Tanzania - National Agricultural and Livestock Extension Rehabilitation Project

Document of The World Bank FOR oMCLkL USE ONLY GX Iq q q - -rS Re"pt N. P-5008-TA MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERRATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 13.7 NILLION TO THE UNITED REPUBLIC OF TANZANIA FOR A NATIONAL AGRICULTURAL AND LIVESTOCK EXTENSION REHABILITATION PROJECT FEBRUARY 28, 1989 Tis document has a restitfd distdbaton and may be used by recipient ondy in the peruanmme of thdir offical dties Its contents may not otherwise be disbclosed without World Bank authorizaton.  CURRENCY EQUIVALENTS Currency Unit: Tanzania Shilling (TSh) US$1.00 . T.Sh.95.00 1/ TSh 1.00 - US$0.01 WEIGHTS AND MEASURES Metric System Government Fiscal Year July 1 - June 30 Abbreviations AfDF - African Development Fund. EEC - European Economic. Community ERP - Economlc Recovery Program FAO - Food and Agriculture Organization of the United Nations GOT - Government of Tanzania IDA - International Development Association IFAD - International Fund for Agricultural Development IMF - International Monetary Fund MALD - Ministry of Agriculture and Livestock Development PFP - Policy Framework Paper PER - Public Expenditure Review SPAAR - Special Program for African Agricultural Research UNDP - United Nations Development Program 1I The exchange rate recently changed to US$1.00 - T. Sh. 120.00. However, an analysis shows no substantial change in total project costs results therefrom.  FOR OMCIAL USE ONLY (i) TANZANUI NATIWAUL AGRICJLTURAL AND LIVESTOCK EXTENSION RRUAIILIT&TION PRJECT CREDIT AND PROJECT SUMMARY Borrower: The United Republic of Tanzania Beneficiary: Ministry of Agriculture and Livestock Development Amount: SDR 13.7 million (US$18.4 million) Terms: Standard, with 40 years maturity Onlending Terms: Not applicable Financing Plan: Government US$ 3.2 million AfDF US$ 8.8 million IDA US$18.4 million TOTAL US$30.4 million Economic Rate of Return: Not Applicable Staff Appraisal Report: Report No. 7366-TA MAP: IBRD No: 20852 Thi document has a rtictd distdibution and may be used by rdpients only in the peformane of their offlcial duties Its contents may not othewise be discbsed witlut World Bank athorization.  MEMIORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE UNITED REPUBLIC OF TANZANIA FOR A NATIONAL AGRICULTURAL AND LIVESTOCK EXTENSION REHABILITATION PROJECT 1. The following memorandum and recommendation on a proposed development credit to the United Republic of Tanzania for SDR 13.7 million (US$18.4 million equivalent) is submitted for approval. The proposed credit would be on standard IDA terms with 40 years maturity and would help finance the first phase of a long-term program to rehabilitate extension services in Tanzania. Cofinancing of the project by AfD7 for US$8.8 million equivalent has already been secured. 2. Background. Development of the agricultural sector, which accounts for about 50 percent of GNP, 75 percent of exports, and 80 percent of employment, is critical to the economy. However, for more than a decade up to the mid-1980s, agriculture was neglected in Tanzania as the Government favored urban industrial growth, based on extensive state ownership and regulation of the economy. As a consequence, agricultural output declined and the country was increasingly unable to feed itself. In addition, agricultural exports, the country's main source of foreign e-schange earnings, fell steadily, contributing to the growing balance of payments difficulties. The economy overall stagnated, leading the Government to adopt an Economic Recovery Program (ERP) in June, 1986, and to implement a far-reaching structural adjustment program supported by an IMF stand-by agreement and an IDA Multi Sector Rehabilitation Credit. A second year Policy Framework Paper (PFP), covering above program, was approved in November 1988. 3. With assistance from IDA and other donors, Tanzania has prepared and is pursuing a revised strategy in the agricultural sector. This strategy includes improvements in pricing and marketing policy, both for inputs and output, and improvements in agricultural services, e.g., credit, research and extension, marketing and distribution systems. Emphasis is being placed on producer incentives to encourage production of basic staples (grains particularly) for domestic consumption and cash crops for export (tea, coffee, cashew, and coconuts). Surpluses of maize may also become available for export. Institutional improvements are being developed to improve the effectiveness of service delivery. Smallholders are receiving increased attention under the revised strategy. IDA is assisting in the implementation of the above strategy with a number of projects, including the proposed National Agricultural and Livestock Extension Rehabilitation Project, and is helping the Government to mobilize and coordinate donor assistance in support of this strategy. 4. Agriculture and livestock extension services are extremely weak in Tanzania at the present time. In the first place, the services are provided by two separate entities in the Ministry of Agriculture and Livestock Development (MALD), resulting in lack of coordination and costly duplication of ar lvities. Funds for both research and extension are inadequate, as is training; and staff morale is low. Linkages between research and extension are virtually non-existent and contacts with farmers are highly sporadic and infrequent. Therefore, there is little  - 2 - dissemination, of existing technical packages and know-how to farmers by the two services. Cdrrently, many donors such as the EEC, FAO, IFAD, UNDP, the Federal Republic of Germany, the Netherlands and Japan support the agricultural sector and are especially involved in extension acLivities meant to improve production and yields. However, their activities are adversely affected by the present situation, which substantially reduces the planned impact of their programs. 5. The Government has recognized the need to establish a more efficient and cost-effective extension system to ensure a steady flow of improved technology to the farming community, including messages in agroforestry, erosion control and other environment conservation measures. As part of its African Agricultural Services Initiative, IDA assisted MALD to set up a pilot extension operation based on the Training and Visit methodology. This pilot operation demonstrated the feasibility of the proposed organization and extension methodology and it verified the strong interest and eagerness of farmers to receive technical support. It also confirmed the importance of a focus on women farmers to maximize the diffusion of the new technical messages and it identified the interest of NGO's in participating in field activities. On the basis of this pilot program and other donor experiences in extension activities, the Government, with IDA assistance, prepared the proposed project to complement the National Agricultural and Livestock Research Project, which is the first project in Africa supported by the Special Program for African Agricultural Research (SPAAR). In addition, it would strengthen the Impact of the policy measures (dealing basically with pricing and marketing) designed to increase agricultural production and incomes which are being introduced as part of the ERP. 6. Rationale for IDA Involvement. Because of its extensive experience in assisting countries in improving their extension services, particularly through the Training and Visit methodology, IDA's involvement in this project is essential. In addition, IDA was involved in the design and implementation of the pilot operation on which this project is based and thus has an adequate background epecifically in the Tanzanian environment. Moreover, IDA has been assisting Tanzania in formulating the overall agricultural sectoral strategy, of which this project is an integral part. IDA's participation is, therefore, necessary to ensure the smooth and effective implementation of the GOT's agricultural strategy and the introduction of a new extension methodology. 7. Project Objectives. The project aims to rehabilitate and consolidate existing extension services into one efficient and cost-effective system able to disseminate appropriate agricultural technologies to farmers, thereby enabling them to increase agricultural production and rural incomes. In particular, the project would focus on: (a) gradual, steady and well-planned unification of crop and livestock extension services into a multidiL.iplinary system; (b) strengthening of the organization, coordination, management, and supervision of extension activities; and (c) upgrading and/or provision of necessary human resources, physical infrastructure, and logistical support. 8. Project Description. The proposed project would strengthen MALD's capacity to plan, carry out and supervise extension activities through training, logistical support and technical assistance. The project, to be carried out over 8 years, would provide investment and incremental financing for: (a) establishment of an appropriately streamlined organization and management structure, capable of providing leadership, and based on a single chain of command from headquarters to the field; (b) introduction of a cost-effective extension methodology to enhance the adoption of improved technologies by project participants; (c) acquisition and maintenance of new or  - 3 - upgraded physical infrastructure, including housing ard training facilities, equipment and materials, and vehicles to enable staff to attain a higher degree of coverage of the farming community. (d) strengthening of MALD's implementation capacity through the provision of technical assistance; and (e) preparation of the second phase of the agricultural and livestock extension rehabilitation process. The total cost of the project is estimated at USS30.4 million equivalent, with a foreign exchange component of US$20.8 million (68%). A breakdown of costs and the financing plan are shown in Schedule A. The amounts and methods of procurement and of disbursements, and the disbursement schedule are shown in Schedule B. A timetable ,of key project processing events and the status of Bank Group operations in Tanzania are given in Schedules C and D, respectively. A map of Tanzania (IBRD Nc- 20852), and Staff Appraisal Report, No. 7366-TA dated January 12, 1989, are attached. 9. Agreed Actions. IDA reached agreements with GOT on the following matters: (a) establishment of an Extension Unit in MALD, and the nomination of the Commissioner for Agriculture and Livestock Development, and the Assistant Commissioner for Extension Services; (b) design of an action plan for the coordination of extension activities in ongoing agricultural development projects and programs by November 30, 1989; (c) design and preparation of implementation schedules for the project's Management Information System and Overall Evaluation System six months after Credit effectiveness; (d) joint GOT/IDA, design and carrying out of a project implementation review at the end of the third project year; and (e) provision of adequate budgetary allocations to MALD to cover in full extension recurrent costs by the eighth year of the project, and thereafter. 10. Benefits. The proposed project is expected to improve the delivery of technology to a large portion of the Tanzanian farming community, which should lead to increases in yield levels for both staple food and export crops. The project would thereby raise rural incomes and employment and contribute towards the national objectives of self-sufficiency in staple foods and increased export earnings from the agricultural sector. Moreover, the project will help accelerate the integration of women in the economy, and the involvement of NGOs in the agricultural sector. 11. Risks. Main project risks include organizational difficulties, lower than expected adoption rates of technical recommendations by farmers, and inadequate local funding. To minimize these risks, the project would: (a) provide for adequate technical assistance to help the rehabilitation process; and (b) taking into consideration the results of the pilot operation and other donor experience in extension, improve systematically the design of * extension activities to relate extension messages more closely to farmer needs, strengthen extension-research linkages, and provide adequate staff and farmer training and supervision. On the question of inadequate local funding, assurances were received from the GOT that it would provide the required budgetary resources timely and consistent with the Public Expenditure Review. 12. 1 am satisfied that the proposed Credit would comply with the Articles of Association and recommend that the Executive Directors approve the proposed Credit. Barber B. Conable President Attachments Washington D.C. February 28, 1989  Schedule A TANZANIA NATIONAL AGRICULTURAL AND LIVESTOCK EXTENSION REHABILITATION PROJECT Eotimated Costs and Financing Plan Local Foreign TOTAL -----US$Million-- Estimated Costs A. Extension Organization 4.9 13.7 18.6 and Management B. Staff and Farmers Training 2.9 2.2 5.1 C. Technical Assistance - 2.1 2.1 Total Baseline Costs-X/ 7.8 18.0 25.8 - ts|Minm - Physical Contingencies 0.7 0.8 1.5 Price Contingencies 1.1 2.0 3.1 Total Project Costs 9.6 20.8 30.4 1/ Pet of taxes and duties Financing Plan Local Foreign TOTAL ----US$Nillion- IDA 4.4 14.0 18.4 AfDF 2.0 6.8 8.8 GOT 3.2 - 3.2 9.6 20.8 30.4  Schedule B Page 1 of 2 TANZANIA NATIONAL AGRICULTURAL AND LIVESTOCK EXTENSION REHABILITATION PROJECT PROCUREHENT METHOD AND DISBURSEMENTS Procurement Method 1/ (US$ Million) Expenditure Category ICa NA Other 2/ GOT TOTAL Civil Works _ _ 3.4 - 3.4 13.41 - (3.41 gquipment and Furniture - 2.8 - 2.8 12.81 - [2.81 Vehicles 6.2 - - - 6.2 (6.2) - - - (6.2) Technical Assistance - 2.2 - - 2.2 (2.2) - - (2.2) Training - 3.5 1.3 - 4.8 (3.5) - - (3.5) - 11-31 - [1.31 Vehicle Operation and - 5.2 - 2.1 7.3 Maintenance (5.2) - - (5.2) Equipment Operation and - - 1.1 0.4 1.5 Maintenance [1-11 - 11.11 Salaries, Wages and Allovances - 1.3 - 0.4 1.7 (1.3) - - (1.3) Building Maintenance - - 0.2 0.1 0.3 [0.21 - [0.21 Office Supplies - - - 0.1 0.1 Office Rental Charges _- 0.1 0.1 Total 6.2 12.2 8.8 3.2 30.4 IDA (6.2) (12.2) - - (18.4) AfDF _ _ [8.81 - [8.81 1/ Figures in parentheses represent IDA financing and figures in brackets represent AfDF financing. 2/ To be carried out accordlg to AfDF procedures.  sd~u1e a 162 ;Owl Aunmt mebA_mit -9Ltr US$ 89IIMEJ B L (a) Vehles 5.4 100 of d midttive (b) Tsctical Ah d