Morocco - Agriculture Sector Investment Loan (ASIL) Project

Docume The Worl !NV 1 -.i N,, q"!i-() Nfl, 1v-- (:A';h-. FOR OFFICIAL AAI~~~~~A4 A/ ~~~~~~~3 Yo / 'ot Report No. 9240-MOR STAFF APPRAISAL REPORT KINGDOM OF MOROCCO AGRICULTURE SECTOR INVESTMENT LOAN (ASIL) JULY 29, 1991 Europe, Middle East and North Africa Region Maghreb Department Agriculture Operations Division I This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency unit - Dirham (DH) US$1.00 DH 8.0 DH 1.00 US$0.125 (as of March 1991) FISCAL YEAR January 1 to December 31 GLOSSARY OF ABBREVIATIONS AER - Agriculture Expenditure Review ASAL - Agricultural Sector Adjustment Loan BEMC - Budget Execution Monitoring Committee CED - Comptroller of Commitments and Expenditures CGED - Comptroller General of Commitments and Expenditures CMV - Ex nsion Centers under ORMVAs CT - Extension Centers under DPAs DCFTT - Directorate of Land Surveying and Titling DE - Directorate of Livestock DEAR - Directorate of Agricultural Education and Research DEFCS - Directorate of Forestry and Soil Conservation DER - Directorate of Rural Equipment (irrigation) DPA - Provincial Departments of Agriculture DPAE - Directorate of Planning and Economic Affairs DPV - Directorate of Crop Production DPVCTRF - Directorate of Plant Protection DVRA - Directorate of Extension and Agrarian Reform ENA - National College of Agriculture ENFI - National School of Forest Engineers FDA - MARA's Technology Development Program GOM - Government of Morocco GDP - Gross Domestic Product HYV - High Yielding Variety IAV - Agricultural and Veterinary Institute Hassan II INRA - National Institute for Agricultural Research MARA - Ministry of Agriculture and Agrarian Reform M&E - Monitoring and Evaluation MOI - Ministry of the Interior and Information MTASAP - Medium-Term Agricultural Sector Adjustment Program OED - Operation's Evaluation Department of the Bank O&M - Operation and Maintenance ORMVA - Regional Agricultural Development Authorities (irrigation) PERL - Public Enterprise Restructuring Loan PPAR - Project Performance Audit Report SAL - Structural Adjustment Loan  FOR OFFICIUL USE ONLY STAFE APPRAXSALREPORT KINGDOM OF xmOCCO ALICuLTUEa SECTOR INVESTME_T LOAN oan -an-d Protect SuMmar Barroymr: Kingdom of Morocco Am2oun: US$50 million equivalent Terms: Repayment in 20 years, including 5 years of grace, with interest at the standard variable rate. Executing Age2ny: Ministry of Agriculture and Agrarian Reform (MARA). Prolect Des=&ition: The primary objective of the ASIL would be to support a well-conceived investment program in Morocco's agricultural sector. The program being supported is a 1991-92 time-slice of the Government's total investment program in agriculture, estimated at US$640 million. The ASIL would finance about 8 percent of this program. The ASIL would also promote essential policy reform measures to improve the investment process, strengthen MARA's institutional capacity and continue to advance key sector policy issues notably in the important livestock and irrigation subsectors. The ASIL would finance specific critical investments selected from the Government's two-year investment program. These include: small- and large-scale irrigation; crop diversification and area development including roads; destoning, and land consolidation; equipment for plant protection; forest management plans and plantation establishment; and technical equipment, vaccines and rangeland improvement for livestock. Also financed, would be a technology development program promoting (a) better soil cultivation, seed bed preparation end crop management through use, f appropriate tractor-drawn farm implements, (b) more efficient small-scale irrigation, (c) Improved crop storage, (d) improved livestock production through better stock and feeding, (e) fruit tree planting as part of crop diversification measures, and (f, land improvement. This document has a restricted distribution and may bs used by recipi...ts only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - The package of policy measures supported by the ASIL includes: (a) reforms in the investment process in three general areas (i) budget execution (faster delegation of funds, better monitoring of expenditures); (ii) institutional strengthening (improvement of KARA's staffing and structure); and (iii) project selection (use of objective criteria for new MARA investments); (b) livestock sector reforms; and (c) improved recovery of irrigation water charges. Project Risks: The two major risks facing the project are i) the possible Government failure to provide adequate and timely budget funding and ii) the institutional risk arising from an entrenched bureaucracy resisting changes and inert to stimulus to improve its performance. The timeliness risk is addressed directly by the ASIL through measures to accelerate the delegation of funds. The risk of adequacy of funding is reduced by the fact that the ASIL is financing about 90 percent of the investments it covers and, as a result, the Ministry of Agriculture may be able to protect them better. This risk will be minimized even further if SAL 2 goes ahead, because MARAs budget would be part of the protected priority investments. To minimize the institutional risk, the organizational reform program has been designed with clear transparent and monitorable targets which would be closely supervised during the implementation of the ASIL. The technical implementation of the investments should be no major risk, since ASIL supports the regular investment program and MARA has experience in the type of investments financed.  - LiL - Estimated 1991-1992 Program Cost % Local Foreig 1Q5^1 - US$ Milllon- A. IRRIGATION Small-scale 26 17 43 Large-scale 197 154 351 B. NON-IRRIGATION Crop Prodsuction 30 11 41 Extension 13 8 21 Forestry 31 13 44 Livestock 20 10 30 Plant Protection 8 5 13 Education 12 8 20 Research 9 10 19 Technology Des lopment 17 10 27 Planning 3 4 7 Land Policy 14 _1 24 Total Program Costs 380 260 640 Financing Plan for the 1291-1922 Program 2