Malawi - Agriculture Diversification

Report No. PIC836 Project Name Malawi-Agriculture Diversification Region Africa Sector Agriculture Project Task ID MWPA1665 Implementing Agencies Department of Economic Planning and Development Ministry of Agriculture Malawi Investment Promotion Agency Estate Extension Service Trust and other private sector groups Date Prepared March 1994 Projected Board Date July 1996 Objective 1. The main objective of the proposed project is to promote broad- based agriculture diversification led by the private sector as a new source of sustainable growth and poverty reduction. The project will expand agro-based employment and business opportunities in line with national objectives and responsive to evolving market opportunities. The project would build on and complement existing initiatives and financial institutions, providing a coherent institutional and policy framework for promoting agricultural diversification and coordinating donor assistance. Description 2. Recent sector analysis and a preliminary assessment of project requirements suggest the following three tentative components: a) institutional and policy development in the public and private sector, addressing policy, institutional and financing constraints, gender issues, investment promotion, and project implementation; b) support for the development and dissemination of suitable market and production technology and infrastructure, and the development of a market intelligence system; c) development and design of diversification schemes (led by the private sector and participating financial institutions) and investment opportunities by reducing the high entry cost and risk associated with initial entry and participation in unproven agriculture diversification schemes. Implementation 3. As now proposed, this would be a 5 year project, as part of a longer term national agricultural diversification program. The main coordinating body will be an Inter-Sectoral Agricultural Diversification Steering Committee (to be chaired by the Ministry of Agriculture, with key representatives from the public and private sectors who have strong incentives to ensure project success). The Malawi Investment Promotion Agency (MIPA) and sectoral Ministries will play a key role in removing  policy constraints, and various private sector institutions will play the main role in promoting the development, design and financing of viable diversification schemes (e.g., Tobacco Association of Malawi, Estate Extension Service Trust, women-based groups/associations and participating financing institutions). Financing and Cost 4. The estimated project cost is US$ million. IDA financing would be approximately US$ 15 million, and other donors are expected to contribute US$ 7.5 million. The Government is expected to contribute US$ 2.5 million. Environmental Aspects 5. The project is likely to be placed in environmental category B, in which case an environmental analysis will be completed. The project's emphasis on diversification would promote agricultural practices and cropping patterns which would help reverse a serious decline in soil fertility and land degradation (e.g, reduced tobacco curing and mixed cropping systems). The project would be designed to ensure that any adverse environmental effects are minimized, and would include needed mechanisms to monitor the effects during the implementation period. Contact Point: Public Information Center The World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone: (202)458-5454 Fax No.: (202)522-1500 Note: This is information based on an evolving project. Certain components may not necessarily be included in the final project. - 2 -