CIRCULATING COPY Report No. 644a-SL ID BE RETURNED TO REPORTS DESK Appraisal of Integrated Agricultural Development Project 11 RETURN TOI Sierra Leone PIEPORTS m--Z-. Volume 1: The Main Report WITI 'N | April 8, 1975 ON E VW ' Western Africa =0 COP0fakY Regional Office Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. CURRENCY EQUIVALENTS Currency Unit - Sierra Leone Leone Le 1 = US$1.20 US$1 = Le 0.833 WEIGHTS AND NEASURES 1 acre (ac) = 0.405 hectare (ha) 1 mile = 1.61 kilometer (km) 1 sq. mile = 640 acres = 259 ha 1 ton = 2,240 pounds (lb) 1 hundredweight (cwt) = 112 lb = 51.02 kg 1 bushel husk rice = 60 lb ABBREVIATIONS ARI Agricultural Research Institute EAP Eastern Area Project EAPMU Eastern Area Project Management Unit FFC Farmer Finance Conpany LBA Licenced Buying Agent MANR Ministry of Agriculture and Natural Resources NAP Northern Area Project NAPMU Northern Area Project Management Unit NDB National Development Bank PAC Project Advisory Committee PESU Project Evaluation and Services Unit SLG Sierra Leone Government SLPMB Sierra Leone Produce Marketing Board SLPMC Sierra Leone Produce Marketing Company FISCAL YEAR July 1 - June 30 SIERRA LEONE APPRAISAL OF INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II TABLE OF CONTENTS Volume 1 Page no. Summary and Conclusions ................................... i - iii I. Introduction ....................................... 1 II. Background ........................................... 2 A. General ....,...................................... 2 B. Agricultural Sector . . 2 C. Institutions ..................................... 3 III. Project Area ......................................... 4 IV. The Project .......................................... 6 A. General .......... .......... 6 - Northern Area Project ......................... 7 - Eastern Area Project .......................... 8 - Central Support Services ................9 B. Detailed Features ...... .......................... 9 - Civil Works .............................. 9 - Farm and Crop Development .......... ........... 10 - Investigations and Research ................. .. 11 - Central Support Services .......... ............ 12 V. Cost Estimates and Financial Arrangements ..... ....... 12 A. Project Costs .................................... 12 B. Proposed Financing ............................... 14 C. Procurement ...................................... 15 D. Disbursement ..................................... 16 E. Budgetary Control, Funding Procedures, Accounts and Audit ............................. 17 VI. Organization and Management ..... ..................... 18 A. Organization .................. ................... 18 B. Staffing and Consultants .......... .. ............. 20 C. Staff and Farmer Training ........... ............. 21 D. Farm Inputs, Procurement, Distribution, and Credit Procedures ............... .. ............. 21 This report is based on the findings of an appraisal mission composed of Messrs. Grimshaw and Arben (Bank) and Calkin, Fleming, Reader, and Tagoe (Consultants) which visited Sierra Leone in June 1974. Table of Contents (continued) Page no. VII. Production, Markets, Farmers' Benefits, and Financial Implication to Government ................ ... 24 A. Production ........................................ 24 B. Markets and Prices ................................ 25 C. Farmer Benefits .......... ......................... 27 D. Financial Implication to Government ............... 29 VIII. Economic Benefits and Justification ..... ............. 29 IX. Agreements reached with the Borrower .* ................ 31 Annexes 1. Administration and Institutions 2. Marketing, Markets, and Prices 3. Organization and Staffing 4. Costs of Central Support Services 5. Summaries of Project Costs and Financial Details 6. Economic Benefits and Costs Analysis Maps 1. Location of Project Areas 2. Eastern Area Project 3. Northern Area Project SUPPLEMENTARY VOLUMES Volume 2 Northern Area Project Annexes 1. Project Area 2. Farm and Crop Development 3. Civil Works 4. Marketing and Farm Inputs 5. Northern Area Project Costs Volume 3 Eastern Area Project Annex 1 Performance of Ongoing Integrated Agricultural Development Project Annex 2 Project Area Annex 3 Farm and Crop Development Annex 4 Marketing and Farm Inputs Annex 5 Project Costs SIERRA LEONE APPRAISAL OF INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II SUMMARY AND CONCLUSIONS (i) The Republic of Sierra Leone (SLG) has requested Bank assistance to finance an agricultural development project in the Northern Province of Sierra Leone and to extend the development of the ongoing integrated Agri- cultural Development Project in the Eastern Province financed under IDA Credit 323SL of June 30, 1972. The project was prepared by the Sierra Leone Government with the assistance of- the Resident Mission for Western Africa and consultants financed under the first credit. This report is based on the findings of an appraisal mission that visited Sierra Leone in June 1974. (ii) Under the present economic circumstances of the declining, formerly dominant, diamond mining industry it is becoming increasingly important for Sierra Leone to expand its export crops, to reduce food imports, and to in- crease rural incomes. Farmers in the north have a per capita income of only US$30 per annum, compared with US$60 in the east, and the average per capita income for the country is about US$160. The difference between the East and the North reflects mainly better soils and climatic conditions, lower popula- tion density and the predominance of export earning tree crops in the East. (iii) To correct this imbalance, Government is placing greater emphasis' on development in the north even though economic returns are substantially lower than in the southern and eastern areas. The ongoing Integrated Agri- cultural Development Project in the east has prover thnat under good manage- ment and with adequate services and inputs farmers respond well. The success of the project has encouraged Government to look for similar developments elsewhere; at the same time SLG appreciates the need for continued develop- ment in the higher potential eastern and southern areas. (iv) The project covers two separate areas referred to as the Eastern Area Project (EAP), which is identical to the ongoing Integrated Agricul- tural Development Project area, and the Northern Area Project (NAP). EAP comprises 4,300 sq. miles, 65,000 farm families and is divided into 32 chiefdom administrative divisions. Some 6,000 EAP farmers would be directly affected by the project. NAP comprises 1,300 sq. miles, 14,000 farm families and 8 chiefdoms; 8,000 NAP farmers would be affected by the project. In each area farm sizes are small, less than 6 acres, and NAP has limited areas of inland swamp (6,000 acres utilizable), compared to unlimited swamp areas in EAP (estimated at more than 60,000 acres). (v) The project would provide physical infrastructure, support services and farm inputs to ensure for the future a sound agricultural and development base. For NAP it would construct 20 miles and improve 280 miles of crop extraction roads, 200 village wells, 5 market centers, a farmer training - ii - center, staff houses, stores and offices; it would provide extension and other farmer services, including a project established seed multiplication farm, vehicles and equipment, and improved production, through short- and medium-term loans, of 6,000 acres of inland swamp rice, 25,000 acres of upland rice and 10,000 acres of groundnuts; it would investigate the potential of livestock development in the Northern Province; and would research into methods of increasing wood fuel for future expansion of tobacco production. For EAP the project would construct 12 market centers, additional staff houses, stores, and offices; in conjunction with improved farmer services it would provide short-, medium- and long-term credit to increase the production of 1,800 acres of inland swamp rice and 36,000 acres of upland rice; would develop 4,200 acres of inland swamp for rice production; and establish 1,000 acres of cocoa and 1,600 acres of small holder oil palm; it would establish a farmer finance company to assume the existing activities of the revolving credit fund. For EAP and NAP production increases would be brought about by using improved seeds, fertilizers and pesticides. (vi) The project would provide support to central Government institu- tions, including establishing and staffing a Project Evaluation and Services Unit (PESU) in the Ministry of Agriculture and Natural Resources (MANR) to provide operational and financial support for NAP and EAP; and would stren- gthen MANR's planning capacity by hiring specialist consultants. (vii) The existing EAP management unit (EAPMU) would be expanded, and a new project management unit (NAPMU) would be established for NAP. Both units would be responsible to the Permanent Secretary of MANR. (viii) The proposed IDA credit of US$5 million and a Bank loan of US$5.0 million, repayable at 8-1/2% over 25 years including a five year grace period for principal, during which interest and commitment charges would be paid, would be made to the Republic of Sierra Leone. The loan/credit of US$10.0 million would be 73% of total project costs, estimated at US$13.7 million, and would cover all the foreign exchange costs estimated at US$6.0 million and 52% of local costs estimated at US$4.0 million. Of the US$10.0 million, US$1.0 million would be for support services to centralized Government in- stitutions; US$2.3 million for EAP, US$4.3 million for NAP; and the remainder US$2.4 million would be for contingencies. SLG would finance 26% of the project costs amounting to US$2.9 million and the remaining 1%, US$0.2 million, would be contributed by participating farmers in the form of cash payments for seasonal inputs. (ix) Procurement of vehicles, plant, equipment, fertilizers, pesticides and tools for contracts with a value of more than Le 20,000 (US$24,000) would be through international competitive bidding (ICB), and would have an estimated value of US$1.7 million. A maximum limit of US$200,000 would be set for those items purchased through contracts of less than US$24,000. Contracts for the construction of buildings, houses, and the purchase of construction materials and furnishings valued at US$1.3 million would not be suitable for ICB, due to their dispersed location and small size of individual contracts and orders; - iii - for these items contracts would be awarded on the basis of competitive bidding advertised locally and in accordance with local procedures satisfactory to the Bank; in the latter case, foreign firms and suppliers would not be precluded from bidding. Road construction and improvement would be undertaken on force account due to the shortage of suitable contractors. Wells would be con- structed by villagers using project supplied materials. The estimated cost for road and water development is US$1.3 million. A large part of project costs, US$7.6 million, would be for labor, staff salaries and allowances, hiring of consultants, vehicle and maintenance operations, farm planting materials and general services, and would be unsuitable for competitive bid- ding. The remaining US$3.1 million would be for physical and price contin- gencies. Internationally recruited staff and consultants would be employed under terms and conditions acceptable to the Bank. (x) Proceeds of the Bank Loan and IDA Credit would be disbursed to cover: (a) 100% of the CIF cost of directly imported vehicles, heavy plant and equip- ment or 87% of the costs if procured locally - US$0.9 million; (b) 100% of the CIF cost of directly imported fertilizers - US$0.5 million; (c) 100% of the costs of internationally recruited staff and consultants - US$1.3 million; (d) 70% of the total cost of buildings, houses, furnishings, construction materials for roads and wells, local staff, support services, and vehicle and plant operation - US$3.8 million; (e) 70% of farm inputs other than fertili- zers, including pesticides, fungicides, herbicides, tools, hired labor, spray- ing machines - US$1.0 million; and (f) an unallocated amount totalling US$2.4 million. Disbursements would be made against import documentation, contracts and certified records of expenditure. (xi) 14,000 farmers would directly beneAit from the project. The annual incremental production at full development, inclusive of the initial phase of EAP would be 10,500 tons of white rice, 3,200 tons of palm oil, 550 tons of cocoa and 1,100 tons of groundnuts. The project would indirectly benefit a further 65,000 farmers through provision of better communications, water supplies and markets. Intangible benefits include the improved health of the population through better water supplies, improved trading and social services due to better communications, the strengthening of Government institutions, improved evaluation and planning of existing and future projects, and the commercial reorientation of credit and farm supplies. The internal economic rate of return is estimated for NAP at 14%, for EAP 36% and for the overall project 26%. The net per capita income of directly affected persons would rise in EAP from US$60 to US$100 and for NAP from US$30 to US$40. The per capita incomes of participants increase by about 6% and 11% per annum for NAP and EAP respectively over the full development period. (xii) On the basis of the assurances and conditions set out in Chapter IX, the project is suitable for an IDA credit of US$5 million and a Bank loan of US$5.0 million. I. INTRODUCTION 1.01 This report appraises an application made to the Bank Group by the Government of the Republic of Sierra Leone (SLG) to assist in financing a new project in the Northern Province and an extension of an ongoing project in the Eastern and Southern Provinces of Sierra Leone that is financed under Credit 323-SL. The projects would benefit farm families whose incomes are about US$30 per capita in the North and US$60 in the East. A total of some 14,000 farm families would directly participate and some 65,000 additional farm families would receive indirect benefits from the projects. 1.02 The feasibility study for the Northern Area Project (NAP) was financed partly under Credit 323-SL and was prepared by SLG with the assistance of United Kingdom technical assistance, consultants, and the Bank's Regional Mission to Western Africa (RMWA). Plans for the extension of the Eastern Area Project (EAP) were prepared by SLG on the basis of the results of the ongoing project and after discussion with various Bank supervision missions. 1.03 The ongoing Eastern Area Project, now more than half completed, has had good farmer response. The Credit was signed in June 1972, and became effective six months later. The project's primary objective was to provide farm services, credit and input supplies to about 3,000 farmers to help them develop swamp rice, cocoa and oil palm. It also provided for the construction of a modern palm oil mill; and for the execution of rice milling and marketing, forestry and northern agricultural project studies. Although slow starting the project Is Inow oil schedule and in some instances has more than achieved its targets. 3,300 acres of swamp rice have been developed (110% of appraisal estimate), 475 acres of cocoa (190%), 508 acres of plantation oil palm (100%) and 955 acres of smallholder oil palm (96%). All the studies except for the forestry study have been completed, and the palm oil mill is under construction. The IDA credit has been committed and it is expected that the project will be substantially completed in October 1975, six months ahead of appraisal esti- mate, and that 6,000 acres of swamp rice, 750 acres of cocoa, and 2,260 acres of oil palm will have been successfully established. 1.04 The ongoing EAP has provided a means of testing farmers' responses to new techniques; however, it was necessary because of the weaknesses of Government's agricultural services to set up EAP as a semi-enclave operation. Under the proposed extension EAP project management unit would become more closely associated with the Eastern Provinces regular agricultural services, in that the latter would fall under the administration of EAP. Thus it is expected that by 1978 when the extension to EMP would be complete a fully integrated agricultural service would be functioning to provide the majority of Eastern Province farmers with an adequate service. 1.05 The Northern Area Project (NAP) would concentrate on stimulating the production of rice and groundnuts. NAP management would have the same high level of autonomy afforded to EAP and administrative and technical procedures would be those that have been proven in the Eastern Province. At a later stage of NAP development it would be integrated with the regular agricultural services provided by the Ministry of Agriculture and Natural Resources (MANR). II. BACKGROUND A. General 2.01 The Republic of Sierra Leone covers about 28,000 square miles and has a population of about 2.8 million. GNP in 1973 was estimated at Le373 million (US$448 million) equivalent to Le133 (US$160) per capita. The economy comprises two main sectors: a well developed, export-orientated mining sector, dominated by the diamond industry, which employs 4% of the economically active population and produces 16% of GNP and about 80% of total exports; and a poorly developed agricultural sector that provides livelihoods for 75% of the popula- tion, 32% of GNP and about 20% of total exports. B. Agricultural Sector 2.02 Sierra Leone has two distinct ecological zones. The northern half of the country has long dry seasons, and supports a system of shifting annual crop cultivation in which rice, groundnuts and sorghum are the principal crops. The southern half has a rainfall and climate suitable for the profitable cul- tivation of three crops especially cocoa, coffee, and oil palm which are Sierra Leone's main export crops, as well as for rice and other annual crops. The south has the best agricultural potential, and because most mining and indus- trial activities are located in the south, it has a rural economy that is much more cash orientated than that of the north which is basically a subsistance economy. 2.03 Rice is the staple food of Sierra Leone, and until the early 1950s the country was self-sufficient in this commodity. During the last 20 years, however, an average of some 30,000 tons of white rice have been imported annually, and in 1973/74 rice imports totalled 42,000 tons at a cost of some US$17 million. These imports reflect an average per capita consumption of 250 lb, the highest in West Africa, and the inability, so far, of Government to effectively stimulate domestic production. 2.04 Export crops accounted in 1973 for foreign exchange earnings of about US$30 million, and comprised 32,000 tons of palm kernels, 6,000 tons of cocoa beans, 12,000 tons of coffee beans, and 400 tons of ginger. Of all agricultural exports only about 16% was produced in the northern zone. 2.05 Government's major aspirations for the agricultural sector include: (a) self-sufficiency in rice; (b) increasing production of the main export crops and thus foreign exchange earnings and export tax revenues; and (c) correcting regional income imbalances, particularly between the north and south. Incentives for rice and export crop production are now being provided through higher Government guaranteed prices for these key crops and the evidence is that farmers are responding. Longer term production objec- tives should be achieved through development projects providing effective extension, credit and input supply services to farmers. The objective of correcting regional imbalances will be more difficult to achieve primarily because the natural resources of southern Sierra Leone are superior to those of the north. Per capita incomes in the north are only half of that estimated for the south, and there is a real need to attempt to correct this imbalance, though seemingly a very difficult task. Government's main assistance to northern farmers to date has been through subsidized tractor hire services and fertilizers. Much of these have been employed in uneconomic activities and only a small number of farmers, usually the more wealthy, have benefited. The proposed northern project is designed to help improve farm incomes in the north but as shown later in this report investments in agriculture in the north cannot generate such high return as in the south. C. Institutions 2.06 Government agencies and institutions that would be concerned with the projects are described in Annex 1. The most important are the Ministry of Agriculture and Natural Resources (MANR), the Sierra Leone Produce Marketing Board (SLPMB), the Rice Corporation, and the National Development Bank (NDB). 2.07 The Ministry of Agriculture and Natural Resources (MANR) is currently reviewing its own organization and needs, especially planning, training and research, in order to better equip it to carry out Government's objectives. The improvement in agricultural research is critical if these objectives are to be achieved. It is important that a research policy is drawn up that would ensure: (a) support to existing and planned agricultural development programs, (b) coordination of the programs undertaken by the individual research in- stitutions in Sierra Leone, (c) rationalization of the terms and conditions of employment for research workers, and (d) adequate financial planning for the research program. During negotiations assurances were obtained from Govern- ment that by March 31, 1976, it would prepare, for review with the Bank, pro- posals for a research policy for Sierra Leone. 2.08 The Sierra Leone Produce Marketing Board (SL1MB), established in 1949 is responsible for marketing the country's main export crops and fixing, in conjunction with Government, cocoa, coffee and palm kernel producer prices. SLPMB is required to maintain a price stabilization fund; and since 1967 has contributed Le500,000 annually from its operating surpluses to the Government budget. SLPMB operates through Licensed Buying Agents (LBA), who are respon- sible for purchasing, grading, storing and evacuating produce to the port of shipment; and through the Sierra Leone Produce Marketing Company (SLPMC), a London subsidiary, for overseas sales. Currently SLPMB is run very conserva- tively, and reserves now stand at Le2.5 million. Unfortunately this con- servatism hrs generally meant that producer prices have been too low to -it->ulate production. 2.09 The Rice Corporation, established in 1965, imports milled rice and buys, mills, and markets domestically produced husk rice. Minimum producer prices, recently raised from Le3.20 to Le5.00 per bushel for husk rice, are maintained through a floor price system. Very little husk rice has been purchased by the Corporation in recent years because its floor price has been lower than market value. This has resulted in inadequate supplies for its three rice mills which have operated at a loss. The Corporation has become more active and in addition to a guaranteed floor price it intends to employ mobile buying teams. These would initially function in EAP and NAP areas. Full details on marketing are at Annex 2. 2.10 National Development Bank (NDB) provides development credit for industrial and agricultural purposes. NDB is closely linked to the Bank of Sierra Leone and to the commercial banks. NDB makes medium- to long-term loans and restricts its lending to -loans of between US$9,000 to US$75,000. Thus small farmers are excluded from its program. The cooperative movement is in disarray, and except for credit provided by EAP to project farmers, Government has so far been unable to provide any effective farm credit system. NDB is interested in the possibility of being involved in small- holder credit, although realizing the problems involved. Under the project a Farmer Finance Company would be established in EAP in which NDB would participate through equity (para. 6.21). III. THE PROJECT AREA 3.01 General. The Northern Area Project (NAP) centered on Makeni in the Northern Province covers 1,300 square miles and affects 14,000 farming families (172,000 people) in all. The Eastern Area Project (EAP) centered on Kenema covers 4,300 square miles and supports 65,000 farm families (400,000 people), of which initially 60,000 will be affected. Together the two project areas comprise 20% of the total land area of Sierra Leone and accomodate 20% of its population. 3.02 Northern Project Area (see Supplementary Volume 2) has a rainfall over 100 inches falling in a 6 month wet season. There are two major soil groups: the Rokel River series, of which the so called bolilands are part 1/; and the granite and acid gneisses from which the inland swamps and upland soils are derived. Up until now assured ways of developing the bolilands economically have not been evolved, consequently the project would be confined largely to the non boliland soils which now support 90% of the population. Except for isolated inselburgs, the NAP area is moderately to gently rolling. 3.03 NAP is divided into eight chiefdoms each administered by a Paramount Chief and chiefdom councillors who exert considerable influence and authority. 1/ These are low lying areas that cover 40% of the project area. The boli- lands have an inherent infertility and are subject to flooding during the rains. -5- The main tribal groups in order of importance are the Temne, the Foulah, the Lunba and the Loko. The Foulah are the major cattle holding community in the country. 3.04 Communications are based on a north/south all weather spine road which is adequate, and numerous small but poorly maintained earth surfaced feeder roads and tracks. Most of the roads and tracks are impassable during the wet season. 3.05 Health and education facilities in the project area are at least average for Sierra Leone. The project area contains twelve dispensaries, six health centers and four hospitals. Similarly education facilities are adequate. Neither health nor education standards are considered a likely constraint to achieving project objectives. Village water supplies are in- adequate, and improvement of these supplies under the project are likely to have a significant impact on the health of the villagers. 3.06 The farming system for upland soils is one of shifting cultivation, in which 1 - 2 years cropping are followed by 5 - 10 years of bush fallow; upland rice and groundnuts are the main crops. Most of the inland valley swamps (8,000 acres) are used for rice and for other crops such as cassava leaf and groundnuts grown mainly for home consumption. The fertility of both upland soils and swamps is declining in the face of population increases, and the lack of any practical alternative to shifting cultivation. It is estimated that 24% of the population cultivates swamps only, 55% uplands and swamps, and 21% uplands only. The average farmer cultivates between 5 - 6 acres annually of which 1 acre is swampland. 3.07 Land is owned by the community as a whole and ultimate responsibility for primary allocation is that of the paramount chief. Once land has been allocated, the usufruct is both retainable and inheritable for as long as it is claimed. Actual occupants of the land comprise those with land title and those who have acquired land from title holders. The latter type of acquisi- tion is generally short-term for uplands and long-term for swampland and is unheritable. Land so acquired is referred to locally as "begged-land", but the actual transaction is accompanied by cash or gifts in kind. As the value of swampland will increase under the project, a tendency could develop for title holders to press for recovery of "begged-land". As this would be to the disadvantage of the present occupants, project management would pay partic- ular attention to this issue and would make every effort to agree on arrange- ments with the traditional authorities to ensure that swamp developers have satisfactory security of tenure to ensure their participation. Fortunately it is estimated that only 15% of the swamps are occupied as "begged-land", and consequently even should problems develop the success of the project would not be jeopardized. 3.08 Crop yields are very low. Swamps yield about 1,200 lb husk rice/acre, and the uplands, under shifting cultivation and mixed cropping, about 500 lb husk rice/acre, mixed with beans, sorghum, maize and beniseed. Groundnut yields are about 900 lb unshelled nuts/acre. - 6 - 3.09 There are about 15,000 head of cattle in the area, mostly owned by semi-nomadic Foulah tribesmen. The cattle are of the trypanosomiasis tolerant Ndama breed. Under current management conditions their productivity is low and genetic potential limited. With increasing population, competition for land between farmers and cattle owners has become more intense and there is a need to stabilize the situation. One possible means, which would be tested under the project, would be settlement of Foulah families on small scale ranches. 3.10 Eastern Project Area (see Supplementary Volume 3) is topographically more broken with clearly defined valleys. Rainfall is generally higher and more reliable than in the NAP area, and as the area has better upland and swamp soils, the agricultural potential is markedly better than in the north. 3.11 EAP is divided into 32 chiefdoms with similar traditional disciplines to those in the north. Most of the 18 ethnic groups of Sierra Leone are re- presented of which the Mende are dominant. The average family size of about 6 is half that of the typical northern farm family. 3.12 Road communications need improvement in extent of network and con- dition, and the inadequacy of crop extraction roads is a major production and marketing constraint. 3.13 As in the north, social and agricultural services to farmers are limited, although the latter are now being improved under the ongoing project. However, the need for improved water supplies in EAP is not so acute as in NAP and improvements can be delayed until some later phase of development. 3.14 The farming system reflects the greater reliability of the area's dry season rainfall, and its better soils. Thus cocoa, coffee and oil palm are of major importance; and there is greater potential for swamp rice devel- opment than in the north, due to a greater area of swamps and more favorable soils. Upland cultivation follows a shifting pattern and 20% of the upland areas are cultivated each year with fallow periods rarely exceeding 6 - 7 years. Due to increasing land pressure there is a tendency to move toward an increased exploitation of swamps. Average farm size is generally smaller, 2 - 3 acres of upland cultivation, and some 40% of the farmers cultivating in addition 1 - 3 acres of swamp. The land tenure system is basically the same as in the north, but because population pressure is less, the problems over "begged-land" are less likely to arise. 3.15 Yields levels of upland and swamp rice are similar to those in the north, 1,200 lb and 500 lb husk rice/acre respectively. .There is no accurate data on cocoa and coffee yields, but these are estimated at not more than 300 lb/acre annually. IV. THE PROJECT A. General 4.01 The Eastern and Northern area projects have two principal objectives. First, to increase agricultural production and thus farm incomes through pro- - 7 - ject actions. Second, to establish in the Eastern and Northern areas systems of farmer support services that should remain in perpetuity to serve as the means for delivering further technology packages to their farmer communities. Currently Sierra Leone has a nation-wide agricultural extension service, but because in the past, due to the lack of staff, funds and clear programs, it has been unable to do much to help farmers; the general stagnation in the agri- cultural sector described in Chapter II is a consequence of this weakness. The establishment and operation of a complex of services for farmers is expensive, and while Bank Group funds would help initiate them, the impact and usefulness of the services so created would diminish rapidly if adequate support is not available after the proposed IDA credit and Bank loan have been disbursed. As Sierra Leone's fiscal situation is difficult, the risk that sufficient finance would not be available to support these services in the post project period should not be discounted; consequently it would be a feature of the two proj- ects that those service functions involving credit and input supply would be designed to permit transfer as soon as possible to farmer owned and operated commercial agencies. Once firmly established such agencies would not require Government financing for their operation. Additionally, projects of this kind enjoy during the disbursement period of project funds a high degree of autonomy and work relatively independently of the existing national agricultural ser- vices, though with a long-term objective of eventual amalgamation. EAP is currently at a stage where a degree of amalgamation can be undertaken; in con- sequence at the commencement of the extension to EAP, the Project Manager would be responsible for the project as well as those normal agricultural ser- vices operating outside the project area; the latter affects 20% of the Eastern Province. In 1978 the autonomy enjoyed by the management unit would fall away and its services would then be totally reintegrated with the national agricultural service, albeit that the operations of the service would thus be more highly concentrated than in other parts of the country. A similar change in the case of NAP is not proposed since a period of autonomy exten- ding beyond the loan/credit disbursement period is probably required before institutions are sufficiently well developed to permit the change. The North- ern Area Project would be carried out over four years, 1975/76 - 1978/79, and the Eastern Area Project over two years 1975/76 - 1976/77. The projects would involve: (a) For the Northern Area Project (i) Civil Works - constructing 20 miles and upgrading 280,miles of crop extraction roads; - constructing 200 village wells on a self help basis; - establishing 5 market centers; - constructing a training center; - constructing houses, stores and offices for project management staff; - 8 - (ii) Farm and crop development - establishing extension and other farmer support services, and providing these with staff, vehicles and equipment; - providing short- and medium-term credit through a revolving credit fund for labor, pesticides, ferti- lizers, and irproved planting material to increase the production of 6,000 acres of inland swamp rice, 25,000 acres of upland rice, and 10,000 acres ef groundnuts; - developing a seed multiplication farm; (iii) Investigations and research - investigating the potential for future livestock development and the establishment of three privately operated cattle ranches; - researching methods of increasing wood fuel produc- tion for tobacco farmers; (b) For the Eastern Area Project (i) Civil Works - establishing 12 market centers; - constructing houses, warehouses and offices; (ii) Farm and crop development - expanding extension and other farmer support services established under the first project; - providing short-, medium- and long-term credit for labor, pesticides, fertilizers and improved planting material to increase the production of 1,800 acres of inland swamp rice and 36,000 acres of upland rice, to develop 4,200 acres of inland swamp for rice produc- tion, and to establish 1,000 acres of cocoa and 1,600 acres of oil palm; - continuing the development and improvement of seed multiplication farms; - establishing a Farmer Finance Company to take over the activities of the EAP project's revolving Credit Fund; and - 9- (c) Central Support Services - establishing and staffing a Project Evaluation and Services Unit in MANR Freetown to provide operational and financial support for EAP and NAP, and to assist the EAP Farmer Finance Company and the company that is to be established to manage the oil palm nucleus estate and mill developed under EAP; - assisting MANR to prepare new projects for the agricultural sector by providing consultants for short-term specialist assignments; 4.02 The existing project management unit at Kenema would be responsible for EAP activities, and a new project management unit would be established at Makeni for NAP. B. Detailed Features 4.03 To avoid repetition, proposals for NAP and EAP are treated together in the following paragraphs and in each case supportive data can be found in the respective Supplementary Volumes 2 and 3. Civil Works 4.04 Crop extraction roads. Under NAP 280 miles of existing crop extraction roads would be improved and 20 miles of new road constructed to ensure all weather access by light traffic in the wet and heavy trucks during the dry season. The existing road network is generally adequate in extent, but the roads are in disrepair and require some improvements including improved for- mation, drainage and culverting. Most of the soils have a high laterite con- tent and therefore very little surfacing is required. The road construction and improvement program would be over four years and would include the con- struction of 20 bridges and 900 pipe culverts. Nearly all construction work would be carried out by the project on force account since the amount and type of work is scattered in terms of location and time and would be un- attractive to major contractors. Petty contractors would be used as much as possible. 4.05 A minimum of 250 miles of crop extraction road construction and improvement are essential for the EAP to proceed satisfactorily, for which Government is seeking assistance from bilateral sources for these roads, and final arrangements are expected to be conducted shortly with USAID. During negotiations assurances were obtained that not later than December 1, 1975, arrangements would be made for the construction and improvement of roads in EAP that were satisfactory to the Bank. 4.06 Village wells. The project would assist villages in NAP to construct 200 hand dug wells. The villages would provide all the labor, and the project technical supervision, building supplies and hand pumps. - 10 - 4.07 Market centers. The project would establish five market centers in NAP and twelve market centers in EAP for input distribution and produce buying. Each center would comprise a warehouse (8,000 ft3) for storage of fertilizers, seeds and pesticides, and offices. Facilities including scales would be provided at the center for both statutory and private marketing operations. 4.08 Training center. The project would construct a new 40 bed training center for NAP. The center would be used for farmer and staff training on the same basis as the successful training scheme currently operated by EAP. 4.09 Houses, offices and stores. The project would construct buildings required for project staff and operations. These include, for NAP, 8 staff houses, 7 offices, and 2 stores; and for EAP 4 houses and a store. All other accomodation for both EAP and NAP would be rented. Construction would normally be undertaken by contractors, available in both areas, and force account would be undertaken only in exceptional circumstances. Building supervisors would be employed to ensure that construction standards were satisfactory. Farm and Crop Development 4.10 Extension and farmer support services. Administrative, technical and commercial staff would be provided under the project. This would mean for NAP and EAP respectively employment of up to 104 and 136 staff of all categories. Where called for, staff would be provided with vehicles and other equipment. (Details are in Annex 3.) 4.11 Inland valley swamp development. Based on EAP experience the project would improve the production of rice on 6,000 acres of inland valley swamp in NAP through better water control and drainage methods. In EAP some 1,800 acres would be improved, and 4,200 acres of undeveloped inland swamp brought into rice production, bringing the total EAP swamp development program to 12,000 acres. 4.12 Upland crop development. Uplands provide 60% of Sierra Leone's national rice production, and the project would aim at achieving production increases in rice and groundnuts providing improved seed under mass saturation programs 1/. In NAP, improved fungicide-treated rice varieties such as ROK I, II, and III (T52) and LAC 23 would be distributed to farmers. This should result in 25,000 acres of higher yielding rice; 36,000 acres of upland rice in EAP would be similarly improved. In NAP groundnuts are an important upland crop and using similar mass saturation techniques, improved varieties would be introduced over the 10,000 acres now sown to low yielding varieties. 1/ The complete evacuation of old seed from a rural unit (such as a village) in exchange for improved seed. - 11 - 4.13 Little is known about the response of rice (particularly under mixed cropping) and groundnut to fertilizers under upland conditions in Sierra Leone. Consequently fertilizer application would be approached cau- tiously with emphasis being given initially to fertilizer use on the permanent- ly cropped soils that constitute about 10% of total. 4.14 Tree crop development. The project would extend existing EAP proj- ect oil palm plantings by 1,600 acres to 4,150 acres. Participation would be restricted to smallholders who would be permitted to plant a maximum of 10 acres. Oil palm seedlings produced by the Daru Oil Palm Company, that is to be formed under the project, would be purchased for distribution to farmers. The harvested fruit bunches would be purchased by the Company at road side buying points. A further 1,000 acres of cocoa would be planted (4 acres maximum per farmer) bringing total EAP project cocoa plantings to 1,750 acres. 4.15 Seed multiplication. NAP would establish a fully irrigated 100 acre seed multiplication farm, and the two existing EAP rice seed farms (total 50 acres) would be improved. The national Rice Research Station at Rokupr would supply foundation seed to the seed farms for multiplication and the project would sell improved seed direct to farmers or to registered seed pro- ducers for further multiplication. In the latter case the project would be responsible for cleaning and dressing seed prior to distribution. EAP would establish a new cocoa seed garden as a first step towards initiating an expanded cocoa development program envisaged from 1978 onwards. 4.16 Supply of inputs. Farm inputs would be provided to farmers both for cash and credit. Currently EAP operates a revolving credit fund, but prior to December 31, 1975, Government would establi3h a farmer finance company to take over its functions. NAP would establish a revolving credit fund as in the first stage of EAP. In both instances seasonal credit would be provided for fertilizers, seeds, and pesticides, and medium- and long-term credit for swamp development, and for the establishment of cocoa and oil palm. Details on the organizational arrangements for credit are at Chapter VI. Investigations and Research 4.17 Livestock development. The project would develop three 1,000 acre privately owned and operated pilot cattle ranches, and would provide technical assistance and limited credit for stall-fattening of cattle and for pig breed- ing. The investigations into cattle and pig production would be a forerunner for an expanded livestock program that might be developed over a wider area in the north at some future time. 4.18 Wood fuel production. The Rokel Tobacco Leaf Company has established a modest fire cured and flue cured tobacco program in Northern Sierra Leone. The project would not include any aspect of the Company's successful program but would assist the Forestry Division of MANR to undertake a series of trials to determine a future wood fuel plantation program to provide fuel wood for tobacco curing. - 12 - Central Support Services 4.19 Project Evaluation and Services Unit (PESU) would be set up within MANR Freetown to provide operational and financial support for NAP, EAP and other special agricultural projects that might be developed in the future (see para. 6.04). PESU staff and support costs would be funded under the project. 4.20 Support to Daru Oil Palm Company. The existing EAP, Government op- erated, oil palm estate and mill would be taken over by a compan,7, the Daru Oil Palm Company (see para. 7.06) to be formed for that purpose. The project would provide funds to cover the cost of an experienced and internationally recruited General Manager. During negotiations it was agreed that the General Manager would be appointed on terms, conditions and with qualifications satis- factory to the Bank. V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS A. Project Costs 5.01 Project costs are estimated to be Le 11.4 million (US$13.7 million) of which the foreign exchange component would be Le 5.0 million (US$6.0 mil- lion) or 44% of total project costs. 5.02 The breakdown of project costs is detailed in Annex 5, in Supplemen- tary volumes 2 and 3, and is summarized in the following Table: - 13 - 6broa, 06 FOojeot C00to -------------- la.000---- -.1U8$ '000 … .__________-_ UAP _ r68 _ Sw,ioMs Total Loal toreign Total. iealine oosts Irt6ra.tn tur0. wot Road iep-osat _ 1,049.3 - 1,049.3 478.1 7B1.1 1,259.2 12 Well comtruction 1600 6o.0 56.2 15.8 72.0 1 S-oto . ctre. 156.0 65.0 -221.0 10o6.1 159.1 265 .2 3 frsa0,g aentre - 85.0 -85.0 141.8 61 .2 102.0 117 F. irwt o,ta Circrt.I F8.Ui-. 269.1 274.0 . 543.1 117.3 534.4 651.7 6 RectiOg eatsril., P-Sti.ideO, tool,gd hired 4laCr 790.7 436.0 1,226.7 1,364.3 107.7 1,672.0 14 20 Frs' -ort sece.a coats Local .t6f. 684.7 1,273.8 109.0 2,068.5 2,482.2 - 2,462.2 23 T.oh,ikal oai.tstgo 1141.0 6414,0 339.01 927 .0 - 1,112.4 1,112.14 10 5ta66 twa.a ed tfi,-a 122.0 607.6 595279.6 254.2 381.3 635.5 6 4d Sod tse . r ohinery 122.3 441.9 44.7 608.9 152.3 578.4 730.7 7 Ad.i.totr_ti_ d ojprtiaS .0.t. 344.3 829.7 60.0 1,234.0 806.5 674.3 1,460.0 1 60 Other eoOt, T-dhnilol a,i.stgo,e to Onl P.. Co. - . 80.0 8O.0 - 96.0 96.0 1 T-hbni-e -Ugtsee - fe.aibilitJ studioe . - 100.0 100.0 - 120.0 120.0 1 F.F.C. (0i0t.e) - - 100 0 10.0 96.o 24.0 120.C 1 3 Total Bgoel, aot.. 2,633.1 5.366.3 832.7 8,830.1 54644.0 6615.7 10.599.7 100 Pb8'doal o,tb,lgC]ea 131.7 26.3 141.6 661.6 29b.7 283.2 529.9 Pri.c 0ntiends. _34.5 1.534.2 78.1 2.116.8 1.6442.0 1.133.0 2.575.0 T.tal 3,299.3 7,168.6 952.4 11,.20.5 7,692.7 6,011.9 13,706.6 -s--- ..........................,!2:2 ........ .............. ........................... 29 63 E 100 56 46 10D 5.03 Project costs are incremental based on prices ruling at June 1, 1974, and exclude all identifiable taxes. Physical contingencies comprise 5% of base line costs and price contingencies allow for compounded increases in costs of: (a) vehicles, plant and farm inputs (excluding fertilizer) of 14% in 1974, 12% in 1975, 10% in 1976, and 8% in 1977, 78 and 79; (b) houses, build- ings and construction materials for roads and water supplies of 18% in 1974, 16% in 1975, 14% in 1976 and 12% in 1977, 78 and 79; and (c) salaries for local staff and other local costs of 12% in 1974 with a pro rata reduction to 8% in 1979. Price contingencies are not included for fertilizers as Bank projections indicate that the average 1980 current prices should be not higher than current 1974 prices. Analysis of costs show that (a) 29% is for EAP, 63% for NAP and 8% for support services to MANR in Freetown, and (b) on another basis 17% is for project infrastructure, 20% for incremental farm inputs, 3% for assistance to project related institutions, and 60% for support services to farmers. The latter includes staff costs for the extension, development and credit components of the project, as well as the houses, offices, vehicles and other backup needed by such staff. - 14 - B. Proposed Financing 5.04 The Bank Group's share in project financing would be an IDA credit of US$5.0 million on standard terms and an IBRD loan of US$5.0 million at 8-1/2% repayable over 25 years including a five year grace period for princi- pal during which interest and commitment charges would be paid. The Bank group contribution would be equivalent to 73% of total project costs and would cover all foreign exchange costs estimated at Le 5.0 million (US$6.0 million) and 52% of local costs estimated at Le 3.3 million (US$4.0 million). Of the US$10.0 million, Le 0.8 million IS$1.0 million) would be for support services to centralized institutions; Le 1.9 million (US$2.3 million) would be for EAP; Le 3.6 million (US$4.3 million) would be for NAP; and the remainder Le 2.0 million (US$2.4 million) would be for contingencies. In EAP US$1.2 million (Le 1.0 million) would be for loans to farmers, and in NAP US$0.8 million (le 0.7 million). 5.05 SLG would finance 26% of project costs amounting to Le 2.9 million (US$3.5 million). The remaining 1% of project costs or Le 0.17 million (US$0.2 million) would be contributed by participating farmers through cash purchases of seasonal inputs. Details of the project financing plan are shown at Annex 5, and are summarized below: - 15 - Summary of Proposed Financing Total IDA/IBRD SLG Farmers ----------------- Le '000 --- Service Investment Costs Vehicles and equipment 830.8 724.5 106.3 -- Buildings and construction 1,138.6 797.0 341.6 -- Farm Input Costs Fertilizers 543.1 446.8 33.0 63.3- Others, including plant, material, pesticides, and hired labor 1,226.7 858.7 286.5 81.5 Annual Operating Costs Local staff and assistance to FFC 2,319.0 1,623.3 695.72 Vehicles and plant 946.6 662.6 284.0 -- General services 612.3 -- 612.3 -- Technical Assistance 1,215.0 1,215.0 -- - Contingencies Physical 441.6 316.4 118.0 7.2 Price 2,146.8 1,689.0 438.8 19.0 Total Le '000 11,420.5 8,333.3 2,916.2 171.0 Total US$'OOO 13,704.6 10,000.0 3,499.4 205.2 Distribution % 100 73 26 1 5.06 During negotiations it was agreed that retroactive financing of up to US$100,000 (Le 83,000) would be available for the employment of a Financial Controller for PESU and the Project Manager and Accountant for NAP (para 6.09). Such financing would apply from March 31, 1975. C. Procurement 5.07 Procurement of vehicles, plant, equipment, fertilizers, pesticides, and tools under contracts with a value of more than Le 20,000 (US$24,000), would be through international competitive bidding (ICB) in accordance with Bank - 16 - guidelines. Such procurement is estimated to have a value of about Le 1.4 million (US$1.7 million). A maximum limit totalling US$200,000 would be set for those items purchased through contracts of less than US$24,000. Domes- tically manufactured goods would be allowed a 15% preference when comparing domestic bids with those of foreign manufacturers. Contracts for the con- struction of buildings, houses, and the purchase of construction materials and furnishings valued at Le 1.1 million (US$1.3 million) would not be attractive to foreign contractors due to the dispersed location of the work and the small size of individual contracts; for these items, con.racts would be awarded on the basis of competitive bidding advertised locally ani in accordance with procedures satisfactory to the Bank; in these cases foreign firms and suppliers would not be precluded from bidding. Road construction would be carried out on force account due to the shortage of suitable con- tractors. A large part of project costs, an estimated Le 6.3 million (US$7.6 million) would be for labor, staff salaries and allowances, consultants, vehicle maintenance and operation, planting materials, and general services, that would be unsuitable for competitive bidding. The remaining Le 2.6 million (US$3.1 million) of estimated project costs would be contingencies. Sierra Leone has no preferential import tariff arrangements. D. Disbursement 5.08 The proceeds of the IDA Credit (US$5.0 million) and IBRD loan (US$5.0 million) would be disbursed over four years to cover 73% of total project costs against the following categories: - 17 - Cat. 1 100% of the cif cost of directly imported vehicles, heavy plant, and equipment (or 87% of the cost of these items if locally pro- cured), totalling US$0.9 million (Le 0.7 mil- lion) Cat. 2 100% of the cif cost of directly imported fertilizer totalling US$0.5 million (Le 0.4 million) Cat. 3 100% of the cost of internationally recruited staff and consultants, totalling US$1.4 million (Le 1.2 million) Cat. 4 70% of the total cost of buildings, houses, furnishings, construction materials for roads and wells, local staff, support services, and vehicle and plant operation, totalling US$ 3.8 million (Le 3.2 million) Cat. 5 70% of farm inputs other than fertilizers, including seeds, planting materials, pesticides, fungicides, herbicides, tools, hired labor, spraying machines, totalling US$ 1.0 million (Le 0.0 million) Cat. 6 An unallocated amount totalling US$ 2.4 million (Le 2.0 million) to cover physical and price contingencies 5.09 Disbursements would be against import documentation, contracts, and certified records of expenditures. For disbursement made against certified records of expenditures, documentation would not be submitted for review as a matter of course, but would be retained by the respective management units for scrutiny by Bank supervision missions. Any surplus loan funds after completion of the project would after consultation with the Bank be used to further develop the project areas. E. Budgetary Control, Funding Procedures, Accounts, and Audits 5.10 Budgets. Annual budgets would be prepared by NAP and EAP, and included in the MANR development budget. The management of each unit would submit monthly cash flow estimates containing costs, revenues, and working capital requirements to PESU for approval and Government funding. 5.11 Funding Procedures. SLG would set up accounts with commercial banks for PESU and for NAP with initial sums of Le 20,000 and Le 100,000 respectively. - 18 - During negotiations, agreement was obtained that as a condition of credit effectiveness, SLG would furnish the Bank with satisfactory evidence that the bank accounts had been established, that initial payments had been made anid that procedures satisfactory to the Bank to ensure that adequate funds are available at all times in such accounts have been agreed between SLG and the bankers for NAPMU, EAPMIU and PESU. 5.12 Accounts and Audits. Separate accounts maintained for NAP, EAP, PESU, and the Farmer Finance Company would be kept under acceptable commercial accounting procedures which would also provide cost accounting and project evaluation data. All accounts would be audited annually by independent audi- tors acceptable to the Bank. Audited annual accounts, balance sheets, and operating statements for NAP, EAP, FFC, and PESU would be submitted to the Bank within four months of the closing of the financial year. Assurances to this effect were obtained during negotiations. VI. ORGANIZATION AND MANAGEMENT A. Organization 6.01 The NAP would be managed by the Northern Area Project Management Unit (NAPMU) that would be established for this purpose and the EAP would be managed by the existing Eastern Area Project Management Unit (EAPMU). 6.02 A Project Advisory Committee (PAC) that was established under the ongoing project to coordinate the activities of MANR and other Government Departments concerning the project would be expanded to cover NAP. The Per- manent Secretary of MANR would continue to be chairman, and members, as now, would include representatives of the Ministries of Finance, Local Government, W4orks and Development, the National Development Bank, Produce Marketing Board, and Rice Corporation. Additionally, the following personnel from MANR would be members: Chief Agriculturist, Assistant Chief Agriculturist (Projects), Financial Controller and Projects Economist of PESU (see para 6.04), and the Managers of NAPMU and EAPMU. 6.03 Project Coordinating Committees (PCC) would be established for NAP and EAP to advise project management on local affairs and to assist management in its dealings with the Chiefdom authorities. The Committees would meet monthly and would comprise the Provincial Secretary-Chairman, Provincial Agricultural Officer, Divisional Officers for Works, Health, and Education, three farmer representatives and a senior Paramount Chief. 1/ In each case the project manager would be Secretary. 1/ In addition, the Manager of the Rokel Tobacco Leaf Company would be a Committee member for NAP. - 19 - 6.04 A Project Evaluation and Services Unit (PESU) would be established in MANR reporting directly to the Permanent Secretary. PESU would oversee and assist the Project Management Units in order to (a) ensure effective fin- ancial control and flow of funds to the projects; (b) assist in maintaining adequate accounts; (c) formulate credit and farm input supply systems; (d) evaluate ongoing projects; and (e) generally provide support for the two pro- jects as well as other agricultural development schemes being implemented by MANR. Importantly PESU would be responsible for the procurement arrangements of the two projects, for submitting reimbursement claims to the Bank, and for the internal audit of the two projects. PESU would be headed by a Financial Controller with appropriate accounting and administrative experience. The Controller would be supported by a Commercial Services Officer who would have special responsibility for helping the projects develop satisfactory credit and input supply systems; and a Projects Economist who would be responsible for the evaluation of ongoing projects and the evaluation of new projects proposed by the Divisional Planning Units of MANR. 6.05 During negotiations it was agreed that a condition of credit and loan effectiveness would be the establishment, with terms of reference satis- factory to thy Bank, of NAPMU, and the redefinition of the responsibilities and terms of reference for EAPMU in line with the various proposals made in this project. Additionally assurances were obtained that the two Project Committees would be established within 3 months of credit/loan effectiveness. 6.06 Project Administration. The Permanent Secretary of MANR would have direct responsibility for the two projects. The Permanent Secretary would in consultation with the project managers, appoint a senior staff member of each project as Deputy Project Manager. The EAP Project Manager would also be responsible for areas of the Eastern Province (20%) outside the EAP, for which he would delegate day-to-day responsibilities to a Senior Agricultural Officer. Details of the two project management units are given in Annex 3 together with organizational charts. 6.07 Each project management unit would be divided into five sections responsible for the following operations: - Administration and Personnel: personnel, staff transportation, registry, security, and public relations; - Finance: project accounts, procurements, stores, internal audit, budgetary control; - Extension and Training: extension, staff and farmer training, seed multiplication and research; - Conservation and Land Development: land use planning, data collection, specialist surveys in land and swamp development, water control surveys, and, where appropriate, construction of roads and water supplies, and supervision of building development and other civil works; - 20 - Commercial Services: supply of farm inputs, credit, and coordi- nation of processing and marketing activities as required. Commercial Services would maintain close marketing links with agencies such as the Rice Corporation and Produce Marketing Board. 6.08 Agricultural Project Evaluation and Planning. MANR is strengthening its planning capabilities to formulate new projects and evaluate ongoing pro- jects. PESU would be provided with data by the projects for evaluation and would issue regular evaluation reports on project progress. B. Staffing and Consultants 6.09 While most positions in the two projects would be filled by nationals it is probable that some positions would have to be filled by internationally recruited staff in the absence of experienced Sierra Leonean personnel. In management positions it would appear that the Project Manager, NAPMU, and Financial Controller, PESU, would have to be recruited internationally. During negotiations it was agreed that a condition of credit/loan effectiveness would be that the Project Manager and Accountant for NAPMU and the Financial Con- troller for PESU would have been appointed on terms, conditions and with quali- fications and experience acceptable to the Bank. 6.10 As Sierra Leone is critically short of experienced high level tech- nical staff, international recruitment would probably be required for some of the Senior technical positions. During negotiations assurances were obtained that whether internationally or locally recruited SLG would appoint on terms and conditions and with qualifications satisfactory to the Bank (i) the Pro- ject Manager, Accountant, Commercial Officer, Extension and Training Officer, Conservation and Land Development Officer, Livestock Officer and Construction Engineer for NAPMU; (ii) the Project Manager, Accountant, Commercial Officer, Extension and Training Officer, and Conservation and Land Development Officer of EAPMU; and (iii) the Financial Controller and Commercial Services Officer of PESU. 6.11 Other Project Staff. The great majority of project staff would be obtained through transfers within MANR and from other Government Departments, from the commercial sector, or through special in service training courses established by NAP and EAP. It would be important that a critical minimum of staff were in post prior to the start of the first cropping season and during negotiations assurances were obtained that eight professional officers or experienced technical officers and 30 agricultural field assistants would be appointed to NAP within 6 months of credit effectiveness. 6.12 Most project staff would be appointed as pensionable Government employees and salaries generally would follow Government scales, although inducement benefits would be provided where necessary. Internationally recruited staff as well as some specialist Sierra Leonean staff such as sur- - 21 - veyors, sales agents, and accountants etc. would be appointed on three year contracts. 6.13 About 20 man months of individual consultant time would be financed under the credit to assist MANR in project preparation, evaluation and other specialist areas. During negotiations assurances were obtained that employ- ment be for purposes agreed with the Bank, and that the consultants so employ- ed would be acceptable to the Bank. C. Staff and Farmer Training 6.14 NAPMU and EAPMU would train their junior staff at project established training centers. EAP experience is that practical courses of one or two days, and at the longest of one week, are the most effective. 6.15 Farmer training at EAP has been very successful, particularly for swamp rice. Courses are for one week's duration. EAP also operates special courses for Chiefdom Agricultural Demonstrators, who are paid employees of the Chiefdoms and who after training return to advise farmers. This type of course is proven at EAP and would be continued and introduced under the NAP. D. Farm Inputs - Procurement, Distribution, and Credit Procedures 6.16 NAP and EAP would be responsible for the procurement, distribution,, and sale, for cash or credit, of fertilizers, seeds, seedlings, pesticides, fungicides, and other farm inputs to project participants (see Supplementary Volumes 2 and 3 for details). It is expected that initially about 90% of the seasonal inputs would be sold on credit. The gross value of inputs re- quired during the project development period is estimated at Le 1.2 million for fertilizers; Le 0.5 million for seeds and seedlings; Le 0.04 million for fungicides and pesticides; and Le 0.8 million for cash credit and tools for swamp development. In addition, Le 20,000 would be available to farmers for the purchase of cattle and pigs under the NAP livestock development component. 6.17 Farm Inputs. The Commercial Services Sections (CSS) of EAP and NAP would be responsible for input supply. Most importantly, however, the aim of both CSS would be to develop farm input organizations that eventually could be run by the participants themselves as either corporate or cooperative ven- tures. Sales of inputs would be made by area salesmen operating from the market centers described in para 4.07; salesmen would be salaried project staff, but they would receive bonuses related to sales. To encourage volume sales, which would reduce CSS expenses, discounts would be offered to farmer groups buying in bulk in the case of fertilizer those purchasing 5 tons or more; and conversely for those buying less than one ton, a 10% premium would be added. The CSS would be responsible for the sale of seeds produced by the project's seed multiplication farms, and would offer spraying services to rice, cocoa, and oil palm growers. - 22 - 6.18 Subsidies. Currently SLG provides farmers with subsidies of up to 70% of the real cost for fertilizers, and tractor and equipment are hired at subsidized costs. In 1973 about 90% of agriculture subsidies went to relatively large rice farmers in the Boliland areas that engage in at best a marginal and probably a sub-economic system of production. The current farm gate price of husk rice is equivalent to US$240 per ton, one of the highest prices in West Africa. The crop budgets discussed in para 7.10 and detailed in Supplementary Volumes 2 and 3 show that current and projected prices are a sufficient incentive for farmers to grow swamp and upland rice without sub- sidies, and it would appear that Government could remove the subsidies without endangering production. Consequently, the subsidy program seems unnecessary. If the current fertilizer subsidy is applied to NAP and EAP, it would add an additional cost over the life of the project of about Le 1.5 million (US$1.8 million) to Government's already difficult fiscal position. During negotia- tions it was proposed that under the project, project farmers should not receive any subsidy for fertilizer. The proposal was unacceptable to Govern- ment for political and operational reasons. However it was recognized that subsidies were not warranted on economic and financial grounds. SLG gave assurances that subsidies to project farmers would be reduced by 30% (at the present rate, representing a saving of Le 0.5 million on the first four years of the project); and that by March 31, 1976 SLG would provide the Bank with proposals for the reduction or removal of all agricultural input subsidies, and would consult with the Bank on the implementation of such proposals. Credit 6.19 The project's credit systems would be linked closely with Chiefdom administrations, a system that has worked well in EAP. A Credit Advisory Committee (CAC) would be formed in each development area to appraise the status and credit worthiness of applicants, and its members would be leading farmers from the area. Borrowers would either be individuals, or in some instances, particularly for swamp development, an individual representing a group of farmers. If the latter is adopted, substantial savings in the cost of loan processing could be effected. Currently EAP development loans carry an 8% interest rate and seasonal loans a fixed charge of 10%. To avoid dis- crepancies between existing and new borrowers these rates would be maintained. Farmers would be able to receive development loans to establish up to 10 acres of oil palm, 4 acres of cocoa and about 3 acres of swamp rice. For the latter there would be no fixed acreage limit, since groups of farmers may be offered a single loan to develop a swamp as a whole. Development loans for oil palm would average Le 130 per acre at 8% over 13 years with a four year grace period for principal and interest; for cocoa Le 150 per acre at 8% over 12 years with a four year grace period for principal and interest (interest to be capitalized for oil palm and cocoa); and for swamp rice loans depending on the type of swamp between Le 45 to Le 70 per acre at 8% over 5 years. De- velopment loans would be in kind for seedlings, fertilizers and implements, and in cash for labor. Seasonal loans for crop inputs would be in kind and amounts would vary depending on the type of input package offered to the farmer (see details in Supplementary Volumes 2 and 3). - 23 - 6.20 Recovery of oil palm loans would be through a cess of Le 11 per ton of fresh fruit bunches applied to deliveries at the mill. Repayments of all other loans would be in cash by the borrower. In order to encourage debt repayment, pressures would be applied collectively to villages or groups of farmers on a basis of group liability, and in those instances when debt pay- ments are not made, the traditional administrative authorities would be re- quested to assist in their recovery. 6.21 Credit Institutions. Under the ongoing EAP a revolving credit fund is managed by the EAP credit manager. The fund is held in a bank deposit account, separate from other project accounts. The system is satisfactory so far, but Government and the Bank agree that a more permanent and institution- alized credit system is necessary. Consequently it is proposed that project credit should be handled and controlled by a Farmer Finance Company (FFC). Government would own Le 1.4 million class A shares in FFC, of which 400,000 would be in the name of the National Development Bank (NDB), both with full voting rights but no dividends. There would also be 100,000 class B shares, each valued at Le 1 with voting rights and dividend entitlements, some of which would be held by farmers who would purchase them as a condition of obtaining FFC credit. Class B shares would also be available to three commercial banks who have indicated a desire to participate. Final equity holding of NDB and its precise linkage with FFC would be determined during the forthcoming apprais- al of NDB by the Bank. The FFC Board would comprise representatives of NDB- chairman, the commercial banks, PESU, and EAPMU, and two farmers appointed by the Paramount Chiefs of EAP. Details of FFC and proposed memorandum and articles of association are at Supplementary Volume 3. FFC headquarters would be at Kenema, a small operational staff would be employed, which would work closely with EAP's CSS. Due to the relatively small turnover during its first two years of operations FFC would incur losses. SLG would provide grants of up to Le 50,000 a year to FFC to cover losses incurred during the first two years of operation. During negotiations assurances were obtained that SLG would establish not later than December 31, 1975, the EAP FFC, with memorandum and articles of association, board of directors, operational procedures and staffing satisfactory to the Bank. 6.22 A revolving credit fund would be formed and operated by NAPMU with the objective of converting it to a FFC at a later date. 6.23 Source of Funds. Loans to participating farmers would be made out of funds provided under the project. On repayment, the funds would, in the case of EAP, be held as Government equity in FFC, and for NAP in the revolving credit fund established for that purpose. By 1978, sufficient equity would have been built up in FFC to allow it to operate independently on a self financing basis. Thereafter, any further loan funds could be borrowed by FFC at con- ventional rates from NDB and the commercial banks. - 24 - VII. PRODUCTION, MARKETS, FARMERS' BENEFITS, AND FINANCIAL IMPLICATION TO GOVERNMENT A. Production 7.01 The complexities of cropping mixtures and patterns in the project areas make yield variations between farms inevitable and substantial. Pre- development yields are based on questionable statistical data adjusted on the basis of field experience. Estimated postdevelopment yields are based on EAP results to date, and analysis of research data in Sierra Leone and neighboring countries with similar ecological conditions. Details are pro- vided in Supplementary Volumes 2 and 3 and are summarized below: - Before development - At full development Total Total Area Av. Yield Prod. Area Av. Yield Prod. (ac) (lb/acre) ('000 (ac) (lb/acre) ('000 tons) tons) Inland swamp rice /1 NAP 6,000 1,200 3.21 6,000 2,400 6.43 Inland swamp rice EAP 6,600 1,300 3,83 12,000 2,625 14.06 Upland rice Perm Cult NAP 1,250 800 0.54 1,250 1,800 1.00 Upland rice Shift Cult NAP 24,000 500 5.36 24,000 650 6.96 Upland rice Shift Cult EAP 36,000 500 8.04 36,000 650 10.45 Upland Groundnuts /2 Perm Cult NAP 2,500 1,000 1.12 2,500 1,600 1.79 Upland Groundnuts Shift Cult NAP 4,000 900 1.61 4,000 1,300 2.32 Upland Groundnuts Shift Cult NAP 400 900 1.61 4,000 1,000 1.79 Cocoa -- -- -- 1,750 700 0.55 Oil Palm (Outgrowers) oil 775 4,130 1,725 3,18 Oil Palm immature (Outgrowers) kernels 775 plantings 4,130 403 0.74 /1 all rice production quoted as husk rice /2 groundnuts quoted as "in shell" 7.02 Yield improvements are considered realistic in the light of limited research and plant breeding program currently undertaken in Sierra Leone. Re- search results have been reduced by at least half to allow for the size of - 25 - research plots and for large numbers of farmers. Incremental production for NAP at full development 1/ would be 5,400 tons of husk rice and 1,100 tons of groundnuts (equivalent to about 1,600 tons unshelled nuts); and for EAP, inclusive of the initial phase, 12,600 tons of husk rice, 550 tons of cocoa, 3,200 tons of palm oil and 750 tons of palm kernels. In total, the project would produce about 18,000 tons of incremental husk rice (about 10,500 tons of white rice), equivalent to about 20% of 1973 imports. B. Markets and Prices 7.03 Marketing and pricing policies (see Annex 2 for details) would continue to be reviewed and, where possible, improved during the project. No major changes are envisaged for. SLPMB and Rice Corporation. However, the Rice Corporation would be required to actively participate in NAP and EAP and provide a floor price and an alternative outlet to the farmers. 7.04 Rice. Although statistics are weak, it is estimated that by 1978 rice consumption would reach 385,000 tons, 75,000 tons more than in 1973 when 42,000 tons were imported. It is estimated that the market-dependent population in 1981 would require 128,000 tons of milled rice, or depending on milling outturn, a husk rice equivalent of about 180,000 tons. Current- ly, 86,000 tons or 49% of 1981 requirements are being marketed. Project- produced rice would therefore substitute for imports. It is expected that most of the EAP incremental rice would be marketed, but as NAP farmers' home rice consumption is currently below average, a proportion of NAP production may be retained. Economic farm gate prices are based on projections made by the Bank's Economic Analysis and Projections Division, for Thai milled 5% broken F.O.B. Bangkok and adjusted for 15% broken. Economic farm gate prices for 1985 (in constant 1974 prices) are estimated at Le 159 and Le 163 per ton husk rice for EAP and NAP, respectively, compared to a current price of about Le 230. 7.05 Groundnuts. In the early 1950's Sierra Leone was a small exporter of groundnuts, but currently imports about 1,400 tons (3,100 tons groundnut equivalent) of soft oils. Incremental production would therefore effectively be import substitution, with an economic value related to that of the cheapest acceptable vegetable oil. For practical purposes, prices have been calcu- lated on the basis of the Bank projections for Nigerian groundnuts delivered Freetown. Economic farm gate prices are estimated for 1985 (in constant 1974 prices) at Le 171 per ton compared with current values of Le 239. In the past, SLPMB treated groundnuts as a statutory crop and established annual floor prices. As groundnut production would be an important component of NAP it would be necessary to reestablish a guaranteed floor price. During 1/ Full development for rice and groundnuts coincides with the completion of loan and credit disbursements, i.e., 1979, for cocoa 1984, oil palm 1986. - 26 - negotiations, assurances were obtained that SLPMB would gazette groundnuts as a statutory crop, prepare a price formula satisfactory to the Bank, and publish floor price not later than December 31, 1975. 7.06 Palm Oil. Domestic production is declining and the supply/demand balance is expected to worsen with a deficit of 12,000 tons predicted for 1980. Local prices for palm oil are above world levels and there would be no problems in marketing project produced oil. To ensure efficient outgrower ffb collection, optimal prices, and proper marketing and financial control, it is important that the oil palm estate and palm oil mill established under the ongoing EAP is formed into a Company. Government has agreed and assurances were obtained that SLG, not later than September 15, 1975, would establish the Daru Oil Palm Company with memorandum and articles of association acceptable to the Bank; and that a pricing formula, accept- able to the Bank for the purchase of fresh fruit bunches from project farmers would be included. Details on the establishment of Daru oil Palm Company, cash flows, projected balance sheets, and the Company's memorandum and articles of association, which were agreed at negotiations, are at Supplementary Volume 3. 7.07 Project palm kernels would be sold to SLPMB to be crushed at its mill near Freetown. Economic and financial mill gate prices are estimated on a basis of import substitution for palm oil and export parity for palm kernels and kernel oil. Using Bank projected prices (in constant 1974 prices) the 1985 millgate price for palm oil is estimated at Le 270 per ton (currently Le 419) and for palm kernels Le 132 per ton. 7.08 Cocoa. Project cocoa production would account for 5% of expected national output which represents only 0.5% of world production. The economic farm gate price for cocoa based on Bank projected prices (in constant 1974 prices) is in 1980 Le 855 per ton. 7.09 The following table summarizes estimated prices for project produced commodities based on current Bank projections (in constant 1974 prices): - 27 - Rice Groundnuts Palm Oil Palm Kernels Cocoa ------------------- Leone/ton ---------------------- CIF Freetown 1974 363 /1 355 /3 431 CIF Freetown 1980 220 /1 215 /3 258 149 (FOB) 902 (FOB) CIF Freetown 1985 224 /1 240 /3 282 164 (FOB) -- Economic farm gate: EAP 1974 230 /2 -- 419 EAP 1980 150 /2 -- 250 117 855 EAP 1985 159 2 -- 270 132 -- NAP 1974 234 /2 239 /4 NAP 1980 154 /2 141 /4 - NAP 1985 163 /2 171 /4 - /1 White rice /2 Husk rice /3 Shelled /4 Unshelled. C. Farmer Benefits 7.10 About 14,000 participating farmers would obtain substantial in- creases in income; and additional indirect benefits from improved roads, water supplies, and marketing would accrue to a further 65,000 farmers in the pro- ject areas. 7.11 Estimated direct benefits have been calculated on a per acre basis for the five principal crops. The summarized crop budgets below compare the benefits of improved technology over traditional practices within the respec- tive project areas: - 28 - Traditional Developed Cropping Cropping Net Net return Net Net return Return per manday Return per manday Le/acre Le Le/acre Le Inland Swamp rice NAP 94 1.30 160 1.65 Inland swamp rice EAP 102 1.38 166 1.68 Upland rice Perm Cult. NAP 61 1.20 122 1.69 Upland rice Shift Cult NAP 3& 0.85 50 1.10 Upland rice Shift Cult EAP 38 0.85 50 1.10 Upland groundnuts Per Cult NAP 44 1.05 62 1.21 Upland groundnuts Shift Cult NAP 39 1.02 47 1.10 Upland groundnuts Shift Cult NAP 39 1.02 43 1.08 Cocoa (new planting) 44 1.05 138 7.7 Oil Palm (new planting) 39 1.05 63 5.7 7.12 The main conclusions drawn from the above are: (a) that when using unsubsidized fertilizers the returns to swamp rice and permanently cropped upland rice are attractive, and the incentive is adequate to ensure farmer response; (b) on the basis of known techniques and field observations, the returns to improved crop inputs under shifting cultivation are limited, though the risks are small; and (c) in the case of cocoa and oil palm, the return per manday is high, particularly where land is available but labor is limited. For full details, see Supplementary Volumes 2 and 3. 7.13 Project action would result at full development in measureable increases in annual net family incomes totalling Le 760,000 for NAP or, on average, Le 95 per directly affected family. The additional total income for EAP would be about Le 1.3 million annually or Le 215 per directly affected family. In EAP, per capita incomes would be raised from preproject US$60 to US$100, and NAP, whose family size is nearly double that of EAP, per capita incomes would rise from US$30 to US$40. - 29 - D. Financial Implication to Government 7.14 The project's financial implication to Government's cash flow is summarized in Annex 5. At full development Government direct revenues would be minimal with an annual revenue, through export taxes on cocoa and palm kernels, of only Le 180,000 per annum. Indirect taxation principally through taxes on consumer goods, estimated at 12% of farm incomes, would additionally provide about Le 200,000 per annum. Even so the Government deficit, during the first 10 years of the project, would average Le 0.9 million per annum, inclusive of IDA credit and IBRD loan repayments. This deficit would in- crease by a further Le 250,000 per annum if fertilizer subsidies are not removed. If the farm input supply aspects of the project eventually become a self-financed operation, then the cost to Government to maintain the re- maining services established under the project, exclusive of debt repayments, would be in the order of Le 500,000 per annum. This would not be unreasonable in the context of Sierra Leone, since the development base established should in the future provide much improved services to 20% of the country's farmers. VIII. ECONOMIC BENEFITS AND JUSTIFICATION 8.01 The project's principal direct benefit would be an incremental in- crease in farm production which would result in higher incomes for 14,000 farm families, and better living standards for the remaining project popula- tion, (about 65,000 families) who could benefit through improved infrastruc- ture and marketing arrangements provided under the project. The estimated internal economic rate of return for NAP is 14% and for EAP 36%. The combined rate of return is 26%. Important assumptions used in the calculations at Annex 6, are: (a) a shadow wage rate for incremental labor of Le 0.60 and Le 0.30 per man day for EAP and NAP respectively compared to the official Government wage of Le 0.85 per day on the basis that the majority of incremental labor is unpaid family labor, and that for NAP farmers job opportunities are less, their per capita incomes are half that of EAP farmers, and the opportunities to take up new land is extremely limited; (b) the exclusion of all identifiable taxes from economic costs; (c) economic farm gate prices in 1974 constant Leone as projected by the Bank's Economic Analysis and Projections Divisions (para 7.09) based on export parity for palm kernels and cocoa, and import substitution for rice, palm oil, and groundnuts; (d) a sharp reduction in service staff, particularly extension staff, after the project development period is completed on the basis that a continued extension effort would only - 30 - be warranted if new techniques and innovations are made available to farmers resulting in increased benefits over and above those projected under the project; (e) the exclusion of road and water development, forestry and livestock research and, future project preparation costs, as the benefits attributed to them are intangible; and (f) the economic analysis for EAP combines the costs and benefits of the new investment with that of the ongoing investment (Credit 323SL). The appraisal report for the ongoing pro- ject projected a rate of return of 15%, even with relatively heavy administrative and investment costs required to estab- lish the project. The new investment is a natural exten- sion to the ongoing project and is closely linked to overhead investments already incurred. Indications are that a separate analysis for the extension of EAP would result in an internal rate of return considerably higher than the combined rate of 36%. This is particularly so since production levels and sub- sequent benefits would be at an optimum from the start of the extension. 8.02 Although the economic viability of NAP is much lower than EAP bene- fits have been calculated using crop yields that might be exceeded during project implementation with the introduction of improved seeds and techniques that are presently unavailable. The economic rate of return is sensitive to yield increases. For example, increasing NAP benefits by 10%, equivalent to an incremental 15 lb/acre increase of upland husk rice, the rate of return would increase to 17%. A full sensitivity analysis for both EAP and NAP is at Annex 6. 8.03 The project would have important secondary benefits that would accrue both to the people of the project areas and to the Government as a whole. The more important ones would be that: (a) the people of the project areas would benefit from (i) a general improvement in communications and, in the case of NAP, improvement in water supplies and the subsequent re- duction in dysenteric diseases, (ii) increased farmer par- ticipation in local development and (iii) improved marketing facilities; (b) the Government of Sierra Leone would benefit through reduced dependence on imported foods, and in increased exports, which together at full development would amount to annual foreign exchange earnings/savings of Le 4.1 million (US$4.9 million); the realizing of an agricultural development policy that could be expanded to cover the major rural areas of Sierra Leone; the strengthening of Government institutions; the commercial reorien- tation of credit and farm supplies; and assistance to Government in developing and planning new projects for future implementation. - 31 - IX. AGREEMENTS REACHED WITH THE BORROWER 9.01 During negotiations it was agreed that retroactive financing of up to US$100,000 (Le 83,000) would be available for the employment of a Finan- cial Controller for PESU, and the Project Manager and Accountant of NAP. Such financing would apply from March 31, 1975 (AR para 5.06 and CA schedule 1 para 4). 9.02 During negotiations assurances were obtained from SLG that: (a) by March 31, 1976, Government would prepare for review with the Bank, proposals for a research policy for Sierra Leone (AR para 2.07 and CA section 4.02); (b) not later than December 1975 arrangements would be made for the construction and improvement of roads in EAP that were satisfactory to the Bank (AR para 4.05 and CA section 3.07); (c) audited annual accounts for EAPMU, NAPMU, PESU, and the Farmer Finance Company would be prepared by independent auditors, acceptable to the Bank, for submission to the Bank, within four months of the closing of the financial year (AR para 5.12 and CA section 4.01 (b)); (d) Project Coordinating Committees for EAPMU and NAPMU would be established within three months of credit/loan effective date (AR para 6.05 and CA section 3.03 (iv)); (e) the Project Manager, Accountant, Commercial Officer, Extension and Training Officer, Conservation and Land Development Officer, Livestock Officer and Construction Engineer for NAPMU; the Project Manager, Accountant, Commercial Officer, Extension and Training Officer, Conservation and Land Development Officer for EAPMU; the Financial Controller and Commercial Services Officer of PESU; and the General Manager of the Daru Oil Palm Company would be appointed on terms, conditions and with qualifications satisfactory to the Bank; (AR para 4.20 and 6.10 and CA section 3.04); 1/ AR = Appraisal Report CA = Development Credit Agreement - 32 - (f) eight professional or experienced technical officers and thirty agricultural Field Assistants would be appointed to NAP within 6 months of credit/loan effectiveness (AR para 6.11 and CA section 3.05); (g) appointment of specialist consultants to assist MANR in project preparation would be made for purposes agreed with the Bank, and their terms of reference, qualifications and conditions of employment would be acceptable to the Bank (AR para 6.13 and CA section 3.02); (h) subsidies to project farmers would be reduced by 30%, and that by March 31, 1976, SLG would provide the Bank with proposals for the reduction or removal of all agricultural input subsidies, and would consult with the Bank on the implementation of such proposals (AR para 6.18 and CA section 4.03); (i) SLG would establish not later than December 31, 1975, a Farmer Finance Company for EAP, with memorandum and arti- cles of association, board of directors, operational pro- cedures and staffing satisfactory to the Bank (AR para 6.21 and CA section 3.06); (j) SLPMB would gazette groundnuts as a statutory crop, prepare a price formula satisfactory to the Bank and publish a floor price not later than December 31, 1975 (AR para 7.05 and CA section 4.04); and (k) SLG, not later than September 15, 1975, would establish the Daru Oil Palm Company with memorandum and articles of asso- ciation acceptable to the Bank; and that a pricing formula, acceptable to the Bank for the purchase of fresh fruit bunches from project farmers would be included (AR para 7.06 and CA section 3.08). 9.03 During negotiations it was agreed that conditions of effectiveness of the credit/loan would be that: (a) SLG would furnish the Bank with satisfactory evidence that PESU and NAP bank accounts had been established with initial payments of Le 20,000 and Le 100,000 respectively and that procedures satisfactory to the Bank to ensure that adequate funds are available at all times in such accounts have been agreed between Government and the bankers for NAPMU, EAPMU and PESU (AR para 5.11 and CA section 6.01 (b)); (b) SLG would establish with terms of reference satisfactory to the Bank, NAPMU, and would redefine the terms of reference for EAPMU (AR para 6.05 and CA section 6.01 (c)); and - 33 - (c) the Project Manager and Accountant of NAPMU and the Financial Controller of PESU had been appointed on terms, conditions and with qualifications satisfactory to the Bank (AR para 6.09 and CA section 6.01 (d)). 9.04 On the basis of the above assurances and conditions the project is suitable for an IDA credit of US$5 million and a Bank loan of US$5 million. I Volume 1 Annex 1 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Administration and Institutions Contents Page No. Background ........ ................ . . ... . 1 Local Administration ..... . . 1 Government Agricultural Services. 1 Training and Research . 2 Development Financing .....2 Marketing .. ........ 2 Volume 1 Annex 1 Page 1 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Administration and Institutions 1. Background. Sierra Leone, covering an area of 27,925 square miles, with an estimated 1973 population of 2.8 million, became an independent Sovereign state within the British Commonwealth in 1961, and a Republic in 1971. Independence ended a long period of British administration, initially by Company rule, followed in 1808 by a small Coastal Crown Colony covering some 256 square miles, to which was added, in 1896 a protectorate administ- ration covering the remainder of the country. 2. Local Administration. For administrative purposes, the country is divided into the Western Area, covering most of the old Crown Colony, and three provinces (Northern, Southern and Eastern) covering the old protectorate. The provinces are each under the control of a Resident Minister, and are divided into twelve districts (five in the North, four in the South and three in the East) each administered by a District Officer and supported by a Dis- trict Council. Each District is divided into chiefdoms administered by Paramount Chiefs and Chiefdom Councillors with their own treasuries and chiefdom courts. The District Councils, which originally operated as advisory bodies, now have extensive functions and powers of precepting on chiefdom administrations. 3. Government Agricultural Services. Responsibility for agriculture lies with the Ministry of Agriculture and Natural Resources (MANR) which comprises four main divisions covering agriculture, forestry, veterinary and fisheries. The agriculture division, which is the largest, is responsible for extension, farmer training and research coordination, and for preparing investment proposals for the sector. British technical assistance has been provided for MANR since 1972. National development policy and coordination between ministries on economic affairs lies with the Ministry of Development and Economic Planning, which is also responsible for investigation and appli- cation of external sources of funds and technical assistance for development. 4. At the regional level, MANR is represented by Principal Agricultural Officers supported by Agricultural Officers, Agricultural Superintendents and Agricultural Instructors. MANR is inadequately financed and the staff are poorly trained. This, coupled with a lack of back-up services and over con- centration on mechanical cultivation programs, has fragmented and greatly reduced MANR effectiveness over most of the agriculture sector. Overall staff/farmer ratio is low (including instructors in training, around 1:2,500 farmers). Volume 1 Annex 1 Page 2 5. Training and Research. Njala University College (NUC) and the Rice Research Station, Rokupr (RRS) are responsible for agricultural training and research. NUC includes degree and certificate courses in agriculture and agricultural education and operates as a regional center for West Africa in special programs in agricultural education. Approximately 20-30% of annual enrollment in the sub-degree courses are for students from The Gambia. Due primarily to lack of Government investment in the agricultural secto-:, the demand for degree and certificate holders has been minimal which resulted in low intakes in the early 1970's. A critical shortage of trained manpower is forecast by MANR, although based on this, highly optimistic development pro- posals are anticipated for which finance is, at best, uncertain. 6. Research is conducted both by NUC and RRS, and a serious problem has been the lack of coordination between them and MANR. Since the early 1960's, shortages of funds and staff, (and related conditions of service), have greatly limited research, but assistance is now being provided by UNDP and the West African Rice Development Association (WARDA), and Government is considering proposals for an Agricultural Research Institute as part of a general program of research reorganization. 7. Development Financing. There are two national credit organizations the National Development Bank (NDB) and the National Cooperative Development Bank (NCDB), the latter concentrating solely on cooperatives. NDB lending policy is directed towards established entrepreneurs who can offer suitable collateral for medium and long term loans (3 to 15 years), and generally limits its financial participation in any one enterprise to a minimum of US$9,375 and a maximum of US$75,000. 8. Outside the Eastern Area Project, virtually no institutional credit is available to smallholders, who rely heavily on village money lenders. Most farmers have only limited cash reserves and are forced to borrow money in times of hardship; loans are often secured by pledging land or a future harvest. While reflecting the high degree of risk involved, effective interest rates are often extremely high, leading to a debt cycle from which escape is difficult. 9. Marketing. The Sierra Leone Produce Marketing Board (SLPMB), a statutory corporation established in 1949, is responsible for marketing the country's main export crops. Overseas sales policy is efficiently executed by the Sierra Leone Produce Marketing Company (SLPMC), a wholly owned London- based subsidiary. Prices for statutory crops 1/ are fixed annually by Govern- ment and SLPMB is required to maintain a price stabilization fund. Primary marketing operations are conducted through licensed buying agents, although consideration is being given to more direct SLPMB involvement. The present arrangements, while generally satisfactory, need considerable improvement if farmers' interests are to be served and agricultural potential adequately exploited. 1/ Presently cocoa, coffee, ginger and palm kernel. Volume 1 Annex 1 Page 3 10. SLPMB policy is still largely conditioned by the consequences of a technically unsound and politically motivated diversification program which resulted in near bankruptcy in 1966. Extremely conservative fiscal and operational policies had to be adopted subsequently to accumulate working capital and re-establish the stabilisation fund. In recent years SLPMB operating profits have been earned largely due to a passive pricing policy where emphasis on stabilisation of producer prices has contributed to the slow growth of marketed production. 11. The whole question of crop pricing is being reexamined by Govern- ment to find a satisfactory balance between maintenance of revenue through export taxes and the development levy, while simultaneously providing adequate production incentives and reducing losses from smuggling. The purpose and role of SLPMB also needs reexamination as the present ad hoc approach to marketing problems and policies is impeding the realization of full benefits from agricultural exports as well undermining confidence both at home and overseas (see Annex 2). 12. The Rice Corporation was established in 1965 to continue Govern- ment involvement in rice production and marketing which began in 1936. Responsibility for production passed to MANR in 1968 and the Corporation's activities are now confined to importing, and milling and marketing local rice. 13. Imports, which can account for over half of the estimated total rice marketed, have been the main activity of the Corporation as the result- ing profits finance the marketing of domestic rice. Minimum producer prices are maintained through a floor price system, the Corporation being the residual buyer in a largely deficient market. As a result supplies for economic operation of the three large and rather poorly sited milles owned by the Corporation are usually inadequate. Nevertheless a more agressive field buying policy is now being introduced in an attempt to secure a larger market share; the recent sharp increase in floor price to current market levels (Le 5.00/bushel) should assist providing adequate financing arrangements can be made. 14. The existing 931 registered cooperative societies have played little part in marketing since the collapse of the Cooperative Marketing Federation in 1967. In 1970/71 less than 8% of all farm holders were members of local societies compared with 10% in 1965/66. Efforts are being made to revitalise the movement, (with expatriate assistance under bi-lateral aid), but shortage of trained leaders and managers is a severe constraint. This problem is compounded by the fact that cooperatives are institutions imposed on a traditional structure and did not result from natural evolution. A National Cooperative Development Bank was established in 1971 and now has a number of branches but it is not an important factor and the movement is unlikely to make any significant impact in the medium term. Volume 1 Annex 2 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II MARKETING, MARKETS, AND PRICES A. Background Summary B. Statutory Considerations C. Overall Policy and Organization D. Individual Crop Marketing - Rice and other main food crops - Palm products - Cocoa E. Marketing and the Project F. Future Development and Prices Table 1 Purchases of Rice by Rice Corporation Table 2 Average Milling Costs in the Rice Corporation Mills at Kissy, Mambolo, and Torma Bum Table 3 Estimated Cost of Parboiling and Milling Rice at Rice Corporation Mill Table 4 Performance Report Small Rice Mill Table 5 Effects of Variation in 1970/71 Survey Results on Estimate of 1972/1973 Production Table 6 Supply and Demand Projections Table 7 Estimated Rice Requirements of Market Dependent Population Table 8 Rice Prices 1962-73 Table 9 Estimated Milling Costs - Small Mills fitted with Pre-cleaner Table 10 Marketing and Prices - Crop Values - Husk Rice Table 11 Production - Main Foodcrops 1970/71 Table 12 Vegetable Oil Imports Table 13 Crop Values - Groundnuts: Import Substitution Table 14 Marketing and Prices - Crop Values - Groundnuts Table 15 Palm Oil Demand and Production Table 16 Palm Oil Traders Buying and Selling Prices Table 17 Estimated Millgate Value of Palm Oil Table 18 Sierra Leone Produce Marketing Board Produce Purchases by Province Table 19 Millgate Value of Palm Kernel Table 20 Cocoa - Economic Value Calculation Table 21 Marketing and Prices - Fertilizer Imports Volume 1 Annex 2 Page 1 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II MARKETING, MARKETS, AND PRICES A. Background Summary 1. Rice has become the prime staple food of Sierra Leone, although its importance varies considerably between areas; a surplus/self sufficient situation changed to one of deficiency in the early 1950's since when imports of milled rice have averaged about 23,000 tons annually (see Table 1). This is equivalent to about 10 percent of total consumption and 30 percent of effective market demand. Recently production appears to have increased at about the same rate as population but more slowly than demand, which is estimated at about 250 lb per capita and is expected to reach 385,000 tons by 1978; 75,000 tons more than in 1973 when some 42,000 tons were imported. Total incremental production from the two projects of 18,000 tons husk rice, or about 10,500 tons usable milled rice, will reduce the deficiency in areas served by the projects and consequently import requirements. 2. Official intervention in rice marketing is directed towards mini- mising: consumer prices (by controlling imports) and guaranteeing producer returns (through a floor price system). These aims are incompatible in some- degree, but in any case the extent of involvement by the Government agency 1/ has been insufficient to adequately influence prices in either sector. 3. The greater part of production is processed by traditional hand- pounding methods, although there are about 200 privately operated, small Englebert type mills scattered over the country. These mills are believed to achieve a lower rate of extraction than hand pounding, so increased consumer demand may require a corresponding increase in husk rice. 4. The handling, pricing and taxing of export crops is controlled by Government through a statutory corporation, the Sierra Leone Produce Market- ing Board (SLPMB). Attention to these crops, which are predominantly perennial by nature, does not conflict with food crops, but the pricing and taxation policy has not encouraged their development. 1/ The Rice Corporation. Volume 1 Annex 2 Page 2 B. Statutory Considerations 5. The marketing, movement and processing of agricultural produce is affected by three Acts of Parliament: The Control of Goods Act (1962); The Agricultural Act (1966); and The Factories Act (1974). In addition, various Ordinances and Acts provide for the establishment of two statutory marketing organizations; The Sierra Leone Produce Marketing Board (SLPMB) and the Rice Corporation (Corporation). 6. Both the Control of Goods Act and the Agriculture Act lay down rules covering handling, storage, movement and quality inspection, while the former also makes provision for inspection of market places and includes the obligation on Inspectors to regularly report prices. 7. The Factories Act superceded The Safe Working and Inspection Act, and is the only instrument by which control of processing or other agro- industry may be exercised. The provisions of the old Act, like those cover- ing price reporting, have been largely ignored, and no formal record exists of mill numbers, capacities and situations. Efforts are being made under the new Act to rectify this situation. 8. The Act establishing the Rice Corporation also stipulates that only citizens of Sierra Leone "shall buy or sell rice either wholesale or retail as a trader". This exclusivity does not extend to processing rice or other produce, nor would it appear to affect the attainment of LBA status for either of the statutory marketing organizations (in 1971/72 non-indigenous LBA accounted for 68% of the total produce delivered to SLPMB). 9. The statutory marketing processes differ somewhat between SLPMB and the Corporation but both come under the Ministry of Trade and Industry and are essentially franchise operations providing opportunities for mono- polistic exploitation. The Rice Corporation (Corporation) 10. The Corporation was established in 1965, for the "planting, culti- vation, harvesting, import, export, purchase, transporting, milling, sale and distribution of rice" in Sierra Leone, 1/ and enjoys sole rights over importing and exporting. The Corporation's production programs failed to make any impact, resulting by 1968 in severe financial losses, and conse- quently Government transferred responsibility for this activity to MANR. The Corporation has only a small capital (Le 1.55 million) about 40 percent of which is tied up in fixed assets, primarily rice mills and associated buildings. 1/ The Rice Corporation Act, 1965. Volume 1 Annex 2 Page 3 11. Accounts are not available beyond 30 June 1971, and these have little relevance at this time except to underline the fact that the Corpora- tion is not financially equipped to perform much more than a trading function. However, it was intended to carry out a far more extensive and influential role. 12. The operations of the Corporation were to be financed from profits made through selling imported milled rice at internal prices unrelated to world levels. Domestic production efforts were to be supported through floor prices for husk rice related to, but below, the equivalent official selling prices. In a deficit situation with extensive production and rather small unrelated centres of intensive demand, the inevitable result has been con- tinued emphasis on imports, declining participation in primary marketing and increasing underutilization of high cost milling equipment. 13. Import requirements are estimated in conjunction with MANR and supplies usually obtained on a Government-to-Government basis. Rice is available for sale from Corporation stores and at retail level from Licensed Selling Agents (LSA). LSA quotas, margins and official selling prices are fixed in consultation with Government but official prices are difficult, if not impossible, to enforce and seldom observed. 14. Day-to-day buying and selling operations have been mainly handled by licensed agents (LBA and LSA) but a number of buying teams have been trained by the Corporation. The purpose of these teams, which will operate from twelve centers spread over the country, is to identify sources of market- able husk rice and to buy at farm level. This represents a radical departure from previous practice, particularly as it makes the guaranteed producer price available to farmgate as well as at nominated Buying Centers. 1/ 15. The Corporation owns disc-sheller type rice mills and associated parboiling equipment. All the machinery is old, relatively poorly maintained and uneconomic to operate, a problem which is magnified by the small volume of husk rice purchases (Tables 1, 2 and 3). The mills are situated as follows: Theoretical Capacity /1 Location Erected Tons/Hour Tons/Year Freetown 1959 and 1963 2.1 . 8,400 Mambolo 1950 1.0 4,000 Torma Bum 1956 1.4 5,600 /1 Basis 200 x 20 hour milling days. 1/ *r, ate price normally corresponds to 70 - 80 percent of guaranteed pri( under this system. Volume 1 Annex 2 Page 4 16. In addition the Corporation has purchased six small integrated mills with rubber roller shellers. These were bought primarily for evalua- tion, althougl it is not clear why six of the same make and type were needed for this purpose. They have proved unsatisfactory for a number of reasons, including design defects, and although the only available measured test report shows a white rice recovery of 74 percent by weight, achieved through- put was less than 35 percent of that advertised by the manufacturers (Table 4). The Sierra Leone Produce Marketing Board (SLPMB) 17. The SLPMB was established in 1949 to "secure the most favorable arrangements for the purchase, export and marketing of Sierra Leone's produce and to assist in the development by all possible means of the agri- cultural industry of Sierra Leone for the benefit and prosperity of the producers and areas of production." 18. The SLPMB has the sole right to export agricultural produce but at present only cocoa, coffee, ginger, piassava and benniseed and palm kernels are handled. SLPMB maintains a price stabilization reserve of Le 2.5 million, and appears to be very strong financially having recovered from the mis- management of the mid-1960's which made it virtually bankrupt. The latest published accounts (to June 30, 1972) show net assets of Le 8.1 million, including the price stabilization reserve fund which is invested in Government stock. Le 2.4 million is available in cash or Treasury Bills, while produce in stock or transit is valued at Le 1.4 million. Debtors stand at Le 486,000, after bad debt provision of Le 214,000 and creditors at Le 686,000 including Le 242,000 on Government account. 19. Guaranteed producer prices payable at nominated trading centres are linked to export values and fixed annually with the prior approval of Government. Rural buying and first assembly is carried out by Licensed Buying Agents (LBA) and subagents. Quality control is the responsibility of the Produce Inspection Branch (PIB) of MANR who inspect and seal produce prior to despatch to SLPMB warehouses and reinspect prior to export. Payment is only made to LBA against delivery of sound marketable produce. 20. Export sales are arranged by Sierra Leone Produce Marketing Company Limited (SLPMC) a wholly owned subsidiary of SLPMB. SLPMC enjoys a high reputation in commodity markets, operates at a cost of about one half of one percent of cif values and profits are remitted to Government in the form of dividends. Volume 1 Annex 2 Page 5 21. A duty is levied on all produce exported 1/ and SLPMB is also required to make an annual contribution of Le 500,000 to the Development Fund, but is not liable to Income or Corporation tax. Indicative marketing costs, expressed as a percentage of realized fob values, are as follows: Palm Kernel Cocoa 1970/71 1971/72 1970/71 1971/72 Buying Station Price 54 72 58 78 LBA 11 14 4 5 Transport 4 5 1 1 Handling and Port Charges 2 2 1 1 SLPMB Administration /1 14 19 3 2 Export Duty /2 10 10 17 10 fob Cost 95 122 84 98 fob Value 100 100 100 100 Profit (Loss) /3 5 (22) 16 2 /1 Administrative expenditure is arbitrarily allocated over crops and runs at about 5 percent of cost of purchases, or roundly Le 8 per ton of produce handled. /2 Expressed as a percentage of Buying Station Price export duty reaches 18 percent, 14 percent, 29 percent and 13 percent respectively. /3 Over the period 1968/69 to 1972/73 net profits have averaged about 10 percent of turnover (i.e. value of sales including duty). 22. SLPMB owns nine small palm oil mills of which eight are operating (compared with five at the time of negotiating Credit 323-SL) all are old, uneconomic and inefficient. No satisfactorily phased closure program has yet been made. Oil from these mills is sold by SLPMB at a fixed price (presently 114 per lb) in an effort to influence the market but is insuffi- cient for this purpose. The mills have consistently operated at a loss, 2/ a situation that cannot be expected to improve as their inefficiency directly affects the price that can be paid for ffb, and hence throughput. 1/ Presently expressed as a percentage of fob value as follows: ginger 5 percent, palm kernels, palm kernel cake 10 percent, palm kernel oil 15 percent, cocoa and coffee 10 percent, plus 1 percent for every Le 10.00 by which value exceeds Le 400/ton, up to a maximum of 40 percent. 2/ Average annual loss 1967/68 - 1971/72 was about Le 80,000. Excluding the period 1964/65 - 1966/67, accumulated loss from 1950 to 1972 exceeded Le 2 million. Volume 1 Annex 2 Page 6 23. SLPMB also owns a palm kernel mill with an annual capacity of about 35,000 tons of kernels. This was close in 1968 after incurring losses of Le 150,000 in the first seven months of operation. A complete rehabilitation program was started in 1973 by a well known international firm of milling engineers, and in 1974 the Ministry of Trade and Industry awarded a mill management contract to a London-based company; this includes sole selling rights for Sierra Leone palm kernel oil and palm kernel cake. For the marketing process the fee is 5 percent of cif price, ten times the average cost of marketing through SLPMC, who continue to handle the export of palm kernels and other produce. C. Overall Policy, Organization and Crop Pricing 24. An unduly cautious pricing policy has been maintained over the years; and the desire to secure tax revenue appears to have obscured the possibilities of increasing revenue through producer incentives. Also, while SLPMB has been effectively sequestrating agricultural sector earnings into capital reserves considerably above those required by law, while still paying taxes at a rate equivalent to about 18% of turnover, the Rice Corporation has been short of working capital and unable to develop a marketing policy capable of providing incentive to stimulate adequate production increases. 25. Past export crop policy has been directed towards inter-season stability, price, rather than earnings, and has paid scant attention to the effects on the producer of the difference between announced prices and farmgate receipts. This has reduced incentives for new planting, and has inhibited exploitation of existing perennial crops. The effects of this policy are impossible to quantify accurately, but for palm kernels alone have been estimated 1/ to have caused an average annual non-realization of potential export earnings of Le 1.7 million over the period 1950-1970. 26. MANR is presently working on export pricing proposals designed to increase producer incentives while maintaining adequate price support reserves. These proposals are still in an early stage of development and care needs to be exercised to avoid theoretically attractive policies whose benefits can be nullified by difficulty of practical application. Given the national policy of 'reducing dependence on food imports', 2/ reconsideration of crop prices must include rice, as well as the mechanics and methods for ensuring fair and efficient guaranteed producer and consumer prices at farm- gate and retail levels respectively. 1/ In a paper presented at the Queen Elizabeth House Development Seminar, Oxford University in February 1974, John Levi used time series data from which to calculate price elasticity of supply. 2/ 1972 budget statement. Volume 1 Annex 2 Page 7 27. A rolling three to five year minimum price structure should be developed, related to projected world prices and production costs. Within this structure minimum annual prices for perennial crops would be announced twelve months in advance. Annual crop prices would be announced pre-planting and confirmed, or increased, prior to the beginning of the marketing season. Resource Utilization 28. Marketed production is almost entirely confined to crops with a high value-volume ratio which make less demands on transport and handling facilities. Total quantity handled has only once exceeded 120,000 tons, with the greater part of the work involved (assembly and delivery, or collection and distribution), being carried out by largely unsupervised agents. At present this is administered by two statutory organizations operating in broadly the same geographical areas; both organizations are also responsi- ble for some form of processing, which is usually unprofitable due to lack of throughput. Having regard to the slender financial and managerial resources available this appears inappropriate, relevant though it may have been to earlier circumstances. It has often been suggested that it would be desirable to have only one body responsible for all statutory obligations in agricultural marketing and processing. The creation of a single autono- mous organization may be justified but reorganization should not be under- taken without the most careful examination and analysis of policy objectives. 29. Produce marketing requirements in Sierra Leone fall into four cate- gories which could dictate the direction of reorganization. There are: Internal Collection and distribution; Primary processing; Shipping and Forwarding; and Overseas sale and purchase. 30. Benefits would accrue if corporate responsibilities are realigned to meet these requirements, emphasis being laid on functions rather than crops. Processing or conversion responsibilities undertaken by statutory organizations can lead to waste and development of uneconomic and undesir- able distribution patterns and examples exist in the rice and oil mills under public ownership. There is normally only one source of raw material, the supply of which can be regulated by considerations unrelated to normal operating requirements. Since rice and palm produce can only be consumed after processing, a sound foundation exists for development of this section of agro-industry; consideration should be given to excising existing pro- cessing units from SLPMB and the Corporation and encouraging additional investment and expansion. Volume 1 Annex 2 Page 8 Grading and Classification 31. There are a large number of varieties and types of rice grown in Sierra Leone and although farmers tend to differentiate between them when considering farm/home consumption requirements, this does not apply in the wholesale husk rice market. 1/ As a consequence offerings are usually mixed and may contain different origins (i.e., swamp and upland rice) as well as varieties, although upland rice is generally preferred for home consumption and swamp rice predominates in the market place. Milling characteristics and performance vary considerably between varieties, while differences in grain size cause processing problems reducing either throughput, whole grain recoveries, or both. 32. There is urgent need for the introduction of a simple classifica- tion system, starting possibly with origin, variety and admixture. Presently there is no price differentiation at Corporation buying points, provided rice is reasonably sound. Nevertheless the benefits accruing from graded grain are quantifiable, and the Corporation should be able to devise and apply a premium pricing structure to discourage farmers from comingling various varieties and qualities. 2/ Such an effort could well be matched by some form of seed flushing operation by MANR. Market Information 33. Although provision exists for a price reporting service (para 6) and the Ministry of Labor records some price series for use in the cost of living index, little has been done to develop comprehensive crop reporting and market intelligence. There is a marked need for such information. Limited work of a subjective nature is being carried out by officers in MANR and the Corporation but the system needs to be expanded and formalized if market transparence is to be improved and national requirements adequately forecast and met. Weights and Measures 34. Rice and most other produce is traditionally traded by measure although both SLPMB and the Corporation buy by weight. Measures are of standard description but not always similar capacity, so value or cost adjustments can be made without changing price. Standardization and improve- ment are as necessary as they are difficult and expensive to enforce, but a start should be made by policing of LBA while Corporation buying teams could demonstrate the relationship between the two systems. 1/ A rather intricate traditional grade and classification system has been observed for milled rice, particularly at retail level. 2/ Foreign matter accounted for 3 to 3.7% of husk rice delivered to Kissy mill in 1972. Volume 1 Annex 2 Page 9 D. Individual Crop Marketing Rice 35. A major study of rice milling and marketing 1/ financed under Credit 323-SL was completed in early 1974 and is now being considered by Government. Most previously known qualitative information has been assembled, presented and analyzed in the report and quantitative production and demand projections made. Movement and milling requirements have also been stipulated and a possible policy outlined for improving mill management and operation. Deficiencies and failings in the present marketing system are highlighted and specific remedies proposed. 36. The recommendations include, inter alia: (a) establishment of a staggered, regional differentiated floor price system for husk rice; (b) establishment of a National Pricing Committee; (c) maintenance of consumer prices at a constant level through releasing adequate quantities and, if necessary, by rationing retail sales; (d) improvement in market intelligence and statistical services; (e) standardization and enforcement of measures and (metric) weights; (f) aid to the milling industry through training courses and investment incentives; (g) modernization of Rice Corporation mills by introduction of rubber roller mills of various types; (h) replacement of traditional parboiling techniques by new methods; (i) improvement in status, responsibilities and organization of Rice Corporation to enable it to play a leading part in implementing recommendations; and (j) provision of appropriate credit facilities to farmers. 1/ Rice Milling and Marketing Study: Sierra Leone Agrar-und Hydrotechnik GMBH 1973. Volume 1 Annex 2 Page 10 37. A considerable proportion of the conclusions are based on supply and demand projections. These have necessarily been constructed from a limited data base, together with some information of uncertain accuracy. On the supply side total reliance was placed on the 1965/66 and 1970/71 Agricultural Statistical Surveys, using an acreage growth figure, derived from the differences between the two surveys, to arrive at a 1973 base area. Averages of the 1965/66 and 1970/71 yield figures were applied to this base area to achieve a 1973 production estimate, from which annual projections are made, by districts, through 1983. Various area and yield assumptions are used to produce 'low', 'medium' and 'high' variants. Subsequent to the report being published, errors of sampling and calculation have been dis- covered in the 1970/71 survey, which call into question some of the basic assumptions and arguments used in the study and invalidates some of the conclusions. The extent of the discrepancies, which are highlighted in Table 5, do not, however, have a maj6r impact on the recommendations since these are generally confined to already well identified areas of system and organizational imperfection. 38. Fitting the corrected 1970/71 survey figures to the assumptions causes the 1973 base production figure to exceed estimated demand, which did not in fact occur since balancing imports were needed, while use of the 'low variant' results in surpluses being projected for 1978 onwards (Table 6). Past production performance makes such an event unlikely, although no account has been taken of possible production response to the recent very sharp increase in floor price. Space does not permit full analysis of the projec- tions, nor time a revision of the projections which, given the uncertain data base and lack of quantitative information, could be just as open to question. Nevertheless the situation provides a number of pointers to potentially profitable directions of work for the development of new data. 39. Whatever the shortcomings of the 1970/71 survey there are no adequate grounds for rejecting it as an accurate measure of total production compared to 1965/66, although sampling errors among individual components are suffi- cient to make detailed projections unrealistic. Nevertheless, available qualitative and quantitative information makes the estimate of 1973 milled rice consumption (320,800 tons) look reasonable and probable. Assessing rice consumption is, however, bedevilled by difficulty in converting to husk rice equivalent, a problem that is aggravated in Sierra Leone as only a small proportion of the crop is milled in a manner permitting accurate assessment of a recovery factor. There are sufficient grounds for the assumption that 75% of husk rice production is hand pounded, and variation in recovery rates in this sector will have a very significant effect on total white rice availability. Tests at Njala University resulted in a factor of 0.7 being used for the conversion of husk rice by pounding, which when combined with the relevant recovery for mechanical milling (0.53) gave a national average of 0.66, a figure that is used throughout the study. There is quite a lot of precedent for this figure, including the 1965/66 Agricultural Statistical Survey, although the Bank has used .60 in the past. 1/ Nevertheless, 70% rice 1/ Appraisal of Integrated Agricultural Development Project, Sierra Leone PA-104b, June 1972. Volume 1 Annex 2 Page 11 recovery is very high by any standards and considerably more than the 55% estimated by GDI 1/ which is comparable to that achieved with Indica varieties in other countries. 2/ The following table demonstrates the effect of varia- tion in recovery rates. Husk Rice (net) /1 ------- Recovery Rates ------------ White Rice '000 tons Traditional Mechanical Average '000 tons 526 0.70 0.53 0.66 347 526 0.65 0.53 0.62 326 526 0.60 0.53 0.58 305 526 0.55 0.53 0.545 287 526 0.55 0.60 0.56 295 526 0.55 0.65 0.575 302 526 0.55 0.70 0.59 310 526 0.60 0.65 0.625 328 526 0.65 0.65 0.65 341 526 0.70 0.70 0.70 367 /1 i.e., after deducting 10% losses and requirements for seed. 40. These figures well example the difficulties inherent in having to attempt precise projections with a data base better suited to providing probable indications of magnitude. Much of the information required for the relatively sophisticated attempt that was made could be accumulated through the recommended market intelligence service (para 34); in the mean- time further investigation into traditional recovery rates should be made at village level, and thought given to the possible effects of elasticity of consumption among subsistence population on marketed supplies. Overall Considerations 41. The pattern of rice marketing has changed considerably since the late 1950s, primarily as a result of the widespread introduction of small mills into the private sector. Until this time consumer demands outstripped traditional processing capacity which resulted in an increasing proportion 1/ 'Feasibility of an Inland Valley Swamp Development Program Unit' July 1973. 2/ Philippines and Nepal. Volume 1 Annex 2 Page 12 of husk rice being channelled through the government owned milling centers at Freetown, Mambolo and Torma Bum. This restricted marketing alternatives open to producers, and an attractive floor price encouraged the flow of rice into the statutory system. During the early 1960s the Rice Department, fore- runners of the Corporation, probably had a share of around 50% of both the producer (husk rice) market and the consumer (milled rice) market. In broad terms this latter position has been maintained, but participation in the primary market, and thus statutory influence on producer prices is now in- significant (Table 7). 42. A market share of 25 to 35% is normally sufficient to exert pricing influence, yet comparison of available consumer price series (compiled by the Ministry of Labor) and the official selling prices for milled rice indicates that corporation market activities have had little lasting effect on consumer prices (Table 8). In the chronic deficiency situation that has developed over the last two decades this may be ascribed to a number of causes including: - inadequate interseason stabilizing stocks; - inadequate participation at retail level (i.e., through 'fair price' shops or by means of applied price controls. 43. The maintenance of fixed wholesale selling prices without effective retail price control has caused a two tier price structure to develop, with the difference between the two levels benefitting traders and merchants rather than consumers. 44. A consequence of this has been the creation of a high differential between market and guaranteed prices for husk rice which has also impeded the translation of market demand, through price effect, into a production response. Swamp rice accounts for the greater part of market supply, and incentive to develop this source has to be provided or accompanied by market accessibility and stability, as well as finance; effective market demand, however, is generally inelastic and consequently prices react sharply to relatively small changes in supply. The wide price spread contributes to market instability and reduces or removes incentive to achieve sustained increases in marketed production. This has been exacerbated by the fact that producer prices have not been guaranteed at farm gate, and transport to market is both difficult and expensive 1/ from most swamp and cultivated upland areas. The introduc- tion of farm gate buying by the Corporation will go some-way to improve the position, but will probably only directly benefit the larger farmer, since economic and management considerations will necessitate purchases being made on a lorry load basis, and initial collective assembly by smaller farmers will still be necessary. 1/ It has been estimated that over 50% of farm produce is headloaded to market. Ox and donkey carts are virtually unknown and almost the only mechanized transport to points of assembly is the "poda-poda," usually a pick-up adapted to carry passengers, in which people and freight are charged at the same rate. Volume 1 Annex 2 Page 13 45. Although high internal prices for rice may be largely attributed to operational and administrative defects within the statutory system, low mill recovery rates are an important factor. Apart from technical defi- ciencies in the actual milling operation, husk weight, as a percentage of total grain weight, varies considerably between varieties, as does grain size, which further aggravates the maximizing of achievable yields in terms of edible grain. 46. Rural Assembly. The fragmented nature of production, well identi- fied demand centers and the undeveloped state of rural transport combine to exert a strong influence on the market structure and systems. Marketing practices are also biased as a result of traditional credit operations which require repayment in kind rather than cash. 47. Most of the first assembly process occurs at village level, with farmers bringing in head loads of rice to a local trader who may buy either on his own account or as agent for a larger trader or wholesaler. There is little competition at this level and transportation constraints often result in forced sales. Possibly because of this, the farmer-trader is becoming more common in the surplus producing areas, although the extent of activity varies considerably. This may range from simple transport of husk rice to a main market center, such as Makeni, for sale., through to the complete operation of parboiling, transporting to mill for custom milling and there- after transport of milled rice to a demand center such as Kono or Kailahun for sale to retailers. 48. The merchanting sector of the rice trade revolves around the milling operation and most large wholesaler/dealers will own, or have prefer- ential access to, at least one mill. The mill buildings also afford some storage facility, but it appears that most storage occurs at farm level, as would be expected in this type of environment. Nevertheless storage does not appear to be a trade constraint although losses may account for over 10% of the crop. 49. Rice dealers have to be licensed, but this appears to be honoured more in the breach than the observance and in practise seems to be confined to the 450 larger and full time dealers. Dealers at wholesale level probably total 1,000, a large number relative to probable volume of trade, but indi- cative of lack of market transparence; this in turn necessitates a large amount of individual participation, with consequent effects on marketing costs and margins. 50. The physical and infrastructural factors which influence the system make general conclusions unusually dangerous to apply to specific circums- tances, however two surveys, 1/ one of which is devoted to the Makeni area, 1/ Rice Milling and Marketing Study and Feasibility Study of an inland Valley Swamp Development Program Unit in the Northern Province of Sierra Leone - GDI 1973. Volume 1 Annex 2 Page 14 reveal a reasonable correlation between market centers and conclude that the marketing system adequately reflects supply and demand conditions, at least at local level. It does not necessarily follow, however, that there is no room for improvement: conditions at the first assembly stage leave much to be desired, particularly in so far as competition is concerned. At the other end of the scale there is room and need for considerable improvement in the regularity, availability and distribution of supplies through the Corporation if the market balancing function is to be properly fulfilled and production incentives maintained. The difficulties of the Corporation are compounded by a lack of production and market information. The planned greater staff activity in the field should result in an improvement in quantity and quality of available intelligence; but the need for crop and market information is not confined to rice, and reconsideration of organizational and functional requirements in statutory marketing should include the examination of ways and means of providing essential information to all levels in the agricul- tural sector. 51. Marketing and market planning problems are increased by the apparently uneven pattern of consumption between seasons. It has been estimated 1/ that relative consumption on a quarterly basis starting imme- diately post harvest is in the proportions 4:3:2:1; these figures may be correct as a national average, although they imply a remarkable elasticity of consumption, but cannot be used on a regional basis since almost equal accessibility to other acceptable food supplies is also implicit. While considerable acreages of alternative food crops have been observed and recorded in the north, particularly round Makeni, this is not the case in the east. Rice Milling 52. It has been estimated that an average white rice recovery of about 53% by weight is achieved by the small mills in the private sector, while around 63% is recovered in the larger Corporation owned mills. The small mills remove husk and bran in one or, very occasionally, two passes and are simple, rugged and generally abused. Although better recoveries may be expected from mills fitted with rubber covered shellers, the present low rates are directly attributable to the manner in which milling is carried out rather than to shortcomings in Engelbert type mills which, when properly used, can produce 63-68% outturns, depending on rice variety. 53. Recommendations for the modernization and improvement of the mill- ing industry, including training requirements are now being considered by Government; however, a great deal of work remains to be done in machinery evaluation, as well as in assessment of necessary mill capacities and sites 1/ Rice Milling and Marketing Study. Volume 1 Annex 2 Page 15 before any large scale capital program can be embarked upon. Effects of the continuing rapid escalation in costs of all new equipment should be carefully weighed against the low book value of existing mills, and the relatively low cost of rehabilitation and modification necessary to attain the recovery rates of which this design and make of machinery is capable. 54. Losses caused through milling inefficiency create a direct foreign exchange cost. For example, during 1971 an average recovery rate of 65% for the milled marketed surplus would have resulted in increased availability of about 10,000 tons of locally produced rice, with a corresponding reduction in imports and a saving of some Le 1.25 million on the import bill. 55. Estimated operating costs for the sample mills which are to be evaluated in EAP are shown in Table 9. Provision has been made for the labor needed for a merchanting/milling operation; should activity be confined to custom milling some small saving could be achieved. The high fixed costs (never less than Le 4.60/ton) are due to the use of loan funds for all capital expenditure, with repayment over 5 years. The costs should be com- pared with current custom milling charges which vary between 204 and 404 per bushel for which the rice owner may expect a recovery rate of around 55%. With the new mills, providing the paddy is properly precleaned, recovery should be not less than 65% by weight, plus 5-10% small brokens and bran having a value of about Le 1.00 per ton of husk rice milled. 56. Parboiled rice is almost universally preferred, and this process certainly reduces the percentage of broken grains in a milled sample. Par- boilding is traditionally carried out in 44 gallon drums, in which husk rice is soaked and steamed overnight before being spread out to dry on cement or clay pads, mats or adjacent roads. Although the simplicity of the operation and lack of aids in determining temperature and moisture lends to a variability in ultimate quality, there are indications that individuals can and do achieve considerable evenness between batches. 57. The costs of traditional parboiling have not been included in Table 9, although they are in the estimated costs for the Corporation mill at Kissy. A 44 gallon drum will hold 1 sack (2-1/2 bushels) of husk rice, assuming the cycle occupies 45 minutes (load, boil, unLoad), parboiling one ton would take about 9 hours and cost about Le 1.50 (say 44/bushel) for labor and firewood. The method of drying naturally results in increased admixture, particularly pieces of stone, tarmac, etc. all of which finds its way into the mills with deleterious effects. Simple improvements in the traditional process could be made without much capital investment and would result in a better and more uniform product, a consideration far more important to the miller/dealer than to an individual who pays a straight fee for custom milling. Some suggestions are contained in the Rice Milling and Marketing Study and experiments are planned in the ongoing EAP. Economic farmgate rice prices are shown in Table 10. Volume 1 Annex 2 Page 16 58. In summary, the development of rice marketing and the rice market is affected by: (a) the impact of statutory activity and intention failing to reach producers and consumers; (b) underdevelopment of farm to market transportation and roads; (c) lack of competition at points of first assembly; (d) inefficient milling which prevents recovery of full value of the grain; and (e) lack of crop and market information and uncertainty over patterns of consumption. 59. Other Food Crops (see Table 11). A wide variety of crops are grown and marketed; of these cassava, groundnuts, maize, millet and sweet potato are the most important. With the exception of groundnuts, which are moved over long distances, disposal of these crops is confined almost entirely to local market centers. Cassava and sweet potato are probably grown as much for the leaf as for the tuber, although consumption of the latter increases with the 'hungry season'. Maize is the prime staple grain for the Foulah and only unimportant surpluses find their way to market. This tends to indicate a failure of the market to transmit consumer requirements to producers: maize has been imported in small quantities since 1969 to meet feed industry requirements. Groundnuts are used extensively as a food, being prepared in a number of ways, and the oil is highly valued for cooking. Trade occurs both on a shelled and unshelled basis, although the former method is usually confined to retail level. All shelling is carried out by hand. 60. Although Sierra Leone was a small net exporter of groundnuts during the 1950's, production is now inadequate to meet local needs and a privately owned mill at Bo is inoperative due to lack of supplies. Imports of soft oils have averaged about 1,400 tons annually (3,100 tons groundnut equivalent) over the past four years (Table 12). Incremental production from the project would therefore effectively be import substitution, with an economic value related to that of the cheapest acceptable vegetable oil (Table 13). For practical purposes prices have been calculated on the basis of Bank projec- tions for Nigerian groundnuts delivered Freetown, while SLPMB would be required to guarantee a floor price equal to export parity (Table 14). Volume 1 Annex 2 Page 17 Palm Products - Markets and Prices Palm Oil 61. Palm oil is an important item in the national diet: present domestic production is insufficient to meet demand and varying quantities of imports have been recorded over the past few years (Table 12). The supply/demand imbalance is expected to worsen during the rest of this decade, a deficit of about 12,000 tons being projected for 1980 1/ (Table 15). 62. Although local preference is for the red, traditionally processed oil as opposed to the white and purer, but less tasty oil, that will be produced by the mill at Daru; this is not likely to impose any serious marketing constraint, however, since in a deficiency situation prime poten- tial competition would be from imp6rted oils of similar quality to that from Daru. 63. Local prices are reported to exceed world levels (Table 16) although SLPMB attempts to set a market ceiling by selling oil from its mills at 11k/lb wholesale. This price is now (July 1974) something of an anomaly in that it is below export parity and in fact very close to Bank projected prices through 1980 (Table 17). The 5-7% of production that is available to SLPMB is, how- ever, insufficient, and these efforts tend to benefit traders more than con- sumers, especially during the period when oil from traditionally processed wild palm is in short supply. Palm Kernels 64. Apart from a brief period in 1968, all SLPMB palm kernel purchases were exported unprocessed until early 1974, when rehabilitation of the mill at Wellington allowed crushing to restart on a commercial basis. Full capacity (30,000 tons kernels) is below present and projected purchases, so exports of kernels as well as oil and cake are expected to continue in the foreseeable future (Table 18). 65. Palm kernels are purchased by LBA and delivered to store or Welling- ton mill as directed by SLPMB; the greater part of production comes from wild palm and marketed supply thus tend to have a considerable opportunist element. LBA operate extensively throughout EAP and NAP, although a large proportion of their purchases are made by sub-agents, away from nominated buying points and at levels reported to be between 60% and 80% of official prices. 66. Exports of palm kernels and palm kernel products from Sierra Leone account for a very small proportion of world trade (less than 6% in 1972), and incremental production resulting from EAP will make little difference. Although it is possible that a small amount of oil will be needed locally in import substitution, the crop, and thus pricing policy, will continue to be export oriented. Economic and financial millgate prices are therefore calculated on this basis using current marketing charges and taxation policies (Table 19). 1/ Palm Oil Market Study, African Development Bank 1973. Volume 1 Annex 2 Page 18 E. Marketing and the Projects 67. Various studies already referred to indicate satisfactory market performance for short term changes in supply/demand relationships but not for longer term needs or interseasonal stability. Although a proportion of the present difficulties is due to inadequacies within MANR as well as the absence of institutional credit, official pricing policies and organizational and operational failures among statutory bodies are as much to blame. The projects would seek to: (i) create or restore confidence in the market and the system; (ii) provide a sound basis for-field operations by the official marketing organizations; (iii) provide assistance in the development of overall marketing policies, organization and practice; (iv) provide a mechanism through which may be demonstrated the relationships between the various commercial aspects of agriculture (inputs, credit and marketing), and provide a basis for effective management and sound development thereof. 68. A series of market areas would be created, each embracing a number of development areas. Each market area would have a market center which would become the focal point for commercial activity in that area. 69. Each market center would consist of a store of about 8,000 ft3 together with necessary offices in a fenced one to two acre area. For maximum economy modular design and building systems would be adopted and offices would be built on the lean-to principle. Facilities, including scales would be provided for statutory marketing operations to ensure active competition and proper performance by LBA and the private sector. Represen- tatives from both SLPMB and the Corporation would not be necessary for this function which could be efficiently carried out by a single buying team. The objective is to stimulate, not suffocate, local commercial activity, while providing the farmer with readier access to a guaranteed minimum price structure. 70. The performance of LBA has appeared to be reasonably satisfactory despite the absence of any regular reporting and control system. It is not envisaged that direct project participation in marketing would be necessary; however there would be advantages if the project becomes an LBA, not for buying produce, but to permit the appointment of farmer groups as sub-agents, and project staff to carry out an audit and training function. 71. If circumstances warrant, facilities would be made available at market centers for produce assembly by farmers engaging in group marketing activities, but these would be on a strictly short term basis and terminal Volume 1 Annex 2 Page 19 storage facilities would not be provided. Produce Inspectors would also be able to work at and from the centers which would also become a collection and dissemination point for crop and market intelligence. F. Future Development 72. Some problem areas are discussed in Section C (paras 25 through 35). Corrective action and improvement of marketing deficiencies must occur if the very modest growth rate projected for the sector 1/ is to be achieved. Work is being carried out on some aspects of marketing, particularly export crop pricing, by MANR; however, many of the possible and badly needed benefits are likely to be lost or wasted because it is being tackled in isolation. 73. Sierra Leone has a large proportion of its agricultural wealth in high value tree crops which require little marketing infrastructure. This provides opportunity for high tax imposition without compensatory benefits to the agricultural sector as a whole; low producer prices reflect not only heavy taxation and undue capital acquisition by SLPMB, but also high costs of primary marketing. 74. Difficulties of balance between annual and perennial crops occur, exacerbated by a naturally accelerating growth of market dependent population and the move away from subsistence agriculture. The failure of perennial crop marketing policies to help stimulate food crop production has been compounded by effective consumer subsidies (through imported rice sales) that the further hindered the development of incentives for increasing food production. 75. The statutory marketing organizations operating under this unsatis- factory situation are victims of their origins and circumstances. The effect of past failures has led to change being feared, with consequently little attempt being made to anticipate how future marketing needs and demands may be met. Price manipulation and the largely perennial nature of gazetted crops has allowed this lack of enterprise to be obscured in the case of SLPMB, while the rather different and difficult circumstances of the Rice Corporation have not encouraged or allowed the implementation of meaningful policies. 76. Marketing policies and practices must encourage agricultural develop- ment. In the case of the prime export commodities, Sierra Leone production is too small to influence the market. Every effort must be made to offset the disadvantages of being a market follower by introducing systems which will allow a greater share of consumer expenditure to reach the farmets. 1/ 3.1% - IBRD Economic Survey 1974. Volume 1 Annex 2 Page 20 77. In this respect the recent diversion of palm kernel oil and cake marketing away from SLPMC is unfortunate. Sierra Leone export market partici- pation is small, a good national image has been created by single channel export marketing and overheads have been kept within reasonable limits. Excision of responsibility for one crop can only increase the proportional expenses for other crops. Mill rehabilitation and production management was essential to the development of a sound palm kernel oil marketing policy, but is an in adequate basis for fragmentation of the marketing operation. Volune 1 Annex 2 Table 1 SIERRA LEONE INTIGRATED AGRICULTURAL DEVELOP1MNT PROJECT II Purchases of Rice by Rice Corporation / Calendar Imports V Domestic / Year (tOOO tons) 1955 21 6 1956 37 8 1957 31 10 1958 22 11 1959 43 9 1960 29 21 1961 4 19 1962 27 U1 1963 21 19 1964 1 10 1965 19 5 1966 35 2 1967 24 4 1968 17 3 1969 13 5 1970 41 1 1971 27 4 1972 7 7 1973 42 1 Source: Rice Milling and Marketing Study, Rice Corporation, National Statistics OfficE 2 Rice Department up to 1965. g Milled rice. / Husk rice equivalent (a small and variable amount is bought as 'cleanedf (i.e. husked, rice). SIERRA LEONE INTEGRATED AGRICULTURAL DEVEIODPMENT PROJECT II Average Milling Costs in the Rice Corporation Mills Kissy. Mambolo. and Torma Bum (Leones) 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 Tonnage of husk rice processed 8,724 2,162 3,920 4,122 2,966 1,895 Fixed Costs Depreciation 15,648 17,195 16,368 24,904 24,946 25,148 Milling wages 77,485 43,784 32,421 35,607 27,192 25,410 Operation Cbsts Fuel, power, water 34,237 21,683 20,208 23,267 25,161 15,519 Plant repairs - 502 1,735 8,418 6,713 12,284 Total 127,370 83,164 70,732 92,196 84,012 78,361 Processing cost per ton of husk rice (excluding office overheads, inclusive parboiling) 15 8 18 22 28 41 Percent outturn milled rice 61.75 61.56 64.97 58-73 64 47 Utilization of capacity in percent of annual theoretical capacity 1/ 50 12 22 23 17 11 2/ Definition of theoretical annual capacity for mills bigger than 1 ton/hour: 200 working days at 20 hours. Source: Rice Milling and Marketing Study. 0 Volume 1 Annex 2 Table 3 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Estimated Cost of Parboiling and Mil1ing Rice at Rice Corporation Mill - Kissy - 1974 Hours running 2 2,000 4,000 5,000 Le Le Le Fixed Costs Depreciation 10,000 10,000 10,000 Wages ?/ 30,000 60,000 70,000 Variable Costs Fuel, power, water 21,000 40O,000 50,000 Repairs and spares 10,000 12,000 13,000 Total (excluding administration) 71,000 122,000 143,000 Husk rice parboiled and milled 4,200 8,400 10,500 Cost (Le/ton) net of administration 16.9 14.5 13.6 Adopted from information contained in 'Rice Milling and Marketing Study' 2 (1) and (2) basis 200 day milling year; (3) basis 250 day milling year. g Basic staff stated to be 70 per shift plus 5 per shift for parboiling and 25% on standby or emergency work. This seems excessive, comparable machinery elsewhere is operated efficiently on + 30 per shift, including pack- ing to retail. On this basis costs per ton of husk rice milled would be: Hours milling 2,000 4,000 5,000 Costs Le/ton 14.5 10.9 10.2 Volume 1 Annex 2 Table 4 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Performance Report Small Rice Mill Characteristics The machine consists of a husking chamber, aspirator section and million chamber. Hulling is accomplished by a pair of rubber covered rollers; these are separate discharge outlets for milled rice, bran, husks. Method Upgraded upland rice was parboiled (soaked for 8 hours, boiled with steam at 100 lab/in2) and dried 1/. After storing for 3 days the grain was weighed into mill hoppers. Result Rated capacity = 1,100 lbs husk rice/hour Equivalent per ton Husk rice input 1,200 lbs 2,240 lbs White rice output 889 lbs 1,660 Bran output 67 lbs 125 lbs Husk output not recorded Immature grain output not recorded Milling time 175 minutes 5.45 hours Fuel consumed 1.13 gallons 2.11 Rate of fuel consumption 0.386 gallons/hour Rate of input (husk rice 411.4 lb/hour Rate of output (white rice) 323.6 lbs/hour 1/ No moisture readings were taken. Volume 1 Annex 2 Table 4 Recovery Rates White rice 74.1% Bran 5.6% Remarks High temperature of rice after milling resulted in tendency for bran to stick to the rice, which was consequently of very mixed appearance. Bran also tends to clog perforated screen in milling chamber, reducing through- put and causing irregular whiteness. Means need to be found to improve aspiration and reduce temperatures'. Source: Adapted from information provided from Rice Corporation. VolumIe 1 Amex 2 TraBle ' SIERRA LEONE INTGRATED AGRICULTURAL DEVELOPMENT PROJECT II Effects of Variation in 1970/1 Surwey Results on Estimate of 1972/1973 Production Average Acreage Annual Acreage Yield/Acre / Production Difference 1970/71 % Increase 1972173 ( (tons) tIQ (tons) (b - a) -UPLAND- (a) 600,747 109 623,792 o.h5Oo 0.5310 305,970 (b) 662,444 2.4 694,623 o.5oo 0.5555 349,222 43,252 --SWAMPS-- (a) 206,810 6.4 234,129 0.81411 0.5991 168,948 (b) 222,521 9.24 265,549 0.84141 1.1435 263,902 94,954 Total Difference 138,206 tons (a) - Original 1970/71 Agricultural Statistical Survey figures. (b) - Corrected 1970/71 Agricultural Statistical Survey figures. / Production projections in the Rice Milling and Marketing Study are based on estimates of 1973 production achieved by applying average annual acreage growth rates 1965/66-1970/71 to 1970/71 survey acreage, and using average of 1965/66 and 1970/71 yields. / ( i) 1965/66 average yield in tons of 2,240 lbs. (ii) 1970/71 average yield in tons of 2,240 lbs. SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II SUPPLY AND DEMAND PROJECTIONS (basis apply assumptions and low variant of Rice Milling and Marketing Study to corrected 1970171 Survey) 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 Uplands Area ('000 acres) 694.6 711.3 728.3 745.8 763.7 782.0 797.6 810.4 820.1 826.7 830.0 Yield (t/acre) 0.5028 0.5028 0.5028 0.5028 0.5028 0.5028 0.5028 0.5028 0.5028 0.5028 0.5028 Production ('000 tons) 349.2 357.6 366.2 375.0 384.0 393.2 401.0 407.5 412.3 415.7 417.3 Swamps Area ('000 acres) 265.5 289.9 316.6 345.7 377.5 412.3 450.2 491.6 535.8 584.1 636.6 Yield (t/acre) 0.9938 0.8302 o.6665 0.5028 0.6665 0.8302 0.9938 0.9938 0.9938 0.9938 0.9938 Production ('000 tons) 263.9 240.7 211.0 173.8 251.6 342.3 447.4 488.6 532.5 580.5 632.7 Total 613.1 598.3 577.2 548.8 635.6 735.5 848.4 896.1 944.8 996.2 1,050.0 Milled Rice 1/ 347.0 337.5 324.3 306.5 357.2 415.5 481.7 509.1 537.0 566.6 597.6 Projected Demand 320.8 332.6 344.8 357.8 370.9 384.4 398.0 411.8 426.4 444.1 456.o Surplus (Deficiency) 26.2 4.9 (20.5) (51.3) (13.7) 31.1 83.7 97.3 110.6 122.5 141.6 I/ Basis 66% recovery after deduction for seed at 1 bushel/acre and losses (1o0 of production). July 23, 1974 H SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Estimated Rice Requirements of Market Dependent Population ---- MILLED RICE ----------- ---------- HUSK RICE ----------- Market / Market d RICE CORPORATION Marketed / RICE CORPORATION Population Demand Sales / Market Supply Purchases Market (1000) (tons) (tons) Share % (tons) (tons) Share % 3 Year Average 1961-1963 350 37,500 21,500 57 35,000 15,900 45 1966-1968 480 52,500 27,000 51 51,000 3,100 6 1971-1973 640 71,500 28,000 39 86,000 4,000 5 1976-1978 835 95,000 - - 1981-1983 1,100 127,500 - / Assumed to approximate to urban population (although differently composed) and to grow at 6g 1961/63-1966/68, 6% 1966/68-1971/73 and 54 thereafter. g Based on following estimated per capita consumption - 196;-63 240 lbs; 1966-68 245 lbs; 1971-73 250 lbs; 1976-78 255 lbs; 1981-83 260 lbs. 2 Based on imports plus domestic purchases. Assumed to equal difference between market demand and total imports (private sector imports totalled 17,200 tons 1961-63). Average milling outturn 64% Corporation, 53% private mills. / Husk rice equivalents ('000 tons): % Recovery 53 56 59 62 65 68 71 1976-78 157.5 149.1 141.5 134.7 128.5 122.8 117.6 1981-83 207.5 196.4 186.4 177.4 169.2 161.8 154.9 0 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Rice Prices 1962-73 -- -IMPORTS------ - -MILLED RICE ------HUSK RICE-- Quantity Landed Retail Price Local Rice / Guaranteed (5) + milling costs # ('000 tons Price (Official) / Prices Price as of % (3) as of % (4) (1) __ 2M (3) (4) (3) ~~~~~~~(6) (7) Le/ton Le/ton Le/ton Le/ton 1962 20.8 105.8 n.a. 172.6 62.9 - 66 1963 20.8 95.2 n.a. 150.6 59.2 _ 71 1964 0.5 177.6 n.a. 173.4 59.2 - 62 1965 18.7 102.0 n.a. 202.6 59.2 - 53 1966 34.5 104.3 120.6 191.1 59.2 82 56 1967 23.8 103.5 130.9 193.6 74.0 100 68 1968 16.5 153.4 130.9 196.4 74.0 100 67 1969 13.1 124.2 159.6 213.1 74.0 82 62 1970 41.1 108.7 159.6 251.4 74.0 82 52 1971 26.9 118.7 159.6 202.8 88.1 96 75 1972 6.7 n.a. 159.6 239.6 85.1 93 62 1973 42.5 n.a. 201.6 232.1 85.1 73 64 1974/June n.a. n.a. 350.0/425.6 n.a. 118.4/185.0 57/71 _ V cif price plus Le 4.50 costs to warehouse. / Average national price. & 0 / As recorded by Ministry of Labor. 0 6 / Based on 64% recovery plus Le 15.00 per ton milling and transport costs. D Volume 1 Annex 2 Table 9 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Estimated Milling Costs - Small Hills fitted with Pre- cleaner ( (2 (3) Le Fixed Depreciation 1/ 1,590 1,59o 1,590 Debt service and repayment / 2,300 2,300 2,300 Salaries Operator (1) 350 ( 350 350 Laborer (2) 400 4,64o (1) 200 4sJ440 200 h,lQ0 Variable Fuel 3/ 1,400 1,000 700 Oil 15 15 10 Spares/repairs / 900 2,315 750 1,865 620 1,330 6,955 6,305 5,770 Contingencies (10%) 695 635 580 Total 7,650 6,940 6,350 Cost/bushel huisk rice Le 0.21 Le 0.25 Le 0.34 Cost per ton husk rice / Le 7.65 Le 9.25 Le 12,7( (1) Basis 2,000 hours milling 1,000 tons husk rice (2) Basis 1,500 hours milling = 7,500 tons husk rice (3) Basis 1,000 hours m-Illing = 500 tons husk rice / Mill, precleaner, and engine 20% of cost (Le 6,750). Shed 10% (cost Le 2,400). 2/ Basis 100% loan on all capital investment repayable over 5 years, interest at 8%. 3 Basis one gph at Le 0.67/gallon + oil 1.5 gallons/2-0 hours. 15%, 13.5% and 12% of fixed and variables. i/ All prices basis June 1974 quotations. C/ Outturn = 65% white rice + 5-10% small brokens and bran; valued at Le 20 per ton or Le 1.0 per ton of husk rice milled. Volume 1 Annex 2 SIERRA LEONE Table 10 INTEGRATED AGRICULTURAL DEVEIFE)NT PROJECT II CENrRAL SERVICES AND SUHMARIES Marketing and Prices Crop Values - Runk Rice (Imort Equivalent) 1974 1980 1985 .... Leones per 2,240 lbs .... cif Freetown fl 362.50 219.50 223.50 Clearing, handling, etc. 4.00 4.00 4.00 Landed Freetown 366.50 223.50 227.50 Marketing charges /2 7.50 7.50 7.50 Rice value 374.00 231.00 235.00 Paddy equipment Z3 224.40 144.40 152.75 Milling costs 4 10.00 10.00 10.00 Value RENOWN 214.40 134.40 142.75 MAKENI Add: Transport costs /5 16.00 16.00 16.00 Economic Faragate Value 230.00 150.00 159.00 KENMA Add: Transport Costs /5 20.00 20.00 20.00 Economic FarMate Value 234.00 154.00 163.00 /1 Basis Thai milled 5 percent broken for Bangkok adjusted for 15 percent broken (less 15 percent) and ocean freight/insurance (US$ 30.00 m. ton). Bank project Thai basis values as folllis: 1974, US$ 460; 1980, US$ 265; 1985, US$ 270 at per m. ton, fob. /2 Basis about 15,000 tons imports annually. 3 Basis following milling factors (by weight): 1974, 6Cq; 1980, 62.5% 1985, 65%. See Table 9 , Annex 2 . Basis 81 ton/mile for average of 200 and 250 miles to Makeni and Kenema areas respectively. June 28, 1974 Volume - SIERRA LEONE Table 11 INTEGRATEI) AGR1CULTU1t L liIJhLu.NL PnOJdiS'l II NORTHERN REGION PROJlECT PRODUCTION MAIN FOODCROPS 1970/71 Article Acres Tons Husk Rice 884,965 621,100 Cassava / 41,000 81,000 Palm Oil n.a. 31,000 Cocoa Yam 11,000 21,000 Sweet Potato / 17,000 18,000 Groundnuts 34,000 15,000 Maize 26,000 10,000 Millet 14,000 6,300 Guinea Corn (Sorghum) 12,000 5,900 Peppers 2,200 2,200 Chinese Yam 1,000 1,600 Plantain 2,000 1,100 Fundi 3,400 910 Benniseed 4,400 790 Broad Beans 780 350 2/ Tonnage refere to tubers only although both cassava and sweet potato are also grown for their leaves which form an important part of the national diet. Source: Agricultural Statistical Survey 1970/71 Palm Oil:sADB Appraisal of Gambia Oil Palm Project 1973. June 20, 1974 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II NORTHERN REGION PROJECT Vegetable Oil Imports 1965 1966 1967 1968 1969 1970 1971 1972 1973 Groundnut Oil 1,033 725 975 834 577 1,019 307 391 29 Soya, Cotton, Sunflower) 1,369 1,102 1,836 1,855 509 2,157 1,826 2,904 2,915 Rapeseed oil ) Olive Oil n.a 31 55 48 56 65 44 56 47 Fixed Oils n.e.s. 64 51 65 62 50 246 480 145 106 Palm Oil 470 32 53 33 11 35 147 569 85 Linseed Oil n.a 3 n.a 12 n.a 2 87 4 6 Processed Oils 9 57 7 14 18 10 23 44 285 Source: Quarterly Bulletin of Statistics June 20, 1974 0: CD Volume 1 Annex 2 Table 13 SIERA IEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Crop Values - Groundnutas Import Substitution 1974 1980 1985 --Leones per 2,2240 lbs----- cif Freetown 1 355-20 214.90 239.90 Ianding Charges etc. 5.00 5.00 5.00 Value Landed 360.20 219.90 244-90 Transport / 9.60 9.60 9.60 350.60 210.30 235.30 In Shell equivalent / 245.42 147.20 164.70 Assembly Costs 2 6.00 6.00 6.00 Value Farimgate 5/ 239.42 141.20 170.70 Basis Nigerian shelled groundnuts, Bank projected values cif Europe (US$ m ton): 1974: 430 1980: 267 1985: 296 adjusted for freight differential ($ 17.40 m ton) to cif Freetown / Basis 120 miles at 80/mile. / Basis 70% shelling percentage. W Transport to development center + shelling costs (hand operated sheller), i Export parity values for floor price calculations would be as follows (Le/2,240 lbs, in shell): 1974 1980 1985 Farmgate 224 126* 143 July 25, 1974 Volume 1 Annex 2 Table 14 SIERRA LEONE INTEGRATED AGRICULTURAL DEVEIOWEPNT PROJECT II CENTRAL SERVICES AND SUMMARIES Marketing and Prices Crop Values - Groundnuts (Export vquivalent) 1974 1980 1985 GROUNDNUTS ..* Leones per long ton 0.0 cif Europe /1 338.40 229.90 254.90 Less: Freight and Inasrance 26.00 26.00 26.00 312.0 21390 22.90 Handling and Storage 3.40 3.40 3.40 Delivered Freetown 209.00 210.50 225.50 Transport from Makeni area Z2 16.00 16.00 16.00 -293.00 194.50 209.50 In shell equivalent /3 205.00 136.15 146.65 Shelling costs 5.00 5.00 5.00 Value farmgate MAXENI 200.00 131.00 141.50 = /1 Basis: Nigerian shelled groundnuts, Bank projected values (US$/m.ton) 1974, 393; 1980, 267; 1985, 296. 2 Basis: 200 miles at 8a/mile. 13 Basis: 70 percent shelling outturn. June 28, 1974 SIIRa LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Palm Oil Demand and Production (toQo tons) Year I973 174 1 197 5 1976 1977 1978 1979 1980 1981 1982 1983 12 3 1985 19 6 1987 Demand Population million 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4s1 4.2 Human consumption kg/capita/year 12.6 12.7 12.8 12.9 12.9 13.0 13.0 13.1 13.1 13.1 13,l 13,1 13.1 13.1 13.1 Human consumption Total 35.3 36.8 38.4 40.0 41.3 42.9 44.2 45.9 47.2 48.5 49. 8 51.1 52.4 53.7 55.0 Soap consumption Total 5.4 5:'5 5.6 5.7 5.8 5.9 5.9 6.0 6.1 6.2 6.3 6.4 6.5 Total Consumption 35.3 36.8 43.8 45,5 46.9 48.6 50.0 51.8 53.1 54.5 55.9 .§5 3 58.7 60.1 61.5 Production Daru 5,000 ac 1.1 1.5 2.1 2.7 3.3 3.7 4.0 4.2 4.3 14.3 4.3 4.3 143 4.3 4.3 Gambia existing 2,106 ac .3 .5 1.0 1.4 108 2.1 2.2 2,2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Gambia new 8,500 ac o.6 1.5 3.1 4.9 6,2 7.4 7.8 7.8 7.8 Total Plantations 1.4 2.0 3.1 4.1 5.1 5.8 6.8 7.9 9.6 U114 12.9 13.9 14.3 14.3 14.3 Wild groves 31.0 31,0 31,0 31,0 31.0 31.0 31.0 31.0 31.0 31.0 31.0 31.0 31.0 31.0 31.0 Total Production 32.4 33.0 34.1 35.1 36.1 36.8 37.8 38.9 40.6 42.4 43.9 44.9 45.3 45.3 45.3 Supply Deficit 2.9 3.8 9.7 10.4 10.8 11.8 12.2 12.9 12.5 12.1 12.1 13.4 13.4 14.8 16.2 Sources ADB Palm Oil Market Study 1973 - SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Palm Oil Traders Buying and Selling Prices (Leones per tin of 38 lbs) JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTENBER OCTOBER NOVEMBER DECEMBER Bux Sell Bus Sell BUY Sell Buv Sell BUY Sell BUY Sell Buv Sell Buy Sell Buv Sell Buv Sell BUY Sell B S Kenema 1968 5.50 5.55 5.50 6.53 4.90 5.13 3.78 4.35 3.63 4.83 3.91 4.00 3.50 4.00 4.50 - 3.50 4.50 4.75 6.50 - - - - 1969 - - 3.50 4.00 4.12 - 3.50 - 3.70 - - - - - 4.50 5.00 5.00 5. 4.00 5.79 5.50 5.99 5.50 6.00 1970 5.52 6.30 5.79 6.69 5.51 6.11 4.50 5.12 3.83 4.33 3.06 4.00 2.83 3.26 3.50 4.56 3.13 5.00 3.20 4.95 3.78 4,41 3.29 5.00 1971 4.86 5.93 4.75 6.00 - - 4.00 5.55 4.50 5.50 4.50 5.50 - - 5.50 6.50 - - 5.00 6.00 5.00 6.00 - - 1972 8.50 10.00 8.00 9.00 - - 5.80 6.00 5.50 6.00 5.00 5.55 5.83 6.67 6.00 7.13 5.88 6.89 5.85 6.76 5.59 6.13 5.50 6.25 Source: Produce Inspection Service MANR. July 24, 1974 a Volume 1 Annex 2 SIEBBAALEONE Table 17 INTEGRATED AGRICULTURAL DEVEIOPMENT PROJECT II Eatimated Millqate Value of Palm Oil 1974 1980 1985 -----Leones per 2,240 lbs--- cif Freetown / 430O50 258.30 281.50 Port Charges, handling etc. 4.50 4.50 4.50 Value landed 435000 262.80 286.00 Less transport g/ 16.00 16.00 16.00 Millgate Price 419.00 246.80 270.00 v Basis Bank projected price (constant 1974 US$). Malayan palm oil cif Europe: 1974 $500 n ton 1980 $300 m ton 1985 $327 m ton d Assuming market for Daru oil will have an average of 200 mile selling radius - 200 miles @ 8¢ per mile. July 25, 1974 Volume 1 Annex: 2 Table 18 SIERR LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Sierra Leone Produce Marketing Board Produce Purchases by Province PAIM KERNELS COCOA BEANS COFFEE BEANS GINGER Province Tonnage A. Tonnage % Tonmge % Tonnage % 1969 Northern 12,430 31 - - 573 7 20 5 Southern 14,637 36 194 5 1,897 24 393 94 Eastern 13,534 33 3,800 95 5,421 69 5 1 Western 79 - - - 14 - Nil - Total 40J,680 3,994 7,905 418 1970 Northern 14,400 30 - - 415 10 13 2 Southern 18,651 38 220 8 941 23 559 98 Eastern 15,504 32 2,687 92 2,712 66 Western 96 - - - 22 1 - - Total 48,651 2,907 4,090 572 1971 Northern 12,027 24 - - 488 5 27 6 Southern 20,088 42 302 9 1,901 20 431 93 Eastern 16,973 36 3,230 91 7,060 75 6 1 Western 102 - - - 11 - - - Total 49,190 3,532 9,460 464 1972 Northern 15,610 34 - - 81 1 37 9 Southern 20,190 44 316 4 1,731 24 366 91 Eastern 9,873 22 6,922 96 5,329 75 - - Western 86 - - - - - - - Total 45,759 7,238 7,141 403 197 Northern 7,693 25 - - 420 4 15 4 Southern 13,156 41 228 4 2,367 20 368 95 Eastern 10,919 34 5,778 96 8,986 76 3 1 4Western 99 - - - 20 - - - Total 31,867 6,006 11,793 386 Volur,e 1 Annex SIERRA LEONE Table 19 INTEGhATEL HGRICULTURAL DEVEL0If4i,NT PROJ.,CT II Millgate Value of Palm Kernel It is assumeu that palm kernels will be exported as such, or, if sold for crushing the price paid will be directly related to export values. Leones per 2,240 lbs ---Economic--- --Financial- 1980 1985 1980 1985 fob Freetown 1/ l19.O0 164.00 149.00 164.00 Less export duty 2 14.90 16.40 149.00 164.00 134h10 147.60 Port handling and storage 4.00 4.00 4,00 4.00 145-00 160-00 130.10 143-60 SLPMB overheads 2 8.00 8.00 8.00 8.00 137.00 152.00 122.10 135.60 Transport to port 14.,0 14.30J 16.80 16.80i 122.70 137.70 105.30 118.80 Bags 6.00 6.00 6.00 6.00 Millgate Priue 116-70 131.70 99.30 112.80 Note: SLPMB producer price = Le 100 per ton plus Le 13.90 LBA commission. Calculated fob value on same basis as above - Le 210 in 1974 constant prices. / Basis forecast cif Europe in 1974 constant prices 1980 $200.00 and 1985 $218.00 per metric ton. Less freight and insurance $30.00. 2/ July 1974 rate 10% of fob value. 2/ See paragraph 22. / 210 miles at 8¢ ton/mile. Z/ 210 miles at 6.80 ton/mile (80 excluding taxes at 15%). July 30, 1974 Volur,e 1 Ann^ex 'S Table 20 SIERRA LEONE INTEGRkTED AGRICULTURhL DEVELOPMENT PROJECT II Cocoa - EcDnomic Value Calculation per 2,2140 lbs 1980 Spot New York (US$) / 1,165 Insurance, freight and marketing factor 2/ 116 fob Freetown (Leones) 902 Port charges, handling 4 898 Storage and quality allowance 2 896 Road freight / 12 884 Administration 8 876 LBA allowance 20 Value buying station 856 Assembly costs 1 Value Farmgate Le 855 I/ Basis IBRD projected price US$ 0.52/lb for Accra, spot New York in constant 1974 prices (1980 price 0228). 2/ Over past 6 years average fob Freetown price has averaged slightly better than 90% of average New York spot price. July 31, 1974 Volume 1 Annex 2 Table 21 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II CENTRAL SERVICES AND SINMARIES Marketing and Prices Fertiliser Imports (Tons) ..... .N ...... P205 ...... Not Sulphate of Supurphosphate Otherwise Ammonia Other of Lime Other Specified Year 1965 43 180 50 675 5 1966 388 54 556 1,449 291 1967 260 47 418 10 450 1968 i19 36 420 562 240 1969 194 167 225 1 611 1970 1,278 32 432 305 241 1971 25 2,120 110 1,001 51 1972 - 2,758 12 101 212 1973 70 2,218 168 - 1,952 Source: Quartery Bulletin of Statistics. June 28, 1974 Volume 1 Annex 3 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Organization and Staffing Contents page A. Organization Ganeral 1 Central Administration 1 Local Administration 2 Administrative Transitions 6 B. Staffing Schedule 1. Establishment of a Project Services Unit Schedule 2. Establishment of NAP Management Unit Schedule 3. Establishment of EAP Management Unit Schedule 4. Job Descriptions Chart 1. Organization of Ministry of Agriculture and Natural Resources Chart 2. Organization of NAP Management Unit Chart 3. Organization of EAP Management Unit Table 1. Staff Requirements - Freetown Support Services Table 2. Staff Requirements - Northern Area Project Table 3. Staff Requirements - Eastern Area Project Volume 1 Annex 3 Page 1 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Organization and Staffing A. Organization General 1. The Eastern and Northern Projects, occupying a combined gross area of 3,960 sq. miles, represents nearly 15% of the gross land area of Sierra Leone. Together they will provide a major impact on the agricultural sector and the relationship between project management and existing administrative and institutional services is very important. Central Administration 2. Each project will be managed by separate Project Management Units (PMU's). The EAPMU is already established and located at Kenema and the NAPMU will be established and located at Makeni. The PMU's form part of the Ministry of Agriculture and Natural Resources (MANR) and will report directly to the Permanent Secretary of Agriculture. A Project Evaluation and Services Unit would be established at MANR Freetown to provide operational and financial support to the projects and to evaluate ongoing projects. 3. The Project Evaluation and Services Unit would be established within MANR in Freetown and would be responsible for providing operational service support, financial control and guidance to Bank and other externally financed agricultural projects. The unit would include: (a) a Financial Controller, who would head PESU, responsible for all project accounting matters, financial coordination and control, and internal audit; (b) a Commercial Services Officer, responsible for sales systems and policy, farm credit supervision, institutional develop- ment, and coordination of project marketing with the Govern- ment marketing institutions; and (c) a Projects Economist, responsible for evaluation of ongoing projects and evaluation of proposed projects formulated by the planning staff of the MANR technical divisions. The organizational arrangements for MANR are shown in Chart 1. Volume 1 Annex 3 Page 2 4. The Project Advisory Committee (PAC), already established under the Eastern Area Project, would play an active role in technical and policy decisions. The Committee would ensure coordination between projects, other Divisions of MANR, and related Government Departments and service institu- tions. 5. Local Administration. At the regional level, the projects would operate as autonomous units but would maintain a close and formalized rela- tionship with local departments and institutions. The latter would be achieved through Project and Chiefdom Planning Committees which would be essential both for successful project implementation and for the gradual transition of management responsibilities. 6. The Project Management Units (see schedule 3 and 4 of this Annex) would each consist of five sections covering Extension and Training, Conserva- tion and Land Development, Administration, Finance, and Commercial Services. The Extension and Training Section would be responsible for introducing manage- ment and technical services to farmers through intensive extension effort supported by applied research, improved seed, and staff and farmer training facilities. The Conservation and Land Development Section would be responsible for planning project development strategies, data collection and land use planning, and directing all land development and civil works programs. The Administration and Finance Sections would provide full supporting services for the project, covering transport, personnel, public relations, procurement and accounts. 7. The Commercial Services Section would be primarily concerned with procurement and distribution of farm inputs, but represents an important change in concept. The unit would operate commercially and the objective would be to sell farm inputs for cash or credit. The unit would operate on a pricing structure which would include direct investment and distribution costs and would encourage optimum farmer participation in distribution through price incentives for bulk purchases and collection. Grouping of farmers into production units with economies of scale would be actively encouraged by the production department in close coordination with the Chiefdom authorities which are sufficiently strong and respected to supply the necessary disciplines for group responsibility. The Commercial Service Sections would be managed at project level by Sierra Leoneans with suitable business acumen, but would be assisted by the Project Evaluation and Services Unit in Freetown. Credit Services would be ancillary to the input supply network, and while in NAP initially operating as a project financed and controlled credit fund, the intention would be to transfer the established credit fund to an independent Farmers' Finance Company (FFC). For the Eastern Area Project, such developments are already underway and are discussed in more detail in Volume 3 Annex 4 Appendix I. 8. Project Coordinating Committees would be established in each project to coordinate development with local departments and institutions and to allow participation of farmers and traditional leaders in the planning process. At Volume 1 Annex 3 Page 3 the project level, a Project Coordinating Committee (PCC) chaired by the Provin- cial Secretary, and represented by the Provincial Agricultural Officer, Local Government, Public Works, Education, Health, and Paramount Chiefdoms, would convene quarterly. In the Northern Area Project, the committee would also be represented by the Rokel Leaf Tobacco Company subsidiary of the Aureol Tobacco Company which would be closely associated with the NAP Production Department in all aspects of tobacco extension. At the Chiefdom and village levels, the projects would operate through committees of traditional leaders and elected farmers representatives. 9. Administrative Transitions. Project organization has been influenced by two important objectives, namely that in future commercial services would be able to operate without Government financing, and that the remaining proj- ect services would revert as quickly as possible to Government. A major objective of both projects is to encourage institutional development in parallel with agricultural development so that progress becomes self perpetuat- ing. For the Eastern Area Project, proposals for establishing an Oil Palm Company at Daru, and a Farmer Finance Company at Kenema are already under consideration. A similar finance company could be established at Makeni at some time in the future. 10. Farm input supply procedures would follow strictly commercial lines and although pricing structures would reflect direct investment and distri- bution costs, the Commercial Services Section would be subsidized initially to cover salaries and transport costs of sales agents, who would supervize and service all cash and credit sales. However during project implementation four significant developments would take place: (a) farmers would become experienced in important aspects of crop husbandry thereby reducing their dependence on the technical services of sales agents and extension staff; (b) grouping of farmers would be encouraged by the extension staff to allow economies of scale in the distribution network; (c) group development would be intimately associated with the chiefdom authorities which are strong and respected, and would provide the necessary disciplines to ensure group responsibility for debts; (d) training programs in crop husbandry and development would be established for chiefdom agents for employment by chiefdom authorities as group instructors (training programs of this sort are already underway at Kenema). 11. These developments, which from experience obtained under the on- going Eastern Area Project are believed to be realistic, would allow marked staff and overall cost reductions. While development in the Northern Area Volume 1 Annex 3 Page 4 Project is likely to be slower and more difficult due to the conditions of the area (see Volume 2), at Kenema it is expected that by 1978, progress would be such as to allow a farm supply company to be established, either independently, or as a subsidiary of the farmer finance company. 12. While the primary aim is to achieve sustained improvement through institutional development, a Government sponsored extension service would have an essential role to play in disseminating research findings, and extending development into aspects and areas not covered by the existing projects. From the outset, the Provincial Agricultural Officer (PAO) for the Northern Province would be involved in project development planning through the Project Advisory Committee, and ultimately would take over all activities scheduled for continued Government administration. For the Eastern Area Pro- ject a special Senior Agricultural officer would be responsible to the Project Manager for the direction and control of all non-project actions within 1/ and outside the project area. 13. The organizational arrangements for the Project Management Units are shown in Charts 2 and 3. B. Staffing 14. Details of staff numbers required for the projects are given at Tables 1 through 3, and job descriptions for senior positions are detailed at Schedule 4. 15. All provincial agricultural staff currently working in the project areas, except those directly involved in the mechanized farming program, would be transferred to the projects. This would amount to 20 additional field assistants for the NAP and 15 for the EAP. Agricultural Officer (degree) staff and Field Assistants (certificate) staff are currently trained at Njala University and information regarding the future MANR supply and demand situation is uncertain. There are currently a number of agricultural develop- ment proposals (other than the Eastern and Northern Projects) being considered by Government which if implemented, could cause a serious manpower deficit. However, assuming that implementation of other projects during the disburse- ment period is low, staff demands of the proposed Bank projects would be only marginally in excess of the expected outturn from Njala. In addition, Govern- ment is currently considering proposals for a new training program to be fLnanced under UK bilateral assistance with a scheduled outturn of 150 trained agriculturalists per annum. In the case of both degree and certificate staff, neither project is expected to face serious recruitment problems. 1/ For example, for mechanical cultivation throughout the Eastern Province. Volume 1 Annex 3 Schedule 1 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Establishment of a Project Evaluation and Services Unit 1. Under the project, a Project Evaluation and Services Unit (PESU) would be established in MANR Freetown. PESU would initially be composed of: (a) Financial Controller (b) Commercial Services Director; (c) Accountant; and (d) Projects Economist 2. The PESU would be responsible to the Permanent Secretary of MANR and would undertake a controlling and service role to IDA/IBRD financed and other Government operated agricultural projects. Its main functions would be: (a) undertaking continuous project evaluation; (b) providing EAPMU, NAPMU and other project management units with information relevant to decision making; (c) establishing priorities for new projects within the agricultural sector; (d) forward planning; (e) training and assisting the staff of EAPMU, NAPMU and other project management units in appropriate accounting, auditing, stores and procurement procedures; (f) processing reimbursement claims; (g) auditing EAPMU, NAPMU and other project management units; (h) establishing suitable credit systems for project farmers; (i) developing appropriate farm input supply systems; and (j) carrying out any other functions as may be assigned to it by the MANR. 3. The Financial Controller would be head of PESU and would be a member of the Project Advisory Committee. Volume 1 Annex 3 Schedule 2 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II NORTHERN AREA PROJECT Establishment of Project Management Unit (Draft) 1. As a condition of credit effectiveness the Sierra Leone Government would be required to publish in the Government Gazette an order establishing the Northern Area Project Management Unit (NAPMU). The order would set out the objectives and responsibilities of NAPMU and would include the following: 2. NAPMU would be managed by a Project Manager and its objectives would be: (a) development of 8 Chiefdoms, including 1/ that make up the Northern Area Project, with a view to increasing agricultural production and raising the living standards of the project area population; (b) supervision, location, and construction of civil works including roads, water supplies, buildings, soil conservation, and swamp water control structures; (c) development and management of a seed multiplication farm and associated registered seed producers; (d) training of project staff and farmers; (e) provision of market centers and storage facilities; (f) provision of credit, extension, and market services; (g) procurement of farm inputs, vehicles, equipment, and plant; (h) development of supporting project infrastructure such as houses, buildings, offices, etc. for the above services; (i) undertaking of agricultural and forestry research; and (j) the establishment of fact finding cattle ranches to determine parameters for future livestock development in Sierra Leone. 1/ Chiefdom names to be inserted. Volume 1 Annex 3 Schedule 2 Page 2 3. NAPMU would be responsible to the Permanent Secretary MANR. NAPMU would be responsible for the day-to-day operations of the project, and in particular, it would be responsible for carrying out the objectives as stated in para 2. The main duties of NAPMU would be: (a) the implementation of an agricultural development program for NAP following the policy guidelines of PDC; (b) the preparation of annual budgets and cash flows for approval by the Permanent Secretary of MANR. Subsequent to annual approval, NAPMU would submit to the Head of PESU monthly cash flows indicating the detailed funding requirements and expenditures for the project. (c) the recruitment of project staff, with the approval of the Permanent Secretary of MANR; (d) the advertising, negotiating, calling for tenders, for the erection of buildings, and construction of civil works, and the supply of goods, services, and materials as may seem to be requisite for the proper discharge of its duties; (e) the operation of project bank accounts; and (f) the preparation of reimbursement claims, against project expenditures, for submission through Permanent Secretary MANR to the World Bank. 4. NAPMU would have full control over all MANR staff within NAP except for those involved with MANR tractor hire service. 5. NAP would closely liaise with the Rokel Tobacco Leaf Company in respect of production of leaf tobacco within NAP. 6. NAPMU would collaborate with SLPMB and the Rice Corporation in the development of efficient marketing systems within NAP. 7. NAPMU would establish a special revolving credit fund for the financing of credit to NAP farmers. 8. NAPMU would prepare quarterly and annual reports for simultaneous submission to Permanent Secretary MANR and the Bank. 9. NAPMU would be delegated any additional duties and powers by the Permanent Secretary MANR to the attainment of the objectives set out in the order. Volume 1 Annex 3 Schedule 3 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II EASTERN AREA PROJECT Establishment of Project Management Unit (Draft) 1. As a condition of credit effectiveness the Sierra Leone Government would be required to publish an order in the Government Gazette redefining the objectives and responsibilities of the Eastern Area Project Management Unit and would include the following: 2. EAPMU would be managed by a Project Manager and its objectives would be: (a) development of 32 Chiefdoms, including 1/ ---------- that make up the Eastern Area Project, with a view to increasing agricultural production and raising the living standards of the project area population; (b) direction, location, and construction, when necessary, of civil works including roads, water supplies, buildings, soil conservation, and swamp water control structures; (c) development and management of seed multiplication farms and associated registered seed producers; (d) training of project staff and farmers; (e) provision of market centers and storage facilities; (f) provision of extension and marketing services; (g) procurement of farm inputs, vehicles, equipment and plant; (h) development of supporting project infrastructures such as houses, buildings, offices, etc. for the above services; and (i) the undertaking of agricultural research. 1/ To be inserted. Volume 1 Annex 3 Schedule 3 Page 2 3. EAPMU, would be responsible to the Permanent Secretary MANR. EAPMU would be responsible for the day-to-day operation of the project. In particu- lar, it would be responsible for carrying out the objectives as stated in para 2 above. The main duties of EAPMU would be: (a) the implementation of an agricultural development program for EAP following the policy guidelines of PDC: (b) the preparation of annual budgets and cash flows for approval by the Permanent Secretary of MANR. Subsequent to annual approval, EAPMU would submit to the Head of PESU monthly cash flows indicating the detailed funding requirements and expenditures of the project. (c) the recruitment of project staff with the approvalof the Permanent Secretary of MANR; (d) the advertising, negotiating, calling for tenders, for the erection of buildings, the construction of civil works, and the supply of goods, services, and materials as may seem to be requisite for the proper discharge of its duties; (e) the operation of project bank accounts; (f) the preparation of reimbursement claims, against project expenditures, for submission through the Permanent Secretary of MANR to the World Bank. 4. EAPMU would have full control over all MANR staff within EAP, and the Manager would, with the assistance of a Senior Agricultural Officer, direct the operations of the other MANR staff in those areas of the Eastern Province falling outside the physical boundaries of EAP. 5. EAPMU would closely liaise with the Farmer Finance Company (FFC) on the distribution of farm inputs and recovery of credit repayments. The Project Manager would be appointed to be a director of FFC. 6. EAPMU would closely liaise with the Daru Oil Palm Company on the collection of fresh fruit bunches from EAP farmers and the production of palm oil seedlings for project growers. 7. EAPMU would collaborate with SLPMB and the Rice Corporation in the development of efficient marketing systems within EAP. Volume 1 Annex 3 Schedule 3 Page 3 8. EAPMU would prepare quarterly and annual reports for the simultaneous submission to Permanent Secretary of MANR and the Bank. 9. EAP would be delegated any additional duties and powers by Permanent Secretary of MANR to the attainment of the objectives as set out in this order. Volume 1 Annex 3 Schedule 4 SIERRA LEONE INTEGRATED AGRICULTURAL AND RURAL DEVELOPMENT PROJECT II JOB DESCRIPTIONS AND QUALIFICATIONS FOR PROJECT SENIOR STAFF APPOINTMENTS 1. FINANCIAL CONTROLLER for Project Evaluation and Services Unit (PESU) (i) The Financial Controller would be a professionally qualified accountant with additional training in business management. He should have had sufficient experience in a senior position in a large public corporation or commercial company. If possible, he should have knowledge of banking and credit procedures. (ii) The Financial Controller would be Head of PESU and would report to the Permanent Secretary MANR. His duties would include: (a) internal audit of project accounts; (b) assisting project management units establish proper accounting procedures; (c) reviewing and approving annual budgets and monthly cash flows, and liaison with Ministry of Finance for appropriation of the required funds; (d) ensuring correct application of project funds; (e) checking and preparing, if necessary, reimbursement claims for IDA funds; (f) reviewing procurement documents and approval of bid applications; (g) when necessary, bulking of procurement requirements; (h) consulting and coordinating with other financial institutions concerning the operations of the project-associated, Government owned, companies; and (i) assisting the Commercial Services Officer of PESU with financial matters related to farm input supply and credit. (j) training c.f relevant project staff. (iii) The appointment would be initially for three years and his duty station would be Freetown. Volume 1 Annex 3 Schedule 4 Page 2 2. COMMERCIAL SERVICES OFFICER for Project Evaluation and Services Unit (PESU) (i) The Commercial Services Officer would be fully qualified in business management and/or appropriate practical experience, and should have held a senior position in a large agricultural selling organization, such as an international fertilizer or agricultural chemical company, or a similar position on an agricultural project involving the distribution of farm inputs to large numbers of farmers for cash or credit. (ii) The duties of the Commercial Services Officer would include: (a) the development of commercially oriented systems of low cost input supplies to project farmers; (b) the coordination of systems between projects; (c) the application of recording procedures; (d) the practical application of farm credit supply and recovery systems; (e) assistance in procurement, and bulking of procurement requirements for project farm inputs; (f) coordination of national marketing institutions with project needs; and (g) the training of relevant project staff. (iii) The appointment would be for three years and the duty station would be Freetown. 3. PROJECT MANAGER (required for NAPMU and EAPMU) (i) Experience would be the main criterion for the selection of a Project Manager, although a formal qualification in agriculture would be important. At least 10 years' experience in successful agricultural develop- ment work in the field, including development-oriented projects, preferably in Africa, would be required. A high degree of administrative ability, experience in dealing with the highest level of Government, especially in committee work, and previous involvement in extension in small farmer communities would all be necessary. The responsibilities of the Project Manager would be the control of all project activities and the coordination of all project activities with those of other Government agencies and local agencies and institutions. Volume 1 Annex 3 Schedule 4 Page 3 (ii) His duties would include: (a) day-to-day implementation of project policy; (b) control of all project funds with the assistance of the Accountant; (c) responsibility for project personnel matters with the assistance of the Administrative Officer; (d) coordination of all project activities; (e) reporting project progress to Government through written reports and through the various project committees; (f) training project staff and ensuring a proper management training program is successfully implemented; and (g) in the case of EAPMU Project Manager, the direction of MANR activities in those parts of the Eastern Province falling outside the project area. (iii) The Project Manager would be responsible to the Permanent Secretary of MANR. Duty stations would be Kenema (EAPMU) and Makeni (NAPMU). 5. PROJECT ACCOUNTANT (required for EAPMU and NAPMU) (i) The Project Accountant would be a professionally qualified accountant. He should have had at least 5 years' experience in a senior position in a public corporation, commercial company, or development project. (ii) He would be in charge of the Accounts Departments and his main responsibility would be the keeping of project accounts. His duties would include: (a) preparation of budgets, cash flows, and estimates of expenditure for the project; (b) control and supervision of accounts maintained by the project's Commercial Services Section; (c) the responsibilities for the project stores and requisites (excluding farm inputs), with the assistance of the Department Heads, and for stores' control and audit pro- cedures; and (d) training account staff. Volume 1 Annex 3 Schedule 4 Page 4 (iii) His duty station would be at Kenema (EAPMU) or Makeni (NAPMU). 6. Extension and Training Officer (required for EAPMU and NAPMU) (i) The Officer would be a qualified agriculturalist and would have a thorough knowledge of tropical crop production and related problems. He would have had at least 5 years' experience in extension work with small farmers, and would have knowledge of tropical tree crops and rice production. (ii) The Officer would be responsible for the operation of the Project Extension and Training Section. His duties would include: (a) Section budget control; (b) organization of project extension services through a Service Extension Officer; (c) supervision of project training programs for farmers and project staff; (d) supervision of seed multiplication and research; (e) coordination with MANR Forestry Division on forestry research (NAP only); (f) livestock fact finding (NAP only); and (g) close liaison with the Commercial Services Section. (ii) He would be directly responsible to the Project Manager and would assist the Project Manager in his dealings with other government and local agencies in matters related to production. His duty station would be Makeni (NAPMU) or Kenema (EAPMU). 7. Conservation and Land Development Officer (required for EAPMU and NAPMU) (i) The Officer would be a professionally qualified civil engineer with additional experience in land planning and irrigation and water control schemes. He should have had at least 5 years' practical experience and should have held senior positions in Government, commercial companies, or corporations. (ii) His duties would include: (a) Section budgetary control; Volume 1 Annex 3 Schedule 4 Page 5 (b) land-use planning and the physical planning of the phased development program; (c) data collection for evaluation purposes; (d) supervision of civil works and advising the Project Manager on procurement requirements; (e) land and swamp development; and (f) coordination with Ministry of Works. (iii) He would be directly responsible to the Project Manager. He would be based at Kenema (EAPMU) or Makeni (NAPMU). 8. COMMERCIAL SERVICES OFFICER (required for NAPMU and EAPMU) (i) The Officer should have had successful experience as a senior commercial sales executive of a large company in Sierra Leone; or should have had experience with input supply and farm credit on an agricultural develop- ment project. (ii) He would be responsible for the operations of the Commercial Services Section and his duties would include: (a) establishing a sales organization for the dissemination of farm inputs to small farmers; (b) in NAP, establishing a revolving credit fund, and in coor- dination with local authorities and the Extension and Training Section make credit available to farmers; (c) in EAP, coordinating his Section with the Farmer Finance Company with respect to sales credit; (d) responsibility for timely procurement, storage, and accounting of farm inputs; (e) provision of pest control services to farmers; and (f) the commercial aspects of the distribution of project multiplied improved seeds and seedlings. (iii) He would be directly responsible to the Project Manager. He would be stationed at Kenema (EAPMU) or Makeni (NAPMU). Volume 1 Annex 3 Schedule 4 Page 6 9. PROJECT ADMINISTRATIVE OFFICER (required for NAPMU and EAPMU) (i) He should be an experienced administrative officer and should be able to deal with high-level Government officials, and should have had experience in personnel matters. (ii) He would be responsible for the project's Administrative Section and his duties would include: (a) section budgetary control; (b) project personnel; (c) project transportation; (d) maintenance of a project registry; (e) control and checking of project stores; (f) the general project security; (g) public relations; and (h) training administration staff. (iii) He would be directly responsible to the Project Manager. His duty station at either Kenema (EAPMU) or Makeni (NAPMU). 10. CONSTRUCTION ENGINEER (required for NAPMU only) (i) He should have had successful experience in design, construction, and maintenance of earth roads, and the construction of buldings. The con- struction engineer would be responsible for the implementation of the project's civil works program. (ii) He would be responsible to the Conservation and Land Development Officer and his duties would include: (a) locating and designing new roads or improvements to existing earth roads; (b) the supervision of road construction and plant; (c) the supervision and direction of road maintenance; (d) supervision and direction of the well-building program; Volume 1 Annex 3 Schedule 4 Page 7 (e) supervision of the Building Supervisor; and (f) training. (iii) He would be based at Makeni. 11. GENERAL MANAGER for Daru Oil Palm Company (i) He should have experience in management of oil palm production and processing operations, both from technical and financial aspects, either in West Africa or in the Far East. (ii) He would assume the management of the company and his duties would include: (a) supervising the managers of the Mill and the Estate; (b) ensuring coordinated fruit flow from estate, and project smallholder farmers to the mill; (c) financial matters; (d) marketing of mill products; (e) coordinating the Company; activities and needs with EAP, SLPMB, and local financial institutions; and (f) preparation of the company budget and financial control. (iii) He would be responsible to the Board of Directors, would be appointed initially for two years. 12. LIVESTOCK SPECIALIST (required for NAPMU) (i) The livestock Specialist should be an experienced and practical animal husbandry man who has both managed commercial ranches and has been involved in small scale cattle fattening operations, and has a knowledge of pig production. He should have had experience in Africa. (ii) He would be responsible to the Extension and Training Officer, and his duties would include: (a) establishing three privately operated 1,000 acre cattle ranch/farms; Volume 1 Annex 3 Schedule 4 Page 8 (b) determining technical parameters for future livestock production schemes; (c) determining simple systems of stall feeding cattle for fattening; (d) in suitable areas, development of pig and small animal production; and (e) assisting the MANR to prepare a long-term livestock production policy for Sierra Leone. (iii) His assignment would be for three to four years and his duty station would be Makeni. SIERRE LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT ti Organization of Ministry of Agricutture and Natural Resources MINISTER OF AGRICULTURE AND NATUfRAL RESOURCES I PERMANENT SECRE TAR AGRICULTURAL PROJECT EVALUATION RESEARCH INSTITUTE _r . . . . . . - . - . AND SERVICES UNIT PROJECT ADVISORY |- . . . . . . . . PULICITV UNIT COMMITTEE PRODUCE j __ 113R ULTURAL F ERIES FORESTRY II~~~~~~ETERINARY ADMINISTRIATIV EASTERN AREA NORTHERN DZSI S oj AND E AREAP 'C IVISION E DIVII OUNT Engineering and Mechanization Livestock Exftensiotn SOUTHRN WESTEFN EASTERN N ESI H O E AS T REGIONAL OFFICE | | REGIONAL OFFICE REGIONALOFC EIOA FIEREINLOFC -To Ebs established WE- Ta denk-9751 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT 11 NORTHERN AREA PROJECT Project Organization MINISTER DF AGRICULTURE AND NATURAL RESOURCES PERMANENT SECRETAVALATIO DIVISION OF AGRICUETURE AJERVICCES UNIT AT MAKENI P NAGEMENT AT FREETOWN UNIT PROJECT COORDINATING PROJECT ADVISORY COMMtTTEE PROJECT MANAGER COMMITTEE EXTENSION AND CONSERVATION AND E ClA TRAINING I ANn DEVELDP^AFNT l~~~~~~~~SON IN EN XTENSIUN LANNING AND TIA 'INC, I ANn| DAACLETD l l l -| ~~~~~~~~~~~~~~~~~PUBLIC RELAT ONS | | STORES & e MARISETING | _ RIOT CORPORATION| TRAINING LANG DEVELOPMENT SE-| TASOT SElRRA LEONE SEED ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~AREING BOARD MULTIPLICATION CIVIL WNRKS REsEARCH l l B FORESTRY -| SCRT F RESEARCH l | ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~W.,Id 8ank 9752 LIVESTOCK FACT FINDING | SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT 11 EASTERN AREA PROJECT Project Organization | MINISTR Of AGRICULTURE AND NATURAL RESOURCES PERMANENT SECRETARY AT KENEMA PROJECT MANAGEMENT APROJECTEVALUATIO PROJECT COORDINATING PROJECT ADVISORY FROMMTEETCODNTN PROJECT MANAGER COMMITTEE Iv I FIELD OPIEFRATIONS AD|I |ATO FINANCE -CMMRCA I I L IE_tICE _ _2 PERSONNEL l _l ACCOUNTS l -| INPUT SALES p ~~~~~~~~~~~~~~ r-q FARM SUPPLY CO. -UPLY |O EASTERN PROVINCE EXTENSION AND CONSERVATION ANDFAMRFINC FARMERS REGISTRY PROCUREMENT CREDIT _4 FARMERS FINANCE OUTSI DE PROJECT AREA TRAINING LAND DEVELOPMENT CRDTCOMPANY -|EXTENSION [ -| LAND USEPNING - PUELI RELATOS|- STOE I -N -| TRAINING l -| LANDRDEVELOPMENT | _ TO BE FORMED DURING PHASE It PROJECT World BANk-9753 Volume 1 Annex 3 Table 1 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Staff Requirement for Freetown Support Services Project Evaluation & Services Unit .Year 1 Year 2 Year 3 Year 4 Financial Controller 1 L 1 1 Commercial Services Officer 1 Y 17Z 171 1 Projects Economist 1E 1 1 1 L 1 Accountant 1 1 1 1 Clerks 2 2 2 2 Confidential Secretary 1 1 1 1 Driver 2 2 2 2 General Manager of Oil Palm Co. 1 1 / 1 L LQ Internationally recruited. Volume 1 Annex 3 SIERRA LEONE Table 2 INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Staff Requirements for Northern Area Project / Post Development Project Development Period Period Year 1 Year 2 Year 3 Year 4 Year 5 Year 6-20 Project Administration Services Project Manager 1 2 1 2/ 1 2/ 1 - - Accountant 1 1 1 1 - - Internal Auditor 1 1 1 1 - Administrative Officer 1 1 1 1 1 1 Freetown Agent 1 1 1 1 - - Extension and Training Services Extension and Training Officer 1 1 2/ 1 / 1 - - Senior Extension Officer 1 1 1 1 1 1 Agricultural Officers 5 5 5 5 5 2 Agricultural Instructors 20 30 40 40 30 20 Training Officer 1 1 1 1 1 1 Training Instructors 4 4 4 4 4 4 Farm Manager (Seed Multiplication) 1 1 1 1 1 1 Assistant Farm Manager/ Outgrowers - 1 1 1 1 1 Research Officer/ Seed Multiplication 1 1 1 1 1 1 Research Assistants 4 4 4 4 - - Livestock Specialist 1 1 / 1 2 1 - - Livestock Assistants 2 2 2 2 - - Conservation and Land Development Services Conservation and Land Development Officer 1 / 1 / 1 v 1 - - Senior Land Planner 1 1 1 1 - - Surveyors 6 8 10 10 - - Statistician 1 1 1 1 - - Construction Engineer 1 / 1 2 1 j 1 - - Construction Executive Officer 1 .1 1 1 - - Building Supervisor 1 1 1 1 - - Foremen 2 2 2 2 - - Commercial Services Commercial Officer 1 1 1 1 1 1 Accountant 1 1 1 1 1 1 Stores Controller 1 1 1 1 1 1 Area Salesmen 5 :6 6 6 6 6 Storemen/Clerks 5 sS 5 5 5 5 5 Accounts Assistants 5 5 5 5 5 5 Total 78 92 104 104 64 52 1/ Excludes office support staff, drivers, laborers, etc. 2/ Internationally recruited staff. September 4, 1974 Volume 1 Annex 3 Table 3 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Staff Requirement for Eastern Area Project j Interim Project Post Development Year 1 Year 2 Year 3 Year 4-20 Project Administration Services Project Manager 1 1 - - Accountant 1 1 1 1 Internal Auditor 1 1 - - Administrative Officer 1 1 1 1 Freetown Agent 1 1 - - Extension and Training Services Extension and Training Officer 1 2/ 1 / - - Senior Extension Officer 1 1 1 1 Agricultural Officers 4 5 5 3 Agricultural Instructors 28 32. 32 16 Field Assistants (training) 18 22 20 5 Training Officer 1 1 1 1 Training Instructors 4 4 4 4 Farm Manager 1 1 1 1 Assistant Farm Manager 1 1 1 1 Research Officer/Seed Multiplication 1 1 1 1 Research Assistants 4 8 - - Conservation and Land Development Services Conservation and Land Development Officer 1 2 1 2/ - - Statistician 1 1 - - Senior Land Planner 1 1 - - Building Supervisor 1 1 - - Field Surveyors 9 11 - - Commercial Services Commercial Officer 1 1 1 1 Store Controller 1 1 1 1 Accountant 1 1 1 1 Area Salesmen 12 12 12 12 Area Storemen/Clerks 12 12 12 12 Accounts Assistants 12 12 12 12 Total 121 136 107 74 / Excludes office staff, drivers, etc. - costs included for junior staff in appropriate cost tables. 2/ Internationally recruited staff. September 4, 1974 Volume I Annex 4 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Costs of Central Support Services Table 1 Salaries, Wages and Emoluments Table 2 Vehicles and Equipment Table 3 General Services SIRRA LEONE INTEGRATED AGRICUILTURAL DEVELOPMENT FROJECT II CENTRAL SUPPORT SERVICES Salaries, Wages and Emolunents (Le '0OOOJ Foreign Exchange Unit Cost Year 1 Year 2 Year 3 Year 4 Total F Costs Local Costs Project Evaluation & Servicee Unit Financial Controller 41.0/15.0 (1) 41.0 (1) 41.0 (1) 41.0 (1) 15.0 138.0 100 /1 123.0 15.0 Commercial Services Officer 36.0/12.0 (1) 36.0 (1) 36.0 (1) 36.0 (1) 12.0 120.0 100 7T 108.0 12.0 Projects Economist 36.0/ 8.0 (1) 36.0 (1) 36.0 (1) 36.0 (1) 8.0 1 06.0 100 71 108.0 8.0 Accountant 8.0 (1) 8.0 (1) 8.0 (1) 8.0 (1) 8.0 32.0 _ - 32.0 Clerks 2.5 (2) 5.0 (2) 5.0 (2) 5.0 (2) 5.0 20.0 - - 20.0 Confidential Secretary 2.5 (1 ) 2.5 (1 ) 2.5 (1 ) 2.5 (1 ) 2.5 10.0 - - 10.0 Driver 1.5 (2) 3.o (2) 3.0 (2) 3.0 (2) 3.0 12.0 _ 12.0 Total 131.5 131.5 131.5 53.5 448.0 76 339.0 109.0 Local staff costs 18.5 18.5 18.5 53.5 109.0 - - 109.0 Internationally recruited staff costs 113.0 113.0 113.0 - 339.0 100 339.0 - /1 Foreiga exchange cost 100% of expenditure years 1, 2 and 3 only (internationally recruited staff). Year 4, 100% local cost. Internationally recruited staff costs are gross costs made up of salary plus allowances; settlement costs etc. equivalent to approx. 100% salary. I23 0D SIERRA IEONE INIEGRATED AGRICUITURAL DEVELOR1ENT EROJECT II Central Support Services Vehicles and Equipment Le ' 000 Foreign Exchange Local Unit Cost Year 1 Year 2 Year 3 Year 4 Total % Costs Costs Saloon cars (2,000 cc) 4.2 (3) 12.6 - - (3) 12.6 25.2 90 22.7 2.5 Typevriters 0.5 (2) 1.0 - - - 1.0 90 0.9 0.1 Office furniture and fittirgs incluiirg air-cooiitiozurs etc 6.5 - - - 6.5 80 5.2 1.3 House furniture and fittiris 6.o (2) 12.0 - - _ 12.0 60 7.2 4-8 Total 32.1 - - 12.6 414.7 81 36.0 8.7 S........................a............. ..=*SS .....................f SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT HROJECT II Central Support Services General Service Costs Le '000 Foreign Exchange Local Unit Cost Year 1 Year 2 Year 3 Year 4 Total % Costs Costs Vehicle operatirg costs 3.0 (3) 9.0 (3) 9.0 (3) 9.0 (3) 9.0 36.0 70 25.2 1 0.8 Office operating costs covering stationery, telephones, post, cables, messenger and sweeper facilities, office machinery maintenance 6.0 6.0 6.0 6.0 6.o 24.0 - 24.0 Total 15.0 15.0 15.0 15.0 60.0 42 25.2 34.8 .....................................................................................w Volume I Annex 5 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Summaries of Project Costs and Financial Details Table 1 Summary of Eastern Area project costs Table 2 Summary of Northern Area project costs Table 3 Summary of Central Services Costs Table 4 Annual price contingencies used in project estimates Table 5 Detailed proposals for project financing Table 6 IDA/Bank credit disbursement schedule Table 7 Illustrative cash flow for Government SIERRA LEONE Vnnex S INrTERATED AGRICULTURAL DEVBLOPID31T PROJECT II Table 1 Summary of Eastern Area Project Costs Le '000 Foreign Exchange Local percentage of percentage of Eastern Area Project Year 1 Year 2 Year 3 Year 4 Total % cost cost baseline cost total Administration Services Salaries, wages aid eaolumnts 77.7 77.7 - - 155.4 - - 155.4 Vehicles, plant, eqpipment 21.1 - - 21.1 90 19.1 2.0 Buildings, farnishings etc 10.0 10.0 - - 20.0 - - 20.0 Vehicle operating 4.6 5.0 - 9.6 70 6.7 2.9 General services 55.4 55.4 - _ 110.8 14 15.0 95.8 subtotal 168.8 148.1 - _ 316.9 13 40.8 276.1 12 10 Extension & Trainirg Services /1 Salaries, wages ard snolumants 168.3 188.7 - - 357.0 20 72.0 285.0 Vehicles, plant, equipment 63.1 7.5 - - 70.6 90 63.5 7.1 Buildirgs, furnishirgs etc 56.o 28.0 - - 84.0 60 50.4 33.6 Vehicle operatirg 54.6 59.4 - - 114.0 70 79.8 34.2 General services 10.3 10.4 - - 20.7 27 5.5 15.2 subtotal 352.3 294.0 - - 646.3 42 271.2 375.1 25 4 20 Conservation & Land Development Services Salaries, wages aid emolusents 70.9 73.4 - - 144.3 50 72.0 72.3 Vehicles, plait, equipment 17.4 0.5 - - 17.9 90 16.2 1.7 Vehicle operatirg 4.6 5.0 - - 9.6 70 6.7 2.9 General services 3.0 3.0 - - 6.o - - 6.0 subtotal 95.9 81.9 - - 177.8 53 94.9 82.9 7 5 Comssrcial Services Salaries, wages aid emoluments 86.o 86.o - - 172.0 - - 172.0 Vehicles, plant, equipsent 12.7 - - - 12.7 90 11.4 1.3 Buildirgs, farnishirgs etc 96.0 78.0 - - 174.0 60 104.4 69.6 Vehicle operatirg 27.2 29.6 - - 56.8 70 39.8 17.0 General services 8.4 8.4 - - 16.8 - - 16.8 subtotal 230.3 202.0 - - 432.3 36 155.6 276.7 16 13 Farm Inputs Fertilizer 141.8 127.3 - - 269.1 80 215.3 53.8 Planting materials, pesticides, tools, hired labor 418.8 371.9 - - 790.7 9 68.7 722.0 subtotal 560.6 499.2 - - 1,059.8 27 284.0 775.8 40 32 Total 1,407.9 1,225.2 - - 2,633.1 32 846.5 1,786.6 100 Physical cortirgeniei /2 70.4 61.3 - - 131.7 32 42.1 89.6 4 Price cortirgencies 224.8 309.7 - - 534.5 32 171.0 363.5 16 Total EAP 1,703.1 1,596.2 - - 3,299.3 32 1,059.6 2,239.7 100 ......... .. - .=.=.==.==.,==.=.................................. = _.=_.._......... /1 includiirg seed multiplication 7-2 5% of total 73 see Table 4 for detail Jamnary 15, '-5 IWMIRATED AMMI201RAL EIV.OJff8K I0OJICTIa II Suinay of Northern Area blojct Costs La '000 Foreign kobange Local Percentage of Percentage of Northern Area Proi ct Year 1 Year 2 Tar 3 Year 4 Total . wet coat baseline cost total Administration Swrvices Salaries, wages, ecl mta 95.7 106.7 106.7 75.7 384.8 31 120.0 264.8 Vehicles, plat, eqSp nt 73.7 2.0 0.8 14.7 91.2 75 68.2 23.0 Bildiis, feurnsbicgs etc 154.0 - - - 154.0 60 92.4 61.6 Vehicle operating 4.7 5.o 5.4 5.4 20.5 70 14.4 6.t O neral suwvices 63.0 63.6 64.6 61.6 252.8 21 52.0 200.8 eabtotel 391.1 177.3 177.5 157.4 903.3 38 347.0 556.3 17 13 Ext_naion & Training Servic3a Salaries, sages, emoluments 206,0 229.8 245.2 187.2 686.2 25 216.0 652.2 Vehicles, plant, eqoip_nt 132.9 33.5 14.4 69.1 2b9.9 90 224.9 25.0 B.ildirgs, frrnishirgs etc 236.6 20.0 - - 256.6 60 154.0 102.6 Vehicle operating 66.o 74.8 79.8 79.9 300.5 70 210.4 90.1 General services 18.4 24.D 25.0 25.0 92.4 14 12.5 79.9 subtotal 659.9 382.1 364.4 361.2 1,767.6 46 817.8 949.8 33 24 ConservatiSn & Land Devalopent Services Salaries, wages, seoluments 66.o 71.6 77.2 48.2 263.0 61 108.0 155.0 Vehicles, plunt, equip_t 39.9 2.4 3.6 15.1 61.0 90 54.9 6.1 Buiidirgs, furcihliga etc 60.0 - - _ 60.0 60 36.0 24.0 Vehicle operating 4.7 5.0 5.6 5.4 20.5 70 14.4 6.1 Gernral services 1.3 1.5 1.7 1.7 6.2 - - 6.2 subtotal 171.9 80.5 87.9 70.4 41D,7 52 213.3 197.4 8 6 lo,erotal Services Salaries, wagea, moluinnts 46.7 50.9 52.1 52.1 201.8 - - 201.8 Vehicles, plant, equipFnt 29.2 0.4 2.0 8.2 39.8 87 34.5 5.3 &l3diEsg, ibrniehinge etc 87.0 - . - 87.0 52 52.2 34.8 Vehicle operating 28,1 30.1 32.5 32.5 123.2 70 86.2 37.0 Oeneral services 3.4 3.4 3.4 3.4 13.6 - - 13.6 subtotal 194.4 84.8 90.0 96.2 465.4 37 172.9 292.5 9 7 Road bvLoepnt 256.5 445.5 187.7 161 .6 1,o94.3 62 650.9 398.4 19 14 Water Developnt 15.0 15.0 15.0 15.0 60.0 22 13.2 46.8 1 1 Farm lmiza Fertilizar 15.0 62.0 91.0 106.0 274.0 84 230.0 64.0 Panting interia3a, pesticidee, tools, hired labor 35.1 136.6 126.6 137.7 W36.0 9 39.0 397.0 subtotal 50.1 198.6 217.6 2.3.7 710.0 38 269.0 641.0 10 Total 1,736.9 '1,383.8 1,140.1 1,105.5 5,366.3 46 2,484.1 2,882.2 100 PtW'icel contingeni7 /2 86.8 69.2 57.0 55.3 268.3 46 1-23.4 144.9 4 Price contingaigies 314.2 344.9 351.0 524.1 1.534.2 46 705.7 828.5 21 Total NAP 2,137.9 1,797.9 1,548.1 1,684.9 7,168.8 46 3,313.2 3,855.6 100 ... . ..… . .. . /1 includirg seed miLtiplicstion 5% of total smee Tabe 4 for detail January 15, 1975 SIERRA LEOIE INTEGRATED AGRICULTURAL DEVELORIINT PROJECT II Sumnary of Central Services Costs (Le '000) Foreign Exchange Year 1 Year 2 Year 3 Year 4 Total , cost Local cost Vehicles & equipment for PESU 32.1 - - 12.6 44.7 81 36.0 8.7 Local staff fbr PESU 18.5 18.5 18.5 53.5 109.0 - - 109.0 Interrmtionally recruited staff for PESU /3 113.0 113.0 113.0 - 339.0 100 339.0 General services oost to PESU 15.0 15.0 15.0 15.0 60.0 42 25.2 34.8 F.F.C. (operating losses) /3 50.0 50.0 - - 100.0 20 20.0 80.0 Daru Oil Palm Co. General Manager /3 40.0 40.0 - - 80.0 100 80.0 - Consultants for proJect plannirg /3 50.0 50.0 - - 100.0 100 100.0 Subtotal 318.6 286.5 146.5 81.1 832.7 72 600.2 232.5 Physical contingencies /1 15.9 14.3 7.3 4.1 41.6 72 30.0 11.6 Price contirgencies 2 11.8 10.1 13.7 42.5 78.1 20 15.6 62.5 Total Central Services Ccsts 346.3 310.9 167.5 127.7 952.4 68 645.8 306.6 /1 at 5% of total cost. /2 see Table 4, items marked /3 are not included in price contirgencies. a durirg first tio years only. ;q Volume 1 Aninex 5_ Table h SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Annual Price Contingencies used in Project Cost Calculations - ------------Percentages------------- Year 1 Year 2 Year 3 Year 4 Vehicles andPlant 18 28 38 49 Farm inputs L2 18 28 38 49 Civil works 24 40 57 76 Local staff sala 18 30 41 53 General services 18 30 41 53 /1 based on Bank Central Project guidelines of December 31, 1974. 2 excluding fertilizers for which no price contingencies are estimated as 1979 current prices are likely to be less than estimated for 1974. 13 internationally recruited staff, consultants, and assistance to FFC excluded as contingency elements in base costs. /4 local costs inflation rate reduced from 12% 1975 to 8% 1979. January 15, 1975 Volume 1 Anex Table 5 SIERRA LEONE INTEGRATED AGRICULTURAL DEVEIDPMENT PROJECT II IDA Credit / IBRD Loan Disbursement Schedule IDA Credit IBRD Loan US$ Million Cumulative US$ Million Cumulative US$ Million US$ Million FY 1976 Quarter 1 _ 2 0.3 0.3 - 3 0.8 1.1 - _ 4 1.0 2.1 - _ FY 1977 Quarter 1 1.2 3.3 - - 2 1.2 4.5 - - 3 0.5 5.0 0.5 0.5 4 - - 0.5 1.0 FY 1978 Quarter 1 _- 0.5 1.5 2 - - 0.5 2.0 3 _ - 0.5 2.5 4 - - 0.5 2.9 FY 1979 Quarter 1 - - 0.3 3.2 2 _ - 0.3 3.5 3 - 0.3 3.9 4 - - 0.3 4.2 FY 1980 Quarter 1 _- 0.3 4 5 2 - - 0.3 4.8 3 - - 0.2 5.0 January 15, 1975 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Details of Project Financing Per Disbursements Year 1 Year 2 Year 3 Year 4 Total Total Schedulc ----- Le 1000 .................... us$ tooo US$ millions World Bank Disbursements Vehicles, plant and equipment 4d.9 195. 0 19.0 1o5.6 724.5 869.4 0.9 Fertilizers 128.9 155.2 74.6 88.1 446.8 536.2 0.5 Technical Assistance 459.o q59.o 297.0 - 1,215.0 1,458.o 1.4 Buildings, houses and construct-ion materials 550.3 181.3 29.1 363 797.0 956.4 1.0 Local staff A 483.9 542.7 275.6 321.1 1,623.3 1,948.0 2.0 Vehicle, plant, and equipment operating costs 185.4 201.3 137.8 138.1 662.6 795.1 0.8 Farm inputs (other than fertilizer) 317.7 356.o 88.6 96.L 858.7 1,030.4 1.0 Unallocated 530c.0 589.0 310.0 576.4 2,005.4 2,4G6.5 2.4 Total Bank Disbursements 3,060.1 2,679.5 1,231.7 1,362.0 8,333.3 10,000.0 10.0 Sierra Leone Government Disbursements Vehicles, plant and equipment 60.3 29.1 2.8 14.1 1 o6.3 Fertilizer 9.3 11.4 5.5 6.8 3350 Buildings, houses and construction material 235.8 77.7 12.4 15.7 341.6 Local staff |1 207.4 232.6 118.1 137.6 695.7 Vehicle, plant, and equipment operating costs 79.5 86.; 590 59.2 284 o Farm inputs (other than fertilizer) lo4.4 117.1 29.1 3 0 2 General Services Costs 186.2 192.6 118.? 115.3 612.3 Unallocated 190.0 210.0 120.0 36.8 556.8 Total SLG Disbursements 1,072.9 956.7 465.1 421.5 2,916.2 Farmers' Cost Fertilizer 18.6 22.7 10.9 11.1 63.3 Farm inputs (other than fertilizer) 31.8 35.5 8.9 5.3 81.5 Unallocated 5.3 10.4 5.2 5.3 26.2 Total Farmers' Cost 55.7 25.0 21.7 171.0 TOTAL FINANCING 4,188.7 3,704.8 1,721.8 1,805.2 11,420.5 olH /1 Includes assistance to FFC for the first two years. January 15, 1975 SIERRA LEONE INTEGRATED AGRICLLTURAL DEVELOPMENT PROJECT II Illustr-ti-e C-eh Flow for Sierra Leone GaovranmoL (Lt 'SF9) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Yeara 11-25 Yearn 25-50 Inf loe of FPnds IDA Credit 1/ 3,060.1 1,106.6 - - IBRD Loan 1/ - 1,572.9 1,231.7 1,362,0 3,060.1 2,679.5 1,231.7 1,362.0 Enport dutiea - pal. khernolr / 1.2 1.8 2.8 4.1 5.8 7.7 9.0 10.0 10.5 10.8 10.8 10.8 - .c.. 2/ 4.4 16.0 32.4 64.0 101.7 130.1 158.1 172.3 172.3 172.3 172.3 172.3 Revenuc fr.. indire-t tenatiam 3/ - - 46.0 109.0 173.0 1980. 18.0 198.0 198.0 203.0 212.0 221.0 Total Inflaw 3,065.7 2,697.3 1,312.9 1,539.1 280.5 335.8 365.1 380.3 380.3 386.1 395.1 403.1 OutflIpw of Funds Pro-ect Expondit-ro Vehiclen, plant and equipmnnt 465.2 224.1 21.8 119.7 Fertiliers 138.2 166.6 80.1 94.9 T-chnical esniatance 459.0 459.0 297.0 - Building housen and .ne.trection eater-iln 786.1 259.0 41.5 60.0 Local staff 691.3 775.3 393.7 450.7 Vehicles, plant and equip-ent eperating canto 264.9 287.6 196.8 197.3 Facm inpats (ether than fertilieer) 422.1 473.0 117.7 132.4 General services caste 186.2 192.6 11982 115.3 Unallocated 720.0 799.0 430.0 613.2 Peat disbrsementn period project - 481.0 409.0 796.0 758.0 758.0 758.0 758.0 758.0 725.0 673.0 4,133.0 3,636.2 2,177.8 2,192.5 796.0 758.0 758.0 758.0 758.0 758.0 725.0 673.0 Debt Servicing IDA Credit - interest 4/ 11.5 27.1 31.2 31.2 31.2 31.2 31.2 31.? 31.2 31.2 71.4 140.0 - principal repayment - - - - - - - - TIBD to an-internstt 5/ - 66.8 186.1 296.3 - - - principal & inttoret repaynene 6/ - - - - 354.2 436.8 436.8 436.8 436.8 436.8 436.8 - ommitment charge 29.4 25.4 14.8 C,1 - - - - - - 40.9 119.3 732.1 332.6 385.4 468.0 468.0 460.0 468.0 468.0 508.2 140.0 Total Outflow 4,173.9 3,755.5 2,409.9 2,525.1 1,181.4 1,226.0 1,226.0 1,226.0 1,226.0 1,226.0 1,233.2 813.0 Net floe doriog year (deficit) (1,108.2) (1,058.2) (1,097.0) (956.0) (900.9) (890.2) (060.9) (845.7) (845.7) (039.9) (030.1) ( 409.9) Acoamulative Cash Flew (1,108.2) (2,166.4) (3,263.4) (4,249.4) (5,150.3) (6,040.5) (6,901.4) (7,747.1) (8,592.8) (9,432.7) (22,004.2) (32,251.7) 1/ IDA Credit of Le 4,166,600 drawn down firet, followed by IBRD Loan of Lt 3,916,700. 2/ Export doties - Pal k-er-elo: 100. FOB proceedo - Coree 102 for fSi-t Lt 400 p.t. FOB plan edditionol 1% for -oth Lt p.t. ovec Lt 400 p,t. FOB price taken at Lt 900 p.t. Dory Lt 315 p.t. (i.e. 10% + 25% - 35% of Lt 900 p.t. FOB). 3/ Revenu from indirect ta-ation based on a 12% noitiplen of pro)err incremental interne (aftoc allowing tea yearn for ipa-t). 4/ IDA Credit - interest 3/4 of 17, p.a. - repayment of principal 1% yearn 11 thre 20; 3% year, 21 thru 50. 5/ IBRD Ltoan- itere-t 8-1/2% p.a. - repayment of prin-ipal 40 eq-al half yearly install ynts oes 6 thru 25. - ommitment foe 3/4 of 1% of ondiobursed funds. 6/ IBRD Ltas inte-eot and principal after y-es 4 han been shown on an equal annuity basis r ilustration only. In practice, icc--rit is charged em the balancr of the Ioan. Joocary 15, 1975 Volume I Annex 6 SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Economic Benefits and Costs Analysis Table 1 Internal rate of return - sensitivity analysis Table 2 Economic cash flow - EAP Table 3 Incremental on-farm labor - EAP Table 4 Incremental benefits - EAP Table 5 Economic cash flow - NAP Table 6 Incremental on-farm labor - NAP Table 7 Incremental benefits - NAP SIERRA LEONE INTEGRATED AGITCULTURAL DEVELOPMENT PROJECT II Internal Rate of Return Sensitivity Analysis Incremental Costs Incremental Rate of Return % Cotnbined direct benefits Rate of overhead production EAP NAP Return K K K 36 14 26 K K -10 29 10 X K -20 23 5 K K -30 17 - K -10 -10 32 11 K -20 -20 29 9 K -30 -30 25 6 K -h0 -40 21 3 K -50 -50 17 - +10 :+10 K 30 10 +20 +20 K 25 7 +30 +30 K 21 3 K K +10 142 17 K K +20 :49 21 K K +30 55 25 K constant HA cr 0l SIERRA LEONE INrIERATED AGRICULTURAL DEVELO1M8 FROJECT II Economic Cash X'low -EAP Le '0OO Incremontal -------Phase I Project-/---- Incremental Cnpljs Year -3 Year -2 Year -1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Years 10-17 Overhead CostsU Salaries and emoluments 403 426 244 185 185 185 185 185 185 185 Vehicles, plant, and equipment 114 8 6 31 31 31 31 31 31 31 Buildings, furnishings, and construction materials 162 116 Vehicle operating costs 91 99 61 45 45 45 45 45 45 45 General service costs 77 77 56 51 51 51 51 51 51 51 Physical contingencies 5% 2/ -/ -142 38 18 15 15 15 15 15 15 15 Subtotal ;61 7003/, T 800 385 327 327 327 327 327 327 327 Incremental Direct Production Costs Farm development inputs 4 58 165 340 511 601 555 545 539 530 534 536 536 536 Incremental labor 5 48 1 96 318 448 544 372 299 303 309 313 319 319 319 Physical contingencies 5% 5 18 33 48 57 46 42 42 42 42 43 4 4 Subtotal 111 379 691 1007 1202 973 z X Er W 9 9 9 Share of Project Evaluation & Services Unit (50%) 70 56 56 33 33 33 33 33 33 33 Total Incremental costs 625 979 1391 1966 2058 1414 1246 1244 1241 1249 1258 1258 1258 Incremental benefits, 77 415 961 1834 2547 2615 2598 2603 2857 3080 3255 3366 3433 1/excludes costs of developing oil palm estate, palm oil mill, and studies. 2/audited expenses _/estimates V/excluding hired labor _/ahadm wage rate of 600 per day 6/see Volume I, Annex 6, table 4 H!_ SIERRA LEONE INTEtRATED AGRICULTTRAL DEVELOP14NT 19DJECT II Increantal On-Far'. Labor / EIP Iear -3 Year -2 Year -i Year 1 Year 2 Year 3 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10-20 Upland Rice '000 mandays - - .8 36.0 72.0 108.0 108.0 108.0 108.0 108.0 108.0 108.0 108.0 Swamp Rice Swamp Development " 33.3 186.3 296.0 396.0 396.0 123.0 - - - - - - - lice Production 11 .9 75.0 150.0 225.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 Cocoa Developmmt " 12.8 31.2 34.7 59.8 72.8 45.1 43.6 46.0 49.8 55.3 60.3 61 .3 61.3 Oil Palm Outgrowers " 21 .1 34.6 48.3 56.7 65.2 43.0 46.7 51.5 56.8 59.1 60.7 61.5 61 .9 Total Development Labor " 79.1 327.1 530.7 746.5 906.0 619.1 498.3 505.5 514.6 522.4 529.0 530.8 531.2 Value of Incremental Labor /2 La '000 47.5 196.3 318.4 447.9 543.6 371.5 299.0 303.3 308.8 313.4 317.4 318.5 318.7 1/ Calculated from incremental labor estimates given in Annex 2, Tables 1 to 7, continued with development projections given in Annex 2, Table 10. 2/ At slhdow wage rate of 60Q per manday. SIERRA LEONE IN11RATED AMIiIJWtAL DVL1,FH0EW PROJECT II Incremental Benefits - EAP Le ' OOO -------Phase I Project------- Year -3 Year -2 Year -1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Years 10-17 Incremental Production tons Husk rice 260 1610 3920 8040 11830 12640 12640 12640 12640 12640 12640 12640 12640 Cocoa --- 1--- ---- 14 51 t03 203 323 413 502 547 547 547 Palm oil 50 95> 185 305 485 745 1115 1545 2055 2445 2790 3045 3180 Palm kernels 12 25 50 80 120 185 275 385 510 595 665 705 725 Economic farm gate prices'( Le/ton Husk rice 230 230 230 214 198 1 182 166 150 152 154 156 158 159 Cocoa --- --- --- 1095 1074 942 906 855 855 855 855 855 855 Palm oil 297 419 311, 288 277 261 253 254 254 258 262 266 270 Palm kernels 170 198 152 141 136 128 124 120 120 123 126 129 132 Incremental farm gate benefits Le '000 Husk rice 60 370 902 1720 2342 2300 2098 1896 1921 1947 1972 1997 2010 Cocoa -- --- --- 15 55 97 184 276 353 429 468 468 468 Palm oil 15 40 58 88 134 194 282 386 522 631 731 810 859 Palm kernels 2 5 1 11 16 24 34 45 61 73 84 91 96 Total incremental benefits 77 415 961 1834 2547 2615 2598 2603 2857 3080 3255 3366 3433 _/ see Volume I, Annex 2. SIERRA LEONE INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT II Economic Cash Flow - NAP Le '000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10-20 Incremental investment costs Overhead costs Salaries and emolumentsl/ I/ 363 408 430 342 185 116 116 116 116 116 Vehicles, plant, and equipment 259 18 20 100 27 27 27 27 27 27 Buildings, furnishings, 1d construction material17 494 20 - - - - - - - Vehicle operating costs 98 109 119 119 56 36 36 36 36 36 General services costs 86 89 91 88 27 27 27 27 27 27 Physical contingencies 5% 65 32 33 32 15 10 10 10 10 10 Sub-total 1365 676 693 681 310 216 216 216 216 216 Incremental direct production costs Farm development ail inputs2/ 19 93 195 312 312 312 312 312 312 312 Incremental labor 18 70 123 152 107 92 92 92 92 92 Physical contingencies 5% 2 8 16 23 21 20 20 20 20 20 Sub-total 39 171 334 487 440 424 424 424 424 424 Share of PYoject Evaluation & Services Unit (30%) 42 34 34 20 20 20 20 20 20 20 Total Incremental Costs 1,446 881 1,061 1,188 770 660 660 660 660 660 Incremental benefits 61 394 785 1,142 1,o47 1,067 1,087 1,107 1,12#- i,142 1/ excludes livestock, forestry, roads and water costs 2/ excludes labor included in incremental labor < 3/ shadow wage rate of Le 0.3 per manday (see Table 6) W , , 4/ see Table 7 ° X SIERRA LEONE INTEGRATED AGRICULTURAL DEVELIPMENT PROJECT II Incremental On-Faru Labor1/- NAP Year 1 Year 2 Year 3 Year h Year i Year 6 onwards Swamp Rice Swamp Development 1000 mandays 37.5 125.0 187.5 200.0 50,0 - Rice Production tOOQ mandays 12.5 50.0 100l 0 150.0 150.0 150.0 Uplands-Permanent Rice Production '000 mandays 6.5 19,0 31L0 310 310 31.0 Groundnut Production I000 mandays - 500 15.0 25.0 25.0 25.0 Uplands-Shifting Rice Production t000 mandays 10 24.0 48.0 72.0 72.0 72,0 Groundnut Production (1) " 2.5 7.5 20.0 20,0 20.0 20.0 Groundnut Production (2) t 1.0 3,0 8.0 8.0 800 8.0 Total Incremental Labor '000 mundays 61.0 233.5 409,5 506.0 356,0 306.0 Value of Incremental Iabor 2J Le '000 18.3 70.0 122.8 151.8 106.8 91.8 1/ Calculated from incremental labor estimates given in Annex 2, Tables 1-8, combined with development projections given in Annex 2, Table 10. ?/ At shadow wage rate of 30 ¢ per manday, August 6, 197h Volume 1 Annex 6 Table 7 SIERRA LEONE IffTATED AGRICUMIMUAL 'DEVLOPmF wtoJlCT II Incremental Benefits - NAP Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Years lo-20 Incremental production tons Husk rice 280 1720 3550 5370 5370 5370 5370 5370 5370 5370 Ground nuts (unshelled) --- 250 720 1560 1560 1560 1560 1560 1560 1560 Econoraic farm gate p ricesi/ LeRton Husk rice 218 206 190 170 154 156 158 160 162 163 Gracnd nuts (unshelled) 171 161 153 147 141 147 153 159 165 171 Incremental farm gate benefits Le '000 Husk rice 61 354 675 913 827 838 848 859 870 875 Ground nuts -- 40 110 229 220 229 239 248 257 267 Total incremental benefits 61 394 785 1142 1047 1067 1087 1107 1127 1142 1/ Volume 1, Annex 2. 5 ,3£, tt0 / _ _ _ _ _ _ _ a, I(it_ X ~~~~~~~~~~~~~~~~~~~~~~MA PtTANIA | r 6 8 t X ' ¢ r UPPEE - ,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~r-tPPE G U I N E A /:-5 N ' R T H E gR N P R 0 V/1 N C E 'th _1 't'w>aih8drn!ilrar¢'S¢ -w- rhv ' <- ; tX j. 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