AFW CU DEVELOPG U F UND AW 96/01Language: EnglishO riginal: EnglishDie hutiom Tlm lted

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APPRM SAL REPORT

A GRICULTIJRAT, SECTOR INVESTG NT PR O GR AM W(SUPPORT IN FA STERN PROG CE)

REPUBLIC OF ZAm IA

rfMs Report is made available only to stas m embers towhose work it relates. Any further release must beauthorH d by the Vice-president for Operations.

COUNTRY DEPARTM EUSOUTH REGION

OCDSNOVEm ER 1996

AFRICAN D EVELOPM ENT FUND

B.P. 1387 ABIDJAN 01Tel: 20-44-44Fax: 20-49-02

PROGRAAM INFORM ATION

The information given hereunder is intended to provide some guidance to prospectivesuppliers, contractors, consultants and al1 persons interested in the procurement of goods andservices for projects/programmes approved by the Board of Directozs of the Bank Group.M ore detailed information and guidance should be obtained from the Executing Agency ofthe Borrower.

1.

2.

3.

COUNTRY

NAM E OF PROGRAM M E

LOCATION

The Republic of Zambia

Agricultur? Sector Investment Programme

Eastern Province, about 575 km NorthEast of Lusaka

Government of the Republic of Zambia

M inistry of Agriculture, Food and Fisheries

4.

5.

6.

BORROW ER

BENEFICIARY

EXECUTING AGENCY M inistry of Agriculture, Food andFisheriesP. 0 . Box 50197LusakaTelephone: 260-1-253933Telex: 439/40093 M INAGFax: 260-1-253520

Crop development, livestock development,support to research and extension, training,infrastructural facilities like buildings, accessroads and water supplies, nlral financecomprising rural investment funds andagricultural credit, and provision of technicalassistants.

UA 27.19 million

7. PROGRAM M E DESCRIPTION :

8. TOTAL COST

2

9. Foreign CostLocal Cost

U A 21.02 m illionUA 6.16 million

UA 15.00 m illionUA 6.02 million

10. BANK LOAN ADFE der ZAM PIPOn-going un

OTHER SOURCES OF FIN ANCING

GovernmentBenelkiaries

D ATE OF APPROVAL

UA, 5. 10 m illionUA. 1.07 million

Proposed for December 1996 ADFBoard.

','j

21z%. !1. ' j

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<

13. ESTIM ATED STARTING DATE OFPROGRAM M E AND D URATION

14. PROCUREM ENT

January 1997 for 4 years

Procurement of camping equipment,comm unication facilities, cartographfyahd laboratory equipment, chemiéal,fertilizers, vaccines, and m ilk goatswill be procured through InternationalShopping (1S)'. Infrastrutture worksand building matedals through

National Comyetition (NC), Tractorsand farm lmplements? vehicles,motorcycles, offlce 'stationery,household facilities for thé MT C andimproved seeds will be procured byway of National Shopping. T.A. staffwill be recruitbd through LimitedCompetition.

CONSULTANCY SERVICES REOUIREDAr STAGE OF SELECTION : For External Audit, Credit

Administration, Environment andW omen in Development, the stage ofselection will comm ence as soon as theBoard approves the loan.

ZAM BIA

AGRICULTURE SECTOR IW ESTM ENT PROGRAM M E(EASTERN PROVINCE)

TABLE OF CON TENTS

BASIC DATA . CURRENCY Ar M EASURES. LIST OF TABLES,LIST OF AN NEXES. LIST OF ABBREVIATIONS. PROJECT BRIEF.PROJECT M ATRIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i-xiii

1. INTRODUCTION.BACKGROUND AND STRATEGY 1

1.1 Origin and History of the Programme . . . . . . . . . .1.2 Summary of Bank Group Operations in Zambia . . . . . . . . . . .1.3 Fronomic Background and Bank Group Strategy for Zambia .1.4 Performance of Similar Projects in Zambia . . . . . . . . . . . . . . .

2. THE SECTOR .....

2. 1 Salient Features2.2 Stru Ctufe . . . . . . . . . . . . . . . . . . . . . . . .2.3 W omen and Youth in Zambia Agriculture2.4 Recent Performance . .2.5 Agdcultural Institutions . . . . . . . .2.6 The Agricultural Policy Framework2.7 Constraints to Agricultural D evelopment .

THE PROGRAM M E AREA3. 15

7

3 1 Cati On . . . . . . . . . . . . . . . . . . 153.2 Topography, Soils and Vegetation . . . . . . . . . . . . . . . . . . . . . 153.3 C1i mate . . . . . . . . . . . 153.4 Clender Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163.5 Hem1th and Nutn'tion . . . . . 163.6 Agn'culture . . . 173.7 I-gnd 'fenure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 8 Envi ronment . . . . . . . . . . . . . . . 183.9 Programme Beneficinries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4. THE PROGRAM M E ........................

4.1 Background . . . . . . . . . 204 .2 (lbJ- eCQVCS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204.3 Description of Programme Outputs . . . . . . . . . . . . . . . 2 14.4 Detniled Description of Activities and Components . . . . . . . . . . . . . . . 234.5 Programme Assumptions and Risks . . . . . 284.6 The Programme Cost Estimate . . . 29

TABLE OF CONTENTS (Cont'd)

6.

;4.7 Sources of Finance . .

l4.8 Environmental Impact

l t on w omen4.9 lmpac

lPROGRAM ME IM PLEM ENTATION

!5.1 Executing Agency .1

5.2 Organisation and M anagementl5

.3 Co-ordination of the ASIP . .E

'

5.4 Training and Incentives5.5 PIOCUFCITICI'It . . . . . . . . . . . . . . . . . . . .

I5.6 Implgmentation Plan and Expenditure Sqhedule

5.7 M onitoring, Evaluation and Reporting5 8 Reculn-ent Costs . . . . . . k . . ..5.9 Fin 'ancial Management, Accounts and Auéit .

(Recovery and Programme Sustainability5.10 Costl

JUSTIFTCATION!

313234

35

35353637383942434345

47

7.

h6. 1 Tecbnical Justification . . . . . . .

l j troutkon6.2 Programme Benefits and their D s6.3 Finahcial Justifkation .

1 ification6.4 Economic Just

lCONCLUSIONS Ar RECOM M ENDATIONS

f

'

'

l7. 1 Conclusion .

I7.2 Recqmmendations

47484849

51

(i?

This Apprtzsal Report was prepared by Messrs. W .B.O. Obura (Principal. .Agricultural

D onomist and Team Leader, OCDS.2), Z.O. Owiro Givqstock Specialtst, Ceh, sultant), S.)

'

Awuku lcivil/lrri! gation Engineer, Consultant), .J.C. Amon (Tnstitutional/Financial Expert,consultmnt) and Ms. M. Anglow, Agronomist, (OCDS.Z) fpllowing their Missipn to Zambiain June 1996. Clntributions were received from Mr. V. X. disale, Sçnior Couhiy Economist,

1 f M essrs. D. Tripathy (OCDS.2)(OcDs.1). Enqriries should be addressed to Division Chie s,

and E.K. Shaaeldin (OCDS.1).( .!1;i1

2,

BASIC D ATA

Indicator M easure Year(in million)

1. Total Population 9.2 1994

2. Female Population % Total 50.2 1992

3. Poverty Indicator

i) Dependent population per 100 persons of working age 106 1990

ii) Population below absolute poverty level:

a) Urban 47 1990

b) Rural 80 1990

c) Percentage of household income spent on al1 food NA

4. Urbanisation

i) Total Population (million) 9.2 1994

ii) Average Annual Population Growth Rate 3.2 1992

iii) Urban % Total Population 42 1992

iv) Average Annual Urban Population Growth Rate 7.1 1992

5. Components of Population Change

i) Total Fertility Rate (%) 6.0 1994

ii) Crude Birth Rate (per 9000) 45 1994

iii) Crude Death Rate (per '000) 18 19946. Survival Prospects

i) Life Expectancy at Birth (years) 48.9 1992

ii) Infant Mortality (per '000) 80 1994

iii) Child Mortality (each 5 years) per '000 203 1993

iv) Maternal Mortality (per 100,000 live births) 600 19927. Immunisation and ORT use

i) Children immunised against (%)

a) Tuberculosis 88 1993

b) DPT N/A

c) Polio N/A

l!

il -d) Meajles 62 1993

e) ORTI use . 89 1992I '8

. Average D jily lntake (kilocalories/capita) 2049 1994l9

. Access to spfe water (% of population)

i) Total ( 5j 19937o 1993 'ii) urban 9

1

iii) Rural l 28 199310. A, ccess to J'lealth Services (% of population) 75 1993

I11. Health Care

!'i) Populatpn per Physician 11111 1991

ii) Populatpn per Nursing Personnel 5000 19911 r..t ïfh Pers. 51 1993iii) Pekcentyge of Births attended by Trained ea

. - '

l12. Illiteracy Yate (population above 15 yearsj

tal l 25 1.992i) Toii) Male l 17 1992iii) semalel 33 1992

à '13. Primary sghool Gross Bnrolment Ratio

i) Total l 62.2 1990ii) Male ( 1.00 1990

'

lo 1 1990.iii) Femalelj '14

. Number of School Teachersti) Primary Total 27302 1990

1 h ercentage of female teachers 43 1990ii) Of whip p

l15. Pupil Teaçher Ratio

I 'i) Pri m 'ary 44 199 0

! a.5 1990ii) seconlary

I16. Household and Economic Participation of W omen 16.2 ' 1990Household hek

, ded by women (%)

Sources: i) l UNDP Human Development Report 1994, 1995ii) ADB African Development Report 1995.

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LIST OF TABLES

Table

4.1 Summary of Programme Cost Estimate by Component 30

Summary of Programme Cost Estimate by Category of Expenditure 31

Sources of Finance 32

4.4 Expenditure Component and Source of Finance 32

5.1 Expenditure Schedule by Component 41

Expenditure Schedule by Source of Finance 41

l

j CURRENCY EOUIVALENT(As at Jtly 1996.)

Currency Unit Zambian Kiacha (ZMK)1 UA ZM K 1790.201 ZM K UA 0.000561 UA US$ 1.44341 US$ UA 0.6928

t .,1 W EIGHTS Ar M EASURES

1 Metric T'on (mt) 2,204 lb (pounds)1 Kilograntme (kg) 2.2 lb (pounds)1 Metre (rrl) 3.28 ft (feet)1 Kilometr) (km) 0.62 milçs1 Hecure (lha) 2.471 acres

FISCAL YEAR

1 January - 31 December

ABBREVIATIiVTS

l ADB African Development BankADF African Development Fundl icultural sector lnvestment Programme. ASIP AgrASSC Agricultural Sector Steering CoinmitteeBEO Block Extension OfficersCARO Chief Agricultural Research OfficerCEO Camp Extension OfficersCSMS Chief Subject Matter SpecialistCSO Centr;tl Statistics OfficeCUSA Credit Unions and Savings Association of Zambia Cooperative UnionDAC District Agdcultural CommitteeD ACO District Agricultural Co-ordinatorDAPH Department of Animal Productipn and H01thDEM D Depm ment of Econo.mic and M arketiffg DevelopmentD R Director of RejourcesECF East Coast FeverECZ : Environmental Council of ZambiaEEOA : Bconom ic Expansion in Outlying AreasEP : Eastern ProvinceFAO : Food and Agriculture Organisation of the United StatesFG : Farmer GroupFM U : Financial M anagement UnitGRZ : Government of thé Republic of Zambia

!

..

'

'' ,,. $.t* :

(v)

lCB lnternational Competitive BiddingIDA International Developm ent Agency of the W orld BankIS International ShoppingM AFF M inistry of Agdculture Food, and FisheriesM 1S : M anagement Information SystemM OFED : M inistry of Finance and Economic DevelopmentM TC : M ultipurpose Training CentreNAIS : National Agricultural lnformatlon ServiceNCDP : National Com mission of Development and PlanningNGO ; Non Governmental OrganisationNORAD : N om egian Agency for D evelopmentPAC : Provincial Agricultural Com mitteePACO : Provincial Agricultural Co-ordinatorPAO : Provincial Agricultural OfficerPBs Programme BeneficiariesPPM EU Programme Planning M onitoring and Evaluation UnitPS : Permanent SecretaryRC : Rural CreditlkF : Revolving FundRIF : Rural lnvestment FundSAR : Staff Appraisal ReportSCC : Systematic Client ConsultationSCCI : Seed Control and Certification InstituteSIDA : Swedish International D evelopment Agency

SMS : Subject Matter SpecialistSOE : Statement of ExpenditureTOR Terms of ReferenceUA Bank Unit of AccountUN United NationsU M CEF United Nations Children Education FundZABS Zambia Bureau of StatisticsZAM SEED Zambia Seed CompanyZCF/FS Zambia Co-operative Federation/Financial SerdcesZKW Zambian Kwacha

LIST OF ANNEXESXW X V O.

1 Country and Programm e Location

l2. List of Bank Approved Projects in Zambial3. Climatic Data

f4. List of Goods and Services!

D etmiled Cost Estimates

l6. A. Implementation Bar Chart

B. innual Targets for Implementation of ActivitieslTechnical Analysis

A. Sèlected Crops PerformanceIB. crops

livestock Developmentc. Lo. Iàfrastructure

l8. Rurf Finance

l

A. Yural lnvestment FundB. jRural Credit

. f the Agricultural Credit Act 1995C. Summary o

119. W omen in ASIP

l10. Environmental M itigation Statement

J

'

Financial Anfysis

l12. Economic Analysis

113. Orjanisation

A. Chart 1 - M inistry of Agriculture, Food andl

Fhal't 2 - National Steering Committee

Chart 3 - District Agricultural Committeef14. Tùrms of Reference for:

A. Agricultural Sector Steering CommitteeB. Dlstrict Agricultural Committee

Agricultural Sector Investment Programme

l16. List of Documents Used for Reference

'. . ' '

N umber of Pages

01

02

01

04

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. N >* >* <= ';1 8 2 o, o m o yx.9 dz -0 = l ql ol o . >s ez m

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l

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.

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** +-

Q o .) o qz ;z q)O oo m t E w' * t) * w'

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= Q tz r Q 11 w' < * <1 ' c 1z: O.Q m o =c kt O-.Q -z o = Izt Qo

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: > -'z çz Y. & @ = o tha ;= a .u a'T 7J cz r: 'a 31ra = qz o s .- aw e ; Oo x C <.'< u '= x ku (-. Z

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D. * *

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C) Q= == =X r/ > 0% X Q

os < ' os < Co o- D - D

x *ox o < os env. * p.x *o o o

ox X 01 o. .- o % - o

=>m.. *r oo ?Q 3x .5* n œo '> *

1 1 <-:k : % .0> e Q: d u o> ox t= ='- y.

P- *

' Rm

(i)

SUM M ARY. CON CLUSIONS Ar RECOM M END ATTONS

L BORROW ER

2. BENEFICIARY AN DEXECUTING AGENCY

3. LOAN:

a) ADF

b) Terms

i) Service Charge

The Republic of Zambia

M inistry of Agriculture, Food and Fisheries

Not exceeding UA 15.00 million

0.75 per annum on the amounts disbursed andoutstanding.

A commltment charge at the rate of one half percent (0.50%) per annum on the undisbursedportion of the Loan, which shall begin to accrueninety (90) days after the date of signature ofthe Agreement.

50 yemrs including a grace period of 10 years.

1 per cent of the principal loan amount payableannufly from the 11th year after the signing ofthe Loan Agreement through the 20th year and3 per cent per annum thereafter.

ii) Commitment Charge

iii) Duration

iv) Repayment

4. PURPOSE OF THE LOAN The loan would be used to finance the entireforeign cost of the program me amounting to UA15.00 million. The Bank will finance about77.45 per cent of total programme cost.

5. THE PROGRAM M E

a) Obiectives

The programme's sector objectives are to contribute to GDP growth, povertyalleviation, and advancing social development. This would be achieved through increasedhousehold income, improved mobility and improved access to information on markets andprices.

( '+lr7' v. . '. ' - -7+ n v. vv'v . - .. .7 T . .

(ii)

b) DescriptionlC

rop development, livestockdevelopment, iupport to research and extension, training,infrastructural fycilities like buildings, access , roads and water supplies; rural financecomprising rural investment funds and agricùltural credit; and provision of technicalassistants.

6. PROGRAM M E COSTS

I .The progiamme costs are estimated at ZM K 48.669.94 million or UA 27.19 million

lcomposed of foreign costs and local costs as f ollows'.

Summary of Program me Cost Estimates by Comp onent

(irl ly1 ill; () r) 11 $&/ 1, () à1 zl') 11 /1 r)1;lli () p1 IJ/:t )x

COM PONENT r: E j. c Tool F.E L.c Total F.E

1A. AGRIC. DW ELOPMENT1

.

l ' ' ' 'A1 . Crop Devjlopment 529.20 1 1 8.80 648.00 0.30 0.:7 0.37 8 1 .7

A2. Research j 477.4: 92.60 870.00 0.27 0.05 Qk32 83.8A3. Extension and Training 1 4,525.80 2,443.60 1 6,9j9.4* 8.1 1 1 .36 9.48 45.61

j 'B. LIVESTOCK DW ELOP. 2,6 10.95 1 ,378 .94 3,989 .90 1 .46 0.77 ' 2.23 65.4

l ,

c. . STRUCJURE 3,952.34 1,758.98 5,711.31 2.21 0.98 3.19 69.2I

D. RTJRAL FW ANCEl

'

29 2,895.82 0.90 ' 0.72 1.62 55.5D1. RIF J 1,608.53 1,287.7 77 8,977.74 4.51 0.50 5.01 90.0D2. Credit j 8,079.97 89 .

l 766.04 0.00 766.04 0.43 0.00 0.43 100E. TECHNICAL

AsslserucE jSub-erotal J 32,550.23 7,977.98 40,528.21 18.18 4.4.6 72.64 80.3

1 .Physical Contingencies 1,662.18 466.63 2,)28.81 0.93 0.26 1.19 78.1I . 'J 'Pzice Contingencles 3,424.39 2,588.53 6,012.92 1.91 1.45 3,36 57.0I . '

.:'

37,636.80 11,633.14 48,669.94 21.02 6.16 27.19 77.3Total Cost I . .

*>

(iii)

7. SUM M ARY OF PROGRAM M E COST BY CATEGORY OF EXPENDITURE

The total cost by category of expenditure is summarised in the tble below:

Summary of Procramme Cost Estimates bv Catecorv of Exnenditure

(In millions Kwacha) (ln million UA)COM PONENTS %

F.E L.C Total F.E t.C Total F-E

A. Civil works 2. 1 1 2.83 1 , 637.70 3.750.53 1 .1 8 0.9 1 2.1 0 0.56

B. Buildings 3,329.9 5 1 .449.95 4,770.90 1 .8 6 0.8 1 2.674 0.70

C. Equipm ents 998 .83 1 74.6 1 1 . 1 73.44 0.56 0.1 0 0.66 0.85

D. Vehicles 2,539.70 21 5.30 2,755.00 1 .42 0.1 2 1 .54 0.92

E. Services 1.526.55 629.32 2. 1 55.87 0.85 0.35 1.20 O.7 1

F. Tecbnical Assistance 766.04 0.00 766.04 0.43 0.QO 0.43 1 .00

G . Local staff 0.00 264.00 264.00 0.Q0 0.1 6 0.1 5 0.00

H. Training 1 1 ,940.90 2,41 3.00 1 4,353.90 6.67 1 .35 8.02 0.83

1. Farm inputs 1 55.62 5.58 1 61 .20 0.09 0.00 0.09 0.97

J. Operation & maintenance 754.24 60.35 8 1 4.59 0.42 0.03 0.46 0.93

K. Environment 345.60 230.40 576.00 0.1 9 0.1 3 0.32 0.60

L. Credit 8,079.95 897.77 8,977 .74 4.51 0.B0 S.0 1 0.90

Base Cost 32,550.23 7,977.98 40.528.2 1 1 8.1 8 4.46 22.64 0.80

Physical Contingencies 1 ,662.1 8 466.63 2, 1 28.8 1 0.93 0.26 1 .19 0.78

Price Contingencies 3,424.39 2,588.53 6.01 2.92 1 .9 : 1 .45 3.36 0.57

Total Pfogramme cost 37,636.80 1 1 ,033.1 4 48,669.94 21 .02 6.1 6 27.1 9 0.77

8. SOURCES O F FINANCE

The program m e w ould be financed by ADF, GRZ and Beneficiaries asfollow s:

Sources of Finance( I n U A m i I l i o n )

Source F.E L.C Total % of Total

ADF 1 5.00 1 5.00 55.31

ZAM PIP (ON-GOING PROJECT: 6.02 0.00 6.02 22.1CREDIT + RIF)

GRZ 5.10 5.10 1 8.76

Beneficiaries 1 .O7 1 .07 3.79

Total 21 .02 6.17 27.19 100

= & Iv .f

1 ,

1

ï . . à ::j .,t ''1 ( i V ) '''.?

.

9. EXPENDITURE BY COM PONENT AND SOURCE UF FINANCE

I: The proposed expenditure by component and source of funds is indicated ,.1' be Iovv : '''

;j ' '.

i Exnenditure Com Donent and So,tlrce Of Finance): ( I n U A m i l I i o n )( . . ' . a.

l I ADF ZAMPIP ., ' . GRZ Beneficiaries py'lponents ,.c.l t..c. motal F.E. L.c. , motaf . ,.:. .t u-c. votal ,.c. L.c. , molal. èost. -*5j ' ' .

A. YGRICULYURALDEVELOPMENT '' ) .

136 - 0.36 ' - 0.10 0.1.0 - - - 0.45 . s. . (A1 . jcrop Development 0. 'i ..;. (k-j.A 2

. ) I:l e s e a r c h O ) 3 1 - o . 3 ! ' - . o . o 7 o . o 7 - - - () . 3 9 j nyj; j . %'

,A3. lfxtension and Training 9 JB 1 - 9.S1 - 1 .93 1 .9D - - - 1 1 .44i l . .. j1 j . . . k- : C '

e. jIVESTOCK DEVELOP. 1;69 - 1 .69 - 1 .O5 1 .Q.j - - - 2.74 . .ttl lss - z.6s - . ,.., ,.., - - - ..06 .

?.iC. jNFRASTRUCTURE 2'i - . .. . . .loo o.oo o.oo o.oo o.oo ' . ;o. runau FINAxcE . o. 1 , . )1 J ' ' ' ' ',?

jl . RIF 01 00 - 0.00 1 .O5 1 .O5 - 0.48 0.48 * 0.61 0.51 2.04 Ji .. .. . v . . . , . j? p ' . . .1 . ..

..ij2. Credit 0100 - 0.00 4.97 4.97 - 0.05 0.95 - 0.56 0.56 5.58 . . . ..i

l ' ;E. ITECHNICAL 01.48 - 0.48 - 0.00 0.00 - - - 0.48 . ,s,

As ',ISTANCE ) . . . . . '.xii,jh' ! 1)T

otàl 1 51.00 D.OD 1 5.00 6.02 6.02' 9.00 B. 1 O 5. 1 o 0.00 1 .O7 1 .Q7 27. 19 .:'j,lr1 ' ' * :. . j

'

: j' J

'

10. IM PLEM ENTATION i';

f itk: The programme would be implemented over a 4-year period with 1997 being PYI. j: j: ''.' .. :,':,j!!11

. PROCUREM ENT 'iiI I'

jProcurement of communication facilities, cart. ography .equipment, laboratory and , j.'

hemicals, fertifizers and vaccines; milk goats will' be tho. tlgh intein. v'ationâl shopping. Civil .1'1 c .

works and building materials will be procured through, n'àtional çompetition. Procurement 1

: .iof tractors and 1 farm implements; vehicles and moto. r, cycles; oftke .statlonery; household ' zl.t.j1

l facilities for MITCS; and improved seeds will be tlit.éugh national shopping. Technical 'iJ Assisfnnt staff will be recruited through shortlisting procedure. th j . . .2

12. CONCLUSIONS Ar RECOM M ENDATIONSJ j . . :

j . )Conclusion lI j , ,j

1, ASIP has a hich odoritv in the develoomeht orogramme of Zambiwg. It aim s at ,

I *-'''' '*' ''e

'

' '*' . :. '*'

,j alleviating. povejrty especially in the rural areés. ASIP will foster an enabling economic . 1I environment fo 'r private sector development throvugh improvement on the essential agrkultural -'j.

'

k1 ' ,I 1

:'.;; 12i ' .,- (;I . ('

'

'''

':jj

'

. I

I .. .,''' *' '' ' 'xs tsw =. ... . .L uu . . .-a , . . . ' . . . . . ' ;: .:1

3 ' ' :1

(V)

services to farmers, and increasing investment in rural infrastructure. It will also providea conducive framework and combine resources for Zambia's public agricultural supportservices. The public expenditure programme for agriculture will reflect not only the prioritygiven to the sector but also the shared vision of the GRZ and the donor com munity. Theprogramme will therefore considerably increase the chances that adequate funding will beprovided.

The programme will enhance the effectiveness of public sector management byreplacing more than 180 separate project units in the agricultural public expenditureprogramme with a single operation, managed by Zambir s. M ost important is that the ASIPwill focus on the smallholders and wom en farmers, the groups with substnntial untappedgrowth potential. By targeting research, extension services and creating an enablingenvironment to boost private sector initiative, to benefit smallholders and women farmers,the A SIP will remove the constraints faced by them and help improve smallholderproductivity, leading to increase in income and welfare.

The ADF assisted portion of ASIP emphasises poverty alleviation as a major goal.lt is technically feasible, economically justifiable, and financially sustainable. It isformulated withln the framework of GRZ policy and falls within the Reform Programmebeing actively pursued by the GRZ with support from the multilateral institutions. The ASIPis also supported by most of the donor community accredited to Zambia, and is in line withADF VII development strategy.

Recommendations

It is therefore recommended that a loan not exceeding UA 15.00 million begranted from ADF Resources to the Government of the Republic of Zambia for the purpose

of implementing the programme as described in this report, subject to the following particula.rconditions:

Conditions of Entry into Force

A. Prior to entry into force, the Borrower shall have:

i) completed the restructuring of the Ministry of Agriculture, Food andFisheries, to the satisfaction of the Fund and pm icipating donors (para5.1.1);

ii) concluded an agreement for on-lending funds with a duly rejisteredûnancial institutlon, acceptable to the Fund, which shall adminlster therural credit programme. The draft agreement shall be submitted forthe prior approval of the Fund.

iii) completed an agreement, acceptable to the Fund, with the pm icipatingNGOs and the selected financial institution on the mechanism ofoperating/managing the rural credit scheme;

B. Other Conditions

The Borrower shall:

i) hold regular consultations donorsto reaching agreement before the endfollowing year's public investment in

with

5.6.5).

including the Bank with a viewof each financial year on thethe agricultural sector (para.

-RNN.W.m

INTRODUCTION .BACKGROUN D AND STRATEGY

1.1 Origin and History of the Prorramme

1. 1.1 Zambia is located in the Central Plateau of Africa covering an area of 753,000 km2.The country shares borders in the N orth with Tanzania and Zaire, in the W est with Angola,in the South South W est with Namibia. In the South South East lies Zimbabwe.M ozambique and Malawi are located on the Eastern border of Zambia. The population ofthe country is currently estimated at 9.2 million with an annual growth rate of 3.2 per cent.

1. 1.2 Zambia's tropical location, its elevated position and the seasonal southwardmovement of the equatorif low-pressure belt are the dominant factors controlling thecountry's climate. The average temperature ranges from 18 to 20 degrees centigrade, butnight frosts can be expected during the winter months, which normally runs from June toOctober. The mean annual rainfall ranges from about 650 mm in the South to about 1,500mm in the North, falling mainly between October and April.

1.1.3 Tmnd is Zambia's main natural resource. However, much of it is under-utilized.Of the country's total area of 753,000 km2, almost one-quarter is considered arable, but only16 per cent of this is cropped annually. Performance of Agriculture sector has deterioratedsince independence in 1964 tsee section 2.4) As a result, the nutritional level of thepopulation dropped considerably as indicated by 1ow food and nutrient intakes, rise inm alnutrition and under nutrition, and deterioration in household food security, with per capitasupplies of food energy and vital nutrients, including animal protein and vitamins being 25-40per cent below their levels 20 years ago. '

1.1.4 The Agricultural Sector Investment Programme (ASIP) was initiated in Zambia inresponse to the strong dissatisfaction of both the Governm ent of the Republic of Zambia(GRZ) and donors with the country's 1ow agriculture growth rates (para 2.4.1). The 1owgrowth rate has been attributed to several causes. Past government policies were biasedagainst agriculture and 1ed to capital and labour disinvestment in the sector. The parallelmanagement structures established by donor-supported projects and the heavy use of foreignconsultnnts have hindered domestic capacity building. By 1990 there were about 180 donor

financed projects in Zambia's agricultural sector. Most had parallel management structure,and involved little if any sense of local ownership. The GRZ financial resources werestretched to the limit, and on too many occasions, it failed to meet its financial commitments

to the donor assisted projects.

1.1.5 In 1990, in order to arrest the situation, the GRZ embarked on a gradual phasingout of the existing project structures and encouraged closer collaboration among donors tomake aid more efficient. In response, the donors agreed with the GRZ on the need for anintegrated sector approach. In 1992, the GRZ appointed a Zambian task force, drawing fromboth the public and the private sectors to prepare ASIP. ln 1994, the African DevelopmentFund (ADF) and the lnternational Development Agency (IDA) of the World Bank jointlyconducted an appraisal of the ASIP. ADF did not however proceed with the necessaryprocessing of the programme due to inadequate resources. The IDA subsequently approveda loan of US$ 60.00 million (UA 41.57 million) in support of ASIP.

1.1.6 ASIP was intended to be approached from the national point of view with donorsputting their contribution in a common fund. Procurement procedures were to bestmndardised and the activities assigned to one specific unit. Donors did not however, favourthis approach. lt did not provide adequate safeguards on financial control, and there wereno guarantees that procurement of goods and services would be as transparent as donors

would like it to be. It was finally agreed that donors woulé retain their procedures in as farfinancial utilitsation and disbursements ap conceyned.. A unit will be created to co-as

ordinate these jactivities (para. 5.9.2). The .prin' ciple of national approach in theimplementation 'of ASIP was also made optjonal as maqy donors felt Shat they might not bein a positlon to jontrol the implementation of Ktlviti.e's ihey are financing if the pationalstrategy was ada'pted. To this end, donors, Fith eyçep. bien of W orld Bank, opted for specificeographic areaj for their programme activities (para t.1.2).g

1.1.7 Follo j'wing further consultations betweep tllq ADF and GRZ, and the improvement' 'ission in June 1996. In line within ADF resource base, the ADF launched an appraisal 1

.I ' ' ,other donors, thr Fund accepted the GRZ request to conlider Eastern Prpvince (EP) for the

. . . ' ' . i

'

Fund's intervention. The Swedish Internationàl Develppment Agency ISI'DAJ and Beljium1 .

'

Government are assisting in the implementation ûf variot)j p rogrammes in the Province. TheEP portrays a nu'mber of symptoms of povertv, envlronmental degradation and has a potential

1 -'

'

.for the development of micro-business. These charâeteristics are in line with ADF VIIl

selection cdteria for programme/project. Thq propemsed programme focusses on raboutI j jyaly recognised364,285 fafm fayilies who have been identified as .living. below internat o

poverty line. Wjomen are deliberately targeteb And 1p.ç@ Non Governmental Organisationos(NGOs) will assist in implementing part of the. progpamme under sound environmentalm anagement.

1. 1.8 ASIP fits within the current economic policy. lt is embedded in public sectorTeforms in the agricultural sector, Zming at grratey decentralisation ané beneficiaryr'ticipation. lt is placed on top of the GRZ priority,zst of develepment alternatives. ltpn

enjoys full support from donors and stakeholders.

Summary of Bank Grotlp Operations in Zambia

l .. -1.2.1 The Bank Group has to-date approyed 18 loapz.s and 1 1 grapts (exçlpding three

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multinational operations) whose total commitmen-ts net of éançellations is UA 455.2 1 millipn.I ja (j joans andOf the approved pmounts over 42 percent was from ADFrresourcçi. T e approve .

j t ass otytgrants financed 27 projects, 5 lines of credit, Adjustment programmgs and 9 s u .1of these, 13 projects, 4 lines of credit, 3 adjustment jrogrammes a'nd two studies have been1

completed. Annex 2 gives a list of Bank Group operations approved for Zambig.

ISectoral D istributionl1

.2.2 Industrj . Mining and Development Banking. This èsector has been the main(beneficiary, accounting for 39.7 percent of the Ban . G. m up totil commitments to Zambia.

I . ' .The approveed operations include 5 lines of credzits .4 minihg oprrations? an oi1 pipçline

rehabilitation préject, an expansion of a glass factory and a private sector unit 'op. eration in1 The five lines of credit account for about 3.1 pçrcent of the cumulativethe textile sub-sector.1

for the sector; while the amoun.ts appm ved for tke mining sector accountamounts approvedl .

for 59 percent of the sector's share.

1.2.3 Public Utilities Sector. This sector ranks sqqpnd in terms of sectoral allocations,kb t 21 3 percent of the cuinulatiyç amounts approved for Zambia.accounting for ou .) '

Opezations in this sector involve the financing of 5 ,projeclts and one study within the waterd sanitation sul b-sector, as well as 2 telecommunication rehabilitation projects and one'

' i lvemcnt within the water and sanitationproject in the energy sub-sector. Bank Group s nvo

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sub-sector accounts for over 56 percent of the sector's allocation while thetelecom munications sub-sector absorbed over 37 percent', the rem aining went to the energysector.

1.2.4 The Agriculttlral Sector: The Bank Group has approved 6 projects and 3 studieswithin the sector; however, mainly in view of implementation problems, 4 loans and one

grant for the financin! of 2 projects and a study were cancelled pdor to commencement ofoperations. The existlng commitments (after cancellations) within the agricultural sectoraccount for 6.4 percent of the total Bank Group's commitments to Zambia.

1.2.5 Transport: The transport sector accounts for 9.0 percent of the total Bank Groupcommitments to Zambia. The Bank has financed two phases of railway rehabilitation, a road

project, a road study linking Zambia with Malawi and a civil aviation study.

1.2.6 Social: Bank Group commitments within the social sector account for 6.7 percentof the total commitments to Zambia. The ADF has financed two projects and one studywithin the education sub-sector, covering primary and technical education and one projectwithin the hemlth sub-sector.

1.2.7 Policy-Based Operations: The Bank Group has supported the GOZ in its structural

adjustment efforts through three programme loans whose total approved amounts account for16.9 percent of Bank Group's commitments to Zambia. One was an agricultural sector

adjustment loan, the other was an industrial sector adjustment loan and the third was astructural adjustment loan.

General .lmplementation Experience

1.2.8 The overall record of project implementation in Zambia has been unsatisfactory.However agdcultural projects have comparatively performed satisfactorily. Of the approvedoperations, twenty-eight (28) operations comprising 17 projects, 4 lines of credit, 4 policy- 'based operations and 3 studies have been completed. The major implementation problems areattdbutable to poor technical and managerial cajabilities and loose inter-departmental co-ordination as well as inadequate budgetary allocatlons and unfamiliarity and sometimes non-compliance with the Bank Gronp's procurement and disbursement procedures. The rate ofdisbursements, net of cancellations, as at 17 September 1996, was 89.9 percent and 69.3percent of ADB and ADF committed funds respectively.

1.2.9 In the context of the Country Portfolio Review undertaken in 1995, the Governmentand the Bank Group agreed on the following measures in order to improve the performanceof the portfolio: i) executing agencies will be allowed to communicate to the Bank directlyon matters concerning technical issues and through the line M inistries and the M inistry ofFinance on matters that have a bearing on policy in order to streamline com municationdifficulties; ii) the Bank will, where appropriate, continue to incorporate short-termmanaqement and technical training in project design with a view to enhancing localcapaclties; iii) the Bank will intensify its programme of national seminars/worlcshops on BankGroup procurement and disbursement procedures; and iv) the Bank will closely monitor thestafsng of and provision of counterpart funds to projects.

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Economic Backgrotlnd and Bank Group Strateexv. for Zambia

f -1.3.1 Backg 'yound: Unable to sustain Government çxpenditurç and imports throughexternal borrowlng, the Government of Zambia (GRZ) undertook during the 1980slunsuccessful attempts to redress the external and internal imbalances. Aftem ards, thedeepçni

xng of thejeconomic crisis 1ed to the adoption of a Policy Framework Paper (PFP) forthe period 1989 93. The current PFP covers the periud 1995-1998. The objectives of the-1policy reform prozramme under the PFP were to restore macroeconomic stability and effect

! G '. 'structural changes in the economy. These had to be achieved thmugh progresstvely

liberalizing martets, deregulating prices, reforming the public an'd parastatal sector andf

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introducing policies to enhance the role of the private sector.

l1.3.2 M acroeconomic Performance: To ryduce the macroeconomic imbalances, theGovernment adlpted far reaching stabilization mcasurej emhracipg fiscal, financial and

1monetary policies. The objective of these measures has been to reduce the fiscal defkit,I

.control the growth bf money supply and liberalize the exchr ge and trade. sy stem. lnitially

the Governmentj succeeded in reducing the fiscal. dzficliy through rai sipg domestic resourcemobilization, r jstnlcturing government expenditure, i'mproving budgetary management,reducing subsidles, and adopting a cash budget. Howtver, in 1995, thç fiscal deficit rose

' 'ff revenue, adjustment of the wages of the civil servants, ansharply due to a fall in tmn

increase in defenl ce expenditure and an attémpt to ljav: Meridiah D'IAO Bank. However, theGovemmçnt man! aged to tighten monetarv poliov, suuezzing domestiq credit, reducing the

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.rate of growth of money supply and raising the interztt rate.

l ' . - .1.3.3 The Government has also undertaken mçasurrs to restnzcture and prkvatire

lt he objective of reducing the burdetf on the budget and/or to improve 'thelrparmstatals wit t. l 'efficiency. Durigg 1994/95, Zambia Aim ays and Zarfi' bià' Industli al and M ining Corp. oration

(ZIMCO), the State holding company, which managed the Government owpership ih some150 paràstatals land the United Bus Company of Zambia (UBZ) wère liquidated. ZambiaElectdcity Sup 'ply Corporation (ZESCO) and Pbst and' T'elecommunications Corporation(PTC) have beln commercialized. By March 199 6, 102 companies had bee'n privatised' . Afurther 1O0 arej being restructured for privatisation. With regard to Zambia acgnsolidatedCopper M ines (ZCCM), the Government expects to fihalize its pdvatization by the first halfof 1998.

1.3.4 W ith regard to the ex-ternal sector, intelmalional copper prices are set to fallsteadily back to 1993 levels of around 85 cents/lb in'199' 6-97 from an average of. .133 cents/lbin 1995, copper exports are projected to earn only US$ 666.00 million in 1996 and TJSS667.00 million jn 1997. Consequently, total exp ort earnings are now estimated to fall froman estiïated US$ 1.190.00 million in 1995 to US$ 1.1.11k00 million in 1996 with. a smallI #'

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recovery tö US$ 1,180.00 million in 1997. A current aceount d efioit of US$ 25.5.00 millionIis likely in 1996 which will represent a slight Improvelpent on the estimated eteficit of US$

296.00 million) in 1995.However, the current accctlsn't is likely to suffe,r from the drop ingrant aid i:t 1996 arisinj from aid cuts. The current açcöunt deficit'is anticipated to widento US$ 300.00 million ln 1997.

1-3.5 Prospects for growth in 1996 lre better. Growth in GDP of 5.4 percent is expected1 t's domestic balance is projeeteé to be in surplus by abeut 1 percentin 1996. The jGovernmenI fiscal side, the cash budget system has continued to work successfully as aof GDP. On theIbrake on expegditure levels. In 1996, revenue is projected to be maintained at about 19

percent of GDP and total expenditure about 21.8 percent of GDP. The Govemment's overall

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domestic balance is projected to be in surplus by about 1.3 percent of GDP. With regard topdces, the year-on-year inflation rate in July 1996 was 41.7 percent with the monthly raterising by 0.7 percent. The average for the year is now expected to be around 40 percent.This largely reflects the impact of the depreciation in the exchange rate on prices.

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1.3.6 Social Conditions: The economic decline accentuated the problem of poverty inZambia. The incidence of poverty increased significantly. At present, the poor householdsconstitute two thirds of the total population. Of the total number of poor households, nearly85 per cent can be classified as extremely poor. The rural areas are especially struck by highlevels of poverty with 81 per cent of the households living below the poverty line comparedwith half of the urban households living below the poverty line. Rural householdsexperienced reduced income, low food availability and increased m alnutrition. Thepercentage of undem eight children increased from 6. 1 per cent in 1980 to 23 per cent in1990.

1.3.7 Development Challenges: W ith poverty so widespread in the country, the

Tmmbian Govemment faces great challenges. First, it has to sustain the adjustment effortsit has started. This entails reducing the fiscal deficit, increasing resource mobilization and

rationalizinj public expenditure. Second, criticf among the development objectives is thatof diversifylng the base of production and export. Towards that goal, the agricultural andmanufactunng sectors are set to play a major role. At the same time, the Government hasto pay adequate attention to the objective of poverty alleviation. While employmentgeneration, raising incomes through growth, and the rehabilitation of the agricultural sectorwill help in reducing poverty especially in the rural areas, there is a great need for improvingsocial services and developing human capital.

1.3.8 Bank Groun Lendinz Stratezv. Over the medium term, the Bank Group'sLending Strategy and Program me for Zambia will primarily be designed to support Zambia'son-going economic recovery programme and poverty alleviation. W ithin this context the main

thrust of the Bank Groug's medium term lending programme will be directed towardsrealizing the following obgectives:

(i) financing sector investment programmes which are designed to improve theefûciency of the economy and to pave the way for attaining self-sustainedgrowth;

(ii) rehabilitation and improvement of the existing infrastructure particularlywithin the public utilities sector;

(iii) development of the private sector in Zambia either through lines of credit,enclave projects, or directly through the Private Sector Development Unitof the Bank; and

(iv) capacity building through project financing with appropriate institutionalsupport and technical assistance.

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1.4 Performance of Similar Proiects in Zambia

1 the first in a new generation of sector ântegrated investment operations,1.4.1 Aslp is

ring the wholle country. There are no earlier experiences of this kind of approach.cove

l1.4.2 There are, however, two ADF assisted projects whose activities are to be integrated'

('l Extension Project; and, the Agrlculturalinto ASIP. These are the Agricultural Research ahlMarketing and Processing Project (annex 2).

2.

2.1 Salient Features

2.1. 1 Agriculture is a significant player in the Zambia socio-economic landscape.Although it accounts for only 18 per cent of gross domestic product (GDP), agriculturesupplies 90 per cent of a1l the food consumed in the nation. lt provides a livelihood for 60per cent of the labour force. The sector also provides a major market for industries andremains the most important source of employment opportunities for the foreseeable future.

THE AGRICULTURAL SECTOR

2.1.2 Out of a total of 48 million hectares with agricultural potential, only about 27million hectares are actually available for agricultural use. This includes about 3 millionhectares of state land and 24 million hectares of traditional land. Of an estimated 9 millionhectlres of cultivable land, only 16 per cent has been regularly cultivated.

2.1.3 Zambia is divided into 36 agro-ecological zonesl which are further grouped inthree main zones, mainly on the basis of rainfall. Zone 1 is characterized by 1ow rainfall(averaging ' > 800 mm) short growing season and a high risk of drought. Zone 11I ischaracterised by high rainfall (1000 mm), long growing season, 1ow probability of drought,and cooler temperatures during the growing season. Zone 11 falls in between Zones I and1II for most climate variables, with rainfall of 800-1000 mm. Annex 3, provides supportingdetails.

2.2 Structure

2.2.1 Zambia's agricultural sector consists of two subsectors, the Com mercial andSmzlholder subsectors. The commercial frmers can be further broken into two categories,large scale and medium scale - sometimes called emergent small scale farmers. Out of atotal of about 600,000 farming households, the commercial farmers constitute 150,000 to200,000 farming households.

2.2.2 Commercif or large-scale farmers have an average cropped area of 20 hectares andabove; they account for 22 % of a11 cropped land and produce most of the wheat, 85% of thesoyabeans; 75% of the Virginia Tobacco, 35% of the value of maize, a11 of the sugarcaneand seed mize, most of the coffee as well as horticultural .crops for export. Productionunder this sub-sector includes high levels of imported inputs technology and extensivemechanization.

2.2.3 The small-scale emergent or medium-scale producers cultivate about 17% of thetotal cropyed area and they are engaged in semi-intensive farming systems with gartial useof mechmuzation and extensive use of draught power. This category of farmers ls engagedin livestock production under semi-intensive husbandry, mixed farming and hire a 1ow levelof permanent labour in addition to family labour and seasonal labour.

1 n e agro-ecological zones have been determined based on such cbaracteristics as length of growimgperiod, occurrence of drought, rninimum night time, and maximum temperatures, during Decemberto Febnzac ; occurrence of frost in the dry season, and amount of sunshine in the r'ainy semson.

2.2.4 In conjtrast, the traditional farmers who pumber between 400,000 to 450,000 offarming househ 'olds are engaged in farming systems thai include the use of hand hoe, draught

l 1 for subsistence with little surplus for marketing. Thesecultivation and produce main y

farmers producl an average cropped area of 61 % and include about 90% of the nations farmlfamilies wi.th holdings of less than 5 hectares. Low inpuy.of improved technology consisting!

er and seeds aze occasionally used. The main crop grown by the traditionalmainly of fertilizl f traditional seed

.sector is white maize, partly from improved hybrid variqties and partly rom .lM ost of the sorghum

, millet, cassava, groundnuts and m ixed beans are also producyd underthis sub-sector.

2.3 W omen and Youth in Zambian :Agriculture.

2.3.1 W omen farmers play a major role in agriculture. They produce the bulk ofdcultural prolduct; to meet the nation's food requirements and export commodities 'toag

I j f 4 yinczease the foreign exchange base of the country. Out of the wom en populat Qn o .

l live in the nlral areas out ,of which 83 per çent are engaged inmillion, ? 59 petr centI ,, sergentsubsistencé far lming. Of the 21,000 small-scale com.mercial f, armers also known as e

farmer'', aboutf 3 per cent are women who cultikate an ayerage of 10-20 ha and produce alrge marketable surplus. M ost women in agriculture are :solçly responsible for the opezation

l f their farming activities. Although .g gender speci.fic division of labourand manakement ol '' .. k

may flocate certain tasks to men (land preparatio,a m some instances) women invariablyI .

pnrticipate in a wide range of agricultural an'd àgrq-industrial àctivities.

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2.3.2 At t 'he national level, W omen and Youth Sectiop o.f the Department of Agdculturelis the main channel through which efforts to rçach female farmers i! concentrated

. Thelsection has reodented its activities recently in the direction of teaching agricultural sldlls

lated tq imtroved household food security with' çmphasis on food production and therenation's nutritional recuirements as well as support tohruira,l women to participate in rural and

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agricùltural development.

2.3.3 The Government has supported agriculturf and skills training projects for ruralith the collaboration of several United Nativs (UNI qnd bilatçral donor agencies..W om en W

! , . vjaeThe Women yand Youth Section administers rthree (lf xyhese wom en s programmes.' ' ' ' lo ment with a view to promotingproarammes are desisne,d to sunnort z'ural women s d:ve p

''''--''.. 1! '''''''' '''' '''-' ,.self suffkiency in agricultural production; improvq,.lhçir nutdtion status and increase their

@ ' Partkipation in Ruralincom'e jene jrating ventures. These progpmnws includç. W om en s

2 the Household Food Productibn'and Inc' ome Uenerating programme wpportedDevelopment,

by UMCEF,! and the Peoples Participation Project, wliich assists farmers in the formationof grèups in 'which they identify, plan and illjjtlcmens their owft actlvities.

2.4 Recent Performance

2.4.1 Desnite the growth potential 'that exists in the sector, and the hich levels of doporl '*' 'h-'' '

support, growth rates have consistently been, very 1ow and only an average annual growthf 1.5 pl er cent was achieved between 1965 ahd 1995. W ith an average populqtionrate o

àf 3 2 er cent the poor growth of thç agticultural sector has 1ed to a drop ingrowth rate . p , ,1 dards of the population

. Natural fgçtots, iuch as poor rainfall in some years,the living stun

explain pm (of the poor performance. The majqr masons, hoFever, appear to 'have beenmacro-zcon 'omic and sectoral policies pursued bqtwben 19' 64 and 19 91 including hig.h levels1

' ' i ifigtive and discouraged privateof contm l and regulation which restrained privat: àector ninvestments (para 2.7.1).

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2.4.2 Zambia has since 1991 pursued radical reforms which apm from macro-economicstabilisation aim at changing the structure of incentives to increase production of exports andimport-competing goods. Improved performance of the agricultural sector is key to achieving

this objective. However, notwithstanding improved environment on policy agenda, sectorperformance has been dismally poor due to recurrent drought in Eastern and Southern Africasince 1991.

2.4.3 Maize is the major staple crop in Zambia. Area under production has varied from540, 100 ha in 1980 to a peak of 820,574 ha in 1989 before declining to 520,163 ha in 1995.

Production during the correspondinj period are 1,348,731 tonnes in 1980; 1,844,978 tonnesin 1989, and only 737,844 tonnes ln 1995. W hile in 1980 yield per ha was 2.5 tonnes, in1989 it marginally declined to 2.3 tonnes per ha. ln 1995 yield per ha further declined toonly 1.4 tonnes. Increase in production in Zambia has therefore been more dependent onexpansion at the margin than intensive cultivation. Poor farming techniques and lack ofappropriate farming inputs on the part of the smallholders who are the largest cultivators ofthis crop has resulted in 1ow productivity among these people. Drought has furtherexacerbated the already bad situation.

2.4.4 Sdrghum is an important drought resistant staple crop in the relatively dry parts ofthe country. Area under production was 57,720 ha with a production of 18,059 tonnesleading to yield of 0.3 tonnes per ha in 1980. Area under production reached pemk in 1986,when 59,550 ha was put under sorghum. A total of 33,757 tonnes was remlised giving anaverage yield of 0.6 tonnes per ha. Area under production in 1995 declined to 40,361 hawith a production of 26,639 tonnes. An average yield of O.7 tonnes per ha was remlised.Yield per ha appears to have faired better compared to M aize. This could be attributed tothe crop's relatively tolerance to drought.

2.4.5 Cotton is a major cash crop in Zambia. In terms of area, cotton has performed inan erratic manner. In 1980, 30,303 ha was put under cotton. This rose to 51,990 ha in1984 before declining to 38,157 ha in 1987. It rose again to 106,398 in 1989, but droppedto 35,200 ha in 1995. The decline is indeed more pronounced from 1992 when the GRZabandoned the centralised marketing ax=angements. Yields and production also performedinconsistently. In 1980, 22,853 tonnes of seed cotton was produced. In 1989, total .production increased to 34, 154 tonnes before dropping to 16,578 tonnes in 1995. Thçrespective yields are 0.8 tonnes per ha, 0.3 tonnes per ha and 0.5 tonnes per ha. Otherimportant crops grown are rice, mixed beans, millet, sunflower, wheat, tobacco andsoyabeans. Annex 7A, provides details on selected crops performance.

2.4.6 Recent poor performance of the major crops, and indeed of the agdcultural sector,is a reflection of the dilemma facing the small peasu t farmer. Farmers lack the necessarytechnology to improve on their production, and they cannot access to credit because of theinherent high costs. Drought has exacerbated the already bad situation. The macro-economic programme which embodied GRZ withdrawf from the marketing of theagricultural produce, has not been adequately replaced by the private sector as originally

envisaqed. This has 11 to monopolistic and/or oligopolistic tendencies developing in themarketlng structure and have proved quite harmful to the farmer.

2.4.7 Livestock is equally an important economic activity in Zambian economy. Thelivestock sub-sector accounts for 35 per cent of the total agdcultural production. It is a

major contributor to high value food products and sustainable employment and incomes for

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the rural community. lt contributes to drought power and manure for crop production as11 as cash secul rity to majority of livestock farmers.W e

- l2.4.8 It is esjtimated that there are cu=ently 2.8 million herds of cattle, 515,464 goats,118,750 sheep a'nd 322.472 pics. Out of these. 82 oer cent of the total herds of cattle, 97

l ''' 'A %-''''' ''' ''''' .per cent of goats, 64 per cent of sheep and 89 per cznt of pigs are under the smallholdei

tor. lAnnex 7C provides more details.peasant sec

I2.4.9 Zambia has the potential to increase fish production from its lakes dvers, and1 . !swamps and flood plains. Fish farming is inor:asingly bçcorhing a lucrative buslness in rural

l . .. ,areas. It contributes 1.8 per cent to the çDP and abogt 55 per cent of the country s totalIprotein reqgirement. The sub-sector employs appmximately 300,000 people in Eshing net

facturing, lfish trading, fish handling and processingj marin'e engineering and boatmanubuilding.

2.4.10 Although the total catch has increased s'ignificant,ly form 47,000 tonnes in 1971 toIabout 67,000 tonnes in 1993, representing an increase of about 42.5 per cent, thè per capita

lconsumption' has decreased from 12 kg to abogt 8 kgz The decrease can be attributed to a

rapid increase 1in population. Fish production. from . aquaculture has increased fromapproximately 7150 tonnes in 1985 to approximafely 3,500 tonnes, about 4.7 times iàcrease.(2.4.11 The oyerall assessment of sector performaace sincç 1986 show that both food and

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cash crop subseètors have performed nuite below t4e potentials. .Agriculture has been widtlyI '''*' ''*' 'viewed as possessinc creat under utilised capacitv with ootentiàl growth rates estimaied at! *''''' *''''' ''K' '-' '*' .6 per cent

. 'rhere are a number of obstacles which need to be addressed if these potential1 lised These obstacles aze ind'icated i% 'section 2

.7 of this Staff Appraisalis to be fully rem .IR

eport (SAR), and are to be taclcled under the proppsed programme.I2.5 Agrictlltural Institutions

l .2.5. 1 The M inistry of Agriculture- Food and Fishrries ,IMAFF) has the mandate to

1 ' i the tcountry. The artas ofdevelokp and co jordinate a11 agriculture and liveitock jçlivsties n

operatlon include research, extension, crop developmidit, irdgation, fisheries and livestpck.

The Peimanentj Secretary is responsible for the, gçneral administration of the Ministry andthe overall co-ordination of the technical serviçes. The V i.nister, whose function is more1politically oriented provides policy guidelines to the M inistry in accordance with GRZ

policies.

2.5.2 The MAFF is currently being restructvred vpd' çr ASIP. The major focus on theIrestructuring pgocess is on decentralisation Uf dycision making and programme managementto the district level and retrenchment of staff.

l2.5.3 Agriculture Research is a department, of M AFF. 1ts main function is to improve

àf technology with a view to improvipg' ùn the effkiency of production. Theon the frontierl ded by a Director of Research (DR) &nd is assisted by 7 Chief Agriculturaldepm ment is heaI .Research Officgrs (CAROs)

. At the research statiqns a.re the Pzincipal Agricultural ResearchOffkers (PAROs) who are in charge of al1 station tresearch programme7. The Regional Co-lordinators are based at the Regional Research Centres and are responsible for coordination

1of research programmes of work to ensure that the programmes are consisterit with policy1and to avoid duplication.

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2.5.4 The infrastructure supporting research are in bad shape and require rehabilitation.The research stations lack adequate equipment and laboratory facilities to facilitate researchactivities. These shortcomings have affected adversely the operations of research depm ment.

2.5.5 Agricultural Extension: The department of extension is responsible for technicalsupport to farmers in order for the latter to increase production and productivity through theadoption of proven technological innovations. The department also promotes theconservation of natural resources with a view to sustain agricultural production, providelinkages between agricultural research and farmers.

2.5.6 The Extension Services is headed by a Deputy Director who reports to Director,

Field Services. He is supported by 8 Chief Subject Matter Specialist (CSMS) who areresponsible for the technical content of the extension branch work programme. At theProvincial level he is assisted by a Provincial Agricultural Co-ordinator (PACO) who issupported by various SM S. At the district level the District Agricultural Co-ordinator

(DACO), is assisted by a strong team of Subject matter Specialists (SM S). He is the focusof ASIP activities. Districts awre divided into Blocks which are manned by Block ExtensionOfficers (BEOs); and the blocks are further subdivided into Agricultural Camps averaging=ve to eight per block. The camps are manned by Camp Extension Officers (CEOs) whoare the frontline staff providing extension services to the farming community, villageextension groups and demonstration farmers.

2.5.7 The Seed Control and Certiscation Instittlte (SCCI) established in the 1980 toreplace Seeds Services, is wholly responsible for seed and variety quality assurance ofseedlots meant for marketing. It ensures that farmers receive high quality tested seedvarieties for suitable production.

2.5.8 The Zambia Bureau of Standards (ZABS) has the mandate to set national stmndardsby ensuring that agricultural products for both local and export markets attain specifiedstsndards and grades. The Bureau has since 1992 established mandatory stnndards for animalfeed in an effort to rationalise production in the livestock industry with emphasis on poultry

production thereby reducing the variable quality of animal feed which is one of the causesfor rapid decline ln poultry production.

2.5.9 The M arketing and Information Centre under the M AFF is rçsponsible forcollecting marketing and logistics information on agricultural commodities. It analyses andprovides relevant marketing information to farmers. Such information however, seldomreaches the camp levels for dissemination to farmers.

2.5.10 The National Agricultural Information Services (NAIS) is a department within theM AFF. N AIS activities focus largely on mass com munication through Radio and Televisionprogrammes, slides ûlm strips and posters.

2.5.11 At the national level, Zambia Seed Company (ZAM SEED) has the monopoly inse.e.d production; with the exception of cotton seed which is produced by the Lint Companyof Zambia. The company multiplies its seeds through a network of contract growers.Improved seed varieties released by research centers in the country are multiplied byZAM SEED which is also the sole custodian.

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Financial Instittltions

2.5.12 LIM A BA'NK with an asset value of US$ 26 million is fully owned by the GRZ.1ts main objectite was to provide acricultural credit to smallholders. However, due to

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mainly pùlitical considerations, basic banldng regulations were flolpted with and qredits werelextended to beneficiaries without necessary collateial; The benefkiaries on the other handlregarded credit as grants from the GRZ.

2.5.13 LIM A has a poor field representation and th' is has 1ed to poor credit m anagementin terms of delivery and recovery. In 1993, the ADF/YAF provided a grant of UA 0.65million to assist the GRZ in conducting an Agrlcultural Credit, Study. As aem sult of thestudy, LIMA is Furrently being restnlctured. A decision has yet to be made on its futureoperational activities.

2.5. 14 Credit Unions and Savings Association of Zambia' Cooperative Uaion (CU' SA)' ' . --' .stmrted operatingl in 1977, and was successful in the eacly stages. The kçy 'success of the

scheme was thatl it was based on the peasant's flmefs? own saving7. The growth of theCredit Unions w'ps phenomenal, growing from only 6 in 1970 to 603 in 1993 with tavingsof ZMK 109,00: and ZM K 296,411,000 in' the respective years.

2.5.15 Howevjer, the strength of the CUSA started to crumble in 1987 when the GRZdirected that it lwould also lend to non-members. Political'lnterference and pressure coupled

with unfortunatejlending terms left CUSA bankrqpt apld heavily indebted to th. e GRZ. TheADF/TAF assisfed study recommended that CUt A sheuiè' revert to- its original. opçrationalactivities, wherejlendings are extended to members only, vccordtng to one's savings. CUSAis currently res 'tructuring to its histotical activities and is expected to resume lending

lactlvities by October 1996.

l2.5.16 Zambia Co-operative Federation/Firancial Serviers (ZCF/FS) was created in 1983as a financial sexice arm of the coooeratives mpvement. lt lent primadly to the farmers

l ë'' ..through their societies. and was once considyted as atlle largest small farmer . lending

l - .organisatioli. The recovery rate estimated at 89 per cent, was considered quite satisfactory.

2.5.17 Followjng GRZ decision in the early 1990s to channel credit to small scale farmetsthrough. the ZCF/FS, it lost control of the organisation,, and political interference coupledl

,with unsedured credit to non-members led i.t ,to b>nlcruptcy. By 1993/94 the recpvery ratel .

'

had dropped tg a 1ow 8 per cent. ZCF/FS has pptedl to revert to its former practice ofdealing with the loanees through their own societies, as per the study recommendation.

2.5.18 The Brrclays Bank (Z) Ltd. is one of the ywo Commercial Banks eytendingagricultural credit to smallholders. The other one is Zambia National and Commercial B'pnk.Their operations are limited due to the high cost of credlt. Recovery has been unsatisfactory.

2.6 Tke Agricultural Policy Framework

l2.6.1 The GRZ major focus for agriculture sector,' in terms of goals, is to achieve foodl

' lit contribution to industrial base andsecurity for a11 Zambiâns. income ceneratina emolpvme ë #.. .l - -''''' --''' '-- -

-contribution to balance of payments. These objite,ctivzs, however, lleed to be pursued andhieved while a1t the same time sustaining the natural resource base.ac

. . ' . a- v rzxo . . .:. ke ., . s ,

KU:RNX'U ' '

2.6.2 A number of strategies are being pursued to facilitate the attainment of theseobjectives (para. 2.6.1). Market liberalisation including export and import trade have beenput in place since 1991. Decontrol of a11 prices and products, adjustments of the exchangerate in real terms and elimination of exchange rate restrictions are part of the policy agendaaimed at revitalising agricultural sector. Other policy agenda currently being implementedinclude reduction of budget deficits and control of money supply, reform of civil service andthe parastatal sector to improve efficiency and performance. Prom otion of privatisationprogram me in order to encourage private sector participation in future economic growth, isbeing actively pursued.

2.6.3 A number of sectoral strategies are also being implemented. Of significance arethe diversification of crop production from maize to more drought resistnnt crops; and, theborder pdcing of agricultural commodities which will contribute to a more efficient resourceallocation at the micro level. The GRZ has also put in place in ASIP measures to improveon service delivery to smallholders, development of the livestock subsector, improved useof available water resources, expanded opportunities for outlying regions and improvement 'in the economic status of women. The restructuring of the M AFF due for completion inOctober 1996 with greater focus on decentralisation of decision making to the district levelwill facilitate the implementation of the sectoral strategies.

2.7 Constraints to Agricultural Development

2.7.1 Agdculture development in the past has been inhibited by excessive governmentcontrol. This together with inadequate provision of essential public services, resulted inunrfmlized potential in the economy. This was especially serious in agriculture because ofthe controls on crop and input prices, high level of parastatal activity in both marketing andinput supply, and high maize and fertilizer subsidies. The strategy for developing sm all-scalefarmers, pursued up to 1991 relied. on subsidized credit for inputs and mrketing. Thesepolicies and strategies were not sustainable; some of the discernable side effects include thefollowing: i) a poorly developed agriculture sector dominated by a single crop - maize; ii)insolvent public marketing and fazm financing agents', iii) a huge GRZ expenditure onsubsidies which contributed to inflationary budget deficits; iv) persistent balance of paymentdefkits; v) an excessive aggregate demand; vi) price distortion in the economy resulting interms of trade against rural areas; vii) a wealc industrial base representing heavydependence on foreign capital and intermediate inputs; and viii) 1ow capacity utilisaion ofindustries leading to high cost local goods and loss of jobs in industzies.

2.7.2 ln 1991, the GRZ assisted by the donor community, launched an economic reform

programme whose main objéctive was to restore internal and external economic stability.lt also sought to change the way the economy is managed, get the GRZ and parastatals outof business activity, promote the private sector, and focus GRZ efforts on the creation of apositive enabling environment for private sector business, and the provision of the necessaryinfrastructure and social services. As a result of the policy initiative, the severity of theseconstraints (para. 2.7.1) have been minimised. But there still persist a number of microconstraints requiring GRZ attention.

2.7.3 The other micro problems which are quite gersistent at the farmgate level are: i)lack of household storage facilities; ii) weaknesses ln research due to lack of necessarysupporting facilities; iii) inefficient extension system caused by poor infrastructure and

f v 'r-m'' v' ': -7

14

i ' iv) inadequately trained staff' v) poor apd unmaintained feeder and/or accessequ pment, I ,roads which are 'impassable during rainy season anfl itprzadous during the dry season', and

l 'jtem coupled with high interest rate.vi) lack of nlral credit because of inadequate delivery sy

2.7.4 In the livestock sub-sector Tsetse infection and Trypanosomiasis are major weatherl ' ' '

1, ,rdiseases, especiallv in the Eastern Province (àP) which is basically quarantined .l .z' /% :' .!Environmental degradation

, mainly due to low carrying capacity and communal grazing isgetting hold. As a result, during drought a good size of stock is lost.

2.7.5 Recurrent drought has frequented Eastern and. S, outhern Africa for the past decade1 i ity has significantlyor so

. Zambia, especially the EP, has not been gpared.. Crop product v6 k lost as a result of drought

.declined and livestoc12.7.6 The GRZ has put in place a comprehensive packeige of policy frambwork to Qdress

1 4 .these issues (Seçtion 2.6). The proposed ASIP is klso designed in a manner that willfacilitate addressing most of, if not a11 the constrints faciag agricvltural sector.

15

3. THE PROGRAM ME AREA

3.1 Location

The proposed area for Bank's intervention is the Eastern Province (EP) of Zambia(pnc,a 1.1.7). The EP falls mainly under the agro-ecological Zone 11 which covers the centralbelt of the country. The EP is situated between longitudes 30 00' and 34 00' East andlatitudes 10 30' and 15 00' South. It covers an area of about 69,000 km. and is borderedby M alawi in the East and M ozambique in the South. On the northern and western borderslie, the Northern Province and the Central Province respectively. The province is dividedinto six Administrative Districts: Chama, Lundazi, Chipata, Chadiza, Katete and Petauke;and (9 Agricultural Districts with Chipata divided into North and South and additionalcreation of Nyimba and Mambwe districts). The Province occupies a triangular wedgebetween the Zambezi Valley to the south and Luangwa Valley to the north. Theadministrative capital, Chipata lies about 575 km North East of Lusnkn. The most west endof the Province is about 200 km East of Lusakn. Annex 1 provides the programme area.

3.2 Topography. Soils and Vegetation

3.2.1 The EP consists of two main habitable geographical areas namely, Luangwa Valleyand the Plateau. The former covers almost half of the region with an elevation range ofabout 4O0 to 600 metres, is sparsely populated and heavily infested with tsetse flies. Thesouthem half of the Province consists of a central plateau, a rolling and partially woodedupland area of elevation ranging from 900 to 1,400 metres. It is about 80 km wide in Chipatato about 10 km wide just west of Katete. The Plateau descends to the Luangwa Valley withno interfering steep escarpment.

3.2.2 Generally, the Plateau soils are largely well-to moderately drained, light to mediumtextured sands and sandy loams of medium acldity and moderate fertility. There are also

significant areas of red sandl clay loam or clay with a higher inherent fertility. In theValley, soils are mixed alluvlal, but typically medium to heavy-textured soils with goodfertility. The soil pl.l ranges from slightly acidic (PH 5.6) to acidic (PH 4.5) due tomonocropping and in some areas the use of inorganic fertilizer which acidify the soilswithout corrective liming.

3.2.3 Vegetation cover ranges from heavily forested, especially in the W estern plains,to woodland and mainly grasslands suitable for cattle production. Overstocldng in someareas has however, 1ed to overgrazing and soil degradation. The average temperature rangesfrom 15-180C in the coolest months (June to July) to 25-300C in the hottest month(October). The continued climatic changes, exacerbated by frequent droughts have led tofurther deterioration of the vegetation. In the Plateau area, the vegetation is minly M ungaand M iombo woodland. These are characterised by poor soil structure, and 1ow cattlecarrying capacity.

3.3 Climate

Three seasons are distinguished; the rainy season from November to April withaverage rainfall for this period of 1,010 mm and average daily temperature of about 22OC;the cold dry season from M ay to July with average rainfall of about 5 mm and average dailytemperature of about 18.5OC. The lowest temperatures of the year are recorded in June andemrly July but no frost is recorded. The hot dry season st.arts from August to October. The

16

average rainfall for this period is 1 m m , mainly in October and average daily temperature

of 23.20C, with jighest temperatures recorded in September and October. The total annualrainfall exceeds 7j 00 mm throughout the Province. H'ighest rainfall is found in the south-eastern par't of t 'he province. The main rainfall is recorded in Deèember an'd Janual'y, whileinimum rainfalll occurs in July-August. Annex 3 provides clim atic data.m

I3.4 Gender Issues

1 in the programme area are subsiëtence farmers producing mainly for3.4.1 M ost women

lhousehold consumption. A few are involved in tke production of cash crops such as cqtton,

flower and tlbacco. A good number of women yre also engaged in microenterprisessunl i f their domestic roles

, and thij is evident in the increasing numberwhich are an extens on ol . . ' .

of women who own and operate food processbrs such j: groundnpt shellers, rampresses for1 jjak roentep risesunflower firocessing and hammer mills for mai. ze jpçe7sing. Women ç.I

j jt to combine theiractivities are often organized within homes to provide thèfh the oppor un yI , j tkng activities indomestic and mazket responsibilities

. ln general, womçp s ncome generalthe programme azea apart from food processing

, includ: vegetable gardening, fish farming,l it ion and. utilisation and citruspoultry

, piggery, sewing and handicraft, sisal pr: uct1 50 women groups in five Cisttktj (chadiza, Chipata North, Chipata.production. There arej .' .South

, Katete. and M ambwe) which need suppbrt int establishing atheir microenteprises.I . ' jjcjl need assistmnce inSimilarly, there are 20 active youth group; in thè prég/amme area w

lsetting up their microbusinesses. The activltie; for which fiùéncial suoport is ne:ded includeI .

'' ' .'%:.

t'ish farming, vegçtable production, carpentry, black spith, oxen and plough hire in additionto the activities Zentioned above.

I3.4.2 M en in the programme area are mainly involved in charcoal production and thecollection of sm 'a11 timber for construction and wopd sal. es. Others are involved in livestock

l 1 sser extent microbusinesses 'production and to a e

( .3.4.3 W ome'n ventures in the programme ama have rçcdved snp port from the Nbrwegian

A ency for o/elopment (NoRAo) through A/IrICARE (NGo) which implemented thegprogramme. AFRICARE has also provided support thfoepgh the provision of credit to worhengroups for on-f 'arm activities and food processors.. Theiutheran W orld Federation (LW F,)is also promoting on-farm and micro-enterprises in the Province. The Swedish lnteaationalDevelopment Ajency (SIDA) is funding the Economic Mxpansion in Outlying Areas (EEbA)Programme.

3.4.4 Although the'W omen and Youth Section kaîtattracted support frop donor agencies,1 ij inadequate to addres7 t>e maj qf concerns with respect to womenthe level of support

farmers' conditilns which include poor h01th and nutritional status, excesjive workload and11ow level of literacy

.

I3.5 Hea1th and Nutrition

l3.5.1 ykccess to hemlth services, saniLary environ nnent and care as Nvell as household

laccess to food are the basis for a healthy and active life. In the progpmme area, the

j

'

g

'

' '

population does not have easy access to health facilitiej. In gençral, people sometimes have1 for no1 t less than 15 km to (he rfearest hoipital or. hefth centre, thps .childto trave

immunization, plre-natal and oost-natal care arç nQt withitn the reach of the rural po:ulation.l .

'*' .

'

'*' '*' tNational statistics indicate that in aeneral the main èau.ses pf death in hosnital for chlldren.. 1 '*'-''' ''= .

age one to fourteen, are malnutrition (36%), malaria (1.8%), measles (10%), and anemia

*

17

(8%). For persons fifteen years and above, the main diagnosis of admission and death ismalnria (13%), respiratory diseases (10%) and heart disease (9 %).

3.5.2 The nutritional sttus in the province is affected by seasonal factors. Higherunderwçight rates from children are observed in the rainy season than the dry season. Thisis due to the fact that the rainy season coincides with high incidence of diseases such asmalaria and dinrrhea, low levels of staple in stock and also increased labour demandsespecially on women due to their pm icipation in agricultural activities.

3.5.3 The main staple is maize. Other foods consumed, include cassava, rice, sorghum,millet with groundnut and beans as protein based foods. Vegetables, fruits, m eat and poultryare available but not accessible to nlral households due to their low purchasing power. Dataavailable at the national level indicate that the per capita meat consumption has declined from15.8 kg per yemr in 1975 to 11.1 kg in 1990. There has been a similar decline inconsumption of other nutrient dense foods such as milk from 24.4 kg per yemr in 1974 to 9.3kg in 1990. The decline of protein consumed raises concerns over the ability of mosthouseholds especially those in the rural areas to have access to adequate amounts of food interms of nptrients for a healthy and active life.

3.6 Agriculture

3.6.1 The D stern Province was once considered the bread basket of the nation due toits vast naturf resource base and the potential to support m uch higher levels of production.However, this is being constrained by climatic changes leading to recurrent drought in theregion and subsequent land deterioration as a result of pressure on the land.

3.6.2 Notwithstanding the deteriorating environment the area is characterised by a strongagricultural background with small-scale frmers dom inating. Two farming systems are

practiced namely - Plateau Farming System consistinj of ox and hoe cultivation; and ValleyFarming Systems with exclusively hand hoe cultivatlon. Major farming enterpdses on thePlateau are mainly local and hybrid maize, groundnuts, soyabeans, cotton and tobacco.Subsistence crops include maize and sweet potatoes, while hybrid maize, cotton, tobacco, .soyabemns and to a lesser extent sunflower constitute the main cash crops. Fruits andvegetables are also grown but to a lesser extent. Livestock include cattle, pigs, goats andpoultry. In the Valley farming systems, the main crops are sorghum and millet forsubsistence, cotton and hybrid maize for cash. Fnlits and vegetables are produced but ona smaller scale. Livestock include goats, pigs and poultry.

3.6.3 The constraints to food jroduction in the area are prevalence of cro? pest anddiseases, poor soil fertility; few lmproved crop alternatives for adverse envlronments,unreliable rainfall distdbutlon across the season, poor storage facilities of some improvedcrop vadeties, inadequate numbers of work oxen for draft power, limited access to services,

credit and inyuts. Most of these limiting factors will be addressed under the proposed ASIPfor the Provlnce.

3.6.4 Livestock plays a key role in EP economy. Cattle dominates the livestock sectorboth amongst the commercial and traditional fazmers. The total cattle population Suctuatesbetween 250,000 and 275,000 heads (10% of the Nationz herd). The traditional sector, withindigenous small Fxetst Afdcan Zebu (Bos indicus), accounts for 90% of the cattle in EP.Small livestock are also found in high numbers in the EP. According to 1992 censors, therewere 7,309 sheep, 207,261 goats, and 162,035 pigs.

18

3.7 Land Tenure

Zambia has a dual land tenure systems comprisigg regime;s that are statutorily andcustomarily regulated. ln 1970. the Land and M iscellaneot!s Act vested alt. land in Zambia

4 ' ,including the B jarotse Reserve, in the President. xunder zRmbia s current systems of lând' i is not po.ssible. Thé 19?95 iand (Conversion of Titles )legislation, private land ownersh ph ld tenure to statutory lease of 99 jé/s. By this Act, a11 freehold lapdAct converted freeho

and leaseholds of Iover 1O0 years were converted into Ctattltory leaàeholds not. exceedinl 100jye-qrs. Upon expiq , a lease may be extended fQr a furt er 100 years or less as the Presldentmay see fit. The President has delegated land administrj/ion to the Commissioner of LM dslwho is responsible for the administration of the Statr land and allocafes this land for varioustivities includinlg farming. The same system appliés inà tlgk'prpgramme

-area, The prevailingacland tenure syste; does not seem to be detrimental to agricultural development.

. I3.8 Enkironment

3.8.1 Zambia has a large number of institgtifms dealing with environmental. protecyion

and management lof natural resources. These are E'ùvimpmental Council of Zambia (ECZ),Ministry of Envi'ronment and Naturf Resources, Forestry Departmçnt, Natural RejouycesDepm ment, Depl m ment of Fisheries

, National Pazks and W ildlif'e Department, W aterAffairs Departmlnt, Local Authorities, Town and Coùntr?' , Planning Depaft ment, Tourism

Board, Ministry jf Mines and Mineral Development,; V.î, nistry o'/ Agriculturu, Food' andFisheries and Miyistry of Lands. The ECZ is stlpposçd to be a co-urdinating apd ad.yisory

body of a1l the Ministries but its major weykn ess h:s been the lack of support by theinstitutions it is ekpected to advise and co-ordinate and also the absence of appropriate locàl

f he Provincial and Local Authority levels to co-ordinateinstitutional strugtures at tenvironmenttal activities at those levels. The structures of mpst key environmental institutions

1 ..do not provide for formal interaction with local com munities.

(3.8.2 In the programme area, the main environmental concerns in agdculture include land

Idelradation through acidifkation, nutrient loss, det:rioration of soil structure, erosion,ahnization, pestiide and fertilizer pollution and deforpstation which continue to threaten thes

Iachievement of food self sufficiency.

3.8.3 In the policy framework paper (GRZ 1992.), the above agricultural indvcedenvironmental degradation has been recognised. The jtrategies proposed to address the

l ; tissues revolve around development of sustainah. le farming systems, crop diversificat on,

improved use of a6 vailable water resources and fuil utilization of land stlitable for agriculture.I -Others include e'nsuring adequate forest cover in certain areas to prevent soil erosion and

inimize any ad! verse effects of the changing ' of fatlhing technologies. Ajron-forestrym i i this regard, as having an impoytan. t role in soil consexatlon as welltechniques are seen n

in the producti! on of both agricultural and forest products.as

13.8.4 The policy framework has a positive relationship with the local communities and

lemphasizes the need to empower them in order to address the environmental problems as

Ithey arise at the local level. The ASIP has beel a#equately designed to address the

Ienvironmental concerns in the EP.

@

19

@ 3.9 Programme Beneficiaries

3.9.1 The programme will in general benefit the entire EP population, currently estimatedat 1.2 million of which 51 per cent are female. Rehabilitation of research, extension andaccess road infrastructure, will positively affect the entire com munity. The m ain target groupwill however be the smallholders, wom en farm ers, the youth and women entrepreneursengaged in m icro-enterprise activities, and who are so poor in resources that they do not evenqualify for any form of credit. This is the part of the community that surdves on average .. ..less th% one (1) dollar a day at household level, and under the package of current economicreform, they can neither afford health facilities nor meet their obligations of sending theirchildren to school. They number approximately 364,285 and cultivate about 1.3 million haof land, not exceeding 5 ha. per family. Major crops grown include maize, sorghum andmillet. According to a study conducted by the lnstitute for African Studies, University ofZambia, May 1996, they have access to their own source of food for approximately six (6)months in a year. The study clearly identifies the poor (the target group) in terms ofeconomic chazacteristics, and geographical location.

3.9.2 The proposed programme activities, which include Rural lnvestment Fund, RuralCredit, M arket lnformation Service, W omen and Youth development will in particular targetthis vulnerable group. The NGOs operating in the programme area are very familiar withthe target group and the ADF assisted ASIP will utilise their knowledge and experience toreach the target group.

20

4. THE PROGRAM M E

4. 1 Background

4. 1.1 The Agricultural Sector Investment Programme (ASIP) is designed to achievesignificantly greater project efficiency, ownerships, capacity building, and sustainability. Theprogramm e covers the whole country's agriculture sector and will be financed by a11 donorsactive in the sector. It involves common implementation nrrangements.

4.1.2 Donors who are currently engaged in the implementation of ASIP include theW orld Bank which is acting as ''Donor of last Resort'' and is assisting in the implementationof Policy and Institutional Improvement of the Public Sectors, Research, Extension, Trainingand Rural Finance. Other active participants are the NORAD supporting agriculturaldevelopment in Northern Province; Dutch assisting agricultural projects in W estern Province;IFAD and lDA supporting North W estern Province Area Development Project; GTZfinancing Area Development Project and Household Food Secudty Programme in SouthernProvince; the FINNIDA is supporting Livelihood Development Project in LuampulaProvince, and the EU is in the Central and Copperbelt Provinces assisting with smallholder

Development Projects. SIDA and the Belgium Aid are in the Eastern Province providingsupport to Income and Employment Generation activities and the Livestock Disease Controlrespectively.

4.1.3 The ADF will join the donor community in supporting ASIP. It will closelycollaborate with SIDA and Belgium Aid who have poverty alleviation programmes in the EP.Details of the ASIP, indicating scope, detailed descriptlon of components, costs estimate,sources of funds M anagement and Organisation are presented in Annex 15. ln this report,only activities to be financed from ADF source are described. However programme

objectives aze similaz, and a1l ASIP activities, have common management and implementationstructures. The ADF programme is, however, self sustaining and will not suffer from anyrepercussions in the event that other donors fail to support the programme. The nationalpolicy assumptions which are relevant to the ADF programme are the restructudng of M AFFand the establishment of the Agricultural Sector Steering Committee (ASSC). Theseexercises have practicfly been put in place.

4.1.4 The proposed ADF assisted programme will focus on those living below povertylevel as per UNDP desnition. W omen in particular will be targeted in view of theirinvolvement in agricultural activities. The local NGOs who are familiar with the Qargetgroup will assist in implementing the programme, especially in the promotion of micro-enterprises under a friendly environment. This strategy is within the guideline of the ADFVII lending policy.

4.2 Oblectives

4.2.1 The programme's sector goals are to contribute to GDP growth poverty alleviation,!and advancing social development. This would be achieved through lncreased householdincome, improved mobility and improved access to information on markets and pdces.

4.2.2 The programme objective will be specifically aimed at enhancing the productivecapacity of smallholders through improved research and extension services, credit leading toincremental production of 115,120 tonnes of M aize, 428 tonnes of Beans, 428 tonnes ofSorghum, and other crops. As a result of improved cattle hemlth and marketing services,

J ( .'> =

21

incremental production of 16,000 tonnes of lpqat will be realised annually at fulldevelopment. zhhe programme will also seek to imprôve on the living stmndazds of the

1subsistence farmlng population of 364,285, househqlds by providing income generating micro

projects, while jonitoring a sustainable environme, ntal condition and yromoting sotlndprinciples of e 'nttepreneurshin and private initiatives. A comnrehenslve agro-forestry

I - ''''

'

- .

--'

'

.development, and promotion of the use of .oiganic mahure will contribute to fdendlyenvironm ent.

4.3 Description of Program me Outputs

I'A. Aqricultural Development

I(i) Crops

4.3.1 By the completioh of the programme, thcre will be a stmngthened extensipn andresearch systemsk; established seed multiplication units and developed drought resistmnce cropvarieties, including sorghum, millet and cassava.

'. j(ii) R'esearch

l4.3.2 High yielding, drought resistnnt food and legume crojs will be develop ed forfarmers. Agro-torestry technologies will be developed using multlpurpose trees and shrubàto rekerse trends of declining crop yield and .improve' the manzgement of natural resources.

l farm trials will be established in al1 th'e districts (i.e. 16 per district), 27A total of 144 on-demonstrations plots will be established (3 in each district). 'rhe. plant pathology andtolnology labdratories will be equipped with sctentittc eq, uipments eg:nd materials, and theenkera Researtjh Station library will be equipped wfth scientitk books. The production unitMse

will be in operation to produce crops for sale to generate income to sustain recurrent costsof the Research Station.

(iii) Extensionl4

.3.3 Four hundred and fifty (450) field farm demonstration and field days per districti11 be conductled at the camp and block lands. ln addition 45 fodder banks and 81W

l

multipupose tree nurseries will be established per district.l(iv) Training

4.3.4 There will be 22 District Agricultural Officers wllo will undergo syecialisedtraining, and 42 extension staff trained to Diploma level in relevant fields. There w111 be 240mobile cburses for livestock assistants as well as 2 sttldv tours. Farmers will benefit from

, l - :144 farmers training courses. For farmers, womed anb youth, there will be 52 mobile

lcourses, 28 residential courses, 40 inter-district ttudy teurs ând 8 inter-provincial study tours.

f i tants and 4 for extensionNinety-six in-service training will be provided for livkstock ass sstaff.

4.3.5 In addition, extension staff in a11 nine agricultural districts will benefit from 180

inter-provincial I study tours (i.e. 5 tours per district p.er year), 432 one-weok refreshercourses (108 p jr distdct per year), 864 two=week refiesher courses (216 per district pçryear). For the W omen and Youth Section of the MAPF in Chipata, 12 Farm Managementl

ction courses will be conducted for fvmers, women and youth. Study töursand Crop Produ

22

will include 8 inter-provincial and 8 joint extension and research tours. One (1) multipurposeTraining Centre will be constnlcted, and an additional 7 will be rehabilitated. About 40different groups of about 15 to 20 participants trained will reach not less than 6O0 a year.

B. Live-stock

4.3.6 A total of 100 dig tanks will be rehabilitated in the five districts and 8 new onesconstructed in Nyimba distrlct. Sonte 60,000 calves will be immunized which together withdipping should result in a marked reduction in calf mortality to less than 5%.

4.3.7 W ith regard to tsetse control about 2,000 1% 2 of land in the resettlement areas willbe covered with Target Deployment while the sale of trypanocides namely Samarin andBerenid to farmers will increase by at least 20% from the present level of US$ 50,000 yemrlyturnover com ing from the traditional farmers.

4.3.8 n e programme will construct 5 market centres and 5 Quarantine stations inChama, Lundazi, Chipata, Chadiza, and Katete districts together with 480 crush pens. Inaddition, 800 hectares of land will be paddocked at Katete Artificial Insemination Station.

C. Jnfrastructtlre

4.3.9 As a result of the programme in the nine agdcultural districts of the EP, thefollowing outputs will be realised: 8 grade B, 32 grade C and 246 grade D housesrehabilitated. New additional 2 grade B, 1 guest house, 6 grade C and 255 grade D houses

constructed. 7 Farmers Training Centre buildinjs rehabilitated and 1 constructe-d. Sanitaryfacilities compzising 109 W ells/Bores fitted wlth pumps and 361 sanitary blairs will beprovided. 257 communal storage facilities and 257 camp offices provided with one of eachat a11 camps. A total of 400 km of farm access roads together with 10 culverts built. 92small fish ponds constructed and 6 small irrigation schemes rehabilitated. m etails in Annex7D).

(17) Rural Finance

4.3. 10 About 300 women's groups will be constituted to benefit from RIF and RuralCredit. A number of communal facilities will be in place, for example 257 communalstorage platforms will be constructed, 8 new dips will be constructed and 100 dips will berehabilitated. Also a number of micro businesses will be established as follows: 27 ham mermills, 27 oi1 expellers and 36 groundnut shellers. About 1,000 ha will be under vegetablegardening.

: *r ' =>'J

23

4.4 Detailed Description of Activities and Cemponents

1 Agricultural oevelopmentA.

((i) CropI

4.4.1 The shortace of seeds has been one of. thtç limiting factors to farmers'l 'G '' .diversifkation efforts. There is need for diversification of food and lecume crons in order

l ' - ''= )

'

to ensure food security both at the household and national levels. ln this connection, the cropl .

.

production sub-component will suppory the introduction Uf seed multiplication units, fodd:r

banks, fruit andl woody tree nurseries in a1l nine districts to provide a constgn. t supply ofplanting materials to farmers to promote diversifkàtion. Crop husbandry practices and

Iadoption will be oromoted to imnrove the oroduction of drouaht resistant croos such asI ''*' '*'' '*' ' '- '*'' .

sorghum, cassavja and millet as well as other crops including sweet potatozs, groundhuts,mixed beans, s'oyabeans, pigeon pea, open pollinated maize vnrieties, paddy ri,ce antiflower whichl are produced in the programme azea in order to broaden the food securitysun

farm hou! seholds.base of. 1(ii) Research!

4.4.2 Deforqstation, soil erosion and degradation in the programme areas will be.; .mitigated through support for agro-forestry and soll and water conservation practices. Funds

will be provided) to support Msekera Research actiyities in' the mainctenance of soil and watermanagemeny and agro-forestry research for seleqtçd multipupose trees and shnlbs suth asSesbahia sesbanl Gliricidia sepium, Tephrosiy vogriii-and Cajanus cajan . Thçse leguminous1

i h reen nianure and mulch to reducç soilmultipurpose trees and shrubs supply t c g1 i 1ds and supply foddç

.r and fuelwood fùr livestock aliddegradation, improve crops y e ,household fuel yespectively. The multipurpose trees will be releasçd (o .a1l nine agricultural

1 k koù in thç programmedistdcts to reverje the declining trend of soil degradation and de.fore tatarea. Funds will also be made available to support. resezrqh of drought resistlm. t 'crop; such

hum, milllet and cassava as well as other crops whtch are hîgh in demm: by farmersas sorg' dnuts mixed beans

, soyabeans, pigeon pea, open pollinatedincluding sweet potatoes, groun ,

maize varietiesyj paddy rice and sunflower. Such research activities will also support theGRZ policy of diversifying agdculture from maize.

1(iii) E'xtension and Trainingl4

.4.3 To improve the technical capability at al1 levels in the nine districts, short term anddiploma level tlainina will be provided for extensiun staff. Farmers, women and yôuth

j '*''''' '*' ' .training will be supported through mobile and residçntial courses as well as inter-districts andinter-provincial study tours. The multipumose farmers' training centres will be fcrnishedwith equipment and m aterials to facilitate farm ers, womeh and youth training.

4.4.4 The delivery of extension messages and covepge will be enhanced by the provisionl --t.

'

.of vehicles at the distnct, block and camp levels. In this respect funds will be made availablel .. '

for vehicles, motorcycles, minibus, tractor, trailçr and .appropriate com munication radio seti ided to' imptove the living conditions ùf CEOs areand walkie talkies

. Other item s to be proving equipml ent. Some minor office equipment and stationel'y will also be provided.camp

h ' i- ..v $ z '. x

24

4.4.5 The sustainability of the supply of planting m aterials to farm ers will be addressedby the establishment of fodder banks, fruit and woody tree nursedes in a11 nine agdculturaldistdcts. This will also encourage diversification in order to m itigate the effects of foodinsecurity and deforestation.

4.4.6 At the Chipata Agricultural Headquarters, funds will be provided to support twoextension and research workshops per year, monthly workshop of 3 days each; demonstrationon nutrition processing 4 days per month, crop multiplication unit (5 ha); 2 inter-provincialstudy tours per year and 2 joint extension/research tours per year to farmers' fields. Vehiclesto be provided include one minibus, one truck and 2, 4x4 wheel drive.

B. Livestock Development

(i) Disease Control

4.4.7 The program me will provide support for the control of Ticks and Tick bornediseases particularly East Coast Fever (ECFI.. Provisions are made for expansion ofimmunisation programme and construction of 8 dips at Nyimba district and rehabilitation of100 dips in the other districts. Similarly tsetse and tlpanosomiasis control will be effecte,dthrough the Target Deployment Technology and provision of trypanocides. The necessarylaboratory tools including refrigeration facilities will be made available in every district toensure proper storage of vaccines, drugs and samples. The district veterinary laboratorieswill be refurbished to enable them carry out diagnostic duties.

(ii) Extension Services

4.4.8 Animal Husbandry Extension Services will be strengthened in a11 distdcts to ensurean effective service to farmers. Community Livestock Auxiliades as a means of improvingon contact with farmers will be introduced. Vehicles will be made available to improve onmobility. M otorcycle will be provided to extension staff on hire purchase basis. ln-servicecourses for staff, residential courses for farmers demonstration and study tours will beprovided. The programme will make provision for the development of pasture seed formultiplication. These will be sold to willing farmers, while at the same time farmers willbe encouraged to develop their own pasture seed multiplication. Farmers will be trained inuse of animal draught power, particularly in the use of ox-drawn implements.

(iii) Artificial Insemination

4.4.9 The Artificial lnsemination Station at the Katete will be rehabilitated includingpaddocking, sinking of a bore hole, and dipping facilities. The holding capacity will beexpanded to 600 heads of cattle. Three heavy lorries will be procured to facilitatetransportntion of cattle from fr mers to the centre and back. The farmers will pay economicrates for these services.

(iv) M arket Centres

4.4.10 Five livestock m arket centres will be constructed in Chama, Lundazi, Chipata,Chadiza, and Katete districts to facilitate livestock marketing. Crush pens and handling yardswill also be constructed. A loading platform will be made available in each market centreto ease transportation of livestock.

25

(v) Oltlarantine StationsI

4.4.11 The EP is currently ''Quarantined'' becguse of thé spread of ECF and jwine disease.Livestock from El P are therefore not allowed to cross Lwangua river to other parts of the

' fl lrefore been a slump in the marketingcountry for fear of spread of the diseases. There has t e

1of livestock with subsequent drop in value of livestock industry.

I4.4.12 To cornter this, 5 quarantine stations will be.oonstructed in ord. er to isolate infectedcattle. Disease free livestock will be shipped out of the jrovince to larger markets outsidethe EP.

(vi) Meat Ouality

l4.4.13 Fourteen Post M ortem Units will be procured and madq .available to the distriçtsl

i t uality. In connection with this, 4 District Laboratories willas a means of controll ng mea qi (t.è including micwscppes to assist inbe refurbished with necessary laboratory equipmeht an.1 ' 'the identification, and isolation of foreign bodies from the m eat.

l(vii) Dairy Goats

1 . .4.4.14 There is an increasing interest shown by women in the demestic use of goat m ilk.

jProvisions will be made to procure dairy gpats whieh. will bç introduced in every MYC.

Women's groupj and the Youth will receive training on goat 'managemént under droughtconditions. Gohts have a high rate of survival under drpught conditioni, compared to cattle.The goat jrogra 'mme is part of the GRZ wider strategy of diversifying agdculture base in theEP.

4.4.15 The Belgium Government is providing assistance to the GRZ in the control ofllivestock diseases especially tsetse control and tryj. anopmiasis. There are Zambian staff

who have been ! trained in the on-going Belgiufn fundçd proj ect who will as,sist in theimplementation bf ADF assisted programme. Closer copperayion, ahd co-ordination in the

' i d if greater impact is to àeimplementation of the livestock activities in EP will. 'b: reou rel '*' .rfmlised. Joint work procramme will be orenared' and acreed upon annually, the first onel '*' 'h''e '*' ''*'j ' '*-' t ''*' 'beinj planned for the November 1996 Donor s Review Meetlng in Lusnkn, Zambia.1 . '

4.4.16 Technical details of livestock development are contained in Annex 7C, whilel

Annex 4 Table 3 provides the list of goods and services necessary for the implementation ofthese activities.

C. Infrastructure

I '4.4.17 The pioaramme will rehabilitate altqgeth.er 8 Grqde B, 32 Grade C and 257

l h'''- . .Grade D houses in various locations in the nine agriçulturf' districts of the EP for theI . .livestock and croo extension services staff who Will be 'redeployed to the farm level in thel '*' .camps. Generally the rehabilitation will cöker the whole sgectrum of building work.s

including . repaj of cracked brickwork, repair to condrete floor slab repair to roof and

structural fimbe 'r, carpentry, joinery, iron mongery, glazing, plumbing and sanitary fittings,1electrical services and repainting.

. . - ; ..s . .. ...,.. . k..:- q) -.;u:

26

4.4. 18 In addition to the rehabilitated buildings, and in order to meet the demand forhousing, particularly at the camp level, 255 Grade D houses will be built together with 62Grade C and 3 Grade B buildings with one as guest house.

4.4. 19 W ater and sanitary facilities will be made available at al1 the camps by constructing109 wells fitted with hand pumps. An additional 361 sanitary blairs will be constructed toaugment the existing ones.

4.4.20 The existing Farmers Training Centres in 7 of the 9 agricultural districts will berehabilitated and one new centre built in the other district that has no centre.

4.4.21 Farm Access Roads: The programme will maintain on the average, 20 km lengthof agriculturally strategic roads in each district per annum. The work will include grading,

shaping of side drains and spot improvement. It is envisaged that altogether 400 km lenjthof roads will be made passable during the first phase of the programme. In addition, 10 plpeculverts of 600 mm diameter and 3.5 m long, will be constructed.

4.4.22 Communal Facilities: 257 communal storage platforms will be constructed withone such facility at each camp to encourage the storage of seed at camp level and also holdsome stock for higher prices during the lean season.

4.4.23 Fish Ponds: The programme will construct 92 small fish ponds, each measuring

approximatelj 10m x 15m x 1.5m deep (maximum). The excavation for the pond will bedone at the vlllage level with simple hand tools. There are numerous women groups that arecurrently engaged in fish farming as an income generating venture and also to fi11 the proteindefkiency gap in their meals.

4.4.24 Smallscale inigation schemes: 9 smallscale irrigation projects, currently being usedon communal basis to grow horticultural and high valued crops will be rehabilltated. Thework will involve the filling up of gullies on the main embankment, repair to side channelspillway, and replacement of outlet pipes and fittings. The supply channels in the individualplots of approximately 0.25 ha will be desilted and reshaped by the farmers themselves usingsimple tools.

D . Rural Finance

(i) Rural Investment Fund

4.4.25 The Rural Investment Fund (R1F) will assist vulnerable small scale farmers to builda sustainable and productive business capacity in order to increase crop and livestockproduction both for subsistence and the market. R1F will provide financial support to eligiblefarmer groups who for various socio-economic reasons, are unable to pm icipate in economicactivities in an effective manner. Support to infrastructure will 1ay emphasis on rehabilitationand repair of existing ones. Provision of funds will be made for on-farm investment,agricultural and livestock related physical infrastructure, ''tailor-made'' capacity building,training needs for service providers and beneficiaries.

4.4.26 The taqet benefkiaries of the RIF will be basically small scale farmers in the ruralfarming communlties organised in legally recognised Farmer Groups (FG) to undertakeagricultural activities. They live on less than a dollar daily, and partly on food aid (para.3.9.1). These groups are characterise,d by an array of constraints including: i) lack of

27

information and communication channels to redress and discuss econom ic constraints andpotentialities; and ii) lack of financial and management sldlls and capital to allow them

icipate in bulsiness operations. svomen will be given priority in the allocation of R.1/PaMresources.

4.4.27 The potential agricultural investment aotivities to be jgpported by RIF in the P.Pare the followin 'g,: storage platforms, dip tanks, irrij atiop facilities, access roads (max 5 kl%;bridges culvertù transport equipments (donkey' s), markets, soil conservation and' tood! I ?

proces'slng facilittes (hammer mills and oi1 expellers) .f .

4.4.28 Maxi 'mum investments will be the equivalent of US$ 30,000 (ZM K 37.50 millionor UA 20,7.85) (per group per project. Maximum gr4nt of 75 per cent of scheme cost,including preparlation and implementation assistance will be plkovided by RIF leaving FG

lcontribution of at least 25 per cent of total cpst provided in cawsh, matedals and/or labour.

iThe NGOs, to bç selected by the GRZ as well as extenjion officers will assist in the selection

of FGs. The NGOs have a close working relatirnshjp with the local people, and will. >jsistthem in formingl FGs. They will also work wilh the FGs in the development of a numberof micro-projec 'tys. The DACS will be respppstblç fqr; the analysià of the application forapproval by the RIF. Annex 8A provides the necessary jupporting details.

1(ii) Rural Credit(4

.4.29 The level of poverty in rural Zambia is. high in absolute terms and calls f/ specialbou! t 364,285 households in EP are coltsidered too poor and too vullke'rable tomeasures. Aldit facilities currently in operation

. The .current fiqyncial markets', with abenefit from crel .

lending rate of about 60 per cent makes it imposs,ible fo? the poor to have access tb the credit

l i' i11 remain condemned to thefacility. And yqt without this facility the subsistence fa mer w

vicious circle ofj poverty. The RIF is intended to assist the vulnerable FG to ascénd to a

level whem the 'y can access some form of rural credit.l4.4.30 The proaramme proposes to allocate about ZMK 10.,777.00 million (UA 6.02l '%'''''' ''*' '*' ' '

million) being p 'art of the UA 9.21 million facility Availablp updeer the Credit component of,Zambia Agricultlural Marketinz Processinz and Infrastfncttlre Project (ZAMPIP) (Annex 2).

( %'''' ' *'''' -The GRZ has agreeed to this nrrangement. The allocatibn will be utilised to extend financingfacilities to eligible farmers in the EP under this oroztamme to firfanc: short and JnediumI

''*

'

%-''' .

term operating ynd capital costs. This include the porchase of inputs (certified seeds,ial investment (animfs, poult'ry pens,fertilizers and other chemical products), liveitock capi

tc-) and medicilj e. Provision of funds will be made for on-farm' investment, agdcultural andelivestock infrastructure, training needs for serdce providers (prtvate busipess and

lagdcultural benefkiaries). M icro businesses e.g. carp çptry, blacksmith, oxen, ploughs'

ct ib erate strategy to promote womep andrenting activities and other agro-businesses. A e)I

youth gröups access to credit will be put in place.

l4.4.31 The terms and conditions under which Commemiwal Banks (CBs) operatç their creditfacilities do not favour the rurz poor, especially those enxaaed in. aariculture. The CBs have

l '-' '*' 'e - *.'.' --'''' '-'''' '-'''' .lending rates metween 60 and 65 oer cent) and terms.of repayment beyond.thç capability of-

,1 A - .the programme s target group. There is therefore the àeed to set up a Fund, flexible enough

to accommodate risks involved in agriculturf pyoduction, and also that which cak be

sustained by thelrural poor. The Fund will be çxtqnded, . to qualified farmers at a negotiatedinterest rate. This sort of credit will be trans.itionlt' ' and is expected to maintain the

' ed der RIF. It is expected to last about 4 years only and beneficiaries.momentum generat un

ki' ' . J. C.tA..,.w.L

I >

28

will be expected to gradually m ove towards the conventional credit facilities. Thepm icipating NGOs will be required to assist FGs in establishing savings and credit schem esas a replacem ent of the proposed rural credit.

4.4.32 Under the ZAM PIP credit facility, the W orld Bank is lending agdcultural Creditat a rate of 20 per cent lower than the base lending rate. The base lending rate early June1996 was about 51 per cent. This would imply to a credit lending rate of about 39.2 per centunder the W orld Bank credit programme.

4.4.33 The lending rate under the ADF ASIP assisted programme, will follow closely theW orld Bank rate in order not to destabilise financial markets and also to provide someuniformity in agricultural credit management. Nonetheless the lending rate will be requiredto meet a1l the costs relating to the borrowing of the credit funds, costs of delivery to thebenefkiary, monitoring of activities, and costs of credit recovery. The interest rate will alsoaccom modate the foreign exchange and default risks.

4.4.34 lt is proposed that an agreed lump sum of funds will be deposited with a dulyregistered financial institution. The GRZ will reach an on-lending agreement with theSnancial institution which will be responsible for the administration of the Rural Credit (RC).The on-lending agreement will be acceptable to the Bank and ha! been retained as loancondition. An NGO will be retained to assist in the operation of the RC. The NGO togetherwith local GRZ agencies will be responsible for selecting credit beneficiades in line with apredetermined critelia. lt will also be responsible for the delivery of credit to farmers,monitoring of credit application, and credit repayments. The NGO will operate within ASIPframework, will be a member of the DAC and will be accountable to the FM U on al1financial transactions.

4.4.35 The GRZ is in the process of retaining the services of the financial institution and

a local NGO to administer the credit gortfolio. The financial institution and the NGO willhave proven experience in administenng rural credit, especially in the EP. The legal andinstitutional nrrangements regarding the mechanism of operating and managing credit willhave to be acceptable to the Fund and has been retained as a loan condition. A draft hasbeen submitted to the Fund for review. Further details regarding credit management arecontained in Annex 8B.

4.5 Programme Assumptions and Risks

4.5.1 The major assumptions of the ADF aided Programme which cut across thesectoral/specifk objectives, programme outputs and activities are the following:

i) The climatic conditions will stabilise and that recurrent droughts which havehitherto plagued this part of Africa will reduce in intensity.

.: 7 ' > '&

29

ii) The monopolistic and/or oligopolijtic tendencies found in the purchase oflricultural products are a temporary p'henomenon and will eventually giveagl .

way to a competitive market during th'e pfpgramme implem entation;

iii) Timely supply of credit and agricultural inputs will be ensured;j ' .

iv) The project implementation schedule will be adhered to;j ' ;

v) The operation and maintenance of the aisets created will be given priority;'d

l .vi) MAFF will have an efficient mechanism to irhplement the programnbe.1

sk involved in the d ro u gh t cond ttioqs pseo

r

s

sia

s

s

ts

ing utuorienvguya, nodu aefytjeerotthoef4.5.2 The z'iimplementation pl eriod could reduce the programme effict .

drought will be iitiaated to some extent as droutrht resistant crons will be crown. Adoption2 '-'' -' - --' -

-;of subsidiary actlvities like goat rearina and smafl busjneis could relieve some adverse qffect 'j v ' .

of drought through accrual of additional income which çould lead to better acceàs to food for . j' . I ' .

the beneficiariesl The on-coina market reforms and rehabilitation of access roadts will help Tl ''*'*'

'

''*''''' ' '

to develop a co 'mpetitive agricultural product market in the? pedium term. M onitoring of the.$hedule of imjiementation will be strengthened both b) :tll, e Bank as well as the Executing t;sc 6

i The on-going resructuring exercise of MAFF will lead to a tAgency to minlmise sl ppage.duction of 53 Iper cent in agricultural expens'es. Thls will enab,lç the GRz to provide 'readequate resources for operation and maintenancç

. It is fherefore likely that the risks will bél

minimised to ackieve the project objectives.14.6 The Programme Cost Estimate

(4.6.1 The estimated cost of the ADF assisted pmaramme in the EP is abput ZM K

l '.*'-'

d

'''''''' '

48,669.94 million or UA 27.19 million including cohtikpgencles net of duty ànd taxes. TheI zhtK 37 636

.80 million or UA 21,02 millionforeign exchangke component amounts to ,; 0 per cent of toul programme, cost,' W' hile the local cöst portfolio ambuntsrepresenting 77.3: 14 million or UA 6

.16 million representing 22.70 per cent of tötalto zM K 1.1,033.l Details of the programme cost estimates are given in Annex 5 while Annexprogramme cost1 ls of the cost estimate of ASIP at the National level

. A snmmary position15 provides detaiIis shown in tble 4

.1 below:

*

30

Table 4. 1Sum mary of Program me Cost Estimates by Component

(in million Kwacha) (In mîllion UA)COM PONENTS % F.E

F.E L.C Total F.E L.C Total

A. AGRIC. DW ELOPMENT

A1 . Crop Development 529.20 1 1 8.80 648.00 0.30 0.07 0.37 8 1 .7

A2. Research 477.40 92.60 570.00 0.27 0.05 0.32 83.8

A3. Extension and Training 1 4,525.80 2,443.60 1 6,969.40 8.1 1 1 .36 9.48 85.6

B. LIVESTOCK DEVELOP. 2, 6 1 0.95 1 378.94 3989 .90 1 .46 0.77 2.23 65.4

C. INFRASTRUCTURE 3.952.34 1 758.98 571 1 .31 2.21 0.98 3.19 69.2

D. RURAL FINANCE

D1 . RIF 1 ,608.53 1 .287.29 2,895.82 0.90 0.72 1 .62 55.5

D2. Credit 8,Q79 .97 897.77 8,977 .74 4.51 0.50 5.01 90.0

E. TECHNICAL ASSISTANCE 766.04 0.00 766.04 0.43 0.00 0.43 100.0

Sub-Total 32.550.23 7977.98 40,528.21 1 8.1 8 4.46 22.64 80.3

Physical Contingencies 1 662.1 8 466.63 21 28.8 1 0.93 0.26 1 .1 9 78.1

Price Contingencies 3424.39 2588.53 60 12.92 1 .9 1 1 .45 3.36 57.0

Total Cost 37636.80 1 1 ,633.1 4 48,669.94 21 .02 6.1 6 27.1 9 77.3

4.6.2 The programme cost estimate are based on June 1996 current prices. A physicalcontingency of 7 per cent has been applied to a1l items except staff and training. Theapplication of 7 per cent contingency is derived from Fund's experience in theimplementation of the ZAREP. An international price contingency of 5 per cent compoundedis applied to al1 foreign exchange portfolio. The selection of 5 per cent rate is based on thefocussed weighted average of the inflation rate of the Non-Regional M ember Countdes. Apdce contingency of 15 per cent for 1997 and 1998, and 12 per cent for 1999, 2000 and2001 have been applied to the local cost, excluding staff. The contingencies reflect theweight applied to donors contribution in foreign currency to offset local cost bllills. Thelocal cost component is basically staff salaries which normally 1ag behind inflation rates.

4.6.3 Total cost by category of expenditure is summarized in table 4.2 below:

Table 4.2Sum mary of Programme Cost Estimates by Category of Expendittlre

. ' .

1 lln millions Kwacha) , . - (ln million UA)

c O M P O N E 'N TS . %) F.E L.C Totyl'. F.E L.C Total ' F.'E

' l 2 1 1 2.83 1 , 637.70 ' ' 3.750.53 1 .1 8 0.9 1 2.10 0.56A. Civil works ,B. Buildings l 3,329.95 1 .449.95 4,77:.90 1 .86 0.81 2.674 . 0*70C . E q u i p m e nts ( 9 9 8 . 8 3 1 7 4 . 6 1 1 r 1 7 3 . 4 4 0 . 5 6 0 . 1 0 0 . 6. .6 O . 8'5D. Vehicles l 2,539 .7o 2 1 5.30 2.1 5' 5.00 1 .42 Q.1 2 1o.S4 O.9 2E. Services ) 1 ,526.55 629.32 .

.

2, 1 55.87 0.85 0.35 1 .20 O.7 1

F. Technical Xssistjnce 766.04 0.0Q - 766.04 0.43 0.Q0 0.43 1 .00

G . Local staff l o.oo 264.0: ' ' .-2. ,64./00 . 0.00 . 0.1 5 O.1 5 Q.0()H. Training ' ) 1 1 ,940.90 2,41 3.90 1 4,3.51 .90 6.67 1 .35 8.02 0.83

' j ' . .1. Farm inputs l 1 55.62 5.68 1 ç 1 .20 0.09 0.00 0.Q9 0.97.

j -J. Operation & maiqtenance 754.24 60.35 8$4:.59 0.42 0.03 0.46 0.S3:. '- .. .

K. Environm ent l 345.6Q 230.40 57,6.00 0.1 9 0.13 0.32 0.60'

#4 4 51 ' 0.50 S.01 9.90t. credit l 8,079.95 897.77 8,977. . .

Base Cost l 32,550.23 7,977.98 40.,528e21 1 8.1 8 4.46 22.64 0.89j . . 'Physical Contingenzies 1 ,662. 1 8 456.6) 2, 1 2,à,: 1 0.93 0.26 1 .1 9 0.78

. '.: . .) , . '

Price Contingenciej 3,424.39 2,588.53 6.01 2.92 1 .@ 1 1 .45 3.36 ' 0.57

Total Programme cyst 37,636.80 1 1 ,033.1 4 48 669.94 2 1 .02 6.1 6 27.1 9 0.77! .

4.7 Sources of Finance

)4.7.1 The ADF assisted programme will bq financél. frcm three sources: The Africanl .

, r. .-Development Fund (ADF), the Government ot the z'kep. ublic of Zamb ia (GRZ) and theProgramme Beneficinnes (PBs). The ADF will finance a11 the foreicn exchance cost

) 'h ' ' . '*''''' '*''''' .component amounting to UA 21.02 million çquviyAlent to 77.30 per cent of thU total prqectI y , g ua 'ygsculturàlcost. Of this amount UA 6.02 million are on gtj ipg fâ-ciligty under the am

1 A' X '

'

Marketing, Projessing and Infrastructure Proleçt for zgiicultural credit. lsee paia 4.4.31).The GRZ will ûnance part of the local cost amoupting tn UA 5.10 fn illion, which ij aboutl ''.*'

'

.18.7 per cent of tofnl cost, or 82.79 per cent of totml local cost. The GRZ contribution of$ '*' . 7UA 5

.10 million is part of the UA 89.70 millicn the GRZ has committed itself to makel 11 ASIP programme

. lt has fulflled a loan condition with the 1DA inavailable to the overa1 .

' .

this regard (An'nex 15). The PBs will contribute UA 1.07 million in local cost. This is1 t of total programme cost, or 17.21 per cent of t'otal local cost. Theabout 3.19 per cent

proposed finr clng plan is shown in table 4.3 below:

: '.,

' . J . c. . t.) .. .-

r4:'

7

32

Table 4.3Sources of Finance(In UA million)

Source F.E L.C Total % of Total

ADF 15.00 - 15.00 55.31

ZAMPIP (ON-GOING PROJECT: 6.02 0.00 6.02 22.1CREDIT + R1FI

GRZ - 5.10 5.10 18.76

Benetk iaries - 1.07 1.07 3.79

Total 21.02 6.17 27.19 100

4.7.2 The expenditure schedule by component and source of finance will be as indicatedhere under:

Table 4.4Expenditure Component and Source of Finance

( I n UA m i I Iio n )

ADF ZAMPIP GRZ Beneficiarie;

Componentl F.E. L.C. Total F.E. L.C. Total F.E. L.C. Total F.E. L.C. Total Cost

A. AGRICULTURALDEVELOPMENT

A1 . Crop Development Q.36 - 0.36 - 0. 10 0.10 - * - 0.45

A2. Research Q.31 - 0.31 - 0.07 0.07 - - - 0.39

A3. Exlenqion and Training 9.51 - 9.51 - 1 .93 1 .93 - - - 1 1 .44

B. LIVESTOCK DEVELOP. 1.69 - 1 .69 - 1 .O5 1 .05 - - - 2.74

C. INFRASTRUCTURE 2.65 - 2.65 - 1 .41 1 .41 - - - 4.06

D. RURAL FINANCE Q.00 0.00 0.00 0.00 0.00

D1. RIF Q.00 - 0.00 1 .05 1 .05 - 0.48 0.48 - 0.5: 0.51 2.04

D2. Credit 0.00 - 0.0û 4.97 4.97 - 0.0S 0.05 - 0.56 0.56 5.58

E. TECHNICAL 0.48 0.48 - 0.00 0.00 > - - 0.48ASSISTANCE

Total 16.00 0.00 1 6.00 6.02 6.02 0.00 5.10 5.1 0 0.00 1 .07 1.07 27.1 9

4.8 Environmental Impact

4.8.1 According to the Bank Group Environmental Assessment Guidelines, the ASIPfalls under Category 1I. The programme has limited environmental impact that can beroutinely resolved through application of mitigating measures and design changes.

' 5 =.vOv 7

i) Crop/Livestock Extension Infrastructure

4.8.2 The orogramme essentially seeks tö rehabilitate a number of rural infrastructural.

'*' Ifacilities, pnrtlcularly buildings, in the rural areas to Support crop and livestock development.

The improvemenl t of these facilities will enhancè the enyigonment. For the livestock, it isd that comt munity/individual paddocks will be eGtab

.lished. There will also be pasture.expecte

l f d in specific locations for t'àe animal. The farming practicesdçvelopment to produce eej '

proposed in the programme will include the use of green manure to minimize the extensive

use of fertilizerslwhich lead to salinity problems as well as chemical contamination pf surfaceand groundwate'r resources. The agro forestry and àqil conservation. compoftents of the

programme are jpecifically designed and oriented towards sustainabl'e enviranment. Thedesign incorpo 'jates an enhanced active participatitjn of local communities in theenvironmental 'm anagement through their groupings, wörlcing together to solve environmental

l arise.problem s as they

ii) Roads

4.8.3 The fehabilitation of the farm access roads will not impact adversely on theenvironment as there will be no need to clear new aieàs ör open tip large borrow pits. The

I .improvement to the road camber and side drains will ensute controlled flow of surface runoffith minimum almount of erosion from the road surface.W

iii) Irrigation Scheme

4.8.4 The existing small iM gation schemes .have adjusted to the surrounding. The earthrial nepded lfor building up the eroded embm' 'tkment will be obtained from yhe reservoirmate

i f i es and fittings tögether with canal desilting will not have anyarea. The replagement o p p

additional negative impact on the existing scheme. lt miy howevbr improve on efficientl

utilization of rater with less water standinj ip ppels and less breeding grounds formosquitoes. Wjth regards to the use of fertilisbrs and agro-chemicals, and considering thesize of the irrigable areas (max 15 ha) and locaitions, anyy increase ih negative impact wifl beligible. Noy! etheless

, the programme design ihcorporates the use of lfrnnl manure tonegimprove soil fertility at the camp/village level, this will be easily adhered to, because of the

lof fertilizers and agro-chemicals.frightening cost

iv) Fksh Ponds

4.8.5 lt is rgcognised that the construction of thq fish. ponds will create ap additional 150m2 of open water surface area per one pond. Th is may p rovide breeding ground for

. r .mosquitoes but wj ith the endemic nature of malaria ip these areas, the additional effect isminimal and negligible. The sighting of the ponds fgr from the dwelling places will alsoreduce the incidhnce of mosquito invasion.

4.8.6 Provisions have been made available under the ASIP for short term consultnncy

on environment.lThe consultant will review the imp qct of, the programme on environment andwhere necess lary propose mitigating meastires. Annex 10 providès an EnvironmentalMitigation Statelnent for the protection of the environment.

vk1

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34

4.9 Impact on W omen

4.9. 1 By design the ASIP will have a positive impact on women. The programme hasmade provision to address the training needs and resource requirements of women and youthin various agdcultural cottage, and micro enterprises. The activities to be funded under theprogramme will not only increase wom en's integration into economic activities but it willalso increase youth pm icipation in micro-enterprises and subsequently generate employmentopportunities for youth in the province. The shortage of improved seeds in the programmearea is one of the limiting factors to women's effort to diversify. The seed multiplicationunits to be established in all nine districts will sustain seed multiplication and provide asteady supply of improved seeds to both women and youth. This will subsequently increasetheir production levels, while providing surplus for the market to increase their income. Theintroduction of RIF and credit facilities which will be mainly tnrgeted to women, will boostwomen's and youth participation in economic activities.

4.9.2 The development of woody trees, fruit tree nurseries and improved food andlegumes seeds will supply tree products for homestead fuelwood, improve household foodsecudty and increase the consumption of more fruits and protein in women and youth dietsthereby improving the nutritional status and consequently the health of women and youth.

35

PROGRAM M E IM PLEM ENTATION

5.1 Executing Agency

5.1.1 The Ministry of Agriculture, Food and Fisheries (MAFF) will be the ExecutinglAgency (EA). Tjhe MAFF is headed by a Minister. The Permanent Secretary (PS) is theadministrative h'ead, and the accounting general of the M inistry. H e is the overall co-

I .ordinator of day to day activities of the M inèistl'y. The M inistry is currently beingrestructured to ilprove on its operational efficiency. About 70 per cent of the restructuring

lexercise haj been achieved. The establishment of District Agricultural Comm ittees as pal't

f the restructurijg is critical for implementation of ASIP, 'and its attainment will be retainedoas a loan condition. The MAFF is divided into six (6) d'epartments, headed by Direcyors;Depm ments of FI ield Services, Research and Specialis't Service, Economic and M arketing

Depmment, Hulj an Resource and Administratign, Financial Management and Internal Audit.A Procurement Unit has also been created (Annex 1q provides the ofganisation chart).l5.1.2 The jpermanent Secretary will be the overall cp-ordinator of the program me. The

' ics and Marketing Development (PEMD) will co-ordinate the routineDepartment of Economrequiremenis of JASIP on behalf of the PS. The bepptp Director of DEMD in charge ofPolicy and Planning is operating as full time ASIP Co-ordinator.

5.2 Organisation and M anagement

5.2.1 The yrogramme's headqum ers is located within the Ministry of Agdculture, Foodand Fisheries (MAFF). Overall reyonsibility for implementing the ASIP will rest with theMAFF, and no lparallel administratlve programme units will be created. The PermanentSecretary will be the overall co-ordinator of ASIP. assisted by Deputy Director DEM D in

l - .charge of Policy and Planning who will co-ordinate routine activities of ASIP. At the

Provincial levej, the Provincial Agricultural Co-ord. ipétor will be responsible for co-ordinating all the ASIP activities and regularlv stlbmittinèg repo'rts to the ASIP Co-ordinatorI - .at the MAFF headquarters in Lusaka. The Distrkt Agricultural Co-ordinator will be

ible at tlhe district level for al1 ASIP activitits and will initially report to therespons

Provincial Co-/dinator (para. 5.3. 1). The implementatifln arrangements are outlined in thelmplementation M anual, and has been approved by all pm icipating donors.

I5.2.2 M any of the ASIP activities will tmkç place :t the district level where the DistrictAgricultural com! mittee t'oAc) composed of local avic'ulturm specialists, represenutives of

lthe private sector, beneficiaries and the N GOs is located, to ensure that local interests are

served.

5.2.3 The staff at the district level will be delegated increasing responsibility andl .accountability for programming, preparing and implementing activities. They will be

ible for p! reparing budgets, and monitoring AS.I'P financial transactions (para 5.9.3).responsThe Finance M vagement Unit (FMU) (para 5.9.1) established at the M AFF headquarters,will monitor th: flow of funds from the center to the i+plementtnj a'gencies or units. As thecapacity is built at the district level, provincial level strtlbtures wl1l be gradually phased outand staff re-assigned responsibilities, either at the district or national level.

l

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$. 'P*;'

m ?.4c. . . .

36

Co-ordination of the ASIP

5.3. 1 ASIP will be co-ordinated at three main levels: i) An Agricultural Sector SteeringCommittee (ASSC) at the national level; ii) Provincial Agricultural Committee (PAC) at theProvincial level and the Distdct Agricultural Committee (DAC) at the district level.

i) Agricultural Sector Steeling Committee has been established to assumeoverall responsibility for formulating sector policies and co-ordinating theimplementation of al1 ASIP programmes. The M inister of the M AFF willserve as the honourary chairman. A Vice-chairman who is from the PrivateSector, will be elected by the M embers of the Com mittee. The ASSCcomprise of senior officials drawn from the M inistry of Finance andEconomic Development (MOFED), the Bank of Zambia, the M inistry ofAgriculture Food and Fisheries, M inistry of Environment and NaturalResources and the M inistry of Lands. The total membership is 23 of which10 are drawn from the Private Sector. Donors also participate in the ASSC,as observers. The ASSC meets monthly. Since it will not be logisticallypossible for the ADF to be represented at the monthly meetings, anarrangement has been reached with the SIDA to represent the Fund at thesemeetings.

The DEM D of the M AFF will provide secretarial support to the ASSC andperform liaison with each line agency of the M AFF responsible forimplementing ASIP programmes and with donors on implementation issues.In addition, the department will also consolidate the annual workprogramme, prepare sector budgets for ASSC approval, work closely withProcurement and Supplies Unit on matters of procurement, and with theFM U on disbursement issues. It also organizes an annual review of theASIP.

ii) Provincial Aglicultural Committee

The Provincial Agricultural Committees (PAC) will, in the emrly stages ofASIP co-ordinate ASIP activities within the Province. The PAC will assist

DAC in jreparing budgets, Annuz Work Plan, and Auditing. As the DACcapacity IS built to greater responsibility and accountability, the PAC willbe gradually phased out. The PAC will be composed of representatives ofM AFF, Environm ent, Pdvate Sector and Farmers. The ProvincialAgricultural Offker who will be renamed Provincial Agricultural Co-ordinator will be the secretary to the PAC. The chairman will be electedfrom the Private Sector.

iii) District Agricultural Committee

This will be the major focus for the programming and implementation ofASIP activities. Membership of DAC will at most be thirteen (13) persons.These will include three (3) persons from the farming community, four (4)people from the M AFF, one (1) person from the local authodty, two (2)persons from the NGOs, and two (2) from the agdcultuM orientedcommercial sector, M d one (1) from the traditional chiefs. The DistdctAgricultural Officer, who will be renamed District Agricultural Co-ordinator

37

(DACO) will act as the Secretary to the DACS, while the Chairman will beJlected from non GRZ members of the committee. .Th,e Com mittee amongl thers will promote agrictllturgl developmçnt, id

.entify agricultural prioritiesoj

'

'

under work program mes, enstlre thàl plannyd activities are consistent withl olicy objectives of ASIP. The DAC wtll prepare budgets for activities,Pâubmit it to M AFF for approval, and supervise the implementation of the1activities. The DAC will meet at

.leaist once in a month.

liv) Tn the EP where ADF assisted ppgraljalme is located, SIDA which is

ilmplementing ''An Economk. Exjansion in Outlying Areas Programme'' will

yngage an expert to monitor and assist in co-ordinating our activities in the

field (see also para. 5.7.5).l5.3.2 The terms of reference for the ASSC and the DAC are appènded to this report as

j . . 'Annex 14. The lproposed organization structure is also altached as Annex 13.

Technical Assijtance/consultancy Services

à '5.3.3 The ASIP will be wholly implemented by ViFf staff who are qualised for the

' i ions have been maderfor s'hort term consultnncy in W omen inassignment. How

,ever, prov s' :; ring. An undersmndintxhas beendevelopment, credit management and cnvironmental mopito

hed with SIDIA that the programme will be ab le to utillse its technical staff already in thereacl .field in the programme area

. ln the initial stages, S1DA.A,ill make availéble an agro-forestryly b! ased in the EP to assist ADF in developi

.pg agro-forestry activity.expert current

! '5.4 Training and Incentives

Training

5.4.1 Staff training will be an important ccmtrîbuting factor' to the success of thel ially when the district level Will be thç major focus for A'SIP activities.programme, esp jec' de to gradually upgrade the techakal know how of Camp and BlockProvisions have been mal

extension officers to Diploma level. This will enàble them to adeqrately interpret research

recommendationsj, and advise the farmers accordinrly. D-istrict Agricultural Officers as wellas their Veterin 'aFy counterparts will also benefit from xFjecialised traihing. Provisionj arel ' ' ' '

made avilable for specialised courses lasting up to one year tb this cadre of staff. This willlility to conduct research and interpret resezvrçh find. ings for commercialfacilitate their abl

i the commuliication capability between research andapplication. It will also mprove onextension staff.

5.4.2 Provisjons have also been made for on the job training, supplemented byworkshops. Fiel'd tours within the country, and çarefully selected external short tours, to

hic! h are relevant to ASIP will be encouraged.programmes w

5.4.3 The DAC will identifv traininc needs and priority within respective district. Thisl '*' '*'.' '*- ..

will be forwarded to the ASSC for review and approval. The ASSC will then submit itsions! to the MAFF for action

.recommendat i5.4.4 Smallholder farmers and other rural commupity will also benest from organised1

infrastructure for Multipurptys:' Tr#nipg Centres (M.'1-CI with supportingtraining. Trainingfacilities will be put up in each district. Traintng will include literacy campaign, crop

.q. zr-ti' ' -c .. . ' .' . . . . ', .

. .4N . .A

j

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husbandry methods, animal husbandry, harvesting technique, book keeping and other relevantsubjects. Special efforts will be made at the DAC level to involve the women communityin training various subjects, like programme management, rice milling, management of smallbusiness and pdnciples of group formation and management nutrition, child care, etc.Literacy campaigns will be launched from the M TCS. Local N GOs will be contracted topromote women education programmes (see Annex 9). Each stakeholder will be responsiblefor identifying training needs and target group. This will be submitted to DAC fordiscussions and approvf for implementation.

lncentives

5.4.5 The M AFF staff will, for the first time take full responsibility and accountabilityfor the future of Agdcultural development in Zambia. The fact that the program me wasdemand driven, locally initiated, locally prepared, and will be locally managed, is a goodenough incentive for those concerned.

5.4.6 Adequate training facilities have been put in place; infrastructure (residential andfunctional buildings), roads and water are being provided to improve on workingenvironment. M obility is being improved, and conditions of service including salary arebeing reviewed.

5.4.7 Smallholders will benest from improved infrastructure; RIF, Rural Credit underthese sustainable conditions, improved integrated training in a1l aspects of development arejust some of the incentives set aside for the beneficiaries. The fact that resources have beenmade available to the smallholder in affordable terms; the fact that they will have a say onhow these resources should be utilised in a sustainable manner, under a friendly environment,

will be indeed, the major incentive for smallholder and women farmers.

5.5 Procurement

5.5.1 Procurement of Goods and Services financed from ADF loan proceeds will be inaccordance with ADF Rules and Procedure for Procurement of Goods and Services, andADF Guidelines for the Use of Consultants as follows:

International Shopping

Communication facilities and cartography equipment',

b) Tmboratory equipment;c) Office equipment;d) Chemicals, fertilizers, vaccines-,e) Milk goats.

The goods to be procured under this procedure are diversified and that it will be of nocommercial interest for any single supplier to bid for them.

39

ii) National Competition!a) civil works and building mgterials;l .

The location of the construction works to be undertaken are such that (hey arelearly unlikely tol attract bids from outside the bprvowev's country. HoWtver, local bidding,c

Iwill not prevent rny féreign firm from participating i n stle bidd ing. exercise, if it) so wishesto do so. Qualified contractors, and suppliers arç available in large numbers in Zambia.

. 1This will satisfy the need for competition.

liii) National Shopping

(# Tractors and farm implements;b) Vehicles and Motorcycles',1

c) Office Stationery;Y ''Household Facilities'' for M ultipum ose Training Centre;I

e) lmproved seeds.l ,

Yhe g'oods listed above are so diversified th at it will be of no commercial interestIfor any single supplier to bid for them. In addition the V.élue of purchaje for each categoryis too small to jdstifv comoetition bv another forin of ptocttrement. There zre an adequâteI '--'

d

''''' '''''

.number of local and foreign based suppliers in Zambia. to ensure èompetitive prices.

j .. .,'iv) Limited Competition (short list)

lshort term consultancy staff for w' ID, environmental monitoring, prpm otion

l f micro-enterprises, development of trai' hing curriculum for the PBs, andloAudit.

l5.5.2 The proposed List of Goods and Services (LOGS) to be procured is indicated inAnnex 4.

5.6 Tmplementation Plan and Expenditure Schedtlle

15.6.1 The ASIP is the first in a series o? successike four year programmes aimed atI

, y.etter oj- sectoralsupporting the medium-and long-term goals outlined in the Government sllicy

. The first of the ADF assistzd 4 yèar programme will commynce inDevelopment P lo' will be completed by December 2000. lt is plr ned that most of the 1997,January 1997 andI .Progmmme Yemr 1 (PYI) will be devoted to oraanisatiönal asoeçts of the prozramme. ThisI - - --' '*'

. '*' *-'

,will include reèruitment, creation and sensitisation Qf gro:ups, esjéci. ally women s qroups tofacilitate acc:ss lto RIF and Credit. Procurement of most of the goods and servlces withexception of inf 'nastructure, will also be conducted during PYI.

) .##'jatF.d

rr

5.6.2

40

Tentative target dates are summarized hereunder:

Item Activity

1. Board Approval2. Loan Signature3. Loan Effectiveness4. Tender Invitation for Supply

of Vehicles and M otorcyclesTractors and Farm IlnplementsTender Invitation for Civil W orks andSupply of Building M aterialsAward of Contract for Supply of VehiclesM otorcycles, Tractors and Farm Implements

7. Award of Contract for Civil W orks8. M obilisation of Contractors for Civil W orks9. Construction of Civil W orks

10. M obilisation and Recruitment for Rural Fund11. Training of Programme Beneficiaries12. Development of Micro-projects13. Crop D evelopment/Livestock Development14. Activities Completion

The annual targets for the implementation of the activities are shown in Annex 6B.

D>

December 1996January 1997January 1997

February 1997

M arch 1997

M ay 1997July 1997August 1997September 1997 toDecember 2000M arch-Dec. 1997From M azch 1997-From June 1997From June 1997December 2000

5.6.3

5.6.4 Implementation Plans: Fach implementing agency or department will prepare areport on the implementation rrangements for its sub-component or activity. The report willdetmil activities, organisation and arrangements, cost estimates and performance indicators.These reports will be discussed at the DAC meetings, approved and fom arded to M AFFheadquarters where the reports will be consolidated into an A SIP implem entation manual.

5.6.5 Annual W ork Plans and Budget Coordinated by the DEM D, the M AFFimplementing depm ments will be responsible for updating the annual work plans and budgetsfor the ASIP in accordance with the implem entation plan. The ASIP work plan and budgetshave been designed to provide the inputs needed in the M AFF'S annual budgeting exerciseand will generate the data needed for the agriculture sector public investment reviews. Thework plans will detail the activities planned, the budgetary and human resources required,performance indicators, and the procurement programme, including the contract package andestimated costs. During implementation the M AFF will use the ASIP budget structure toaccount for annual expenditures. At the end of each yea.r the M AFF will review the

expenditures, make necesshq adjustments, and prepare a revised ASIP (MAFF) budget forthe following yemr. M aintalnlng the ASIP format for monitoring actual M AFF expenditureswill provide a more stnlctured data base for public expenditures in the agdcultural sector.Three months before the start of the fiscal year the M AFF will prepare a draft annual workplan and supporting budget estimates for each sub-programme and submit them to the ASSCfor approval and to donors for discussion during the annual ASIP review. Each year theGovem ment and donors will reach agreement on the following year's public investments inthe sector. The GRZ agreement to this arrangement will be retained as other a loancondition.

MP W n.

Expenditure Schedule by Component

l5.6.6 The expenditure by component for each year is shown in Table 5. 1 hereunder:

Table 5. 1Expendittlre Schedtlle tny Component

(in million UA)

1CoNponents 1997 1998 1999 2000 TOTALI ' '

A. AGRICULTI ITRAT, DEVELOPAG NTIl .

.

A1. Crop developmynt 0.10 0.11 , - 0.12 0.12 0.45.

g , (j.,,hl. Research ) 0.15 0.07 0.08 . , 0.0' )

M . Extension and Trainina 3.57 2.50 2.61 2.76 11.44j ''*''' '

1 EVELOPAIEN'T 1.31 0.79 0.33 0.30 2.73B. LW ESTOCK D11

C. INFRASTRUC'I'URE 0.89 0.99 1.06 1.12 4.06I '. . . .lD

. RURAL H NANCE 0.00 0.00 0.00 0.00 0.00l . . .

D1. RIF j 0.49 0.60 0.52 0.43 2.04D2. Credit ( 4.98 0.15 0.19 0.26 5.52

lE. TECHNICAL IASSISTANCE 0. 11 0.1.3 0.13 0.12 0.49

5 20 ' 27.19Total j 11.60 5.35 5.04 .

Expenditure Schedule by Source of Finance' j . .5

.6.7 The expenditure schedule by source of finance for each year is shown in table 5.2below: '

Table 5t.2.:Expenditure Schedule by Soylrçe.upf Finance

(in million UA) '

j ' :'Compon 'ents 1997 1998 1999 2000 TOTALl .. .

ADF j 4.98 3.40 3.26 3.36 15.00ZAMPIP ) 4.68 0.43 , 0.45 0.46 6.02GRZ j 1.32 1.36 1. 18 1.25 5.10

. '

tj j5 ' () ja j .cyBenefkinnes j 0.62 0. 17 , . . .

Total j 11.60 5.35 5.04 5.20 27.19

42

Proyramme Planninp. M onitoring. Evaluation and Reporting

5.7. 1 The Programme Planning, Monitoring and Evaluation Unit (PPMEU) has beenestablished in the M AFF. The M onitoring and Evaluation System under the ASIP will havethree components: management information system (MIS), impact evaluation and beneficiaryassessment and feedback, and agricultural sector performance analysis. The DEM D willhave primary responsibility for recommending corrective actions based on the findings of themonitoring and evaluation system.

5.7.2 M anagement Information Systems. The M 1S will be established within eachsubprogram me. Overall responsibility for the M lS will rest with the m onitoring andevaluation unit of the M AFF'S DEM D . The M 1S will contain data on each subprogram me'sSnancial, physical, and personnel inputs and its outputs, which will be evaluated againstpredetermined performance indicators. The DEM D will prepare regular M IS reports,disseminate them to the ASSC and participating donors, and interpret their results fordecision-makers. The DEMD will also be responsible for identifying necessary correctiveactions and ensuring sub-programme managers take those actions.

5.7.3 impact Evaluations and Beneficiary Feedback. The impact of subprogrammes onthe intended beneficiaries will be assessed annually through sample surveys and thesystematic client consultation (SCC). The main source of information will be an improvedversion of the random sample survey of about 5,000 farm households. This baseline survey,which covered the whole of EP was contracted to the Institute for African Studies, Universityof Zambia. It collected input and output data, including social indicators. Informationgathered has been collated for both quantitative and qualitative assessment to enable sub-programme managers form an opinion on the pre-programme status of farming activitiesincluding beneficiaries social and/or welfare status. The results of both the quantitative andthe qualitative evfuations will be used to identify improvements to increase the impact ofASIP activities.

5.7.4 Sector Performance Analysis. Because the ASIP encompasses the entireagricultural sector, its impact will be best evaluated through an analysis of the sector'soverall performance. Thus, a sector performance analysis will be undertaken annually bythe independent institution that will also analyze the surveys. This analysis will attempt to

explain the reasons for both satisfactog and less than satisfactory results, and consider - inaddition to the effects of conventional lnputs and weather variables - the imyact on the sectorof such factors as policy reforms, international trade, and inflation. lt w111 also assess therelative contdbutions of subprogrammes to the sector's overzl performance. The PM EUwill be responsible for ensuring that the methodologies of the surveys and the sectorperformance analysis conform to the highest international standards.

5.7.5 To ensure that the ASIP activities in EP obtain adequate attention, SIDA willengage an expert who will assist in the monitoring of ADF/SIDA assigned activities in theEP. Ayart from submitting his Report to the DEMD, to be incoqorated in the AnnualM onitonng Report, a copy will be submitted to ADF/SIDA for revlew and action whereIIC,CeSSaJ .

Y' 7 ' ' ' 'v ; Arz'n '

43

Reporting

5.7.6 The M AFF, which is the Executing. and Implementing agency, will furnish thelFund with quarterly progress reports in accordance t

.o the terms of the loan agreement in theformat satisfâctojy to the Fund. The report, ampyg.. Qkhprs, will contain assessment of theactivities during the previous quazter, explanation! on 'the4deviatipns from the targets, as wellas ûnancial p edoimu ce. It will also include plân of açtioq', and the budget for the following

ldeline for preparing the Quarterly'progtesj kzport has been madve avdlablequarter. The GuiI

to the M AFF to facililte the preparation of the Réport.

! .5.7.7 The M AFF will be required to prepare a Procrzmrùe Completion 'Report (PCR)I '''' ''' h''-

.within two (2) mqnths of Programme completion. The necessary Guideline will be submittedto the Borrower in due course.

15.8 Recurrent Costs

l5.8.1 The operating costs of the implemenltton .and managem ent of the ASIP arerelated to:

. i) altowances for DAC meetings; ii) prqdugtion costs such as procurement of

inpùts; iii) operating and maintenance costs for etti ipment, vehicles, motorcycles; iv)buildings; v) and remuneration to shoM-term. Technical 'A ssisfnnce.

5.8.2 Th: programme will finance the foreign exchange componenut of gperating costslof the DAC ,meetings; operating and maintenance costs fQr the equipment, vdhicles,

motorcycles ' andt buildings; the programme will alje meet expçnses relating to technicalassisfmnce. Pro j'vision made under the ADF finàncing .ihr.recuqent costs are estimated to

amount to ZMK) 10,750.80 million (UA 6.22 millionl' including rural finance. Dçtailedinformation is giken in Annex 4.l5.8.3 The GRZ will finance pm of the operating local costs relating to production of

1food crops, animal production, infrastructure and managing micro-projects. 1ts contribution1

O million (UA 5.10 million) will finaflce the rçqurrent cojts only, and.of ZMK 8,940.9 a1includes sala.ry and wajes of local staff involved in the implemenyatipn of ASIP. Followingthe restructurinj jekerclse, the GRZ will be in a position 4o allocaye adequate funds to suîtainagricultural àctlv'ities. The GRZ will realize a $3 per cent cost reduction as a result of the

lrestructuring (Annex 15 para 2. 11).

'

j

'

..

5.8.4 Benefkiaries contribution of ZKW 19 1'6.89 (UA 1.07 million) will finance pnrtI '* ''' ' . '

of the recurrent tosts, specifkally by providibg làbour inputs for conso ction and' cess roads

, storage facilities, Ssh. ponds etç. The PBs willqalso cohtributemaintenancé of ac1 jtjynot less th% 25 per cent of the total cost of goods and

. ssèrvices agai. nst a grant frbm orthis will wholly be recurrent costs.credit facilities.l

5.9 Financial M anagement. Accounts and A udit

jFinancial Management Arrangements1 ' snancial procedures for5

.9.1 Implqmentation of the ASIP will follow thç Government splanning budgetina. accountina, internal control and Enancial mapagement. The M AFF

l '*-'- - *''''' ;engaged the servlces of the Price W aterhouse to design a Financial M anagement M anual and

44

an accounting system that will m eet the donors requirements of strong financial management.The Price W aterhouse submitted its Report early 1995 and its recommendations have beenput in place.

5.9.2 As per the Price W aterhouse recom mendation, a Financial M anagem ent Unit(FMU) headed by a Chief Accountant has been created. lt has two distinctive divisions atM AFF headquarters, one dealing with Donor Funds and the other with GRZ Funds. A t theProvincial level, the FM U is headed by an Accountxnt, assisted by two AssistnntAccountnnts. An Accountant also heads the district office, with two assistmnts.

5.9.3 The FMU is responsible for payments, cash management, banking, loanmanagement, fixed assets control, accountability and financial reporting under ASIP. TheFM U is well staffed at a11 levels with trained accountants and has enough office equipmentto facilitate its work. A Financial M anagement Manual acceptable to Donors has beenpublished and is assisting FM U in managing ASIP funds.

Accounts

5.9.4 Yhe MAFF will maintain an accounting and control system which areinternationally acceptable and are capable of reliably recording and reporting a11 financial

trnnsactions. The FMU will manage accounting and control systems for ASIP. Sejarateaccounts will be kept at a11 levels for each participating donor. Each D AC will mmntainadequate accounting records to allow accurate and timely recording of its operations and willprepaze annual financial statements in accordance with generally accepted accountingpdnciples. These annual financial statements will be consolidated by the FM U. Annualfinancial statements prepared for audit will consist of an income and expenditure account forthe yemr, cumulative accounts since loan entry into force, a summ ary of the centrf specialaccount, a summary of reimbursements climed under the statement of expenditure (SOE) .procedures, and statem ents of investment credits for private sector development withpnrticipating NGOs and banks. An Accounting Guide M anual acceptable to Donors detailingthe procedures and requirements has been published and distributed to a11 those concerned.

Auditing

5.9.5 Annual financial statements of ADF-finance,d components will be prepared andaudited in accordance with internationally recognized auditing sfmndards by suitably qualisedindependent auditors. Not later than six months of end of each financial year, the M AFFwill submit to ADF audited Snancial statements of investment credits for the precedingûnancial yemr, audited by private externf auditors acceptable to the Fund. In addition toseparate audit opinions on the Credit accounts, the auditor's report will include: i) thestatement of expenditure, ii) the central special account, and iii) a long-form reyort ormanagement letter commenting on the adequacy of the accounting system and lnternalcontrols.

5.9.6 ln addition, the financial mr agement unit will contract external auditors to auditthe special account, the statement of expenditure, and the withdrawal applications every sixmonths and to assist the districts in improving their accounting practices. In particular, theauditors will confrm that:

45

i) Procurement rules have been followed.

ii) Fund withdrawals have taken place in accordance with ASIP procedures.

iii) The ASIP funds have not been used to provide funds to parties other thanprogramme beneficiaries.

Subprogrammes have not been financed twice through other donor funds.

v) W ithdrawal applications fully document expenditures and include onlyeligible expenditures.

vi) Countepart funds have been advanced in accordance with the agreed workprogram me.

5.9.7 The Accounting Guide Manual (pgra. 5.9.4) also includes procedures andrequirements of auditing. Provisions have been made avxlable to facilitate retention of anindependent external auditor, to audit the accounts annually.

5.10 Cost Recovery and Progr>mme Sustainqbility

Cost Recover.y

5.10.1 The GRZ has out in olace a mechapism of cost zeoovery in most of the projectsl *' ''*' ' .

and/or programmes financèd from public ftlnds. M echanisms for recovez'y qf agriculture1 d in the credit institutions

, but was neveç put into force. because of pbllticalcredit is embodiél .reasons. Farmers, however, directly paid for other serviees rendered like cattle dipping andlartificial insemination.

l5.10.2 Under the proposed jrogramme, beneficiaziçs will pay fully fpr a11 their farminputs and serviges. Qualified cllents will obtaih credit from the Rurf Finançe (RF) to payfor the required goods and serdces. The NGOs which will be managing the RF have a

l k rjxe sasm cropnetwork of experts in the field who have field experience in debt collfèct on.

Budget shown in Annex 11, Tables 3, 4 and 5 indicato that farmers will be in a position toatly proculre goods and services from thçir own tésourceC, or service the loan, if theyeventu

lso wish to borrow from the RF. A risk premigm of about 2 per cent has been incorporated

lin the lendtng rate as insurance against default.

(5. 10.3 Farmers involved with the small scale irrigatitm will maintain the syjtem at th. eir

l . '

own cost. Users of artificial insemination services, dipping services, and market facilitiesl usz and userswill pay for these services on demand. However, cost shadng between the ,t ine facilities on a 50:50 basis i,s prop' .e' sed. D siszase control like the ECFof Livestock QuarantI

,is GRZ responsibility, and it should meet part of the inaintenance costs of the quarantineinfrastructure.

Programme Sustainability

5.10.4 ' Post implementation period which commencçj in PY5 tplanned for 2001), will becritical if the yrogramme is to attain its long terms objective pf contributing to povertyalleviation and facilitating GDP growth. These öbjeçtivés will be achieved, but only if the

. N . k '*' nj. y. ; yr@l

46

program mes sustain its operations after the investment period. There are three cost centreswhich will require continued inflow of funds during the post-implementation period. Theseare:

i) extension and research staff salaries and wages',ii) maintenance of equipment, vehicles and infrastructure;iii) operating expenses.

5.10.5 ASIP is being implemented under the existing M AFF framework and will notengage incremental staff. There will therefore be no incremental cost during and postimplementation period. Regarding the maintenance of public infrastructure, the PBs areexpected to contribute to the mintenance of these facilities. The cost recovery mechanism,which is already in place will ensure that the PBs pay for the A1 services, and maintenanceof m arket infrastnlcture through m arket levy. Such contributions will facilitate the

maintenance of major programme infrastructure like paddocks, and yens. Farmersthemselves will maintain irdgation infrastructure, fish ponds and other mlcro businesses.Farming activities will sustain itself through the establishment of a Revolving Fund. TheAccess Roads will be m aintained by the local authority which is levying a fix tnx on thepopulation.

5.10.6 Extension Services, Research and Disease Control are the responsibility of PublicSector, and the GRZ will be expected to utilize public funds to maintain programme

infrastructure like residential and functional buildings, replacement of research equipment andvehicles. The programme has a healthy Projected Income Statement, and w1l1 be able toprovide adequate returns to meet any operating and maintenance expenses that need to beincurred by the Public Sector. lt will also be able to adequately service the loan with a netreturn to the Public Coffers. Details on financial status of the programme can be found inSection 6.3 of the SAR. And with restructuring of the M AFF, the GRZ will re>lize a 53 percent cost reduction in agriculturi expenses. This should enable it meet its obligationssatisfactorily (Annex 15).

5.10.7 Environmental sustainability will of course be an area of major concern fùrProgramme long term snccess. The ASIP would have positive environmental effects throughits support for improved farming and conservation practices. Its investments would befocused on such effols as minimum tillage, research on sustainable farming systems, andpromotion of insitu soil and water conservation . As a land-surplus country, Zambia has thepotential for the sustainable expansion of cultivated area on which the projections of itsagricultural growth are in part based. In addition, the National Environmental Action Planto be implemente,d concurrently with the ASIP, will restrict cultivation in environmentally

sensitive areas. An Environmeno Support Programme under preparation in the Ministy ofEnvironment and Natural Resources will also improve environment-related institutlonalcapacity in the country as well as EP and address specifk environmental issues. Under theASIP the purchase of agdcultural inputs and chemicals deemed environmentally unacceptablewill not be permitted, and an environmental mitigation plan has been developed to addressany adverse environmental impact tsee Annex 10). Provisions have also been made for shortterm consultancy services in environmental management.

6. JUSTIFJCATION

l6.1 Technical Justiscation

i) Agriculturei6

.1.1 The programme is technicily justified in various ways. It will provide impyovedd varieties andl improved crop husbandry practices to efthance crop diversification efforts.see

Toho

i ssips th

ve jylt Otsrtal suuyiutagb ol ey sytirsaoart e goyjy tes ctlnjj cwj jljy yr mt o,j; ycoovuon tyeors ot hareo jye f faecj tj Sv jO( j( sr eycuu rrt jaeoni tmdajf 0o Ur Vchrto pi ns

lneeded by farmers for diversitk ation purposest The trginiàg of extension staf, f .will improvei k' them mori''. effective in the communication ofextension deliverv svstems therebv mn 1ng

,I '-'

'

'*' '-'

'

.

rese>rch and exyension methodologies to the farming community- The yroposed traipingmethod for the PBs is the most technically effective altem ative of impartlng knowledge tothe target group.

ii) taivestoct

6.1.2 S ng term experience in EP has demonstrated that a rigorous 39 week dippingschedule rrsults in effective control of ticks and tick borne' diseases, especially ECF. The

1 ' '.calf immunijatior provides long protection against ECF and' is,likely to be the möst effettivecontrol meàsure by choice in the future. The programme 'approach lncluding b0th strategies,

1 d the most technically feasible, and cost effective way of controlling ECFwhich are considere

in the EP.

iii) Infrastructure

6.1.3 The rehabilitation of buildings basicallj involves the replacement of defectivç orl . ,damaged portioqs of the structures.. The technqlogy is thzrefore simple and involves the

utilization of artisans, particularly masons and carpenters at the local level to achieve thebjecuve. The lp! ethod adopted has been successfutly 'ujed for the ZAREP project and it isoalso the sfn'n' dard method in the buildina industrv. NçW buildings or stnlctures will be putl

1-- -

. .- .up by using relevant construction drawlngs with a coni. pet:nt supervisor.j -6.1.4 The 'construction of fish pond will adop y laboiur intensiye method. through the use. l . , ,

'

of pick axes, mattocks, shovels and headpans. The nsl. of michanical excavation using a. l . 'back hoe excav'ator has been considered but discardèd becauîe of the small size nature

(10m x 15m x 1I.5m depth) of the popd and the ektreme remoteness of the sites. Machineexcavation will 'not be cost effective. Furthermore, the existing 5sh ponds in the Province

. I

Nvere hand-excavated.l6.1.5 The rehabilitation of the small-scale irrigation. schemes will also involve labourintensive methods. Cleaning and desilting of canalas will be done by the frmers usinghovels aènd' 'pickl axes. Minor earthworks on thz earth .ilam will also be done manually.. Thes

1 .alternative ùf usàng machines is not recommende/ as they could do more damage because ofthe generally soft ground upstream of the dam as well as ih the inigable area. The size and

f work dl o not wnrrant the use of machines.nature o

JU 'W - -.-

48

6. 1.6 Road rehabilitation will also be labour intensive. This method is currently beingadopted by UNDP feeder road rehabilitation project in some parts of the country, includingthe EP. Simple hand tools will be used for earthworks involved in the spot improvementsas well as cleaning the road side drains.

Prorram me Benefits and their Distribution

6.2. 1 The programme is basically a poverty alleviation strategy. lt will provide to therural family, in incremental terps 115, 120 tonnes of maize, 428 tonnes of sorghum, 654tonnes of millet 3,018 tonnes of groundnuts, 553 tonnes of rice and many other cropsannually at full development, planned to be attained by year 2002. The incrementalproduction is valued at ZMK 22.01 billion (UA 1.2 million) June 1996 prices. Theprogramme will also invest in the income generating micro projects which will improve onthe welfare of the rural community. Net income from sample of micro project is expectedto range on annual basis from ZMK 25.0 million (UA 0.02 million) at full development.

6.2.2 About 364,285 rural households, affecting 1,092,855 people will directly benefitfrom the program me. Other non-quantifiable benefits will be remlised. For exampleimprovements in the rural access roads, constnlction of livestock quarantine centres, andmarket points will generate considerable economic activities leading to substnntial multipliereffects in the economy.

6.2.3 The M ultipup ose Training Centres will malce a significant contribution to therural community in that apart from the illiteracy campaign, the community will also beexposed to simple management principles on micro projects and proper crop husbandrymethods including animal health and husbandry. W omen will be taught, among others, thescience of nutrition, child care and Home Economics (Annex 9).

6.3 Financial Justification

6.3.1 The Financial Rate of Return is estimated at 29.80 percent. The followingassumptions are made to estimate the ûnancial internal rate of return (F1RR) under thisprogram me:

i) the snancial pdce is the constant market price at farmgate;

ii) the yield for each crop is estimated to increase from 1997 to 2001 steady;

iii) the areas cultivated will increase by 2 per cent up to 1999, and by 5 percent from 2000 up to 2007;

iv) it is expected that the extension services and various assistnnce providedunder this projramme will be targeted primarily towards smallscale farmers;the areas consldered for calculating the expected revenues generated by theprogramme is 25 per cent of the total area under cultivation by a11 farmers(small scale, emerging and commercial farmers) engaged in all agriculturalproduction (sorghum, maize rice, sunflower, millet, tobacco, cotton,soyabe-qn etc.in the EP.

mr

49

v) althoush signitkant financial benefits w.i.l1 be re/ised from the programme,1 '--''''' 'it is not possible to assess the finailèiral im pact attainable from al1 activitiesivolved, specifically new micro-businrss. However, .'farm budget andl icro-business samples shown in Anhçx 11, Tables 3, 4, 5 indicatemlsatisfactory financial status.

lvi) programme costs and benefits are programmed Over 30 years.

I6.3.2 Programmed cash flows prepared for crop and, livestock production show that total

l '/ to zMx 44 699 million Sn 2oo6 (forrevenues will gror from ZMK 6,773.4 million in 199 ,details see Ahne 'x 11).

6.4 Economic Jkstification

l6.4. 1 Zambia is one of the poorest countries i.n Africa. .About .47 Jyr cent of 4he urhàn

lation and 80l per cent of the rural population live below povvrty level. The country ispopu1

a net impotter of food, importing on average 60 per cent of food it consùmes, valued at( ja t in some cases

,ZMK 10.3 billion (UA 57.54 million) annually. Recént studies show t a .ially ln EPl most of the families produce food stlf

,ficieht for only six m onths ofespec

domestic coltsumption. The proposed programme will contljbute significantly in eeasing theseburden. The imljort bill will be reduced by about ZMK 14.62 billion (UA 8.2 inillion)annually net of lmported inputs after the prgjrammé attains full development. Theprogramme will provide an opportunity for the rural family to be self sufficient in foodroduction. As a landlocked country with a high cost ttipiportation system, the programmePprovides an easy window by which the GRZ can improve on its currelti account.

6.4.2 The Economic Rate of Return (ERR) of the pmgramme for the first phase is aboutknnex 12) over a programme lifè of 30 yeazs. Being basicfly a Rural29.90 per cent (l

.

Development Prjgramme, composed of a high content of socîal investment, the rate of returnis considered qujte high. However, this is due to 1pw incremental capital cost reqùired torehabilitate .the civil works. Being a landlocked countryj. th: import parity price is also quite

high. !l6

.4.3 W ith regard to sensitivity analysis, there are only two probabilities which mayl

affect the programme performance:

li) recurrent drouaht w'hich will have downward impact on çrop and livestockI ''-'''' .productivity thus undermining (hç returns from these activities. A! i it analysis show that with ç#.'ç.y,,.@, dzdlipe'of 20 per cent' of focussedsensit v y .'production, the programme remains vlable with an LRR of 23.92 per cent.

Iii) 'an increase in operating cost as, a çonsequence of external factors mayadversely affect the unit cost' of imported itemvs. A sensitivity analysisshows that even with a cost ovçrrun of 20 per cent, the programme remainsviable with an ERR of 28.59 per cçnt..

6.4.4 As shown in para. 6.4.3, the programmç is less sensitive So some likely adverseIoccurrences which may affect its viability.

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6.4.5

50

The principal assumptions employed in the economic analysis are:

i) Benefits: Only incremental benefits arising from incremental costs havebeen considered.

ii) Plices: Import parity price has been assumed for maize while domesticfarmgate prices have been applied for other products. The other productsare insignificant in volume and value to warrant parity pricing.

iii) Value of ZMK: lt is generally accepted that the ZMK is currently tradingfreely in financial markets. Hence no shadow pricing has been applied.

iv) Imbour: Hired labour will be insignificant in the programme since theprogram me is designed to operate within the fram ework of the familylabour. However, where applicable, labour has been priced at the currenton going rates which is considered as a true reflection of their economicvalue.

v) Programme Life: The economic life of the prolramme has been assumedto be 30 years. Replacement of program me equlpment with econom ic lifeshorter than this period has been included. Actual operating andmaintenance costs over the programme life has also been included.Terminal benefits have been ignored.

CONCLUSIONS Ar RECOM M ENDATIONS

IConclusion

17. 1.1 ASIP has a high priority in the development programme of Zambia. It aims at

iating poverty' especially in the rural areas. AS1# will fostrr afl enabling economicallev

environment for p/vate sector development threugh iimprovement on the essential agriculturalices to farmerls, and increasing investment in rural infrastructure: It will also provideserv

t k and combine resources for Z'ambia's public agricultural supporta conducive framewor1serdces. The public expenditure programme for agriculwture will reflect not oply the priority1 but also the shared vision of the .G'RZ and th'e donor community. Thegiven to the sectqr

programme will therefore considerably increase the chahces that adequate funding will beprovided.

7.1.2 Thç programme will enhance the effectiveness of public sector management byreplacing lhore than 180 separate project units in the agricultural publlc çxpenditurelprogramme with a single operation, managed by Zambians. M ost important is that the ASIPwill focus on the smallholders, women farmers and tht yoùth, the groups with substnntialuntapped growth potential. By targeting research, extension selvices and creating anenablingenvironment to boost private sector initiative, to benefitt' sm allholders and wom en farmers,

lthe ASIP will rrmove the constraints faced by them and help improve smallholderproductivity, leading to increase in income and welfare.

l7.1.3 The ADF assisted portion of ASIP emphasijes poverty alleviation as a major goal.It is technically I feasible, economically justifiable, ' gnd finaricially sustai' nable. lt isformulated withi 'n the framework of GRZ policy and féils within the Refurm Programme'

ilateral institutions. The ASIPbeing actively pujsued by the GRZ with support frbm the m'ultis also supported by most of the donor commtlnity accredited to Zambia, and is in line with

IADF V11 development strategy

.IRecommendations

l7.2.1 lt is therefore recommended that a loan not exceeding UA 15.00 million be

I ' 'granted frc'ln ADF Resources to the Government of the ltetpgblic of Zambia for the purpose

. 1

of implementihg the programme as described in this report, subject to the following particularconditions:

Conditions of Entry into Force

lA . Prior to entry into force, the Borrower shall have:

li) completed the restructuring of the Ministry of Agricultum, Food and

Fisheries, to the satisfaction of the Fund and pm icipating donors (para5.1.1),-

ii) concluded an agreement for on-le.ding fund. s with a duly rejisteredfinancial institution, acceptàble tö fh' : Fund, which shall adminlster therural credit programme. The draft agreement shall be submitted forthe prior approval of the Fund.

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iii) completed an agreement, acceptable to the Fund, with the participatingN GOs and the selected financial institution on the mechanism ofoperating/managing the rural credit schem e;

B. Other Conditions

The Borrower shall:

i) hold regular consultations with donors including thc Bank with a viewto reaching agreement before the end of each financial year on thefollowing year's public investment in the agricultural sector (para.5.6.5).

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')

ANNEF 3Z A M B I A

AGRICULTURAL SECTOR INVESTMENT PROGRAMME

W e-ASIP Study of the Stmtus of Smallholder Farming andAgricultural Services in EP, SP and NW P of Zam bia

The M ain Features of Zam bia's Agro-ecological Zones

Source: Compiled from A.Bunyolo, B.chirwa and M .M uchinda's *Agro-ecologicaland Climatic Conditions'' in Stephen W. Muliokela (ed). 1995

Zmmbia Seed Technology Hnntlbook . .

. Average Rainfall by Agro-ecolDgicas Zones (mm)

Year ' Zqne I Zone 11 Znnr I1I

1987/D 792.2 693.3 963.0

' 1983/84 398.4 623.2 . 1 3 16.4

1984/85 660.4 8 12.6 1223.8

198546 522.3 1044.4 1358.5

1986/87 574.4 652.9 84 1 .4

1987/88 725.7 584.6 965.4

1988/89 639.2 1 164.7 1222.7

1989/90 654.3 837.5 1 l 39.2

1990/91 699.5 l 033.9 l 057.7

199192 575.5 6 15.3 97 1 .5

199H 3 549.1 8 l0.t E l 7.QSoume: Mdereological Depnrenaent.

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c.*XxChccUN%=9u

AN N E X : 4TABLE : 1

M MBIAAGRICULTUM L SECTOR INVESTMENT PROGG MME

LIST OF GOODS AND SERVICES

ZKW MillionQUANTITY UNIT TOTAL

d::l d::l lh/l 1:). 1::) 1hk1 IEC IIkI -l- 16; I.ZI 18$1 I rl- J?f?f?i?J)J?f?Jé3?ë?6?ig3?8?f@i#siJgfé6@ii.i:éEi2if?8?8)E)siTgs?s?f@Jf6iE?f.:2:sëf@féf:s'f@:?F?JE3?i)T?!@iéiif?ffJ@T)J?6éf@:gf?féJ?!JigJ6!?FéE?!éC?iii?3gfi5@fgFifiié9?ijJ?fgi?6éf?F#1997 1998 1999 2000 TOTAL COST COST

A. AGRIC L lRA DE ELOPMENT

- 00 EGU S -* Reaserch activities LS 1.O 1 .0 1.0 1 .0 4.0 1 .0Q 4.00

- On-farm trials 4X9 districts Nb 36.0 36.0 36.0 36.0 144.0 3.00 432.00

O- Lab. & scient. e ui t and research mat. & books LS 1.0 1.0 59.00 59.00- Establishment of Produdion units LS 1.0 1.0 3.00 3.00

O 0.0- Trador 75 HP N* 1.0 1.0 40.00 40.00- Motor cIe N@ 4.0 4.0 8.00 32.00

8.2. EXTENSION- .N

- Demomeld da s/distrid N* 450.0 450.0 450.0 450.0 1 800.0 5.00 9 0QQ.0Q- Estabiishment fodder bank/distrid N* 45.0 45.0 45.0 45.0 180.0 2.00 360.00- Establishment wood kees/district N* 81 .0 81 .0 81 .0 81 .0 324.0 2.00 648.00

- N* 9.0 9.û 50.00 459.005 N* 9.0 9.0 40.00 360.00

2.4. FOUR-WHEEQS DRIVE 4X4 N* 18.Q 18.0 40.00 720.00NT & STATIONARY N* 9.0 9.Q 9.0 9.0 36.0 10.0Q 360.00

6. MULTIP-URPOSE TRAINING CENTER- Household e ui ment N* 9.O 9.0 20.00 180.00- Cam in e ui ment N* 9.0 9.Q 5.00 45.01- Communication radio set N* 9.0 9.0 6.50 .68.50- W alkie-Talkie I distrid N* 10.0 10.0 5.00 50.00

.2.7. CHIPATA HEADQUATERS- Vehicles 4X4 N* 2.0 2.0 50.00 100.00- Truck 30 T N* 1.0 1.0 90.00 90.00- Minibus N* 1.Q 1.0 50.00 60.00E ui ment and Stl lies* Production of teachin materials LS 1.O 1.0 1.0 1.Q 4.0 5.00 20.00

RECURRENT COSTS 3Q% of vehicles LS 1 .0 1.0 1.0 3.0 72.00 216.000.0

- Seed multi lication N* 9.0 9.0 9.0 9.0 36.0 3.00 108.90- Pest control N* 9.0 9.0 9.0 9.0 36.0 5.00 180.0Q- Fruit nurseries / disbid N* 45.0 45.0 45.0 45.0 18Q.0 2.00 360.00

OTA 13 925. 0

AN N E X : 4TABLE : 2

M MBIAAGRICULTUM L SECTOR INVESTMENT PROGM MME

LIST OF GOOD: AND SERVICES

. . z6'T MillionI QUANTITY UNIT IOTAL't2;) t::l 11/1 l:l t::h 1'$1 IEE I$kl -17 :El I.;, lh$l l -l- tiitr..(tiEE.ki. ic'i).là. sjlliE.i-iijtkï)- .j#sè8t7. :.:i.i.E1.E:(. ît. iq$à6E,i)Eà3f.kë. i:.i!s.i3i.!$F. !.F!.EjsE.?!.5E.:Ejtsji;j.â9èiè.i!.2;.iF!5E.s)ië:z.. tEg2!.iE.?.is)EE.F)iE.s;.k..:. i(!ài@2jsE.E@J@5s.iIi):..!.l .

,.1s9'? 1:9.98 19aa 2.0.:: TorrAlw .cos'r . c osT

4 TRAINING I ' '' e ' . ' ' . '

- Starf trainin l n.'0'. ' 0.00- Shbrt term cburses N* ' ' ' 3 3 3 3 . 12.0 7.Q,: . 84.09* Di Ioma couises ' 'N* 3 ' ' 2 ' 2 . 2 9.Q - 4.60 41.44* Mobile (mursks for livestock M sistants ' N* 60 60 60 '60 24D.0 : 0.507 1 20:0..9. . . q .

* Stud tours l N* 1 . 1 ' 2.0 3Q:()' Q' ' 60.09*.ln-servic: trdinin 4 courses/ r/6 districts N@ 24 24 '24 24 96.0 1i@0' ' .' ,96.00

; . .e . . .

- Farmérs Trainih' , 7 - ' ' () 00* 'Farmers/Womeh & Youth mobile course Cpurse ' .13'.0 13.Q 13.Q ' ' 11:. ' - 62.0 ' 3tDU.' 1.5620i ' ' 1 ** Farmer/Wxomev & Youth residential course -

'Cdtirse 7.0 7.O 7.D. 7.O 28.û . 2.0.0, 1 l.; 56.00'# Farmer/lomet & Youth tours inter district Course 10. .0 10.0 10:0 10.0 40 .0 '' 3.00', ; .i . 120.00* FarmerM omet &. Youth tours inter rovincial Course 2.0 ' '' 2-'0 ' 2.0 ' 2.0' 8.Q 4.-00' ' 9-2.00

- Staff Trainin 1 N* . ' p 0.0 .* Sholt term cb. urses . M4rl/ ear ' ' 9.0 9.Q 9.Q 274. 7.U0- 189.90

* Di loma couryès - Ndistrid Map/ ear '' 9.O ' 9.0 9.0: :7.0 5.00 ' .135,.00* ln-service train.in LS 1*.0. 1 .0 '' 1 .Q 1 .0 4.Q 3.00' , 12..00

- Local'jrairîin l ' ' ' - . 0.0 : '* Distrjd stàff 1 (week for 9 distrids Week. ' ' IO#..Q. i ' 138.0. 108.0 ' 198.0 ' 43 7:0 .- ' 1 .5O 6:8.00* Cprr? ïstaff 2 Weeks for 9 districts ' Weèk' 1'Q8.O. 108.0 4 'U'8.0 10Qs0 412.1 '. 3c.'oo' 4'a2.V. 6-û0.* S.taff tours for 9 districts Jinter rovince N* ' 45.Q'' ' 45.0' 45.0: 45.0 . ' 1%Q,Q '' . 4.'s0' 0! 729,99

z ' '

. .' : ' ' ' ' 21 kl ..- Tech. nical kainin' Man. qar 1 .0 '. 1.O 1 .0 3.0 '-' 3.0Q' 9.00

' u QAD-QUATERS .. - Di . ltime trainin 1 Ma& eir. 2.Q 1 .Q 1.5Q 4.60

- Residèntiàl,coufses . ' . ' '' '' ' ' '. :' $$* Farm mbna elbent aimont 3.Q '' 3.O 3.9 3.0 - 12.'1 : '.. 2.5Q-. r ' 3690* Cro- ' rbductidn a:/mont 3.9 ' ' . *3..0 3.Q 3.Q 4 kk.'Q' '.) . x' 2.@7. ? 74.00. r . ' ' e ' ' ' '' ' '. . ' ' '' . '.'J :' 'Mprithl

. workiho 3 da s each .Mgn/d.à . 1.84 1 8.0. 1 8.0 .. 1 8.Q 72.9. . 3 .QQ' F- 21.$,9 9* Demonstratio?i nutrition rocessin d da s each Man/da .24.0 24.0 24.0 24.0 96..0 . ... 1-.57 ;. ' ' . 1##.00* Demonstratioti cro' multi Iication 5ha N* 1 .0 . 1,.0 ' ' '5,O-Q' ' 6.00

. .p g v ' ' ... R'ou rs l . .* lntet- roviniciél tours Ne . 2.0'. 2.0 2.0 ' 7:0 . 8.0 ' 42$.0 32.0. 9 2 '* Joint extensio: and research tours N* 2.0! '-' 2,O . . 2.0: 2.,e-, ' ' . .- .

.*:; . M'.DD' 37.00. ': .I TOTAL ' ' ' ' = ' * ' ' 4 261 9*01

YAN N E X : 4TABLE : 3

M MBIAAGRICULTURAL SECTOR INVESTMENT PROGRAMME

LIST OF GOODS AND SERVICES

zim MillionI QUANTITY UNIT TOTAL

I::I (::1 18/1 1:1 (::h ISkI !E2 14k1 -I* 1E; 1..1 l$k1 I -l7 !è!iEi2iEi!(Ei!iiè2!1iiiE(Ei!@E(Eiièi!2iiii!E!EiEi!i!i?(E!!iE(E@E@!(iè!(EiE:.E:.ii:('(iiEië!iiE!Ei!!!iEq!'.(iE@!é!!ii!i!i!qEii(!iE@Eii@iiE(:(!@!@2((!!iE(2iq(ii!iEi!@!à!!E@iiE(EiiiièE(1997 1998 1999 2000 TOTAL COST COST

C EVELOPMQNI

- East Coast Fever lmmunization Pro ramme Calves 1000 7500 7500 75C0 7500 30 000.0 0.0079 236.55- Tsetse and anosomiasis 0.0 0.00e Tar et technolo 1x5 distficts N* 1 .5 1 2.5 64.45 1 61.13* Communication 1x5 diGtricts N* 3 2 6.0 7.50 37.60* Cam in e ui ment lx diskids N* 3 2 6.Q 5.1% 25.00* Carto ra h e ui ment rovince N* 1 1.0 34.98 34.98* Trans od and fuel 1x5 distrids N* 1.5 1 2.5 170.86 427.15* T anosomiasis sam lin 1x5 districts N* 3 2 6.0 19.95 99.75* Staff Alloo nces 1x5 districts N* 5 5 5 5 20.0 12.00 240.00% Cam in E ui ment Province N* 1 1.0 5.00 6.00* Alowances Province N* 1 1 1 1 4.0 6.00 24.00* Fuels and lubricants Province N* 1 1 1 1 4.0 7.40 29.60* T anocides

- Samorin K 2 2 2 2 8.0 6.50 62.00* Befenil box of 1,000 each salchet 40 40 40 40 160.0 0.60 96.00

- Solar Powered frid es - cold chain N* 15 15 30.0 4.00 120.00- Laboratories rehabilittion and e ui ment N* 4 4.0 10.00 4Q.00- Moat ins edion - est modem kits N* 14 14.0 2.00 28.09

ESTOCK EXTENSION- Trans ort* 4x4 W heel Driva N* 2 2.0 45.00 90.00* Motor c cles N* 26 26.0 8.00 208.03* Minibus N* 1 1.0 50.00 50.90* 71 truck N* 1 1.0 40.00 40.00

RECURRENT COSTS LS 1 1 1 3.0 116.40 349.20- Farmer Trainin* Residential courses N* 12 12 12 12 48.0 0.50 24.00* Animal Draft Power N* 12 12 12 12 48.0 0.50 24.00* Pasture seed . ton 0.45 0.45 0.45 0.45 1.8 2.00 3.60

B3. ARTIFICIAL INSEMINATION SERVICE-KATETE 0.0- Cattle trucks N* 1 1.0 60.00 80.00- Paddockin ha 20O 2O0 400.0 0.50 200.00- 75HP tractor and trailor N* 1 1.0 45.00 45.10

0.0- Market centers N@ 3 2 5.0 10.00 60.00- Quarantine stations N* 3 2 6.0 20.00 100.00- Animal trucks N* 3 3.0 e0.00 . 249.00- Crush ens & Handlin ards N* 2O0 200 80 480.0 1.00 480.00 '

B5. DAIRY GOATS 0.0- Female N* 15 15 30.0 0.20 6.00- Male N* 3 3 6.0 0.60 3.60 '- lnfrastructure N* 3 3 6.0 2.OU ' . 12.00 ,'- Maintenance LS 0.5 0.5 0.5 0.5 2.0 4.32 '8.64 '- Stud Tours N* 1 1 2.0 30.00 60.00

B6. DAC MEETINGS N* 648 648 648 648 2 592.0 0.1Q 259.20TOTAL 3 989.90

AN NE X '. 4TABLE : 4

M MBIAAGRICULTUM L SECTOR INVESTMENT PROGM MME

LIST OF GODDS AND SERM CES

ZKW Million' ' - 9T/ANJJIY UNIT . TOTAL

4::2 1::1 lQ 1:' (:21 lî$I !E2 IFSI -l- 1E; 1u.I 1$k1 l -17' i@5i.$!.1Ei.:EiJEi2CE.iE$. kiIEj;'IZgEIiS;, j1(i!ëi.!E!EEjèEEiE!iEhEE?2, Ei2!E6:!:55!è6ëtE(LiiiE(ti9i:!.t.Fjii@è(2èiéi@i(ij!i.!@5!ilE,Eè@i(i2i!2(>!:.!(j. Tt7-h.liiiiiit)(' qi.E!!@E!.E!fï1.997.' 1,:98 1999 ' . 2000 , TOTAL COST COST

C ' U C TIU R' E ' ' ' . -G l ' '

- Extensiop StafftHousin ' . ' 0.0 '* Rehabilitatiön ' . ,: 0.0;

. 2j j . . j j 4..: . z .()c y.g;- Hi h cost house N , . .- Medium coit house N* 3 .' J 4 . 4 4 1 5.0 ' 1 .50 22.50- Low.cost hobse N* 35 , 74 74 74 257.0 ' 1 .00a' ' 257.00;

. , ) 4, (jtj- Multi ur osv farmers trainin center N J .. ' 2 2 2 7.9. 20.0Q 1 .* New conétrti' ction ' ' .'.. 0.0 ' . '- Hi h cost h4use 0.0 23.00 0.09

. ' : . ' '- Med.igm coït hnuse N 1 2 3 2 8.0 . 2..2.90 1 76.00.:

. . , '- LoW cost house N ..,, 9 10 10 1Q 3.9.0 1O.QD .790.00> Multi ur osb. farmers trainin center N* 1. ' 1.Q 34V.00' ' ' 380.00- Cam Qm. cel N* . 35' 70 70 71 246.0 3.20 787.20

- Livestock Staffli-lousin ' ' ' ' ' ' ' '.* Rebâbilitatiin . . .- Hi ' h cost hôuse N* '''1 1 ' 1 1 4.0. r 2.00 8.00- Medi.um cos) house N* 3 4 4 5 16.0' 1 ,50 24.00'.... LoW c/st hoi.lse N* . 2 0.0 0.50, 0.U0* New constrtiction ' ' ' ..- Low cost hobse N@ 36 60 60 60 216.0: 10.0: 2,160.00

- Kato o1a Livestock Unit 0k0 i- Poult I Lot 4' 4 8.0 , 0..15. 1.20- Pi p . unitd Lot 1 1 .0 4.0. .0 ' 4.00 .:- Fencin 1 Lot i .1.. 1.0 :.00 2.00- Submersiblé um Lot ' 1 . ' 1.0 ' 6,.0. 0 6.01- Securi li Ntin Lot 1. . 4.0 2.U0 2.00

- Sanitatipn elairk . - '* Extepsion sdlvices staff N* 36 36 36 37 . 146.0 ' 1.20 174.00* ; . .Livestock services staff N 54 54 ' 54 54 2162 . .. 1..20 . 269.20

CZ.ROADS' IMPROVEMENT '' '- Farm acce>s rdads Krh 50 .' - 50 50 5U ' . Q002' 4 Q6)' 800.00- Culverts I N* . ' . 1O: ' . . 1 0.0 Q.1'7 1 .71 -

C3. RECURRENTS COSTS LS 1 1 1 1 4.0. . 27.13 108.50 'l YOTAL 5 711.31'

.> :1

X 'j-; '

ANNEX : 4TABLE : 6

M MBIAAGRICULTUM L SECTOR INVESTMFNT PROGM MME

LIST OF GOODS AND SERMCES

zsm MillionQUANTITY UNIT TOTAL

COMPONENTS UNIT :EEiii!ièiiiEà:i!'EiiiEiEiEiEiEiEiElEi:i!(E:E@EEi4'@:i!:':èE@ElEëEë!(:èE(7ii(1@!@EliECEiEëE)Ei@:ëiàiii(!qEti@ElE)ëii!ièiéi!Ei!):ëi(E:E@EàEiiàEi!iEiiiEàE)!@:(i@!i:(!!iàë!!èEiE@!!E(1997 1998 1999 2000 TOTAL COST COST

D. RURAL F' INANCED1. RURAL INVESTMENT FUNDS 0.0

- Stora e latforms N* 43 214 257.0 0.66 169.62- Di tanks N* 0.0 0.00* New construction N* 8 8.0 3.50 28.00* Rehabilitation N* 40 40 20 100.0 2.00 200.00

- Irri ation facilities N* 9 9.0 2.00 18.00- Access roads N* 1O0 100 10O 1C0 400.0 4.00 1,600.00- Markets N* 2 3 4 9.0 30.00 270.00- Soil conservation Schemes LS 36 36 36 36 144.0 4.00 576.00- Processin facilities N* 0.0 . 0.00* Hammer mills N* 3 9 9 6 27.0 0.30 8.10* Oi1 ex elleo N* 3 9 9 6 27.0 0.30 8.10* Groundnuts shellers N* 6 12 12 6 36.0 0.50 18.00

S B- OTA 2 89 .82

- Cro roduction* ln uts LS 1 1.0 .000.00 8 00Q.00* Materials N* 2 9 9 18 38.0 4.00 152.00* E ui menl N* 2 9 9 18 38.9 3.0Q 114.00

- Ve etable ardenin N* 50 100 1C)G 100 350.: 0.30 105.00- lrri ation Farmin N* 27 36 72 72 207.0 1.20 248.40- Poult N* 23 23 23 23 92.9 0.35 32.20- Fish onds N* 23 42 42 60 167.0 0.52 86.'84- Sisal and Citrus roduction - N* 3 9 9 9 39.0 2.20 66.00- Car enters worksho s N* 6 18 27 27 78.0 0.35 27.30- Blacksmith worksho s N* 6 18 27 27 78.0 0.35 27.30- Handicraft N* 6 18 27 27 78.0 0.25 19.50- Animal drau ht ower hirin N* 6 18 18 29 71.0 0.70 49.79* Dai oats N* 18 27 27 27 99.0 0.50 ' 49.50

s B-AOTA cmEDI-- 8 977TOTAL RURAL FINANCE '11 873.56

II

A N N E X : 4TABLE : 6

ZAMBIAAGRICULTURAL SECTOR INVESTMENT PROGRA MME

LIST OF GOODS AND SERM CES

, zKw MîjlionQMANTITY UNIT TOTAL

4::2 4::) 18/1 I:I 4::) 1$k1 iEl 1$k1 -I- t!i 1.;1 1îk1 I -r El!q.ii!iêièiE.1:.t't')èE1.ElFiiEi:(q7. l.?lillpidiiEëiiiiiiiiilllliiiiiEilillëëEq t!@E@E@!!!)àil!i(l!i!èEi:)!ii!:!;(ii@:(2(ièE@Ei! riEitqiiiilitltlll:ièllèlEèiiii:iiiElElzllà- 1997 . 1998 1 999 200Q TOTAL CIST COST

f. TQ-CHNICAL ASSISTANC: ' 'E1. EXTERNAL AUDIT

- Fees I LS 1 1 1 1 4.0 ' ' 156.25 625.00E2. CREDIT CONSULTANCY . .

- Fees l Man/ ear 0.5 1 1 Q.5 3.0 47.00 141.Q0E3.. ENVIRONMENT ' :

- Erwironmentaliét National Prntection Council Man/Mont ' 1.5 ' 1.5 1 .5 1 .5 6.0 0.0035 0.02E4. WOMEN IN DEVELOPMENT ' ' .

- Curricula Develb. ment ex ert an/mont ' p.' . 3.0 . 0.0024 0.Q1- Field Follow-u 1 an/mont 2 2 2 . 2 8.0 0.0015 0.01

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< W & id Y K / Y W W 6 6 4 6 06 6 d G ild o 6 d d W- 6 6Q d d o d i - il .& O œ % O N O X m o œ r m œ N œ X r m œ o œ c N R O X N N o x œ r r r oo V m œ o O œ % O> & r > WN X XX v r D œ R X* &' *

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w n d i d b 6 b m œ m = 6 & d d bb b l b d d d d 6 Y m'6 % Nœ b d d i c d oM co œ D O & p- (N AT (N œ % % m v' C v' % >'O r' X r' o r' P- * %- R eU x- rq rq .

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. V O V x - o m œ D x m r c m œ D V A A & c A m O O % O v C X X G O œ OX V œ W D A V O N D = = m œ N q œ m mœ œ

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o o o o o o c o N œ o o o o o o o o c & & & D & D c & O e V & & o D % % Xo.o o o o oo œ q q o qq o q o q qq to qq o q o o x m N q o o o q Rq< v i d d d di & N d o- d o d o oo od o od œ & i i œ - - G d& m m*o o G v = m œ o N œ o m . a v mo v vmr < v m r œ r - œ r aO

& & & & & (D o > * o c & & D & & & & & & & & & & & c D O P1 m CD c D o X O r'& Q) D & & D % % N % c (D v o D D o c & & & & & (D & (N R R v: q >. D D 1: % q Ro n d m' d d d dv - -m d i& d d d b dd d d 6 dd d < N œ > % & d < m N - *o M (N (N rp D u7 v- F) o O m O (N P1 r' Vo < m (% X

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o o o o o o o o œ m o o o o o o o o o o o = C D o o o o o œ o o o o v x Wo.o o o o o q ë / n t q q o t qg q o o o o o Q Q Q Q R NQ q t o o o o œ< v d d d d d o - - m o o - d oo o o d d d d 6 o œ - m o œm N * d & - & Go o a o m m * m N œ x v o a v m œ r o or < e œ - œ r e V R GO

N P1 (9

D C7 o O CD c o v' * m O & & & & & & C7 & c c & & & & & c O * P- O & & D X O Y*o œ D & & & % R >: R & & V D CD c c c CD D & C & & & (N R V1 R % U- c & P: q q Rm n d =' 6 6 d 6 v < * e 6 d & d ù 6 d d d d 6 d 6 d 6 < - m œ = & 6 < * m > oA v. œ > O r = & & D o % W X r %* % œ œ -

& & & & & & o W X m & & D D c & & D & & & & & & & * & 0 * * D & & & œ œ eO V & D & & % e > W D D c c & & c o c & & c & c & * V O œ O X O O O W X V=M d d l d '- 'm *0 *- d& i d d dd d d d d d 6 d d + G G d '* +3 8 *- '* 'o &

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< > * d d 6 d li >. G & d d e4 o d 6 o o o o o 6 d 6 Y f: m œ m *- >. m o P1 v' O œo o v' F) m A œ m 1- œ * * Nr r/ % m œ e (N m* e v- - (H v œ v- F) P1 v' v'O -P1 e4 DW

OO & & c o c c o - >' = (D c) c7 o o (D c & & & & & o c7 o (D o eh o t* & & & o X * (>

& (o o c c o tq R @! q o cp v o & c & CD c (D o c c (D o (N (R u! >: (R >. & c >: q œ N* d =' d d d dv v oo d i& d d d d bd d d d d6 dV - œ o œ & 6 < m a ZvAQ a - o * m& o o œ o a - %* v œ v -e

O & 0 o o o o o - œ o o o o o o o o o c o o o c o o o o o w w c o o o œ œ -O o v o o o o v - m v o o œ o o o o D o o o o c c c c v o m m n o o o - m vX =.d d d d b < 'œ d & d ld d d d d 6 6 6 6 d d d d * '= '- '> 4 + 6 6 & Z 4 'œ

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o e (S (M (N r % F) >. v* R lX F) C: O r' r':4 % M)

C & & CD & c & m P. œ D C) c c c CD & & & c c CD CD C7 CD & D * e * & & c & X œ Oo œ D D & c % q M q D D % & co o o o c c D c o D c s n q N N DC N R E Q>. c; =' ui d c; d >. *- % o d (6 & d d 6 d ui c; c; c; d d d d 6 to = v- to oi 6 & eh o1 % tpo Q eq (M e: qa m fn xr xr e) = œ eq rq e:o xr = œ

r

& & & & O & c œ œ W c c & c & & & & & & & c c & & O D œ œ R O & & & œ X XD V K N & &q q R q Dc e & & & & c & X & c & & & O E % N h X cc o q Rr='d & & d &œ œ o v d& 6 6 6 d 6 6 6 66 b 6 6 d d m o - o V l d m m œ o

. * r V F) r' r' R V c >. CS tD (D (N C) (9 V uD r & G1 c m C3 D * CN V i) O VW W X v' &' (9 lw ** v- e W P1 œ v* **** % %

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.â % > K = a: w- 's c; -. ua * .0 @) K w m o g K tut) @) t; 'y a. >- œ u. x (u M 'd 'B .R g? = < = c o #- o u. w = .ï i- o u..e? = :r z t5 o = q) o % < x fZ = o z c = ofe ro 1: *' / o E : p u 1 s. x s. = =* t) K s o o ;o r .s .* E to .* o j- z :p , .c m z o o s. s. :0 .'o k? s y-e j: = >- o s. u F- @) 13 = = o F7 < ca o $ i- u o c = y- (J x m* i

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Mg - *v' % %

& & & D & & & & & & & c CD & & & c ' t) C7 D' &! (Q: c & & '& 'o & o oW ' C & Nr c c c & (D & & & c c D D & & & c ' (D C.' & c D ' .c & % o % *X u d + =' t6 6 ai c; ci d 6 t6 c; d c5 cb d 6 c; c; 6 d c; d 6 d ci vi c; G ti*

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a & v c r œ m c & m v Y a ' D m m v O & œ m oY = v m c m < .a m * m %

m . 'D %

o & o o o o o o o o & o o o o 'o' o; : 'o. o . o o4 o' o .0 o' o o ,0 tp *(R G! 04 o o Q? C! <? CR ct 6R Q? Q? C? G! CR O : SY QR V! S1 Ct *' D $R CR >: o N1 r:< ol v. Z d c; % o e) v o ce e) kn (n eq % 6 o' o pu. =, v œ c; = cp +. c; .- e)ol o rq e) v- (9 tp v œ ol * c, i.' ko c) s. œ o

v D v ' o a OO

*1 o o o (D & & o (D & CD & & c) c b (D c7 ' & G &'2 d7 c) e (D & o o œ œDI' cp (N D o o c) c) & c c & & (D D o .0 ' c c7 ) c' cy ci D c cô (D q q =t qo n dl J cf + d & d d d d + (S cf d c; d c; ci c; ci to (9 d cs c c; ta o * xro M I ' (N (N m v' ' ' ' r = % f9o .u I . v'(N .

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*

ANNEX 68Page 1

ZAM BIA

AGRICULTURAL SECTOR JN-VESTM ENT PROGRAM ME

Critical Targets for the lmplementation of Activities

A. PROJECT YEAR 1 (1997)

i) Research

Four (4) on-farms tdals will be established in each district, diploma course for onetechnical staff will be undertmken; one tractor (75 hp) and 4 motorcycles will beprocured; production unit will be established, scientifk equipment and supplies for theplant pathology and entomology laboratories will be procured. The research librarywill be equipped with scientisc books. The first tranche of funds for researchactivities will be disbursed.

Chipata Agric. Headquarters: 3 farm management and 3 crop production residentialcourses will be undertnken; 2 extension and research workshop conducted; 12workshops conducted; 12 sessions of demonstration on nutdtion processing will beconducted, one crop multiplication unit of 5 ha will be established; 2 inter-provincialstudy tours organised and 2 joint extension/research tours to farmers' Keldsundertaken. One minibus, one truck and 2, 4x4 wheel drive will be procured.

ii) Extension

A11 farmer women and youth training will commence. 10 mobile and 10 residentifcourses will be conducted per distdct per year; 10 inter-district and 2 provincial studytours per district will be organised; 12 one week refresher courses for DAOs will be

conducted per year ger distdct and 24 z-week refresher courses per district per yearwill be organised; 5 mter-province study tours will be organised for BEOs and CEOSper district. About 3,750 farmers, 15 women groups and 5 youth groups will betrained; 450 demonstration and Seld days organised, 5 fodder banks established perdistrict, 9 multipurpose tree nursedes established per district; 1 tractor and trailer perdistdct procured; 2 4x4 wheel drive per distdct prpcured; household equipment forthe multipurpose training center procured; 1 set of camping equipment, 1communication radio sets and 10 walkie talkies per district procured.

iii) Crop Development

1 see.d multiplication unit and 5 fruit nurseries will be established per distdct.

B.

ANNEX 68Page 2 of 5

iv) Livestock Development(Apart from procurement of equipment, vehicles, m otorcycles and m achine, no activityl

will be completed during PYI. Howevet, construetion of market centres, quarantineions, J rush pens and handling yards, paddocldng at the Katete Artificialstat

' C tre rehabilitation of laboratoriesy' and purchase of dairy goodà willInsemination en ,1

in PYI. Activities relating to di/ease control (East Coast Fever), pasturecommencqseed and Animal Production Extension services will commence in PY 1 ar!d continueithroughout implementatlon period.

lv) Jnfrastnlcture'

jTen (10) pipe culverts will be constructed, including 200 km of access roads.1

'b her infrastructure façilities willConstrjuction and rehabilitation of buildipgs, aùd talso c 'ommence in 1997 and continue throughout implementation period.

lvi) Rural Finance

About 10 women's groups and a further 5 other groups will be constituted tobenefit from RIF and Credit facilities.

lPROJECTI YEAR 2 (1998)

j 'i) Four (4) on-farms trifs will be established in' each tistrict; diploma course forone t jchnical staff will be undertnkeni' produotion unit will be' established, 3

; h staff will commence short term trainin'g in food and legume agronomy,researçanimal production and agro-forestq . The iecond tranche of funds för research1activitles will be disbursed.

lii) ExtensionNot less than 10 mobile and 10 residentiz cotïrses will bé conducted per districtI '

per year; 10 inter-district and 2 provincial study touts per disthcj will be1 bAos will be organised per yearorganised; 12 one week refreshçr courses for.dilstrict and 24 z-week refresher course; per d'fstrict per ye-qr will beperl ' 5 inter-proviuce study tours will be ùrgrised for BEOs and CEOs pe#organijed, .

districy. About 3,750 farmers, 15 women gtoups and 5 youthl troups Will bet50 demonstration and feld days org.ato ised 5 fodder balik established pertrained; ,

Idistrict and 9 multipurpose tree nurseries estib lished per district.l

iii) Crop Developmentl

A total of 5 fruit nurseries will be established p er district.

i

*

. . - . .vtF ç

# ANNEX 68Page 3 of 5

iv) Livestock Development

5 market centres and 5 quarantine stations constructed in Chadiza, Chipata,Lundazi, Katete and Petauke, 480 crush pens established and 8O0 ha paddockedat the Katete Artificial Insemination Station.

v) Infrastructure

Rehabilitation of Katopola Livestock unit completed. 40 km of access roads(cumulative completed). Constnlction of fish ponds, and buildings in progress.

vi) Rural Finance

Cumulatively 70 women's groups will be in place and a further other 20 willbenefit from RIF and Credit facilities. Not less than 137 micro projects will havebeen established a1l over EP.

C. PROJECT YEAR 3 (1999)

i) Training

Not less th% 12 staff will be trained up to diploma level. A further two staff willbe trained in short-term courses in various related disciplines.

ii) Research

Four on-farms trials will be established in each distdct, a production unit will beestablished. Third tranche of funds for research activities released.

iii) Extension

10 mobile and 10 residential courses will be conducted per distzict 10 inter-district

and 2 provincial study tours per distdct will be orjnnised; 12 one week refreshercourses for DAOs will be organised per yemr per dlstdct and 24, z-week refreshercourses per district per yenr will be organised; 5 inter-province study tours willbe organised for BEOs and CEOs per distdct. About 1,150 farmers, 15 womengroups and 5 youth groups trnined; 450 demonstration and field days organised,5 fodder bank established per district and 9 multipup ose t1'ee nurseries establishedper district.

iv) Crop Development

5 fruit nurseries will be established per district.

D .

ANN EX 68Page 4 of 5

v) Liveslock Development

lDisease control measures, pasture seed development and Animal production

iles in progress.servl

vi) Infrastnlcture!C

onstruction and rehabilitation of buildincs in progress', 68 new buildingsI - .constructed and 86 houses rehabilitated. A further 160 km of access roadslconstructed/rehabilitated 48 fish ponds constructed.

vii) Rural Finance

Cumulatively 70 women's groups will have been constituted, managing not less1450 mlcro projects. A further 45 othir groups will also be constitutedthanl

'

ri te entrepreneurs will havefunnigg also 45 micro projects. Not less th'a: 81 p vabene 'ltted from rural credit to finance lpicro projects. Not less than 2,400. smallscale subsistence farmers will have obtained credit to finance farming operations.

PROJECT YEAR 4 (2000)

i) Training

Cumulatively, 42 staff will have been trained to diploma level and 22 staff trained1in short-term courses.

Iii) ResearchYear 4

(4 onrfarms trials will be established in each district, production unit will beestablished. animal production and acro-forestry onvgoing. The third tranche of

l * 'i'i'

d

'- .

funds for research activities will be disbùrsed .

1iii) Extension

l bile and lo residential courses win be conducted per district yer yeor; 1010 moldistrict and 2 provincial stud. y iours per dijtrict will be organlzed; 12 oneinterI .

week refresher courses for DAOs will be organised per year per district and 24l : i1l be organised; 5 inter-provincez-week refresher courses jer district per yemr w

studyt tours will be organlsed for BEOs gnd' CEOS per .district. About 3,750farm 'ers, 15 women groups and 5 youth groùps trained; 450 demonstration and

Seld ldays organised, 5 fodder banks established per distdct and 9 Multipurposetree 'nurseries established per district.

* 7N

M .

# ANNEX 68Page 5 of 5

iv) Crop Development

Five fruit nurseries established in each district.

Livestock Development

60,000 calves, immunised, 4 laboratoriesavailable annually.

reequipped, 1,800 kg pasture se.e.d

vi) lnfrastructure

A1l infrastructure worlcs completed. Details obtainable in M nex 7C.

vii) Rural Finance

Not less tI:M 255 wonlen's groups operational. Other groups will not be less than90. Not less t14% 137 micro-projects fnanced from RIF and/or Rural Credit.About 3,200 farmers benefitting from farm credit.

#-

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ANNEX 78

ZAM BIA

AGRICULTURAL SECTOR INVESTM ENT PROGRAM M ETECHNICAL ANALYSIS

B: CROPS

Cttltural Practices for Crop and Fnlit Tree Production

( . 'A1 Crbp production is generally affected by soil.infertility and degradation as well

l ( bsistence farmers withas insufficient rainfall. M ost of the farmers in the oroiec. àrea are su .1 .'%' -'' '-1ow production lqvels as a result of inadequate input and poor crop lhanagement

. The useof fertilizer is on 1ow innut basis as a result of farmers' oerceived risk of adverse conditions.

l ''''' '': .Most farmers pj ncipally practise mono-cropping with lit.tle attention given to possiblebenefits of legu 'mes. However, mono-cropp ing could be Associated with the cropping ofl

.legum es as'alley ctopping in order to benefit from the nitrbgen-fixingvpropetties of legumes.it hls been observed that farmers who planted in the early part of the croppingFurthermore,

I .

season (November) were less affected by the dry spell. Thus early planting and the use ofhort duration vairieties of the various crpps could reduce the effect of moisture stress' ands

1 2.1y ting (January). Production levelssubsequent 1ow yjields which are associated with latè f. ancould be increas 'ed bv aoorooriate cultural oractices such. as early planting, tim ely weediqg

l '''' ''''' * * ''* .and timely application of fertilizer both basal and, top dressing, seed spacing within andbetween rows, anl d the recommended plant population ifk order to miximise yiélds.

(A.2 For fruit tree nursery, it is impprtant to avoid soils ilifested with nematodes

' It is preferable to use soil that l'tas ùot beén previously planted tö fruitor soil borne diseases.

ies. Raised! seedbeds of sandy loam or a mixture of 3/4 sandy loam apd 1/4 peat mossnurserI .

would be satisfactory. Since there is considerable variation in tke performance of seeds taken. 1from different trees it is best to select the seed from heàlthy virus-tested o1d trees, knoFn to

I . ,produce vigorous, uniform seedlings which developiinto satisfactory orchard trees after being

l ired cultivar.budded to the desl

A3 Seeds should be planted in rows 2 to 3 in. apart and 1 in. part within the row.They should be pl ressed lightly in the soil and covçred wixth a 1/2 to 3/4 in. layer of sand to!

) prevent crusting jand aids in the control of ''dampsng dff'' fungi. The soil should be kept: moist at al1 time'j until the seedlings emerge. After the seedlings are 8 to 12 in. 111, theyI, are ready to be transplanted from the seedbed to the nnrsery row. The soil should be wet1 thoroughly to a d! epth of 18 in before the seeàlings are dug. This will loosen and façilitate

l

the removal of the seedling with little danger of root ihjury. Seedlings should be plantedspaced 10 to 12 lin apart in 3 to 4 ft. rows. S:edling. 7 may alsö be budded to shorten thepropagation tim 'e by about 6 to 12 months. Howeve'r the time of budding should coincidewith the warm weather to ensure a good bud union.

B:LASIPANEXAOSie

l .-., ;);z$..fr u. . I :. .

e

ANNEX 7CPage 1 of 5

C. LIVESTOCK DEVELOPM ENT

Policy

B1 The Department of Animal Production and Health (DAPH) is operating withina long term Government policy framework whereby it is responsible for a11 nationallyimportant diseases but with provision for a11 other Veterinary Services to be at full cost tothe livestock owner. Vaccination and inoculation programmes for prevention of thesediseases may be sub-contracted to privade sector with the Government monitoring theprogram me.

The Governm ent's involvement in the livestock sector will be directed towards increasingproduction efficiency especially among smallholder farmers.

At present a1l activities are carried out by the Govem ment staff as private veterinary practicedoes not just exist in Fmstern Province.

Livestock Districts

B2 lt is important to note that whereas crop production is practised in a11 the ninedistricts of the Province, Livestock activities are feund in only the five districts of Chipata,Lundazi, Katete, Petatlke and Chadiza. The sixth one, Nyimba was added on recently andis to begin to be serviced with dips under this programme. The position of blocks and campsin each district are as follows'.

D istrict

ChipataChadizaKatetePetaukeLudaziNyimbaChamaM ambwe

No. of Blocks

83444243

No. of Camps

5623344042182316

83 Animal Husbandry Extension. service appears to be very wemk in the Province.At the time of the mission there was no Provincial Animal Husbandry Officer and only 3districts had officers. This was also a transition period when the responsibilities for animalproduction extension were being transferred from the Depm ment of Agriculture to the newDAPH. There is need for an Animal Husbandry Officer at BSc. level in every district.

The proposal to have Community Livestock Auxiliaries as contact personsbetween the Livestock Assistant and the farmer needs to be implem ented soon.

B:ïASIPANEM OSie

. . ,Y

ANNEX 7CPage 2 of 5

84 ldeally there should be a graduate Animal Husbandry O fficer in everylivestock district and a Livestock Assistant at camp level.

Against this background an example is given of Katete district where tllere isa veterinary offiter as D.V.O. with two Animal Husbgnctry Officers (one at the district andhe otller at camp! level). There are also three Livestock O'fficers, one Laboratory Assistant,tthree Tsetse Corltrol Assistants and fifteen Veterinary Asàihstants. The district has twenty six

I t

'

. . .

(26) dip tanks ayd eighty nine (89) crush pens most of which have been vandalized and rundown. In addition it has also the Artificial Insemination Centre. This basic informationabout Katete ha 's been used as a base for malcing egtimates for the other districts, accordinghe official no! rms.to t

lIliseases

i85 Tick borne diseases particularly East Coast Fever (ECF) and tsetse transmittedtrypanosoliasis are the most important cattle diseéses.

ECF if not controlled can cause mortality in cattle of 25-30%. The mainIcontrol measures are regular dipping or spraying with acarisidés or immunization of calves.

The diseas: is )at present restricted to Eastern Province and it is for this reason ' thatmovement of 'cattle outside Eastern Province into the remainder of Zambia - beyondLwangwa River - has been banned.

j'rsetse covers more than 40% of Zambia's land mass. Samarin is a drug' iasis and is sold at ZM K 6,500 per grain which is enough to treatwhich cures Trp anosom

8 animals. Ber 'enil is a drug used for prevention pf the disease and is sold at ZM K 6O0 persachet which is enough for one animal.

Belgium Assistance for ECF through immunization started in 1987 and

between 1987-1195 abont 120,000 calves had been immunized at an average cost of ZMK7,880 each. M 'ortality was reduced from 30% (0:2.5% . Farmers actually pay ZM K 2,000

l i e orted to be very pojitive.per calf and the response s r pI

86 The Belgium project is also assisting in the control of tsetse through Target1 i1l not sustain thePlanting. There is fear amongst staff that the Gövernment m sources w

ISIP is therefore coming in at th: rlght time to enhance continuation of theprogramme. A

program me.

B7 European Union has been supporting a èegional Tsetse programme (Malawi,Mozambique aàl d Zimbabwe) since 1988 with .a secörid '. ph.ase due to start in 1996 but isoperations are jot felt on the ground in Eastern. Ptpvince. There is a National CoordinatingCommittee for Tsetse Control and Rural Development matters concerning tsetse control.

B:yAsrpAxExAosie

ANNEX 7CPage 3 of 5

B8 Cost Recovery System for Tsetse control by Target Planting has not yet beenworked out but is under active consideration. The sale of dnlgs for tsetse control has anannual turnover of ZK 50,000,000 and is therefore considered very effective.

89 Artificial Insemination Selwice There is a station at Katete where animals arebrought for service from a11 the other six districts. This m ust be a very expensive exercisebut the costs were not immediately available nor were the present charges per animal perservice. These will be worked out but a charge to the farmer of ZM K 4,000 per pregnancyshould be reasonable. W hen the facilities at Katete are fully operational including reliableprovision for transportation of the animals then the charges can be reviewed upwardsannually.

The objective is to upgrade the local ANGORA SAHIWAL and BORANbreeds.

Livestock Evaluation

B10 The program me has focused attention mainly on cattle but other forms oflivestock are also kept in the Province. This is because cattle are dominant and prom isegreater and faster economic returns on investm ent. The estimated total livestock populationis as follows:

Year

1992/931993/941994/95

Cattle

263233252946237514

Livestock slaughter in 1994 were 4502 cattle, 1308 goats, 835 sheep and 7467

Sheep

1408615947

Goats

157754181952194327

Pigs

170874213740198316

Poultry

300000

Pigs.

B11 Dairying Dairy farming in Eastern Province is based on 4 Commercial and5 small scale farmers all in Chipata district who supply m ilk to the dairy at Chipata.

M ilk produced in the traditional sector is either consum ed at home or soldwithin the neighbourhood and does not reach the formal m arket.B12 M arket Centres The cold storage of Zambia used to organize sale yards in thecountry side but since privatization in 1993 marketing of livestock has not been active.

The Belgium project organized a pilot sale in Chipata with very good restllts.The intention is to spread the idea throughout the Province.

B:LASIPANEM OSie

AN NEX 7CPage 4 of 5

Ultimately the market centres shotlld be self-financing units once established.

j , - 'B13 O'tlarantine Stations: There are 2 qqarantine stations in Fmstern Province atFerl'i and Kanyukya. There is need to have on'e welsl sited station per district which is well

d managedl to facilitate the movement of ani'mals. to the market.run an

l .B14 Cjld Chain: lmmunization programmes at the moment depend on districtoffice fridges. Y cold chain is a very important, usuaj requirement for storage of yaccinesand other drugsj. There is therefore need to decentràlize these facilities at, least to theblocklevel. 78 s'olar power fridges w ere requeàted but due to financial limitations they werereduced to 39.

B15 M eat Inspection: It was pointed out by the Provincial staff that under ASIPal1 meat injpectibn activities have to be carried out by tt'te Department and no one else. ButIthe necessary legislation has yet to be enacted to that effect. At present meat inspection isstill being done by Public Hea1th Officers under Local Authorities.

lt is an lnternational requirement that all meat has to be inspected byVeterinary Officers if international standards are to be met.

14 Post M ortem Kits are for Chama, Lundazi, Chipate, Chadiza, Katete andlN yim ba districts.

B16 Rehabilitation and Equipment of Tmbora.toriçs: These are required fordiagnosis of coimon diseases. The details incluée, microscopes, Refrigerator, Antoclave,

(lncubator, Centrifuge, Bunsen Burner, Haemocrit Reader and H aem ocrit Cartrifinge. In the

( ' j.case of Katete Laboratory Extension is also reqtiired. lt is necessary that these tem s shouldbe provided for effective disease surveillance.

Specific request was made for the u boratories at Lundazi, Katete, Chadiza .and Petauke wiih a provision of ZMK 10 million each. '

lB17 Dairy Goat: These are intended for W omen Groups and Youth Clubs. ltshould be notedl at the outset that management of Daiq Goats is totally different from themanagement of lindigenous meat goats. lt is therefore absolutely essential that the AnimalHusbandry Of rtkers from each district who wl11 be an area with an established dairy goatl

. .

project. The Central Province of Kenya is suggested. as a possible .area for such a tour. Thelnecessary financial provisions have been made for this.

( .B18 Animal Draught Power: There has been an Animal Draught Power and CattleDevelopment Plroiect in Luapula Province funded by the Flnnish Government and also a

l < ka s nded by theNational Animal Drouzht Power Coordination Pzoaiamme in Lusn

1 '- .. -.

Netherlands. Eastern Province needs to draw çxperieùce from these two projects.!B:hASP ANEM OSie

. a .... , . . > . .L . ' k ' . .'. . 't; '

. 'Y, ,

ANNEX 7CPage 5 of 5

The objective of the present proposal is to continue training farmers on variousaspects of animal draught power including the use of various implements.

There is also the need to import donkeys for use in areas where Cattle do notthrive because of disease problem s.

The importation can be done by traders but credit facilities will be needed forthis.

lt was observed that animal draught power has a significant impact on area ofland brought under cultivation. Using hand tools farmers cultivate on the average only 2.5hectares per household.

B:ïASIPANEM OSie

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AN NEX 8APace 1 of 7

ZAM BIAAGRICULTURAL SECTOR INVESTM ENT PROGRAM M E

(EASTERN PROVINCE)

RUM L INVESTM ENT FUND (RlF)

INTRODUCTION

1 . 1 The Rural lnvestment Fund (R1F), is one among 15 Sub-programmes of theAgricultural Sector Investment Programme (ASIP) which is a new approach toagricultural development aim ed at harmonising investment in the sector in order to

optimise the use of resources. Projects under RIF are aimed at building theproductive capacity of the poor Sm all Scale Farm ers, who for various socio-econom icreasons are unable to participate in economic activities in an effective m anner, byproviding financial support to eligible farmer groups.

Support to infrastrucmre will lay emphasis on rehabilitation and repair of existingones. Areas eligible for assistance include lmprovement of Accessibility and Term sof Trade (access to economic and social services e.g. development and uprading oftransport routes lirtking productive areas and markets), Direct productiveInfrastructure (Output and income raising activities e.g. drought power services),Direct Labour Saving lnfrastructure (Saving time and energy particularly forwomen e.g. oil presses, harnmer mills). Suppol't to RIF projects will be based ondem and-driven investments and ''matching grants'' partnership between RIF andFarmer Group (FG) of 75% and 25% contribution respectively, to total project costs.

1.3 In line with Govermnent policy of decentralisation, the bulk of RIF operations w illbe at district level through the District Agricultural Comm ittee (DAC).Decentralisation of decision-m aking on agricultural activities at the local level withinthe framework of the Public Sector Reform Progralnme (PSRP) will be an importantingredient in the im plementation of RIF. The RIF will be based in Lusaka and willoperate as an autonomous entity of the Departm ent of Econom ics and M arketingDevelopment (DEMD) of the Ministry of Agriculture, Food and Fisheries (M AFF)It will be headed by an independent RIF Co-ordinator guided on policy issues, by theDAC and the ASIP N ational Steering Comm ittee.

GENERAL OBJECTIVE

2. 1 The general objective of RJF is to assist vulnerable small scale fanners, to build asustainable and productive business capacity in order to increase crop and livestockproduction both for subsistence and the m arket. This will be facilitated through theprovision of on-fann investm ent, agriculmral related physical infrastrucm re, ''tailor-m ade'' capacity building training needs for service providers and beneficiaries.

b:ïBILLANNEX

ANNEX 8APage 2 of 7

SPECIFIC OBJECTIVES OF THE RIF

lTo encourage equity expansion of the operations of vulnerable groups by assistinghem to act uire essential capital facilities to undertake improved production practices;t ;

. .

Offer training services directly or indirectly in respect of organisational and groupivity, fpl anagement and responsibility, techniçal denials or record ke'eping,act

operational decision making, etc; so that the vulnerâble groups can develop the skills

to manageltheir crop and livestock produciion and marketing activities in a profitablemanner usling the advantages öffered by group action;

l .To promoie capacity building among FGs fhrough' savings with financial institutions,

l làtionships Witlï.such institutions for possible f'uturethereby developing sustainable re. anjloans,

'

jEncourag 'e establishment or strengthening of FG s and provision of essential

11 support to improve their efficiency, and training of these in selectedoperationa

provinces and districts.

TARGET BENEFICIARV S

l .The target beneficiaries of the RIF, are basicall'y sm all scale farmers in the rural

' i legally recdgEnised FGs .to undertake agriculturalfarming communities organised n

activities. ) Essentially these are smallholder 'households facing increasing difficultiesto cope 'with emerging economic challengesï.r.; T'hese group are charâcterised by anI

.

array of eonstraints including lack of information and communication chalmels to' ' ints and pbyentialities

. Other limitations indluderedkess aqd discuss economic constlalack of financial and management skills atzd capittal to allow them participate in

l itbusiness operations. The target group will eventually graduate to Rural Cred

1 Comm ercial Credit by PYJ.leading to

GUIDING PRW CIPLES OF RIF OPERATYONS

l .Provide paching grants (no credit) for demqnd-driven investments proposed bygroups of fanners (no individual investments) belbnging to the target population.

b. Support capacity building of rural saving and loan instimtions.

Use of simnle stream lined and transpareht prgcqdures to speed up RJF investment' j A' .'cycle (identification, approval, flow' of fdnds and implementation) and , at the sameI

J . .time, m ildm ise the risk of failure and M isuse of funds.

j -Decentralise to district level, the approval, implementation and supervision process.

b:ïBILLANNEX

k

tw

ANNEX--8APage 3 of 7

Involve private sector (including NGO's) to the extent possible.

M onitor closely RIF activities from the initial Stages.

Keep RIF implem entation tlexible; adopt the principle of ''learning-by-doing'' .

An independent RIF Coordinator in charge of the program me, guided on policyissues, by the DAC and the ASIP N ational Steering Comm ittee.

ELIGIBILITY CRITERIA

g.

6 .

The eligibility criteria to the RIF assistance are established according to the beneficiaryqualification - their degree Of vulnerability and need. Local NGOs will assist in ascertainingthe eligibility.

Bene' ficiary Oualifications

Preference would be given to individuals operating as m embers of legitimately organisedgroups in priority ares, who could dem onstrate ability to develop capacity to becomeeconom ically self-supporting.

6. 1.2 These would be selected on the basis of:-

a. lncrease vulnerability of food shortages in the lean periods due to inability toovercome resource handicaps in form production',

b. Cultivating about 3 hectares, on average, under rainfed conditions;

c. Experience in working in groups or willingness to join in the group endeavoursto overcome existing constraints.

6.2 GROUP CHARACTERISTICS

The group has to be registered to operate legitim ately as a free organised group incomm ercial production of crops and livestock; agribusiness and other related activitiessuch as fisheries.

A minimum of between ten (10) and fifty (50) active members, and

M aintain a group account with a commercial bank. That is the group will have to beassociated with a Saving and Loan (S&L) instimtion approved by the DAC or asim ilar body detennined by the ASIP National Steering Comm ittee.

The FG should have been in existence for at least six months.

b.

d.

bChBILLANNEX

l

ANNEX 8APage 4 of 7

ELIGIBILITY CRITERIA OF SAVINGS AND LOAN

j -(S&L) INSTITUTIONS

Support to S&L will be provided to both existing S&L groups and establishm ent Ofnew ones. The following eligibility criteria will apply tlj the instimtions providingsuch suppgrtr-

1 institutions interested in supporting the establishments of s&L groupsS&Llundej the RIF, should aim at expanding S&L activities in rural areas; be at least

3 years in business and present audited financial statements.

lb. Eligible activities will include the followingr- Capacity building to train S& L

l ' ' induction workshops andgroups, preparation of guidelines and m anuals,trainling assoeiated with the establisxhment/strengthe/ng of groups.

c. RIF support of participating institutions will be determined by the num ber ofS&L groups they assist and the group spedific çost of such assistance; however,

l ihe equivalent of US$ 200,000',annual payment under RIF should not exeeed

d lmaximum support per group would amount to 75% of total project cost.anl

d. Eligibility of an institution to participate will initially be for one year only; its1

extension will be conditional on satisfactory perfonnance.

f .

.

Appjoval of support to legally organijed S&L instimtions and groups will be therespbnsibility of the DAC. Support to S&L institutiohs will have to bel

,' ,,endorsed on a no objection basis by the ASIP National Steering Committee.l8. POTENTIAL AGRICULTURAL INVESTM ENT ACTIVITIES TO BE

SIJPPORW D BY RlF(

The activities to be supported by the RIF should be cornm ercially sustainable taking

into account riskj factors. The need for diversification of the agricultural base would be animportant cpnsideration. Also services such as road maintenance and bridge construction

' ively contribute towhich by themjelves are not commercially oriented , but prpgresssustainability and profitability of productive Operations wOuld be supported by the Fund.

Specifk ally the following shall be supported:-

a. Appropriate post harvest handling and m arketing facilities, including drying andstorage;

b. D ip tanks, water developm ent for simple irrigatibn system s, including appropriate size1 ially fOr group vegetableplunger and centrifugal type pum ps f0r lifting water

, especgardens', and livestock watering. All these will require viability assessm ent;

b:TBILLANNEX

Nè

(

>

r < . .

ANNEX 8APage 5 of 7

Livestock gene pool improvem ent schem es and introduction of donkey traction power;

Access roads (maximum 5 kilometers) to farming areas, bridges, culverts and simpleanim al transport equipm ent for m oving produce and inputs between farm s andmarkets;

Rehabilitation and construction of markets,sheds',

comm unity produce and input storage

Soil conservation schemes',

Processing facilities such as hamm er m ills and oilequipment;

expellers and repair of such

h. Other investments could also qualify, if they are consistent with RIF criteria and itcan be sown that they are likely to contribute to improved production and incom es ofthe group.

SUPPLEM ENTARY REOUIREM ENTS

Having regard for the current l0w standard of education and basic skills of the targetbeneficiaries and the capacity of extension and other related NGO staff, an importantprovision in the Fund would be appropriate training to the adm inistrators of the Fund,the field staff and the target farmers on the instimtional and procedural arrangem entsfor implem entation;

Training in the technical aspects related to implementation and management of groupsin comm ercial activities such as record keeping and account, banking operations,savings and borrowing;

Provision of accurate infonnation on economic and market factors relevant to thesm all seale farmers;

b.

d. Additional training of local institutions or NGO's involved in capacity building ofsm all scale farm ers to Organise and manage working groups.

10. FUNDW G RESTRICTIONS

1O. 1 The following restrictions will apply:

i) Maximum investments would be theproject;

equivalent of US$30,000 per group per

bCIBILLANNEX

ANNEX 8-4Page 6 of 7

M aximum matching grant of 75% of scheme cost inçluding preparation andl .im plem entation assistance will be provided by RIF leaving FG contribution ofl

at lest 25% of total cost provided in cash, materials and/or labour.

iii) Last day of disbursements under the scheme not to be more than two years afterits approval by the District Agricultural Committee (DAC).

limum RIF investments per district will be 20 farmers groups during theMaxfirst two years.

R1F OPERATING PROCEDURES

111. 1 RIF Operations will start up with the following proceduresr-

'

j ,a. 18 initial districts (2 per province) have been identifie'd and will be the focus of R1F'sl

first year activities. However, applications for RIF investments will be accepted also' f district must have a DAC whosefrom other non-initial districts

. To quali y, al

compositign would be in accordance with the guidelines provided by the ASIPNational Steering Cornmittee. EP is however exempted frem this restr?iction. TheDAC is eixpected to be in place in al1 nine agricultural districts by December 1996

land will a1l be the focus for the RIF.

lEligible fanners (groups) will prepare a requdst for RIF investment, on their own or

with helpj from an NGO, Consultant or any other Advisory Agency or individual oftheir choi'ce, and subm it it to the DAC for Approval.

c. Requests f0r RIF investment will be considefed in two stages: a summ gry proposalwhich will be considered by DAC fOr conjistency with RTF eligibility cri4eria and

I *'' .likelihood of viabilitv/sustainability. lf cleared for the second stage, preparation,

1 *'

'

i'''

d

'

financial 'managem ent arrangem ents and other organisational aspects will be agreed

upon.

d. DAC will assess IUF requests once a m onth, with copies sent to the FinancialManagem! ent Unit (FMU), and other relevant' inrstitutions in the province or districts.

le. Agreement forms will be signed by the RIF coordinator with copies sent to the FM U .

j 'Schem e funds will be m anaged by the FG or 'the body supporting it. For exam ple,

l : ) juse thq wholethey m ay contract an NGO to m anage funds for them and he p orga

project. However, the DAC would make a decision on this.

g. Rapid assessment M ethodologies will be in place to facilitate for the expeditiousl f rogranunes

.assessmem o p

b:ïBILLANNEX

l

ANNEX 8APage 7 of 7

Reasons for rejection Of finance requests will be fully provided in writing by theDAC. This is expected to prom ote transpareney in the system .

Supervision and m onitoring of activities funded under the schem e will be theresponsibility of the DAC and methodologies will be devised by the DAC, bearingin mind the importance of the preventing m isuse of funds.

OTHER ORGANISATIONAL ISSUES

Application Forms:- ln order to accelerate initial activities, the relevant parts ofM icro-project Unit (MPU) fonn will be used during RIF's first year or until suitableforms will have been produced. However, a user friendly short fol'm for assessingeligibility of FGs to RIF investm ent will be prepared by the RIF Coordinator.

Inform ation campaigns will be initiated in the intial districts in order to informfanners and other stakeholders of the facilities available under RIF and how to accessthem .

The extension staff will also be instrumental in explaining to farmers the RIF andhow to access its support.

About 60% of the districts are expected to have at least one Advisory Agency. Thesewill be infonned of R.IF's objectives and criteria and invited to provide support toFGs.

13. TRAINING ANW W ORKSHOPS

Training of DAC members, extension staff, NGO 's and Other stakeholders w ill beessential to the success of RIF. Therefore, a m odel will be developed for basicstakeholders' training at district lovel. This will be developed by the RIFCoordinator.

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ANN EX 8BPage 1 of 6

ZAM BIA

AGRICULTURAL SECTOR INVESTMENT PROGRAM M ERURAL CREDIT

1. 1 Right from the time of independence the Zambian government has been trying toincrease and enhance people's participation in econom ic pursuits. Since the bulk of theZambian population resides in rural areas and eke a living through agricultural activities,government efforts have a1l but focused on how these people could make farm ing aworthwhile income generation occupation.

1.2 Amongst all the support that government has accorded to the agdcultural sector,credit provision has been the most thorny issue. M easures put in place in this endeavourhave raised from persuading financial institutions to be linient in their dealings with smallscale farmers; attempts at nationalisation of banks and up to the creation of farmer ownedlending injtitutions. lndeed through a11 these efforts, large amounts of money has be-enpumped into the sector. U nfortunately, the results have been very disappointing. Not onlyhas farming failed to develop, but the capacity of governm ent to support the sector has alsoeroded.

1.3 In M ay 1993, the ADF/TAF Boafd of Directors approved a grant of UA 0.65million to assist GRZ in studying the impact of liberalised policy on agriculture credit. Thestudy findings indicate that structural bottlenecks including lack of adequate credit policycontributed to poor performance of credit schemes. The institutions which were createdspecifically to provide credit perform ed dismally. Although created with good intentions theinstitutions performance succumbed from the GRZ interference in their operations. Thefarmers were made to believe that credits were GRZ grants. In addition, institutions neverput in place satisfactory cost recovery mechanism to ensure that repaym ents were made.These institutions are now all in severe financial conditions. The study has recommendedthat these institutions be restructtlred to facilitate their operations on comm ercial basis or beliquidated.

1.4 As a result of the Restructuring Programme the GRZ has withdrawn from mostof the economic activities. Unfortunately the withdrawal of GRZ from these activifesincluding credit, and marketing was not met by an enthusiastic response from the privatesector. ln most parts of the country, especially the programme area there is a general feelingamong the farmers of abandonment. Credit has become unsuitable due to the high interestrates averaging to 60 per cent. Producer prices have plumented due to the oligopolistic andmonopolistic activities arising from lack of competition in the m arketing system . Agriculturesector is therefore suffering from a setback resulting from the liberfised policies.

1.5 The ASIP has been formulated within the purpose of providing a framework withinwhich the sector is to develop. The rehabilitation and/or construction of rural infrastructureincluding access roads and storage platforms are aimed at opening up the rural areas tofacilitate private sector pm icipation in economic activities. The introduction of Rural

ANN EX 8BPage 2 of 6

Investment Fund (lk1F) is aimed at assisting vulnerable small scale farmers to build asustainable and lproductive business capacity in ofder to increase crop and livestockproduction both for subsistence and the market. The RIF would be. a once for a1l exerciseand beneficiaries would be required to switch to commercial credit gradually.

1.7 It is proposed that a self sustaining Revolving Fund. (lkF) be established, and be1 UO)k The RF wöuld be a successor to theoperated by a Non-Governmental Organization (Nj

RIF and would extend loans to nualified farmers. The farm ers would be exoected to oay al ''*' '*'' ''A

.service charge which would be adequate in meeting al1 costs relating to acquidng,l ring and recovering the credit. The paym ent of the service charge wouldprocessing, delivle

be gradually incr'eased over a four year period to converge with the commercial rates chargedby the local Commercial Banks. The exact ctlt off period would be discussed with localeconomists, tmklng into consideration the internal financial markets.

l2. The Justiscation of Revolving Ftlnd

2.1 Since 1991, the GRZ undertook a commitment to limit its direct involvement in

economic persuijs and 1et the private sector play a prominent role. This applied toagricultural credtt as well. Unfortunately, the prikate seçtor, especially commercial Bankspnrticipation in the Rurf Credit has been dismal. Tle Financial market has distortionshereby the noml inal interest rate (inflation rate) is prohibitive at about 60 p. er cent. ThisWin a way casts alclbud on the real interest rate, and ,borrowing under these circumsfmnces,would mostly li 'kely ensure a negative rate of return. Th/e tural populàtion is hard hit giventhe 1ow prices of farm produce resulting from monopolistic and/or oligopolistic marketingsystems which have developed as a result of the restnlrturing programme.

2.2 There are two alternative approaches to this problem. The first one is' to donothing about it and wait fir the financial market tè 'stablise. This has a very highopportunity cost: one cannot tell with element of certalntyzsWhen an equiqlibdum between thenominal and real rates would be realised. To await for this u'ncertmih development would beto condemn the poverty stricken rural population to eternal sufferipgs. I-oss of economicactivities and rdturns would worsen the economic situation and further desta. bilise thefinanciat mrketl

I2.3 The second alternative is to act now in a manner that would least destabilise thefinancial marketl The 1DA has opted for this altçrnativeçand i.s extending agricultural creditat a rate of 20% less the base lending rate. Th'e j. roposal'is to provide a li,ne of credit to theNGOs operàting in the area to onlend to the. deservipj. segnïent of the population. The'

i desned as those living on.le.ts than a d'ollar a day pei householdsegment of the population s

and are not ablelto provide food for themselves a11 year rpund. They also cannot access toexisting crédit f jcilities because they lack nrcess&ty. ' qùéliftcations. They duldvate 1es6 th%five hectares of land. Provided the line of credit js e'wtèltd' ':d to the NGOs to on lend ON 'L' Yto qualiied and ldeserving households

, impact on finah è'ial mari ets would. be minimised.

) m .

AN NEX 88Page 3 of 6

2.4 The line of credit of course has some ''built in subsidy''. This however is onlyrelevant in as far as the rate charged is below the nominal interest rate. However,considering the target group, the opportunity cost for the nominal rate is zero since thattarget group does not borrow, as of now from the financial market. Under the Zambiancircumstmnces, this would appear to be the most logical way to assist in poverty alleviation.

2.5 This m angement would be transitional while m acro-economics, especialy financialmarket is being stabilised. It is proposed that the transitional period should not exceed four(4) yemrs.

3. Proposed Operation of the Revolving Fund

Obiective

3. 1 The lkF shall be used to extend financing facilities at concenssionary rates (servicecharge) to eligible applicants towards procurement of agricultural goods and services,purchase of essential capital faciliteis in order to promote micro-enterprises. The RF wouldbuild on momentum created under RIF.

3.2 The District Agriculttlre Comm ittees, with the active participation of the twoN GOs based in the EP would mallage the RF. A special account shall be opened with a localcom mercial bank with proceeds from the draw down of the loan from the ADF. Loanswould be disbursed out of this account. All expenses of operating the lkF would be debitedto this account.

3.3 The operations of the RF is transitory. The benetkiades are expected to graduallygraduate to the market rates by the end of the implementation of phase 1 of the program me.The exact timing of the transitory period would be discussed with the GRZ.

The Beneficiaries

3.4 The target group would be essentially the smallholders/households facingincreasing difficultles to cope up with econom ic challenges as a result of the Structural

Adjustment Programmes. The social baseline survey conducted by the lnstitute of AfricanStudies of the University of Zambia in M ay 1996 identified them as these smallholders whocurrently live on less than a dollar a day and produce food enough to cater for their needsfor up to six months in a calendar year. The local NGOs will assist in isolating andidentifying these people.

Operating Procedures

3.5 Qualified frmers or entrepreneurs individually or in groups would yrepare arequest for credit. The NGOs assistance in preparing the beneficiary for this exerclse wouldbe mandatory. The request would be submitted to the DAC for approval. Requests for the1kF would be considered in two stages: a sum mary proposal which would be considered by

11 .

ANN EX 88Page 4 of 6

D AC for consisstency with RF eligibility criteria and likelihood of viability/sustainability.j 'lf clered for the second stage

, detailed preparation, including financial analysis, financialImanagement arrangements and other organisational aspects wbul' d be agreed upon.

iAgreem ent forms would be signed by DACO, the Beneficiary, and the supervising N GO.

1 FF and the supervisingCopies of the agreements would be sent to the oarticioating CB, M A

l ''%.' '''' 'NGO. DAC lould consider RF requests once a month. NGO services would be

remunerated by the service charge paid by the Beneficiazy (see paza. 3. 18).1 i i ating CB would open account for each approved benefkiary.3.6 The part c p

inst! the approval would be debited to this account. Rbpayments would bePayments agadited in the saml e account. The CB would charge a fee for services rendered. This ij stillcre

to be negotiated.

3.7 Reasoqs for rejection of any financial requests would be fully provided in writingby the DAC. This is expected to promote traffsparency in the system . Supervision and

itodng of actkvities funded under the RF would b ç the responsibility of DAC in general,mOnI .

and of the supervising NGO in particular.

Types of Financing Available

!Financing of Capital Eqtlipmentl3

.8 A list of equipment that would be considered for financing would be drawn up by' ailable to the public

. The percentage ef cost financed would normally beDAC and made qvup to 75 per cent of the total cost of equipment.

l3.9 W orking Capital Financing: A list of items viz. fertilizers, pesticides, fuel etc.would be drawn Li p along with standard ''cycles'' for prod,gction to determine the ''sflmdardworking capital 'gap'' f0r various items of agricultural produce. Financing would be limitedto 75 per cent o? the total working capital requirement.

Collateral

3. 10 W hile the extent of colateral required will be assessed by the committee on a case-by-case basis. The Agricultural Credit Act of 1995 will provide the necessary guideline.

al the fohlowing options shall be applied:In gener

(Financing of capital equipment'.

l- Pledge of such equipment

(- Personal Guarantee of one individual

In case of leasehold - land a right on the lcesase'- In case of freehold land - à. floating charge on the land- Floating charge on stock.s and/or receivables of a11 agricultural produce

IGroup Guarantee

I

M' 'M

$'v' ).).

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ANNEX 8BPage 5 of 6

Financing of W orking CapitalHypothecation of stocks and/or receivables of a11 agricultural producePersonal Guarantee of one individualIn case of leasehold land - a 'right on the lease'In case of freehold land - a floating charge on the landGroup Guarantee

M inimum Amount

3. 11 There will be ''no minimum'' loan amount. Fmch case will be considered on itsown m edt.

M aximum Amount

3.12 The maximum amount of loan shall be limited to US$20,000 for an individual andUS$35,000 for a Group. Higher amounts can be considered, at the discretion of the DACfor both worldng capital and equipm ent financing.

Approved Vendors of Inputs and M aterials

3.13 A list of approved vendors shall be drawn up and appended periodically.Negotiations will be carried out to ensure that such vendors offer firm rates for a certminperiod. 'Rate contracts' may be entered into by the Com mittee to avoid price fluctuationsin the short term. A1l purchases will have to be from approved vendors unless a borrowercan produce evidence that other sources are offering 'cheaper' or 'better quality inputs.

Condition Precedent

3. 14 The borrower shall satisfy a11 terms stipulated in the 'Loan Sanction Trtters' inrespect of margin money, insurance, documentation and such other conditions that may havebeen stipulated.

M ode of Disbursem ent

3. 15 In a11 cases payments will be made directly to the supplier of equipment or serviceupon production of documentary evidence of supply.

Repayment Period

3. 16 The repayment period of capital equipment shall be 5 years including a graceperiod of up to one year which may be reduced at the discretion of the DAC. Therepayment schedule shall be drawn up depending on the prospective remlisation date of theagricultural produce i.e. reference shall be made to the monthly cash flows during theimplem entation period and are expected to follow a 'baloon' pattem .

AN NEX 8BPage 6 of 6

3. 17 The repayment period for working capital loans shall be determined by the naturelof crop and prospective realisation of the agricultural produce i.e. reference shall be m ade

the monthly Jash flows during the implementation period and are expected to follow ato'bullet' pattern.

Interest Rate

i3.18 The service fee (interest) shall be chargqp' ,from the date of commitment. The feeis expected to be' close to the rate charued under lDX credit facility and should incorporate

I '%'-'''' 'rate at which fu 'nds are borrowed from ADF, CB administrative fee, N GOs charges, foreign

lexchange risks, and default risk.

l ' al if circumstsnces demand.The service fee can be adjusted with Fund s approv ,l

Cost Recovery

l3.19 The siupervising NGO would be responsible for cost recovery. He would keep

records of the 1 'oanees make frequent supervision visits éltd ensure that credit is recovered' loan agreem ent signed between DAC and the beneficiary

.in accordance to

#%

c

A N N E X : . il CPage : 1 /2

ZAM BIAAGRICULTURE SECTOR INVESTMENT PROGRAM ME

SUMMARY OF THE AGRICULTURAL CREDIT ACT, 1 995

INTRODUCTION

The Agricultural Credit Act has been introduced to facilitale the borrow ing of m oney on the securityof charges created upon farm ing stock, additional assets or other agricultural assets and to providefor the registration of such charges.

M INIM UM REQUIREM ENTS FOR CREDIT AGREEMENTS2.

2.1 The Act stipulates that a contract for the advancement to a farm er of inputs or other item s requiredfor cultivation (Credit Agreement) shall state :

(i) the value of the inputs or other items at the time these are advanced to the farmer;

(ii) the interest rate lo be charged, expressed at an annual percentage rate (no direct or indirectcompounding of interest shall be allowed as part of the contractl; and

(iii) any charges. fees or penalties the farmer will be required to pay if the farmer does not pay ordeliver the produce at the price agreed on as stipulated in the contract.

2.2 The Act further indicates that any person or company advancing any inputs or item s to a farmer shallprovide 1he farm er w ith a written statement show ing the value and cost to the farmer of the inputs,the interest rate and any charges. fees or penalties.

2.3 The Act states that any person or company advancing inputs to a farm er w ithout fully disclosing theabove requirem ents shall be guilty of an offense and shall be Iiable on conviction to a fine. In addition,such person shall be ineligible to register a charge created by the farm er on the basis of an agreementor contract, and such charge shall be void.

3. CREATION OF CHARGES

A charge is essentially a written testimony in which a farmer provides his farming stock (agriculturalcommodities, Iivestock, poultry, fish stocks, vehicles, machinery, etc.) and/or additional assets (anytangible asset, excluding Iand) as collateral, i.e credit security, to any person for any inputs or moneyadvanced to the farmer.

3.2 Charges in favour of any person m ay also be created by any person, trader or com pany on alI or anyportion of the agricultural com modities w hich the trader or company purchases or intends to purchasefrom a farmer.

4. REGISTRATION OF CHARGES

4. 1 Every agricultural charge shall be registered within thirty days after its execution; if not so registered,the charge shall be void. -.

4.2 Charges shall be registered by sending by post or delivering ot the District Agricultural Office in eachdistrict capital, a m emorandum of the instrument creating the charge ans such particulars of thecharge as may be prescribed together w ith the prescribed fee.

(l

6,!

6k1;I)

68I6t111

6F2t

1

lANNEX 8CPage: 2/2 ..+

EFFECTS OF THE CHARGES'

jThe creation of 'a charge gives the holder of that charge the follow ing rights: >'

1 '(i) to take possession of any property specitied in the charge in case of defaulting or non-paym ent of credit;

(ii) to sell the property after an interval of fou/teen days or within a shorter period as may be

specifiedjby the charge. The proceeds of sale of 'suçh property by the holder of the charge willbe used to repav the credit secured bv the chatne; the surplus, if anv, of the p'roceeds shall . (be paid t'o the farmer. i

l .k

'

-''#

OBLIGATION FOR FARM ERS, TRADERS AND COM PAN,IES '@

j ; $y , .,yThe Act im poses the follow ing obligations on farm ers, traders and com panies : r

(i) to repay to the holder of the charge the procëèdb of. selling any property or receiving any , i.''

m oney in respect of any asset comprised in the charge; (,.?:r

'-j(ii) if the holder is a company, the farmer or trader shall not sell the commodity for which he ,

received lloans or advances of inputs or other items but shall deliver to the holder the 1,.agrièultu 'ral com modity in the amount agreed in tlne charge;

(iii) when selling any commodity or asset which is yubject to an ajricultural charge, the farmer orlall give the person buying the ccimmödit?. or aà.set a w ritten notice w hich shall betrader shl

' fo'llow ing information:acknoledged by the person buying and shall cöntain the

1 icultural charge over tine commozity* the name and address of all persons holding an agrloq asset to be sold;1 iority of the charge, and. t:e pr

* thte amount secured by each charge; anv farmer, trader or com pany w ho fails to giveI

w ritten notice shall be guilty of an offense and shall be liable to a fine.

l t(iv) any person who receives a w ritten noticq shall pay 1he proceeds of the sale to the holders of tI

the agricultural charge in accordance w ith the w ritten notice; any person not doing so shal'l ljbe guilty of an offense and shall be Iiable to a fine. j

1.FRAUD

Any farm er, trader or com pany w ho has created an a'g ricultural charge and w ho, w ith intent of

defraud, fails totcomply with the obligations imposed. by the Act as to the payment to the holuer'ofa charge of anyj sums received by the farmer, trader or company by way of proceeds of sale, orremoves any pr 'operty subject to the charge, shall be guilty of an offense and shall be Iiable to a finelor to im prisonm ent for a period not exceeding three years.

l . t1,Where any com pany, w ith intent to defraud, misrepresents its rights and obligation under this Act or' f f his rights under lhîs Act

, the direclors anà managers of sucln - 'in any way deprives a armer ol '*)company shall be guilty of an offense and shall be Iiable to a fine or im prisonm ent for a period not

.,f 1exceeding three years. i''

(1

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i. ,1, ? ?tjr .*v

<

AN> X 9

ZAM BIA

Agricultural Sector lnvestment Programm e(Eastern Province)

W omen and Youth in ASIP

The W ID component being introduced under the programm e will address cross cuttingissues at the household, farm, and microenterprise levels to create awareness of theopportunities available to women and youth under the programme and how they couldenhance poverty alleviation, improve household food secudty and nutrition, enhance thesocial and economic welfare of the most vulnerable and resource poor wom en and youth inthe project area.

Under this unit, funds will be provided for technical assistnnt, curricula developmentwith specifk cross cutting programmes for women and youth training. The programmes willinclude food and nutrition to improve the use of protein and vegetables high in Vitamin A,B6, Iodine and Iron which are the most important micro-nutrient deficiencies in Zambia andassociated with measles, diarrhoea and respiratory tract infections, blindness and anemiaamong children and adults; food processing technologies for cassava, sorghum, millet andoi1 seeds; processing and preservation of vegetable especially those rich in Vitamin A;appropriate technology coolcing stove to reduce household fuelwood use which is diminishingforest areas; water harvesting and conservation technologies to mitigate the effects ofdrought: developing women's potential for alternative cash crop and the introduction ofcottage enterprises and microbusinesses to broaden household cash sources; labor savingtechnology in pnrticular for farm operations usually undertaken by women; farm managementand savings, basic book keeping, socif welfare programmes including child immunizationprogrammes, pre and post natal care.

A11 these prolrammes will be incorporateed into the training programmes to beconducted at the multlpurpose training center, thus no additional cost will be provided. Theretained NGOs would be contracted to promote these programmes. The mission heldpreliminary discussions with the two NGOs while in the field.

AN NEX 10Page 1 of î

ZAM BIA

AGRICULTURAL SECTOR INVESTM ENT PROGM M M E(EASTERN PROVINCE)

Environmental M itigation Statement

1. The Agriculture Sector lnvestment Programm e is a sector wide programm e

encompassing all aspects of agricultural production in Zambia. The primary objectiveof the programme is to enable the M inistry of Agriculture Food and Fisheries torationalize the use of both its own and donor resources in the development of theagricultural sector. Through this rationalization the M inistry will reduce expendimreson food and agricultural input subsidies, and increase its provision of public servicessuch as agricultural research, agricultural extension, anim al health and landadm inistration. This refocusing of responsibilities by the M inistry will greatlyenhance its ability to prom ote and ellforce enviromnentally sound agriculturalpractices.

Land use: The programm e will fund the developm ent and im plementation of aNational Land Use Plan. The Plan will be designed to ensure the production ofenvironmentally sensitive areas, giving particular attention to biodiversity protectionand watershed m anagement. W hile implementation of the plan is not expected untilthe third or fourth year of the project, it is not anticipated that there will be any majorexpansion of cropping onto new lands during the period of the project since it isestimated that approximately 50% of existing crop land on commercial fanns isunderutilized (World Bank, 1992), lt is not anticipated that any new land clearing forcomm ercial agriculture will be required before 2000.

Agricultural Practices: Through the increased allocation of resources to agriculm ralextension and agricultural research the Government will prom ote the following:

2,

3.

Appropriate Use of Agricultural Chemicals (Pesticides and Herbicides) . lninstances where it is necessary to use agricultural chem icals, the research andextension system will develop recom mendations that m inim ize ecologicaldamage from the use of these chemicals, and educate farm ers to use safeapplication practices.

Fertilizer Use: Farm ers will be encouraged, tltrough both price incentives(removal of fertilizer subsidies) and extension messages to make more efficientuse of chem ical fertilizers, thus reducing the pollution from this source.Organic fertilizers and the use of composing will be promoted as an alternativeand more sustainable source of soil nutrients.

bJSBILLANNEX

ANNEX 10Page ? of 2

c) Soil Erosion: W hile soil erosion hazards on Zambia are generally low, thel .M inistry has an active programm e of eiosiolp control through the construction

Iof physical structures and a pilot program me tö prom ote the use of Vetiver

(graS9.

d) Alin 'imum-or-No-Tillage Cultivation: The ministl'y will be developing alprogramme to develop and encourage minimum or no-tillage practices that are

) priate for Zambia.approJ ,

lrrigation: No new larce scale irrication schemes am plalmed under this project.l -'-'' -''''' .However, there are plans to rehabilitate existing sm allholder schem es. In the proqess

l , ,of rehabilitation, the M inistry will be expected to meet the Bank s environmentalstandards, thus upgrading m any of the coulntriès existing system s.

Livéstock and W ildlife M anagement This pro.giramm e will focus on improvihganim al health and disease control. The anim al production unit within the D epartm ent

of Animaltproduction and Health will be transfzrred to the Extenjion and /ResearchDepartment which will ensure greater coverage through a fnore disciplined approachlt

o information dissemination. Within the commercial farming sector tllere has beenlrease in the farm ing of indigenqus liyestockg primarily antelope. In thea rapid incl i ease in this type of farining tùgether with the integrated wildlifelong ren

, an ncrIm anagement program mes in the Game M anagement areas surrounding national parksl

will greatly increase the biodiversity in the country.

Fisheries: Under the proposed fisheries program m e there will be increasedpromotion of sm all scale fish farm ing that is environmentélly benign. There w ill alsobe an increase in the monitoring of large fisheries such as the Lake Kariba, Lake1

.

Bangweulu, and the Kafue Flats to ensure long run sustainability of these fisheries.

I7. Roads and lnfrastructure: The program me does not include any plans for the

ldevelopment of new roads or any other major civil works. As a result there is no risk fromlthis type of activity

.

References:

W orld Bank and Government of Zambia, 1992. Assessm ent of Potential Land for ExpandinglAgriculm ral Production in Zambia

.

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E' .o ..:N m o - N - o = * O m - m c - o œ e m m & = o œ X m o e o - m œ D o N - c e e oo E.!hm o o o m o - o - o o m a / a a m mc m m * O c e c o N m v o m & d < s O > mo ji.a - b œ D N 'm œ b m w w m m m v 0 * 'œ a m / œ = O i% a o o o œ o m: i - - r' = = - - *e' - * - - &m ...i. .rx cq m o >. m to co (0 to o m % (N * œ œ çp (n œ

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o ' = >. c; (0 c) >. ' (N tp c5 rq % e) m m v- F7 tn ' * c to & >- m e) m to cq ru jv œ m œ.c = . v- m fhl - - = - - - - c w VO tN & G m D fh- = < rg rn v' o m % (N % v. .D m @>(a O 1 cl v (D = to (n >. m eq ' , rqj = * r- = W= .

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q ; j to :0 zq ua (m y .:,0- tu (x E l : . t kc o c7 v, > t o . ; s c. l j j. i l .. l t t xt o r , o. , . .F- x u s. . ko j- tuuj s s : 1 j y,j.p a . . o to .. , u, . .< x .9 : o y v v m u) to ; ,xjlo j w (y s. ; g , .; gj ko :z: s (rjx o z j j ..j' = 'g '&' u1 !! '&- 1:0 : * vllls-s- cq x: o ...y=j < = -c' u -.. (p c: aitop % tu uj p qp t) ; . , .j1 'a u c ..-. 1 ''-ttv rl'o c ,-4 I oo u: ug j ug 1 ! g) ..ol (y; j l . ' u l j -. j , y =s. xo 7.. ê!m j '-.o s .c% oz c j j ocj j j j , uz ' . =D ' r try , zj -'< @ = trj k V. ' . ' ' .. , . . . , L . j-(z) œ tl & cl ar Gé X e ta.< 1: *c i l ar l uj = j = J ! o o . . q j to ! o. w . (o o w. cx . .0 g g . m . w.g c. w j. u ( j u.! ! s u a toto. o Q tu 0 . ' t'/) - : x ,tu ua o, . E w c é .g . 8 co j 1 j . u ku> , tu> ; , j r.p <,..x $y- . . xw j. j , y j = gj j x, (z: y Eo o a 'oa ,s a s wx .j g . ' >. . z. o g '-'-w 'Mg '-< , l Dx ,..='. - Ao , , '.y,aC1 p a: e o m .9 o G m o. =< a: ul kuljo . = u < x tz- < lo a. w, s. w o tp . s . j. a: a;. z o, o w.. =, ,. r juj. (z ., .ïœ fv u s? --' % u t s. a. a: a: x z o tv = I )m ' a:! tvO *.1 . k q? ' >. rxc 2 uq o ' >. at7 1 I = u = = l 1 c: wu F.l d. up . tl# l i trl . a( ? o I s. I t, .zl x,cl . s. =s 9e: u4 =œ ' >. j ? i = j = = = g .0 . .J -1 œo. 1, > . sp œ. 1 p. .

. . . . J= Do' Mo ''a.q œo ==o

'*-tx. =:o 'Wc: mo =! jl 1y , j So j ! j ' ! $ ' g j g qpm . o.u y j l a$ ' j j l (.)< , jOx . ' j (1 oL u l , ug . j tlg .a j =s. j g cw 'Dol ! j ! j j Sfa ! . ! ) œ< oo j . qpo 0w' up j j . Qx ala ' . . , . . 'l.u o u oz :z: (! = x : a , . uz = = = (r) t.u a) < ! , j:z , j . x o .a (u o :q = a i, = =, = (r) ku (n < , u z..sajoa..e- tv (v = =. (v x m 'o ky a: < < < tltu s; ict e. j iw jf s, ..u u o o p o t:u p p m p $ .0 , <:. < : < 'ju? I , , s. jy h= j g . i .g j := <2! :> a.9 j x..: <.<..s.*u v'> ou l 1 u K g / 1 K j ' oœ ' ' ' 'o j tua J ' j auu J ). s. j ,1 uso . j , zw , oz..x.u su- . g.- .;y.. .v, , .s u. .a. .. . .sx . -....% ! y ..m ,s , i sJ..s/ 1 ; , t xK o. . oj.j (w qgu ; su - y.o g #'Z u+ G L*

.= = = k= .. . : : . . . .-= == =-m---.-- . ;K ;R:.j'T)

1 jP-i

1 '!:2

6

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*

#

œ == mc <<

>

N X X X Xœ œ œ o m& = = W XW V V D OG m x m

c c c c x& œ W O œo m m m XN <'+ G c'

m m G m

% N N X Vo m m o Dc N N œ =N & a'< G

W m r a

& N o * & Xo c N c x o& X m r D m% > & W c

m m m m

œ e & X mo c r & ro c c c cZ (N o' o' to' c)

œ (x (x m m&œ

< D D u3 thwu. o co * rh- *o c 0) c) & >'

rN - * * -xr V (N %kl v m v- m

c9

oj **E o c œ m v c< o o œ m o mZ O o m v m v= m - * -œ o œ c mœ cG kc Mœ w.J = p- o >- c) o< c v- ko u7 o mU c) o m * < oc En V = (D u3<cI

X & c c m %D X O V D VO X O X X Nœ = o G

N N o . = - g g ya œ m œ e mc u m œ o o N N %m . . . m . oo D m m

rq (x

m* e*U2 oD= L)œ 2> ul

-W n.m o

K

*

<ul>'

KF uzO * UJ

u < *u. ul <I I ae* Q 'J< uafJ n KG g VQ=; ;

* œ* oU urq) LJ> *

oG G* œ* wN œ* 0G wt) uq)= ST g& Dr r

X t XX X XL C C

m r-Ox . *

R c œA < << > œ

tu

<

Oa.

œZ

XZ <

1 œ gF- ua u

ua x% > o 2m K tJ ï< œ14 o c 6

û) >UJ t)* kuu Z< =D œ

-JDt

<

i. : ': : : cx to % v co o v cq cq co k = gto jW t-3pw I W, ' y toE : ! , E Xcl toto

Xtq Xm . Cp G) Xm 00 0. l (j uJj t j j j r t/ t @ , , ciwr* ... . . .o f cx ro (o cq (< c; m >1, m cx ,x.,p : oa cx xr c; j xr 1cf (6- cx

co ro

aq;.cxl..rxl.ll : f j j jl uj kt

) c). (o. to. m. co m. o co (:740 m j rx .jjo jp.,a jj' Gl to r'l CNI cq 6 =$ >- m lC% IXko (z) cq % cj cq v- j (s e/jo = cx m ! rx raç,wjla l

--=v--ap-xr : (N (o xr < * (r v (N cxl (v) rt'ù * (77 j c/jb: f ''Zo :: :E co to co co cq c) co o o . a (g jso : c) to to m co v co * = =t - . - . - ko 1,-. m jco )rofNl : : m (

.o tn cq cq (:5 >- jkoa rx Yj%t: .ë(o (x w - ! cuqli j m cq >- e'7 (Nl N '.( F (<) Cg''m Cv:-.C! . . 1 (.: .. q: ...

(n $iE f. cq (o % xr co ccl > (x (x c7 * oltcl m: Vjjvni: : :. E. : : E . j co to *(0 Om g = om g g ym j j U wjwj y <m j j , goo E : c) toxm 4 .;! .' E ra tzf (.; &' (x' c; jv co p jjmI E

.i':: ;:. E

: < *. wc.k w.

to y g? m-j ogj jmgI . m (xE (<) (N m jr ,, loi ! co (x ' cx (x (n p. to + , S z) 1 om jcq (N o (N mo f:i :* fx xr s. m = s. (o rto c; w; !qy iijso E :: = v % o co o o s

. ' 1:! . ' . . . . . c) o ko o =(N ' ! Ftx xr m (N (N c5 o eq o toullo' i): (o (x % z; oj n jto c;E m okI e7 C< m v-

m E'EEm o * = v * m (N (N (n (p, tq o o ço tqo E EEi:* o v' to c) * to c3 r% : s s e; oo :! kjïC cq rq c) m c) cz p- V : '

. .E. : - - - - - m r<. b. >. 1*cq Efiltcx cq o: m m c; o co 0,)q..:-iE'.ëji co cxl e) o w x wj xrE :i').v cq (o v- ja- m'E::. .:u .

. . l.: Z..* '--w-- (*

o ' : E.(N (D * v- X O m (N CN O to lh7 tD Xgœyljtn jo . co o m tn s. (x) tn o o (x xj g jw qyo (7) C) o * (N * (D to to Lo (x. mtjolCQ : ol 0- IU W n-- c; % ll% I w-livjljcuj

je ('q (n w. ) k cu (y) ! j >. y c) j jar-- (7.k (.Nj .j .j j jy

.1t... 11 .,1 1,.s. -..1:....= lprsy07 (N CD * v- X to = Cq (N CO >. * 'X Otjrljcjc) I a7 (& m tn m tD tn

...& N j (.4 Q cj j . zj j j s. j )(73' c) o o v cq % w .w 1 jo. to ojrom . (V m- o'I m- m- (z$ Om j r.- t m-j to fjo-jlj-!.X m m jo ,vu ky j (x; x;r j

= cx mj j 1 Ilt--ll.J. :r..o c.- :='= r-..1

* : : co o >. c) tn tn c) cq ('q (v) to % ' * j. j% j! eq 1 'v-j j jcï j x- c7 * to = (n to o * <; m,a ,ijltgo, : to o (n r.- m s. co (u w o kojjcoj!m .. - - e,- s om j . c) t rx qo , j

.. (N (z7 , ; , j j j.: c) & vw j jj

m c.k f'O l . ..... j lj

- Ij' j f

u-aa ïoau,m !:>. co co o co c) co (v) cq (x co v) to l % I co j l v l j ko lCj s.trl

oc

wc & (D

0(:7 C% o; J j uj ' g , 6 jj j j é j j= . : - - - (-)1 zo t-u trx- E cu. va. cs rxlî. tJrsJ,,e,jE: f; taï: (j:Eg m mj ,, , j okjN=- * -*-----*1---

. ii ii. l lrliy....: I oz (., 1oco c .(!m s.o o j 1 .z ,a u- . > oo a Mo ..e a ') (a j q'u ji l oo

F- E E (z: Fv 'tQ) zR t7 tu ' E ' E z so ' % t tn p. t! 1 ) (7 !o ju (u c: z: ! m o j o clcljp D x

.- . . 9 (p :2 q c t ku o,jo.a jj, v-olj o :D x o o 1- a s : +: s .v ::) juuj .j o< o .-c O < u LLJ u. c) s uz to i:c : hz: .$ . = O :$.GrI=lt (t

.! X .c% o . s ozl '- ' -: . ' -E w' t.u 6 1= jua '. t, yq j!tn- n. o s x s o . . = an >' h- ;)Içp . l otutu z o

,w a 5 a K .x a,- l uz cu ! Go m- ' ' tlltll . <,. , q i <r, ' O+- l 1 1 *- ' )O (J 'l cw -0 E' .-' -= == e =œ tj >w 'rj 'eup 8- '*-uu ' t ! -b- i , R ( ' ' : R lo F- c o c s. .0(D .9 : a. z x 'ua jw pjolio I2 x s = j -e u z = a o xg.ufl=,F- D w x w

. y s. u. j us j uu j us j .) j .a j ..t g i uu , y tz- j iœ o o= = = tu z x o m z x o m z <'!< f<lirijrllJ tl-l = = = ar , . , < . . , < I-ti- li-jlrzlzrtrllj> t a t a (a . g l o p o !<' <ttl -= a

. R a. 7 . u. eauesFccllqz,lpsl. . J.-XL.. '-

*

ANNEX 11

Table 3ZA MBIAAGRICULTURAL SECTOR INVESTMEN T PROGRAMME#

(EASTERN FROVINCE)PROJECTED INCOME STATMENT FOR OILSEED PROCESSING PROJECT

INFORMATION DATA (1)Initial costsRetail price od a ram pressPlank and other equipmentDaily operating costssunflower seed (5Okg)Payment of two operatorsBottles (optional)Fuel

ReqairsDally productionLiters of clarified oiIKilograms of seedcakeW ork days per monthsalesPrice for 750m1 of oiIPrice per kilo of seedcake

(1) : Source AFRICARE, Zambia

Thousand Kwacha

REVENUE# YR1 YR2 YR3 YR4 YR5 YR6REVENUESSales of oil 3,840 3,840 3,840 3,840 3,840 3,840Sales of seedcake 592 592 592 592 592 592TOTAL REVENUES 4,432 4,432 4,432 4,432 4,432 4,432OPERATING COSTS 1 ,749 1 ,749 1,749 1 ,749 1,749 1 ,749INVESTMENT 222 0 0 0 0 O* Interest (rate of 200/ 44* Repayment 0 105 1O5 105TOTAL COSTS 2,015 1,854 1,854 1,854 1,749 1,749PROFIT* Yearly profit 2,417 2,578 2,578 2,578 2,683 2,683I * Cumulative profit 2 417 4 995 7 572 10 15O 12 833 15 517

ZM K

21000012000

100005000260010005000

123720

1500100

e

2r %M Yœ == &W << >;;

J

#X&OC<

& & & &co qo :0 yW LD CDX X X X

= = X

œ m m cX m m c

' m m W& - - -

= m œm O cr

W m m eX = m &

' m m œ& - - -

m = Wm O &m

W m m cX m m œ

' m m œc - - -

= m œm c c

&O

& & & X

X e c ;œ q cX LD LO X

m %- X

D r & rX X O Fœ r &X X A X

m = X

=&Oœ

SX><

OCDG1

D C D A

X k9 D ;œ up cX tD to d7

m m X

W m m cX m m c

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m m œm O cr-

œ > % ON - 4 0d m c

m V r> X %

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m X &= c X

C)

r e

D O D C

X e O ;œ * oX X O Xm m X>

D VX <O lk

Xo &*

X

r-

co to co toOcu

90:0

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m = lX

& c O cXc o yœ c D

X LO LOl COm = 10

N

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07 m X XX m' (<J (D' m X %D

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v- X %w- %

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X=

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= '-o uc. -aO N <

r % ?o r œ >o o x o* + 0 -

Aq =œ(n zœ E wc a n&) c

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lA D = N X = * X c % O N > X c % r c c % o * X c c & D % % & c && m X % W = % m r c * m O N O m m m X r c c X O c m O O œ X c =o = W % % = V X m * N O c N m œ m O c c m m X m c c m

r c m > 0 % m N œm m > m = mr

V & = œ X m X X & V X N > X c % c c c r & X X & & & V V c c o& œ œ V m = % W X c * = c N O m = m X r m c œ & c m 0 0 < c %& = m % = m V X O O N O X N m c m D o c m X * N > %CS - -* m m > 0 0 & > m

m m m m m mr

& & > N X m * X D % X N N O c % e O c % c X X D c & O c % & & *& m X % m = % > r c e = c N O m = m X e c & m & c m < c & D X c& = m % % v V X O O N O X N = œ m O D C R = N c m N %CS * - -r c m > c O & N m c

m œ N m m mr

m D = N X m X X & % O N > O e % r D c % c X m & m & m N N m No W m % œ = % m O c r = c N O œ = m X * c & = O m > œ x c V &o m œ v V m V X O A N O C N m c v m o c o e c % o N

* c m N X O & * œm m œ m m mr

Z v- X m e7 X m X X & * X r< >' X trl % tn & (D < & * < & X (D & % % Cq & N(E & m Cq 0) (N m % (N ko (D tn v' @) r- O Cq = (N X <) tn c CD & X C) CO b. & (> C) C)D & C) (N X V r' % X y) kD U< O (D b. v- (D v' (N c <) % Cq % 1- >. (N &b' m - .tu x- c m >. O e7 e) o e7a: r- > v- m m mWmo .9Y S D X = V X m X X D V O N N N O K m D C N D X X D X X X O N > & vy o c m m œ v V m e o r v c m x v x a - r c œ N o c c N e & & % *O D D m * = r % * O A N O = A m A m W D C O m & & & cQ r m ' G 'o D X & N O c œ

O RZ tZO w e(Jku c) CN = & CN v- * (N C7 * X r- * tD t/ c = & e7 xr & 01 X o c m tD t/ m- c & =

CD (D (N * Nr = O 07 ko >- = m (N ?< O v- O œ % % tn (N m CD O & C) C& (N * >. v-= C) xr (N & O m X X b' m CN X m m m Cq c % C) % (D v- v m >.< x- . . -= * % Cq % U- (N & k: (D c

a: v- v-ul

KX X m œ m m o r o o m N o o r m m o m o o o e o o m e œ œ > o oO r m m o r m m e m m v X r x o œ w e r m D O m O 0 * m c cO c m c m X m - m m m m c m % O X œ * m <r % w W > T' m o . = =

r

N m m o m m m m o o m - o œ o o m o o N o o o o o - o c o o o * g g gc e m m m m m e m o m c D c m m c o > o v * % & o m* - m m c & o * % m m & O X &œ œ m m =

m & c' o o o o P R Pm m - m m O O X

4- Wo g) q) RW c c c r o c == c c o = o sr o2

c 2 j 2 2 cc 2 a 2 2 c:c 2 t (q z:s. H c H .- h H rx H w h 'a H o 1 - ... rnOc Emw E c EW E= Ej E-c Ew Em Don t s2 q) r w c c c &= R c R wo R c R 2 R o R a R w2 R œ œ *o - o rS z =2 < = x c x u z = z w z o x = - x o m m z* G o N = N C N a N = N c - = - * œ x *c =

. a q = u o z z n m= 2 = = w < o œ o m9 X ' œ f X : d œ S o 1 2 X - U t o u o o :=0 2 9=

x m x m w m œ m z m = m œ m x s w o .g o o= o o o a œ o o 0 = o o w w m z . o .s= cs a c< s c o a c x a c s c a a c M a c so a - ,a& o oœ 0= o < o ; o x o o o o o x o o e . R uo z < o zœ o c D o m m o c a o m œ o m o o x c o m œ o z o œ o œ o œp

- I p - o 9. - a. Pw - œ pw - u p. - F- gw - F- gw - t û) ed o @) & = o = Otll - a 69 -- a a a < a u- a tll a &) a (a . O p = K û)%! R = œ : = j R = tll R = >- R = z R = u-a 7 = >uu 7 = z -d. s 8 o w: s x j<xoo-œ Mooxoo-oDxo Mo Mœ os o o w o w wGX - E * N E X - E œ - E A - E * N E X - E D - E = E o = =

o a zx j ,* '% * '% * *H * *ul * *. W * *u u * *.a * * Q- V Z E< = =W

2 2 t G 2 2 2 2 u .2 u *> G * * > o * O œ m

*6 'u t) *d 'u- t) *3 .u. (J *d 'u. t' *d 'u- t) *3 '= t) *d 'v- *d u. o o o u2 u (J œ 2> œ S - œ S - X S - œ S - œ S - œ S - œ S œ S > S œ o - x œ o œ r œ o

#

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D LO C) i toC7 (D CD l (DX LD C)l X

< Lo- uo co1.œme

D x c mN X X O'D c Dm -

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-w

O c XX œ cm œ m

O X c =N X X D'X X XT-

- --

--

X c XO œ em œ =

O X c =N X X D'X C Dm

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X c XO œ cm œ =

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co to oltoOœ

touo 8 I Xco

>. - -30 -uo I (x)œ = = tk LD

r e&&G1

c r c rO e O cX A K XN X X Xœ m m c

Sc5<h4

&CD&CV

& LO C71 tflCD (D CD $ (DX UD C7

J X>. trl tot XCQ m m j u7

& O & cW X D X'X & cm* -= - - -O c =X c &> m r

D O O *N O X X6 X O %

O X %X O X

& O D mC X O Xd O O O

O O VO N =

03 C) to & I toCg (Dqrj Do t f'OcoTC to W XQN m m t tn

co o Io toOco

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- cy j QoQopw to 1)1 ct)œ m m lr

N x:

> wGX

C

>.

07=

D to D .' tflCD (D c i (Dœ to & tn

- - .-1rh- tfl tfl 1 XG1 =' = 1 tfl

D X X G, CNI% O OOd O O o

X X -X 13 wr

McD

O

X=

X

Da.K

>C

c) r.M m&. . .

oR =& YuU) i . ,(vsX X -

o.o vu *QN .o uQ

. - J(n N, <r H= ?q) = 'œ 1-q) o ;< O(/) LL O F-

'(%-q Fœ

s =* wL J :(J) c

z o * .Q

CED * .cE c) mF- t a mtll : 'u (tX % a. CQ O

Oem

c

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X

:* vejM >m =A <= =< c

m

> m> =< *= -c m&= cm =

<

X cm c> &> m*m *> mX =- D

= =& = >> LJ MQJ <m I =* c c

<= =< m o= & -= >> >- <= = œ

< D > -- QJ * =m - <= 7 s o< c =N < = o

*c X= m -- c - v - - =

I e* < & t), < & II Q: X I1 - I

I I œI1 1 #-I I Dd = ' -' *d D V - - *<ê ts y- = 1 m1 = u: < tll I =' < Q/ Q: X 1 -d X Q: > - 'd D = * X Il X c >* < II m = œ. II uz - ku 'I a: X c 'I c I tn

= e. I < 1 ku< x I I t7- kkl I - - - kutl X - I == ku - I =< C1 = I D= < D I t/- = Iu. < '

x I

d e - -9 m œ =I = - u m1 u = - x1 œ < > -p < - X c1 m u œ <1 m œ m cI œ c YI X * c

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ANNG 1G

ZAM BIA

AGRICULTURAL SECTOR INY ESTM ENT(EASTERN PROVINCE)

TERM S O F REFERENCE FOR TH E AGRICULTUR ALSECTOR STEERW G COm H TTEE

The Agdcultural Sector Steering Committee (ASSC) serves as the policy mnkingbody of ASIP and provides a forum where senior GRZ officials, donors andrepresentatives of the private sector can assess the performance and progress beingmade under ASIP. The Committee receives reports on:

* )l11)111)

On the basis of these, it is the responsibility of the ASSC to makerecommendations to the M inister of M AFF concem ing:

future prospects for sector growth and development;recent sector perform ance; andevaluation of ASIP sub-program mes.

i)ii)iii)iv)

The ASSC will be comprised of Senior Officials drawn from the M inistry ofFinance, the National Commission of Development and Planning (NCDP), theBank of Zambia, the M inistry of Agriculture, Food and Fishedes, and theM inistry of Environment and N atural Resources. The total membership will be23 of which 10 will be drawn from the Private Sector. The M inister of M AFFwill serve as the honourary Chairman. A Vice-chairman who will be from thePdvate Sector, will be elected by the M embeis of the Com mittee.

further policy or restructuring changes;changes on the objectives or orientation of public sector serdces;changes in funding levels of different ASIP sub-programm es', andother matters adversely affecting overall programme performance.

ZAM BIA

Annex 14 BPace 1 of 4

AGRICULTURAL S-ECTOR INVESTM ENT PROGM M M E(EASTERN PROVINCE)

TERM S OF REFERENCE F- OR- THE DISTRICT AGRJCULTUM L COM M ITTEE

1. NAM E OF THE ORGO IZATION:

1. 1 The name of the organization at district level shall be called the District AgriculturalComm ittee.

COM POSITION OF THE COM M ITTEE:

The Comm ittee will draw its m embership largely from the private sector withminim al government representation. Possible membership shall be drawn from localfanner organizations, participating NGOs, Church Organizations, Private SectorInstitutions, Governm ent Depanm ents and any other resource persons the Comm itteemay view appropriate from the local community. This composition biased towardsthe private sector and in particular the farmers is intended to instill an elem ent ofownership of ASIP on the part of the farmers since this comm ittee shall be mandatedto determine the economic and developm ent destiny of the district in term s ofagricultural activities. The Chairperson of this comm ittee will com e from the privatesector and this will be on a rotating basis as determ ined by the comm ittee.

2.2 Specifically, there will be at most thirteen (13) persons on the Committee. These willinclude 3 persons from the farming community (preferably 1 representing small scalefarmers, one from Zam bia National Farmers Union, and one representing comm ercialfarmers), 4 people from the M inistry of Agriculture, Food and Fisheries (DistrictAgricultural Coordinator, one Field Service Officer, one Officer from Econom ic andMarket development, and one Research Officer), one person from the local authoritiespreferably a council secretary, two persons from the NGOS (i.e. one from the Churchand 1 from the development NGOs), and two people from the agricultural orientedcomm ercial sector such as trading and m arketing and lastly but not the least one fromthe traditional chiefs. lt is important to state that the comm ittee m ay occasionallyinvite resource persons as observers or ex-officials as it m ay deem appropriate.

2.3 The District Agriculm ral Coordinator who is the representative from M AFF will actas secretariat to the DACS. The seeretariat will initially expedite the fonnation ofthe comm ittee by consulting umbrella institutions such as NGOS and falnnerassociations on who should be nominated to the District Agriculm ral Comm ittee.Vested interest must be declared by potential mem bers to participate in the functionsof the comm ittees otherwise those found wanting will be disqualified. M embers ofthe Comm ittee who are from the private sectot will be renominated every two yearsand any one who becom es an elected M ember of Parliament will cease to be am ember of the comm ittee.

b:ïBILLANNEX

ANNEX 14BPage 2 of 4

tACCOUNTABILITY

3. 1 The Comm ittee will be accountable and respotjsible to the ASIP National SteeringlComm ittee at national level

. A representàtive (preferably Chairman) of the1com m ittee will sit in the Agricultural Comm ittee of the District Development

lCornm ittee but will however, be independent of the District Developm ent Com m ittees

land the local councils though it will liaise with them .

I . .SCOPE 'OF ACTW ITIES/TERM S OF REFERENCE:

lThe DAIC will promote agriculmral development and coordinate jlanning and

implementation at cam p and district levels through the following m eans:-

Act as a forum for dissem ination and prom otion of districtagricultural inform ation;

ii) Play an advisory role to Dis'trict Develapmenf CoordinationCommittee (DDCC) and District Blanning Unit On agriculturaldevelopm ent',

iii) Ensure that no duplication of proj' ect. activities take place;

Coordinate with other instiNtions such as District DevelopmentCoordination Conunittee, District Plarming Unit, churches and N GOs inline with m ulti-disciplinary and integrated approach;

v) Identify agricultural priorities under work programs accoirding to thevarious sub-program s and also identify priority sub program s at any givenperiod as a basis for funding;

vi) Ensure that planned activities are consistent with policy objectives underASIP ;

vii) Source funds in collaboration with ASIP Steering Committee for identifiedproject;

viii) Report on a quarterly basis to the secretariat of the ASIP SteeringComm ittee ensure funds are disbursed according to work program s;

iv) Ensure that integrated and collabprative approach between subprograms;

Assess viability and iocial acceptability of projects and programs throughreview and approval of work program and budgets',

IITïBILLANNEX

nk.)

I ANN EX 14B

Page 3 of 4

M onitor and supervise overall ASIP implem entation and impact at districtlevel including reviewing progress and resolving problem s that m ay arise;

Conduct on the spot check of the subprogram s activities',

Spearhead the development of a reporting system specific to the districts;

M onitor impact of programs as part of M onitoring and Evaluation systemunder M AFF;

Receive quarterly reports on issues, constraints and prospects forimplementing district ASIP activities',

xii)

x111)

)C111)

xv)

xvi) Based on evaluation, progress reports etc the DACS should provideguidelines and direction for ASIP im plementation at district levels;

M ake policy proposals and/or advice to the National ASIP SteeringComm ittee for consideration in order to ensure that there is localparticipation in ASIP programs at district level;

Act as forum to promote long term maintenance of infrastructure byinvolving local committees in project identification and implementation.

xvll)

xvlll)

TERM S OF REFERENCE: District Agricultural Committee on Rural Financin:

These can be sum marized as follows:

To coordinate and m onitor the implementation of the Rural lnvestmentFund and Rural Credit projects of ASIP;

To m ake recomm endations to the National Rural Investment Fund

Coordinator for funding of approved project proposals.

T0 assess and approve viable project submitted to DAC by small scaleproducer groups/farmer groups, for financing through Rural Credit orRIF;

To ensure consistent linkages between RIF and Rural Credit fundedactivities with other ASIP subprogram s and multi sectoral activities;

To identify and m ake necessary recomm endations on policy issues relatedto RIF and Rural Credit supported activities.

To prepare Quarterly Progress Reports on Rural Finance activities',vi)

b:ïBILLANNEX

AN NEX 14BPage 4 of 4

FUNDING

!6. 1 Memberj of the Colnmittee will be paidf sitting allowance which will be disbursed

through FM U. For this year, 1996 the ASIP jectetariat will facilitate ihe provision

of fundsl for DACS through a supplçmentary budget. DACS will however, berequested to m ake provisional budgets to suppoqtt their activities. ln 1997 theselbudgets should be part of the overall ASIP budget

.

lFREOUENCY OF M EETG GS:

l .The committee will meet at least once quarterly however, in the initial stages of ASIPlimplementation the com m ittee w ill be requim d to meet on a monthly basis

. M eetingsl ittee only become effective ând genuine when a 50% quol'um is formed.of the com m

(TI/E FRAME

I .The D ;AC were operational in principle by June 1996. However, for Eastelm' h DAC is expected to beProvince, where ADF activities are to be eoncentrated, t ç1 -fully op 'erational by January 1997. This has been retained as a loan condition.

1

b:hBILLANNEX

.. . . . '.. ,vk'u . . J.....<.h .u. .

ïr+ ';

!' ANNEX 15Page 1 of 7

ZAM BIA

AGRICULTURAL SECTOR INVESTM ENT PROGRAM M E

A. Concept

2. 1 The proposed Agricultural Sector lnvestment Programme (ASIP) is a depm ure fromthe tradltional project approach. The ASIP is designed to achieve signitkantly greaterproject effkiency, ownership, capacity building, and sustainability. Seven features of theASIP differentiate it from traditional projects. It covers the entire country's agdculturalsector. lt has been prepared by a Zambian task force with members drawn from both thepublic and the private sector. lt will be implemented within the institutionf framework ofthe M inistry of Agriculture, Food, and Fisheries (MAFF), without separate subprogrammeunits. It will be financed by all donors active in the sector and the donors' procedures forprocurement, repoling, accounting, and auditing would be stmndardized as much as possible.The use of long-term expatriate technical assistance would be kept to a maximum, and short-term technical assistnnce would be supplied on demand from the ASIP implementors. TheASIP has a built-in flexibility that is based on annuz reviews and adjustments. And it isembedded in public sector reforms in the agricultural sector aimed at greater decentralizationand beneficiary participation. These features should protect the ASIP from the risks ofcomplex project design and overreliance on long-term technical assistnnce that have besetmost projects and that often lead to failure. ln addition, management by Zambians throughnormal government institutional channels would make the ASIP m ore likely than traditionfprojects to induce a strong sense of national ownership to build capacity, and to provesustainable.

2.2 Collaboration between donors and the Govem ment in the preparation of the ASIP wasrecognized as essential to ensure donor support. During the design and preparation of theASIP, the task force used the donors as a sounding board for proposed concepts, elements,and design and solicited their views at critical stages. W hen the draft programme preparationreport was ready, the Government presented it to donors for critical evaluation in M arch1994. n e issues of concern to donors and the Government were then identised andaddressed, including gender, accountability, vulnerable groups, counterpm funding,implementation arrangements, and harmonization of donors' procedures. As a result of the

effective consultation and collaboràtion, a1l major donors in the agricultural sector aresupporting and co/nancing the ASIP. To ensure successful implementation, the donors andthe Government agreed to continue the constructive collaboration by meeting at least oncea month to address implementation issues or any other donors concerns as they arise. Inaddition, each yemr the Government and donors will review and agree on the following year'spublic investments in the sector before the budget is finalized.

ANNEX 15Page 2 of 7

B. Rationale and Objectivesl ' ricultural sector has gr:àt potential to respond rapidly to the2.3 Rationale. Zambia s ag

Ieconom ic reform program me supported by D opor Com,munity. It can play a central role in1 ' ic growth and poverty reduction strategy

. It is also important inthe Government s economIeconomic adjustment bv providinc the initial supplv response needed to stimulate economicI '-' '-' 'h''- ''*' ''*' '-' '*'

.activity, azkd can support economic growth in the lonprun by providing sustainable export

earnings. But !if the expected growth is to materialize, ,,the private investments hgve to bepromoted and 'public support must be ntade more effkient. ln 'Addition, donor support toPmmbian agricùlture should be better coordinated to ensure maximum impact (in agriculture

I .

alone there are more than 180 donor-funded projects).' j2.4 The ASIP would involve a partnership between the Government and donors in

ld implementing the agdcultural sect6r programme. The Government wouldform ulating an

' iority programmes in agriculture and would work with donprs toidentify and prepre pr' fficiency

, capacity, and sustaipability of thbse programmes, but withoutimprove the e'

V hi The proposed ASIP would also complement the ongoing donor-sacrifking o jners p.' licy Framework Paper (PFP) forsupported structural adjustment efforts as outlined in the Po

1994-96.

2.5 Summary Description

2.6 The ASIP would be implemented over a four yemr period and has four mainI

components (for donor support bv component, s:e table 1). The ûrst, policy and institutionall '*' -'' .improvements, would focus on outstanding policy reforms in key areas of marketing

' i to marketing parastatals), tradr and pricing, food security, and land(eliminating jubsid es

use and land henure. It would support institutional revstructuring and strengthening, with anemphasis on imorovine the caoacitv of sectoral 'akencies to orovide efficient services (that! -.' '--e -'' -y' . %--' A

..

cannot be provided at oresent bv the orivatb Gector) in the priority azeas of agriculturall '*' -#' ''' .

research, extension, livestock, and rural finalze. It i% expected that in a broad programme.

like the ASIPI, the allocation of resources between the tomponents shown in this report is justindicative. 'and will be revised annually in consultatiön between the Government and donors

. - I ,tnklng into account the previous year s result.

l2.7 The second component would undertake public investment to complement and support

Ithe polidy and institutional improvements. Investments would be made in the following

Ipriority areas:

i) Agricultural research to provide appropriate technologies for increasedproductivity.

ii) Agdcultural extension to accelerate dissemination of technologies, increaseproductivity, and promote resource conservation.

*

ANNEX 15Page 3 of 7

111) Livestock production and healthsmallholders, improve diseaseproductivity.

to strengthen public support services toprevention and control, and increase

iv)

v)

vi)

A?ii)

Fisheries development for smallholders, especially resource-poor households-

Rehabilitation of small-scale irrigation facilities for smallholders.

Agricultural training to strengthen human resources.

Farm power and mechanization to assist smallholders in increasing agriculturalproduction.

2.8 The third component, private sector development, would help create an enablingenvironment and incentives for the private sector. This component would also support ruralûnancial services for productive and agriculturf marketing activities, multiplication anddistribution of seeds for smallholders, and new product development (horticulture anddiversitkation into new crops and the establishment of the Golden Valley AgriculturalResemrch Trust).

2.9 The fourth component, pilot investment schemes, would establish a rural investmentfund to suyport small-scale capital investments in rural communities on a matching grantbasis and lt would support the privatization of government farms. Broad dissemination ofselected new technologies would follow from pilot and demonstration stages.

Table 1: The Indicative D onor support by component

& - r lN = ZU ZFD: IFY NOO FlNNl> :/D &e # IICA &J)x #zfFo &>/D

Poliq W iutitudannl xlw rovem- s

M lïc >vnt. rr/grx

Ree-nrrlvEa rwionUvt:lxkF'lkwriulnigrionFarm mwzr a .

mvlsan'lvxucnTrànùv

x ' z

X :

X X

X

Pri- e ad/r drvelopm- -.pronrœn '.

r.,.zî nwlupliozuanRuY 5nln'*New pe ucl dçvtlnplrznl

hlot lvzzrz't''tr J/ZN J

RuY lvumxnt fllre!Priutizxuon of f*nnla

A

AN NEX 15Page 4 of 7

2. 10 The ADF will be financing part of the following components: Extension; Research;I . Iajgation;Livestock Production and H ealth; Fisheries; Farm Power and M echanisation,

Training; Seed M ultiplication and Distribution; and Rural Finance. At the zequest of theGRZ, and with other agreement of other donors, ADF assistance will concentrate in Fmste'rnProvince of Zambia.

lI). C osts estinaates

l2.11 As a part of the ASIP preparation, the Government carried out a jublic expenditure'

ltural sector. This review sih owed that Zamtbla's publlc expenditures inreview of the agricu' J illion a ear

. Total expendituresagriculture over the past five years have averaged US$'1?87. m . JJunder the ASIP, are estimated at US$350 million over fouy years, lncluding provisions 'forI

.

physical and price contingencies, or an averqge. US$87k5 million a year. lf the ASIP wasnot implemented, and expenditures in the agricultural

. sector followed historical trends, they

lwould reach about US$740 million over the next four years. Thus, the ASIP would result! ' .in efficiency gains of about US$390 million

, or a 13 percent cost reduction (figure 1). Theduction in exlpenditures would be due in part to the sqvings from eliminating waste due tore

duplication. of activities and from eliminating government sub.sidies for agriçultural credit.

A s a result of these savings the level of effective inves.tments in the sector .i.s expected toincrease. The foreign exchange component of .AS.IP costs would bq about U S$174 million,or 49.7 percent. Base costs 'have beeq estimgted.yin U.S. dollars at mid-December 1994prices, and the price contingencies are projectçd a.t 3 percçnt fbr 1985-199 7, and 2.9 percentfor 1998-1999 (see table 4 and annex 2 for sumparies of estimated project costs). Physicalcontingencies 'are as follows: civil works, 10 percent; vehicles and office equipment, 5percent; input supplies, 10 percent; and recurrent eosts, 10 percent.

2.12 The ASIP cost estimates have beep prqpa.pd. using the COSTAB computerIprojramme. Because of the programme's size, the Government plans to use copputerizçdI ' '- .-prqect management (CPMI to support its implemenution. CPM is expected to help improveheduling, m! onitodng, and reporting of implkementation; allow greater precision inscestimating thel disbursement profile; improve çoordination between donor and Governmentactions throu 'gh a unified schedule; and allow close synchronization betWeen ASIP costestimates and the MAFF budgeting system.

E. M ANCING

I2.13 Flnanqing plan. Of the total estimated cost for the ASIP of US$350 million aboutUS$ 140 millton would be Snanced by the Government and the pfogramme's benefkiafies.Total external fnancing would be about US$210' million, of which US$60 million wouldl

ing donor-supported projects. Donors Would grovide US$150 million in newcome from ongoresources, of which ADF would provide about US$ 21.65 mlllion.

2.14 Local funding. The Government would finamce 100 percent of sta,ff salaries andemoluments and an increasin! share of the incremental recurrent expenditures. ln year 1 oflthe ASIP the Government ls expected to finance 23 percent of incremental recurrent

expendituresij by year 4 its funding of such expenditures will have increased to about 45percent (ûguqe 2). The Government's total estimated contdbution over the four yemrs of theASIP would be about US$130 million of which US$e 21.65 million will be contributed byV

iaries are expected to contribute US$ 10 million.ADF; bene

> -.'W r N

'< .i D '*

4'

*

)IAN NEX 15Page 5 of 7

2. 15 The indicative fnancing plan is as indicated in table 2 below :

Source A m o u n t

In US $ In UA % of Total

ADF 21.65 15.00 6.19

1DA 60.00 41.57 17. 14

Govt. of Zambia 130.00 90.06 37.14

UNDP 1.00 0.69 0.28

SIDA 12.30 8.52 3.51

IFAD 21.00 14.55 6.00

NORAD 8.90 6.17 2.54

FINNIDA 8.20 5.68 2.34

Others 86.95 60.24 24.86

Total 350.00 242.48 100.00

F.

2.16 Overall responsibility for implementing the ASIP would rest with the M AFF, and no

pnrnllel administrative project units would be created. The imjlementation arrangements areoutlined in the implementation manual. M any of the ASIP actlvities would tnke place at thedistrict level, and as capacity is built at that level, provincif-level would be delegatedincreasing responsibility and accountability for programming, procuring requisite goods andservices, and auditing ASIP financial transactions. The proposed financial management unitwould monitor the flow of funds from the centre to the implementing agencies or units.

M anagement and OrganKation

2.17 Private sector agencies would handle the program me's pdvate sector developm entcomponent. Each agency would prepre annual plans and budgets and execute and monitori? component. These agencies would also prepare progress reports, which would beconsolidated by the Department of Economics and Marketing Development (DEMD) ofM AFF. The pm icipating banks would handle the rural snance credit subprogramme.

2.18 Coordination of the ASIP. An agricultural sector steerinj committee (ASSC) hasbeen established to assume overàll responsibility for formulatlng sector policies andcoordinating the implementation of a11 ASIP programmes. The M inister of the M AFF wouldserve as the honorary chairman, and the vice chzrman would be elected by the members ofthe committee. The ASSC would comprise senior officials drawn from the M inistry ofFinance, the National Commission for Development and Planning, the Bank of Zambia, and

ANNEX 15Page 6 of 7

the M inistries of Agriculture and Land and Environment and threé representatives of the

pzivate sector. lAssurances were obtained at negotiations that the Govemment would maintainASSC during the ASIP implementation.

l2.19 The DEM D of the M AFF would provide secretariat suoport to the ASSC and perform

J '*' . . '*'

.liaison with each line agency of the M AFF rrsponsiblp för implementing ASIP programmesIand with donors on implementation issues. ln additiön, the division would consolidate thel '

annual work p 'rjogramme, prepare sector budgqts for ASSC approval, handle procurement anddisbursement 'matters through the financial managemen't unit, and organize an ahnual mviewof the ASIP.

2.20 Financial manaqement arrangements. Implementation of the ASIP would followl ' fs nclal procedures for planning, budgeting, accounting, internal control,the Government s na

l ' é d conceins about we.mknestes inand financial management. Donors have, howeyer, eypr ssel ' financial management and àccounting system

. In pnticular, therethe Government s current

are delays in Ithe flow of funds from the provincial level .to the districts because of theMinistry of Finance's failure to disbtirse the full émounts budgeted in th: Yellow Bookl

. -(annual budget). This leads to arbitrary allocation decisions by the P, rovincial Accountingit with litltle correspondence between plan pbj éctives and budgetary allocations. InUn ,

I . .addition, the districts lack autonomy in their expendkures. The most criticql conaequencesfor the impleientation of the ASIP is the lack of effective accountability' in the current

lfinancial management system.

l . has engaged th. e consulting firm Price2.21 In response to the donors concerns, the M AFFW aterhouse tù desizn an accountinz svstem that rectises the current wenknesses and meets

, 1 *-' %''' - 'the donors jeporting requirements. Price W aterhogkse completed its first .tdraff report inSeptember 1994, but the new system is not expeded to be fully optrational beforeeffectiveness of the ASIP. The MAFF has thereforù. êecided to put .in place a traqsitionalarrangement with suftkient internal contrcls, trknsparency, and finqpcial rçpottingmechanisms to meet the information needs of the Governntent and donors and to ensure thatI . 'funds reach 'the intended beneficiaries. This tranjiti Qnal artangement inql.udes three keycomponents. First, the financial management unit iai4 the MAFF, stgffeà. hy profçssiokallyqualified accounting personnel, would deal with a11 issues of accountability, disbursement,!

and financial reporting under the.ASIP. Second,, a donor fund.s division 'withinprocurement,

the financial management unit would be responsibli . for accounting for funds from donorspnrticipaying in the transitional arrangement and foi a11 other exterùal ftlnding currentlyexcludid from the nationz budgeting ptocesj. Thirdk, a system of direct disbursement to thedistdcts wour ld facilitate programme implemeafa

.. 'tiop ih the field through . easier access to

Ifunds. The proposed system would include several key control elements: an internal audit

section that Iùould check al1 expenditure su.mmaries from the di,strictsa qum erly and annualI A and other donors, and a bionnial ektornat audit of the special acc'ountsnancial reports to IDl

.

and statement of expenditure withdrawals.

*' Jvj

-4$

ANN EX 15Page 7 of 7

2.22 Critical to the success of the proposed decentralized accounting system is humanresources capacity at the district levels. The M AFF will develop a time-bound programm eto improve capacity at the district level so that fiscal control can be fully decentralized todistricts. The proposed transition'al arrangements, including setting up and staffing theFinancial M anagement Unit, are being implemented by the Government.

r

' o

..#: Vt

I #I fl z

I

ANNEX 16Page 1 of 2

ZAM BIA

AGRICULTURAL SECTOR INVESTM ENT PROGRAM M E

LIST OF DO CUM ENTS USED FOR REFERENCE

African Developm ent Bank - Zambia, Country Portfolio1995.

Review Report, October

African Developm ent Bank - African Development Report, 1995.

Barlk of Zambia - Statistics, Fortnightly, M ay 1996.

CSO - Zambia in Figures, 1994.

CSO - Quarterly Digest of Statistics, Fourth Quarter 1994.

CSO - National Accounts, Statistical Bulletin, No. 5, August 1995.

4 .

6.

CSO - External Trade Bulletin, July 1994.

CSO - National Census of Agriculture, Part 1, 1994.

Embassy of Sweden: ReportW orkshop, February 1996.

on the Proceedings of the Agriculmral Sector

10. FAO - National Action Plan f0r lncreasing Food Production fOr Food Security UnderASIP, October 1995.

11. FAO - Special Program m e on Food Production inLIFDGS.

Suppol of Food Security 1

12. GRZ - Proceedings Of the First National Agricultural Research Program m e ReviewW orkshop, June 1993.

13. GRZ - ASIP Sector W orking/preparation Reports, July 1994.

14. GRZ - The Socio-Economic Impact of Aids, 1994.

15. GRZ - Rural Investment Fund, 1995.

16. GRZ - M AFF National Agriculmral Policy, M ay 1995.

B:hASIPANEXhASa.M.

IANNEX 16Page 2 of 2

GRZ - ASIP: Implem entation M anual, February 1995.

/18. GRZ - Review of Agro-Forestry Research in Eastern Province, October 1992./

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'

GRZ - P'riority Setting in Agricultural Resarch, September 1993.

GRZ - Annual Report, Eastern Province, 1993-94.

/GRZ - ASIP: Financial M anagem ent Unit - Accounting Guide M anual.

?GRZ - The Agricultural Credit Act, 1995.

Institute for African Sttldies, University of Zdmbia - The Status of SmallholdersFanning and Agriculmral Services in Zambia, January 1996.

'

;Institute' fOr African Studies, University èf Zambia - Agricultural Sector PprfonnanceiAnalysis.

IMarx T.M. (Dr.) Banking with and by the People. Some InnovativelApproaches.

I26. Richard W oodroofe and Association: ADB/GRZ Agriculmral Credit Study, January

1995.

27. SIDA !- Econom ic Expension in Outlying Areas: Support to Incom e and Em ploym enttion, July 1994.Genera

28. UNDP - Strengthening of Dairy Training and Extension in Zambia. 1990-91.

29. UNDP - Human Development Report, 1995.

30. W orld Bank - ASIP: Supervision Report, April 1996.

W orld Bank - Staff Appraisal Report: Agricultural Sector lnvestm ent Programm e,lh4arch 1995

.

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