Tunisia - Agricultural Research and Extension Project

Document of The World Bank FOR OFFICIAL USE ONLY ,-A/ 3 2 / 7 - AJ Report No. 7549-TUN STAFF APPRAISAL REPORT REPUBLIC OF TUNISIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT MAY 8, 1990 Europe, Middle East and North Africa Region Maghreb Department II Agriculture Operations Division This document has a restricted distribution and may be used by recipients only in the performance of * 2 j. I # 5 I I -  CURRENCY EOUIVALENTS Currency Unir - tuniaian Dinar (D) US$1.00 - D 0.949 D 1 00 - US$1.053 WEIGHTS AND MEASURES The metric system is used throughout this report GLOSSARY OF ABB3REVIATONS AVFA Agricultural Extension and Training Agency (Agence de la Vulgarisation et de la Formation Agricoles) BNA National Agricultural Bank (Banque Nationale Agricole) CRA Local Extension Unit (Centre de Rayonnement Agricole) CRDA Ragional Agricultural Development Commission (Commissariat Regional de Developpement Agricole) CRCR Rural Engineering Research Center (Centre de Recherche du G6nie Rural) CTV Sub-Regional Extension Unit (Cellule Territoriale de Vulgarisation) DGPDIA General Directorate of Planning and Agricultural Investments (Direction Generale de la Planification et des Investissements Agricoles) DGRFA General Director-ce of Research and Agricultural Training (Direction Generale de la Recherche et de la Formation Agricole) DGPV General Directorate of Plant Production (Direction Generale de la Production Vegetale) DV Extension Directorate (Direction de la Vulgarisation) DVPA Regional Extension Division (Division de la Vulgarisation et de la promotion de la production Agricole) DRA Agricultural Research Directorate (Direction de la Recherche Agricole) ESA Junior Agricultural College (Ecole Superieure d'Agriculture) GIAF Interprofessional Citrus and Fruit Association (Groupement Interprofessionnel des Agrumes et des Fruits) GID Interprofessional Date Association (Groupement Interprofessionnel des Dattes) GIL Interprofessional Vegetable Association GRGR (Groupement Interprofessionnel des Legumes) ICARDA International Center for Agricultural Research in Dry Areas (Centre International pour la Recherche Agronomique des Regions ArLdes) INAT National College of Agriculture (Institut National Agronomique de Tunis) INRAT National Institute of Agricultural Research (Instirut National de Recherche Agronomique de Tunisie) INRF National Institute of Forestry Research (Instimut National de Recherche Foresti&re) IRESA Institute of Agricultural Research and Higher Education (Institution de Recherche et de l'Enseignement Superieur Agricoles) ISNAR International Service for National Agricultural Research 10 Olive Institute (Institut de l'Olivier) IRA Arid Zones Insticute (Institut des Regions Arides) MOA Minsatry of Agriculture (Minist6re de l'Agriculture) MOF Ministry of Finance (Ministere des Finances) MTASAP Medium-Term Agricultural Sector Adjustment Program OC Cereals Agency (Office des Cereales) OEP National Livestock and Pasture Agency (Office de I'Elevage et des kAturages) OKV Development Agency (Office de Mise en Valeur) ONH National Vegetable Oil Agency (Office Nationale de lI'Huile) PEU Project Execution Unit SMS Subject Matter Specialist T&V Training and Visi Extension Organization Methodology REPUBLIC OF TUNISIA Fiscal mear January 1 - December 31  FOR OMCLAL USE ONLY STAFF APPRAISAL REPORT TUNISIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT Loan and ProJect Summary Borrower: Republic of Tunisia Amount: US$17 million equivalent Terms: 17 years including 5 years of grace, at the standard variable interest rate. Proiect DescriRtion: The Project would support reorganization and strengthening of research and extension. The research component would be executed by MOA's restructured agricultural research organization. Project support, covering 10 priority research themes, would consist of: (i) introduction of programming and budgeting by objectives; (ii) strengthening of organizational, managerial, monitoring and evaluation capacities; (iii) construction and improvement of laboratories, sheds, workshops, stables, offices, and staff housing for five main research centers, three regional research centers and eight field stations; (iv) provision of equipment, fellowships and consultants. For extension, the project's objectives would be accomplished through: (i) concentration and improvement of extension support, mass media production, monitoring and evaluation at central level; (ii) strengthening and improvement of 15 regional specialized extension services; (iii) st_engthening of about 550 and construction of 54 local extension centers; (iv) provision of equipment, foreign and local training, and corsultants; and (v) a pilot extension program for women. Benefits and Risks: Apart from the medium-and long-term impact on production of key commodities and farm income, the Project would have a positive environmental impact through improved soil, water and pest management. The Government has already initiated important .nstitutional changes but implemettation may be slower than foreseen. A second risk factor is the tight operational budgetary situation. However, in the medium-term the concentration of tasks of various agencies is expected to counteract much of the estimated incremental operational expenditures. This document has a restricted distribution and may be usee by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - (ii) - Estimated Proiect Costs: Local ForeiLm Total ----------------US$Million------------ Research Component 7.2 10.7 17.9 Extension Component 6.5 4.3 10.8 Total Base Costs 13.7 15.0 28.7 Physical Contingencies 0.3 0.6 0.9 Price Contingencies 2.2 2.2 4.4 Total Project Costs 16.2 aL 17.8 34.0 Financing Plan: Local Foreign Total ----------------US$Million------------ World Bank - 17.0 17.0 Government 7.3 0.8 8.1 Net Project Cost 7.3 17.8 25.1 Taxes and Duties 8.9 - 8.9 Total Projet Cost 16.2 17.8 34.0 Estimated Disbursements: Bank FY 1991 1992 1993 1994 1995 1996 1997 ----------------US$Million-------------- Annual 0.8 2.3 3.4 3.5 3.5 2.7 0.8 Cumulative 0.8 3.1 6.5 10.0 13.5 16.2 17.0 Economic Rate of Return: n.a. Map: IBRD 21123 a/ includes US$8.9 million of taxes and duties.  - (iii) - STAFF APPRAISAL REPORT TUNISIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT Table of Contents Page No. I. INTRODUCTION .............................................. 1 II. RESEARCH AND EXTENSION PRESENT SITUATION AND PROBLEMS ......................... 1 A. Agricultural Sector Backgrounl and Performance ....... 1 B. Agricultural Research - Present Situation ............ 3 C. Agricultural Extension - Present Situation ........... 5 D. Research and Extension - Weaknesses and Problems .... 7 E. Government strategy to Remedy Weaknesses of Research and Extension ............................ 9 III. BAtUK LENDING IN AGRICULTURE AND PAST PERFORMANCE ........ 10 IV. THE PROJECT .............................................. 12 A. Rationale for Bank Involvement ......... ............. 12 B. Objectives .......................................... 13 C. General Description and Components .................. 13 a. Research ...................................... 13 b. Extension ..................... 14 D. Detailed Features .......... ........... 14 a. Research ..................... 14 b. Extension ..................... 19 E. Costs ......... ............ 21 F. Financing ......... .. .......... 22 G. Procurement ........... .......... 23 H. Disbursements ........ .. ........... 24 V. PROJECT IMPLEMENTATION ........... ................. 26 A. Organization and Implementation ..... ................ 26 B. Start-up Activities ........ ......................... 28 C. Monitoring, Reporting and Supervision ................ 29 D. Accounts and Audit ........ .......................... 30 VI. ENVIRONMENTAL IMPACT ......... .......................... 30 This report is based on the findings of an Appraisal Mission which visited Tunisia in September/October 1988, composed of Mr. J.P. van der Veen (Mission Leader), Ms. S. Engelhard (Legal Specialist), Messrs. Suppa (Financial Ana- lyst,FAO/CP), P. Roche (Agricultural Research, Consultant), W. Zijp (Agricultural Extension, Consultant), A. Ducreux (Farm Machinery, Consultant), A. Bouchitte (Financial Management, Consultant).  - (iv) _ Table of Contents (continued) VII. BENEFITS AND JUSTIFICATION ................................ 31 VIII. AGREEMENTS REACHED AND RECOMMENDATION ................. 32 Supporting Tables Table 1: Cost of Project components by year Table 2: Summary Accounts Table 3: Estimated Schedule of Disbursements of Bank Loan Table 4a: Technical Assistance Requirements Table 4b: Training Requirements TabLe Sa: Staff Requirements, Research Table 5b: Staff Requirements, Research Table 6: Staff Requirements, Extension Table 7: Construction Program of CRAs Table 8: Current Agricultural Research Operations Table 9: Proposed Bank Supervision Input Table 10: Selected Documents and Data available in Project File Annexes I. Agricultural Extension Organization Charts la. Implementation Schedule, Research Component lb. Implementation Schedule, Extension Component 2. Chart of Planned Organization, Research and Extension MaR iIBRD 21123 Annexes in Implementation Volume Annex 1: Detailed Cost Estimates Annex 2- Agricultural Research Annex 3: Integrated Pest Management Research Annex 4: Soil and Water Conservation Research Annex 5: Agricultural Mechanization Research Annex 6: Research Programming, Budgeting and Financial Management Annex 7: Integration of Women in Agricultural Development Annex 8: Consultants Terms of Reference Annex 9: Guidelines for Monitoring and Evaluation Annex 10: Extension Training  STAFF APPRAISAL REPORT TUNISIA AGRICULTURAL RESEARCH AND EXTENSION PROJECT I. INTRODUCTION 1.01 The Bank has worked closely with the Government in reviewing past agricultural expenditure policies and in developing the strategy for investments under the VIIth Development Plan (1987-1991). An integral part of the Plan is the start of a ten-year program to reform and strengthen agricultural research.-. and extension. The program is based on two masterplan stud -i on research and extension prepared with Bank financing (Technical Assistance Project, Loan 2197-TUN). 1.02 Under the Medium-Term Sector Adjustment Program (MTASAP) supported by two Agricultural Sector Adjustment Loans (ASAL-I, Loan 2754-TUN and ASAL- II, Loan 3078-TUN), institutional reform of agricultural research and extension has been given some importance. In 1986, a National Research Directorate (DRA) was established within the Ministry of Agriculture (MOA). An Extension Directorate (DV) has also been set up within the General Directorate of Plant Production (DGPV). The Government's medium-term objectives for research and extension under the MTASAP are to: (a) unify the institutional framework of research, at present carried out by a number of institutes and agencies without adequate coordination and prioritization of objectives and activities; (b) unify the extension tasks now carried out by several agencies, starting with the rainfed areas; and (c) provide better linkages between research and extension. This report presents the appraisal of a project designed to help the Government achieve this and to start implementing the new system. 1.03 The Project, prepared by the Government in early 1987 with the assistance of an FAO/IBRD cooperative program team, would support the first five-year phase of the ten-year program envisaged under the VIIth Development Plan. It was appraised in October 1988, following pre-appraisal in March and June 1988. The Government's subsequent action to restructure Agricult"ral Research and Extension services required the updating of the draft staff appraisal report by two missions in April and October 1989. II. RESEARCH AND EXTENSION - PRESENT SITUATION AND PROBLEMS A. Agricultural Sector Background anc Performance 2.01 While some 40% of Tunisia's 7.8 million population is rural, agriculture's share in the GDP has declined from 24% in 1960 to 11% in 1988, and its share in total employment has declined from 56% in 1960 to about 30% in 1987. The relative decline of agriculture has been caused mainly by the more rapid growth of other sectors.  2.02 Tunisia has a total land area of 16.4 million ha of which 8.4 million ha are suitable for agriculture and grazing. Of the 5.0 million ha of cultivable land, i4% is planted in cereals, 35% in fruit trees, 11 in forage crops, vegetables, grair. legumes and indus_.rial crops, and the remaining 20% is normally left fallow. There is no scope for horizontal expansion of rainfed agriculture; in certain parts of the country horizontal development has been excessive, resulting in important soil and water erosion. Given the high variability in rainfall, important efforts have been made to develop irrigated agriculture. However, available water resources have largely been developed and there is little scope for further irrigation development. Therefore, the development of the sector now depends mostly on an increased output per unit of land, and water, and capital inputs. To achieve this, research, complemented by an effective extension program, has a crucial role. 2.03 The country can be divided into three main ecological zones (Map IBRD-19893). The northern zone (25% of the total land area) is the most fertile, normally receiving adequate rainfall (400-1,000 mm) for a productive rainfed agriculture. The North is Tunisia's most important agricultural region both for rainfed and irrigated farming. The central zone (15% of Tunisia) receives between 200 and 400 mm of rainfall. Rainfed agriculture in the central zone is limited to fruit tree plantations (mostly olives), low yield cereals and range- land. The southern part (60% of Tunisia) is a pre-desert zone receiving less than 200 mm of rainfall. It is used mainly for extensive grazing, while in the pockets of iirigation (oases) dates are the most important crop. Past Performance 2.04 The value of agricultural production has grown substantially over the past 20 years. It grew at 4.4% per annum in real terms between 1970 and 1979, compared to 3% per annum for middle income countries as a group. However, the pace of growth slowed dowo to 2.8% per annum between 1977 and 1987, while in real price terms, the value of food imports rose by 6.1% p.a. from 1977-86, and agricultural exports declined by 10% p.a. 2.05 The continued growth of agricultural production and rural migration has resulted in an increase in average per capita income in agriculture (from US$173 in 1960/62 to US$323 in 1984, measured in constant 1980 prices) and a reduction in percencage of rural population living below the absolute poverty level (from 17% iTi 1975 to 7% in 1985). At national level, open unemployment in recent years increased from about 13% in 1984 to about 15% in 1988. Popu- lation growth declined from 3.5% to 2.5% per annum from the early 1960s to the 1980s. National DeveloDment Plans and Government Strategy. 2.06 Under the VIth Development Plan (1982-86), the Government's objectives for the sector included a balanced commodity trade in agricultural products, and increased rural employment and incomes. Resolution of key issues such as employment, regional income disparities and the increase in efficiency of many investments in the sector became critical due to the ileed to adjust the economy to a post-hydrocarbon situation. Consistent with its macro economic objective of improving the balance of payments and alleviating the burden on the budget, the Government, in close collaboration with the Bank, prepared a Medium  - 3 - Term Agriculture Adjustment Program (MTASAP) in 1986. Its main objective is to promote greater efficiency and increased production ro substitute for imports and increase exports. As part of an effort to improve the use of public resources, the program also seeks to improve essential support services, with a particular emphasis on Agricultural Research and Extension. 2.07 The V