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FOR OFFICIAL USE ONLY
Report No. 3274
PROJECT PERFORMANCE AUDIT REPORT
MALI: INTEGRATED RURAL DEVELOPMENT PROJECT
(CREDIT 491-MLI)
December 31, 1980
FILE COPY"Operations Evaluation Department
This document has a restricted distribution and may be used by recipients only In the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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ABBREVIATIONS
FAC Fonds d'Aide et de Cooperation
IDA International Development Association
IER Institut d'Economie Rurale
IRDP Integrated Rural Development Programme
OA Operation Arachide
OACV Operation Arachides et Cultures Vivrieres
ODIPAC Office de Developpement Integree de la Productiond'Arachides et de Cereales
OPAM Office des Produits Agricole du Mali
OSRP Office de Soutien et de Regularisation
des PrixSCAER Societe des Credits Agricole et d'Equipement
RuralSEPAMA Societe d'Exploit*tion des Produits
Arachidiers du Mali
SEPOM Societe d'Exploitation des Produits
Oleagineux du MaliSOMIEX Societe Malienne d'Import-Export
FISCAL YEAR
Government January 1 - December 31OACVuntil 1974 January 1 - December 311975 January 1 - September 30thereafter October 1 - September 30
FOR OFFICIAL USE ONLY
PROJECT PERFORMANCE AUDIT REPORT
MALI: INTEGRATED RURAL DEVELOPMENT PROJECT(CREDIT 491-MLI)
TABLE OF CONTENTS
Page No.
Preface .................................... .. ... . . ............. iBasic Data Sheet .............................. 6..................... iiHighlights ......................................... .. iii
PROJECT PERFORMANCE AUDIT MEMORANDUM
I. Project Summary .... ............ 1
II. Main Issues .............. ...... . .................. 4A. General ....... o.. ................ o....... .o. ..... 4B. Project Design . ............... .. ........... 4C. Institutional Problems 8......... .............. 8D. Additional Findings ............. .............. 12
PROJECT COMPLETION REPORT
I. Background .. .4....... .. . ................. ....... 17II. Preparation and Appraisal ................................ 18
III. Implementation ...................... * ..... ....... ........ 22IV. Production Impact ............ ........... 24V. Impact of Other Project Components ....................... 29
VI. Project Cost and Financing .............. ... 32VII. Institutional Development ......................... .... 34
VIII. Finanancial and Economic Results .. .............. 36IX. Performance of the Association, OACV, and Goverment...... 40X. Conclusions ............... ......... .. ................. 43
Annexes 1-7
Map
This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
PROJECT PERFORMANCE AUDIT REPORT
MALI: INTEGRATED RURAL DEVELOPMENT PROJECT(CREDIT 491-MLI)
PREFACE
This is a performance audit of the Integrated Rural DevelopmentProject in Mali, for which Credit 491-MLI was approved in June 1974 in thesum of US$8.0 million and closed on time, on September 30, 1978.
This audit consists of a memorandum prepared by the OperationsEvaluation Department and a Project Completion Report (PCR) dated January 17,1980. The PCR was prepared by the Western Africa Regional Office on the basisof a country visit in September 1979. The project agency, OACV, did notcontribute to the PCR; however, reports of the Evaluation Unit, financed underthe project, were extensively used. The audit memorandum is based on a reviewof the Appraisal Report (No. 340A-MLI) dated May 13, 1974, the President'sReport (P-1398A-MLI) of May 24, 1974, the Credit Agreement dated July 1, 1974and the PCR. Correspondence with the Borrower and internal Bank memoranda onproject issues as contained in relevant Bank files have also been reviewedand Bank staff associated with the project have been interviewed.
An OED mission visited Mali in August 1980. The mission helddiscussions with officials of the Ministries of Rural Development, Finance andPlanning, participating banks and the project agency. A field trip to visitsome of the participating farmers was undertaken. The information obtainedduring that mission was used to evaluate the conclusions of the PCR and isalso reflected in the audit memorandum.
A copy of the draft report was sent to the Borrower on November 11,1980; no comments, however, have been received.
The audit finds the PCR comprehensive and accurate with respect tothe project's achievements and shortcomings. The points discussed in theaudit memorandum have been selected because of their relevance to this as wellas other Bank projects.
The valuable assistance provided during the preparation of thisreport by the Government of Mali, staff of the Project Unit and farmers isgratefully acknowledged.
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PROJECT PERFORMANCE AUDIT REPORT BASIC DATA SHEET
MALI: INTEGRATED RURAL DEVELOPMENT PROJECT (CREDIT 491-MLI)
KEY PROJECT DATA
Appraisal Actual or
Item Expectation Current Estimate
Total Project Cost (US$ million) 18.9 12.7
Underrun (%) - 32L?
Credit Amount (US$ million) 8.0
Disbursed - 8.0
Date for Completion of Physical Components 03/78 03/78
Proportion Completed by Above Date (%) 100 100
Economic Rate of Return (%) 91 neg.
Cumulative Estimated and Actual Disbursements
(US$)
FY74/75 FY/75/76 FY76/77 FY77/78 FY78/79
Estimated 2,300 4,900 6,700 7,700 8,000
Actual 200 2,500 4,200 8,000 -
Actual/Estimated (%) 8.7 51.0 62.7 103.9 -
OTHER PROJECT DATA
Actual or
Item Original Revisions Est. Actual
First Mention in Files or Timetable - - 08/71
Government-s Application - - 08/71
Negotiations 04/15/74 - 04/15/74
Board Approval 06/06/74 - 06/06/74
Credit Agreement Date 07/01/74 - 07/01/74
Effectiveness Date 09/30/74 11/30/74 12/09/74
Closing Date 09/30/78 09/30/78
Borrower Government of Mali
Executing Agency Operation Arachide et Cultures Vivrieres (OACV)
Fiscal Year of Borrower January 1 - December 31
Follow-on Project none
MISSION DATA
Sent Month/ No. of No. of Man- Date of
Item by Year Weeks Persons Weeks Report
Identification RHWA 08/71 08/71
Preparation RMWA 01/72 1.8 3 2.4 02/03/72
06/72 1 1 1.0 07/07/72
03/73 1 2 2.0 04/02/73
Preappraisal HQ 04/73 1 1 1.0 05/17/73
Appraisal HQ 06/73 5 5 25.0 05/13/74
Follow-up RMWA-
Appraisal HQ 03/74 2 4 8.0 05/23/74
Total 11.8 39.4
Supervision I HQ 07/74 1 1 1.0 07/30/74
Supervision II HQ 10/74 1 2 2.0 12/20/74
Supervision III HQ 05/75 0.5 2 1.0 05/21/75
Supervision IV HQ 11/75 1 1 1.0 02/02/75
Supervision V HQ 04/76 3 3 9.0 09/28/76
Supervision VI HQ 01/77 2 2 4.0 04/06/77
Supervision VII HQ 12/77 3 3 9.0 02/28/78
Supervision VIII HQ 11/78 1 1 1.0 11/29/78
Total 12.5 28.0
COUNTRY EXCHANGE RATES
Name of Currency (Abbreviation) Mali Franc (MF)
Year:Appraisal Year Average Exchange Rate: US$1 = MF445.4
Intervening Years Average US$1 = MF462.5
Completion Year Average US$1 = MF473.7
/a For a summary discussion, see para. 10.
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PROJECT PERFORMANCE AUDIT REPORT
MALI: INTEGRATED RURAL DEVELOPMENT PROJECT
(CREDIT 491-MLI)
HIGHLIGHTS
The Integrated Rural Development Project (Cr. 491-MLI) was designed
to support the continuation of the development of groundnut production ini-tiated under a previous project financed through French aid and the extension
of Government support to the development of cereal production. Project
activities centered on extension, input supply, marketing, and social services
to the communities involved.
The project has not achieved its production objectives because offailures in project design, weaknesses in project management, unfavorable
Government policies, and lack of consistency and continuity in Bank support.The project's impact on farmer incomes of those who had access to subsidizedequipment and inputs was positive. The subsidies more than compensated these
farmers for lower produce prices obtainable at official rather than privatemarkets. However, only a limited number of farmers benefited from subsidized
inputs, while all farmers were expected and at times obliged to sell theirproduce through official channels. The net benefit stream resulting from theproject is essentially negative in the aggregate.
Other points of special interest are:
- suitability to farmers of technological packages doubtful (PPAMparas. 8 and 30; PCR paras. 4.07, 4.08 and 4.12);
- organization and management of project inadequate (PPAM paras.17,27 and 34);
- need to review Bank experience with agricultural extension inSahelian countries (PPAM para. 31);
- project did not provide the appropriate technical assistance(PPAM paras. 47-49; PCR para. 3.06);
- monitoring and evaluation lacked relevance for project management
(PPAM paras. 50 and 51);
- project failed to reach target population (PPAM paras. 57 and 58;PCR para. 9.10); and
- project design did not fit macro-economic environment prevailingin the country (PPAM paras. 60 and 61).
PROJECT PERFORMANCE AUDIT MEMORANDUM
MALI: INTEGRATED RURAL DEVELOPMENT PROJECT(CREDIT 491-MLI)
I. PROJECT SUMMARYI/
1. The Integrated Rural Development Project (IRDP), the second BankGroup operation in Mali-s rural sector, was appraised in June 1973 with the
participation of the co-financier, Fonds d'Aide et de Cooperation (FAC). The
project's main objectives were to continue groundnut development in Mali'swestern and central provinces, which had been successfully initiated in 1967under a FAC-financed project; to extend the scope of project activities tocereals, and to expand the project area to the east.
2. In consequence, project activities focused on improvement of exten-
sion services, input and equipment supply, and provision of marketing services
in the old project area, and the development of similar services in the newproject areas. Ancillary project components were a rural tracks improvementprogram; a functional literacy program; the improvement of medical facilities;a small livestock component comprising veterinary services and some cattlefattening; a small agricultural research program; the supply of equipment toblacksmiths; the establishment of an evaluation unit; and the execution of astudy of cereals marketing and pricing policies. Total project cost wasestimated at US$18.9 million, for which an IDA credit of US$8.0 million
equivalent was approved in June 1974. The project provided technical assis-tance in the fields of agriculture and financial management through two French
consultant firms. The project started in April 1973 and was completed inMarch 1978. (The first project year was financed entirely by FAC). Theexecuting agency was Operation Arachides et Cultures Vivrieres (OACV), abranch of the Ministry of Rural Development.
3. Assurances were obtained from Government that IDA would be consultedannually on the producer price for the coming season and the price structure(bareme) for groundnuts, which specifies the charges to be reimbursed to eachagency engaged in collection, transport, processing and export of groundnuts,respectively. Government also agreed to set up a stabilization fund forgroundnuts and to consult with IDA on payments to be made into, or from, thisfund. The Association would also be consulted on any policy changes regarding
prices and subsidization of inputs and equipment.
4. With the exception of the buildings component, physical execution ofthe project encountered few problems. Execution of ancillary projects throughspecial agencies was, on the whole, satisfactory, in particular for the track
1/ Adapted from the PCR.
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improvement program, the livestock component, and the establishment of the
evaluation unit. Not all objectives of the subprojects were reached, however.
5. Groundnut production increased considerably in project years 2-4
(after a stagnation in year 1 attributable to weather conditions) but relapsed
to pre-project levels in the last project year, and remained low in the lastyear on record (1978/79). Groundnut marketings (through official channels)
followed a similar course but fell to a level some 25% below pre-projectmarketing volumes. Cereals production appears to have increased but there is
no reliable statistical indicator to gauge the increase, or the project-s
contribution to this increase, as data on pre-project areas under cultivation
are very uncertain.
6. Although the correlation between groundnut production (and market-
ing) and economic indicators (producer price of groundnuts, prices of inputs,and relative groundnuts: cereals prices) is weak, there is no doubt thatgroundnuts have become less attractive compared to cereals. Market prices for
both cereals and groundnuts in recent years were frequently more than twice as
high as official producer prices, and adjustments made in the last projectyears were too little and too late and therefore remained ineffectual. Otherfactors contributing to the decline of groundnuts production are more directly
attributable to OACV's performance (rather than to Government's pricing
policies) and comprise late start of the buying campaign, bottlenecks in thesupply of inputs and bags, poor seed quality, and a decline in the quality of
extension staff which accompanied the expansion in area.
7. High market prices of cereals, partly fueled by demand from neigh-
boring countries, induced a diversion of farmers' efforts towards these crops,
This is reflected in strong demand for cereals fertilizer (and slackeningdemand for groundnut fertilizer); demand for improved seed, and, most con-vincingly, concentration of cultivation efforts on cereals fields.
8. Farmers proved more ready to apply selected productivity-raisinginputs (mainly improved seed and fungicides, but also fertilizer) than to
apply the whole package of recommended cultivation techniques. High-density
sowing and early sowing, in particular, were largely rejected, farmers pre-ferring a risk-averting staggering of sowing dates and a larger number oflow-density plots. However, developments were far from uniform in individual
sub-areas. The new OACV areas in the east reverted to their traditionalemphasis on cereals much faster than the core of the groundnut belt, where
groundnuts partially held their own.
9. Distribution of equipment, improved seed, fungicides and fertilizerremained behind appraisal estimates for most of these items, but projections
had been very optimistic, and the absolute increase is satisfactory for
several items, in particular use of fungicides and improved seed. Sales of
agricultural equipment were initially restricted more by supply bottlenecks
than by lack of demand, and later on by steep increases in prices.
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10. OACV s system of financial reporting was not geared to the conceptof incremental expenditure which governs the definition of many project com-ponents. Therefore, no data are available about the precise counterpartfinancing by Mali, and therefore of total project cost. A tentative recon-struction shows project costs of US$12.7 million, which is 32% below theappraisal estimate. The shortfall is partly attributable to lower thananticipated expenditures for subsidies for agricultural inputs and partly dueto a reallocation of expenditures, approved by IDA, from categories with ahigh Malian participation to categories with a low participation.
11. At the time of appraisal, OACV had a history of several years'successful performance, but its effectiveness was impaired by dependence onother agencies for supplies (inputs, bags) and short-term credit, which wasprovided by its clients, the groundnut crushers and exporters.
12. The performance of the Bank was uneven: supervision missions weregenerally pleased with the project's progress as long as outward dangersignals were not yet apparent. The decline in the adoption rate of recom-mended techniques, the stagnation in fertilizer use, the unsound financialpractices of OACV and the explosion of operating expenditure only came intofocus when the turn of the tide in groundnut marketing initiated a rapidcoll-apse of OACV. In the initial years, Government-s non-compliance withimportant covenants was tacitly tolerated. In the final stages, however, theBank contributed actively, and with determination, to the shaping of reorgani-zation, which is now under way. An essential step in this process of per-suasion was the Bank's refusal to further process a proposed second OACVproject (appraised in early 1978) until Government had accepted and imple-mented the proposed institutional and financial reforms.
13. Government's performance was weak. It maintained producer pricesat a level not in line with the market situation and, until 1979, reactedbelatedly and too timidly when this became apparent. It also resisted insti-tutional reform aiming at giving OACV greater freedom of action and bringingit under the discipline of commercial banks- scrutiny, and did not comply withthe Credit Agreement s provision to channel some of the groundnut exportsurpluses of the early years into a stabilization fund.
14. The economic benefits of the project are difficult to assess becauseof the uncertainties surrounding the recorded increase of production, in par-ticular of cereals, and because it remains uncertain to what extent observedincreases and decreases in production can be attributed to the project or mustbe attributed to extraneous factors, in the first place price policies.Incremental cereals production was estimated on the basis of recorded inputsupply and extension service achievements and their impact on production asestimated at appraisal. For groundnuts, the same method was used as analternative to recorded groundnut production increases. In all cases, thenet benefit flow resulting from the project is essentially negative in theaggregate.
II. MAIN ISSUES
A. General
15. The PCR describes the failure of one of the first integrated ruraldevelopment projects in Sahelian Africa. It attributes responsibility forfailure both to the approach used in project design for integrated ruraldevelopment and to OACV-s management and internal organization.
16. The audit concurs with the general finding that project designshould have taken greater account of the requirements of a rural developmentproject, particularly in respect of institutional organization and its rela-tionship with the socio-economic and the ecological environment. The auditalso considers, however, that most of the problems labelled "management" wereessentially problems of design since many factors which influe ced managementperformance were not, in fact, subject to management control.1' Poor overallperformance of this complex project must not, therefore, be cited as evidenceof failure of the concept of integrated rural development, but rather afailure of project design, which, as OED analyses have shown, have been thesingle most prevalent factor in poor project performance in this type ofproject.
B. Project Design
17. Use of Traditional Structures for Integrated Rural Development.This project is an example of the Bank-s use of institutional structuresdeveloped and perfected during implementation of traditional-style projects,in the design of a rural development project where the key to success restsinstead on human and social factors.
18. Although rural development projects share the goals of economic andinstitutional development, they also aim at changing the way in which tradi-tional rural societies have functioned in the past, paying special attentionto improving productivity, welfare and income levels of the rural poor. Suchprojects create extensive and diffuse boundaries for an organizational struc-ture, since a number of independent agencies at the regional, national andlocal levels, together with project beneficiaries, are likely to influenceproject outcome. A suitable project organization, therefore, is one whichcontrols the basic functions necessary to achieve physical targets but alsoestablishes a network of influence over the independent agencies involved.Integration should at first, concern all necessary functions related to asingle or a few closely related objectives. Complementarity between thevarious objectives of rural development might not be found through a singleinstitution but rather through coordinating bodies of different institutionsat local, regional and national levels.
1/ This was a major finding of Staff Working Paper No. 375.
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19. This project, however, intended the integration to be sectoralrather than functional. It tried to integrate, under the same project insti-
tution, various sectors of rural development: groundnut production, cerealproduction, livestock, health, functional literacy, and rural tracks. Most of
these objectives were OACV's responsibility, while some remained the special-ized agencies': veterinary, health programs and functional litpracy; but nocoordination mechanism was ensured to achieve complementarity 'Letween thesevarious objectives. Coordination problems were exacerbated by the size of the
area covered by the project: 135,000 km2 , 1.2 million inhabitants and 120,000farms.
20. At the same time, OACV had only incomplete control over key func-tions, particularly groundnut marketing, credit and input delivery necessaryfor achievement of project objectives. The only function controlled entirelyby OACV was agricultural extension. It controlled only the organization ofprimary marketing but was dependent on the Societe Malienne dImport-Export(SOMIEX), Societe d'Exploitation des Produits Oleagineux du Mali (SEPOM) andSociete d'Exploitation des Produits Arachidiers du Mali (SEPAMA) for bagsand marketing funds. In addition, OACV had only partial control over creditallocation and limited influence on credit recovery and input supply. As inmost projects credit allocation and recovery were also influenced by local and
national administrations.
21. As stated in PCR (para. 7.04), project performance, therefore,would depend only partially on OACV's internal mapagement and organizatin andmainly on the performance of other institutions- over which OACV had littleinfluence or control. Furthermore, as the PCR clearly explains, the collapse
of the project was provoked by the att tude of the most important partner:the farmers themselves. A tentative- explanation of their attitudes isthat, given a comparatively low official producer price, their principalobjective remained that of securing adequate food crop production (cereals)for their families.-3 Farmer interest in growing cereals was reinforced bythe lack of a reliable marketing and storage system, for these basic staples,which made reliance on outside supply risky.4/
1/ Particularly the Societe des Credits Agricole et D'Equipment Rural(SCAER), SOMIEX, SEPOM, SEPAMA and the Office des Produits Agricole duMali (OPAM).
2/ The PCR is more specific and claims that low farmer prices are the mainreason for marketing decline.
3/ See M. de la Croix, Rapport de mission au Mali 12-30 May 1979.
4/ Mali Sud project shows the best way to promote a cash crop is to securefood production at the same time.
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22. Extension Services. The principal component for achieving expandedagricultural production was intensification of extension work. Project designfor this component drew heavily on experience under a previous project which,however, did not share the objectives of integrated rural development nor didits scope encompass the same geographical areas. The institutional structure,which had been tested on an experimental basis by OACV's predecessor, Oper-ation Arachide, was regarded as more than adequate by the appraisal mission.
23. The structure established by the French consultants was a hierar-chical one centered on "pilot farmers". At first sight this system seems tobe very close to the Training and Visit System promoted by the Bank in otherSahelian countries. The failure of the extension system being a key projectissue, it would have been useful to undertake a comprehensive post evaluationof its achievement. Extension structure was found too costly. A reduction ofinstitutional overhead through a gradual transfer of tasks to cooperatives andmutual guarantee groups is considered under the new OPIPAC technical assis-tance project.
24. The concept of farmers' participation, however, was totally lackingin OACV's project despite the prevalence of very favorable conditions createdby the Adult literacy component of former "Operation Arachide". This isconfirmed by experiments undertaken by the current project's functionalliteracy campaign demonstrating that increased farmer participation at thevillage level was feasible. This can be explained by two main reasons. Thefirst one was the general philosophy of extension methodology basicallydesigned as a One Way, top to bottom approach, and the implicit distrust offarmers' capabilities. The second was the disappointing results of thecooperative system established under the former regime and the lack of a clearnational policy on this matter.-' The fact remains, however, that thisproject is an example of project management-s and subsequent Bank supervisionmissions' limited ability to see ahead and plan project development. Alldecisions in extension policy were taken under pressure of external eventswhich the project failed to control, influence or even appreciate.
25. When OACV-s financial situation was at ease in 1977, a Bank super-vision mission recommended a 30 to 50% increase in the number of field exten-sion workers. Eleven months later another supervision mission recommended areduction of staff in groundnut marginal areas when the abrupt change inproject's fortune became evident.
26. The appraisal report assumed that the quality of extension staff wasmore than adequate. At this stage it is difficult to know if the extensionservice was then really as good as stated. Quality of extension staff onlybecame an issue in supervision reports in January 1977, when the extensionsystem was intensively surveyed. But, the PCR is right when it statesthat "slowing down and even decline in the adoption of recommended techniques
1/ An experimental project aiming at rehabilitatin of cooperative structuresstarted in 1976 but was, and still is, limited to the 7th region of Maliand concentrates mainly on herdsmen and fishermen cooperatives.
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and the stagnation of fertilizer use might have alerted supervision missionssomewhat earlier" (para. 9.04). Missions should also have been alerted byOACV-s Management Note of June 1975 which questioned the quality of extensionstaff. Given the importance which extension was to play in the achievement ofproject objectives, it would have been useful to undertake a comprehensiveevaluation of its accomplishments during project implementation.
27. Technical Packages exhibited similar shortcomings to those describedfor extension services. Despite the importance attached to food crops, whichfollowed mainly from the Bank -s thinking about rural development at that time(this view, however, was not shared by Government, nor apparently by thesupervision missions), a defined technical package for cereal production wasnon-existent; "the appraisal report had excluded fertilizer application tocereals from the extension program and evidently misjudged its economicattractiveness." (PCR, para. 4.14). However, OACV should be credited for itsefforts, although limited, to provide improved paddy seeds and maize.
28. Bank proposals for institutional changes favored groundnuts as acash crop and paid little attention to food crops. Moreover food crop pro-duction, which was far above appraisal estimates, turned out to be more asubject of concern than satisfaction for the Bank. Reorganization of cerealmarketing was found "beyond the scope of this project" by the September 1976supervision mission, which recommended "that project objectives can only bereoriented to lessen OACV-s efforts on cereal promotion, and to emphasizegroundnut development." (para. 6.05). The PCR also notes that incrementalproduction of food crops was more a result of increasing farmer concern andfavorable climatic conditions than a result of the project's impact.
29. For groundnuts, the technical package was considered well proven byfarmer experience under the preceding Operation Arachide project; but, the PCRcorrectly points out the lack of flexibility in its application to otherareas. With a few exceptions,I/ package components have been readily acceptedby farmers although the technical adequacy and effectiveness of the packagehave been challenged.
30. This is not the first time that the Bank has been faced with thiscrucial technical issue. The PPAR op Senegal Terres Neuves ResettlementProject highlighted a similar problem2' and, in fact, Senegal Terres Neuvesand OACV are examples of two opposite approaches: the "heavy" technicalpackage promoted in Terres Neuves and recommended for Mali and the "light"technical packa e approach promoted by OACV and also used in the Senegal SineSaloum project.-
1/ Principally the use of fungicide.
2/ PPAR: Senegal Terres Neuves Resettlement Project, Report No. 2589,June 29, 1979.
3/ Not yet completed.
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31. Given the importance and difficulties of agricultural extension workin Sahelian countries, it appears advisable to undertake an in-depth survey ofthe Bank-s experience in the region and, together with other financing agen-cies and research institutions, initiate a seminar on soil fertility problemsin Sub-Saharan Africa.
32. Credit and Input Supply. Like other institutional arrangements,organization of credit and input supplies were not designed with the require-ments of a rural development project in mind. The feasibility study pointedout that "difficulties encountered in promoting development, and independentfrom extension efforts, are generally due to delays in supply of requiredinputs and limited financial resources of the farmers." The system wasconsidered satisfactory at appraisal as long as contentious issues betweenOACV and Societe de Credite Agricole et d'Equipement Rural (SCAER), which wasresponsible for the supply of inputs and agricultural credit, were to besolved on the basis of a reciprocal service agreement. Nothing was designedto solve the input supply problems. This situation could not improve spon-taneously; in fact it worsened through project life and was one of the mainreasons for the slow follow-up on recommended cultivation practices. This is,again, not a problem specific to this project. OED has found input supply tobe a major bottleneck in several projects where functional responsibility isdivided among several institutions without clear lines of coordination. Thisfurther confirms the merits of sectoral policy planning to tackle problemsarising from rural development projects, with their inherently diverse yetinterdependent characteristics. In the case of OACV, the Bank's responseso far has been to provide basic studies, e.g. a cereal marketing survey,financed under the present credit.!V
33. Marketing. Project design correctly evaluated the importance ofcereal marketing as the key issue for food crop development. A study onproducer prices and marketing arrangements for millet and sorghum was financedunder the project. In addition, the potential for higher priced crops (con-fectionary and edible groundnuts) was well perceived by the feasibility study,although project design did not pay sufficient attention to groundnut market-ing problems which existed at appraisal. However, the existence of localmarkets and the regional market (particularly illegal exports to neighboringCFA countries) were not taken into account.
C. Institutional Problems
34. The PCR attributes failure of this project to poor design and weakmanagement. On this latter point, it states that: (i) there has been ageneral decline of OACV performance over project life; (ii) the Malian projectmanagement was largely responsible for this situation; and (iii) the Govern-ment had an overall negative attitude towards institutional problems but
1/ The Bank learned from the deficiencies revealed between 1973 and 1976 andimposed a condition in the Mali Sud Project (Credit 669) authorizing CMDTto arrange its own input supply if the existing system would not improvewithin a year and the same clause was adopted for the second Mopti RiceProject (Credit 227) in 1977.
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finally accepted the Bank's recommendations (paras. 7.01-7.06). The auditmission, however, found that many "management" problems are essentially theresult of poor project design: (i) institutional problems already existed atappraisal time; (ii) OACV-s financial structure was not questioned by the Bankuntil the adverse trend in groundnut marketing became apparent; (iii) theproject component intended to improve OACV-s managerial weakness was inade-quate; and (iv) Bank influence, while overall positive, has lacked consistencyand continuity.
35. Existing Institutional Problems and Sank Reaction. No mention wasmade in the appraisal report of problems arisIng out of OACV's relations withother institutions. These were particularly acute in respect of groundnutmarketing, where delays and shortages of bags and credit were widespread.Instead, the appraisal report refers to the establishment of efficient market-ing channels, lack of which was thought to be the reason for loss of interestby farmers in groundnuts as a cash crop. The feasibility study had alreadydrawn attention to problems in credit supply.i/
36. The Bank was slow, first, to recognize that there were groundnutmarketing problems, and second, to realize that these were symptomatic ofunderlying institutional problems caused by poor project design. This,however, developed into a wider problem, where the Bank (and project manage-ment) failed to plan project development.
37. It was OACV, in its 1974-75 Annual Report, which highlighted delaysin the marketing campaign, attributing them to bottlenecks in input supply./The April 1976 Bank supervision report mentioned, for the first time, theshortage of bags and the resultant costly transfers and storage. This broughtto the attention of the Bank, the need for structural reorganization of OACVincluding a redefinition of its relation Eo input supply organizations. Theinstitutional problem became a key issue for the follow-on project. The Bankidentified the complexity of the problem in a project brief prepared in June1977, but, no decision was reached as to which approach would be best suitedfor OACV. Hence, the chance to institute measures which could have favorablyaffected project outcome was lost.
38. The project brief of June 1977 outlined the two solutions opento OACV. The first consisted of giving OACV full financial autonomy andresponsibility for marketing and possibly exporcing groundnuts. This wouldrequire a change in its charter: from a non-profit association extendingassistance to farmer-type organizations, 0ACV would be incorporated as a
1/ "The organization is frequently forced to utilize its operations fundsto finance crop purchases. It is not recommended to continue thispractice and it would be advisable to provide adequate funds throughparastatals (SOMIEX, SEPOM) to finance marketing operations."
2/ While 85,000 bags were necessary, only 37,266 were available on January1, 1975 although the marketing was scheduled to open on December 1, 1974and OACV had to finance marketing out of its own funds.
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commercial company. While the change would encourage efficiency, it would not
necessarily best serve, in the long run, the interests of rural development.
The second approach involved the creation of a Groundnut Fund which could
be incorporated without modifying the existing institutional framework.
Basically, OACV would receive credit and operating funds from this institu-
tion, which would administer a cost-based price structure without taxesor
subsidies. Whereas this latter approach would have the advantage of being
easier to implement, while introducing some rationalization in the existingsystem, it could in fact reduce OACV's independence since its financial
standing would be subject to the Fund's control.
39. The project brief also suggested separating OACV's various objec-
tives: a directorate would be created and made responsible for marketing,credit and inputs supply. This could, after project completion, either become
a central cooperative organization or a commercial state corporation. It also
recommended that the non-commercial services offered by OACV could be restruc-
tured under a permanent regional development organization. The project briefconcluded that "because of the important foreign exchange losses, togethey
with the deficit incurred by this problem-ridden industry and because of its
interdependence with OACV through the bareme, it is recommended that the Bank
review the situation and help Government to find a solution to this problem
during the next appraisal."
40. On the basis of these findings, the Bank recommended in August 1977
that OACV-s status be changed to that of a commercial company. This position
was steadfastly maintained despite increasing signs of the impending collapse
of official groundnut marketing. The recommendation had to be abandoned later
when it became evident that groundnut processing and export could no longer be
considered a profitable activity.
41. Financial Structure: The Bareme Issue.l/ The system of bareme
is generally used by developing countries whose budgetary earnings derive
principally from exports of cash crops. The introduction of this system in
Mali in 1970 was viewed as a progressive step because it secured operating
funds for Operation Arachide. It provided OACV with a source of increasingearnings as long as the marketing achievements were above expectations. The
system, however, encouraged OACV to overestimate the project-s provisional
budgets and underestimate marketing prospects. The appraisal mission wasaware of these problems and included credit covenants, which required annual
consultation with IDA, on the price structure (bareme) for groundnuts, the
producer price and contributions to the Stabilization Fund. But, supervision
missions did not insist on Government and OACV compliance as long as marketing
results were good (para. 10.02).
1/ See para. 3. For the PCR a basic flaw in OACV's structure is OACVs
dependence on bareme revenue while at the same time being unable to
intervene when producer prices are set.
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42. The audit mission endorses the PCR-s conclusion that with the col-
lapse of official marketing and decline of groundnut prices on the world
market, the bareme system is no longer suiable for financing OACV's recurrent
costs and supporting Government revenue.- The audit mission also considers
that this system could have been effective if the Bank had insisted on Govern-
ment compliance with the bareme and Stabilization Fund covenants. The basic
flaw of OACV-s financial structure was rather the lack of a Stabilization Fund
and of close monitoring of OACV's operating expenditures than the baremesystem per se.
43. Project Management. While in agreement with the overall PCR analy-
sis on project management, the audit disagrees on some points and considers
that the Bank-s attitude vis-a-vis the Project Manager lacked consistencyand equity. Technical assistance performance should also have been evaluated.
44. The extreme centralization of decision making (PCR, para. 7.03) was
not introduced by the Malian Project Manager but was rather an inheritancefrom the previous Operation Arachide project. Furthermore, the Bank was well
aware of the problem since the beginning of the project. The first super-
vision mission, October 1974, expressed its concern: "Project management
appears over-centralized. In addition, there seems to be a propensity to
deprive other agencies involved in project execution of some of their respon-sibility. This situation, if not corrected, will undoubtedly hinder the
development of a project of this magnitude."
45. The situation was apparently corrected and confirmed by the super-
vision mission of April 1976: "The organization of OACV was reviewed by themission, and found to be satisfactory. The heavy concentration of powerwith the Project Manager of OACV, who is very dynamic, and has a strong
personality, seems to be the best solution at this stage of OACV's develop-ment." The momentum given by OACV-s Project Manager to the execution of theproject was, in fact, regarded as a positive factor in discussion regarding a
follow-on project. These initial findings were not borne out by subsequentevents. In fact, the Bank changed its position vis a vis the suitability ofthe Project Manager and so informed the Government. However, it was difficultfor the Government to understand the sudden and drastic change in the Bank'sjudgment of the performance of the Project Manager, who, in the end, wasinduced to tender his resignation at the insistence of the Bank.
46. Shortcomings in financial management were acknowledged during theOACV Conseil d'Administration of 1978 by the Project Manager himself, whowas accused of using operating funds to finance unscheduled investments (para.7.05). The audit mission considers, however, that the interpretation of such"unscheduled investments" as being "indicative of an increasingly self-servinginstitution" (para. 8.05) is not entirely correct. The ample loans to staff(FM 107 million or $225,000) in fact cover bicycles and mopeds purchased by
1/ This is clearly illustrated in the findings of the appraisal missionworking on the ODIPAC Technical Assistance Project.
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OACV and sold on credit to extension staff and personnel as planned at apprai-sal. The problem lies not in the existence of such loans but in the manage-ment of the credit, where repayment terms were longer than the life of theequipment.
47. Role of Technical Assistance. The PCR does not refer to the tech-nical assistance component, which was intended to strengthen administrativeand financial services. Since the follow-on project would be essentially atechnical assistance project, it is useful to assess, more precisely, the roleof technical assistance in the first project.
48. Weaknesses in OACV-s accounting and credit control had been identi-fied by the appraisal mission. The only relevant project component was aprovision for accounting assistance during the first year. Analysis of thereports of the firm which provided such assistance shows no evidence thatthey shared the concern of the first supervision mission regarding OACV'sfinancial management." Assistance was given primarily for accounting andcredit organization. OACV does not seem to have received specific assistancein budgetary procedures as the 1975 supervision suggested.
49. The Bank-s response to OACVs management shortcomings was to provideaccounting and auditing consultants.-1 While this was certainly necessaryto project success, it was insufficient.
D. Additional Findings
50. Evaluation Unit. A successful project component was the EvaluationUnit, appropriately established in IER.- The audit supports the PCR'sgeneral comments that its work had little impact on project development (para.5.12) but its pioneering studies were most useful. The audit considers that amonitoring unit, closely integrated with the management structure, where it ismost likely to be effective, would also have made a useful contribution toproject development.
1/ "Financial management and procedures remain unsatisfactory. The majorshortcoming, however, is OACV-s budgetary procedures. The budget isprepared primarily as a justification for funds to be obtained from thebareme or from external financial sources. It does not reflect realisticOACV capital and operating requirements and there is no budgetary con-trol." Supervision mission May 1975.
2/ As the consultant provided to the Minister of Rural Development by theCaisse Centrale de Cooperation Economique pointed out: "the accountingsystem was entirely unsuitable to OACV-s management problems makingmanagement control impossible."
3/ A department of the Ministry of Rural Development.
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51. The Bank closely supervised this component, providing two specia-lized missions in 1976 and 1977. There should have been, however, exchangesof experience among monitoring and evaluation units of several Bank-supportedprojects and, more specifically, between OACV and the Mopti Rice Project.l/
52. The Evaluation Unit focused mainly on OACV's impact a' the farmer'slevel (PCR para. 5.10). Farming surveys carried out by the Unit providedvaluable information on agricultural production and will certainly be usefulfor preparation of a new project. However, they provide little information onsome of the basic problems now faced by 0ACV at the farm level, namely: (i)farmers- attitudes vis-a-vis groundnut marketing and role of the black market;(ii) end use of groundnuts produced by women on individual fields, which com-prise 40 to 50% of total acreage in some areas; (iii) development of agricul-tural credit and reasons for the increase in bad debts, and (iv) extent offarmers' indebtedness to private merchants as a result of the drought and itsimpact on marketing behavior.-- These questions can only be answered by anin-depth socio-economic study. It could be included in the ODIPAC TechnicalAssistance project but the study would have to be extended to include theentire area previously covered by OACV. The methodology developed for eval-uating the functional literacy campaign could be used, since it includesself-evaluation at the village level. Results obtained by this method can beused to validate the opinion poll approach which has been used to date.
53. The consultant in charge of the evaluation was careful to involveintensively population in the project area as well as Malian staff in theevaluation effort. As a result: (i) the evaluation cost less than appraisalestimates; (ii) the techniques used are now firmly implanted in the evaluationprogram; (iii) the information required for improving the program was gatheredby those responsible for the program-s operation, and (iv) the Malian stafftrained in the process of evaluation were subsequently able to use the samemethodology for functional literacy activities in the Segou area.3/ Themethodology designed and implemented for this component was found to beinteresting and valuable both by the Malian Government and Bank staff, inspite of delays which occurred in submission of the final report.
54. Monitoring of OACV activities was suggested by one of the specia-lized supervision missions but could not be implemented by the already over-loaded Evaluation Unit. It must be said, however, that Bank experience atthat time was very limited and that this Unit was one of the first establishedunder a Bank-supported project in Sahelian Africa.
1/ See PPAR, Mali Mopti Rice Project, when issued; it iscurrently underpreparation.
2/ A farmer representative to the 1978 Conseil d'Administration suggestedthat one of the reasons for increased farmer usage of black markets wastheir indebtedness to private merchants after the drought.
3/ Functional literacy centers had been established in every sector coveredby OACV except Segou.
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55. Project's Impact at Farmer Level. It is difficult to assess accu-rately the project's impact on farmer income. The PCR maintains that officialprices offered by OACV have been lower than those prevailing on the openmarket, thus farmers have incurred some loss of income (para. 8.01). The PCRalso suggests that, in the final years of the project, coercive methods wereused for the collection of groundnuts (para. 9.10). 0ACV's former ProjectManager strongly denies that coercive measures were employed by OACV staff.He acknowledges, however, that coercive methods were employed by the adminis-tration and local police for credit recovery!/ and for cereal marketing.
56. More important is the equity issue (PCR para. 9.10). Only somefarmers had access to subsidized equipment and inputs, thereby obtaining anadvantage over others. Furthermore, only larger families were able to fulfilthe requirements for obtaining agricultural credit: two term payments and theclearing of 1.5 ha but no credit allowed for the purchase of oxen. The sharpincrease in price of both equipment and oxen further reduced the number ofeligible farmers.
57. Surveys made by the Evaluation Unit discovered that nearly half thelabor force and a large part of the area under groundnut cultivation (30 to50% in some areas) received no direct attention from extension staff. As inmost other rural development projects in Sahelian Africa, women play animportant role in agricultural production and yet, with some remarkableexceptions, are generally not considered by extension staff.
58. It is interesting to know, however, that farmer reaction has beenpositive overall, at least in the Kita area visited by the audit mission.3/Farmers do regard OACV as an input supplier and there is a strong demand forgroundnut seeds!! and "complexe cotton" fertilizer. The disappointmentexpressed by farmers of the Kenieba area after the announcement of OACV-swithdrawal is an indication of the dependence farmers built on OACV. Theresult should have been progressive reliance on the self-help approach todevelopment.
59. Macro-economic Consideration. This project is a typical example ofthe need to take into account the macro-economic environment in countrieswhere agriculture is the most important sector. OACV's performance wasconsiderably affected by the generally unfavorable economic environmentcreated by Government policy. Producer price policy and allocation of ground-nut earnings were the most important constituents of this environment andtheir negative influence on OACV's performance is analyzed well in the PCR.
1/ A 10% bonus was offered by OACV to officials who recovered debts.
2/ See PPAR on Senegal Casamance Rice Project, op. cit.
3/ This impression is confirmed by the Evaluation Unit's findings and by afield mission undertaken by M. Delacroix in 1979.
4/ During this comparison (1980/81) farmers accepted to pay cash at 125FM/kg for groundnut seeds provided by OACV.
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60. The deterioration in terms of trade was at first passed on tofarmers, but, with the declining trend of world market prices, the groundnutsector has in recent years proved unable to support OACVs high costs andGovernment-s substantial levies as well. The conclusions of the PCR on thealternatives open to the Malian Government are not explicit; the PCR merelyrefers to the Agricultural Sector Memoranduml/ for Mali. The findings of thisMemorandum warrant being mentioned:
"The inadequacy of OACV, which is real enough, should not obscure,however, the fact that groundnuts as an export crop are beingcaught in a squeeze between a stagnating world market and risingdomestic prices (of groundnuts as well as other foodstuffs), whichwould possibly have produced the same eclipse of exports over asomewhat longer term. Food prices have been rising faster thanf.o.b. prices of export crops in much of tropical Africa over thelast decade. Domestic inflation, fueled by this increase, leads torapidly rising costs of intermediary services (transport, insurance,handling), thereby reducing the export parity prices in relation tof.o.b. prices. Groundnuts are the exemplary product to study theeffect of these "scissors" as they are both an export crop and adomestic food crop."
This memorandum further demonstrates that, for OACV-s financial situation toreach even a precarious break-even position, all taxes and transfers borne byOACV would have to be eliminated, and OACV's expenditure per ton of groundnutswould have to be sharply reduced.
61. Two other main project components also suffered from a failureto consider macro-economic issues. The livestock stall fattening componentwas beset with marketing problems, despite a good start due to strong farmerinterest. Also, the findings of the cereals marketing study were not accept-able for project implementation.
62. The lessons seem to have been learned. Appropriate changes havebeen incorporated in the ODIPAC Technical Assistance project, now underdiscussion. It is to be hoped that this project will also provide an opportu-nity to experiment on new approaches, taking into consideration the macro-economic environment. Another lesson from this project is that supervisionmissions do not necessarily assess, on a continuous basis, such key issues asthe macro-economic environment and institutional problems relevant to anintegrated rural development project. Different approaches to monitoringthese key issues should be explored.
1/ Report (No. 2567-MLI) of June 22, 1979.
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MALI
INTEGRATED RURAL DEVELOPMENT PROJECT (Cr. 491-MLI)
PROJECT COMPLETION REPORT
January 17, 1980
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I. BACKGROUND
1.01 The Integrated Rural Development Project (Cr. 491-MLI) was the
second Bank Gro-n operation in Mali's agricultural sector; the first was
a rice development project in the flood plains around Mopti (Cr. 277-MLI,
1972). An IDA credit of US$8.0 million equivalent was approved for theIntegrated Rural Development Project (IRDP); the agreement was signed on
July 1st, 1974.
1.02 The main objective of the IRDP was to continue the development
of groundnut production in Mali's western and central provinces, which had
been successfully initiated in 1967 with financing from French Aid (FAC); to
expand the project area towards the east; and to extend the scope of project
activities to cereals, in the first place millet and sorghum, the country's
staple food.
1.03 Groundnut production in Mali had been fairly stable until the
early 1960's; production was not less than 110,000 tons, of which some 75,000tons were marketed. 1/ The disruption of established marketing channels,
following the departure of French trading firms, and unattractive producerprices (unchanged from 1959 through 1966 in spite of substantial inflation)
caused a sharp decline in groundnut production and marketing. In 1965/66,total production was estimated at 75,000 tons, and production marketed throughofficial channels was a mere 28,000 tons.
1.04 A first attempt to redress the situation failed in 1966/67 dueto lack of direction and inadequacies of Government's general agricultural
services. Thereupon a special project agency, Operation Arachides (OA),
was created in 1967; its staff was exclusively concerned with the promotionof groundnut production in the area of Mali best suited for this crop (the
Kita region, with rainfall between 700 mm and 1,200 mm); the project focussedon production, quality control and distribution of improved seed, extensionadvice and reliable marketing services. In spite of mediocre and even adverse
weather conditions, OA succeeded in halting and reversing the decliningtrend of groundnut production; in the early 1970's, groundnut productionwas back to more than 100,000 tons. For additional information on OA seeAnnex 1.
1.05 In the early 'seventies, Government, under the impression of thedrought years, shifted agricultural priorities from cash crops to food crops.This change of orientation is also reflected in the National Development Plan1974-78 (prolonged to 1979). The further expansion of groundnut productionwas therefore to be supplemented by a parallel promotion of cereals produc-tion. This new concern with broadening the scope of OA's activities developedat a time when the World Bank started to focus on a new type of rural develop-ment projects, which inter alia also implied greater attention to food crops.It was against this background that the IRDP was prepared and appraised.
1/ Unless otherwise specified, all quantity figures refer to groundnuts inthe shell.
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II. PREPARATION AND APPRAISAL
A. Chronology
2.01 The project was identified in August 1971 by the Bank's RegionalMission in Western Africa (RMWA). A second mission from RMWA visited Mali inFebruary 1972. This mission submitted a first outline according to which theproject would not only expand agricultural production through intensificationof extension work but would also include social infrastructure (education,health) and feeder roads. At the mission's recommendation Government securedFAC assistance for the preparation of the feasibility study. Institutd'Economie Rurale (IER), a section of the Ministry of Rural Development,provided background information and statistical data.
2.02 The feasibility study was started in May 1972 and submitted toIDA in February 1973. The proposed project contained two parts:
- the main project was agricultural development (groundnutsand cereals) through improved extension services in areaswhere OA was already involved, and similar development innew areas (Segou and Kenieba);
- the ancillary projects included feeder roads, functionalliteracy, research, health and livestock components. Thefeasibility study estimated the project's cost at MF14.8billion (US$32.8 million) over a five-year period.
2.03 The feasibility study was reviewed by a preappraisal mission from HQin March 1973; it recommended changes in the project's content, in particulardeletion of rice development (lack of preparation); replacement of a proposedmajor feeder road improvement program by a small feeder road unit within OAsince many feeder roads were to be financed under the Third Highway Project(Cr. 599-MLI); elimination of the proposed riverblindness program since thiswas to be tackled separately by a consortium of foreign donors in the contextof a regional project covering several countries. In addition, HQ requestedthat before appraisal more information be made available concerning thefinances and operations of a number of Government agencies (SCAER, SEPOM,SOMIEX, OPAM, OSRP); detailed operating results of OA by extension zone; OA'sfinancial results for 1971 and 1972; and an analysis of on-going functionalliteracy programs.
2.04 The project was appraised in June 1973 with the participationof FAC.
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B. Project Content
2.05 Project activities were:
(a) intensifying OA activities, in areas then served by theprogram, to cover not only groundnuts but all principalfarming activities, especially the production of basiccereals and livestock;
(b) expanding QA services into new areas, namely Segou andKenieba;
(c) supplying farm inputs and equipment on cash or credit toparticipating farmers.
To support the above, the project also included:
(d) a rural tracks improvement program for spot repairs onapproximately 1,500 km of tracks;
(e) a functional literacy program;
(f) a program of agricultural research to supplement thecurrent national program;
(g) improvement of medical facilities;
(h) improvement of veterinary services;
(i) the supply of equipment on credit to selected blacksmiths;and
(j) establishment of a project evaluation unit.
The project also financed a study of cereal producer prices and marketingarrangements.
2.06 The project extended over 5 years from April 1973 to March 1978.The first project year (PYl) was financed entirely by FAC; IDA financingcovered only PY2-5. This arrangement had been requested by FAC and hadbeen agreed to by the Association when an understanding had been reachedwith FAC on the activities to be financed in PY1.
C. Targets
2.07 The project's targets with respect to its main activity, the expan-sion and intensification of groundnut and cereals production, are summarizedin Annex 2, Tables 1-3. The steep increase in area and production in PY2(both with and without the project) reflects the expansion of activitiesto the vast Segou province; the projected drop in average yields in PY2
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indicates that in Segou province farmers are less familiar with groundnut
cultivation and that climatic conditions are less favorable, both factors
resulting in lower anticipated yields than further west. The difference is
less for millet (Table 3b).
2.08 It was projected that even without the project, areas under ground-
nuts and cereals would continue to expand for a certain period; the growth
rate for areas under cereals was assumed to be close to the population growth
rate, and the area under groundnuts about twice that much (until PY4), presum-
ably to take into account a possible spin-off from OA activities in the
pre-project period.
2.09 A noteworthy feature of the proposed technical package is that
for cereals no fertilizer application was recommended in the Appraisal Report.
Low cereals prices and lack of demonstrated response of the local millet and
sorghum varieties were given as the reasons.
2.10 With the projected adoption rates shown in Table 2, total production
of groundnuts was to reach 171,000 tons in year 7, and cereals production
195,000 tons; incremental production was estimated at 65,000 tons of ground-
nuts and 36,000 tons of cereals. It should be noted that at least for cereals
the statistical basis was quite insufficient to permit such projections.
In Mali, areas under cereals, total cereals production, and by implication
also yields, are not known with any degree of accuracy; the margin of uncer-
tainty is not less than 20%. Characteristically, the reported area under
cereals cultivation started to rise briskly as soon as OACV instructed exten-
sion agents to also report on progress of cereals cultivation.
D. Institutional Arrangements
2.11 The project agency OA changed its name to Operation Arachides
et Cultures Vivrieres (OACV) to reflect the new emphasis on promotion of
cereals production. Unlike most other Operations de Developpement in Mali,OACV remained, and still is, a unit of the Ministry of Rural Development.
The Association did not seek to change the status of OACV at the time of
appraisal but focussed on the Board of Directors of OACV to ensure that
all relevant Government agencies were represented.
2.12 Other institutional arrangements of importance were:
- an agreement between the Societe de Credit Agricole et
d'Equipement Rural (SCAER) and OACV provided that SCAERwould supply inputs and agricultural credit, and that OACV
would collect credit repayments on behalf of SCAER;
- the Office de Soutien et de Regularisation des Prix (ORSP)
would set up a price stabilisation fund for groundnuts and
intervene with subsidies should world market prices not be
sufficient to cover OACV expenses; to enable ORSP to exercise
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this function, surpluses from groundnut exports would
be channelled to ORSP to build up a stabilization fund.
2.13 Assurances were obtained from Government that IDA would be consultedannually on the producer price for the coming season, the payments to be madeinto or from the ORSP account, and the individual items of the price schedule(bareme) for groundnut marketing, which specifies the charges per ton whichwill be reimbursed to each agency for collection, processing and export ofgroundnuts. The Association would also be consulted on any policy changeregarding prices and subsidization of inputs.
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III. IMPLEMENTATION
A. Effectiveness and Start-Up
3.01 The project was approved by the Board on June 6, 1974, was signedJuly 1st and became effective December 9, 1974. The interval between signingand effectiveness was normal since there was only one specific conditionof effectiveness: conclusion of the agreement between OACV and SCAER (para.2.12). There were no specific start-up problems since OACV was already anoperating agency, fully staffed, and the project had in fact started oneyear before the IDA Credit was approved (para. 2.06).
B. Physical Progress
3.02 Physical execution of the project comprised construction of build-ings; procurement of vehicles and equipment; recruitment of technical assis-tance and incremental local staff; implementation of the agricultural creditprogram and of the ancillary programs (para. 3.07-3.09).
3.03 The IDA-financed construction of stores, offices and staff-housesencountered many problems. Most contracts were awarded to local buildersafter local competitive bidding which was carried out in a manner satisfactoryto the Association. Although contracts were broken into small lots, localbuilders experienced technical and financial difficulties and completedbuildings frequently with considerable delay. The OACV headquarters buildingat Bamako was never built because bids by far exceeded appraisal estimates;this had no detrimental effect on operations as existing headquarters aresomewhat cramped but tolerable.
3.04 In addition to IDA-financed constructions, OACV built furtherstores, offices and houses which were mostly financed, in an unorthodox way,out of operating funds (Chapter VIII). Total construction in the projectperiod as compared to IDA-financed construction was as follows:
IDA-financed Total
Storage space 2,430 m2 3,562 m2Staff housing 3,610 m2 4,165 m2Office rooms 66 84
Buildings not included in the Project were not subject to the control ofGovernment's Rural Works Department with respect to technical specificationsor procurement procedures. Many of the additional buildings were of lowpriority.
3.05 Procurement of vehicles and equipment did not raise particularproblems.
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3.06 It had been agreed, by side-letter, between the Association andGovernment that a consulting firm would continue to provide technical assist-ance to OACV in the field of agriculture. Technical assistance for admini-strative and financial services of OACV was provided by another firm ofconsultants. The initial contract was prolonged as OACV proved unable tocontinue without further assistance in this field. The appraisal report didnot contain specifications of the professional profiles, terms of reference orstipulation of responsibilities of technical assistants but only an informalunderstanding that technical assistants would be hired under terms of referenceand conditions acceptable to IDA. In the event, OACV proved unwilling to givein-line responsibilities to technical assistants (with the exception of thehead of the evaluation unit) and consequently advice on matters of key impor-tance was not systematically implemented, and this greatly reduced the effec-tiveness of the technical assistance component.
3.07 The feeder road improvement program started in 1975 and was carriedout successfully. This was due, to a great extent, to the personality ofthe Malian engineer in charge and to his excellent working relationship withthe Department of Public Works which allowed him to call on their expertiseand equipment whenever required, although he himself reported to the GeneralManager of OACV.
3.08 Likewise, the veterinary and health programs and the functionalliteracy component, all executed through specialized agencies, were imple-mented without major problems, although objectives were not always fullyachieved (Chapter V).
3.09 The study of cereals prices and marketing systems in Mali wasexecuted by consultants and submitted in 1976. Terms of reference had beencleared with HQ; in the following the study was monitored and oriented by IER(see also para 5.13).
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IV. PRODUCTION IMPACT
4.01 Summary: Groundnut production rose considerably in project years2-4 but relapsed to pre-project levels in the last project year and thefollowing year (Annex 3, Table 1). Marketed production followed a similarcourse but fell to a level some 25% below pre-project levels. Cereals produc-tion appears to have increased but there is no reliable statistical indicatorto gauge the increase, or the project's contribution to this increase.
4.02 The project's impact will be discussed in more detail in the follow-ing paragraphs for groundnuts and cereals separately - although the unequalfortunes of the two crops were interrelated. The statistical basis for thefollowing discussion is at Annex 3.
A. Groundnuts
4.03 To appreciate the economic factors which affected the rise andsubsequent fall of groundnut production, it is necessary to also be awareof climatic influences. In brief, rainfall was
- on the whole poor in 1973/74 (PYl)
- excellent in 1974/75 (PY2)
- good in 1975/76 (PY3)
- mediocre in 1976/77 (PY4)
- poor in 1977/78 (PY5), and
- good in 1978/79, the most recent campaign.
4.04 In 1973/74, stagnating groundnut production primarily reflectedclimatic conditions; in the following, production rose in good years aswell as in mediocre years; on the other hand, it remained low even in as gooda year as 1978/79. The steep fall in 1977/78 (PY5) reflects both poor growingconditions and the economic factors discussed below.
4.05 The development of production does not follow a simple pattern.The correlation with official producer prices for groundnuts is poor, and sois the correlation with input prices or the ratio of cereals to groundnutprices. Groundnut production and marketing volumes continued to rise in spiteof a relative increase in cereals prices and steep increases in equipmentprices, and subsequently production fell in spite of stable input prices andrising producer prices. On the whole, producer prices, input prices andgeneral consumer prices increased at roughly the same rate over the projectperiod (Table 3). Although statistics of areas under groundnuts and of totalgroundnut production are surrounded by uncertainties, the margin of error ismuch smaller than the reported decline in area and total production. Therecan be no doubt that groundnuts have become an increasingly less attractivecrop and that farmers have shifted efforts to cereals:
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- official producer prices of cereals are a poor indicator,as market prices of cereals rose steeply in recent years;after the excellent 1974/75 harvest, cereals prices remainedlow through 1975/76 and thereafter started to rise again;this rise was accentuated by the poor 1977/78 harvest andthe absequent need to restock granaries in 1978/79;
- prices of groundnuts on the parallel market (for domesticconsumption and clandestine exports) also rose steeply asfrom 1977; this accounts for the particularly steep drop inmarketing; since prices for both cereals and groundnuts werefrequently more than twice the official producer price, thetimid adjustments made in 1976 and 1977 were ineffectual.
4.06 Other factors, inherent in OACV's declining performance, contrib-uted to the decrease in groundnut production, in particular
- late start of the buying campaign;
- frequent bottlenecks and delays in the supply of
inputs and the provision of bags;
- poor quality of improved seeds; and
- a decline in the quality of extension staff whichaccompanied the expansion in area.
4.07 The application of recommended cultivation practices remainedwell behind appraisal targets (Table 4). The most readily accepted themeswere use of fungicides for seed dressing and the use of improved seed andfertilizer. Farmers resisted the recommended high-density sowing, which isnot compatible with the traditional practice of ridging, as well as the earlysowing, preferring a risk-averting staggering of sowing dates and a largernumber of low-density plots. Fertilizer use on groundnuts peaked in PY3.
4.08 Developments were far from uniform in the individual sub-areas; thisis reflected in production figures of Table 1. After the poor results of1977/78, the newly integrated areas in zone 4 and 5, which have significantlylower rainfall and are traditionally more cereals-oriented, reverted to theiroriginal pattern of cultivation; losses in zones 1-3, the traditional ground-nut belt, were much smaller. This result suggests that the expansion of theOACV area and the schematic application of OACV extension methods to ecologi-cally and economically different areas was a mistake which needs to be cor-rected.
B. Cereals
4.09 There has been a definite shift of efforts away from groundnutsto cereals, in particular in zones 4 and 5 but also in the traditional ground-nut areas. Since most farms operate under full employment in peak seasons,
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the desire to improve their food security (or to take advantage of prevailinghigh cereal prices) has forced a certain reduction in groundnut cultivation.Statistics of areas under cereals are suspect. As shown in Table 5, reportedcultivated areas increase by 8-10% annually over the project period, whichwould only be possible if there had been widespread underemployment before theproject or spectacular technical progress, and neither was the case. Thus,there is no firm basis to determine the true increase in cereals production.An attempt has been made in Table 6 to quantify 0ACV-induced increases incereals production on the basis of observed input supply and extension acti-vities; the same methodology has been applied to measure project-inducedincreases in groundnut production, as opposed to reported increases anddecreases in production (Table 2), which reflect influences extraneous to theproject agency's activities as well.
4.10 Evidence of increased interest in cereals cultivation comes mainlyfrom surveys conducted by OACV's Evaluation Unit (para. 5.04), which show:
- frequent requests of farmers for improved cereals seed,
- frequent requests of farmers for cereals fertilizer (notrecommended by the project),
- use of groundnut fertilizer on cereals fields, and
- more efforts spent on cultivating cereals than on ground-nuts.
The following data from a 1977/78 sample survey are telling; observationof certain cultivation practices in % of surveyed farms:
Zone 1 Zone 2 Zone 3 Zone 4 Zone 5
Sowing before July 15
Cereals 93 94 83 53 75Groundnuts 50 57 58 13 44
Two or more weedings
Cereals 38 93 64 29 41Groundnuts 36 73 17 10 25
4.11 Although most indicators point in that direction, it is not yetcertain that the increased interest in cereals is a structural and permanentphenomenon and not motivated primarily by the need to replenish stocks andsatisfy increased local demands for cereals after the poor 1977/78 harvest.The drought of the early 'seventies was also followed by a period of marketsaturation and low cereals prices. Staple foodstuffs, after all, have a lowelasticity of demand, and continuous good harvests may bring about a collapse
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of the now very attractive market prices for cereals and a certain reorienta-tion towards groundnuts. The 1979/80 season, with a significantly increasedgroundnut price (MF80/kg), and following on a good crop year, will provide
important clues to answer this question. If groundnut production and marketingresponds to these favorable conditions, there is still hope for redressing the
situation, at least in the core areas of the groundnut belt.
C. Distribution of Farm Equipment and Inputs
4.12 Farmers proved more ready to apply selected productivity-increasinginputs, in the first place seed and fungicides, than to apply the wholepackage of recommended cultivation techniques (para. 4.07). Timely sowing ofgroundnuts, for instance, was achieved on 22% of the groundnut area in PY5,against an appraisal estimate of 60%. There has been a continuous decline inthe percentage throughout the project period, reflecting farmers' primaryconcern with sowing cereals at optimal dates (para 4.10). Similarly, high-density sowing of groundnuts was recorded on 14% of the area in PY5, against50% estimated at appraisal. Distribution of improved seed and fungicidesremained partially behind appraisal estimates (Table 7) but the latter werevery optimistic, and the absolute increase is satisfactory for several items,in particular use of fungicides and of improved groundnut seed. The increasemight have been higher if deficiencies in the supply system and the unevenquality of extension work had not acted as a break (para. 4.15).
4.13 With respect to the use of fungicides on groundnuts and cereals,the official figures must be interpreted with caution. Given the increasedinterest of farmers in cereals, the share of fungicides applied to cerealsmay be larger than indicated, and the share of groundnuts smaller. Thesame applies to fertilizer use, even if the groundnut fertilizer is notthe most appropriate for cereals cultivation.
4.14 Throughout the first four project years, fertilizer use was mainlyrestricted by limited supplies. The price of groundnut fertilizer was keptfairly stable, and the higher price of cereals fertilizer was no impediment togenerating vivid demand. The increase of fertilizer use on groundnuts waslimited partly because of supply constraints (SCAER delivery delays) and, inthe later years, by decreasing economic interest in groundnut cultivation andincreasing demand for cereals fertilizer, which remained unsatisfied. TheAppraisal Report had expressly excluded fertilizer application to cereals fromthe extension program and evidently misjudged its economic attractiveness.
4.15 The increase in equipment use was mainly limited by supply bottle-necks and by failure of extension staff in some sectors to actively informfarmers of the benefits from equipment use (see table 7 for a comparison ofprojected and actual distribution). Results in individual sectors reflect theability and dynamism of sector heads as much as differences in farmers'receptiveness. Farmers generally complained about the steep price increasesbut, on the whole, demand continued to exceed available supplies, in particularfor carts. In the case of toolbars, the price increases appear to haveinduced a certain diversion towards ploughs; this has detrimental effects onthe weeding capacity of farmers as toolbars are multi-purpose and also servefor weeding.
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D. Other Developments in Agriculture
4.16 During the project period, first attempts were made to developquality-groundnuts for exports, namely confectionary groundnuts and ediblegroundnuts.
- The variety 47-10, which is grown in the northeastern partof the OACV area, i.e. in the zones attached to OACV duringthe project period, began to be treated as a confectionary
groundnut; this required no special cultivation method butonly careful screening and preparation at marketing. Threehundred tons were prepared in 1976/77, and a screening devicewas installed. Confectionary groundnuts fetch a premium of33%, which fully justifies the additional labor input. Itis expected that in the long run, at least 20,000 tons couldbe marketed as confectionary groundnuts.
- For the cultivation of edible groundnuts ("arachides de bouche")the variety GH 119-20 was imported from Senegal in 1976 and iscultivated in the southwestern part of the OACV area aroundKenieba, another recent addition to the project area. Incontrast to confectionary groundnuts, production of ediblegroundnuts requires mastery of all improved techniques andneeds careful monitoring both during the growing season andat marketing. About 80 tons were harvested in the firsttwo years. It is expected that in the long run 10,000 tonscould be marketed.
These initiatives should be followed up. Given the mediocre outlook forworld market prices of groundnuts and groundnut oil, it is important forMali, in its land-locked position, to export groundnuts in the form yieldingthe highest specific value.
4.17 As in the cotton-growing areas of CMDT, farmers in the OACV areashowed lively interest in expanding maize cultivation; this applies inparticular to the areas of higher rainfall (more than 900 - 1,000 mm). UnlikeCMDT, OACV did not follow-up. Given the higher yield potential of maize, OACVwill be well advised to respond to these demands as higher productivity incereals production may help to contain the area shift from groundnuts tocereals.
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V. Impact of Other Project Components
5.01 In support of its action to develop animal-drawn cultivation, OACVexecuted a program to train and equip blacksmiths throughout the project area.
Blacksmiths would provide maintenance and repair services and in some casesmake spares and even agricultural equipment. OACV distinguished three stagesof training: Stage 1 - blacksmiths are initiated to the use of elementary
equipment; Stage 2 - blacksmiths use all techniques for forging and tempering
and are initiated to woodworking for the building of carts: Stage 3 - black-smiths use welding equipment and are able to repair small motors. In 1977
a total of 171 blacksmiths had been trained: 68 had completed the first
stage, 83 the second and 20 the third. At a later stage, the most advanced
blacksmiths are to be equipped with a small mill for the grinding of cereals.
5.02 The achievements of the blacksmith program fell far short of
appraisal estimates (Annex 4, Table 1). This is in sharp contrast to
the success the blacksmith program experiences in the neighboring Mali-Sud
project. The difference in performance is attributed mainly to insufficient
attention given to this component by OACV management.
5.03 The track improvement subproject started with a delay of one year
but then made remarkable progress under a dynamic and able head of the track
improvement unit who cooperated closely with the Public Works Department.
In the end, 1,987 km of tracks had been improved against 1,500 km projected
at appraisal (Table 2).
5.04 The livestock subproject financed under the project consisted of
(i) health protection of livestock; (ii) stall fattening; and (iii) main-tenance of draft oxen. This program was implemented by a zootechnical
engineer with two lower-grade livestock specialists, 3 assistants, two
nurses and 10 vaccinators (1 for each sector). Results are summarized inTable 3.
5.05 Although the impact of the livestock subproject cannot be easily
quantified, there has been a good response from farmers, especially in thesectors of Koulikoro and Banamba where livestock activities started inFebruary 1975. The number of cattle in the OACV area was estimated at 2.3million in 1977/78, of which 6% were vaccinated against rinderpest, 4%against pleuropneumonia (CBPP) and 3% against pasteurellosis. Draught-oxen inthe area were estimated at 40,000. Of the latter, about 20% were treated in
1977 for internal parasites, 4% against external parasites, and 85% fortrypanosomiasis. Improved husbandry practices included cultivation of foddercrops, ensilage and, in Koulikoro, Banamba and Segou, stall fattening. Stallfattening was carried out with 444 head of cattle in 1977, involving some 205farmers. This technique has been readily adopted by farmers; constraints onfurther development are the availability of credit for purchasing animals andthe organization of marketing of fattened animals.
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5.06 The health subDroject consisted of distribution of malaria-preventive medicine, construction of several dispensaries and the trainingof mid-wives and first aid volunteers, and provision of vehicles. Theprogram concentrated on the 1st Region (Kayes), which is particularlydeficient in communications, The program started late (1977) and wasmanaged by local committees in each of the four administrative units of theRegion. It maintained close contact with the local branch of the adultliteracy program. At the time of the last supervision mission, two dis-pensaries were still to be built. Due to the remoteness of the Kayes area,this subproject has received little attention from supervision missions.
5.07 Functional literacy in the OACV area started in 1969 under theauspices of UNESCO and FAC. The Bank Group financed an evaluation offunctional literacy under this project and a number of functional literacyactivities (staff, housing, operating costs) under an education project.In 1977 there are 634 centers of" functional literacy in every sectorcovered by OACV except Segou. The participants represented 2.5% of therural population and 7% of the population reached by the program. Theevaluation showed that most participants quickly lost the knowledge gainedduring courses if they did not take repeater courses and if they did not applytheir new skills in practice. The main benefit of the program was thus tocreate within the villages nuclei of farmers able to assume increased respon-sibilities in the organization of village communities. Results are summarizedin Table 4.
5.08 The agricultural research component consisted of varietal researchon groundnuts, as well as research on diseases and soil surveys. Technicalassistance was provided by IRHO (for groundnuts) and IRAT (for cereals).Research activities were coordinated by IER.
5.09 Research coordination by IER proved to be lacking in flexibility.In particular, OACV did not benefit from the services of the IRHO researcherwhose (part-time) services were badly needed for seed quality control, butwho was not released by IER. OACV's seed quality declined considerablyover the project period and reduced farmers' willingness to pay the highprice for seed of sometimes dubious effectiveness. IER has failed to providea final account of the research activities for which it was responsible underthe project.
5.10 The project financed the establishment of an evaluation unitwhich would eventually coordinate the evaluation of all agricultural projectscarried out by the "Operations de Development Rural". In a first step, itwould concentrate on the impact of the OACV project and determine whetherany of the project objectives or the organization of OACV could be improved.
5.11 The studies carried out by the evaluation unit included: (a) abroad-based descriptive survey of the entire OACV area, through the samplingof some 1,100 farms, or 1% of the total, to outline the main characteristicsof the area (1976); (b) an indepth farming system survey with daily obser-vation of a total of 32 representative farms in the four eco-systems com-prising the OACV area, over a one-year cultivation period (1976-77); (c) astatistical survey of the agricultural potential of the Segou area with
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measurement of areas, yields and production; and (d) an opinion poll (1978)in the same area about farmers' problems and their perception of OACV'sactivities.
5.12 The Unit had practically no impact on the development of theproject because (i) it was created too late (July 17, 1975) and spent mostof its time on the necessary basic studies, and (ii) management of OACVignored relevant findings when they became available. The valuable studies ofthe evaluation unit, which were carried out competently, are now largelycompleted, and will serve as a basis for a redefinition of OACV objectives anda change in its organization. They were also used for the preparation of thisreport.
5.13 The study on cereals marketing had been executed by consultants(para. 3.10). The Institut d'Economie Rurale (IER), which monitored thestudy, influenced its orientation and policy conclusions. The report, in theend, reflected IER's well-known views on the subject and advocated a tighteningof OPAM's trading monopoly, an impractical solution since experience showsthat in the prevailing conditions such a monopoly cannot be enforced andserious attempts at enforcement aggravate rather than relieve supply problems.An intermediary review of the study's progress by a supervision mission couldhave led to a more balanced treatment and more constructive policy recommenda-tions. However, in view of Government's unresponsive attitude to the recommen-dations of several other studies on the subject, executed subsequently, 1/ itis doubtful whether a more successful execution of this project componentwould have had an impact on Government's cereals marketing policy.
1/ In particular: A study on grain marketing systems in Mali, by Universityof Michigan, acting as consultants for the Comite Inter-Etat de LutteContre la Secheresse dans les Pays du Sahel (CILSS), in 1978; and a studyon grain marketing policies in Mali by FAO and several other donorinstitutions, also submitted in 1978. Both studies advocated a liberali-zation of marketing policies.
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VI. Project Cost and Financing
A. Cost and Financing
6.01 The following summary is based on a reconstruction of the Maliancontribution to project costs. Details of the assumptions are discussed inAnnex 5. With a minor adjustment in the definition of total project cost(explained in the Annex), costs ex ante and ex post are summarized below:
Appraisal Actual
FM US$ FM US$Million 1000 % Million 1000 %
IDA 4,000 8,000 43.2 3,790 1/ 8,000 63.2FAC 1,259 2,518 13.6 1,259 2,722 2/ 21.5Govt. 2,148 4,296 23.2 290 627 2/ 5.0Farmers 1,857 3,714 20.0 605 1,308 2/ 10.3
Total 9,264 18,528 100.0 5,944 12,657 100.0
It appears that total expenditure remained some 36% below the appraisalmark in terms of FM, and by 32% if expressed in US$. (The difference isdue to the change in the US$ value between appraisal and completion of theproject.)
6.02 This reduction is due to a drastic shortfall in the Malian partici-pation. The low contribution by farmers reflects the disappointing paceof increase in the use of equipment and inputs (see section IV c above).The same factor accounts for part of the shortfall in Government's contribu-tion, namely the subsidies on equipment and inputs: these were reducedper unit of equipment and input, and the total quantity distributed remainedbehind expectations. The remaining shortfall in Government's participationis due to the reallocation from expenditure categories with relatively highMalian participation to categories with a low Malian participation (operatingcost); to the increase in the share of IDA financing of seed from 18% to 90%;and to the allocation of the entire unallocated to these categories withvery low Malian participation. These reallocations were approved by theAssociation (Annex 5, Table 1).
1/ Exchange rate used: US$1=MF473.7 (average over project period weightedwith amounts of IDA credit disbursed).
2/ Exchange rate used: US$1=MF462.5 (simple average over project period).The FAC contribution had been fixed in FM terms.
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6.03 The small amount of incremental input subsidies was not paid byGovernment but de facto by the Association (in the case of improved seed)and by farmers (in the case of fertilizer and equipment); this is more fullyexamined in Annex 5. In fact, it appears that OACV farmers - in additionto substantial amounts of export taxes - paid about US$4 million for thefinancing of input and equipment subsidies through a special levy in the priceschedule (bareme), whereas they received only subsidies worth US$1 millionover the project period. If this were taken into account, Government'scontribution would have been squarely negative in the aggregate.
6.04 The financing of 90% of incremental groundnut seed by the Associa-tion should have resulted in the build-up of a working capital of roughlyUS$1 million at the end of the project period provided that farmers repaidthe annual credit on schedule and Government paid the subsidy element.Even allowing for arrears and Government's non-payment of subsidies (para.6.03), there ought to have remained a sizable residual of this fund. Inreality, however, all liquid funds were used by OACV to cover urgent financialneeds. In future projects, it is advisable to clearly identify the financingof incremental inputs as the financing of an asset (working capital for inputpurchases) and require the proceeds to be maintained in a separate account,which would be verified by the statutory annual audits.
B. Disbursement
6.05 Disbursements lagged considerably behind appraisal estimates until1976 and then quickly caught up with projected amounts; in the end, the creditwas fully disbursed several months ahead of the estimated date (Table 2).Initial delays were attributable to delays in procurement (buildings, vehiclesand equipment) as well as slow processing of disbursement requests at OACV;this reflected the low efficiency of OACV's central administrative and finan-cial services. Also, OACV was in a comfortable financial position until 1976and was in no hurry to obtain reimbursements from the Association. Thischanged drastically in the last two project years when the Association wasasked to approve a substantial increase in the allocation of finance foroperating expenditure out of the unallocated category (para. 6.02).
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VII. Institutional Development
7.01 At the time of appraisal, OACV was well managed and looked back
on several years of successful performance. It was expected that OACV
would be able to carry out the project without major institutional reform.
The appraisal mission only insisted on an agreement with the agricultural
credit and input supply organization SCAER and on the establishment of a
groundnut price stabilisation fund by ORSP. The first condition was fulfilled,the second not, and there are no records of a reminder having been addressed
to Government. Beyond this, a strengthening of the weak administrative and
financial services was undertaken through a firm of consultants.
7.02 These consultants (i) introduced inventory controls; (ii) initiated
a decentralization of the credit recording operations; (iii) assisted in
the establishment of annual accounts; and (iv) trained local staff. While
the procedural changes have been helpful, the quality of administrative
and financial services is still low, according to the findings of a FAC-
financed chartered accountant who visited the OACV in March 1979 1/.
7.03 The Malian General Manager, who took over from his expatriate
predecessor in 1975, instituted a system of extreme centralization in decision-making, paralyzing the five regional heads of service. This reluctance to
delegate was particularly unfortunate in an organization which extended over
1,000 km from East to West and in an area with notoriously poor communications,in particular west of Bamako. Prolonged trips abroad undertaken by the GM in1977 and 1978 exacerbated management problems. The GM-s lack of financial and
management skills--he was trained as an agriculturalist and extension spe-
cialist--contributed to financial unorthodoxies which led OACV into difficul-
ties which seriously reduced its effectiveness (para. 8.02-8.06).
7.04 Financial problems of OACV were not only due to management mistakes;
they also brought into focus the inadequate status of OACV as a branch of the
Ministry of Rural Development without any degree of autonomy, and its extreme
dependence on other agencies, in the first place the export monopoly of
SOMIEX, and the groundnut crushers SEPOM and SEPAMA, who provided the credit
for groundnut purchases as OACV had no direct access to bank credit, lacking
the "autonomie juridique et financiere". If OACV had access to credit from a
commercial bank, it would automatically be subject to scrutiny and forced to
observe certain standards of financial management.
7.05 The basic flaw in OACV's structure is, however, that it depends
for its recurrent cost financing on a margin per ton of groundnuts marketed
which is annually negotiated with Government on the basis of a projected
marketed volume; however, OACV has only a limited say in the determination
of producer prices which ultimately determine the actual volume of groundnuts
coming forth, and in the determination of other items of the bareme, such as
the margin for collection, which frequently does not reflect real cost; as a
consequence, OACV is exposed to serious shortfalls in earnings over which it
has no control but for which it is not compensated.
1/ M. Fleury, Rapport de Mission, OACV, March 20, 1979, p. 1.
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7.06 As from 1977, the shortcomings of 0ACV's structure have beenpointed out, with increasing frequency and insistence, by Bank missions;Government, at first unwilling to move, is now preparing a reorganizationof OACV. This reorganization is expected to comprise the change to a statutewith financial, legal and managerial autonomy, a review of the financialfoundations, and the splitting of the unwieldy and heterogenous organizationinto two or more separate Operations de Developpement. Although the IDA-financed project could not prevent or halt the institutional decline ofOACV, the Association has made important contributions to the identificationof structural weaknesses and to creating an awareness in Government ofthe changes to be implemented.
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VIII. Financial and Economic Results
A. Financial Results
a) Farmers
8.01 It is difficult to assess the project's financial impact on farmers.For cereals, incremental production can only be estimated, and no informationis available about incremental marketing through private market channels.In the case of groundnuts, the incremental volume of marketed production in1974/75 - 1976/77 must be seen against the rising discrepancy between theofficial price and the private market price. Farmers selling to OACV (becausethey had incurred debts for equipment, inputs and seed) increased their cashincome compared to pre-project times, but suffered an income loss compared tosales on the parallel market. The abrupt fall in marketing in 1977/78 (towhich poor weather contributed) and 1978/79 (under normal weather conditions)shows that in farmers' perception they do no longer gain from the OACV programat prevailing input and output prices. Gains from access to subsidized inputsand equipments (the latter for a small number of farmers annually) are morethan offset by revenue foregone by sales through official rather than privatemarket channels, and by the subsidy recovery collected through the bareme(para. 6.03), which was four times the amount of subsidies received byfarmers. Here, farmers with access to subsidized equipment and inputs bene-fitted at the expense of the majority of OACV farmers.
b) The Project Agency OACV
8.02 The financial situation of OACV was sound in 1972/73 but underwenta steep decline in the course of the project. The decline is due to a numberof causes, which will be discussed in turn.
8.03 With the inception of the IDA/FAC-financed project, OACV operatingexpenditure exploded: from MF 490 million in 1972/73 to more than five timesthat figure four years later (Annex 6, Table 1). Inflation, and expansionin OACV's area, can account for not more than half the increase. In 1976/77,when total operating expenditure was approaching FM 3 billion (US$7 million),OACV, prompted by the Association and FAC, made successful efforts to curtail
expenditure; by that time, however, the gap between official and privatemarket prices had caused marketing volumes to drop; as a consequence, theincrease in OACV cost per ton of groundnuts marketed (Table 1) continued:
while in the last pre-project year OACV costs per ton marketed had been 44% ofthe producer price, these costs were 143% of the (much higher) producer pricein the last project year (1977/78).
8.04 In spite of OACV's steep increase in recurrent expenditure, itscash-flow situation did not deteriorate drastically until the end of theproject period since funds continued to come in from the foreign sources offinance. OACV could have maintained a manageable financial position hadthe manager not resorted to financing of unscheduled investments (para. 8.05)from his operating funds, consisting in the first place of advances fromgroundnut crushers SEPOM and SEPAMA and exporters SOMIEX. This resulted inthe build-up of short-term debt of FM 2.38 billion (US$5 million) untilSeptember 1978. Until 1979, this figure is expected to reach FM 3 billion.
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As a consequence of this policy, OACV's working capital had become negative in
1976/77; net assets were a mere FM 720 million (US$1.5 million) at the end ofthe 1977/78 campaign and are expected to become negative in the course of1979. This means that all remaining assets, fixed and otherwise, will be morethan balanced by short-term debt. A summary balance sheet as of September 30,1978, is at Ta 'e 2.
8.05 Investments financed with these short-term funds include trucks,but also residential buildings for staff (FM 610 million or US$1.5 million)and ample loans to staff (FM 107 million or US$225,000), items indicative ofan increasingly self-serving institution.
8.06 The consultants repeatedly pointed out to OACV management thatfinancial procedures were in conflict with principles of sound financialmanagement. In addition, financial control of the most basic kind seems tobe deficient. The balance sheet, for instance, contains a "provision fordebtors to cashier" of US$200,000, which is a euphemism for unexplainedshortages in the field offices' cash-boxes. Auditors Price Waterhousereviewed the 1975, 1976, and 1977 accounts prepared with the assistance of theconsulting firm but did not express an auditor's opinion on them because theywere not present at stock-taking. Before any reorganization and financialconsolidation of OACV, Government should arrange for a professional audit ofOACV accounts by a firm of international standing, and the Association shouldnot consider any further credit to OACV until this has been done.
c) Government
8.07 Government decided in 1970 to take OACV out of the national budget -which until that time had provided salaries of extension staff - and to makeit entirely dependent on revenue from marketing (and external subsidies). Atthe same time, Government drew substantial revenues from the groundnut sectorthrough
- the ORSP levy- the CSP tax (3% of fob value)- the export tax, and
the surplus accruing to the state monopoly exporter SOMIEX (difference betweenprojected and actual export proceeds, if the latter exceeded the former). Inrecent years, the three tax components have, with the exception of 1976/77,amounted to FM 20,000/ton (US$43/ton) on average, and total tax revenue fromgroundnuts has been close to US$10 million over the project period (notcounting any surpluses of realized over scheduled export prices). In addi-tion, SCAER netted some US$3 million from the excess of subsidy recovery thoughthe groundnut bareme over subsidies actually paid to OACV farmers (although thisamount was never transferred to SCAER by OACV) see Annex 5.
8.08 With world market prices of groundnuts sluggish, or even decliningin real terms, the groundnut sector has in recent years proved unable tosupport OACV's high costs, Government's substantial levies, and an attractiveproducer price as well. The lesson of recent years is not only that OACVexpenditure must be brought back into line but also that the groundnut exportsin a landlocked country can no longer be taxed as heavily as in the past.
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B. Economic Results
8.09 Assumptions underlying the economic analysis are explained inAnnex 7. The economic analysis faces two major difficulties, one factual,
the other methodological:
- by how much did groundnuts and cereals production increase(or decrease) over the project period?
- how much of the increase (or decrease) can be attributed to
project-related activities, and how much must be attributed
to project-external influences (market signals in particular)?
8.10 A possible way of dealing with both problems simultaneously hasbeen discussed in Annex 3 and applied in Table 6 of that Annex. This method
has also been the basis for the economic analysis which uses:
- firstly, incremental production of cereals and groundnuts as
deduced from recorded extension and input supply activities;
and
- secondly, the described method for cereals only, and recorded
production figures for groundnuts.
The first-mentioned method is thought to reflect more closely the project'sreal impact while the second one only illustrates, as far as groundnuts are
concerned, the powerful impact of an unfavorable economic setting. Theimportant drawback of the first method is, of course, that its results are
purely conjectural with respect to the postulated effect on production of
the various input supply and extension activities taken into account.
However, the chosen method is the best one under the given circumstances.
8.11 Whichever method of computation is applied, the result is in each
case an essentially negative net benefit stream without meaningful internalrates of return.
- In the first case (Table 2), this may be interpreted as showing
that the impact of the OACV staff in terms of increased pro-
ductivity of farmers has not been commensurate with the expen-
diture involved; this may reflect low efficiency of the organi-zation, or excessive costs, or both. As discussed in precedingchapters, it does reflect both.
- The second case (Table 3) shows that the results of extension
work - however modest in this case - can be thwarted and anni-hilated if they are not accompanied by a macro-economic frameworkwhich makes it worthwhile for farmers to pursue the project's
objectives.
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8.12 The second case, however, also has a more hopeful aspect: as longas the market signals were reasonably favorable (PY1-4), the project's successwas remarkable in terms of incremental production of groundnuts; with a morecompetitive groundnut producer price, it may be possible to bring productionback to the level prevailing in PY3 and PY4, or close to it. If groundnutproduction had remained stationary at the PY3 level, the IRR would have beenvery high indeed 1/. However, the producer price required to induce produc-tion at that scale may well be above the export-parity price and thereforerequire subsidies.2/
1/ Due to the absence of heavy initial outlays, the ERR of rural developmentprojects is very volatile. This is particularly true in the case offollow-up projects or, as in this case, where a project builds on apre-existing institution. The benefit-cost ratio is probably a moreappropriate measure in this case.
2/ This problem is further discussed in the Agricultural Sector Memorandumfor Mali (Report No. 2567-MLI) of June 22, 1979.
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IX. Performance of the Association, OACV and Government
A. The Association
9.01 Various features of the project's design contributed to its un-satisfactory result; before these are discussed it should be recalled,however, that the main reasons for the result are wrong pricing policiesand managerial weaknesses.
9.02 The project provided for a Malian participation of more than 40%of net of tax costs, to be shared about equally between OACV and farmers.Such a high proportion was unrealistic in Mali, one of the poorest countrieswhich had - and still has - serious budgetary problems.
9.03 While the overall contribution of Mali was excessive, the requiredcounterpart financing was not distributed judiciously: Malian contributionsfor vehicles, equipment, buildings etc. were in the 20-40% range; on the otherhand, the financing plan provided for minimal Malian participation in incre-mental operating cost (8%) and local staff (9%); this amounted to an invita-tion to expand operating expenditure liberally; the allocation of the bulk ofthe "Unallocated" category to operating expenditure (up 46% from appraisalestimates) shows that this invitation was gladly accepted.
9.04 Supervision missions were generally pleased with the project'sprogress as long as outwardly the danger signals were not yet apparent;the slowing down and even decline in the adoption of recommended techniquesand the stagnation of fertilizer use might have alerted supervision missionssomewhat earlier. Supervision concentrated on agricultural matters (credit,input supply, seed problem) and institutional matters (bareme, relationswith SCAER, SOMIEX, SEPOM) and were somewhat deficient in economic analysis.Similarly, the unsound financial practices of OACV, in the first placefinancing investment out of operating funds, and lack of restraint in con-trolling operating expenditures, came into focus only when the turn in thetide of marketing initiated a rapid collapse of OACV's finances.
9.05 Government's non-compliance with important covenants (consultationson producer price and groundnut bareme, establishment of a groundnut stabi-lization fund) was tacitly tolerated as long as there seemed to be no reasonto disagree with the decisions taken. The Association has been pressing moreconsistently, in fact nearly annually, for adequate producer prices but as itwas not consulted beforehand, this had only a limited impact on the pricesdecided upon.
9.06 In the final stages, the Association, through its supervisionmissions, its Resident Representative, and policy discussions held atvarious levels, has contributed actively and constructively to thereorganization of OACV which is now under way. An essential step in thisprocess of persuasion was the Association's refusal to further process a
- 41 -
proposed second OACV project which, according to the 1977 plans submitted byIER, was to be an inflated follow-up of the first project. The Associationappraised a much reduced version of this proposal in early 1978 but stoppedfurther processing in mid-1978, when it appeared that Government was not yetready to accept basic institutional and financial reforms. In the meantime,Government and the Association have come much closer to a consensus on whatneeds to be done (para 10.3).
B. OACV
9.07 The performance of OACV declined over the project period. Aidedby favorable economic conditions in 1974/75 - 1976/77, it succeeded inconsiderably expanding groundnut production and marketing. Frictionsoriginated, with regard to field operations, from reliance on third agenciesfor essential services (bags, input, credit), and these did not alwaysarrive in time, or in required quantities.
9.08 The expansion in area to Segou and Kenieba was accompanied, however,by a decline in the quality of field staff, and a loosening of financial andpersonnel control, features exacerbated by the General Manager-s attempt tokeep all the strings in his hand. Expatriate staff both in field assignmentsand in administration and finance were denied decsion-making power, robbingthem of much of their potential usefulness. This refusal to grant in-lineresponsibility to expatriates is a national policy, however, and not attrib-utable to OACV. 1/
9.09 The quality of OACV-s financial reporting as well as of its annualactivity reports also declined through the years, the 1974/75 Annual Report(for PY1) being the last reasonably exhaustive and informative such report.Independent auditors as well as consultants urged OACV to undertake reforms infinancial control but few of the recommendations were implemented until 1978.
9.10 In 1977/78 and 1978/79, when marketing declined sharply and OACV'sfuture was clearly at stake, field staff, at the order of management, beganto use quasi-requisitionary methods in marketing groundnuts in a desperateeffort to meet targets that were unrealistic at the authorized producerprices. As a consequence, OACV has lost farmers' goodwill in those areaswhere coercive or intimidating methods were used. This may prove a mortgageon future efforts to redress the situation.
C. Government
9.11 Government was not financially involved in the project since ithad decided that OACV, a branch of the Ministry of Rural Development, shouldbe able to subsist on the statutory revenue from the bareme and funds madeavailable by the Association and FAC. Government must be held responsible,however, for maintaining OACV's inappropriate organizational structure, its
1/ The one major exception to this policy is CMDT (Mali-Sud), where ex-patriates occupy in-line positions. This is explained by the fact thatCHDT is a "societe mixte" with French participation.
- 42-
lack of access to seasonal credit etc., in the face of the increasing difficul-ties arising therefrom. The only relevant provisions built i-to the CreditAgreement (regarding a stabilization fund and annual consultations on producerprices and baremes) tenrc unheeded (para 9.14).
9.12 As in the case of cereals, where OPAM has a largely ineffectualmarketing monopoly, Government has maintained the producer price of ground-nuts at a low level, ignoring the lessons of the 'sixties and not following upon the encouraging new start made in June 1974. When adjustments were finallymade, they were too little and too late, the free market price remaining sofar above the official prices as to make the increases ineffective. Only in1979, when the marketing volume had plummeted to 32,000 tons, did Governmentgo to, and even slightly above, export parity by a bold increase from EM 60 toFM 80/kg. At the time of writing this report it is impossible to indicate,however, what the impact on the 1979/80 marketing volume will be.
9.13 Finally, Government did not exercise its supervisory responsi-bilities over the General Manager. The fact that OACV, unlike most otherOperations de Developpement, remained a branch of the Ministry of RuralDevelopment, imposed special supervisory responsibility on the Minister.The General Manager, however, operated in a largely unfettered manner andauthorized important investments that were not budgeted and not properlyfunded; the steep rise in operating expenditure (from MF 800 million in1974/75 to MF 2,900 million in 1977/78) went unchecked until financial con-straints enforced severe cut-backs. Lack of supervision by Government wasmost serious in the expansionist period between 1975 and 1977.
D. Compliance with Covenants
9.14 As stated earlier, the financial covenants (para 2.13) were notcomplied with. In the end, the factors that caused OACV's defeat were thosethe covenants were designed to avoid, i.e. inadequate producer prices, in-adequate sources of revenue, and no protection against spells of low worldmarket prices through a stabilization fund. The Associations, at hindsight,was right to feel strongly about these matters at appraisal, but then failedto show the necessary determination in obtaining Government's compliance.
9.15 Governments non-compliance with its obligation to consult theAssociation on changes in producer prices and baremes positions was brought upby a supervision mission in 1975 but there are no records of a follow-up.The failure to set up the groundnut stabilization fund in ORSP was pointedout in a letter to Government in early 1977. Also in 1977, OACV was reminded,with some emphasis, of its obligations to have its account audited. Untilthat time, no audit had been performed. In the end, the Association receivedonly a limited review of the 1975 to 1977 accounts (see para. 8.06 above).
- 43 -
X. Conclusions
10.01 The Integrated Rural Development Project was prepared and appraisedat a time when the Bank had launched very few projects of this kind. Thus,knowledge of agricultural and socio-economic conditions in the area waslimited. This is reflected in the optimistic appraisal estimates with respectto adoption rates and increases in cultivated area and production, in the lackof differentiation between ecologically diverse areas, and some misjudgmentof the relative attractiveness of groundnuts and cereals, respectively. Inthe meantime, many lessons have been learned from this and similar projects. 1/
10.02 The appraisal focussed on a number of important issues that weretranslated into covenants designed to ensure adequate producer prices, adequateincome for OACV, protection against price fluctuations, and strengthening of0ACV management. The project got off to a good start in terms of incrementalproduction and OACV revenue, but incremental production was to a large extentdue to favorable economic conditions unrelated to the project; this tended toobscure the view on emerging weaknesses in OACV's performance and structure.Government and OACV did not comply with important covenants (consultation onproducer prices and the baremes, creation of a stabilization fund), and theAssociation did not insist as long as the going was good. When the tideturned, adjustments were made too late and too timidly. The lesson would seemto be that:
- covenants should only be sought if they are deemed crucial forthe project's success and are thought to be enforceable, but
- once they are sought and obtained, compliance should be insistedon to maintain the Association's seriousness of intent.
10.03 The turn in OACV's fortunes occurred so late in the project periodas to make corrective action by supervision missions and the Associationimpossible. However, since 1977 the Association has, in continuous discussionwith Malian authorities, contributed to identifying the main causes of thecollapse of groundnut marketing and gained Government's acceptance of theseviews. Besides managerial shortcomings and inadequate producer prices, re-peatedly high-lighted in the preceding pages, important findings were:
- the need for a differentiated approach to each of the sub-areasconstituting the OACV area, adjusting direction and intensityof intervention to prospective returns;
- the need for a review of recommended cultivation practices totake into account the constraints revealed by farmers'reactions;
1/ See in particular: Rural Development Projects: A Retrospective Viewof Bank Experience in Sub-Saharan Africa, October 13, 1978, ReportNo. 2242.
- 44 -
- the need for a genuine effort to meet farmers' demands withrespect to improving cereals cultivation;
- the need for a new status of OACV with a higher degree offinancial and managerial autonomy, giving it access to bankcredit (which, of course, requires first a consolidation ofits debts) and making it less dependent on other state agencies;and
- the need for a revenue structure making OACV less dependent onmarketing volumes and reflecting its increasing involvement inthe promotion of crops which are not marketed through officialchannels, or are not marketed at all.
10.04 These issues are in the center of on-going discussions with Govern-ment which may lead to a Technical Assistance Project aimed at working outin detail and implementing these institutional, technical and financialchanges, laying the basis for a new project on the foundation of lessonsdrawn for experiences with Cr. 491-MLI.
10.05 Several of the ancillary project components were executed quitesuccesfully, in the first place the rural roads improvement program, thelivestock subproject, and the setting up of the Evaluation Unit.
- 45 -
ANNEX 1
MAL I
INTEGRATED RURAL DEVELOPMENT PROJECT
Project Completion Report
Operation Arachides
1. Operation Arachide (OA) was created in June 1967 with FAC financing.Technical assistance was provided by a French consultanting firm. OA originallyfocussed on the Kita/Sebekoro area and gradually spread out to the westernareas of Kayes/Bafoulabe (1969/70 and 1970/71) and the northern area ofMourdiah (1971/72). In 1971/72, OA covered closed to 100,000 ha in an areaof about 80,000 km2 in western and central Mali with a total populationof 0.6 million, or roughly 60,000 farm families.
2. The impact of OA is reflected in the figures of Table 1. Theincrease in production can be atributed to a considerable extent to increasesin yields. The impact of the technical package propagated by OA is shown inthe following figures. The percentage of farmers in the OA area using im-proved methods increased as follows:
1967/68 1968/69 1969/70 1970/71 1971/72
Seed dressing 14 20 15 18 24Fertilizer 4 10 8 19 25
3. During the tri-annual national recovery program (1969/70-1971/72)which was launched after the change of Government in November 1968, agricul-tural exports increased from MF 4.9 billion to MF 9.6 billion; groundnutscontributed significantly to this recovery with groundnut exports risingfrom MF 0.8 billion to MF 3.0 billion.
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Groundnut Production and Marketi. 196661 191 2
Area 1000 ha OA area Yield (kg/ha) OA area Production (1.000t) OA area karketed (0OOt) OA area
YerI/Mali OA area in % Mali OA area Mali Mali OA area in % Mall OA area in --
19 - - 802 - - 103 - 39 - -
140 46.2 33 551 385 0.70 77 17.8 23 30 10.5
191,/)9 129 51.0 40 481 470 0.98 62 24.0 39 28 14.5 52
19(9/.0 118 75.0 64 750 753 1.00 89 56-5 63 57 58.1 67
1970/71 162 102.6 64 661 668 1.01 107 68.5 64 74 46.0 62
145 92.4 64 771 812 1.05 112 75.0 67 60 44.0 73
I r/ cops are marketed in January - April of the year following the year of production.
cr !
MALT
INTEGRATED RIRAL DEVELOPMENT PROJECT
Pro lect Completionk_eport_
Diffusion of Recounnended Techniques n Pro ject Area
(Es,timated at appraisal)
9 979 4 1914p, i9'( l 9( '77 1977 { 97" '79 1979/80rePr ,cct py Py, py PY4 _ )(PY)
Ia ha ha¯ ha
'lelv -,wn l9,900 0 7. 00 100 4 7, 400 !0 94,00 10,900 '0 112.100 ,0 114/00 (>0
.r. .... '>,100 0 F00 "N 41. 400 90 '4."00 3 7.00 4> 90,A00 !0 9,400 ''0 9:,00 50i t i '', ' I 9 4900 4? - .200 40 70, 00 4' t,.?00 .0 99',00 l-, 102,00 0,000 1!
0.0 ") 7',900 "' 94,000 l0 120,00 70 127,100 70 10, 00 70 19,700 70
Appialugi ii:l e , 0 49,100 47 ,00 40 79.!00 4' 94,l00 5! 99,00 >'. 10 ,.0 ' 10!,000 55
"x ..owi r I i <i.. 'j4m) .' 4,90 4 ', 40 1,00 20. 9-0 1 ? 0, 400 17 -,000 19 46,00 4
bl
Us,,>ing, to-is. 9-0 1 ' ,1.0 9l ',100 '9 57,0:0 9 109,(00 i5 190,1)0 .0 1¯9, 00 O 19 ,000 .0
i< .i a I i - I I1 0 ' O '/,100 . 40,000 l'1 4',,.00 1H :",',,00 ?1 '9,9>00 21 > 00 2 >(7,400 '>
-- p I..i 0 9 .0 9 : ,''11 M11, 9go o0, 0 - ,o00 i i 7,00 14 41,71,0 1
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
Pro ject Completion Report
ircremental Production Induced by the Pro ject
(Estinated at appralsal)
1 972 1973 /74 19(475 1975 76 1976/77 1977/7R 1978/79 1979/80
Pre-Project PYI PY, PY3 PY4 PYS (PY6) (PY')
al rGroIunounutsý
Are (ha)
1 tliet¯ ro ject 99,100 10',700 135,200 1 700 1,400 159,000 159,000 159,000
With Proieet - 104,600 138 100 156,00 172,400 121,600 186,950 191,050
Wi t hout 'ro jec t 7- 71 97 697 670 6,7 667 66!7
W i i I'i je' t1 720 Pl 277 P9 295 295
Produl i on ( ros)Witilorlit 'ret 7. 0 7,430 94,170 100, 920 104,770 106,(0 106,070 106,070
Witi Irolject 2,900 107,(90 127,750 151,250 162,500 167,25 170,955
ncremental Productin 7,470 13,520 26,W30 46,480 56,430 61;215 64, R5
bl CerueasI
Area hi-)Wil ,ri rolt 111,000 11 ,750 23, 920 242, 320 247, 950 253, 450 253, 450 253,450
Witl Proeel 116. 750 234.300 244,900 255,200 26650 266 , 470 269,900
Avereage Y i el d ()?g/ha)W i tit ' r jecr ) h ? 626 6?4 624 623 623 623
W i thi ro e 667 6ss 662 625 703 717 720
Il rodlc t i O (-t onS)Witlhuit Project 74,3 10 75, 920 146,510 151, 320 154,700 152, 000 158,000 152, 000
With I'rojeel 77,4"1 1S3,AO 163,535 174,720 15.255 191,135 194,35
Inr. wlt ;l Product ion 1,90 7,020 12,2 1 20,020 27,255 33, 135 36,355
ANNEX 3
Page 1
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
Project Completion Report
Incremental Production
1. Determination of incremental production is made difficult, in the
case of OACV, by two factors:
- the weakness of data regarding cultivated area and yields;and
- the fact that the project area expanded by close to 40%during the project period.
For cereals, data on both pre-project areas and yields, and therefore also
for incremental areas and yields, are very weak. The extraordinary increaseregistered by OACV reflects, most probably, an increasing concern with, and
attention to, the cereals aspect of OACV.
2. Development of total groundnut production and marketing is summa-
rized in Table 2. The main changes in project area during the project periodwere:
- inclusion of Segou province (zone 5) in 1975/76 with anestimated area of 50,800 ha and 34,000 tons of groundnuts;
- inclusion of Kenieba sector to Kayes/Bafoulabe (zone 1),with an estimated area of 6,000 ha and production of 4,500 t.
These estimates are approximate. A small part of zone 5 was integratedin 1974/75 already but this had to be neglected because of lack of details.Figures of Table 2 were adjusted by adding the above-mentioned productionand area figures to the years preceding integration into OACV (Table 1).Fortunately, marketing data for production outside OACV are available for1972/73 and 1973/74; thus, marketed production could also be adjusted toa constant area.
3. The resulting incremental production is still a very rough orderof magnitude because:
- it depends on the quality of OACV's and the EvaluationUnit's area and yield data; wherever they differ, the(lower) Evaluation Unit's figures have been used from1975/76 onwards 1/;
1/ No Evaluation Unit data available for earlier years.
- 50 -
ANNEX 3Page 2
- it is assumed that without the project total productionwould remain unchanged, which is questionable at leastfor the medium-term effect of improved seed, fertilizer,and extension advice; and
- the base year data (1972/73) is an estimate derived frommarketing data and intrapolation between 1971/72 and1973/74.
For these reasons incremental production as given in Table 2 must be regardedas an upper limit.
4. An alternative estimate was derived on the basis of documentedextension and input supply activities of OACV. Each of these actions (dis-tribution of improved seed, of fungicides, of fertilizer, and of equipment;propagation of high-density sowing) was linked to incremental productionestimates as shown in Table 1 of Annex 2. The same approach was used forcereals (with the after-effect of groundnut fertilizer as an additional item).The result is shown in Table 6. For groundnuts, incremental production ismuch lower than in Table 2, but also more stable. For cereals, it is the onlyestimate available as reported increases in area (Table 5) are quite improbable.
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Development af Groundnut Cultivation in OAgV Area _196'/68 1978/ 9
67/68 68/69 69/70 70/t 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79- Project Period -
Area
1 Kayes/Bafoulab6 20.2 (27) 34.8 34.4 33.0 27.32 Kita 31.0 (40) 418 40.1 45.9 42.2
3 Kolokani 17.2 (18) 19.0 18.2 16.6 18.0
4 Koulikoro 10.8 (15) 18.4 17.6 16.6 5.65 Segou - ('7) 56.4 54.1 40.0 27.1
Total 46.2 51.0 75.0 102.6 92.4 (86) 86.2 107.3 170.5 164.4 152.1 120.1
Production
I Kayes/Bafoulab4 15.2 (22) 31.0 34.7 27.4 24.0
2 Kita 35.1 (42) 46.0 47.2 40.p 40.7
3 Kolokani 11.1 (16) 19.0 21.0 12.3 13.44 Koulikoro 5.2 (12) 16.7 17.8 5.4 3.4 I5 Segou - (5) 37.8 39.7 16.9 19.5
Total 17.8 24.0 56.5 68.5 75.0 (69) 66.6 96.0 150.6 160.4 10P.4 100.9
Marketing
1 Kayes/Bafoulabi - - 3.3 6.2 9.1 7.2 9.2 12.2 15.7 16.4 9.3 9.0
2 Kita 3.8 8.3 16.3 21.3 22.2 27.9 25.3 27.6 32.3 33.5 23.8 18.0
3 Kolokani 3.7 3.6 9.0 9.6 8.2 4.6 4.4 9.3 12.2 11.5 4.3 3.24 Koulikoro 3.0 2.6 5.8 8.9 4.5 1.8 1.2 5.5 7.9 7.4 0.6 0.25 Segou - 5.4 10.3 8.0 2.3 3.9
Total 10.5 14.4 34.4 46.1 44.0 41.4 40.2 60.1 78.5 77.0 40.3 34.2
1 Kayes/BafoulabI 750 (800) 778 1,009 830 84!2 Kita 950 (1,050) 1,100 1,177 876 u60
3 Kolokani 647 (900) 1,000 1,155 756 604 Koulikoro 478 (800) 908 1,009 325 6005 Segou - (700) 648 575 421 720
Average 385 470 753 688 812 (800) 784 900 880 976 673 84O
) = estimate
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
Project Completion Report
Estimated Incremental Production of Proundnuts, 1972/73 - 1978/79
72/73 73/74 74/75 75/76 76/77 77/78 78/79--------------- Project Period --------------
OACV Area under groundnuts, unadjusted(1,000 ha) 1/ 86.2 86.2 107.3 170.5 164.4 152.1 120.1
Adjustment Segou/Reni6ba 56.8 56.8 56.8 - - -
Groundnut Area Adjusted 144.0 144.0 164.1 170.5 164.4 152.1 120.1
OACV groundnut production unadjusted(1,000 t) 1/ 69.0 66.6 96.0 150.6 160.4 102.4 100.9
Adjustment Segou/Kenigba 38.5 38.5 38.5 - - - -
Groundnut production adjusted 107.5 105.1 134.5 150.6 160.4 102.4 100.9 Ln
Marketed groundnuts OACV (1,000 t) 41.4 40.2 60.1 78.5 77.0 40.3 34.2
Adjustment 1972/73 and 1973/74 2/ 8.5 3.9 - - - - -
Marketed groundnuts, adjusted 49.9 44.1 60.1 78.5 77.0 40.3 34.2
Marketed production in % 46 42 45 52 48 39 34
Incremental Area (1,000 ha) 0 21.1 26.5 20.4 8.1 -23.9
Incremental Production (1,000 t) -2.4 27.0 43.1 52.9 -5.1 -6.6
Incromental Marketed Production
(1,000 t) -1.2 18.7 37.1 35.6 -1.1 -7.2
1/ Table 1.2/ OACV, Compte Rendu de la Campagne 1973/74, P. 84.
M t>,
IA LI
INTEGRATL) RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Selected Economic Indicators for Pro ect Period
1972/73 1973/74 1974/75 1975/76 1976/77 1977/78
Producer Prices (FM/kg)
CroundloL 30 30 40 40 45 50Millet/Sorghum/Maize 20 20 32 32 32 36
Price ratio groundnuts cereals 1.50 1.50 1.25 1.25 1.41 1.39
Index of Producer Prices
Crounidnuts 100 100 133 133 150 167Cureatu 100 1.00 160 160 160 180
LO
ComiposIite Index of Input andE<ulpment Prices 1/ 100 100 135 167 178 180
(Equ i pment) (100) (100) (100). (144) (231) (231)(Seed) (100) (100) (159) (188) (188) (188)(Pertilizer) (100) (100) (100) (112) (111) (121)
Consumer Prices (Food) 2/
Controlled (Cooperatives) 100 110 132 161 178 196Uncontrolled (Markets) 100 128 1.33 140 150 188Average . 100 119 133 150 164 192
1/ Prices to OACV farmers, weighed with PY3 sales values. The Index Includes toolbars, seeders, carts,stiperphosphate, and improved seed.
2/ Official statistics. For 1972/73 agricultural year, the 1972 prices were used as these influeice1972/73 decisions of farmers, and correapondingly for subsequent years.
- 54 -.
ANNEX 3MALI Table 4
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Development of Improved Production Methods, 1972/73 - 1977/78
PYO PYl PY2 PY3 PY4 PY51972/73 1973/74 1974/75 1975/76 1976/77 1977/78
Total Areas (1000 ha)Improved Seed
Groundnuts 15.1 19.3 21.8 60.7 69.0 40.9Cereals - - - 5.5 3.5 2.4
Fungicides
Groundnuts 20.7 33.5 36.1 51.6 38.8 52.2Cereals 17.4 15.0 37.3 44.7 35.1 53.1
Fertilizer
Groundnuts 30.4 40.3 36.3 52.9 39.2 50.4Cereals - - - 2.2 0.8 3.1
Ox-drawn Cultivation 1/ 8.0 15.4 20.0 27.2 32.9 39.7
High Density Sowing 2/ 24.9 18.8 23.6 27.3 29.6 21.3
Incremental Areas (1000 ha) 3/Improved Seed
Groundnuts 4.2 6.7 45.6 53.9 25.8Cereals - - 5.5 3.5 2.4
Fungicides
Groundnuts 12.8 13.4 30.9 18.1 31.5Cereals - 19.9 27.3 17.7 35.4
Fertilizer
Groundnuts 9.9 5.9 22.5 8.8 20.0Cereals - - 2.2 0.8 3.1
Ox-drawn Cultivation 7.4 12.0 19.2 24.9 31.7
High Density Sowing - 2.4 4.7 -
1/ Until and including 1972/73, OACV distributed 1,328 toolbars. Assumed area covered per toolbar = 6 ha,comprising both cereals and groundnuts. For allocation between groundnuts and cereals see Table 6 , footnote 2.
2/ Groundnuts only.
3/ Assuming that without the project all areas would remain at PYO level.
- 55 -
ANNEX 3Table 5
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Appraisal Estimate and Reported Increase in Cultivated Area in OACV(1,000 ha)
Appraisal Estimate Reported by OACV Estimated by Evaluation Unit
PYO PY5 PYO PY5 PYO PY5
a) OACV area under groundnuts 99.6 96.0 86.4 2/
Correction for areas added
to OACV subsequently 1/ 26.0 50.8 45.7 2/
Total Groundnut Area 125.6 181.6 144,8 152.1 132.1 143.8
b) OACV area under cereals 114.0 114.0 96.9 2/
Correction for areas addedto OACV subsequently 1/ 114.3 145.0 123.3 2/
Total Cereals Area 228.3 263.7 259.0 426.6 220.2 331.3
Total Cultivated Area 353.9 445.3 393.8 578.7 352.3 475.1
Average Annual Increase (%) 4.7 8.0 6.2- of which groundnuts (7.7) (1.0) (1.7)- of which cereals (3.0) (10.5) (8.5)
Rate of Rural PopulationIncrease (%) 3/ 2.2 2.2 2.2
1/ The area reported for 1975/76, the year of entry into OACV, was used without correction for PYO. If acorrection had been made for increases over these 3 years, the base year figures would have been lowerand the apparent increase in cultivated area even higher than shown.
2/ EU estimates are 10% lower than OACV estimates for groundnuts, and 15% for cereals. These results, basedon surveys in PY4 and PY5, were applied to base year estimates as well.
3/ Estimate.
- 56 -
ANNEX 3MA.LI Table 6
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Estimated Incremental Production of Groundnuts and Cereals
1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 a/ 1979/80 etc.PY1 PY2 PY3 PY4 PYS
A. Groundnuts
Increm. Area (1000 ha) 1/
Improved seed 4.2 6.7 45.6 53.9 25.8 27.5 27.5Fungicides 12.8 13.4 30.9 18.1 31.5 21.5 21.5Fertilizer 9.9 5.9 22.5 8.8 20.0 8.2 8.2
High density - - 2.4 4.7 - - -Deep ploughing 2/ 2.6 4.2 6.7 7.5 7.9 8.4 13/ 8.9 13/
Increm. Production (1000 t)
Improved seed 3/ 0.4 0.7 4.6 5.4 2.6 2.8 2.8Fungicides 4/ 0.6 0.7 1.5 1.9 1.6 1.2 1.2Fertilizer T/ 2.5 1.5 5.6 2.2 5.0 2.1 2.1High density 6/ - - 0.5 0.9 - - -Deep ploughing 7/ 0.5 0.7 1.2 1.3 1.4 1.5 14/ 1.6 14/
Total Increm. Production 4.0 3.6 13.4 11.7 10.6 7.6 7.7 14/
B. Cereals
Increm. Area (1000 ha) 1/
Improved seed - - 5.5 3.5 2.4 1.5 1.5Fungicides - 19.9 27.3 17.7 35.4 28.2 28.2Fertilizer direct - - 2.2 0.8 3.1 4.8 4.8Fertilizer after-effect 8/ - 9.9 5.9 22.5 8.8 20.0 8.2Deep ploughing 2/ 4.8 7.8 12.5 17.4 23.8 5.4 15/ 27.0 15/
Increm. Production (1000 t)
Improved seed 9/ - - 0.6 0.4 0.2 0.2 0.2Fungicides 10/ - 1.8 2.5 1.6 3.2 2.5 2.5Fertilizer direct 11/ - - 0.5 0.2 0.8 1.2 1.2Fertilizer after-effect 12/ - 1.5 0.9 3.4 1.3 3.0 1.2Deep ploughing 7/ 0.8 1.3 2.2 3.0 4.2 4.5 16/ 4.8 16/
Total Increm. Production 0.8 4.6 6.7 8.6 9.7 11.4 9.9 16/
a/ Based on data for 1978/79.1/ See Table 4.2/ Share of groundnuts assumed to be roughly proportional to share of area under groundnuts in total cultivated area,
i.e. 35% in PY1-3, 30% in PY4, and 25% in PY5 and thereafter.3/ Increm. area times 100 kg/ha.4/ Increm. area times 50 kg/ha.5/ " " " 250 kg/ha.6/ " " " 200 kg/ha.
7/ " 175 kg/ha.81 " " under groundnuts in preceding year was used as the indicator.
9/ " " times 100 kg/ha.
10/ " " " 90 kg/ha.
1/ " " " 250 kg/ha.
150 kg/ha.13/ The area increases by 500 ha a year to reflect the continuing increase in the number of toolbars. The increase
levels off after 5 years to reflect beginning replacement needs.11/ Production continues to increase by 100 tons a year for a period of 5 years. See footnote 13.15/ The area increases by 1,600 ha a year to reflect the continuing increase in the number of toolbars. The increase
levels off after 5 years to reflect beginning replacement needs.16/ Production continues to increase by 300 tons a year for a oeriod of 5 years. See footnote 15.
NB. Yield increases used are those suggested by the Appraisal Report and shown in Annex 2 , Table 1 of this PCR.
MALI
INTEGRATED PURAL LEVELOP?ENT PROJECT
PROJECT OMFLETION REPORT
Equipment and Input Use: Apprai8al Estimatee and Actual Development, 1972/73 - 1977/78
pyl PY2 PY3 PY4 PY5 PY5 Actual inAppr. Act. Appr. Act. Appr. Act. Appr. Act. Appr. Act. % of Appr.
A. uri?tities of Inputsit) Giroundnjuta
kertilizer (t) 3,195 2,176 3,590 2,097 4,585 3,450 6,165 2,550 6,490 3,021 47F'uI,gicide (kg) 4,830 5,02? 6,070 5,408 7,560 7,736 9,480 5,814 10,980 7,834 71Improved seed (t) 2,695 1,928 3,610 6,078 if 4,455 6,074 4,950 7,638 5,705 6,326 111
) Cereals
Fertilizer (t) -- - 330 - 119 - 470 n.a.Pungic1de (kg) 905 750 1,675 1,867 2,175 2,234 2,740 1,606 3,270 2,657 81
improvel sce.l (t) - - - 97 - 25 - 22 n.a.
B. Cuantities of' Eqjuipment
Toolhars 1,SX) 1,098 2,050 905 2,550 1,208 3,100 940 3,750 1,142 302eeders i,000 1,126 1,670 887 2,100 1,169 2,570 928 3,o8o 1,149 37crts 650 120 1,025 180 1,280 980 1,550 1,136 1,875 1,564 83
Loundnut Lifter 400 - 600 - 745 - 930 - 1,125 - 0hon - - - - - - - - 70 n.a.
/' InrIClns ,'0o t of seed donated by EDF.
-4a-
- 58 -, h- 1
MALI
7NTEGPATID RULÅL DE77LOP AN' PROJECT
PROJECT CM2LETION RPPORT
Results of Elacksmith Projec C zc-et(Nuzber of Blacksmiths EquiDed)
OACV Staze 1 Stage 2 Stage 3 Total
5 9 2 16
II 16 12 6 34
III Il 10 4 25
.L 20 25 2 47
v 17 9 6 32
otal 69 65 154
ÄDOpra:sal
Target 348 261 38 647
-59 -
MALI ANNEX 4Table 2
INTEGPATED PUPAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Achievements of the Feeder Road Unit (km)
1 1973/74 II 1974/75 111 1375/76 IV 1976/771 V 1977/7ts Total
Sectors 0 1/ M 2/ 0 i 0 M 0 =M M 0 Im
Kayes 78 25 75 78 100
Kenieba 20 50 50 30 100 50
Bafoulab 100 70 50 65 55 75 165
Rita 50 200 50 75 65 50 65 325
Kolokani 36 67 47 53 36 167
Koulikoro 65 65
Banamba 35 35 70
Segou 50 92 142
Monimpt 80 80
Sano 30 30
San 53 53
Tominian 100 50 36 186
Total - 184 4521170 530 1115 165 85 286 554 1433
1,987 km
Appraisal Estimate' 1,500 km
1/ Road opening.2/ Road maintenance
Source: OACV - November 1978
MALI
INTEGRATED RURAL EEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Summary of Livestock Project Activities
Sector
Kayes Kenieba Bafoulabe Kita Kolokani Banamba Koulikoro Segou San Tominian
Vaccinations
- Rinderpeat 72,308 6,175 4,920 - 18,450 3,725 1,346 10,908 22,895 2,630- Peripneumonia 71,100 9,858 11,437 39,418 18,450 3,725 1,167 10,908 22,895 7,502- Pasteurella 53,792 - 2,612 5,624 1,577 - 582 - - -- l3ackquarter 9,934 2,064 861 3,154 223 - 170 - - -- Anthrax - - - - 172 - - - - -
Anti-parasite treatments
ON- Internal 586 189 1,065 840 1,071 1,070 2,811 2,865 474 1,983 C- External 35 - 5 24 6 95 120 26 714 815
Clinical treatmwnts
- General 30 - 1 42 102 740 95 1,062 262 118- Ca5tration5 85 52 45 129 349 219 19 144 251 580
Feeding
- Number of cattle 264 13 87 889 1,354 1,566 789 1,493 198 643- Hectares of fodder crop 105 6.5 46.5 160 110 170 201 201 14 38- Number of ailage pits 16 5 6 77 60 62 48 117 5 62
'Imallholder fattening (77/78)
- Number of fattened cattle - - - - - 104 123 217 - -- Number of particip. farmers - - - - - 43 51 111 - -
wl
- 61 -
ANNEX 5
MAL I
INTEGRATED RURAL DEVELOPMENT PROJECT
Project Completion Report
Project Cost and Financing
1. It is difficult to reconstitute actual project cost because no
details are available about the actual amount of counterpart funds provided
by Mali. The system of reporting of OACV as well as the annual financial
statements and balance-sheets submitted to auditors were not geared to the
concept of incremental expenditure used to define key project components
(farm inputs, local staff, operating expenditure). This annex deals mainly
with the reconstruction of the Malian contributions to project cost. (The
disbursements of IDA are summarized in Tables 1 and 2. The FAC contribution
of FM 1,259 million was also fully disbursed by the end of the project period.
It should be noted that the FAC contribution was fixed in terms of FM.)
2. The contribution of Government and of project farmers will be
discussed under four headings:
- construction and equipment,- incremental local staff and operating cost,- incremental groundnut seed, and
- incremental farm inputs and equipment.
The latter two will require more detailed examination.
3. According to data supplied by OACV, the Malian contribution toward
the cost of buildings (excl. taxes) was FM 169.1 million, which is equivalent
to US$357,000 at the (weighted) average exchange rate. Starting from theAssociation's disbursement of US$1.203 million, which is equivalent to 70%of net of tax costs, the Malian 20% ought to have been US$343,000. Thesmall difference can be explained by deviations of the actual exchange ratefrom the average rate used here.
4. The Association disbursed 100% of the foreign exchange cost ofvehicles purchased under the project. No information about local costsis available. An estimated 15% of border costs was imputed for the Maliancontribution (i.e. about 10% for dealer's services and 5% for transportfrom the border to final destination). This amounts to US$140,000 or FM66.3 million.
5. In the case of incremental local staff and operating cost, theamount contributed by Mali must be deduced from the IDA disbursements:
- 62 -
ANNEX 5Page 2
(a) for local staff, 9% of US$453,000= US$58,000 1/0.70
(b) for operating cost, 8% of US$2,394,000=US$266,000 1!0.72
At the weighted average exchange rate, these amounts correspond to FM 27.5million and FM 126.0 million, respectively.
6. Total and incremental quantities of equipment and farm inputs(incl. improved seed) are at Table 3. We shall first examine the financingof incremental quantities of improved groundnut seed (Table 4), in whichIDA participated only as from PY 2. (Project activities in PY 1 had beenfinanced by FAC). Accordingly, incremental quantities are defined as thoseexceeding quantities in PY 1. It appears from Table 4 that IDA financed morethan total incremental cost of improved seed because
(a) the cost figure of FM 84/kg advanced by OACV proved to be higherthan actual cost as established by OACV accounting services in 1979;only in 1977/78 (when there were no incremental quantities of seedand thus no disbursements) did the actual cost exceed the figure ofFM 84/kg;
(b) in PY 4, OACV expected to distribute 8,530 tons and claimedreimbursements for the corresponding incremental quantity. Accord-ing to subsequent supervision missions, only 7,638 tons wereactually distributed.
As a consequence, total IDA disbursements exceeded actual cost by 90 million(US$200,000), and Government's contribution is negative. A corrollary findingis that IDA did de facto finance the subsidy element in incremental seeddistributed amounting to FM 40 million (US$100,000).
7. However, the real financing needs for incremental seed were notthose shown in Table 4, which was constructed according to the Bank's standardmethodology. What is left out, in our calculation of incremental inputfinancing needs, is the incremental financing required for cost increasesaffecting the non-incremental amounts. In the present case, these needsamount to FM 90 million 2/ - which by coincidence is exactly equal to excessdisbursements identified in the preceding paragraph. In this project, theimpact of the omission was minor because the initial level of seed distri-bution was low but wherever a project builds on a substantial level of
1/ See Table 1 of this Annex and Table 1 of Annex 13 of the AppraisalReport.
2/ This amount consists of FM 53 million for the financing of the 1928tons distributed in PY 1 (FM 78,200 - 50,9000 x 1,928 t, plus the incre-mental financing needs of incremental amounts distributed in PY 2 and PY3, respectively.
-63 -
ANNEX 5
Page 3
pre-existing input distribution, appropriate arrangements should be made
for these financing needs in order to avoid financial bottlenecks in times of
high inflation rates 1/.
8. Since farmers are supposed to repay improved seed at the end of
the season and Government is responsible for the subsidy element, OACV ought
to have had, at the end of the project, a working capital equal to IDA's
disbursements for seed plus the 10% contribution of 0ACV itself, i.e. some FM
550 million. The amount which ought to be still available at the end of the
project can be smaller than this amount for the following reasons:
- because Government did not pay the subsidies (FM 40 million);
- because OACV did not make its own contribution (FM 50 million),and
- because of arrears in farmers' repayment of seed credit.
The total for the latter item is not available but is unlikely to amount
to the residual FM 450 million. There is no working capital for seed pur-
chases left, however, as OACV in the financial crisis of recent years has used
up all available liquid assets. It would be preferable, in future projects,
to term the financing of incremental inputs "financing of a working capital
for incremental inputs" to make it clear that what the Association ultimately
finances is not a recurring cost (inputs) but a capital asset since incremen-tal inputs are ultimately paid for by farmers (abstracting from defaults
and arrears). Also, the continued existence of this asset, as it builds up
over the project years, should explicitly be made the object of the annual
audit examination.
9. Table 5 shows incremental distribution of equipment, fungicidesand fertilizer to OACV farmers. These means of production are distributed
through SCAER at subsidized prices. The subsidy element is to be recovered
through a levy on marketed groundnuts. The total amount of incrementalequipment and inputs distributed is small; fertilizer accounts for two thirdsof it. Total subsidies amount to FM 353 - 220 = FM 133 million (US$300,000)over the project period. At the same time, the amount recovered through theSCAER levy of the groundnut price schedule was FM 291 million, or more than
twice the subsidy received 2/. Thus, Government's contribution was negative
here as well.
1/ Elaborate arrangements for the financing (by Govt.) of cost increasesfor non-incremental inputs have been made in the recent Dosso Agricul-
tural Development Project in Niger, for instance.(Report No. 2493-NIR)2/ In PY 2, the incremental marketing volume (net of seed requirements)
was 15,200 tons; in PY 3, 17,400 tons. The levy was FM 8,930/ton andF1 8,936/ton, respectively.
- 64 -
ANNEX 5Page 4
10. This result prompts a similar calculation for total (rather thanincremental) quantities of groundnuts marketed. This is presented in Table 6.It appears that over the project period subsidies amounted to FM 488 million(just over US$1 million) while four times as much, FM 1.9 billion (US$4 mil-lion) were recovered from farmers under the title of subsidy financing. Thus,apart from the various export taxes levied on groundnuts, OACV farmers madeadditional substantial contributions to Government finances. (It is immate-rial, in this context, that OACV did not pass on these receipts to SCAER butused it for recurrent expenditure; SCAER is now the largest creditor of OACV.)
11. For a summary of project financing, the following assumptions aremade:
- Government's contribution to the project is limited to the itemsdiscussed in para. 3-5, which amount to a total of US$821,000 or FM380 million, minus the IDA excess payment for seeds mentioned inpara. 6 above. The net contribution is therefore FM 290 millionl/.
- Farmers' contribution is equal to the value of incremental inputsand equipment at prices paid by farmers, i.e. FM 220 million forSCAER-delivered items, FM 381 million for incremental groundnutseeds 2/, and FM 4 million for small quantities of improved cerealsseeds, or a total of FM 605 million or US$1.308 million. (Arrearsin credit repayment are left out of account since no records areavailable to the Association; any arrears would decrease the amountof farmers' participation and increase Government's share cor-respondingly.)
This yields the following summary table which compares actual financingof project activities with the original financing plan:
1/ Deduction of the US$3 million collected for subsidy recuperation inexcess of subsidies given to OACV farmers would turn Government'scontribution into a negative value. Although such a treatment wouldalso be admissible it was not used here; rather, the excess leviesare regarded as a supplementary tax levied on OACV farmers, comparableto the various export taxes which ultimately are also borne by farmers.
2/ For farmers' contribution, of course, incremental amounts include PY 1.Prices paid by farmers for improved seed were FM 34.5/kg in PY 1, FM55/kg in PY2 and FM 65/kg thereafter.
- 65 -
ANNEX 5
Page 5
Appraisal ActualFM US$ FM US$
Million 1000 % Million 1000 %
IDA 4,000 8,000 43.2 3,790 2/ 8,000 63.2FAC 1,259 2,518 13.6 1,259 2,722 3/ 21.5Govt. 2,148 4,296 23.2 290 627 3/ 5.0Farmers 1,857 4/ 3,714 20.0 605 1,308 3/ 10.3
Total 9,264 18,528 100.0 5,944 12,657 100.0
1/ Exchange rate FM 500/$.2/ Exchange rate weighted with IDA disbursements in each year: FM 473.7/$.3/ Average exchange rate over project period FM 462.5/$.4/ The initial project cost contained an item for bodies of ox-carts to be
built by local artisans and entirely paid by farmers. Since no infor-mation is available on this item, the original project cost of FM 9,471million was reduced by this item (FM 207 million including contingencies)and is now, for the sake of comparison, FM 9,264 million.
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Planned, Revised and Actual Disbursements Cr. 491-MI.1
Allocation in Reallocation Reallocation Actual Disbursement
Cate ety Vescript ion Credit Agreement % per 1/25/78 % per 4/28/78 per 6/50/78
I Vehicles and graders required 795,000 9.9 1,100,000 15.8 951,107 11.6 931,107 11.6tor the purposes of theproject
Incremental cost of groundnut 208,000 2.6 700,000 8.8 1,214,827 15.2 1,078,794 15.5improved seeds
Construction of buildings and 1.352,600 16.9 650,000 8.1 1,084,752 15.6 1,20),579 15.0project lacilities
4 Expatriate staff, salaries 1,721,000 21.5 1,721,000 21.5 1,686,464 21.1 1,707,539 21.5and consultants' services
Consultants' services under 90,000 1.1 200,000 2.5 254,991 2.9 250,996 2.9
part D(b) of the project,and accounting services
Incremental local staff 807,000 10,1 807,000 10.1 45, 955 5.7 455,941 5.7sala,ries0"
Iu(remental operating costs 1,657,000 20.5 1,637,000 20.5 2,595,946 50.0 2,594,444 50.0 1Coust ruct ion of B1amaloo H1Q 1/ 700,000 8.8 -
Illoillonted 1,589,000 17.4 484,600 6.1 -
To tal 8, 000,000 100 8,000,000 100 8,000,000 100 8,000,000 100
This category was created to allow, by exception, disbursement of 100% of net of tax costs (against 80% in the case of category 5). Construction of'he,dqOarters never materialized however.
HNtnNit. AlI I amun .. to io ,iied t o nearest C
(D>4"' L
ÅNAN.X 5- 67- Table 2
MAkLI
inte2rated Rural Development Proiect
Proiect Comuletion Reoort
Disburse=ent Schedule
(Cu=ulati4ve)
Fiscal Year andSeester Appraisal Actual
1974/75
-st 1,000 200
,nd 2,300 200
1975/76
ist 3,700 5902nd 4,900 2,500
1976/76
Ist 5,900 3,4002nd 6,700 4,200
1977/78
1st 7,200 6,2002nd 7,700 8,000
1978/79
ist 8,0002ud -
- 68 -
MALI ANNEX 5
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Development of Equipment Use and Input Distribution in OACV area, 1972/73 - 1977/78
1972/73 1973/74 1974/75 1975/76 1976/77 1977/78PYO PYl PY2 PY3 PY4 PY5
Total Quantities
A. Equipment (No.)
Toolbar 694 1,098 905 1,208 940 1,14ZSeeder 523 1,126 887 1,169 928 1,149Cart 599 120 180 980 1,136 1,564Hoe - - - - - 70
B. Fertilizer (t)
Superphosphate, simple 1,978 2,176 2,097 3,440 2,550 3,021Urea 110 39 157Phosph. of Ammonia 220 78 313
C. Fungicide (1000 bags)
Groundnuts 20.7 33.5 36.1 51.6 38.8 52.2Cereals 17.4 15.0 37.3 44.7 35.1 53.1
D. Improved Seed (t)
Groundnuts 1,580 1,928 6,078 1/ 6,073 7,638 6,325Cereals - - 26 97 25 22
Incremental Quantities
A. Equipment (No.)
Toolbar 404 - 110 - -Seeder 603 - 43 - -Cart - - 381 156 428Hoe - - - - 70
B. Fertilizer (t)
Superphosphate, simple 198 - 1,264 - -Urea - - 110 - 47Phosphate of Ammonia - - 220 - 93
C. Fungicide (1000 bags)
Groundnuts 12.8 2.6 15.5 - 0.6Cereals - 19.9 7.4 - 8.4
D. Improved Seed (t)
Groundnuts 348 250 2/ 3,895 1,565Cereals - 26 71 - -
1/ Including 3,900 c of seed donated by EDF.2/ Excluding the 3,900 t donated by ZDF.
- 69 -
ANNEX 5Table 4
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Distribution and Financing of Incremental Groundnut Seed
PY 1 PY 2 PY 3 PY 4 PY 5 Total
Total Quantity of Seed Distributed (t)a) Actual 1,928 2,178 6,073 7,638 6,325b) Claimed by OACV 1,928 2,178 6,073 8,530 6,325
Incremental Quantity of SeedDistributed as from PY 2 1/a) Actual 250 3,895 1,565 - 5,710b) Claimed by OACV 250 3,895 2,457 - 6,602
Cost per Ton as Claimed byOACV (FM 1,000) 84.0 84.0 84.0 84.0
IDA Disbursement per Ton(90% of Cost), FM 1,000) 75.6 75.6 75.6 75.6
Total IDA Disbursement (FM Mill) 18.9 294.5 185.7 - 499.1 2/
Actual Cost per Ton acc. toOACV accounts (FM 1,000) 3/ 67.4 69.3 78.2 87.0
Total Actual Cost of Increm.Seed (FM million)a) Actual Quantities 16.9 270.0 122.4 - 409.3b) Quantity Claimed by OACV 16.9 270.0 192.1 - 479.0
Disbursements Due for Increm.Improved Seeda) Actual Quantities and Cost 15.2 242.3 110.1 - 367.6b) Quantity Claimed by OACV 15.2 242.3 172.9 - 430.4
Net Government Contribution a) - 89.8 4/b) - 20.1 4/
1/ IDA participated in the finarcing of increm. seed only as from PY 2./ This amount is identical witn the amount in US$ disbursed for seed (Table 1) at an exchange rate of
FM 462.5 per US$, which is the average exchange rate over the project pari,:c.3/ Detailed breakdown of cost (including treatment, redistribution, and amortization of equipment) is at
West Africa Files.4/ Total actual cost minus IDA disbursement.
- 70 -
ANNEXnTable 5
ITSRA'EJ RURAL JVELCPN' P ECT
PRUGECT C'MPIXTION REPMI
Val. of Lorereotal Equ0pmeot and Inputa: C.st to SCAER and Aroera, 973/74 - 1977/78
1973/74 1974/75 1975/76 1976/77 1977/78 PRUJECT TRIOD1PRIM Te PRICZ To PR IE TM PRICE 1C PRICE TO PR!I=-
FIR SI _håk ____ä_____FARER FRl5 $çAg FAMtS gg FARM(la §g4j FA2R SCAE5 FAIR2RS &fl
A. Equteoent
a) Tooloaro
Numler 404 110 514unit Coat (FN 1,000) 30.0 48.o 43.2 60.0Total Valu. (FK Mill.) 12.1 19.4 4.8 6.6 16.9 26.3
b) 3..derNumbr 603 43 646Uit Cott (FM 1,00) 18.5 28.0 26.6 41.0Total Valut (fM mill.) 11.1 16.9 1.1 1.8 12.2 18.7
e) Cart.
Number 381 156 428 965Unot Coot (FM 1,000) 47.2 54.c 64.7 74.0 64.7 (80.0)Total Valat (FM mill.) 18.0 20.6 10.1 11.5 27.7 34.2 55.8 65.
d) H oa
Number 70 70Unit Cott (IN 1,000) 66.2 (70.0)Total Valu. (Pk moll.) 4.6 4.9 . 4.6 4.9
Total Vala. Equp..nt -2 - - Q3 2- 1.1 U g 89 U i.9
fl. Fertiltoer
o) Soprrchahate hae
Quantjty (t) 198 1,264 1,462Unot coat (N 1,000) 53.8 (55.0) 60.5 94.7Total Valu. (F4 Mill.) 10.7 10.9 76.5 119.7 87.2 130.6
b) Oroa
quantity (t) 110 47 157Unit coat (FIN 1,000) 93.5 24-6.5 92.0 139.4Total valu (FN mill.) 10.3 27.1 4.3 6.6 14.6 33.7
) Sul2 phte of A-.
Quantity (t) 220 93 213Unit cot (FN 1,000) 60.5 250.5 95.0 137.7Total Value (IN mill.) 13.3 55.1 8.8 12.8 22.1 67.9
Total Valuo Fortilizer 10.7 10.9 1001 P0. 13.1 94 12 - 2 2.
C. Fungoidea
a) Grouadnuts
Qantity (1,000 bags) 12.8 2.6 15.5 .. 6 31.5Unit Cost (Fl) (150) (100) (150) (100) (150) (100) (150) (100)Total vala, (4 mill.) 1.9 1.3 0.4 0.3 2.3 1.6 0.1 0.1 4.7
quantity (1,000 laga) 19.9 7.4 8.4 35.7Unit cott (FM) (50) (33) (50) (33)Tota Valu. (Fl .ill.) 1.0 0.7 0.4 0.2 0.4 0.3 1.8 1.2
Total Valu. Fungicides 1j L:i 4 1.0 7 1.8 2-4 6t4
Ttal Valu of Increm.Equipant and Input. / 7Ž2 2 L2.1 ;¾ 2 212 MJ2 M---
z/ xclugng e.
( a ate.
- 71 -
ANNEX 5MALI Table 6
INTEATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Subsidies on Equiment and Inputs Distributed to OACV Farmers. 197304- 197778, and Recuperation of Subsidies
'973/74 1974/75 1975/76 1976/77 1977/78 Project Period
Toolbars
Number 1,098 905 1,208 940 1,14?Unit Subsidy (FM 1,000) 18.0 23.0 16.8 22.6 24.7
Subsidy (FM mill.) 19.8 20.8 20.3 21.2 28.2 110.3
Zeeders
Number 1,126 887 1,169 928 1,149
Unit Subsidy (FM 1,000) 9.5 13.5 14.4 - 6.oSubsidy (FM mill.) 10.7 12.0 16.8 - 16.9 c6.4
Carts
Number 120 180 980 1,136 1,564
Unit Subsidy (FM 1,000) (6.1) 6.1 6.8 9.3 15.3Subsidy (FM mill.) 0.7 1.1 6.7 10.6 23.9 43.0
Hoes
Number 70
Unit Subsidy (FM 1,000) (13.8)
Subsidy (FM mill.) 1.0 1.0
Superohosphate
Tonnage 2,176 2,097 3,440 2,50 3,021Unit Subsidy (FM 1,000) 1.2 6.2 34.2 11.4 14.0Subsidy (FM mill.) 2.6 13.0 117.6 29.1 42.3 204.6
Urea
Tonnage 110 39 157Unit Subsidy (FM 1,000) 153.0 20.0 47.4
Subsidy (FM mill.) 16.8 0.8 7.4 25.0
Sulphate of Amm.
Tonnage 220 78 313Unit Subsidy 190.0 72.0 42.7
Subsidy (FM mill.) 41.8 5.6 13.3 60.7
Groundnut Fungicide
Number of bags (1,000) 33.5 36.1 51.6 38.8 52.2Unit Subsidy (FM) -50 -50 -50 -50 -50Subsidy (FM mill.) -1.7 -1.8 -2.6 -1.9 -2.6 -10.6
Cereals Fungicide
Number of bags (1,000) 15.0 37.3 44.7 35.1 5-.1Unit Subsidy (FM) (-17) (-17) (-17) (-17) (-17)Subsidy (FM mill.) -0.3 -0.5 -0.7 -0.5 -0.8 -2.
Total Subsidies (FM mill.) 44.6 216.7 64.9 129.6
Groundnuts Marketed(net of seed req.), 1,0co t 38.3 55.0 72.4 70.4 34.0
Levy for SCAER (FM/ton) 2,000 8.930 8,936 5.000 10,0Cc
Total Receints for SCAESubsiJies iTM mill.) 76.6 401.2 647.0 02 .LL 1,906.3
Net Contribution by OAC1Farmers to -3CAZR (FM mill.) 1446.6 40.7 287.1 ll.L
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Development of OACV Operating Fxpenditure, 1972/73 1978/79(FM Million)
1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79
Pre-Project Post-Project
Malian Staff 226 258 276 545 692 715
Op. Cost other than
Transport 200 462 566 1,295 1,389 1,065
Transport 23 40 366 340 648 313
Management + Overheads 36 34 56 150 148 112
Various Taxes 1/ 5 4 1 3 18 69
Total 2/ 490 798 1,265 2,333 2,895 2,274 (2,000)
Marketed GroundnutProduction (1000t) 41.4 40.2 60.1 78.5 77.0 40.3 34.2
Seed Requirements (1000t) (4,0) (4.5) 5.8 9.2 8.5 8.4 6.2
Net Marketed Production(1000t) 37.4 35.7 54.3 69.3 68.5 31.9 28.0
Operating Expenditure perNet Ton Marketed(FM1000/t) 13.1 22.4 23.3 33.7 42.3 71.3 71.4
Producer Price (FM1000/t) 30.0 30.0 40.0 40.0 45.0 50.0 60.0
OACV Cost in %Producer Price 44 75 58 84 94 143 119
1/ Excluding export taxes and ORSP levies.
2/ Without depreciation.
- 73 -ANNEX 7
MALI
INTEGRATED RURAL DEVELOPMENT PROJECT
Project Completion Report
Economic Analysis
A. Benefits
1. For groundnuts, two series of incremental production figures weredeveloped in Annex 3 (Tables 2 and 6). The first series can be interpretedas incremental production induced mainly by market signals, which were favor-able in the mid-'seventies but unfavorable after 1976. The second series(Table 6) can be interpreted as the imputed productivity effects of OACVactivities in the project period; incremental production is lower but morestable in this case. Both series will be used alternatively for building abenefit stream but the second is thought to reflect more accurately theproject's impact. For cereals, only the second method (explained in Annex 3,Table 6) will be used as no figures of comparable (relative) reliability areavailable for total and incremental production.
2. Economic prices are derived on the basis of World Bank commodityprice recordings and forecasts, and on transport and other cost items acc.to the Malian baremes.
B. Costs
3. The production-related part of incremental OACV expenditure hasbeen derived in Table 1, with explanations provided in the footnotes.Incremental farm inputs and equipment have been calculated in Table 2 ofAnnex 5; an adjustment has been made for EDF-donated seed which has aneconomic but no financial cost.
4. No opportunity costs of incremental labor were calculated. Mostof the imputed production increase is attributable to productivity-raisingnew inputs (seed, fungicides, fertilizer) requiring minimal amounts ofincremental labor input. Most of the incremental labor requirements occurat harvest time, and part of the harvesting operations are handled bywomen and children with a low opportunity cost.
5. The economic life-time of the project has been set at 15 years,in accordance with appraisal assumptions.
C. Results
6. The resulting net benefit streams (Table 2 and 3) are somewhatperverse, with positive figures initially and negative figures later on.The IRR ie not able to deal adequately with these conditions; the resultingeconomic rates of return are meaningless. The structure of the net benefitflows clearly points to negative returns both in Table 2 and Table 3.
MALI
INTEGRATED RURAL DEVELOPRENT PROJECT
PROJECT COMPLETION REPORT
Incremental OACV Operating Cost during and after Project Period (FM Million)
PY 0 PY 1 PY 2 PY 3 PY 4 PY 5 (6)
Total OACV budget (ex post) 490 798 1,265 2,333 2,895 2,274 2,000 1/
Incremental cost 308 775 1,843 2,405 1,784 1,510
Minus various taxes 2/ (4) (1) (3) (18) (69) (56)
Increm. cost adjusted 304 776 1,840 2,387 1,715 1,454
x 0.85 3/ 258 660 1,564 2,029 1,458 1,236
Increu. production-related tech. asat. 4/ - - - - - (230)
Increm. production-relatedOACV expenditure 258 660 1564 2,029 1 08 1,001
1/ Planned for 1978/79.2/ See Table 1 of Annex 6.3/ The factor 0.85 reflects the share of directly production-related activitea in total projec- cost and excludW3all ancillary subprojects (section 11 of summary cost table in AR) with the partial exception of the costs ofthe track improvement program, of which 50% have been imputed to the project.4/ Cost of technical assistance in PY 5 (acc. to AR estimate) plus proportionate price contingencies. Only staffcoste have been taken into account since operating costs will also accrue for Malian staff replacing rechnicalassistants.
NALI
INTEGRATED RURAL DEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Estimate of Economic Rate of Return of the Project
Method 1: Imputed Effects of Extension and Input Supply Services 1/
FYI PY2 PY3 PY4 I PY5 PY6 PY7 PY8 PY9 PY10 PY11-15
lIenef1
i
Incr. Gronnnuts (100t) 1/ 4.0 3.6 13.4 11.7 w10,6 7.6 7.7 7.8 7.9 8.o 8.0Econ. Price (FM/kg) 150 78 81 131 120 83 85 87 84 81 80Incr. Value (FM mill.) 600 281 1,085 1,533 1,272 631 655 679 664 648 640
Incr. Cereals (ooot) 1/ 0.8 4.6 6.7 8.6 9.7 11.4 9.9 10.2 10.5 io.8 10.8Econ. Price (FM/kg) 85 85 67 61 69 71 80 82 83 84 85Incr. Value (FM mill.) 68 391 449 525 669 809 792 836 872 907 918
Totl lie fIts 668 672 1,534 2,058 1,941 1,440 1,447 1,515 1,536 1,555 1,558
Costs
Jcr. fost of OACV 2/ 258 660 1,.564 2,029 1, 4b8 1,006 1,006 1,006 1,006 1,006 857Incr. Inputs and Equipment / 65 335 / 699 750 857 857 / 857 857 857 857 857
Total Costs 6/ 325 995 2,263 2,7(9 2,315 1,863 1,863 t,863 1,863 1,863 1,863
lenefits - Costs 6/ 345 -525 -729 -721 -374 -423 -416 -348 -327 -308 -305
Econ. Pol?Ni. The rate of return (156%) is not meaningful. Sensitivity analysis shows, for instance, that the RoR would increase further if the benefits in later
project years are decreased. The cash-flow clearly shows an overall negative economic return.
See Table 6 of Annex 3.2/ See Table I above.
Derived froa Tables ) and 5 in Annex 5.Includitg tie economic cost of the EDF-donated 3,900 t of seed.
5/ The increm. cost for 1978/79 was calculated from 1978/79 data and is equal to the figure for PY5 by mere coincidence./ Wi thout taking into account the opportunity cost of increm. labor requirements.
MALI
INTEGRATED RURAL LEVELOPMENT PROJECT
PROJECT COMPLETION REPORT
Estimate of Economic Rate of Return of the Project
Method II: Imputed Effects of Input Supply and Extension Services for Cereals; Reported Incremental Production for Groundnuts
PYl PY2 PY3 PY4 PY5 PY6 PY7 PY8 PY9 PY10 Pyl-15
Jkenefitki
Increm. Groundnuts (1000t) 1 - 27.0 45.1 52.9 - - - -
Econ. Price (FM/kg) - 78 81 131 - - - - -
incr. Vlue (FM74 mill.) - 2,106 3,491 6,930 - - - - - -
Increm. Value ofCereals (FM mill.) 2/ 68 391 449 525 669 809 792 856 872 907 918
Total 13erefits 68 2,497 3,940 7,455 669 809 792 836 872 907 918
Total Coatp 5/ 4/ 325 995 2,263 2,779 2,315 1,863 1,863 1,863 1,863 1,865 1,863
benefits - Costs 4/ -255 1,502 1,677 4,676 -1,646 -1,054 -1,(T1 -1,0f -991 -956 -945
Econ. Rol -
NB. The rate of return (7%) is not meaningful. Sensitivity analysis shows, for instance, that if costs in years 6 - 15 were increased the RoR would
become higher. The meaningless result reflects the fact that benefit streams are not so much project-induced as the result of price policies
and other factors extraneous to the project.
See Table2 of Annex 5.2/ See 'Table 2 above./ See Table? above.
1/ WithouL taking into account the opportunity cost of increm. labor requirements.
M A U R i T A N l A J
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K[TA SEBEKORD -- SAN *J DEVELOPMENT PROJECT•. <OTOR N kOL ~PROJECT AREA
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FARABA -® SECTOR ADMINISTRATVE CENTER(9)y .. Nssoo SUB-SECTOR ADMINISTRATIVE CENTER(24)
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{0 o OTHER TOWNS-SECTOR BOUNDARIES 12'-
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Yanfol Sikassoo EXTENSIONSMAURITANIA REPUBL IC 1967
F N1968EGAL -- MA IL NG 1969
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