example, the cultivation of sweet potatoes in PNG is second in economic importance only to copper mining, but a devastating disease would have a far more profound impact on the nation than an interruption of mining activities. Justification 6.03 The argument for an Agricultural Support Services Project in Papua New Guinea can be summarized as follows: the agriculture sector is perform- ing well below its potential and the deterioration in agricultural support services over the last decade is one of the main contributing factors of the unsatisfactory state of PNG's agriculture. The support services have been fragmented and weakened by the decentralization of important support functions and continuing departure of experienced expatriate staff. Unless a determined effort is made to strengthen the central DPI in several key areas and to enable it to assist the provincial agricultural staff, the service may eventually cease functioning except in a narrow administrative and regulatory role. The result would be a sector remaining largely static and being at an increased risk of widespread damage by introduced pests and diseases. Environmental Considerations 6.04 By improving plant quarantine services and reducing the risk of major pest and disease attack, the project will be beneficial in environ- mental terms. It would also enhance Government's ability to design and implement environmentally sound agricultural development programs and projects. Risks 6.05 If properly implemented and maintained, the proposed project would be essentially risk-free. Uncertainties would be limited to project imple- mentation itself: The proposed project would require a considerable input of specialized staff, and a careful timing of budgeting, staff recruitment and other administrative procedures. The Government is fully alerted to the difficulties of this task and has agreed in principle to avail itself of the services of professional recruitment agents or alternatively, to seek assistance from FAO's Agricultural Operations Division. /1 World Bank: Agricultural Extension, The Training and Visit System, 1977, p. 3. /2 World Bank: Agricultural Research, Sector Policy Paper, 1981, Annex 3.  - 47 - 6.06 In view of the country's policy of gradually replacing expatriate staff, steps must be taken to assure the identification and preparation of national staff eventually to assume additional responsibilities (although in some highly specialized positions such as in agricultural research, expa- triate personnel is expected to be required for some time to come)./l The proposed project includes a substantial fellowship component, and many of the trainees to be sent abroad and later to take over from expatriate staff have already been identified. The trainees would have to execute bond to serve at least for the number of years spent abroad for training. 6.07 Several project components require a close cooperation between the central and provincial agricultural services. This applies particularly to the research/extension linkage which even in the best circumstances is a complex and demanding task. Government and Bank realize the inherent uncertainties. It is therefore proposed that the extension advisory component and its links with agricultural research be given continuous attention during supervision and a prominent place in the monitoring and evaluation process. VII. AGREEMENTS REACHED AND RECOMMENDATIONS 7.01 During negotiations agreement was reached with the Government on the following points: (a) the Government expects the following key positions to be filled and appointees in place by October 1, 1983: four Quarantine Officers; Research Director; Officer-inr-charge of Research Training; Land Development Officer; and Information and Communication Specialist (para. 5.03); (b) the Government of PNG would make 1984-1987 NPEP submissions for the training programs, for the Administrative College and the Plantation Management Training Program as well as additional staff for the Lands Department and ensure that these submissions are given high priority by the relevant departments. If funding under 1984 NPEP is not forthcoming, modified programs will be discussed and agreed with the Bank by December 31, 1983 (paras. 3.18, 3.38 and 3.30); (c) DPI has decided to locate cocoa and coconut research at Keravat and/or Tavilo; coffee and tea research at Kuk; highland food /1 The ISNAR Report assumes that under favorable conditions the agricul- tural research service could be fully nationalized within sixteen years (that is, by 1998).  - 48 - crop research at Aiyura. The location of low-land food crop research has not yet been finalized. DPI is therefore exploring the possibility of sharing the facilities for research with the University of Technology at Lae if the Faculty of Agriculture of the University of Papua New Guinea, Port Moresby is relocated there, failing which the research has to be located at Keravat or Laloki. The Government of PNG would inform the Bank by December 31, 1983 of the status of this proposed arrangement with the University of Technology ( paras. 3.09 and 3.10); (d) DPI is presently engaged in discussions with the Coffee and Cocoa Industry Board on several alternative proposals. Government will continue to discuss further developments with the Bank in the process of reaching a final decision (para. 3.11); (e) the Government of PNG provided the details on curricula and planned student intake for the Agricultural Certificate and Diploma Courses (para. 3.16); (f) the Department of Lands is currently assessing its technical staff strength with a view to recruiting additional staff to meet the Department's as well as DPI's requirements particu- larly with reference to agricultural development projects (para. 3.30); (g) DPI engaged a consultant to conduct a review of PNG's Quarantine and Animal Disease Legislation who failed to produce a report. The Government of PNG will make a formal request to New Zealand Government in April 1983 to carry out the study. The study is expected to be completed by mid-1983. The Government of PNG would inform the Bank by July 31, 1983 of the findings and action taken or proposed to be taken (para. 3.33 and 3.36); (h) the Government of PNG informed the Bank that UNDP fund for financing part of fellowship component would not be available. The loan amount has therefore been increased from US$13.9 mil- lion to $14.1 million (para. 3.44); (i) the Government of PNG furnished the names of the Project Coordinator and Component Managers at negotiations (para. 5.01); (j) the Government of PNG informed the Bank at negotiation that the Crop Research Divison is expected to be established by March 31, 1984 and the reorganization of the entire DPI to be implemented by June 30, 1984 (para. 5.02).  - 49 - 7.02 With the above agreements the projects would be suitable for a Bank loan of US$14.1 million with a 17 year maturity including a grace period of four years. The borrower would be the Independent State of Papua New Guinea.  ANNEX 1 Table 1 -50 - Page 1 PAPUA NEW GUINEA AGRICULTURAL SUPPORT SERVICES PROJECT Project Cost Estimates Foreign Local Foreign Total Local Foreign Total exchange ----- K million ---- ---- US$ million () Crop Research Civil works 0.80 0.40 1.20 1.00 0.50 1.60 31 Furniture and equipment 0.10 0.20 0.30 0.10 0.30 0.40 75 Salaries 0.70 0.80 1.50 0.90 1.00 1.90 53 Travel and subsistence 0.20 0.20 0.40 0.30 0.30 0.50 60 Other operational expenses 0.10 0.20 0.30 0.10 0.30 0.40 75 Baseline costs 1.90 1.80 3.70 2.40 2.40 4.80 50 Physical contingencies 0.10 0.20 0.30 0.10 0.20 0.30 67 Price contingencies 0.30 0.50 0.80 0.40 0.60 1.00 60 Total Cost of Component 2.30 2.50 4.80 2.90 3.20 5.40 59 Agricultural Education and Training Civil works 0.10 0.10 0.20 0.10 0.10 0.30 33 Vehicles - 0.01 0.01 - 0.01 0.01 100 Furniture and equipment 0.02 0.06 0.08 0.03 0.08 0.10 80 Salaries 0.30 0.10 0.40 0.40 0.10 0.50 20 Travel and subsistence 0.20 0.20 0.40 0.30 0.30 0.50 60 Other operational expenses 0.50 0.30 0.80 0.60 0.40 1.00 40 Baseline costs 1.10 0.90 1.90 1.40 1.00 2.40 42 Physical contingencies 0.05 0.05 0.10 0.06 0.06 0.10 60 Price contingencies 0.30 0.15 0.45 0.40 0.15 0.55 27 Total Cost 1.20 1.15 2.45 1.70 1.35 3.05 44 Planning and Economics Furniture and equipment - 0.02 0.02 - 0.03 0.03 100 Salaries 0.30 0.90 1.20 0.40 1.20 1.60 75 Travel and subsistence 0.40 0.10 0.50 0.50 0.20 0.70 28 Other operational expenses 0.03 0.07 0.10 0.04 0.10 0.10 100 Baseline costs 0.70 1.10 1.80 0.90 1.50 2.40 62 Physical - 0.10 0.10 - 0.10 0.10 100 Price 0.20 0.25 0.45 0.30 0.35 0.65 54 Total Cost 0.90 1.45 2.35 1.20 1.95 3.15 62 Agricultural Extension Support Furniture and equipment - 0.20 0.20 - 0.20 0.20 100 Salaries 0.40 0.20 0.60 0.50 0.30 0.80 38 Travel and subsistance 0.20 0.10 0.30 0.30 0.10 0.40 25 Other operational expenses 0.10 0.20 0.30 0.20 0.20 0.40 50 Baseline costs 0.70 0.70 1.40 1.00 0.80 1.80 44 Physical 0.05 0.05 0.10 0.06 0.06 0.10 60 Price 0.25 0.05 0.30 0.30 0.06 0.40 15 Total Cost 1.00 0.80 1.80 1.40 0.90 2.30 39  ANNEX 1 - 51 - Table 1 Page 2 Foreign Local Foreign Total Local Foreign Total exchange ---- K million ---- US$ million () Land Utilization Services Furniture and equipment 0.01 0.03 0.04 0.01 0.04 0.05 20 Salaries 0.30 0.20 0.50 0.40 0.30 0.60 50 Travel and subsistence 0.10 0.06 0.20 0.10 0.08 0.30 27 Other operational expenses 0.20 0.20 0.40 0.30 0.30 0.50 60 Baseline costs 0.60 0.50 1.10 0.80 0.60 1.40 43 Physical contingencies 0.03 0.03 0.06 0.04 0.04 0.08 50 Price contingencies 0.10 0.10 0.20 0.10 0.10 0.30 33 Total Cost 0.80 0.60 1.40 1.00 0.80 1.80 44 Agricultural Project Development Furniture and equipment 0.01 - 0.01 0.01 - 0.01 100 Salaries 0.20 0.40 0.60 0.30 0.50 0.80 62 Travel and subsistence 0.10 0.08 0.20 0.10 0.10 0.30 33 Baseline costs 0.30 0.50 0.80 0.50 0.60 1.10 54 Physical contingencies 0.01 0.01 0.02 0.01 0.01 0.02 50 Price contingencies 0.10 0.10 0.20 0.10 0.10 0.20 50 Total Costs 0.40 0.60 1.00 0.60 0.70 1.30 54 Livestock Services Civil works 0.06 0.04 0.10 0.10 0.05 0.10 50 Vehicles, Furniture and equipment - 0.10 0.10 - 0.10 0.10 100 Salaries 0.20 0.08 0.30 0.30 0.10 0.40 25 Travel and subsistence 0.05 0.05 0.10 0.10 0.10 0.20 50 Other operational expenses 0.01 0.09 0.10 0.01 0.10 0.10 100 Baseline costs 0.40 0.30 0.70 0.50 0.40 0.90 44 Physical contingencies 0.02 0.02 0.04 0.03 0.30 0.06 50 Price contingencies - 0.20 0.20 - 0.30 0.30 100 Total Cost 0.40 0.50 0.90 0.50 0.70 1.20 58 Quarantine Services Vehicle, furniture and equipment - 0.04 0.04 - 0.05 0.05 100 Salaries 0.30 - 0.30 0.40 - 0.40 - Travel and subsistance 0.03 0.01 0.04 0.04 0.01 0.05 20 Other operational expenses 0.10 0.07 0.20 0.10 0.10 0.20 50 Baseline costs . 0.40 0.10 0.50 0.50 0.20 0.70 28 Physical contingencies 0.01 0.01 0.02 0.01 0.01 0.03 33 Price contingencies - 0.10 0.10 - 0.10 0.10 100 Total Cost 0.40 0.20 0.60 0.50 0.30 0.80 38  ANNEX 1 Table 1 -52- Page 3 Foreign Local Foreign Total Local Foreign Total exchange ---- K million ----- ---- US$ million ----- () Plantation Management Training Civil Works 0.05 0.03 0.08 0.06 0.04 0.10 40 Vehicles, furniture and equipment 0.01 0.05 0.06 0.01 0.10 0.10 100 Other operational expenses 0.10 0.06 0.20 0.10 0.10 0.20 50 Baseline costs 0.20 0.10 0.30 0.20 0.20 0.40 50 Physical contingencies 0.01 0.02 0.03 0.01 0.03 0.04 75 Price contingencies - 0.02 0.02 - 0.03 0.03 100 Total Cost 0.20 0.20 0.40 0.20 0.30 0.50 60 Monitoring and Evaluation Baseline costs 0.10 0.10 0.20 0.10 0.10 0.20 50 Physical contingencies 0.01 0.01 0.02 0.01 0.01 0.02 50 Price contingencies 0.01 0.01 0.03 0.01 0.01 0.02 50 Total Cost 0.10 0.10 0.20 0.10 0.10 0.20 50 Fellowships Baseline costs - 1.10 1.10 - 1.40 1.40 100 Physical contingencies - 0.20 0.20 - 0.30 0.30 100 Price contingencies - 0.20 0.20 - 0.30 0.30 100 Total Cost - 1.50 1.50 - 2.00 2.00 100 Consultancies Baseline costs - 0.90 0.90 - 1.20 1.20 100 Price contingencies - 0.20 0.20 - 0.30 0.30 100 Total Cost - 1.10 1.10 - 1.50 1.50 100 Transit Staff Housing Baseline costs 0.06 0.04 0.10 0.08 0.05 0.10 50 Physical contingencies - - 0.01 - - 0.01 100 Price contingencies - - 0.01 - - 0.01 100 Total Cost 0.06 0.04 0.10 0.08 0.05 0.10 50 Total Baseline Cost for Project 6.40 8.10 14.50 8.20 10.60 18.80 56 Total physical contingencies 0.30 0.70 1.00 0.40 0.90 1.30 69 Total price contingencies 1.30 1.90 3.20 1.70 2.50 4.20 60 Total Project Cost 7.90 10.80 18.70 10.30 14.00 24.30 58 Note: Errors in calculations of 0.1 or less are due to rounding.  ANNEX 1 -53- Table 2 PAPUA NEW GUINEA AGRICULTURAL SUPPORT SERVICES PROJECT Incremental Staff Requirements, by Project Component, Qualification and Nationality CR AET PE AES LUS APD LS QS PMT Total Grade TitleN NO E O EQ NO EO 0 NO EQ NO EQ NO EO NO EO N0 EO AS 1 Asst. Secretary Level - l - - - - - - - - - - - - - - - - - I SO 5 Scientific Officer Grade - 3 - - - - - -