Report No. 4200-LBR Liberia y Agricultural Sector Review LE Volume 1: Main Report April 20, 1984 Western Africa Region FOR OFFICIAL USE ONLY H~~~~~~~~~~~ Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. LIBERIA AGRICULTURAL SECTOR REVIEW CURRENCY EQUIVALENTS Currency Unit = United States Dollars WEIGHTS AND MEASURES 1 Metric ton 0.98 long ton 1 long ton 2,240 lb = 1.016 metric ton 1 hectare (ha) 2.47 acres 1 acre = 0.405 hectare 1 kilometer (km) 0.62 mile 1 mile = 1.609 kilometer ABBREVIATIONS ACDB Agricultural and Cooperative Development Bank ADPs Agricultural Development Projects BCADP Bong County Agricultural Development Project BOPC Buto Oil Palm Corporation CAO County Agricultural Officer CARI = Central Agricultural Research Institute CDA Cooperative Development Agency CMEU Central Monitoring and Evaluation Unit CS = Cooperative Society DOPC = Decoris Oil Palm Corporation DPD Department of Planning and Development of MOA GOL Government of Liberia IFAD International Fund for Agricultural Development LCADP Lofa County Agricultural Development Project LCCC = Liberia Cocoa and Coffee Corporation LPMC Liberia Produce Marketing Corporation LPPC Liberia Palm Products Corporation LRDU Liberia Rubber Development Unit M&E = Monitoring and Evaluation MOA Ministry of Agriculture MOA Document "Liberia's Agricultural Development: Policy and Organizational Structure" (MOA, June 1980) MRD Ministry of Rural Development NCADP Nimba County Agricultural Development Project RCL Rubber Corporation of Liberia RDB Rubber Development Board RRIL Rubber Research Institute of Liberia SRSP Smallholder Rice Seed Project TCU Town Cooperative Unit WARDA = West Africa Rice Development Association FISCAL YEAR July 1 - June 30 FOR OFFICIAL USE ONLY LIBERIA AGRICULTURAL SECTOR REVIEW MAIN REPORT Table of Contents Page No. PREFACE ......................................................... iv SUMMARY AND CONCLUSIONS ........ .vi-xx CHAPTER I: BACKGROUND ..................... 1 A. Location, Size and Population ..... ........................ 1 B. The General Economy ....... ................................ I C. The Agricultural Sector ...... ............................. 2 Land Use ................................................ 2 Topography, Soils and Climate ..... ..................... . 2 Role and Structure of the Sector ........................ 2 Farm Systems ............................................. 3 Recent Development Trends ...... ......................... 5 Overall Agriculture . .................................. 5 Food Economy .......................................... 5 Tree Crops ........................................... . 6 Forestry . .............................................. 6 Financing of the Sector .. ............................... 7 CHAPTER II: CROP-SPECIFIC CONSTRAINTS AND GROWTH POTENTIAL .... ..... 8 I. Production and Market Potential ........................... 8 A. Rice ............................................ 8 Upland Rice ....... ...................... 8 Swamp Rice . ...................................... 9 Technological Constraints ..... ................... 11 Farm Power and Mechanization ..................... 12 Communal Farming and Rice Self-Sufficiency ....... 13 B. Cassava ......... .................................... 14 C. Rubber .............................................. 14 D. Coffee and Cocoa .................................... 16 E. Oil Palm ............................................ 17 F. Coconut ............................................. 18 G. Forestry ... 18 II. Domestic Comparative Advantage and Farmer Incentives ..... 20 Rice Development Strategy ...... ......................... 24 III. Conclusion ................................................ 25 CHAPTER III: SECTORAL ISSUES, CONSTRAINTS AND RECOMMENDATIONS ...... 26 A. Infrastructure ........ .................................... 26 B. Institutions and Policies ................................. 27 (i) Ministry of Agriculture .............. .. ................. 27 (ii) Extension ............................................... 31 This document has a restricted distribution and maiy be used by recipients only in the performance of their official duties. Its contents may not otherwise, be disclosed without World Bank authorization. - ii - (iii) Research . .................................. .............. . . 31 (iv) Training ......................... 34 (v) Agricultural Development Projects .......... ............. 35 (vi) Parastatals ................................ ................ . , 38 LPMC ..*..*. ...... ..... 38 LPPC ....... *............................................, 39 LCCC ......***** ...*** o*.. . *................. 39 Privatization ......................... 0...................... 39 (vii) Cooperatives ............. ..... .. .......... .... 40 (viii) Credit . ......................... 42 (ix) Land Tenure ...... .. .. ............. 43 (x) Price Policy ...............o........ 44 (xi) Coordinating Body for Rubber Development . ..... 51 (xii) Public Policy towards Rubber Concessions ................ 52 C. Rehabilitation of Reacquired Plantations ................. 53 CHAPTER IV: A PROPOSED DEVELOPMENT STRATEGY AND ACTION PROGRAM ..... 54 Agriculture ........ ... . ........0.. 54 Forestry ............. ........ .... 57 Implications for Donors' Lending Strategy . 59 Donors' Working Group .... .. ....... ... 59 Bank Sector Strategy. 59 Technical Assistance Requirements 60 Priority Action Program ..... 61 TABLES IN TEXT Table 1 Present and Potential Yields on Smallholders' Farms Table 2 Financial Returns and Domestic Comparative Advantage of Different Crops and Techniques of Production Table 3 Switching Values for Rice Prices, Yields, Labor and Wages Required for Positive Net Social Profitability (Monrovia Delivery) Table 4 DRCs for Rice at Official and Adjusted Exchange Rates ANNEXES Annex 1 Statistical Appendix Table 1 Structure and Growth of the Agricultural Sector Table 2 Subsectoral Value Added and Growth Within the Agricultural Sector Table 3 Value of Exports Table 4 Structure of Exports Table 5 Production and Exports of Rubber Table 6 Production and Exports of Logs and Lumber Table 7 Production and Imports of Rice Table 8 Producers' and Export Prices for Rubber - 1].1 - Table 9 Monthly Producers' and Export Prices for Rubber, 1979 - 1981 Table 10 Producers' and Export Prices for Coffee and Cocoa Table 11 LPMC Purchases of Coffee, Cocoa and Palm Kernels and Production of Palm Oil and Expeller Cake MAPS IBRD Map No. 16714 Geological Map of Liberia IBRD Map No. 3252R Reconnaissance Soil Survey Map IBRD Map No. 10635R Vegetation IBRD Map No. 16711 Agricultural Development Projects and Rubber Concessions IBRD Map No. 16712 Parastatal Plantations IBRD Map No. 13427 Forestry Project IBRD Map No. 13428 Forestry Project - Concession Areas IBRD Map No. 16713 Approximate Ecological Suitability Zones for Commercial Tree Crop Production VOLUME II: SUPPORTING PAPERS Paper 1: The Food Economy Paper 2: The Forestry Sub-Sector VOLUME III: SUPPORTING PAPERS Paper 3: Tree Crop Production Paper 4: Tree Crop Processing and Marketing VOLUME IV: SUPPORTING PAPERS Paper 5: The Institutional Framework Paper 6: Privatization of Marketing and Input Supply - iv - LIBERIA AGRICULTURAL SECUOR REVIEW PREFACE i. The primary objective of the Agricultural Sector Review was to assess the extent to which the agricultural sector could assist the medium-term (five to seven years) economic recovery of Liberia. Consequently, the review focus- sed on major subsectors like food economy (rice and cassava), tree crops (rubber, cocoa, coffee, oil palm and coconut) and forestry, analysis of con- straints and growth potential in each of these subsectors, institutional and policy issues and constraints and a medium 1;erm strategy based on the above analyses. Minor food and tree crops, livestock and fishery (which are also of minor importance now) were not covered under this review, but should be re- viewed at a later date. 1/ ii. The existing data base is thin except for export and import data which provide sufficient basis for analysis of rice, tree crops and forestry subsectors. The available data on acreage and production of most crops gives an idea of the order of magnitude only. In particular, an indepth review of the physical resource base and, therefore, of sector growth potential is not possible due to lack of comprehensive and reliable land use and land capabi- lity data. However, based on available datEa, an attempt to identify the potential major sources of growth in the agricultural sector has been made in this report to help determine strategy and policy directions in the medium- term. iii. This report is based on the findings of a Joint Bank-USAID-GTZ mis- sion which visited Liberia in May-June, 1982 consisting of Messrs. R. Ali (Leader), S. Z. Husain (Deputy Leader and author of Main Report), R. Southworth (Economist), H. Hvidberg-Hansen (Forestry Specialist), S. Bowers (Food Crop Agronomist-USAID), S. Krause (Cooperatives and Privatization- USAID), J. Mathiessen (Forestry Specialist-GTZ), C. Shearing (Tree Crops Agronomist-Consultant), J. Morris (Tree Crops Processing and Marketing- Consultant) and J. Chettoe (Institutional Framework-Consultant). The mission had valuable assistance from T. Jenne, Peace Corps Volunteer working with USAID, Monrovia. iv. The Green Cover version of this report was prepared in May 1983 and circulated to concerned Government Ministries and agencies. However, for a variety of reasons, there was a delay in the discussion of the report with the Government. The report was finally discussed in detail in January 1984 in Monrovia and substantial agreement was reached with the Government on the recommendations of the report. Several measures have already been initiated 1/ The fishery subsector was reviewed by UNDP/FAO Program Development Mission in early 1982. in the agricultural sector which are in line with the recommendations of the report and preparatory steps are being taken to implement some other recommended measures. Further discussions are also in progress on the development of the rubber, oil palm and forestry subsectors. This final report takes into account the comments made by the Ministry of Agriculture on the Green Cover version. - vi - LIBERIA AGRICULTURAL SECTOR REVIEW SUMMARY AND CONCLUSIONS i. Liberia has a total area of 111,000 km2 and population of 1.9 mil- lion. A little over 60% of the population lives in rural areas of which about 85% work in agriculture. Overall population growth rate is 3.3% per annum with the rural rate at about 1.7% and the urban rate at 6.4% primarily due to heavy migration from rural areas. Agriculture is the largest sector in the economy contributing about 32% to GDP, 14% from the monetary sector and 18% from the traditional sector. Forestry accounts for about 37% of monetary agriculture value added and rubber about 33%; in subsistence agriculture, rice accounts for about 40% and cassava 15%. Farm systems are characterized by rubber concessions and foreign-owned oil palm plantations with relatively high production efficiency (but low processing efficiency in rubber), Liberian- owned commercial farms primarily producing rubber with yields half of those in concessions and traditional farms with low productivity of land and labor and producing predominantly for subsistence. About 90% of all agricultural house- holds are in the traditional sector growing rice as the staple food along with cassava and other food crops; a quarter of households also grow coffee and cocoa. Over 90% of rice is grown on uplands, following slash-and-burn shift- ing cultivation, and the rest in swamps. There is a considerable productivity reserve which is still untapped in traditional agriculture. Since 1981, re- portedly hundreds of communal farms, administered by the Ministry of Internal Affairs, have also been in existence where each farmer is required to donate two to three days' labor a week throughout the cropping season. ii. The agricultural sector attained a growth rate of 3.9% per annum in 1974-79 principally because of monetary agriculture growth rate of 5.7% which in turn was due to a high growth rate of 25.5% per annum of forestry. The decline of forestry by 1.3% and 46.5% in 1980 and 1981 respectively led to stagnation of monetary agriculture (0.3% growth) in 1980 and steep decline by about 22% in 1981. Decline of world prices for forest products was princi- pally responsible for the dramatic fall in forestry and monetary agriculture value added in 1981. Rubber industry has been declining since 1974; rubber production (82,300 m.t.) and value added in 1981 were only 93% and 82% respec- tively of those in 1974. Fall in world prices for coffee and cocoa led to a decline in value added of these crops also in 1981. iii. Public sector allocations for agriculture have increased from about 4% of the development budget in 1970 to about 30% in 1980/81. The share of agriculture is proposed to be about 30% (excluding about 3% for forestry) of total public sector investment during the Second Plan (1981-85), which was recently adopted. This is the largest share for any sector and would be 54% more in real terms than the First Plan (1976-80) public sector investment in agriculture. However, the tight liquidity squeeze, particularly for the Government, which has been continuing since 1980, has affected the implemen- tation of development programs and projects in the agricultural as well as other sectors and is likely to be a major constraint in the near future. - vii - iv. An analysis of the sources of growth reveals that productivity increase can be the major source in the medium term (five to seven years) during which a 3 to 4% per annum growth for the sector is feasible. The major potential sources of growth in the medium term are forestry, rubber and upland rice. Other crops which are unlikely to have a major impact in the medium term (because of their small share in the sector at present) but are promising sources of growth in the long term are swamp rice, cassava, oil palm and coco- nut. There is wide ecological suitability for coffee but there are export quota restrictions under the International Coffee Agreement to which Liberia is a signatory. Liberia's current quota for exports to ICO-member countries is 8,700 met. Moreover, Liberia has signed a five-year contract with Libya (a non-ICO country) for an annual delivery of 2,000 m.t. of coffee. Over the two year period (1981 and 1982), Liberia was able to export a total of only 2,500 m.t. to Libya (since Liberia gives first priority to ICO members). Exporting coffee from Liberia (ranging from 8,000 to 10,000 m.t. during the past few years) has, therefore, not been a problem so far. However, with the projected unfavorable international market prospect for coffee, Liberia's export quota to ICO-members is likely to grow very slowly. The non-ICO market (excluding Libya to which exports from Liberia are at world prices) is already very comuetitive and Liberia, with a relatively lower quality coffee, would have to sell in this market at a heavy discount if domestic production substantially exceeds the export quota to ICO countries. The scope for domestic coffee consumption increases is also small. With this international and domestic market situation in view, significant coffee production increase in Liberia is difficult to justify except for relatively small componerts in ADPs which should continue in order to raise smallholders' incomes and to reduce the deleterious effects of slash and burn cultivation on the uplands. Inter- national and domestic market prospects for cocoa are as unfavorable as those for coffee; moreover, ecological suitability for cocoa is very limited. Therefore, significant expansion in cocoa production in Liberia is also difficult to ,justify (as against relatively small components in ADPs which should continue). The analysis of comparative advantage in terms of Domestic Resource Cost Coefficients (DRCs), based on price relationships, input costs, and technologies in 1982 and assuming that the Liberian dollar is at par with the U.S. dollar, clearly shows Liberia's strong comparative advantage in all major export crops viz., rubber, coffee, cocoa and oil palm, even with moderately efficient techniques. However, oil palm has the least favorable DRC among tree crops and, therefore, the competitiveness of Liberian palm oil exports would have to be continually assessed as significant expansion of oil palm plantings is undertaken. An analysis of longer-term price projections (1990) made by the Economic Analysis and Projections Department of the World Bank (Commodity Price Forecasts, dated December 21, 1982) shows that, other things being constant, the domestic comparative advantage of Liberia in rubber, coffee and oil palm will continue but may be lost in cocoa cultivation using fertilizers and chemicals even with adjustment for the recent appreci- ation of the Liberian dollar (para xx.), unless extension costs on improved techniques were significantly reduced and/or marketing efficiency of Liberia Produce Marketing Corporation (LPMC) considerably improved. V. In contrast to tree crops, the problem with rice is more compli- cated. While Liberia has a comparative advantage in expanding rice production for home consumption and consumption close to producing areas through all - viii - available techniques (see para vi below for further discussion), it does not have a comparative advantage in substituting rice imports in Monrovia unless labor-saving techniques and double cropping are promoted. This result remains valid even if the projected real increase in world rice prices till 1990 is taken into account and an adjustment made for the appreciation of the Liberian dollar over 1980-82 of approximately 20% (in relation to the currencies of its trading partners weighted by the relative trade shares). Viable labor-saving techniques are not presently available and, therefore, research into new tech- niques (animal traction and light mechanization) has a high priority. One viable technique, viz., swamp farming with double cropping and labor-saving sickle harvesting and pedal threshing, requires a yield of only 5,300 kg/ha from two crops combined for positive net economic profitability. This is achievable under current conditions in Liberia. Two other techniques, viz., double cropping in swamps and single cropping in swamps with labor-saving sickle harvesting and pedal threshing, arei also economically efficient for import substitution in Monrovia using the projected 1990 real rice price and an adjusted exchange rate. vi. Import substitution of rice in Mcnrovia, however, is a longer-term consideration. In the medium-term, the relevant consideration is import substitution for home consumption or constmption close to producing areas since an estimated one-fourth to one-third of imported rice (90,000 tons in 1982) is going upcountry. DRCs show that expanding rice production for home consumption or consumption close to producing areas is economically profitable under all available techniques. Incremental production under ADPs from both uplands and swamps is still substituting imports for home consumption and con- sumption close to producing areas and, therefore, investment on rice develop- ment through techniques being extended is still economically efficient. How- ever, with possible import substitution ir. Monrovia in view, a beginning should be made under the ADPs with introduction of viable labor-saving devices along with double cropping wherever feasible, while at the same time directing greater research efforts towards developing new labor-saving techniques and adjustments in cropping calendars. vii. In addition to the elements of a rice development strategy following from the analysis of comparative advantage above, other elements would need to address the issues relating to upland and swamp techniques. Traditional up- land rice technique is economically the most inefficient and, therefore, the strategy should be to encourage farmers to cultivate rice in the swamps and to grow tree crops on uplands since swamp rice carries a yield potential two to three times that of upland rice and, on ullands, tree crops offer three to four times the return from upland rice. Reduction in upland acreage is also desirable in order to avoid destruction of high forests (ecological effect) and valuable timber species (loss of foreign exchange) and the possibility of site degradation (loss of soil fertility). However, the change from upland rice to tree crops will be a long-term process since the farmers' commitment to upland rice for subsistence will continue. In the meantime, the strategy should be to, in addition to encouragement of tree crop production, increase productivity of upland rice which may either raise rice output from given resources or release resources, principally labor, for cultivation of more profitable (privately and socially) cash crops. Improved seed (LAC 23) can increase upland rice yields by 20 to 30% and is acceptable to traditional - ix - farmers. However, acute shortage of this seed is a major constraint now. The IFAD-financed Smallholder Rice Seed Project (SRSP) which has just started is designed to benefit about 40% of present upland rice area by year ten. Accel- eration of SRSP is one possibility to increase upland rice productivity. viii. Improved swamp rice techniques have a long-term potential but serious problems have been encountered in their adoption by farmers under ADPs. Some developed swamps have been abandoned and yields have consistently declined. There are several explanations: it is a relatively difficult technique for Liberian farmers who require longer and more intensive supervision than was given by ADPs; it is a labor-intensive technique requiring precise timing but farmers give first priority to upland rice for labor allocation in order to minimize their perceived risks in depending on a new technique (improved swamp); fertilizers are not applied in recommended quantities and on time; returns from rice are not attractive for cash purposes (which are the prin- cipal rationale for promoting improved swamp techniques) compared to tree crops; and there are cultural and attitudinal barriers such as swamp farming being regarded as women's work, farmers' dislike of working in water and fear of water-related diseases (Schistosomiasis). Considering the experience so far, the promotion rate of improved swamps should be modest to allow a careful reassessment and revision of the extension package and careful selection of swamps for development. ix. Rice self-sufficiency had been an overriding Government objective in the past and even extremely inefficient measures such as large-scale mecha- nized farming were adopted to achieve this objective. The latest is communal farming which is wasteful from a resource allocation point of view. Both labor and seed, required for these farms, are scarce and farmers have no in- centives for communal farming. This approach should be immediately discon- tinued. Rice self-sufficiency by the year 2,000 would require a very high growth rate of domestic rice production of 5.8% per annum which is infeasible with the available techniques and their rate of adoption by farmers. The Government should, therefore, avoid a narrow focus on rice, which has inevi- tably resulted in inefficient policies, and instead emphasize food security with due consideration to other food crops, principally cassava, to substitute for rice. The relevance of rice price policy for food security is discussed in paras. xx and xxi. x. There is considerable yield increase potential for cassava. High- yielding mosaic-resistant varieties are available from the Central Agricul- tural Research Institute (CARI). However, cassava is a perishable crop which deteriorates rapidly once harvested. Marketing, therefore, is a major con- straint on cassava expansion. Should rice imports be curtailed or become extremely expensive for consumers, cassava could fill the national food gap (however, the possible adverse nutritional consequences of greater cassava consumption would have to be assessed and alternative sources of protein explored). Relative prices of rice and cassava would, therefore, be extremely important determinants of domestic urban demand for cassava. As for external demand, Liberia is favorably located to compete for the European cassava feed market. A feasibility study of a Liberian cassava-feed industry for export is recommended. - x - xi. As regards rubber, substantial poltential for increased production exists since world market prospects are favorable and Liberia accounts for only 2% of world exports. A 100% increase in yields on Liberian-owned farms through replanting with high-yielding clones is possible. Almost half of rubber trees on Liberian farms are over 22 years old and, therefore, replant- ing or new planting is a high priority. However, a high proportion of exist- ing mature trees are not being tapped by smallholders at present principally due to low producer prices and labor constraint. Low net farmgate prices for smallholders reflect depressed world prices but are also lower than they would otherwise be because of processing inefficiencies in the rubber subsector. Firestone is the price-setter in an oligopsonistic situation. Processing efficiency and prices for smallholder rubber have improved with the commis- sioning of the new Firestone factory (see para xxii for rubber pricing policy). An immediate improvement in returns to labor can be made by changing the presently labor-intensive system of tapping every alternate day without stimulation to reduced frequency tapping every third day with stimulation. This would reduce labor requirement by one-third while not significantly affecting yields. Measures to improve the effectiveness of the Liberia Rubber Development Unit (LRDU) including an expanded extension effort to promote the new tapping systems and stronger monitoring and evaluation are recommended. xii. Forestry has a very significant potential for expansion and medium- term world market prospects are favorable. Coepared to the actual annual log production average in 1978-80 of 30.6 million m , the potential annual coupe ranges from 3.2 to 2.0 million m depending on whether a 25-year or a 40-year cutting cycle is adopted. However, the unutilized potential exists only for the lesser known species, which are difficu,lt to market. The primary species, which are easy to sell, are already being k,arvested beyond their potential annual coupe and at current exploitation levels may not last longer than 12-13 years. Therefore, 'mining' of primary species should be slowed down as soon as world market situation improves and serious market promotion efforts by the Forest Development Authority (FDA) and concessionaires to export lesser known species should be undertaken. A key issue in the forestry sub-sector is the preservation of forest resources to obtain a sustained yield production, at present not possible due to encroachment or. natural forests resulting from shifting cultivation and illegal felling. A long-term policy is needed to separate permanent forest areas from agricultural land. A Land Use and Land Capability Study is of high priority. After a land-use plan for the whole country is prepared, there should be a follow-up within FDA. Strengthening of FDA for better planning, monitoring and control of forest resources and for increased collection of fees and taxes from forestry concessions and rational expansion of domestic wood processing are recommended. Linkages of forestry and agriculture should be improved through establishment of a Land Use Planning Committee and by expansion of the Board of Directors of FDA to include representatives of the Ministry of Agriculture and Ministry of Planning. xiii. Lack of adequate road infrastructure is a major constraint on both agriculture and forestry. Construction, improvement and better maintenance of road infrastructure should remain of very high priority. - xl - xiv. The major institutional constraint is the inability of the Ministry of Agriculture (MOA) to effectively perform its sectoral planning and policy formulation functions, extension services to farmers and monitoring and eval- uation of ADPs and parastatals. Shortage of trained staff, seriously inade- quate logistical support, gross overstaffing at current workloads and lack of technological packages to extend are major reasons. Emphasis on a project approach in the past and lack of serious efforts by external donors to help MOA conduct an integrated sectoral development program have undoubtedly con- tributed to MOA's present ineffectiveness. MOA's reorganization and streng- thening is of very high priority for improvement in sector planning and policy formulation (pricing policy for rice and rubber in particular), reduction of waste through gradual absorption by MOA of extension and training functions now being performed by several agencies including parastatals such as Liberia Palm Products Corporation (LPPC) and Liberia Coffee and Cocoa Corporation (LCCC), greater coordination of research, input supply and credit services, monitoring and evaluation of development programs and establishment of effective linkages between agriculture and forestry. Strengthening of the Department of Planning and Development (DPD) of MOA is of immediate priority. xv. The research institution, CARI, has so far been unable to overcome the technological constraint on the sector (principally lack of adequate technological packages, in particular for swamp rice development, which address the labor constraint). Despite considerable donor assistance in the past, CART has no major research achievements todate excep-t in rice varietal selection. Due to a USAID project (1981-84), some improvement at CARI is evident in infrastructure, equipment, training and linkages with international organizations. While the annual expenditure of about $5 million on CARI (about 13% of the development budget for the agricultural sector in 1982-83) cannot be regarded as low, most of the budgetary funds are consumed by salaries due to overstaffing of unskilled field workers. There is a critical shortage of trained professionals and operating funds are completely inade- quate to carry on a reasonable research program. Other serious constraints on CARI are lack of real autonomy and management inefficiencies. Moreover, there is lack of clear definition of research priorities and linkages with inter- national research institutions are weak. These problems have arisen due to ineffectiveness of the Agricultural Research Committee and lack of coordina- tion among CARI local staff, various externally-financed projects in CARI and the on-going ADPs. Streamlining CARI and reorienting its research program to better address the technological constraints on sectoral growth, is of high priority. A possible mechanism to ensure coordination among various donors, MOA, CARI and ADPs, better formulation of research priorities, improvement of CARI's international linkages and solution of CARI's financial and organiza- tional problems is the establishment and effective operation of a Donors' Working Group (para xxvii). Alternatively, the recommended "sectoral adjustment project" (para xxviii) could provide an overall framework and vehicle for resolution of the above issues. xvi. As institutions, ADPs in Lofa, Bong and Nimba counties, particularly in Lofa (where the experience with the completed Phase I was satisfactory), have performed reasonably well in pursuing a small-farmer development strategy by providing basic infrastructure, inputs and a range of farm support services - xii - to introduce modern technology. However, efforts to make ADPs more cost- effective and integrate them with MOA should continue. The linkages among ADPs and cross-fertilization of experience should also be strengthened. This strengthening should be a major objective of the Central Monitoring and Evaluation Unit (CMEU) of MOA. xvii. The most important parastatal is LPMC which is the sole exporter of coffee, cocoa and palm kernel products, acts as the agent of the Government for PL 480 rice imports and operates a producer price support program by being responsible on a non-exclusive basis for purchasing, milling and selling domestic rice. LPMC's operational costs of the rice program and collection costs of cocoa and coffee are high (37% of f.o.b. price for cocoa and 32% for coffee in 1982). Whether LPMC' s monopoly of coffee and cocoa should be broken is an issue. The continuation of LPMC, which makes its internal purchases through cooperatives and private traders, has extremely important implications for the survival and strengthening of cooperatives. Given the Government's preference for Liberianization of trade and commerce, the development of cooperatives to assume a significant role in marketing and input supply seems to be the best alternative to a parastatal monopoly; it would also signifi- cantly reduce the cost of ADPs (para xvi). If LPMC's monopoly were to be broken in the short term, the ability of the cooperatives to compete with private traders is open to serious doubt. However, even with LPMC support, whether cooperatives would be able to handle marketing and input supply functions in the near future is itself an issue. While the present situation is not very encouraging, a concerted effort is being made for the first time under Lofa Phase II project to develop the capability of cooperatives. The results of these efforts would have to be assessed carefully over the next three to four years before seriously considering breaking LPMC's export monopoly. In the meantime, efforts to improve LPMC's efficiency should be made and are envisaged under Lofa Phase II project. As regards other parastatals, the operations of Liberia Coffee and Cocoa Corporation (LCCC) and Liberia Palm Products Corporation (LPPC) have been very inefficient. In-depth studies of LCCC and LPPC are recommended to determine their financial viability and specify measures needed for their restructuring/expansion/dis- solution/absorption into the MOA. xviii. There exists the interesting possibility of privatizing input supply through private distribution of improved rice seed once it becomes available from SRSP in sufficient quantities. The SRSP should, therefore, explore this possibility. Privatizing the LPMC-managed oil palm plantations and mills and LPPC's plantations is an immediate possibility and should be pursued. xix. The weakness of the credit institution, Agricultural and Cooperative Development Bank (ACDB), is another significant constraint on sector growth. The performance of ACDB has been unsatisfactory as regards provision of rural banking services in general and of credit for the small farmer in parti- cular. Additional financial resources for ACDB, expansion of ACDB rural banking facilities, mobilization of rural savings by ACDB and appropriate incentives for attracting and retaining better quality staff are recommended. - xiii - xx. Lack of a consistent and well-formulated pricing policy has been a significant constraint and reflected the weakness of central institutions which did not possess the analytical capability (for rice, coffee and cocoa) to set price policies. In the case of rubber, there is no appropriate insti- tution responsible for pricing. Rice price policy has vascillated between taxes on imported rice as high as $145/m.t. in 1977, equivalent to a tariff rate of 52%, to consumer subsidies that totalled about $90/m.t. in 1980/81. However, in September 1981, the Monrovia retail price of imported rice was raised to $528/m.t. which once again meant a tariff ($46/m.t., which was about 11% of c.i.f. Monrovia price). However, the tariff was low and therefore, the retail price of imported rice in 1982 was lower than it should have been, that is, there was an implicit subsidy, considering the fact that over the last two years (1980-82), the Liberian dollar, which is at par with the U.S. dollar, is estimated to have appreciated by about 17% in relation to the currencies of its trading partners weighted by the relative trade shares. To this extent, imports have become artificially cheaper and exports less profitable. Subsidised retail rice prices between 1978 and 1981 may have contributed significantly to the increased import levels of the past few years (from 61,000 m.t. in 1978 to 90,000 m.t. in 1982). With declining real rice prices, real cassava prices also fell, indicating that a shift out of cassava might also have contributed to the increased rice imports. World prices of rice have declined steadily since last year and, based on February 1983 c.i.f. Monrovia price of rice imported by LPMC of $390/m.t., the Monrovia retail rice price of $528/m.t. embodies a tariff of about 20% on the c.i.f. price. This is approximately equal to the tariff warranted by the estimated overvaluation of the Liberian dollar and thus the implicit consumer subsidy in 1982 has now vanished. The present consumer prices, therefore, should remain unchanged for sometime. Rice price policy for domestic rice has been limited to producer price support through a purchasing scheme operated by LPMC (para xvii). In the past, LPMC purchases accounted for only 10 to 15% of the marketed rice surplus. Though LPMC purchases were small due to farmer distrust of many licensed buying agents committing irregularities and constant official prices at levels that were attractive to farmers for only brief periods immediately after harvest, the f -ed producer prices served as a reference point for market price determination. In September 1981, a new producer price of $0.40/kg was announced. This was 50% higher than the $0.26/kg price which had been held unchanged for several years. Though the full impact of the new producer price has not yet been adequately documented, LPMC purchases of paddy have increased significantly, implying a larger share of LPMC in the total marketed surplus. It is possible that the new producer price influenced planting decisions in 1982 and 1983 and resulted in larger domestic production of paddy. In economic terms, given the present upcountry average retail consumer price of $0.56/kg for milled rice, producer subsidy is about 20% if producers received $0.40/kg for paddy. However, if, as a result of unautho- rized discounts which are common, producers received only $0.35/kg for paddy, the producer subsidy is only about 7%. Further, if producer prices were to be determined with reference to expected long-term rice prices, the projected 1990 c.i.f. Monrovia rice price adjusted upwards by 20% for the present esti- mated overvaluation of the Liberian dollar would result in an upcountry average retail price of about $0.64/kg for milled rice. At this retail price, the producer subsidy would be only about 5% if producers received $0.40/kg for paddy; if they received only $0.35/kg, there would be a tax of about 7%. In - xiv - the light of the above discussion, the present producer price should remain unchanged for sometime. However, while the present producer price has doubt- less improved relative returns from rice production, these returns are still much lower than those from cash crops such as coffee and cocoa and, therefore, their impact on farmer incentive to adopt improved swamp farming techniques for cash purposes would have to be carefully assessed on a continuous basis. xxi. Increase in rice production is a stated Government objective. How- ever, reduction in urban consumption of rice and greater incentive for other foodcrops should be an equally important objective since declining real con- sumer prices of rice in the past may have significantly increased import levels of rice (para xx). If consumer rice prices are held constant in real terms at their 1982 level, then the rice imnport gap will increase to 137,000 tons by 1990, representing about 43% of total consumption compared to about 40% in 1981, with very significant balance of payments implications. However, given an import price elasticity of demand of -0.8 to -1.0, a 20% increase in real consumer prices, for example, could reduce rice imports by a substantial 16 to 20%. This could facilitate substitution of other food crops such as cassava, leading to increase in production of these crops. An increase in retail rice prices would also increase Government revenues (through tariffs), reduce rice smuggling, increase rural incomes and offer greater incentives to increase rice production through riskier but socially profitable techniques. While the lower income urban groups could be affected adversely, incomes in urban areas are already much higher than those in rural areas and even poorer urban consumers have the choice of partial:Ly switching back to cassava; also the unemployed urban groups have the choice of returning to rural areas and become rice farmers. However, the nutritional implications of greater cassava consumption (para x) should be analysed on a continuous basis. As discussed in para xx, the present consumer rice pricejs embody an import tariff of approximately 20% on the c.i.f. price of rice which removes both explicit and implicit subsidy. However, world prices of rice are projected to increase in real terms in the 1980s and, therefore, consumer rice prices in Liberia, re- flecting increasing c.i.f. prices and possible continuous adjustment for overvaluation of the Liberian dollar, should increase accordingly. For monitoring of the tariff level and periodic adjustments, analytical capability should be built up, preferably in the DPD of MOA, which should be responsible for a continuous review and analysis of the production and consumption effects of rice price policy and for making appropriate recommendations. Moreover, once retail prices of imported rice reach what may be considered incentive levels for cash cropping of rice, the rationale for Government's support price policy through LPMC operations would have to be reviewed; if considered irrelevant, as is likely at that stage, privatization of LPMC's rice opera- tions should be effected; in the meantime, efforts should be made to reduce LPMC's operational costs and increase the effectiveness of its price support program through closer supervision and spot checking of prices actually being paid to farmers. xxii. Absence of an active rubber pricing policy is the result of absence of a coordinating institution for the rubber subsector. Firestone is the price-setter (para xi). Processing efficiency in the rubber industry can be improved leading to increase in net farmgate price, with the introduction of - xv - active competition among processors of rubber. The rehabilitation of the fac- tory of the Rubber Corporation of Liberia (RCL), a Government corporation, should be accelerated to further improve competition. Most importantly, a Rubber Development Board (RDB) should be established to bring together in one forum the various elements in the rubber subsector, principally conces- sionaires, smallholders and the Government, and initiate an effective and frank dialogue among them; improve understanding of the problems facing the subsector; and provide guidelines for policy formulation, including pricing policy which could be followed by RCL and concessionaires. In order to en- courage rubber concessionaires to expand acreage, the RDEB should help develop a more favorable climate through the Government increasingly assuming respon- sibility for social services in concession areas (at present being provided by concessionaires) and also preventing unreasonable wage increases being imposed on concessionaires. The RDB should be chaired by the Minister of Agriculture and should have a broad membership. In order to provide, build and sustain the analytical capacity of the RDB to evolve a rubber policy, a small Rubber Planning and Development Unit could be established in the DPD of MOA to serve as the secretariat of the RDB. If the workload and the complexity of the subsectoral planning and control warrant it, the RDB could later evolve into a full-fledged Rubber Development Authority with a semi-autonomous status. xxiii. A significant issue in the sector is the status of properties and plantations of about 6,500 ha, primarily of rubber, 'reacquired' by the Gov- ernment in 1980 and not yet returned to their original owners (the Government recently decided to return some of the properties to their original owners). Substantial revenues could be generated quickly through rehabilitation of these enterprises. An early decision by the Government is needed on whether these enterprises are to be returned to their previous owners or their heirs or retained by the Government after payment of compensation to the previous owners or their heirs and rehabilitated. xxiv. Major Constraints. In summary, major exogenous constraints on the sector are: (a) depressed world markets for Liberia's major agricultural ex- ports, viz., forestry, rubber, coffee and cocoa (para ii>; and (b) acute financial problems of the Government (para iii). The majior endogenous con- straints are: (a) inadequate road infrastructure (para xiii); (b) weakness of institutions such as MOA (para xiv), CARI (para xv), parastatals namely LPMC, LPPC and LCCC and cooperatives (para xvii), ACDB (para xix), and Forestry Development Authority (para xii); (c) absence of a coordinating institution for the rubber subsector (para xxii); (d) technological constraints (princi- pally lack of technological packages which address the labor constraint) re- flecting the weakness of the research institution (para xv); (e) shortages of inputs, principally improved upland rice seed (para vii); (f) lack of consis- tent and well-formulated pricing policies (principally for rice and rubber) reflecting institutional weaknesses (paras xx - xxii); (g) weak linkages between agriculture and forestry (para xii); (h) misallocation of resources (communal farming) (para ix); and (i) lack of proper uti-Lization of existing investments (reacquired enterprises) (para xxiii). xxv. Development Objectives. The Government's objectives for the agri- cultural sector as stated in the Second Plan document (1981-85) are: (i) to increase the involvement of the large mass of Liberian farm families in the - xvi - development of the agricultural sector; (ii) to stimulate increase in produc- tivity, employment and income of Liberian farmers; (iii) to promote equitable access to the means of production and corresponding widespread and equitable distribution of benefits from agricultural development; (iv) to promote diver- sification of production in the agricultural sector; and (v) to expand agri- culture as a principal base for self-sustaining development. xxvi. A Proposed Strategy. The major elements of a proposed development strategy to achieve the above objectives are summarized below: (a) Complementing export promotion with a conscious and consistent import substitution to attain food security: while the emphasis on export promotion should continue with appropriate importance attached to export crops according to their potential (para iv), a complementary import substitution strategy would consist in clearly distinguishing between the economics of import substitution of rice for home consumption and that for Monrovia (para v and vi) and, based on review of technological changes and analyses of rice import flows to upcountry from year to year, devising appropriate policies for efficient import substitution. A conscious and consistent use of the instrument of rice price policy (para xxi) would help achieve food security within the limits of technical and economic feasibility. (b) Pursuing a regional strategy: Regional specialization based on ecological suitability as well as division of land between permanent forests and agricultural use can be implemented fulLy when a land capability study is completed. Based on the results of this study, therefore, a long-run regional strategy could be formulated which, inter a:Lia, could address the broad issue of resettlement of farmers in areas agriculturally more suitable. This stra- tegy will help make full use of the comparative advantage of Liberia in grow- ing different crops. In the medium-term, however, based on available informa- tion, a regional development strategy should consist in general of one for the coastal belt and most of southeastern counties, dealing primarily with commer- cial farms and nucleus plantations possibly with smallholders/outgrowers, and one for the interior counties (mainly Lofa, Bong and Nimba) based on more integrated rural development because of the relatively higher population density in these areas with presence of a large number of small traditional farmers cultivating multiple crops with significant potential for increasing productivity and large pay-offs possible from construction of physical and social infrastructure. (c) Implementing a gradual program (sectoral) approach to agricul- tural development through reorganization, strengthening and rationalization of existing national institutions; gradual adjustment of on-going projects to bring them within the sectoral framework; creation of new institutions like RDB to help MOA implement its program approach and improving linkages with FDA. (d) Decentralizing and improving the administration of agricultural programs: Decentralization would be in line with the recommendations of the Rural Development Task Force. However, several major tasks such as a massive transfer of funds to the regions to provide logistical support, deployment of better quality of staff, some transfer of authority to County Agricultural - xvii - Officers (CAOs), and establishment of a mechanism for monitoring and evalua- tion of regional work, must be accomplished before decentralisation can work. Major changes in MOA Monrovia operating procedures, productivity, training programs and managerial capability will, therefore, be required. (e) Strengthening and focussing adaptive research to help resolve technological constraints: Streamlining CARI and prioritization of its research activities are central to an agricultural development strategy for Liberia. A regular review of the acceptability and profitability of available techniques in the light of changing relative prices and new directions for research should be undertaken by the existing Agricultural Research Committee with assistance from (a strengthened) DPD of MOA. (f) Improving other institutional support services, viz., extension, training, processing and marketing, input supply, credit, etc.: These should be improved through reorganization, rationalization and strengthening of public sector institutions, development of cooperatives and encouragement of the private sector. (g) Coordination for improved infrastructure: Coordination in policies and resources among Ministries responsible for road infrastructure (Ministries of Public Works and Rural Development), Ministry of Agriculture and Forest Development Authority both at the national and county level is essential. xxvii. Donors' Lending Strategy. The donors' future interventions should comprise both conventional project loans and a more programmatic approach to lending through strengthening of MOA and other national institutions to faci- litate sectorwide policy changes. A corollary of the sectoral approach re- commended above is closer coordination among donors and MOA. At present, donors are by and large operating in isolation in different parts of the coun- try and sector without taking advantage of the complementarity of each others' activities. A working group of representatives of principal aid agencies active in the sector, DPD of MOA, Ministry of Planning (MOP) and Ministry of Finance (MOF) should be set up to facilitate formulation and implementation of a more coherent and clearly defined sector assistance strategy. The streng- thened DPD of MOA should provide support and secretarial assistance for this Group and as such strengthening of DPD should precede the formation of this Group. xxviii. Bank Sector Strategy. In line with the need to initiate a more co- ordinated and focussed sectoral thrust (in contrast to an exclusive project approach), some reorientation of Bank lending strategy is called for. Bank Group lending in the sector at present supports the Government's objectives of increased smallholders' participation and increase in their productivity and income through integrated projects (Lofa and Bong ADPs), export promotion also through increase in smallholders' production (Rubber Development Project and tree crop components in ADPs), improved forestry management (Forestry Project) and diversification of production base (Decoris Oil Palm Project). Institu- tion-building objective is common to each project. This strategy is in line with the needs of the sector and should be continued except for some required changes in the design of ADPs in respect of both technological packages and organizational arrangements, particularly provision for larger farmers instead - xviii - of an exclusive reliance on smallholders, greater emphasis on cost-effective- ness and need to incorporate in ADPs components which would benefit the entire sector in addition to a specific project area. The last mentioned aspect is important to develop a link between specific projects and sector policy which has so far been missing. A reorientation of the Bank's assistance to the sector should be considered with more weight being given to institutions serving the needs of the agricultural sector as a whole. In this regard, a "sectoral adjustment project" deserves consideration. The Working Group (para xxvii) could be an extremely important and effective vehicle for providing an overall framework for sector assistance, and, if required, the Bank should be prepared to play a leading role in the formation and operation of this Group. Fulfilment of the focal role of the DPD of MOA, envisaged in this sector review, in formulating policies relating to agricultural pricing, rationalization and strengthening of national institutions and parastatals, and monitoring and evaluation of developmaent programs, will require Bank and other donors' technical assistance. xxix. Priority recommendations needing immediate action are the follow- ing: (i) Strengthening of the DPD of MOA; this is particularly important if effective sectoral planning, policy formulation and a programmatic approach to development are to be achieved; in particular, development of the capability for collection and analysis of national agricultural statistics, analytical capability for the formulation of a rice price policy and for rubber sub- sectoral planning and policy formulation through RDB and capability for monitoring and evaluation of ADPs and parastatals to ensure stronger linkages and cost-effectiveness of agricultural institutions. This recommendation has some cost implications in terms of increased staffing and logistical support and would require external financing, considering the presently acute finan- cial problems of the Government. (ii) Discontinuation of communal farming; no cost implications; on the contrary, significant reduction in costs if recom- mendation is implemented. (iii) Establishment of RDB; this has some cost implications in terms of increased staffing and logistical support and would require external financing. (iv) Rehabi'Litation of reacquired properties; this has significant cost implications but offers immediate benefits in terms of increased foreign exchange and Government revenues. (v) Initiation of a Land Use and Land Capability Study; this study needs to be initiated so that its results can provide the basis for a 'Longer-term strategy to establish a land use plan for the whole country by separating permanent forest areas from agricultural land, draw-up schemes for resettlement of farmers on better soils with appropriate farming systems, preserve natural forests, assess agricul- tural potential of the country and promote efficient regional specialization based on ecological suitability; this study has significant cost implications but possibilities of external financing of the study are extremely encourag- ing; this study could be undertaken under the recommended "sectoral adjustment project" (para xxviii). xxx. Other priority recommendations on which action is being taken or is envisaged are: improvement of road infrastructure; acceleration of SRSP; strengthening of FDA and other recommendations on forestry; streamlining CARI and reorientation of its research programa; introduction of new tapping systems by LRDU and acceleration of RCL factory construction; improving LPMC efficiency and strengthening of ACDB; feasibility study of cassava-feed - xix - industry {or export; encouragement of private traders for seed distribution; and recommendations on cooperatives and cost-effectiveness of ADPs. xxxi. Recommendations on which action should be initiated as early as possible are: agronomic and financial evaluation of LCCC and LPPC; privatization of LPMC's oil palm plantations and oil mill; formation of a Working Group of donors, MOA, MOP and MOF; reorganization and strengthening of the MOA (other than DPD) and County agricultural offices according to a phased program; coordination for improved road infrastructure among Ministries of Public Works, of Rural Development and of Agriculture and FDA; study of a Rubber Planting Fund and confirmatory survey of rubber areas; feasibility study of coconut production, processing and marketing; and establishment of a Rubber Research Institute. Postscript. The recommendations in paras xxix to xxxi were discussed with the Government and other external donors such as USAID and EEC at various times in 1983 in connection with supervision of ongoing projects financed by the Bank Group and appraisal of Bong Phase II Project prior to the formal detailed discussion of the report with the Government in January 1984. Many of these recommendations have already been implemented by the Government and steps are being taken to implement some others either through the ongoing projects or through the proposed structural Adjustment Credit (SAC). As of April 1984, the implementation status of the recommendations is as follows: (i) the DPD of MOA is being strengthened through an Agricultural Sector Planning Project financed by USAID; (ii) while communal farming has not been officially discontinued, available indications confirm that the Government is moving away from it; (iii) the establishment of RDB is being considered under the proposed SAC; (iv) while some reacquired properties have been handed back to their original owners, a decision on the future of remaining pleLntations is expected to be taken under the proposed SAC; (v) detailed terms of reference (TORs) for a Land Use and Land Capability Study (to be called Nationeal Land Resources Survey) have been prepared by consultants financed by ODA; the Survey (expect- ed to be partly financed by EEC) is likely to be initiated. under the proposed SAC; (vi) rice seed production under SRSP has been accelerated; (vii) strengthening of FDA is in progress under the ongoing Forestry Project financed by the Bank Group and further support is likely under the proposed SAC; (viii) streamlining and strengthening of CARI is in progress under the Agricultural Research and Extension Phase II Project financed by USAID; (ix) efforts to imprcve effectiveness of LRDU and start construction of the RCL rubber factory are being made under the ongoing Rubber Development Project financed by Bank-CDC-ODA; the RCL factory is expected to be operational before the end of 1984; (x) measures to improve efficiency of LPMC are being taken under the Lofa Phase II and Bong Phase II projects, financed by the Bank Group, African Development Bank and IFAD; under Bong Phase II Project, LPMC would divest itself of its oil palm plantations and oil mills; (xi) ACDB is being strengthened under Bong Phase II Project; (xii) a feasibility study of cassava-feed industry for export is to be initiated shortly under Bong Phase II Project; detailed TORs have been prepared and proposals invited from consultants; (xiii) recommendations on cooperatives and cost-effectiveness of ADPs are being implemented under Lofa Phase II and Bong Phase II projects; (xiv) detailed TORs have been prepared for agronomic and financial evaluation of LCCC and LPPC; these studies are expected to be completed and action on - xx - their recommendations initiated under the proposed SAC; (xv) detailed TORs for a rubber strategy study, including a confirmatory survey of rubber growing areas and feasibility of a Rubber Planting Fund, have been prepared; the study would be undertaken either under the ongoing Rubber Development Project or the proposed SAC; (xvi) establishment of a Rubber Research Institute, to be initi- ally financed by the Government of France, is under active consideration of the Government; and (xvii) improvement of road infrastructure is in progress under various ongoing projects. Recommendations on which action has not yet been initiated include: rice seed distribution through private traders (not enough seed available for distribution yet); formation of a Working Group of donors, MOA, MOP and MOF; reorganization and strengthening of MOA (other than DPD) and County agricultural offices; coordination for improved road infra- structure among Ministries of Public Works, of Rural Development and of Agricul- ture and FDA; and feasibility study of coconut production, processing and marketing. CHAPTER I Backgrouncl A. Location, Size and Population 1.01 Liberia is situated on the west coast of Africa, bordered by Ivory Coast on the East, Sierra Leone on the west, Guinea in the north and Atlantic Ocean to the South (IBRD Map 16714). It has an area of about 111,000 km2 (43,000 sq. miles). The total population is estimated at 1.9 million with a low average density of about 16 persons per sq. km. A little over 60% of the population lives in rural areas of which about 85% work in agriculture. There are nine counties and six associated territories, each divided into districts and sub-divided into clan chiefdoms. Overall population growth rate is about 3.3% per annum with the rural rate at about 1.7% and the urban rate at about 6.4% due to heavy migration from rural areas and some migration from neighbor- ing countries. B. The General Economy 1.02 A very important role in the economy is performed by the foreign en- clave sector, consisting mainly of iron ore, forestry and rubber concessions, which is the main source of export earnings and generates about one-third of GDP. However, the economy's dependence on iron ore, rubber and forestry for GDP growth, export receipts, Government revenues and modern sector employment, leaves it vulnerable to the vagaries of international trade. The average per capita income is estimated at US$530. This aggregate figure, however, con- ceals acute income disparities. While the enclave sector yields a per capita GNP of about US$1,620, the large majority of the population which lives in the subsistence sector has a per capita income of about US$160. About 62% of private income is claimed by the top 5% of households and only 11% of private income is received by the lowest 40%. 1.03 Recent Economic Development. Liberia's economic performance in terms of growth, investment and public savings was quite impressive throughout the sixties and until 1974. Real GDP, however, grew at an annual rate of only 0.7% between 1974-79 (principally because of significant decline in mining) compared to 4.2% between 1970-74. In 1980 and 1981 GDP growth was negative. The deterioration in recent years has resulted both from severe structural problems, unfavorable external circumstances and domestic institutional/man- agerial/policy weaknesses. Continued price and demand weakness in interna- tional markets for major exports of Liberia viz., iron ore, rubber and timber has been an important factor. The political uncertainties over the last three years resulted in a large capital flight, a reduction in imports and Govern- ment revenues, and freezing of external credit lines. This, given the use of the US dollar as the currency of Liberia, led to an extremely tight liquidity squeeze, particularly for the Government. The liquidity squeeze, which is - 2 - continuing, has affected the implementation of development programs and pro- jects in the agricultural as well as other sectors and is likely to be a major constraint in the near future. 1/ C. The Agricultural Sector Land Use 1.04 Available land use and land capability data are inadequate to permit a reliable assessment of country-wide potential for cultivation and suitabili- ty for different crops. A country-wide land use and land capability study is of the highest priority and broad guidelines for such a study have been pro- vided at Appendix I to supporting Paper 3: Tree Crop Production. Available information on geology, soils and vegetation, is shown in IBRD Maps 16714, 3252R and 10635R respectively. With a very favorable land/population ratio, the availability of cultivable land is, in general, not a constraint and is unlikely to be so for a long time. The total land surface of Liberia is about 9.8 million ha of which 4.8 million ha is estimated to be forest land. The estimated area used for agriculture is 0.52 million ha (5.3% of the total land area.) Topography, Soils and Climate 1.05 Liberia is within the tropical rainforest zone. The topography con- sists of undulating coastal belt rising into rolling hills of low elevation with many wide and shallow valleys, followed by a heavily forested plateau with elevations between 200-300 m, spread along the border with Guinea. About 75% of the soils belong to the Latosol group. These soils are generally acid, low in water holding capacity and organic matter and are quite variable in nutrient content. This is where most of the shifting cultivation and tree crop planting is carried out. Lithosols, generally not suitable for agricul- ture, occupy another 17% of the land area. About 2% consisting of infertile sandy soils, mainly in the narrow coastal strip, belong to the Regosol group. The remaining 6% are gray hydromorphic and half bog soils occurring as swamplands usually in association with Latosols and are the most fertile soils available for food crop (particularly swamp rice) production. The climate is warm and humid and monsoonal with a dry season from November to March followed by a long and very wet season from April to October. Rainfall ranges from 4,600 mm on the coast to about 1,600 mm inland. Role and Structure of the Sector 1.06 Agriculture is the largest sector in the economy contributing about 32% to GDP, 14% from the monetary sector and 18% from the traditional sec- tor. Monetary agriculture includes forestry, fishing, rubber, cocoa, coffee, 1/ Details on the economy and economic performance in recent years available in "Liberia: Current Economic Situation and Prospects," World Bank Report No. 2662-LBR, December 28, 1979, and "Liberia: Recent Econo- mic Developments and Medium-Term Prospects," World Bank Report No. 4178- LBR, December 30, 1982. - 3 -- palm kernels, and poultry. Traditional agriculture includes rice, cassava, sugarcane, corn, other minor crops and palm produce from wild groves. Based on 1980 figures which are more representative of recent trends, forestry accounted for about 37% of the monetary agriculture value added, rubber about 33%, and cocoa, coffee and palm kernels about 8%; the rest was accounted for by fishing, poultry, etc. In subsistence agriculture value added, rice accounts for about 40%, cassava about 15%, sugarcane 6%, corn 3%, palm produce 12% and all other minor crops 24%. Farm Systems 1.07 Farming systems vary but can be characterized into four broad types as described below. 1.08 Foreign-owned Plantations and Concessions. There are 6 rubber con- cessions, a foreign-owned rubber processing company, two foreign-owned oii palm plantations, and 33 forestry concess:Lons (IBRD Maps 16711, 16712, 13427 and 13428). The basic features of rubber concessions are: highly trained managerial and technical staff - most of them expatriates - working with a large, relatively unskilled labor force; choice of suitable land; extensive capital investment; use of modern production techniques suitable for large- scale operations; and operations at relatively high levels of efficiency (except in processing; see para 3.76). Yields obtained by rubber concessions are only slightly below those of the efficient plantations in Southeast Asia. Current yields are estimated at 1,200 - 1,500 kg. of dry rubber content (d.r.c.) per ha. 1.09 Liberian-owned Commercial Farms. While this group of farms primarily produces rubber, it has also been involved, in production of poultry, hogs, coffee, cocoa, oil palm, rice and vegetables. A majority have farm size of less than 10 ha, averaging about 3 ha per farm. Only the largest Liberian private farms have trained managers and on all but a few of the medium-sized farms, field management is poor and yields low. Yields on rubber farms are estimated to vary between 200 kg d.r.c. per ha to 900 kg/ha with an average of about 650 kg/ha which is about half of yields on concessions. 1.10 Parastatal plantations of oil palm, coffee and cocoa are managed by Liberia Produce Marketing Corporation (LPMC), Liberia Palm Products Corpora- tion (LPPC), Liberia Coffee and Cocoa Corporation (LCCC), Buto Oil Palm Corporation (BOPC) and Decoris Oil Palm Corporation (DOPC). Reliable yield data from these plantations are not available as most of the plantings are not yet in bearing. Technical standards on some parastatal plantations, parti- cularly Decoris, are often adequate and oil palm yields of about 10 to 15 tons of ffb/ha are anticipated. 1.11 Traditional Farms. About 90% of all agricultural households (160,000) are in the traditional sector. The average size of household is 5.4 persons and the average size of cultivated holding is 1.5 ha. The production in this sector is predominantly for subsistence, and is based on rice, cassava and other food crops such as corn, pepper, bitterball, okra, etc. (sometimes there are 15 different crops on a single holding) with occasional sales of surpluses and coffee, cocoa and palm kernels produced exclusively for the market. About - 4 - one quarter of agricultural households grow coffee and coooa. Rice is the staple food and grown by about 90% of all agricultural households. Over 90% of rice is produced on uplands and the rest in swamps. Livestock production is only of minor importance in traditional farming because of unsuitable climatic conditions, particularly for cattle, absence of natural pastures, animal diseases (trypanosomiasis) and the absence of a tradition in livestock farming among Liberian tribesmen. 1.12 The predominant characteristic of traditional farming is low produc- tivity of land and labor. Shifting cultivation on the uplands is still the dominant technique. Under shifting cultivation, usually secondary forest on the uplands is cleared and burned, followed by one or two years of cultivation after which the land is returned to bush fallow for periods averaging 8 to 10 years before a new production cycle is started. The firs-t year rice crop is usually followed by a second year mixed cropping of cassava, vegetables, groundnut and, sometimes, rice. The shifting cultivation method arises from the necessity to restore soil fertility in what is genera:Lly poor, heavily leached soil, unsuitable for continuous annual crops. Howiever, bush fallow cycles are shortened (sometimes to as low as 4 years) with increasing popu- lation pressures on good farm land closer to towns, resul-ing in reduced soil fertility and increased site degradation. 1.15 Because of low technological level on traditiona:l farms, their present average yields are, for almost all crops, far below those obtained in research trials and well below those obtained by more advanced farmers, parti- cularly under the ongoing agricultural development projecl.s (ADPs), and some concessions and parastatals. The farmers, concessions and parastatals who have reached these high levels constitute only a small proportion of the agricul- tural sector in Liberia. There is a considerable productivity reserve which is still untapped. While many important problems, discussed later, remain to be solved in developing a technological base for raising crop yields uniformly throughout Liberia, much can be done to ensure that improved techniques that are available are translated into actual production increcses. This depends on the rate at which these techniques are adopted by farme)rs. While this is partly a function of profitability and applicability, it also depends on the coverage and efficiency of extension services, the adequacy and timeliness of farm supplies and the general level of physical, including marketing, infra- structure. 1.14 The present average yields for different crops arnd the yields obtain- able (and already obtained on some good smallholders' farms) with improved planting material, proper fertilizer application, disease and pest control and better farm management practices, are shown in Table 1. The figures clearly show a potential 100% increase or more in yields of all crops except upland rice where the potential increase is limited to 30 to 40% with available technology. 1.15 Communal Farms. Communal farms were initiated irL 1981 through pro- clamation by Liberia's Head of State and are administered by the Ministry of Internal Affairs. Increasing food production and generating funds for use by counties and districts for public works have been advanced, as rationales for communal farms. Under this system, each town is expected to have at least one communal farm where each farmer is requirejd to donate two to three days a week throughout the cropping season. Reportedly, each of nine counties has com- munal farm assignments of 1,420 ha to be planted to upland rice. If true, the total could be 12,780 ha in the whole country. The proceeds from the produce, to be sold to LPMC, are expected to be spent on local development schemes by the town chief with the approval of District Development Committees. Several hundred communal farms are reported to exist in each county even though no specific plans and procedures for management, harvesting, marketing and expenditure of proceeds are available. Yield data from communal farms are also not available. Table 1: PRESENT AND POTENTIAL YIELDS ON SMALLHOLDERS' FARMS (Kg/ha) Present Yield Yield Obtainable with Available Improved Technology Paddy - Upland 1,200 1,600 - 1,700 Swamp 1,600 3,500 - 4,000 1/ Cassava 5,000 - 6,000 15,000 - 20,000 Rubber 2/ 600 - 700 1,200 - 1,300 Cocoa 3/ 225 550 Coffee 3/ 250 550 Oil Palm (FFB) 5,000 8,000 - 10,000 1/ With double cropping, obtainable yields could be 6,000 - 7,000 kg/ha. 2/ Dry rubber content (d.r.c.) at peak production. 3/ Clean beans at full development. Recent Development Trends 1.16 Overall Agriculture. The agricultural sector attained a growth rate of about 3.9 per cent per annum in 1974-1979, with monetary agriculture grow- ing at about 5.7% and subsistence agriculture at about 3.1%. The overall agricultural growth rate decelerated to 1.6% in 1980 and the sector actually declined by 7.8% in 1981 (Annex 1 Table 1). This was due to stagnation in 1980 (0.3% growth) and steep decline in 1981 (by 21.6%) of monetary agricul- ture which in turn principally occurred in forestry (para 1.20 and Annex 1, Table 2). The high growth rate of monetary agriculture in 1974-79 was also due to a very high growth rate of 25.5% per annum of forestry which increased its share of monetary agriculture value added from about 16% in 1974 to about 37% in 1979. Rubber value added and production have been declining since 1974; a partial recovery was made in 1980 and 1981 compared to 1979 but pro- duction and value added in 1981 were still only 93% and 82% respectively of those in 1974 (Annex 1, Table 2). 1.17 Food Economy. The growth rate of the subsistence sector between 1974-78, years for which official figures are available, was about 2.9% per annum. It is difficult to assess recent developments in the subsistence sec- tor as no agricultural surveys were carried out in 1979 and 1980 while 1981 - 6 - and 1982 survey results are not yet available. Assuming that production and cultivated areas of rice increase at the same rate as the rural population (1.7% per annum at present), the 1981 totals for rice cultivated area and paddy production can be estimated at 218,000 ha and 262,000 m.t respective- iy. Imports of rice have increased from an average of 50,000 m.t. in early 1970s to 95,000 m.t. in 1981 and 90,000 m.t. in 1982. For cassava, using similar assumptions as for rice, the 1981 cultivated area and production are estimated at 37,500 ha and 167,000 m.t. 1/ 1.18 Tree Crops. The development trends in rubber were discussed in para 1.16. Rubber exports accounted for about 17% of total exports in 1980 and were the second largest after iron ore. Rubber production declined from the highest ever level of 88,500 m.t. in 1974 to 79,045 m.t. in 1979 but then recovered partially reaching 82,318 m.t. in 1981 (Annex 1 l'able 5). The decline till 1979 was common to both concessions and Liberian-owned farms but since then, concession production has increased (11% in 198C0 and 1% in 1981) while Liberian production has continued to decline (by 12% in 1980 and 1% in 1981). 1.19 Coffee, cocoa, and palm kernel value added grew at 3.6% per annum in 1974-80 but declined by 15.4% in 1981. The growth till 1980 was accounted for by the steady increase in coffee and cocoa output, 2/ as reflected by LPMC purchases, from about 3,950 tons and 2,730 tons respectively in 1974/75 to 10,240 tons and 5,142 tons respectively in 1979/80 even though palm kernel purchases have declined steadily from 13,797 tons to 6,593 tons in the same period (Annex 1 Table 11). The value added decline in 1981 was caused by fall in world prices for coffee and cocoa as well as reduced LPMC purchases of coffee (8,060 tons) and palm kernels (2,152 tons) even though cocoa purchases increased further to 6,863 tons in 1980/81. Coffee, cocoa and palm products account for about 8% of total exports. 1.20 Forestry. The high growth rate of forestry value added in 1974-79 ws mentioned in para 1.16. Production of logs increased from about 406,000 m in 1974 to about 756,OOOm3 in 1979, an annual growth rate of 13.2%. This was due to strong world demand and prices of forestry products. However, mainly due to unsettled political conditions, the forestry sub-sector value added deslined by 1.3% in 1980 (production of logs declininrg to about 745,000m9, a decline of 1.4%). Mainly due to a steep decline in world prices, the sub-sector experienced a dramatic decline of 46.5% in v-alue added (produc- tion declining to 451,00Gm3 - a decline of about 39.5%) in 1981. Exports of logs, lumber and sawn timber accounted for about 12% of total merchandise exports in 1980 and were the third largest after iron ore and rubber. The percentage declined to 6.9 in 1981. 1/ Details in supporting Paper 1: The Food Economy (Vol,, II, page 1, paras 2 and 4). 2/ An undetermined amount has continued to be smuggled into Liberia from some neighboring countries. -7- Financing of the Sector 1.21 Public sector allocations for agriculture have increased from about 4% of the development budget in 1970 to about 30% in 1980/81. The increase has occurred mainly due to agricultural development projects in Lofa, Bong and Nimba counties; rubber, oil palm, forestry, research and training projects; and establishment of parastatals like LPPC and LCCC. Since these public sector investments complemented private sector investments (for which no esti- mates are available), the total agriculturaL investments have increased sub- stantially in the 1970s. The share of agriculture is proposed to be about 30% (excluding about 3% for forestry) of total public sector investment during the Second Plan (1981-85), which was recently adopted. This is the largest share for any sector and would be 54% more in real terms than the First Plan (July 1976 - June 1980) public sector investment in agriculture. - 8 - CHAPTER II Crop-Specific Constraints and Growth Potential 2.01 An analysis of crop-specific issues, constraints and growth potential in the following pages will be undertaken in three steps: (i) production con- straints and potential in terms of expansion of area under cultivation and/or intensification of production systems and increasing output by using improved technologies, and potential of increasing log production in forestry; (ii) market potential in the light of domestic demand/supply gaps and interna- tional market prospects; and (iii) the country's domestic comparative advan- tage in crop production in terms of Domestic Resource Cost Coefficients (DRCs) and farmer incentives in terms of relative financial returns from different crops at prevailing prices. The production and market discussion will be combined for each major subsector, viz., rice, cassava, rubber, cocoa, coffee, oil palm and forestry, which together account for over 70% of the total agri- cultural value added. Institutional and policy issues (such as pricing, research, etc.) which have a sector-wide significance because of their inter- relationships will be discussed in Chapter III. Production and Market Potential A. Rice 2.02 Upland Rice. The area under upland rice cultivation (including cassava and many other food crops which are intercropped with rice) is esti- mated at about 200,000 ha which is about 40% of the total cropped area in the country. Since the bush fallow system results in indiscriminate destruction of high forests leading to unfavorable ecological effects and loss of poten- tial foreign exchange from marketable species, an expansion of area under upland cultivation is not desirable. In fact, technological improvements in upland cultivatio-n 5hould aim at reduction in the area under cultivation in order to preserve high forests and ensure a sustained yield volume of timber production (para. 2.36). However, in the medium term, it is likely that area under upland rice will increase at the rate of rural population growth (para 1.01). 2.03 Despite the relatively low potential for intensifying upland produc- tion systems (para 1.14), efforts to increase productivity of upland rice would have a significant impact on sector growth because of its large share in the sector. Upland farming is a labor intensive system which takes nearly all available family labor to produce the required rice supplies (further discus- sion of this and labor-saving techniques in paras 2.09 - 2.14). An increase in efficiency of upland rice production would either raise rice output from given resources or release resources, principally labor, for cultivation of more profitable cash crops such as coffee, cocoa, oil palm, and rubber (Table 2). Either outcome would benefit the poorest of the population and thus improve income distribution. Improving upland rice productivity is, therefore, a high priority element of the agricultural development strategy in Liberia. The only available technique, at present, which is compatible with - 9 - traditional farming and can, therefore, be confidently extended is improved seed LAC-23. Based on 1978-80 crop cuttings in Bong and Lofa Counties, LAC-23, as a sole input, increased yields 27% (1,527 kg/ha vs. 1,202 kg/ha) without significantly increasing labor requirements. Farmers who plant LAC-23 are aware of its superior yielding characteristics and rate its eating and cooking qualities equal to that of traditional varieties. 2.04 It is possible that about half of all upland rice area could be planted with LAC-23 in the next ten years. However, improved seed availa- bility is a major constraint now. Whatever small quantity is being produced by the Ministry of Agriculture (MOA), Lofa Country Agricultural Development Project (LCADP) and Bong County Agricultural Development Project (BCADP) is of poor genetic purity and low germination capacity. The IFAD-financed Small- holder Rice Seed Project (SRSP) which has just started is designed to benefit about 40% of present upland rice area by year ten. With a conservative incre- mental yield assumption of 200 kg/ha, a 0.6% per annum growth in upland rice productivity is feasible. Combined with a 1.7% per annum growth from area expansion (para 2.02), the growth rate of upland rice could be about 2.3% per annum for the next 10 years. This could be raised further if improved seed production is increased and more farmers are reached. Efficient measures should, therefore, be adopted to increase production of improved upland rice seed. Acceleration of SRSP is one possibility. 2.05 Swamp Rice. The area under cultivation in swamps is estimated at only 20,000 ha which is about 3% of the estimated 600,000 ha of available fresh water swamps in the country which could be developed for rice produc- tion. 1/ Part of this unexploited land resource is the most fertile available for food crop production. The country's projected rice demand by year 2000 could theoretically be met from swamps. However, without more data concerning the qualities of these swampy soils and the land clearing requirements, it is impossible to estimate even approximately the areas which could be developed productively. 2.06 The potential for increasing swamp rice productivity is considerably higher than that for upland rice. Efforts are being made to realize this potential in LCADP, BCADP and Nimba County Agricultural Development Project (NCADP). However, the experience with swamp rice development has been mixed. From Bong and Lofa crop cuttings, the average weighted yield from improved swamps was 2,645 kg/ha which was considerably less than the potential 3,500 to 4,000 kg/ha which about one-third of the farmers in LCADP and BCADP did achieve. Moreover, LCADP improved swamp average yields decreased from about 3,000 kg/ha in 1977 to less than 2,000 kg/ha in 1980. Similar decreases were noted in BCADP. Several explanations have been offered for unsatisfac- tory adoption of improved swamp technique. First, the improved swamp tech- nology (high yielding varieties like IR-5 and Suakoko 8, fertilizer and pesti- cides) differs radically from traditional swamp farming. It is an irrigated technology imported from Asia. It requires some basic engineering such as designing, laying out and constructing of bunds, irrigation and drainage 1/ FAO: Liberia - Program Development Mission Findings and Recommenda- tions (Draft), Rome, 1982. - 10 - canals, substantial clearing of trees and bush, soil levelling and puddling, nursery preparation, transplanting, water control, ferti:Lizing, weeding and disease and insect control, if necessary. The system is sophisticated with a heavy dependence on proper and timely management. The farmers, therefore, require longer and more intensive supervision than was done during the early years of LCADP and BCADP. A second constraint is the high initial and con- tinuing labor requirements for the improved swamp technique. Competition for labor between the various farming operations, principally for upland rice, which has the first priority for subsistence farmers, is a major reason for farmers becoming increasingly less precise in their management and input applications in improved swamp rice cultivation. (M & E data show that of those farmers who developed improved swamps in Lofa and Bong ADPs, 70% still plant upland rice). More extreme situations in ADPs arose when many developed swamps decreased in size or were abandoned. LCADP monitoring and evaluation (M & E) data show that by the fourth project year, 32% of developed swamps had been abandoned. The situation improved in the fifth project year when the actual area under production was estimated at only 18% less than the developed area. A third factor is that complete clearing of swamps takes more than the first year and renovation of the engineering is vital at the commencement of the second crop year. The more frequently a swamp is cu:Ltivated, the easier working it becomes, since tree stumps are removed, there is less bush regrowth between crops and with proper maintenance the engineering works become consol- idated and settled. However, no provision existed in LCADP Phase I for the second year development loan to farmers who were left alone to continue devel- opment without much guidance from project staff. Farmers returning to the swamps in the second year were confronted with not only tree stumps but sub- stantial shrub regrowth and need for repair work on dykes, bunds and canals. Many farmers, therefore, compromised on technology and settled, with a lower labor input, into a form of cultivation which resulted in lower yields. A fourth reason which applies to decreasing yield with time is the decreasing fertilizer application rate. LCADP data on M & E show that where farmers applied the recommended quantities of fertilizers at the right time, yields above 4,000 kg/ha were obtained. However, in BCADP, the data from M & E showed that in the first year farmers applied only 78% of the recommended amount; in subsequent years 60% or less. Applications have not been timely, particularly the critical TSP basal dressing which stimulates root development and plant establishment. BCADP M & E data show yield reductions of 58% due to a late TSP basal application. The input application problem is related to the first two factors above. A fifth factor is the low relative returns from rice (Table 2), which may explain why rice is still mostly regarded as a subsis- tence crop and most farmers are not interested in yields above the level which guarantees their subsistence requirements. However, an important sixth factor is the social and cultural tradition of rice cultivation not being accepted as a means to increase cash income. Extension services may first have to pene- trate the social barriers to production of rice as a cash crop before adoption of new techniques can be accelerated (para 2.44(iv)). Other cultural and attitudinal factors such as swamp farming being regarded as women's work, farmers' dislike of working in water and fear of water related diseases (Schistosomiasis), have also been important constraints on adoption of the improved swamp technique. - 11 - 2.07 However, despite problems, there are many good swamp rice farms in LCADP and BCADP (NCADP program at the moment is very small and M & E data are not available regarding yields on these farms) and with the adoption of full technological packages and good extension supervision beyond the first year, average single crop yields can approach 4 tons/ha. In particular, where there is a shortage of upland areas, such as in Foya in Lofa County, prospects of bringing all cultivabl-e swamps into production are much better. The appeal of swamp rice with farmers who have adopted it fully lies in its much higher yields and the consequent much lower labor requirement per unit of output com- pared to that of upland rice. It is not possible, however, to project rice production increase from swamps because of uncertainty as to the rate of adop- tion of improved swamp techniques by farmers. 2.08 As regards market potential of rice, with a per capita consumption of rice in the range of 110-130 kg/yr, which is one of the highest consumption levels of rice in Africa, total consumption of rice in 1981 was estimated at 242,000 m.t., of which about 40% was imported. Domestic rice production would have to increase at an annual rate of 4.8% to keep 1990 imports at the esti- mated 1982 level and self-sufficiency in rice by year 2000 would require growth rates of 5.8% per annum. 1/ 2.09 Technological constraints. Given the present farming systems and relative input and output prices, the presently used technology is inadequate to resolve the major constraint of labor availability on increasing production by extensive or more intensive methods. The labor constraint for the sector arises principally because labor requirements for subsistence upland rice production occupy a large percentage of the available family labor and the operations ard timing of alL other crops are adjusted around the upland rice production cycle. Certain tasks are done predominantly by one sex or the other. The critical labor constraint periods for upland rice are for men in January (77% of available male labor) and February (70%) when brushing and felling the forest, and for women in May (71%), July (86%) and November (75%) when planting, weeding and harvesting respectively. 2/ If a fan,ily were to decide to grow an additional half ha of upland rice, they would be utilizing nearly 100% of their available time in these months. Thus a slgnificant increase in rice production by the traditional upland method and production of other crops with the practised technology i3 constrained by labor availabi- lity. Crops such as cassava, sugarcane and cocoa and coffee (harvesting only) whose timing of peak labor requirements differ from those for upland rice can be adapted easily. Crops which compete for labor (rubber and oil palm har- vesting, swamp rice and new cocoa and coffeE planting and brushing), may be cut back or stopped completely to perform the upland rice operations. ks for hired labor, rapid migration to urban areas and employment opportunities in the rubber, mining, forestry and service settors have slowed the growth of farm communities (para 1.01), particularly Df younger, able-bodied males. 1/ Details in supporting Paper 1: The Food Economy (Vol II, page 3, paras 10-13). 2/ Details of farm size, cropping pattern, labor rquirements and avail- able labor time used in the model are .n Annex 1 to supporting Paper 1 The Food Economy (Vol. II, pages 86-92). - 12 - 2.10 Farm Power and Mechanization. Given the strong causal connection between presently-practised upland rice techniques and labor constraints in the agricultural sector, a number of labor-saving techniques have been used and have been or are now being researched in Liberia and elsewhere. Some have been marginally successful (improved felling methods by chainsaws), some are still of unproven value (the use of herbicides and zero tillage) and some have been disastrous (the use of highly mechanized clearing techniques followed by tractor tillage). Attempts at farm mechanization in general, and for the small farmers in particular, have usually not been successful in the past, mainly because they have not fitted the farming systems and also because of insufficient investments in training and facilities for back-up services. Attempts at mechanizing upland rice through the use of crawler tractors for large-scale clearing and tillage have been disastrous because they disturbed thle surface soil, subjecting it to severe erosion, and also disturbed the hydrological balance. As a result, continuous cropping required large and rincreasing applications of fertilizers which quickly resulted in diminishing returns when costs were set against yields. 2.11 The use of hand-pushed planters on uplands has some theoretical advantages such as reduced labor requirement for weeding. But the increased 'abor required to clear land sufficiently to use the planter is likely to cancel this apparent advantage. The use of herbicides for zero tillage (which is being adopted in many other countries in collaboration with IITA) offers a number of advantages: principally soil erosion is prevented because top soil is least disturbed, soil fertility is partially replenished with decaying vegetation, and labor input is much reduced. Furthermore, the appearance on the market in the last few years of relatively cheap herbicides may remove what has hitherto been the biggest constraint to their use. However, research in other parts of the world indicates that a different spectrum of weed species may eventually survive under a zero-tillage regime. Further invest- g_ations into the feasibility of zero-tillge under Liberian conditions has, therefore, to continue. Research is also needed for developing effective control measures for the ground-hog and rice birds since fencing and bird scaring require a significant labor input. 2.12 As for swamps, the labor-saving components of the original Asian irrigated techniques, i.e. animal traction, power tillers, sickle harvesting and pedal or rack threshing have not been successfully adopted in Liberia so far. The use of animal traction on a significant scale can practically be ruled out for the foreseeable future for several reasons., First, trypanoso- miasis is endemic and only two breeds of cattle survive it, the N'dama and the West African Dwarf. Both are too small for normal tillage work and, notwith- standing a well-designed and executed FAO-supported project to develop small, low-draught implements, they become susceptible to trypanosomiasis under any stress such as tillage work. Cross-breeding for increase!d size and resistance is possible but is a long-term approach. Prophylaxis is at present prohibi- tively expensive. The use of buffaloes has also not beer. successful anywhere else in hfrica as they carry a number of diseases. - 3 - 2.13 Power tillers, which are widely used in paddy preparation in Asia, could have applicability to improved swamps in Liberia. However, they are expensive ($1000-1500) and a swamp size of j to 4 ha is required for an economical and efficient use of power tillers. Most swamps in Liberia are 0.5 to 1.5 ha in size. Much of the swampy land is also not accessible with the existing road network. The movement of power tillers like Kubota or Yanmar, even though they are self powered, is extremely difficult across rough or un- levelled land common in Liberia and may not, therefore, reduce labor signifi- cantly. Moreover, lack of repair and maintenance facilities is a major con- strairnt. Cultural attitudes (disharmony with the traditional system) are also a constraint. This form of mechanization is, therefore, difficult to extend on a significant scale in the medium term. 2.14 Improved harvest and post-harvest :echniques offer better prospects of acceptance by farmers. Sickle harvesting and treadle or rack threshing have been adopted elsewhere in Africa. However, their large-scale introduction may not be easy in Liberia since these interventions are not in harmony with the present traditional system. Sickle harvesting requires varieties that mature at the same time. If farmers grew LAC-23 on their entire holding, this problem would be resolved. However, for risk-aversion reasons, farmers con- tinue to plant traditional varieties alongw-ith LAC-23. Rack threshers are not compatible with panicle storage and may require changes in storage facilities and methods in addition to alteration in customary sex roles. Tradi-tional farmers are reluctant to accept interventions which they perceive may stress the system. However, since these techniques can decrease harvesting and post- harvesting labor requirements by approximately 50%, do not require an external support base for maintenance, are relatively simple and substantially increase net financial returns (Table 2), they may eventually be adopted by farmers. 2.15 Communal Farming and Rice Self-Sufficiency. Rice self-sufficiency had been an overriding Government objective in the past and even extremely inefficient measures such as large scale mechanized farming were adopted to achieve this objective. The latest is communal farming (para. 1.15) which appears uneconomic from a resource allocation point of view. The availabilitZy of labor for the farmers' own farm has evidently not been considered in establishing communal farms. With the existing labor constraint (para. 2.090 labor donated to communal farms is labor lost to farmers' privately operated farms. An additional concern is seed supply. If 12,780 ha have been cleared for communal farms (para. 1.15), the seed requirement is 767 m.t., at a planting rate of 60 kg/ha. This quantity is not currently available in Liberia. Given labor and seed constraints, absence of farmer incentives for communal farming and absence of formal procedures for sales of produce and expenditure of proceeds which are likely to induce corruption and generate farmers' distrust, communal farming is a wasteful approach and should be discontinued. It should be repeated that r-Lce self-sufficiency by the year 2000 iwould require a very high growth rate of domestic rice production of 5.8% per annum (para. 2.08) which is infeasible with the available techniques and their rale of adoption by farmers. The Government should, therefore, avoid a narrow focus on rice, which has inevitably resulted in inefficient policies, and instead emphasize food security with due consideration to other food crops, principally cassava, to substitute for rice. Rice price poiicy (paras. 3.53 - 3.61) would play a very important roLe in achieving food security (rice development strategy discussed in para 2.44). - 14 - 2.16 In addition to the issues and constraints relating to rice discussed above, viz., acute shortage of upland rice seed (para 2.04); cultural and social attitudes to swamp farming (para 2.06'; unattractive relative returns i
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Liberia - Agricultural sector review (Vol. 1 of 4) : Main report
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