Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: PAD718

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED IDA GRANT

IN THE AMOUNT OF SDR 5.7 MILLION (US$ 8.72 MILLION EQUIVALENT)

AND

PROPOSED IDA CREDIT

IN THE AMOUNT OF SDR 4.7 MILLION (US$ 7.20 MILLION EQUIVALENT)

TO THE

REPUBLIC OF THE GAMBIA

FOR A

COMMERCIAL AGRICULTURE AND VALUE CHAIN MANAGEMENT PROJECT

February 21, 2014

Agriculture, Irrigation and Rural Development Unit (AFTAI) Sustainable Development Department Country Management Unit AFCF1 Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

i

CURRENCY EQUIVALENTS

(Exchange Rate Effective January 31, 2014)

Currency Unit = United States Dollars DM38.1 = US$1

US$ 1.534 = SDR 1

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AIG Agribusiness Interest Groups ANR Agriculture and Natural Resources AWP&B Annual Work Plan and Budget BAC Business Advisory Services CAADP Comprehensive African Agricultural Development Program CARD Coalition for African Rice Development CBOs Community-Based Organizations CDDP Community Demand-Driven Project CPCU Central Projects Coordination Unit CRR Central River Region DOA Department of Agriculture EA Engagement Agreement ESACL Environmental and Social Assessment Check List ESMF Environmental and Social Management Framework DPC Deputy Project Coordinator EA Engagement Agreement EU European Union FAO Food and Agriculture Organization of the United Nations FASDEP Food and Agriculture Sector Development Project FMA Financial Management Assessment FSS Farm Support Services GAFSP Global Agriculture and Food Security Program GCAV Gambia Commercial Agriculture and Value Chain Management Project GAP Good Agricultural Practices GDP Gross Domestic Product GAIMS Gambia Agricultural Information Management System GCCI Gambia Chamber of Commerce and Industries GCP Growth and Competitiveness Project GHNP Gambia Health and Nutrition Project GIEPA Gambian Investment and Export Promotion Agency

ii

GNAIP Gambia National Agricultural Investment Plan GOTG Government of The Gambia IAs Implementing Agencies IDA International Development Association IMF International Monetary Fund IFPRI International Food Policy Research Institute IFR Interim Financial Report IsDB Islamic Development Bank ISM Implementation Support Mission JAS Joint Assistance Strategy JICA Japan International Cooperation Agency JPS Joint Partnership Strategy RDA Regional Directorate of Agriculture LIA Local Implementation Agency LCU Local Currency Unit MDG Millennium Development Goal MFWR Ministry of Fisheries and Water Resources MG Matching Grants MGS Matching Grant Scheme MLRG Ministry of Lands and Regional Governments MOA Ministry of Agriculture MOFEA Ministry of Finance and Economic Affairs MOFEN Ministry of Forestry and Environment MOTIE Ministry of Trade, Regional Integration and Employment MICS Multiple Indicator Cluster Survey MIS Management Information System MTR Mid Term Review M&E Monitoring and Evaluation NaNA National Nutrition Agency NARI National Agricultural Research Institute NBR North Bank Region Nema (Adopted local name for the) National Agricultural Land and Water Management

Development Program NEPAD New Partnership for African Development NGOs Non-Governmental Organization NPC National Project Coordinator PAGE Program for Accelerated Growth and Employment PCU Project Coordination Unit PEIG Project Economic Interest Groups PIA Project Implementation Agency PMP Pest Management Plan POs Producer Organization PPIAF Public-Private Infrastructure Advisory Facility PRSP Poverty Reduction Paper PSC Project Steering Committee

iii

PTC Project Technical Committee RIA Regional Implementation Agency RPF Resettlement Policy Framework SMEs Small and Medium-Scale Enterprises SRI System of Rice Intensification TA Technical Assistance UNDP United Nations Development Program WAAPP West Africa Agriculture Productivity Program WB The World Bank WCR West Coast Region WFP World Food Program WUA Water Users’ Association

Regional Vice President: Makhtar Diop Country Director: Vera Songwe

Sector Director: Jamal Saghir Sector Manager: Martien van Nieuwkoop

Task Team Leader: Kadir Osman Gyasi

iv

THE GAMBIA Commercial Agriculture and Value Chain Management Project (P125024)

TABLE OF CONTENTS

Page

I.  STRATEGIC CONTEXT .................................................................................................1 

A.  Country Context ............................................................................................................ 1 

B.  Sectoral and Institutional Context ................................................................................. 2 

C.  Higher Level Objectives to which the Project Contributes .......................................... 4 

II.  PROJECT DEVELOPMENT OBJECTIVE(S)..............................................................7 

A.  Project Development Objective .................................................................................... 7 

Project Beneficiaries ........................................................................................................... 7 

PDO Level Results Indicators ........................................................................................... 10 

III.  PROJECT DESCRIPTION ............................................................................................10 

A.  Project Components .................................................................................................... 10 

B.  Project Financing ........................................................................................................ 17 

Project Cost and Financing ............................................................................................... 17 

C.  Lessons Learned and Reflected in the Project Design ................................................ 18 

IV.  IMPLEMENTATION .....................................................................................................19 

A.  Institutional and Implementation Arrangements ........................................................ 19 

B.  Results Monitoring and Evaluation ............................................................................ 22 

C.  Sustainability............................................................................................................... 22 

V.  KEY RISKS AND MITIGATION MEASURES ..........................................................23 

A.  Risk Ratings Summary Table ..................................................................................... 24 

B.  Overall Risk Rating Explanation ................................................................................ 24 

VI.  APPRAISAL SUMMARY ..............................................................................................25 

A.  Economic and Financial Analysis .............................................................................. 25 

B.  Technical ..................................................................................................................... 26 

C.  Financial Management ................................................................................................ 27 

D.  Procurement ................................................................................................................ 28 

E.  Social (including Safeguards) ..................................................................................... 28 

v

F.  Environment (including Safeguards) .......................................................................... 29 

Annex 1: Results Framework and Monitoring .........................................................................31 

Annex 2: Detailed Project Description-. ....................................................................................37 

Annex 3: Implementation Arrangements ..................................................................................57 

Annex 4: Operational Risk Assessment Framework (ORAF) .................................................79 

Annex 5: Implementation Support Plan ....................................................................................84 

Annex 6: Details of the Financial and Economic Analysis .......................................................89 

Annex 7: Details of Social and Environmental safeguards Issues ...........................................94 

Annex 8: Map of Project Area ..................................................................................................101 

vi

.

PAD DATA SHEET

Gambia, The

Commercial Agriculture and Value Chain Management Project (P125024)

PROJECT APPRAISAL DOCUMENT.

AFRICA

AFTA1

Report No.: PAD718.

Basic Information

Project ID EA Category Team Leader

P125024 B - Partial Assessment Kadir Osman Gyasi

Lending Instrument Fragile and/or Capacity Constraints [ ]

Investment Project Financing Financial Intermediaries [ ]

Series of Projects [ ]

Project Implementation Start Date Project Implementation End Date

March 18, 2014 30-May-2019

Expected Effectiveness Date Expected Closing Date

June 19, 2014 30-Nov-2019

Joint IFC

No

Sector Manager Sector Director Country Director Regional Vice President

Martien Van Nieuwkoop Jamal Saghir Vera Songwe Makhtar Diop .

Borrower: REPUBLIC OF THE GAMBIA

Responsible Agency: Ministry of Agriculture

Contact: Ada Mariama Gaye Title: Permanent Secretary 1

Telephone No.:

00-220-422-82-70 Email: adamariama@gmail.com

.

Project Financing Data(in US$ Million)

[ ] Loan [ ] Grant [ ] Guarantee

[ X ] Credit [ X ] IDA Grant [ ] Other

Total Project Cost: 19.27 Total Bank Financing: 15.92

Financing Gap: 0.00 .

vii

Financing Source Amount

BORROWER/RECIPIENT 3.35

IDA Grant 8.72

IDA Credit 7.20

Total 19.27.

Expected Disbursements (in US$ Million)

Fiscal Year

2014 2015 2016 2017 2018 2019 2020

Annual 2.63 3.65 4.62 2.88 1.12 1.02 0.00

Cumulative

2.63 6.28 10.90 13.78 14.90 15.92 0.00

.

Proposed Development Objective(s)

The Project Development Objective for the Commercial Agriculture and Value Chain Management Project (GCAV) is to improve productivity and access to market of targeted agricultural commodities for smallholders in the Project Area. .

Components

Component Name Cost (US$US$ Millions)

Component 1: Support to development of irrigation and key productive infrastructure

13.56

Component 2: Support to value chain management 3.18

Component 3: Project administration and institution building 2.56.

Institutional Data

Sector Board

Agriculture and Rural Development .

Sectors / Climate Change

Sector (Maximum 5 and total percent must equal 100)

Major Sector Sector percent Adaptation Co-benefits percent

Mitigation Co-benefits percent

Agriculture, fishing, and forestry Crops 30

Industry and trade Agro-industry, marketing, and trade

30

Agriculture, fishing, and forestry Agricultural extension and research

20

Agriculture, fishing, and forestry Irrigation and drainage 20

Total 100

viii

I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. .

Themes

Theme (Maximum 5 and total percent must equal 100)

Major theme Theme percent

Trade and integration Trade facilitation and market access 30

Environment and natural resources management

Water resource management 30

Rural development Other rural development 20

Rural development Rural markets 20

Total 100 .

Compliance

Policy

Does the project depart from the CAS in content or in other significant respects?

Yes [ ] No [ X ]

.

Does the project require any waivers of Bank policies? Yes [ ] No [X]

Have these been approved by Bank management? Yes [ ] No [X]

Is approval for any policy waiver sought from the Board? Yes [ ] No [X]

Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] .

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 X

Natural Habitats OP/BP 4.04 X

Forests OP/BP 4.36 X

Pest Management OP 4.09 X

Physical Cultural Resources OP/BP 4.11 X

Indigenous Peoples OP/BP 4.10 X

Involuntary Resettlement OP/BP 4.12 X

Safety of Dams OP/BP 4.37 X

Projects on International Waterways OP/BP 7.50 X

Projects in Disputed Areas OP/BP 7.60 X .

Legal Covenants

Name Recurrent Due Date Frequency

Annual Work Plan and Budget Yes No later than Yearly

ix

October 31 of each year

Description of Covenant The Borrower shall prepare and furnish to the Association for its approval a proposed annual work plan and budget containing all activities proposed to be carried out under the Project in the following Fiscal Year.

Name Recurrent Due Date Frequency

External Auditor December 18, 2014

Description of Covenant The Borrower shall appoint, not later than six months after the Effectiveness Date, the external auditors for the Project, in accordance with the provisions of Section III.C of the Financing Agreement.

Name Recurrent Due Date Frequency

Rolling out of GIFMIS at CPCU August 21, 2015

Description of Covenant The Borrower has, not later than fifteen months after the Project Effectiveness Date, rolled out the activities of the Gambian Integrated Financial Management Information System (GIFMIS) within the Central Projects Coordination Unit (CPCU).

Name Recurrent Due Date Frequency

Financial reporting Yes Not later than 45 days from the end of the quarter

Quarterly

Description of Covenant The Borrower shall prepare and furnish to the Association not later than forty-five (45) days after the end of each calendar quarter, interim un-audited financial reports for the Project, in form and substance satisfactory to the Bank.

Name Recurrent Due Date Frequency

Audit reports Yes By June 30 of each year

Annually

Description of Covenant

The Audited Financial Statements for each period shall be furnished to the Association not later than six (6) months after the end of the project fiscal year. .

Conditions

Name Type

Adoption of the Project Implementation Manual Effectiveness

Description of Condition

The Recipient has prepared and adopted a Project Implementation Manual, in form and substance satisfactory to the Association.

x

Name Type

Confirmation of the appointment of essential Central Projects Coordination Unit (CPCU) staff.

Effectiveness

Description of Condition

The Recipient has, for the purpose of ensuring adequate management and fiduciary capacity, employed or appointed to the CPCU, a project coordinator, financial management specialist, procurement specialist, with qualifications, experience and terms of reference acceptable to the Association.

Team Composition

Bank Staff

Name Title Specialization Unit

Wolfgang M. T. Chadab Senior Finance Officer Senior Finance Officer CTRLA

Alexandra C. Sperling Legal Analyst Legal Analyst LEGAM

Soulemane Fofana Senior Rural Development Specialist

Senior Rural Development Specialist

AFTA1

Kofi-Boateng Agyen Senior Private Sector Development Specialist

Senior Operations Officer

AFTFW

Demba Balde Senior Social Development Specialist

Senior Social Development Specialist

AFTCS

Anta Tall Diallo Program Assistant Program Assistant AFCF1

Jean-Philippe Tre Senior Agriculture Economist

Senior Agriculture Economist

AFTA1

Rose Abena Ampadu Program Assistant Program Assistant AFCW1

Maman-Sani Issa Senior Environmental Specialist

Senior Environmental Specialist

AFTN2

Mamadou Mansour Mbaye

Consultant Consultant AFCF1

Yassin Saine Njie Program Assistant Program Assistant AFMGM

Sidy Diop Senior Procurement Specialist

Senior Procurement Specialist

AFTPW

Kadir Osman Gyasi Senior Agriculture Economist

Team Lead AFTA1

Erick Herman Abiassi Agric. Economist Agric. Economist AFTA1

Sheu Salau E T Consultant E T Consultant AFTA1

Ngor Sene Financial Management Specialist

Financial Management Specialist

AFTMW

Aifa Fatimata Ndoye Niane

Agric. Economist Agric. Economist AFTA1

Elizabeth Hassan Associate Counsel Legal LEGVP

xi

Kazuhiro Yoshida Sr Irrigation Engineer Sr Irrigation Engineer AFTA1

Maya Abi Karam Sr Counsel Legal LEGVP

Faly Diallo Regional Finance Officer Regional Finance Officer CTRLA

Juvenal Nzambimana Sr. Operations Officer Operations Support AFTAI

Non Bank Staff

Name Title Office Phone City

Désiré Richard COQUILLAT

FAO Consultant Washington D.C.

.

Locations

Country First Administrative Division

Location Planned Actual Comments

1

I. STRATEGIC CONTEXT

A. Country Context

1. The Gambia is a low-income country with a population of about 1.8 million people (2012), of which half live in rural areas. Living conditions are generally poor: the country ranked 165 out of 187 in the 2012 UNDP Human Development Index. Gross Domestic Product (GDP) per capita stands at US$497 in 2012. The country’s poverty headcount index remains high at 48.4 percent in 2010, albeit on a downward trend from the 2003 rate of 58 percent.1 Poverty is deeper and more widespread among households headed by agricultural and fishery workers, and there is pronounced spatial diversity, with the poverty headcount index for rural households twice as high as for urban households. There is also the concern that a “feminization” of poverty is underway, exemplified by higher levels of poverty among female-headed households - estimated at 18 percent of the rural households. Poverty of the female-headed households is closely linked to their high illiteracy levels, the absence of economic opportunities, and inadequate access to productive resources, including credit, land ownership, skills and support services. Youth unemployment particularly in urban areas and low productivity in the agricultural sector are contributing factors to income poverty and food insecurity. 2. The Gambia recorded an average real GDP growth rate of 6.2 percent during 2008-2010. Growth is supported by strong agricultural output and healthy gains in tourism activity. However, the 2011/12 crop failure that contributed to the 4.3 percent contraction in GDP in 2011 disrupted the strong growth path. In particular, marked fiscal deterioration, high government borrowing needs and shifts in monetary policy contributed to heightened uncertainty and a jump in real interest rates for government debt. Aside from domestic challenges, the country remains highly vulnerable to external shocks given its relative undiversified economy, driven largely by the service sector. The Gambia re-exports imported commodities such as rice, sugar, and flour to countries in the sub-region, mainly Senegal, Guinea Bissau and Mali. The service sector (dominated mostly by the re-export trade and tourism) accounts for over 50 percent of the GDP. The re-export trade alone constitutes about 80 percent of the country’s merchandise exports and contributes between 53 and 60 percent of domestic tax. Tourism is the key driver of the economy and the most significant foreign exchange earner. Agriculture is another very important sector for the country. However the sector’s performance remains mixed and vulnerable due to its extreme dependence on weather. Groundnut contributes significantly to the national economy, accounting for 60 percent of domestic exports, and 55 percent of rural households engage in groundnut production. However, the commodity has experienced significant decline: exports began to collapse in 2004 to just US$9.6 million compared to US$49 million in 1975 (fluctuating between US$8 million in 2001, to US$10.8 million in 2008) largely due to failures in internal marketing arrangements.

1 The rates are based on the national poverty lines set at US$1.25/day and US$1.00/day (in current US dollars) for 2010 and 2003, respectively.

2

B. Sectoral and Institutional Context

3. The agricultural sector account for about 30 percent of the country’s GDP, and engages about 75 percent of the country’s work force. The majority of the farmers are smallholders cultivating less than 4 hectares per family. It generates approximately 40 percent of foreign exchange earnings and provides two-thirds of total household income. 4. The sector is characterized by subsistence production of rain-fed food crops (coarse grains, rice), semi-intensive cash crop production (groundnuts and horticultural production) and traditional livestock breeding. Farming systems in The Gambia include a wide range of production and cropping patterns in a uni-modal rainfall regime: the two main farming systems are upland and lowland. The upland system involves crops such as groundnuts, millet, sorghum, maize and horticultural crops as well as livestock husbandry. The lowland rainfed farming system is predominantly rice-based (swamp rice) and cultivation is done primarily by women. Only about 3 percent of the country’s arable land is under irrigation. And as in other sahelian countries The Gambia is severely and regularly affected by adverse climatic conditions. The 2011-2012 Sahel droughts caused big losses in agricultural crop production, with serious impacts on household food security and nutrition. 5. The country produces just about 50 percent of its food needs, exposing it to severe hunger and household vulnerability due to food insecurity. The country’s cereal needs have been consistently above local production with the result that the cereal gap has been widening, despite the relative increasing trend of cereal production. The cereal consumption deficit increased from 65,661 MT in 1991 to 150,000 MT in 2007 (GAFSP, 2010). Its national requirements for rice (major staple food) was in the range of 200,000 metric tons (MT) in 2012 while national production of rice was estimated at only 38,800 MT2 or only 19 percent of the country’s needs. The national food deficit is bridged by commercial imports of rice and wheat flour in addition to food aid. High and volatile international food prices regularly affect access to food and hence the living standards of Gambians. As a result the Food and Agriculture Organization of the United Nations (FAO) classifies The Gambia as a Low Income Food Deficit Country (LIFDC). The 2013 Global Hunger Index also classified the level of hunger in The Gambia as serious with 14 points, although it has improved in recent times. 6. Food security and poverty have marked geographic dimensions in the country3. Under-nutrition continues to be a major public health problem exacerbated by poverty, food deficit, and poor dietary habits, among others. The seasonal agricultural pattern also contributes to acute food shortages in the rainy season often referred to as the “hungry season” (July to September), as households exhaust their granary before the harvest period. The low purchasing power of poor urban and rural households also has serious nutrition and health implications. Household food insecurity has exacerbated the prevalence of acute and chronic malnutrition which is particularly affecting under-5 children. According to the 2010 Multiple Indicators Cluster Survey (MICS), 9.5 percent of under-5 children are wasted, and 24.3 are stunted at the national level.

2 Source: Joint CILSS/FEWSNET, FAO, WFP GOTG, 2013. Pre-Harvest Assessment of the 2012/2013 Cropping Season Food and Nutrition Outlook, The Ex-post and Provisional Cereal and Food Balance Sheet) 3 Higher proportion of the poor and food insecure are found in several districts of Central River Region (North and South), Lover River Region, North Bank Region and Upper River Region.

3

7. The agricultural sector, however, has a great potential to be an important driver of growth, for reducing poverty, hunger and malnutrition. The Gambian farm sector has yet to tap its potential. The sector is becoming less attractive to the youth, as they seek a better future in urban settlements and abroad. Mass exodus of youth from the rural areas to urban areas will likely have important consequences for agricultural production, notably labor availability. To realize its full potential the sector will have to address the challenge of low productivity, which is exacerbated by a combination of structural and institutional constraints such as: (i) low levels of rural infrastructure, including insufficiently developed water management systems, leaving the country’s agriculture almost entirely dependent on rainfall, in spite of availability of important inland water resources; (ii) a weak research system and limited capacity and efficiency of extension services leading to poor farming practices; (iii) a lack of adequate delivery mechanisms to ensure the provision of good quality farm inputs such as seed, fertilizer and other agricultural goods and services needed by producers and rural enterprises; (iv) high post-harvest losses, paired with low value addition, exacerbated by weak storage, processing, and marketing capabilities; (v) weak institutional capacity of producer organizations (POs) and of agricultural services; (vi) low levels of private investment; (vii) lack of access to short- and long-term financial capital; and (viii) most crucial of all, adverse agro-climatic conditions. 8. The sector is also faced with competitiveness challenges, as its domestic markets are opened to international trade. Overcoming these constraints is crucial for the enhancement of the productive capacity of the rural poor, over 72 percent of whom depend directly on agriculture for food and incomes. Addressing a number of the constraints to provide a solid base for private sector-led development of the sector, would include: providing a predictable and supportive policy environment; provisioning of better access to product and input markets, improving access to agricultural extension services and to financial services; strengthening the governance, cohesiveness and efficiency of value chains. 9. In order to unleash the potential of agriculture for sustainable growth, a number of key actions are needed, including encouraging private sector-led agricultural export diversification and promoting market-oriented agricultural production based on the smallholder sector. This would require transforming the agriculture sector from subsistence to a commercial orientation focusing on the smallholders as the main pathway to sustainable development. This could be achieved by capitalizing and accelerating growth in potentially fast growing subsectors such as horticulture and coarse grains and by increasing rice (the main staple food) productivity for enhanced food security, income generation and import substitution. 10. Historically, public expenditure for the agricultural sector has tended to focus on groundnuts production, the country’s principal cash crop, with residual amounts only for market development and value-addition. Consequently, little research and development on high value crops is taking place, market information systems for these commodities are virtually non-existent, and food and bio-safety standards are both poorly defined and implemented. Collectively, the above challenges enormously add to the costs of doing business in the sector. They amount to a major disincentive for private sector investments, weak capacity on the part of farmers to invest in diversification to raise yields or improve quality.

4

11. The Government of The Gambia’s strategy to address critical constraints to fast and sustainable development of the agricultural sector includes policy initiatives outlined in the Agricultural and Natural Resources (ANR) sector. One such important initiative is the formulation and validation of the ANR Sector Policy Framework, 2009-2015, which is fully aligned with national goals of Vision 2020, and incorporated as the agricultural pillar of its PRSP-II and Program for Accelerated Growth and Employment (PAGE)4 for 2012-2017. The policy focuses on key areas that will accelerate the modernization of agriculture, improve productivity and competitiveness, and enhance commercialization, particularly of smallholders, by laying a solid foundation for a sustainable and inclusive growth in agricultural sector. To operationalize this policy the Government has developed the Gambia National Agricultural Investment Plan (GNAIP). Ensuing from the African Union’s New Partnership for Africa Development’s (NEPAD) Comprehensive Africa Agriculture Development Program (CAADP) framework, GNAIP re-emphasizes national goals for agricultural development and food security while setting a road map, throughout 2011-15, with the objective to attain at least 8 percent growth in the agricultural sector. The GNAIP is a US$296.7 million program over the period 2011-2015. It is organized around six program areas: (i) improved agricultural land and water management; (ii) improvement of other shared resources (common properties); (iii) development of agricultural value chains and market promotion; (iv) national food and nutrition security; (v) sustainable farm development; and (vi) GNAIP coordination, monitoring and evaluation. 12. The government has also initiated a number of strategies aimed at revitalizing most of the critical sub-sectors to accelerate the achievement of the objectives of the ANR. A National Rice Development Strategy is being finalized, under the auspices of the Coalition for African Rice Development (CARD) funded through Japan International Cooperation Agency (JICA). A seed policy has also been prepared and is receiving cabinet consideration. The Bank is supporting these initiatives through its on-going operations in The Gambia, particularly the West Africa Agricultural Productivity Program (WAAPP 1C). The proposed project will support the modernization of the sector to make it efficient, to strengthen the productive capacities of small- and medium-scale producers and their organizations, and facilitate access to markets and value addition for a selected range of commodities such as rice and horticulture (mainly vegetables).

C. Higher Level Objectives to which the Project Contributes

13. The proposed Commercial Agriculture and Value Chain Management Project’s (GCAV) objective is closely linked to the Government of The Gambia’s strategy for poverty reduction. It would directly improve food security by increasing production and market access for products important to domestic consumption. The project supports government’s strategy on market-oriented agricultural development, and complements interventions supporting the country’s agricultural sector to become more competitive, sustainable and private sector-led which will ensure sustained increases in producers’ incomes.

4 The Program for Accelerated Growth and Employment (PAGE) is the successor to the PRSP II. The PAGE is based on Government’s Vision 2020 and various sector strategies. Its principal objective is to accelerate growth and employment and reduce poverty (World Bank 2013)

5

14. The GCAV will contribute to the GNAIP’s objective of fast and sustainable growth in the agricultural sector necessary to achieve the targeted annual growth stipulated in the PAGE, which is the  country’s most recent Poverty Reduction Strategy Paper and covering the years 2012 to 2017. To do so, the Project will focus primarily on three GNAIP’s program areas: (a) improved agricultural land and water management (Program one) to contribute to the objective of developing 25,000 ha of land for rice and vegetable cultivation – the national objective is to achieve self-sufficiency in rice by 2016; (b) Development of Agricultural Chains and Market Promotion (Program Three) aimed at transforming the agricultural sector from a traditional subsistence economy to a modern market-oriented commercial sector with well integrated food chains and a viable agro-processing private sector, resulting in increased incomes of agricultural value chain actors; and (c) GNAIP Coordination (Program Six) for effective coordination of the 5 technical programs. The project will also contribute to the Gambia National Nutrition Policy (2010-2020) particularly to Pillar 3 related to food and nutrition security at national, community and household levels. 15. The proposed project is consistent with the PAGE as it would contribute to economic growth, and job creation benefiting the most vulnerable groups, and constitutes a key element of the Bank’s partnership strategy for The Gambia. The World Bank and the African Development Bank have developed a Joint Assistance Strategy (JAS) so as to ensure a coordinated and harmonized development approach in programing and portfolio management. The Joint Partnership Strategy (JPS) 2013-2016 deepens the partnership between these institutions and has been designed to better harmonize an important part of donor assistance in The Gambia in line with the “Paris Declaration on Aid Effectiveness”. 16. The proposed Project is closely aligned with Pillar 1 of the JPS “Enhancing Productive Capacity and Competitiveness in order to Strengthen Resilience to External Shocks”. The JPS Pillar 1 recognizes that agricultural productivity and competiveness will both reduce rural poverty and promote pro-poor and inclusive growth, and proposes support in strengthening institutional capacity for promoting market oriented production and private sector participation in the agricultural sector. This is also in consonance with government’s vision of private sector-led, demand-driven, and pro-poor value chain development. The Government’s ambition is to transform the agricultural sector, with individual households and communities moving from subsistence to farming as a business. The rationale of GCAV is to contribute to enabling that transformation by concentrating resources on the principal public sector constraints on private sector production and marketing of key commodities, particularly rice and vegetables. 17. The project’s strategy is to enable smallholders in the project area to increase their productivity and competitiveness and to benefit from improved access to market by focusing on the establishment of rural-urban commercial linkages that can generate a self-sustaining growth. The proposed project supports the development of a vibrant commercial agriculture as a means to move away from subsistence agriculture, which is often synonymous to poverty for a majority of rural households. Producing agricultural products for the expanding urban markets as well as supplying inputs to food processing enterprises will facilitate integration of the rural economy in the country’s overall economy. In the end, it should contribute to increasing incomes and economic opportunities for rural households.

6

18. This operation hinges on the Bank funded Development Policy Operation in The Gambia: Economic Governance Reform Grant (EGRG) which supports the efforts of the Government to improve economic governance by strengthening government accountability, public sector performance, and promoting growth through private sector development. Policies and reforms supported by the EGRG are well aligned with the PAGE. It complements on-going World Bank operations in The Gambia, notably the West Africa Agricultural Productivity Program (WAAPP 1C) and the Gambia Growth and Competitiveness Project (GCP) by helping to upgrade the respective values chain, supported by these projects, focusing on downstream interventions to reduce excessive postharvest losses associated with the targeted crops. The Bank has initiated an analytic advisory activity on sources of growth in the Gambia. This study, when completed, would be expected to provide direction on areas where the proposed study could deepen interventions, particularly in the horticulture sector, to promote inclusive growth. Furthermore, the project would be implemented in coordination with the proposed Health and Nutrition Project in addressing food and nutrition security issues, particularly in coordinating inter-sectoral collaboration on food and nutrition security. The project would contribute to improved household food and nutrition by promoting safe food of high nutritional value and help to diversify local production, processing, packaging and consumption of food rich in micronutrients like vegetables. 19. The proposed project is also closely linked to a number of similar ongoing projects in the sector, including: (i) IFAD funded National Agricultural land and Water Management Development Project (Nema) aimed at increased income from improved productivity based on sustainable land and water management practices targeting lowland rice and vegetables; (ii) the IFAD financed Rural Finance Project (RFP) supporting microfinance intermediation; (iii) the AfDB and IFAD co-financed Livestock and Horticulture Development Project (LHDP) with the objective to reduce rural poverty by raising the incomes of rural producers in livestock and horticulture (Vegetable) production, processing and marketing; and (iv) the Global Agriculture and Food Security Program (GAFSP) funded Food and Agriculture Sector Development Project (FASDEP) which seeks to reduce rural household poverty, food insecurity and malnutrition, through increased agricultural production and productivity and commercialization. GCAV would therefore seek to enhance donor coordination by working closely with these projects and other partners in the agricultural and related sectors to ensure that the Bank’s support complements and builds on on-going donor interventions to bring about synergic interventions in the agricultural sector among development partners. 20. The proposed project would contribute to both competitiveness and employment, and vulnerability and resilience pillars of the Bank’s new Africa Region Strategy – “Africa’s Future and the World Bank’s Support to it”. The Project’s investments in productive infrastructure will contribute to both objectives of the strategy by supporting the attainment of higher growth, resilience to climate change induced weather (drought and flooding) effects, and the diversification of the economy. Diversification of the economy is expected to reduce the economy’s vulnerability and enhance its resilience to external shocks by broadening the economic base and reducing the dependence on drought-prone agriculture.

7

II. PROJECT DEVELOPMENT OBJECTIVE(S)

A. Project Development Objective

21. The Project Development Objective (PDO) for the Commercial Agriculture and Value Chain Management Project (GCAV) is to improve productivity and access to market of targeted agricultural commodities for smallholders in the Project Area. 22. To achieve this objective the project will support targeted investments to remove critical constraints, improve productivity and build organizational and institutional capacities, both private and public, along the value chains of the targeted commodities. In particular, the project will: (i) rehabilitate irrigation infrastructure to enhance the resilience of agricultural production systems to climate change-induced weather shocks in selected areas; (ii) rehabilitate/build commercial postharvest infrastructure to facilitate processing and marketing of agricultural products; (iii) support strengthening of the technical, institutional, managerial and marketing capacities of smallholders and their organizations, as well as other stakeholders involved in agricultural production and value chains, to more effectively operate in a market-driven environment; and (iv) provide institutional-strengthening support to improve the governance of GNAIP. 23. It is expected that the interventions will result in increased productivity coupled with reduced post-harvest losses, improved product range and quality, more efficient processing and improved marketing, thereby generating additional incomes for producers and other operators in the targeted commodity value chains. The selected value chains are rice and horticulture (vegetables), for which accessible markets exist and productivity gains are achievable through adoption of proven technologies. These commodities present potentially profitable business opportunities that can contribute directly to rural poverty reduction as their cultivation is dominated by poor smallholders, predominantly women.

Project Beneficiaries 24. The project beneficiaries are potentially all actors along the value chain of target commodities, with priority to small farmers, but also processors, marketers and service providers catering for smallholder agriculture needs. It will directly support small-holder production as well as seek to provide opportunities for the entrepreneurial poor (with attention to gender) by leveraging private investments in agricultural processing from commercial investors that would provide improvements in input and output marketing opportunities for small holders. Other beneficiaries include government and non-government institutions that are critical for the development of the sector as well as those who avail themselves of new income generating opportunities through formal sector employment in commercial agricultural ventures and improved opportunities for participating in remunerative value chain activities resulting from stronger market linkages with input and/ or output markets. 25. The project is expected to benefit directly (i) at least 40,000 people in Central River Region (CRR), West Coast Region (WCR) and North Bank Region (NBR), of which at least 70 percent are women, comprising of small-scale rice and vegetable farmers, largely women through access to irrigable land; (ii) 500 young entrepreneurs to establish off-farm micro-small-

8

medium enterprises (MSMEs); and (iii) processing and marketing entrepreneurs5. The project will also directly support various government and private sector agencies playing a key role in the agricultural and natural resources sector, such as the ministry of agriculture, water resources and fisheries; trade, regional integration and employment, land and regional governments. Specialized agencies such as the National Agricultural Research Institute (NARI), department of water resources, national environment agency, and targeted value chains will also benefit in capacity building and equipment support. Indirect beneficiaries include members of smallholders’ households, value chain stakeholders, and wage workers engaged in new activities. Direct and indirect beneficiaries would reach a total of 80,000 people. 26. The project area consists of Central River Regions (CRR - North and South) and the North Bank and West Coast regions of the country. The selection of the project area has been guided by the following criteria: (i) highly favorable agro-climatic conditions for the selected commodities and the potential for growth in agricultural production; (ii) availability of water resources (low salinity) and suitability for tidal irrigation development; (iii) existence of some supporting infrastructure (including past experience in irrigation agriculture); (iv) market access and potential synergy with other operations. CRR/N and CRR/S regions have particularly high productive potential. They are key rice and leafy vegetable growing areas with relatively fertile lowland soils, which can be developed to improve national food security. Though most smallholders are currently producing at the subsistence level with high incidence of poverty and food insecurity, there is a significant potential for production increases, both in terms of expansion of cultivated area per farmer and increasing productivity per unit of labor. With a proper enabling environment, reliable water to support all year production, diffusion of labor-saving technology and access to markets, agricultural incomes of smallholders could rise significantly over a relatively short period. 27. Strategic Choices: The project will primarily support two values chains: rice and horticulture (particularly vegetables). In addition, mango will be supported in close collaboration with the Gambia Growth and Competitiveness Project, with focus on increasing domestic processing and postharvest handling to reduce losses. Rice and vegetables have been identified as priority crops, given their potential to achieve both commercial and social development objectives as these crops are mostly cultivated by women and can improve small farmers’ food and nutrition security and income generation opportunities.

28. In particular, rice is the main staple food for Gambians with a per capita consumption of 117 kg per annum. The annual requirement stands at about 200,000 MT out of which only about 19 percent is produced locally. The deficit is met through imports and food aid. Total national area under rice cultivation has increased, over the past decade, while the production is declining particularly in the lowlands. This could be partly attributed to the poor distribution and steady decline of rainfall, adverse growing conditions, limited resources available to farmers and lack of suitable rice varieties. Decline in national rice production has significantly increased the dependency of the rural population on imported rice, thus reducing their savings and net income. Income generated from other farming and off-season farm activities is inevitably used to procure

5 It is expected that the project will rehabilitate 2500 ha for rice of 1ha per household, 100 ha for vegetable of which 40 women/ha; 60 groups of 5 young people for an average matching grant of US$ 15,000; and at least 3 large scale processors.

9

imported rice. It is expected that project intervention would help to bridge the supply gap and generate surpluses that can be sold on the local and national markets. The World Food Program is targeting the produce from this intervention and many other sources for the implementation of its envisaged Purchase for Progress (P4P) program in The Gambia to meet demand for food grains for its school feeding program in the country. 29. Similarly, horticulture plays an important role in the food and nutrition security in The Gambia. It contributes about 4.2 percent to GDP and involves 65 percent of the agriculture labor force. The country has a large potential for expanding its horticulture farming base, essentially due to the demand from the vibrant tourism industry, the fast-growing urban consumers markets and the attractive European outlets. The potential for growth and import substitution exists, but high production costs and producer prices, together with a low domestic consumption6 are constraining the sector. For this reason, horticultural production is receiving a high interest from the government, and it has been identified as a key sector investment priority in “Program 3” of the GNAIP.

30. In The Gambia, horticulture largely consists of a variety of vegetables (tomatoes, onions, peppers, green leaves and eggplants), fruits (mangoes, orange, cashew and bananas) and roots and tubers which are essentially grown in the Western part of the country, where agro-climatic conditions are favorable. In this project, the mango and vegetable value chains were selected because of their ubiquitous character, marketability and existing export potentials. Vegetables are typically grown by smallholder women farmers, who are either working individually (as out-growers in some cases) or within communal gardens. Eighty-eight (88) percent of all women farmers in The Gambia are involved in horticulture production. The production systems consist of small-scale community gardens where the major source of water for irrigation is ground water through shallow hand-dug or concrete lined wells.

31. In the case of mango, the Gambia possesses favorable agro-climatic conditions and comparative advantages for production of the crop, with potentially very high returns to smallholder growers. Growth in the sub-sector could contribute significant revenues to the rural economy. Statistics from FAO show total area under mango production increased from 170ha in 2005 to 250ha in 2008. Considering the low levels of investments required, and given the (virtual) absence of labor costs (family labor), the production costs under a smallholder mango farm orchard are very low with great opportunities for the subsector to grow. Some of the opportunities for sub-sector’s growth include (i) the development of out-growing schemes to supply the local market to enhance the empowerment of farmers, a strategy currently being supported under the World Bank funded GCP; (ii) the development of small-scale processing units (juices and dry mangoes) with affordable and simple technologies, and (iii) the very low use of chemical inputs by smallholder growers, which is desirable in some EU standards to reach niche markets (organic foods). The proposed project will support interventions in postharvest management (processing in juice and dry mangoes) to increase value and reduce postharvest losses.

6According to the Integrated Value Chain Analysis of the Horticulture Sector in The Gambia (GDS, 2009), diet is low in vegetables and averages 6.2kg in 2005 (annual per capita consumption in Senegal is about 35 kg) and wholesale prices in The Gambia are systematically higher than those in Senegal, with price differential varying from 6 percent (pepper) to 100 percent (eggplants).

10

PDO Level Results Indicators 32. The key expected outcome indicators of the proposed project are: (i) increase in productivity-(tons/ha) of targeted commodities: (ii) increased volume of market sales of target commodities by selected producer organizations supported by the project; and (iii) percent reduction in postharvest losses from farmers having access to the postharvest infrastructure under the project. 33. Key intermediate outcome indicators are as follows: (i) increased area with improved irrigation and drainage services (hectares); (ii); number of commercial partnerships established (aggregated by crops); (iii) number of processing, storage, marketing facilities rehabilitated/created; (iv) number of new small and medium agricultural services enterprises set up through matching grant system; (v); (number of operational water user associations created and/or strengthened; (vi) increase of household vegetable in-take because of the project (see Annex 1 for details; and (vii) total number of direct project beneficiaries (disaggregated by gender).

III. PROJECT DESCRIPTION

34. The proposed project will support interventions designed to help the agriculture sector improve productivity and build resilience against weather-related shocks, while improving market access to provide incentives for farmers to produce more. It will seek to maximize the limited IDA resources by: (i) focusing project support on a limited number of commodity value chains that are both important in terms of food security and nutrition, and have significant development potential to respond to market opportunities, and in limited geographical areas with suitable agro-climatic conditions; (ii) focusing project activities in each selected value-chain on resolving the binding constraints on productivity, quality, value-addition and market linkages; (iii) ensuring a fair balance between required hardware as well as software investments to adequately address identified constraints; and (iv) coordinating with similar projects supported by other development partners, in terms of design and implementation, to leverage support in critical areas on the value chains and avoid duplication and enhance development outcomes of the interventions.

A. Project Components

35. The activities of the project are clustered around two main interlinked technical components: (i) support to development of irrigation and productive infrastructure and (ii) support to value chain development. The third component deals with coordination of project activities, and support to the Ministry of Agriculture for overall sector coordination, to facilitate the implementation of the country National Agricultural Investment Program (GNAIP). 36. By its design, the project seeks to lay the foundation for a private sector led agricultural development program in The Gambia, and serve as a catalyst to deepen partnership with other

11

stakeholders including development partners in the sector, especially IFAD and AfDB. The proposed project will focus on the following activities: (i) improving on-farm productivity through reduced weather related risks and production intensification; (ii) increase value addition and market access; and (iii) support institutional development for value chain integration/coordination by strengthening producer organizations and promoting/public private partnerships. Component 1: Support for development of irrigation and key productive infrastructure—US$13.58 million (IDA Grant US$3.75 million; IDA Credit US$7.20 million; Beneficiaries US$2.61 million) 37. This component will support critical public and private infrastructure needs to enhance the resilience and competitiveness of the agricultural sector. The objective of this component is to support the rehabilitation and improvement of tidal irrigation schemes as well as key productive infrastructure to address key constraints in the agricultural production system in order to improve productivity, and to further improve the efficiency of key value chains through improved access to markets. The objectives of this component will be pursued under the following two subcomponents: (i) irrigation development and farm production improvement; and (ii) leveraging private sector investments in agri-business and supporting access to key productive assets. 38. Sub-component 1.1-- Irrigation Development and farm production improvement US$9.19 million (IDA Grant US$1.99 million; IDA Credit US $7.20 million). The Sub-component will seek (i) to improve basic irrigation infrastructure facilities and required management systems to strengthen the country’s resilience to climatic shocks for enhanced production of rice and vegetables; and (ii) to enhance the producers’ access to improved technologies (including climate-smart technologies, bio fortified varieties with iron, carotene, etc.) which increase productivity and competitiveness.

39. The project will complement on-going donor support, (especially Nema and FASDEP), and public sector investments in land and water management so as to reduce the country’s vulnerability to climate change induced risks. These investments are expected to raise the productive potential of the limited agricultural land and to boost rice productivity. Currently, only about 3 percent of the country’s irrigable land has been developed out of the 80,000ha of irrigation potential. The GNAIP targets to bring 25,000ha under improved soil and water management practices. Under this sub-component, the project will finance (i) the rehabilitation of 2,500ha of existing tidal irrigation schemes for intensive rice cultivation around CRR (North and South); (ii) the equipment of 100 ha of women-community groups vegetables gardens schemes with modern irrigation facilities (borehole, complete solar-water pumping system, drip irrigation system, overhead galvanized tank, fencing) in WCR and NBR, in the promotion of improved household nutrition. 40. The sub-component activities will also include the establishment and capacity building of Water User Associations (WUAs), and the preparation of management and maintenance programs for irrigation facilities and equipment.

12

41. The activities to be financed under the irrigation sub-project will include: (i) physical rehabilitation of existing tidal irrigation works, including main and secondary canals and drainage structures as well as the construction of on-farm irrigation systems (works and goods); and (ii) institutional support for a more efficient and sustainable operation and maintenance of the infrastructure and the land and water resources for irrigated agriculture (technical assistance and training). Detailed design of irrigation and drainage schemes will be developed. With the participation from water users, the Ministry of Agriculture will work closely with the Ministry of Water Resources to design and appraise these schemes, with the support of technical specialists appointed by the supervising Ministry for the project. The sites will be selected based on: (i) proximity to markets, (ii) cost and quality evaluation, and (iii) interest expressed by farmer groups/cooperatives to undertake the development of tertiary networks and take subsequent responsibility for management and maintenance. 42. The farm production improvement support activities would be coordinated and implemented in partnership with WAAPP. It would leverage WAAPP support to promote the implementation of applied research and the development and extension of technological packages that improve productivity and produce quality of the irrigation farmers. It will also foster partnership and coordination with other Bank and non-Bank projects in the country to leverage interventions supporting technology development and dissemination to increase access of rice and vegetable farmers in the tidal schemes to improved planting materials and knowledge on good agricultural practices. The project will target smallholder farmers, both within and outside of productive partnerships, to improve their productivity, product quality and cost efficiency. Agriculture in The Gambia is very much dominated by women and therefore labor saving technologies appropriate to women would be identified and extension approaches would be designed to target women. Technologies addressing nutrition relevant issues such as nutrient-high crop varieties, as well as those addressing climate change issues (in terms of adaptation and resilience) would be deliberately targeted for adoption. It would also leverage on seed distribution schemes of WAAPP to increase access of farmers to improved seed. In collaboration with the Bank-funded Maternal and Child Nutrition and Health Results Project, GCAV will also promote household nutrition through information, education and communication activities on proper utilization of diverse and safe foods of high nutritional value (bio-fortified varieties). 43. Sub-Component 1.2: Promoting private sector investment in agribusiness and supporting access to key productive equipment - US$4.37 million (IDA Grant US$1.76 million; Beneficiaries US$2.61 million). The sub-component, will seek to: (i) improve basic postharvest management infrastructure downstream the value chains to improve quality and enhance competitiveness of domestically produced rice, in particular; and (ii) enhance the mechanization of the agricultural works (field preparation, harvesting, threshing, etc.) by building the capacity of the various stakeholders in the private sector, particularly producer organizations and youth groups, and the facilitation of start-up businesses supplying these services to the producers in the tidal irrigation schemes to be rehabilitated.

44. The goal of this sub-component will be achieved by leveraging private resources to improve basic agro-processing and value addition infrastructure for enhancing post-harvest value and performance of agricultural markets and improve competiveness. The sub-component will

13

facilitate demand-driven public-private partnerships with targeted beneficiaries, including producer’ organizations, agro-processors and other relevant Micro, Small and Medium agribusiness Enterprises (MSMEs) to increase domestic production and processing capacities for high-quality rice and horticultural produce (particularly mango) for urban markets. The project’s support will entail facilitating the establishment of high efficiency and high quality-yielding milling enterprises that would improve competitiveness, particularly, of domestically processed rice and absorb marketable rice surpluses for the urban market. It will also promote private sector investments in mango processing facilities and related services. The project will also seek to leverage IFC support for private sector investment in processing facilities with direct relevance to this project. This would be essential for reducing the huge postharvest losses associated with the targeted commodities in The Gambia and connect farmers to markets. 45. A matching grant financing mechanism will be used to leverage private investments into the sector. Funding for selected subprojects would be allocated through a competitive process that will include a beneficiary's contribution in the form of equity in a Matching Grant-cum-Equity-Loan approach. Access to the matching grant will be guided by clearly defined selection criteria such as evidence of pre-existing adequate financial, management and technical capacity, successfully managing horticulture production and marketing and processing operations, and access to market networks in key export countries. Eligible beneficiaries will include private actors operating in the supply chains of the targeted commodities for domestic and export markets, particularly, high quality rice milling and marketing as well as fruit processing (particularly, pulping, freezing and drying of mango in coordination with GCP interventions in the mango sub-sector). The project will also help promote linkages with local rice traders for distribution of processed rice to urban markets. The investments to be supported by the project include support for upgrading or construction of rice processing facilities, processing units and postharvest management of fruits and vegetables, cold chain equipment, warehouses, packaging units etc. It will also finance: (i) consultancy services and studies related to processing; (ii) formulation (within partnership between agro-industries and cooperatives) of nutritive recipes or fortified food from project supported commodities likely for children under 5 years and pregnant women.   46. Furthermore, the sub-component will support sub-projects that largely consist of equipment that requires a business-type use and management to be sustainable and profitable. The matching grant ratio will (initially) be set at different levels for Micro-Small and Medium Scale Enterprises, including producer groups under the condition that the beneficiary group has a contractual agreement with its members to use and manage the equipment as a microenterprise, providing services to the whole group and or community. The sub-component will also be extended to young entrepreneurs who would establish farm support service centers to provide services to farmers. Eligible categories of productive equipment would include: (a) seedling production; (b) small scale agricultural production equipment such as animal traction equipment, power tillers, seeders/hand held cultivators, spraying equipment, etc.; (c) harvesting and postharvest management equipment and facilities, e.g., mobile harvesters, mobile threshers, tarpaulins, drying floors, dryers, etc.; and (d) agricultural marketing equipment, such as transport equipment (ox-cart,), etc.

14

Component 2: Support to value chain management- (IDA Grant: US$3.15 million). 47. The objective of this component is to develop and strengthen the institutional capacity of farmer-based organizations and professional associations of private sector participants in the value chain to scale up best practices and support farmers’ and private sector participants’ sub-projects to address key constraints and exploit the opportunities to improve the productivity, processing, and marketing of selected commodities; and to strengthen marketing and agri-business development through engagement with private sector stakeholders. The component will also support the MoA with technical assistance to review and reorganize the cooperative department of the Ministry. In coordination with the Growth and Competitiveness project, GCAV will support improvements in quality standards in The Gambia. 48. The project will facilitate the establishment, development and operation of private productive partnerships7 among producer organizations; processing and marketing entrepreneurs, as well as public and private sector agencies providing development support services to the target value chains (through public support provided on the basis of transparent procedures to improve private service delivery supporting such partnerships). In doing so, the project will strengthen the technical, institutional, managerial and marketing skills of smallholders and their organizations, as well as that of services providers and other stakeholders involved in agricultural production and value chains, to more effectively operate in a market-driven environment. The component would take a gender and vulnerable group sensitive approach to capacity building and provide support to improved nutritional status among rural households in project affected districts drawing on the findings of the ongoing study on roles of women in production, consumption and reproduction in the Gambia. The support under this component will be provided through the following three sub-components: (i) Strengthening the capacity of the associations of value chain participants; (ii) Linking producers to markets; and (iii) improving agricultural investment climate and service delivery. 49. Sub-component 2.1: Institutional strengthening and value chain coordination (IDA US$1.25 million): Under this sub-component, the project will strengthen the technical and management capacity of producer groups, professional associations and other stakeholders benefiting from the project to adopt effective organizational approaches to access competitive input and output markets through formal linkages between smallholders and either larger-scale commercial farms or separate services providers. The project’s focus will be to strengthen the management and performance of farmer groups as they are seen as a key element to overcome problems of economies of scale and quality assurance. The sub-component will improve coordination and dialogue among actors in the value chain, through the establishment of professional institutions and through support of partnerships between actors, including private-public partnerships.

7 A Productive Partnership is understood here to mean a long-term, voluntary, commercial relationship between a farmers’ organization (and its members) with an agribusiness enterprise aiming to meet market demands. It is based on contractual arrangements (a) to implement a business and investment plan that has been jointly developed and (b) to undertake commercial transactions. Productive Partnerships are one key link within a longer value chain. A Productive Partnership does not constitute a separate legal entity independent of its constituent parts, i.e., a farmer organization and an agribusiness enterprise. 

15

50. The sub-component will finance the following activities: (i) capacity building of professional associations of groups benefiting from sub-projects; (ii) capacity building of public partner institutions, supporting sub-project beneficiaries, and (iii) organizational development and institutional strengthening of the priority value chains. The sub-component will also strengthen the capacities of private and non-governmental agricultural services providers including cooperatives by (i) strengthening the capacities of private sector agencies, NGOs and CBOs to support smallholder groups and their associations to prepare development plans and investment proposals (sub-projects) for funding under Component 1; and (ii) strengthening the managerial and business capacities of local micro-enterprises that provide services to other actors of the target value chains. 51. As far as the eligibility and selection of private and non-governmental agricultural services providers are concerned, preference will be given to those who have the relevant experience, skills, and mandate to work with local communities and smallholder farmer groups or associations. Eligibility and selection criteria will be detailed in the Project Implementation Manual. 52. Sub-component 2.2: Linking Producers to Markets (IDA US$1.52 million). The objective of this sub-component is to support improved value chain development and coordination, through support to SMEs and producer organizations to enhance their productive capacity and competitiveness and to develop market linkages. Through this subcomponent, the project will attempt to link agriculture to tourism, a growing sector in The Gambia with numerous hotels and restaurants which could be a great market to target, particularly for vegetables. The subcomponent will facilitate farmers’ access to market by creating and supporting commercial partnerships between farmers’ organizations and private agribusiness enterprises to foster the integration of a greater number of smallholder producers in performing and remunerative value-chains, by developing and implementing public-private alliances in the project areas aimed at improving market linkages. The aim is to develop long-term, voluntary and commercial relationships and implement a detailed partnership business and investment plan that will help the participating partners to improve their competitiveness. Project support will be provided to at least two (2) partnerships for eligible expenditures including advisory services and training in support of farmer organizations (and their members) and the respective agribusiness partner. Key activities will include facilitating the establishment of productive partnerships, identification and testing of the feasibility of new market opportunities, including product-market chain assessments, market feasibility studies, proprietary brand development studies, and access to specific food product distribution channels, provisioning of advisory services, organizing knowledge management and sharing best practices. 53. The component will finance the preparation and implementation of productive partnership business and investment plans through: technical support services and training towards implementation of selected partnership business plans. In addition to the aforementioned support provided in preparing and implementing productive partnership investment plans, which could be funded through Sub-component 1.2, technical and managerial services would be provided to support: (a) the establishment and development of smallholder farmer organizations; (b) the establishment and development of partnership relations between farmer organizations and agribusiness enterprises; (c) the development of a network of local service providers; (d)

16

interaction between regional governments, business associations and other support institutions to facilitate market-led agricultural growth; and (e) support strengthening the market information system for rice and vegetables through communication support to producer groups using mobile, community radio, the print and other media. Trade fairs and market days will be promoted as well as capacity building of producers in marketing. 54. Sub-component 2.3: Improving the agricultural investment climate and service delivery (IDA US$0.38 million). The sub-component would support policy dialogues with key stakeholders, especially the private sector through public-private round tables, forums or platforms (farmers, processors, entrepreneurs supporting the value chains etc.) to provide a voice on key policy issues and to engender effective partnership with the public sector so as to broaden and deepen the agricultural commercialization agenda. The subcomponent will support MoA to organize, in coordination with GIEPA and the Public Private Partnership (PPP) Unit of the Ministry of Finance and Economic Affairs (MoFEA) participatory policy dialogues to review and improve the agribusiness regulatory environment, institutional conditions and service delivery systems. These business forums would also contribute to the formulation of national agricultural competitiveness strategies, based on market opportunities and comparative advantage. The sub-component will build the capacity of MoA to provide, with support from GIEPA, business services and create a one-stop-shop for investment promotion in the agriculture sector including clear guidelines and templates for private investors. 55. In light of the findings of the recently completed Land Governance Assessment Framework (LGAF), in The Gambia, the project will provide technical advisory services for: (i) the full mapping and demarcation of all land used under the project; and (ii) the implementation of transparent and participatory land use procedures in project areas. This will involve providing support to perform a mapping of project beneficiaries’ farms using geographical information system as well as the preparation of a local cadastral plan showing the allocation of land rights to project beneficiaries. Such rural cadastral plan will be used as a pilot for scale-up at national level when the opportunity arises. Component 3: Project Administration and Institution Building--US$2.56 million (IDA Grant: US$1.82 million; GoTG US$0.74 million). 56. The objective of this component is to ensure proper coordination of project implementing agencies and sound management of project activities, while providing support to the Ministry of Agriculture (MoA) for the overall coordination of the Gambia National Agricultural Investment Plan (GNAIP). This component comprises the following two sub-components: (a) Project management, monitoring and evaluation; and (b) Support to Ministry of Agriculture (MoA) for the implementation of the GNAIP. 57. Sub-component 3.1:—Supporting Project Management, Monitoring and Evaluation --US$2.39 million (IDA (US$1.65 million; and GoTG US$0.74million). This subcomponent would support all activities necessary to ensure that the project is implemented in accordance with the project implementation manual. This subcomponent will: (i) finance the incremental expenses incurred by the Government in implementing the project through the Central Projects Coordination Unit (CPCU) and the participating field implementing agencies and various service providers; (ii) provide technical assistance through consultancies, audits, and training to enhance

17

implementation capacity of the CPCU; and (iii) finance communication and outreach activities to improve project visibility; and (iv) finance various monitoring and evaluation roles. 58. Sub-component 3.2: Support to Ministry of Agriculture (for implementation of GNAIP)—(IDA $0.17 million). Under this subcomponent, the project will provide support to the Ministry of Agriculture to develop strategies and policy frameworks to adequately coordinate and implement the GNAIP. Particularly, the project will provide support to: (i) improve agriculture and rural development policy and strategy formulation and analysis at all levels of government as well as to enhance national capacity to implement the GNAIP; (ii) streamline interagency coordination in delivering public services to the rural sector; and (iii) the GNAIP Steering Committee in conducting strategic studies, performing external monitoring and evaluation, and ensuring appropriate articulation and alignment of donor-funded operations, including the proposed project, with the GNAIP program areas.

B. Project Financing

59. The proposed lending instrument is a five year Investment Project Financing (IPF). The total cost of the project is $19.27 million and would be financed by a combination of IDA Credit and Grant for a total of US$15.92million equivalent. Other sources include parallel co-financing of activities by beneficiaries (supported value chain entrepreneurs) amounting to US$2.61 million, and counterpart funding from the Government budget (US$0.74 million) to partially support additional operating cost of MoA’s relevant departments, including the CPCU, in project implementation. 60. The following table provides a summary of project cost by component. Details of the project costs and its financing plan are provided in Annex 2. Project Cost and Financing Table 1: Project Cost and Financing

Project Components Cost Including

Contingencies

Gvt

Beneficiaries IDA-GRANT

Financing

Percent Financing

IDA-CREDIT

Percent Financing

A. Support for Development of Irrigation and Key Productive Infrastructure

13. 56 2.61 3.75 27.66 7.20 53.10

Subtotal 13.56 2.61 3.75 27.66 7.20 53.10 B. Support to Value

Chain Management 3.15 3.15

Subtotal 3.15 3.15 100.00 C. Project

Administration and Institution Building

2.56 0.74 1.82

Subtotal 2.56 0.74 1.82 71.09 Total Project Costs 19.27 0.74 2.61 8.72 45.25 7.20 37.36

18

C. Lessons Learned and Reflected in the Project Design

61. The project design has benefitted from the Bank’s extensive experience in agriculture and rural development in The Gambia, and other countries in Africa and Asia regions. More specifically, the project draws heavily on the recent analytical work undertaken in The Gambia, particularly The Gambia Agricultural Sector Policy Note and the Public-Private Infrastructure Advisory Facility (PPIAF) report on the Project Pipeline Screening and Support to the Establishment of a PPP Unit in The Gambia. It also draws on the ANR and GNAIP. The Agricultural Policy Note and its accompanying background reports on agricultural values chains in The Gambia not only provided critical insights and inputs for the preparation of the proposed project, but most importantly facilitated the selection of commodities of focus. The design also took into consideration lessons leant from successes and failures from the institutional arrangements of past and on-going IDA funded operations in the country, including, Gambia Community Demand Driven Project (CDDP); Third Education Project, Gambia Growth and Competitiveness Project; and the West Africa Agricultural Productivity Program (1C), as well as past and on-going donor-supported projects in The Gambia, especially AfDB, IFAD and IDB. The relevant lessons include: 62. Government and Beneficiary Commitment: A key lesson from WB, AfDB and IDB-financed projects in The Gambia is that commitment by government and the participation of beneficiaries and other local stakeholders in project implementation ensures smooth implementation, success and sustainability of the project. The PPP and demand-driven approach adopted for the proposed project requires that its design, preparation and implementation are driven by the farmer-based organizations and the professional associations of the private sector participants, notably the agro-dealers, including input suppliers and traders; agro-processors and other agricultural enterprises. The proposed project recognizes the need for considerable and sustained long term support of community organizations, such as WUAs or other agribusiness clusters/farmer-based organizations. This support includes both technical assistance through the project, and political support from the government; 63. Benefits of Small-Scale irrigation infrastructure investments: An important lesson learned from the irrigated agriculture intensification projects in the Africa Region, South East Asia and in many other regions is that compared to large-scale projects, investments to improve and expand existing irrigation facilities for small-to-medium-scale unit areas is less costly in investment of capital, and benefits could build up in a relatively short time. More than fifty per cent of the resources of this project will be devoted to investments in community-managed small-scale irrigation development; 64. Community Ownership of the project: The experience from the World Bank-assisted rural development projects in the Gambia (notably the CDDP) and the West Africa sub-region, particularly Senegal (Small Rural Operations Project) and Nigeria (Fadama I project) provides strong evidence for supporting the formation of WUAs, farmer-based organizations. In general, most of the irrigation projects implemented in the Africa Region show that the recovery of operating and maintenance costs through water charges and beneficiaries’ ownership is key to sustainability. The design of this project, therefore, supports the “user pay” principle and beneficiary participation is explicitly built into project planning, implementation and operation. The tidal irrigation and drainage investments go in parallel with support for institutional

19

development and the establishment of economic interest groups (EIGs)/farmer based organizations where they do not exist and strengthen existing ones;

65. Integration of infrastructure with livelihood activities and value chain approach. The experience from implementing rural development projects in the Africa Region and most other countries in which the World Bank has financed such projects reveals that the integration of infrastructure investments with parallel income-generation initiatives, such as rice and horticultural crop development provides a basis for high returns on investments. Similarly, the establishment of an integrated system that links production, processing and marketing is necessary for the optimum utilization of resources and maximum benefits, and should be the preferred direction for future development of the agricultural sector. The proposed project addresses these issues by placing strong emphasis on an integrated approach which combines investments in infrastructure with those into improved and more diversified agricultural production, and the processing and marketing of these products, i.e. the value-addition imperative; 66. Innovative commercial agriculture interventions that have been approved by IDA with similar objectives and modalities in other countries have provided direction to the proposed project. Notable examples include recently approved Senegal Sustainable and Inclusive Agribusiness Development Project in Senegal; Cote d’Ivoire Agriculture Sector Support Project, and the Ghana Commercial Agriculture Project, among others. Also, relevant were lessons from agribusiness models for fostering public private partnerships in export value chains for improving smallholders’ inclusion and improving farmers’ livelihoods such as demonstrated in the Vietnam Agriculture Competitiveness Project; Papua New Guinea’s Productive Partnership in Agriculture Project, and the productive alliance concept from Latin America. These and many others amply demonstrate that market oriented private sector-led interventions are more likely to be successful in delivering shared growth and prosperity. Value chain development must be private sector led, with public interventions aimed at helping the private sector overcome critical constraints and market failures. This requires a bottom-up approach and interventions must be driven by economically viable projects promoted by private sector and professional organizations for the given value chain. Partnerships need to be market-driven and demand-driven.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

67. Project implementation will take place over five (5) years. With a project mid-term review envisaged take place 2 years after project effectiveness. The Ministry of Agriculture will be the lead implementing institution. 68. The project will be implemented within existing public sector structures while adopting an appropriate private sector orientation to deepen the agriculture commercialization agenda of the project. In terms of implementation therefore the project would: (i) utilize existing institutional mandates and capacity –however limited – and would not create project-specific duplicates; (ii) put particular efforts into institutional coordination across ministries, departments

20

and agencies through strong mutually beneficial partnerships between the responsible Ministry and other units of Government; and (iii) ensure that project management incorporates private sector perspectives essential for long-term private sector involvement in the development and commercialization of The Gambian agricultural sector. 69. The Ministry of Agriculture will have the institutional responsibility for the project, and will be responsible for the project’s proper execution and supervision, in close collaboration with other relevant public and private sector agencies. 70. Strategic oversight and orientation function will be played by an inter-ministerial Project Steering Committee (PSC) whose membership would also include non-public actors. The existing GNAIP steering committee will service as the PSC for GCAV, into which other relevant bodies will be coopted to support the execution of project agenda. The PSC is headed by the Ministry of Agriculture (MoA), with membership comprising MoA, Ministry of Trade, Industry and Regional Integration and Employment (MoTIE), Ministry of Finance and Economic Affairs (MoFEA), Ministry of Fisheries and Water Resources (MOFWR), Ministry of Lands and Regional Government, Ministry of Forestry and Environment (MoFEN), National Nutrition Agency (NaNA), private sector (represented by Gambia Chamber of Commerce and Industries), representative of the farmer-based organizations, representatives respectively of the apex organizations of women and youth; and civil society, represented by the coalition of civil society group in The Gambia. 71. The main responsibilities of the PSC will include: i) providing strategic and policy guidance to ensure effective implementation and coordination of project activities; (ii) ensuring conformity with all applicable policies and guidelines; (iii) reviewing project progress reports and assessing performance indicators; (iv) approving the annual work plan and budget; (v) providing support for the prompt and efficient resolution of challenges or conflicts that arise during project implementation; (vi) facilitating effective collaboration with and among Project stakeholders and implementers; and (vii) such other responsibilities as set forth or elaborated in the Project Implementation Manual. The CPCU will act as the Secretariat for the Project Steering Committee (including preparing the meetings, elaborating the documents for the meeting, recording the minutes of the meeting, etc.). The project steering committee will meet at least twice a year. 72. The CPCU, reporting to the Project Steering Committee, will coordinate the overall implementation of the project. The head of the CPCU will be the national project coordinator (NPC) of this project, and the unit will have all necessary fiduciary staff, adequate monitoring and evaluation capacity and project accountants. The core staff will be supported by technical team from the key implementing partners. These will include an Agribusiness Officer from the Agribusiness Services Unit of DoA, Gender and Social Inclusion Officer from DoA, Soil and Water Management Specialist from the Soil and Water Management Unit of DoA and Safeguards Officer from the National Environment Agency (NEA). The CPCU will coordinate and consolidate the annual work plans and budgets and oversee the financial management and procurement of all other technical implementing agencies.

21

73. The Project Implementation Manual details the implementation modalities and procedures. It includes: (i) description, organization and functioning of project coordination and management bodies; (ii) eligibility criteria and procedures for implementing the project’s support including the matching grants; (iii) implementation modalities for each component and activity; (iv) M&E arrangements and procedures; and (v) social and environmental mitigation plan implementation.

Implementation of project components 74. The management and implementation of individual project components/project subcomponents will be carried out by the selected technical implementing agencies – Ministries, Departments and Agencies (MDAs) - and beneficiary private sector agencies. The CPCU will retain all fiduciary responsibilities. The role of the partnering MDAs is two-fold: they will be responsible as service providers for managing specific aspects of the project activities, as defined in the work plan, and they would also be beneficiaries of capacity building efforts of the project. As the implementation of activities will be directly undertaken by project beneficiaries, including: i) private actors, with the support of specialized operators and many service providers; and, ii) the relevant public services involved in the project, a project Technical Committee (TC) to be chaired by a Permanent Secretary of Agriculture with membership of senior technical personnel of key implementing partners (agencies) will be established to assist the CPCU in day to day project management and coordination and all such functions as elaborated in the PIM. The PIM also provides details of implementation. 75. To foster efficient coordination between the CPCU and technical implementing agencies, each entity will designate a focal point to coordinate the implementation of sub-projects in their respective agencies. The appointment of such focal points will be done within four months of project effectiveness as part of the MoUs signed between the CPCU and the respective technical implementing agencies. The role and responsibility of the focal point will be clearly detailed in the PIM and the respective terms of reference. The project will strengthen the capacity of the focal points through technical assistance and equipment.

76. Reporting, Annual Review, and Mid-Term Review. The CPCU will prepare comprehensive quarterly project progress and financial monitoring reports for review and approval by the NPSC and for the transmission to the Bank. It will organize an annual planning and implementation workshop with all institutions involved in project implementation. The workshop will serve as the basis for the preparation of the following year’s detailed works plans and budgets to be transmitted through the National Project Steering Committee to the Bank for review and approval before October 31 of each year.

77. A Mid-Term Review (MTR) will be conducted jointly by the Borrower and the Bank no later than two years after project effectiveness, during which the project will be examined in depth with a view of improving implementation performance and its developmental impact. A comprehensive report covering the implementation period will be prepared by the MoA and delivered to the Bank at least 30 days before commencement of the MTR.

22

B. Results Monitoring and Evaluation

78. The monitoring and evaluation (M&E) system will be in line with the proposed implementation structure of the Project and therefore fully mainstreamed into the Gambia Agricultural Information Management System (GAIMS). 79. The CPCU will bear overall responsibility of project M&E as aligned to GNAIP results framework. The M&E team will ensure effective and timely monitoring of progress towards achieving the development objective as set out in the Results Framework in Annex 1. Data will feed into the implementation support missions. Data on demand-driven components can only be gathered as and when project beneficiaries are identified. Particular attention will be paid to building sustainable monitoring capacity for SME supported interventions that will extend beyond the life of the project. 80. The Management Information System (MIS) would include social and environmental monitoring indicators to: (i) determine whether or not the mandatory safeguards screening for sub-projects and other project investments have been completed as per the Bank procedures; and (ii) assess the effectiveness of the environmental mitigation measures implemented, including the extent to which subprojects are prepared and subsequently managed in an environmentally and socially sustainable manner. The data collected through the M&E system on management and impact indicators would be disaggregated, and allow for proper assessment of impact on gender. 81. M&E reports, including environmental and social monitoring results, would be prepared semi-annually at the project level. The quarterly reports would be circulated to sector ministries and interested development partners. The project would undertake: (i) an update of the baseline data collected before beginning implementation and (ii) an impact assessment at mid-term, and a final impact assessment six months prior to project completion. 82. The joint Bank-Government semi-annual supervision missions would assess the status of key project outcomes and update legal covenant compliance. The mid-term review would be conducted no later than two years after project effectiveness. A final independent evaluation would be conducted in the last semester of project execution to assess overall achievement of expected project results. The results framework is described in Annex 1.

C. Sustainability

83. The project is being designed following intensive consultations with all stakeholders, and its interventions geared towards attracting private investors and promoting professional producer organizations. Government at various stages during the preparation phase has confirmed its willingness to see this program formulated and quickly implemented, and provided leadership in its preparation: The government facilitated frequent interactions and knowledge exchange workshops among the development partners supporting the sector, to foster effective donor coordination through project preparation leading to implementation. To strengthen the sustainability of project benefits, the project will:

23

(i) Give priority to capacity and institutional strengthening of farmer and community-

based organizations, of private sector operators, as well as public sector institutions. Much of project investments are demand driven and the capacity of project beneficiaries will be strengthened to manage them, including providing possible short-term technical assistance where necessary. Since most project activities will be demanded, owned and managed by project beneficiaries, the prospects are good that they will be sustained long after project completion;

(ii) Stimulate the private operators to take over roles and functions that should normally be within the private sector domain, but which are currently provided by government institutions and/or NGOs. Thus the project will reduce implementation burden on weak public institutions and foster long-term fiscal sustainability;

(iii) Systematically engage the private sector in market development and reinforcing the capacity of private operators. Task forces including the private sector will be established to lay out strategies and action plans, as well as institutional development for the priority commodities covered by the project.

84. Moreover, by anchoring project implementation within MoA through its CPCU and giving it full responsibility for project management, and by linking the project to MoA’s DoA agribusiness program, the project will have a catalytic effect on public sector reform and transparency of governance in the agriculture sector. The project is therefore building capacity and experience within MoA to implement the proposed project and future public sector programs which are necessary for the sustainability of public sector investments in agriculture. Mainstreaming the project implementation arrangements within DoAs Service Units whose staff and agencies would be reinforced would ensure that implementation responsibility is transferred upon project completion. 85. Finally, effective implementation of provisions in the project’ safeguards documents, namely the Environment and Social Management Framework (ESMF), the Pest Management Plan (PMP) and the Resettlement Policy Framework (RPF) would help to identify and avoid or minimize negative environmental and social impacts resulting from project activities, while encouraging and enhancing positive impacts.

V. KEY RISKS AND MITIGATION MEASURES

86. The risks to the project are Substantial. Preliminary risks and mitigation measures that have been identified are presented in the attached “Operational Risk Assessment Framework” (ORAF) worksheet in Annex 4.

24

A. Risk Ratings Summary Table

Table 2: Risk Ratings Summary Risk Category Rating Stakeholder Risk Moderate Implementing Agency Risk - Capacity High - Governance Substantial

Project Risk - Design Moderate - Social and Environmental Moderate - Program and Donor Low - Delivery Monitoring and Sustainability Moderate - Other (Optional)

Overall Implementation Risk Substantial

B. Overall Risk Rating Explanation

87. The overall project risk is rated substantial for both preparation and implementation stages. The rating takes into account the country’s political, economy and institutional capacity challenges. Political economy risks include frequent institutional changes and high turnover of ministers and senior government officials in The Gambia which could increase uncertainties over coordination, especially at the policy level. This migration of skilled staff and capacities can potentially harm the implementation of policies and represent substantial risks to implementation. 88. Regarding the risks associated with the capacity of producer organizations and private sector operators to fully take over ownership and management responsibilities for the commercial infrastructures such as processing facilities, or warehouses, that the project will help develop, arrangements will be discussed and worked out with stakeholders right from the conception stage to ensure the effective and rapid transfer of ownership and management responsibilities. 89. The risk of elite capture exists. Communities may be marginalized in decision making and choice of sub-projects, which could create room for elites to divert the benefits of the project for self-gain. Mitigation measures would include: (i) effective supervision and monitoring to ensure that the benefits are going to the intended target group; (ii) funds will not be granted to individuals; (iii) representatives of POs/NGOs, civil society and private sector will be represented as part of the approval committees; and (iv) appointment of a technical auditor to review quality of service providers in the sub-projects as well as the management of funds by beneficiaries. 90. Given the multitude of public actors and the need for close collaboration to carry out complex tasks, there is a risk of insufficient coordination capacity. A lack of incentives to

25

undertake institutional and business process reforms constitutes another implementation risk. The project will devote substantial resources to institutional strengthening among the technical implementing agencies, both at the coordination level as well at the policy and technical levels. 91. Nonetheless, specific mitigation measures would need to be put in place and their implementation closely monitored at implementation stage to address some risks of governance and corruption as described in the ORAF. 92. Regarding environmental and social safeguards, the project is classified as a “Category B” as the impacts are likely to be small scale and site specific. The risk is considered moderate.

VI. APPRAISAL SUMMARY

A. Economic and Financial Analysis

93. Economic and financial analysis has been carried out as part of project preparation to determine whether the project is financially and economically profitable and sustainable in relation to the investments made. Production and costs are valued at prevailing level of prices (first quarter of 2014). Economic costs and prices are assumed to be equal to financial prices and costs in the absence of value added taxes and other transfers such as personal income taxes, corporate taxes, import duties, and production subsidies. The project is targeting mainly rice and vegetable production. The analysis assumes a macroeconomic environment with price and exchange rate stability. 94. The estimation of the financial and economic benefit was based on the cash flows (revenue) with a five-year and a ten-year projection as the project’s maximum time period for making both social and economic impacts, and to be sustained. The project impact is expected to start materializing on the second year of project implementation given the works and equipment needed. Finally, using a discount factor of 12 percent, the financial net present value (FNPV) and the economic net present value (ENPV) were computed for the project. 95. The results of the financial analysis showed that, given the available financial cash inflows as derived, the project would create great wealth for the communities. The project is financially sound and would generate significant financial profits as shown by the FNPVs estimated at US$12.4 million in a five-year horizon and US$32.5 million in a ten-year horizon and respective financial internal rate of return (IRR) of 49 percent and 61 percent much higher than the interest rate in the financial market (table 3). This result meets the expectations as numerous evidences have shown that agricultural activities and particularly rice and vegetables production are profitable. 96. The economic analysis, on the other hand, displays a NPV of US$ 12.7 million and US$ 33.0 million respectively, in a five-year and a ten-year time horizon. The economic IRR are estimated at 50 percent and 61 percent for the five and ten year’s horizon. The economic IRR are much higher than the opportunity cost of capital in large public investments (17-25 percent). This result suggests that the project is economically sound.

26

97. A sensitivity analysis was carried out to test the robustness of results of the financial and economic assessment: on the assumption of the following adverse scenarios:

i) a decrease by 50 percent of rice yield (2 tons/hectare, two times a year) or a decrease by 50 percent of millet rice price (US$299/ton);

ii) a decrease by 50 percent of vegetables yield (12.5 tons/hectare, two times a year) or 50 percent of post-harvest losses or 50 percent decrease of price (US$325/ton for onion and US$390/ton for tomato);

iii) a combined decrease by 50 percent of rice and vegetable yield or prices; iv) an increase by 50 percent of rice and vegetable production costs, and v) a-two year lag of the completion of the works of the rehabilitation of the schemes

assuming production starts in the year 3 of project implementation instead of the second year.

98. Except the scenario (iii) combining a decrease by 50 percent of rice and vegetable yield or prices, the financial and economic returns to the project remain positive under the other adverse scenarios (i, ii iv and v). In fact, under these adverse scenarios, the financial IRR varies between 13 percent and 43 percent in a five-year time horizon and between 20 percent and 55 percent in a ten-year time horizon while the economic IRR varies between 14 percent and 44 percent and between 21 percent and 56 percent respectively in a five and ten-year horizons. Adversely, the worst adverse scenario (iii) combining a decrease by 50 percent of rice and vegetable yield or prices led to a negative net present value and a financial IRR of 2 percent and an economic IRR of 3 percent in a five-year horizon. However, at a ten-year time horizon, the net present value would become positive with a financial IRR of 22 percent and an economic IRR of 23 percent. 99. The financial and economic rates of return as well as the net present value of economic benefits are given on the table below. A summary of the economic and financial analysis is provided in Annex 6. Table 3: Financial and economic analysis results

Items Financial Analysis Economic Analysis

Time Horizon 5 years 10 years 5 years 10 yearsNet Present Value (US$) 12,403,854 32,534,282 12,765,496 33,034,004

Internal Rate of Return (percent)

49 61 50 62

B. Technical

100. The technical approach embodied within the project reflects a number of background analytical studies, including the Agricultural Sector Policy Note, Public-Private Infrastructure Advisory Facility (PPIAF) rapid assessment report on Project Pipeline Screening and Support to the Establishment of a PPP Unit in The Gambia, as well as many studies that have been carried

27

out in The Gambia in recent times. The agricultural sector policy note, for instance, provides an in-depth assessment of the main agricultural commodities, including those considered in this intervention, in a structure-conduct-performance type of approach and recommends development strategies for the respective value chains. The Government and Bank team also took advantage of key analytical work done in the sector including background papers produced for similar donor funded project in the sector, such as (i) the integrated value chain analysis of the horticultural sector in The Gambia prepared by the Gambia Investment Promotion and Free Zone Authority and the World Bank; (ii) working papers on poverty, targeting and gender; rural infrastructure; vegetable and rice productivity; marketing and value addition; institutional assessment, and on information, knowledge and communities prepared as part of the background studies for the IFAD funded National land and Water Management Project (Nema). Expert knowledge contributions from the broad stakeholder consultations also helped to strengthen the project design. 101. The project technical design is solid as the approach is consistent with that used in a growing number of similar Bank projects in the Africa Region and globally, while at the same time being innovative and designed to reflect local conditions. The project technical design has been widely discussed and agreed upon by the government and stakeholders. Experiences from existing projects in The Gambia, such as the World Bank funded Growth and Competitiveness Project and the Nema funded by IFAD, have been instrumental in feeding back emerging experience in facilitating private sector engagement in agriculture and in designing and managing matching grant schemes in similar projects. 102. That said, the agribusiness agenda is at the forefront of development thinking and therefore maintaining high-level technical inputs to the project to ensure the continued application of best practice will be critical. This implies the need for potentially expensive international technical assistance.

103. Moreover, tidal irrigation, which utilizes natural energy generated by the tidal fluctuation within the river, has advantages of low operation and maintenance costs compared with pump irritation. MoA has an experience of tidal irrigation in the Jahaly-Pacharr project and its potential has been recognized. In order to select suitable location of tidal irrigation the project will conduct topographical surveying and measurement of river water levels. There are several important issues relating to this irrigation to attain double-cropping including: water management and land preparation. The proposed project will establish and strengthen Water Users Associations (WUAs) to support the design and operation of the irrigation scheme.

C. Financial Management

104. A financial management assessment (FMA) of the CPCU, implementing entity of the Project, was carried out in December 2013. The FMA was conducted in accordance with the Financial Management Practices Manual issued by the Financial Management Board on March 1, 2010. The conclusion of the financial Management assessment is that the financial management arrangements will meet the Bank’s minimum requirements under OP/BP10.00 once the mitigation measures are implemented (see FM action plan in Annex 3).

28

105. The residual risk rating for the CPCU will be Substantial. Details on the Financial Management arrangements for this project are included under Annex 3.

106. The CPCU financial management system is weak due to the inexistence of a critical FM function: FM staff is not yet in place and FM procedures have not yet been established. As a result of the financial management capacity constraints, the effectiveness conditions for this project are: (i) the preparation and adoption of the Project Implementation Manuel (PIM), including FM procedures and defining clearly the roles and responsibilities of the various stakeholders, (ii) the recruitment or the appointment of a Financial Management Officer with experience and qualification satisfactory to the Bank. In addition, as a dated covenant, the Project should recruit an external auditor by not later than six (6) months after effectiveness and roll out and use the GIFMIS at the CPCU not later than fifteen (15) month after effectiveness.

D. Procurement

107. Procurement activities for the proposed project will be conducted by the CPCU procurement unit, which will be backstopped by the existing capacities in similar agricultural projects also coordinated under the CPCU (WAAPP, FASDEP, Nema). The CPCU coordinates the implementation of all donor funded projects in the MoA, with teams well versed in the IDA procedures, and have handled procurement under previous and on-going IDA programs as well as all other donor operations. Based on this experience, it is expected that the sum of expertise gained in the agricultural sector projects will highly benefit the arrangement of the new project, and will help to mitigate the residual risks that are: i) the lack of Project Coordinator, ii) the need to update the manual of procedures to take into account the proposed project, iii) the need of training of the staff to be drawn from the existing ministries and departments and iv) the need of space to permit a better filing system. 108. The risk is substantial and is expected to be moderate once the following mitigation measure are implemented: i) appointment a Project Coordinator following a competitive process acceptable to the Bank; ii) update the manual of procedures to take into account the activities of the proposed project; iii) train the staff drawn from existing ministries and departments in World Bank procurement procedures; and iv) find sufficient office space to permit to organize and secure procurement files inter alia. The CPCU has prepared during appraisal, a procurement plan which has been reviewed and approved by IDA.

E. Social (including Safeguards)

109. The proposed project will focus on activities that promote social inclusion and household food security through commercial orientation in agricultural production; youth and women, in particular, are expected to benefit from the project because they are heavily involved in most of the activities and processes along the commodity value chains. It is anticipated that at least 40,000 farmers will directly benefit from project interventions, of which 60 percent would be women, through access to irrigation perimeters for rice and vegetable cultivation, production equipment services, training and advisory services. Total direct and indirect beneficiaries would reach 80,000 people factoring all who will be benefiting from milling and food processing

29

facilities. Furthermore, given the central role women play in the agriculture sector in The Gambia, particularly in the cultivation of rice and vegetables, the project would have special attention being given in the project design for the inclusion of women and youth who are known to bear the primary burdens of agriculture in rural areas. 110. The project is not expected to have serious negative effects on beneficiary communities or individuals. It might happen however, that, in the establishment of processing facilities small pieces of land may be required and this could have the potential for loss of land and for that matter crop losses and therefore some livelihoods. But these are expected to be very minor and manageable. In anticipation of this, a resettlement policy framework (RPF) has been developed through a consultative process to comply with the requirements of OP/BP 4.12, and appropriately address such situations, if they occur. Given that the actual sites for the construction of processing facilities were not known at the time of appraisal, the Borrower prepared the RPF. The RPF has been reviewed by the World Bank and disclosed prior to appraisal. The in country disclosure took place on January 28, 2014 whilst the World Bank Infoshop disclosure occurred on January 27, 2014.

F. Environment (including Safeguards)

111. The proposed project is a rated category B as it is not expected to induce significant adverse environmental and social impacts. Some of the planned activities such as rehabilitation of tidal irrigation schemes, construction of processing facilities, and productive sub-projects may, however, have localized, remediable environmental impacts. Three safeguards policies are triggered: Environmental Assessment (OP/BP 4.01); Pest Management (OP 4.09); Involuntary Resettlement (OP/BP 4.12), and Projects on International Waterway (OP/BP 7.50). To address the safeguards risks and ensure environmental and social sustainability of future subprojects, and because the sites of the specific sub-projects and activities are not yet known, the relevant framework instruments (Environmental and Social Management Framework (ESMF), a Resettlement Policy Framework (RPF) and a Pest Management Plan (PMP)) were prepared, consulted upon, approved and disclosed in-country January 28, 2014 and at the Bank Infoshop January 27, 2014. In the case of OP/BP 7.50, project interventions were determined to fall within notification exception provided for under paragraph 7(a) of OP7.50. A riparian notification exception was provided by the RVP on February 11, 2014. 112. The assessment carried out at the National Environmental Agency (NEA) level, including its regional offices, revealed several constraints to the execution of its responsibilities of enforcing EIA procedure, overseeing compliance to ESMPs, advising and supporting sectors and proponents in sustainability management. These constraints include, among others, limited technical and logistical capabilities, inadequate provisions for the conduct of field audits and limited EIA experience. Therefore, the project will provide capacity building support to the key stakeholders involved with the implementation of the safeguard instruments, including the NEA and REPOs. The support will cover activities such as (i) equipment and tools, (ii) trainings, (iii) sensitization and education. An estimated amount of two hundred forty thousand US dollars (US$240,000) is earmarked and incorporated into the project budget to finance the environmental and social measures apart from eventual resettlement costs covered by Government resources if they occur.

30

113. Public Consultation and Disclosure: All the safeguard instruments were prepared in full compliance with World Bank and national safeguard policies, following a broad consultation framework, involving all relevant stakeholder groups, consistent with the approach adopted at project initiation. This participatory approach will be carried on throughout implementation, maintenance, supervision and evaluation of the project. Prior to disclosure in-country and at the Bank Infoshop, a stakeholder workshop was organized by the Project Government Project Preparation Team, involving relevant project stakeholder groups in government agencies, the private sector, representatives of professional organizations, farming organizations, civil society, and NGOs. 114. The Project is an Environmental Assessment Category B. The policies triggered are: Table 4: Safeguards Policies

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [x] [ ] Natural Habitats (OP/BP 4.04) [ ] [x] Pest Management (OP 4.09) [x] [x] Indigenous Peoples (OP/BP 4.10) [ ] [x] Physical Cultural Resources (OP/BP 4.11) [ ] [x] Involuntary Resettlement (OP/BP 4.12) [x] [ ] Forests (OP/BP 4.36) [ ] [x] Safety of Dams (OP/BP 4.37) [ ] [x] Projects on International Waterways (OP/BP 7.50) [x] [ ] Projects in Disputed Areas (OP/BP 7.60)* [ ] [x]

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas

31

Annex 1: Results Framework and Monitoring

GAMBIA: Commercial Agriculture and Value Chain Management Project

Project Development Objective (PDO): The PDO is to improve productivity and access to market of targeted agricultural commodities for smallholders in in the Project Area.

PDO Results Indicators

WB

Cor

e

Unit Baseline (2014)

Cumulative Target Values Data Collection and reporting

2014 2015 2016 2017 2018 2019 Frequency Data Source / Methodology

Responsibility for Data Collection

Description (indicator definition)

8

PDO Indicator One: Increase in production of targeted commodities due to the project

Tons

Rice: 0 0 0 10,000 22,000 34,000 46,000

Annually

Annul outcome surveys; quarterly and annual progress reports; MoA NASS reports

CPCU/MoA Veg. 0 0 5,000 10,000 15,000 20,000

PDO Indicator Two: Increase in yield of targeted crops

Tons per ha

Rice: 2 2 0 8 8 8 8

Annually

Annual outcome Surveys; quarterly and annual Progress Reports; MoA ASS

CPCU/MoA

The project would increase the yield at least from 2 t/ha to 4t/ha for rice and from 15 t/ha to 25 t/ha and from one to two cropping seasons a year. This is 8t/ha (4t/ha*2 a year) for rice and 50 t/ha (25t/ha*2 a year) for vegetables like onion and tomato.

Veg.15 15 0 25 25 25 25

8 Core-/Indicators from the GEF and CIWA Results Framework (October, 2013) have, to the extent possible, been incorporated in the Project’s results framework; as well as the Bank’s core indicators.

32

PDO Indicator Three: Increase of volume of market sales by rice and vegetables producers beneficiaries of the project

% 0 0 0 50 100 150 200 Annually Surveys / Progress Reports

CPCU/MoA

It is expected that with the increase of yield, producers would be able to satisfy their consumption needs and sell at least 50percent of their surplus.

PDO Indicator Four: Reduction in postharvest losses from farmers having accessibility to the postharvest infrastructure under the project

% 30 30 30 20 15 10 10

PDO Indicator Five: Direct project beneficiaries including household members 9 of which

# Total:0 0 0 10,000 20,000 30,000 40,000 Annually Progress Reports

CPCU/MoA

It is expected the project to target 2500 ha for rice of which 1 household/ha, 100 ha for vegetable of which 40 women/ha; and 100 groups of 5 young for an average matching grant of US$ 15,000.

male rice producers female rice producers female vegetable producers young entrepreneurs

# 0 0

1000 1000 2000 200

2000 2000 3000 300

2500 2500 4000 500

2500 2500 4000 500

2500 2500 4000 500

Annually Progress Reports

CPCU/MoA

Intermediate Result (Component 1): Support to developing irrigation and other key productive infrastructure

One: Area with improved irrigation and drainage services planned by the project

Ha

Rice: 0 0 0 1,000 2,000 2,500 2,500

Annually

Annual Outcome Survey; Quarterly and annual Progress Reports

CPCU

Veg.: 0 0 0 50 100 100 100

9 Direct project beneficiaries from this project are people benefitting from training and outreach activities.

33

Two : Operational water user associations (WUA) created and/or strengthened at bloc level at perimeter level at country level: network of WUA10

0 0 0

0 0 0

0 0 0

100 20 0

100 20 1

100 20 1

100 20 1

100 20 1

Annually

Annual Outcome Survey; Quarterly and annual Progress Reports

CPCU/MoA

For each bloc (30 ha) and perimeter (about 150 ha), a strong water users association would be created or reinforced to ensure maintenance of infrastructure.

Three: Farmers project beneficiaries using improved varieties of rice and vegetables of which at least 70percent women

# 0 0 1,000 5,000 10,000 10,000 10,000 Annually Progress and Staffing Reports

CPCU/MoA

Four: Farmers trained in Good Agricultural Practices/ System of Rice Intensification techniques of which at least 70percent women

# 0 0 1,000 3,000 6,000 10,000 10,000 Annually Progress and Activity Reports

CPCU/MoA

Five: Number of processing and marketing facilities constructed/rehabilitated through matching grant for large scale enterprises

# 0 1 2 3 3 3 3 Annually

Annual Outcome Survey; Quarterly and annual Progress Reports

CPCU/MoA

Number of large scale enterprises processing and marketing supported under matching grants.

Six: Number of new small and medium agricultural services enterprises set up through matching grant system

# 0 0 20 40 50 50 50 Annually

Annual Outcome Survey; Quarterly and annual Progress Reports

CPCU/MoA

Seven: Increase of household vegetable

% 0 0 0 100 200 300 400 Annually Annual Outcome

CPCU/MoA The average per capita consumption is

10 A network of water users’ beneficiaries of the project is created to enable a framework of exchange and sharing good practices for a good local policy of maintenance of perimeters.

34

in-take because of the project

Survey; Quarterly and annual Progress Reports

6.2 kg in Gambia against 34 kg in Senegal. It is expected from the project an increase of household vegetable in-take for better nutrition.

Eight: Frequency of vegetable in-take by children 6-23 months old

Times/week

111 1 1 7 7 7 7 Annually

Annual Outcome Survey; Quarterly and annual Progress Reports

CPCU/MoA

Intermediate Result (Component 2): Support to value chain management One: Number of commercial partnerships or market contracts signed between groups producers and service providers financed under the project

# 0 0 0 20 40 50 50 Annually

Annual Outcome Survey; Quarterly and annual Progress Reports

CPCU/MoA

Two: Number of female producers groups, cooperatives and water users associations benefiting from capacity building from the project

# 0 0 200 400 500 500 500

Annual Outcome Survey; Quarterly and annual Progress Reports

CPCU/MoA

Three: Number of entrepreneurs trained in management skills- biz planning, financial management, marketing, disaggregated by value chain

# 0 0 200 300 400 500 500

Annual Outcome Survey; Quarterly and annual Progress Reports

CPCU/MoA

Four: Number of Producer groups, associations,

# 0 0 50 100 100 100 100 Annual Outcome Survey;

CPCU/MoA

11 To be confirmed from baseline survey

35

cooperatives that benefited from grants and completed their sub-projects

Quarterly and annual Progress Reports

Intermediate Result (Component 3): Project Administration and Institution Building

One: Periodic Progress reports and IFRs produced and submitted timely

% 0 100 100 100 100 100 100 Annually

Annual Progress Reports; supervision mission reports

CPCU/MoA

Two: Percentage of procurement activities executed in conformity with the timing of the procurement plan

# 0 80 80 80 80 80 80 Annually

Annual Progress Reports; supervision mission reports

CPCU/MoA

Three: Level of implementation of annual workplan and budget

% 0 80 80 90 90 100 100 Annually

Annual Progress Reports; supervision mission reports

CPCU/MoA

Four: Percent of sub-projects implemented in compliance with project safeguards instruments

% 0 100 100 100 100 100 100 Annually

Annual Progress Reports; supervision mission reports

CPCU/MoA

Five: A monitoring and evaluation system with database functional (structure, data collection & organization, up-to-date, reporting)

Rating (1-5)

n/a 3 4 5 5 5 5 Annually

Annual Progress Reports; supervision mission reports

CPCU/MoA

36

Activities – Outputs

Chart 1.1: Results Chain of the Gambia Commercial Agriculture and Value Chain Management Project (GCAV)

Development of irrigation and key productive infrastructures

2) Improving  on‐farm management

1) Rehabilitation, extension and modernization of rice and vegetable irrigation schemes

3) Promoting private sector investment in agribusiness and supporting access to key productive equipment through matching grant system

Intermediaries Outcomes

Outcomes Improved access to irrigation facilities

Area with improved irrigation and drainage services

Operational water user associations (WUA) created /strengthened at bloc, perimeter and country level (network)

2) Improving agricultural investment climate and service delivery 

3) Linking producers to markets 

1) Institutional strengthening and value chain coordination 

Support to value chain 

Increased access to improved technologies

Farmers using improved varieties of rice and vegetables (50percent women )

Farmers trained in Good Agricultural Practices/ System of Rice Intensification 

Increased agro-entrepreneurship Number of processing and marketing

facilities constructed/rehabilitated or large scale enterprises

Number of new small and medium agricultural services enterprises set up

Integrated value chain, increased partnership and market connection

Number of market contracts signed between producers  groups and service providers  

Number of producers groups, WUAs  and entrepreneurs trained  

Number of granted sub‐projects operating

Increased productivity and production 

Increase in rice and vegetables production 

Increase in yield 

Reduction in postharvest losses  

 

Impacts Increased 

green growth and jobs  

Improved food security in rice and vegetables 

  Better 

nutrition and health 

  Better 

resilience to weather risks 

 

Increased income (particularly 

for women)

Market oriented-Agriculture

Increase of rice and vegetable volume of market sales  

37

Annex 2: Detailed Project Description-.

GAMBIA: Commercial Agriculture and Value Chain Management Project The project strategy 1. The project is to add up to on-going donor efforts to help the Government of The Gambia to increase land area under irrigation so as to improve the country’s resilience to change induced weather effects and increase agricultural productivity and increase farmers’ incomes by improving access to markets.

Project Development Objective and key indicators 2. The PDO is to improve productivity and access to market of targeted agricultural commodities for smallholders in the Project Area.

3. To achieve this objective the project will support targeted investments to remove critical constraints, improve productivity and efficiency and build organizational and institutional capacities, both private and public, along the value chains of the targeted commodities. In particular, the project will: (i) rehabilitate irrigation infrastructure to enhance the resilience of agricultural production systems to climate change-induced weather shocks in selected areas; (ii) rehabilitate/build commercial postharvest infrastructure to facilitate processing and marketing of agricultural products (iii) support strengthening of the technical, institutional, managerial and marketing capacities of smallholders and their organizations, as well as other stakeholders involved in agricultural production and value chains, to more effectively operate in a market-driven environment; and (iv) provide institutional-strengthening support to improve the governance of GNAIP.

4. It is expected that the project will lead to increased productivity coupled with reduced post-harvest losses, formalized commercial linkages between smallholders with input and output markets, improved product range and quality, thereby generating additional incomes for producers and other operators of the targeted commodity value chains in the project zones.

(a) Key outcomes indicators of the proposed project would be: increase in productivity-tons/ha of targeted commodities; increased volume of market sales of targeted commodities by selected

producer organizations supported by the project percent reduction in postharvest losses from farmers having accessibility

to the postharvest infrastructure under the project

(b) Key intermediate outcomes indicators include: increased area with improved irrigation and drainage services (hectares); percent producers using improved technologies; number of commercial partnerships established (aggregated by crops); number of processing, storage, marketing facilities rehabilitated/created;  number of new small and medium agricultural services enterprises set up

through matching grant system;

38

number of operational water user associations created and/or strengthened; increase of household vegetable in-take because of the project ; and number of direct project beneficiaries of which at least 60 percent are

women. Target activities 5. The project will primarily support two values chains: rice and horticulture (particularly vegetables). In addition, mango will be supported in close collaboration with the Gambia Growth and Competitiveness Project, with focus on increasing domestic processing and postharvest handling to reduce losses. Rice and vegetables have been identified as priority crops, given their potential to achieve both commercial and social development objectives as these crops are mostly cultivated by women and can improve small farmers’ food and nutrition security and income generation opportunities.

6. It is expected that through project support farmers would generate surpluses of the targeted commodities (particularly rice) that can be commercialized on the local and national markets and would substitute for imports. For these priority crops, the project would deal with the entire value chain, including strengthening and building capacity at all stages. For the mango value chain the project would only focus on processing.

Geographic scope and target beneficiaries 7. The project will cover three administrative regions - Central River Region, (CRR), West Coast Region (WCR) and North Bank Region (NBR) - which coincide with four agricultural regions (CRR-North, CRR-South, WCR and NBR). CRR-South and CRR-North by virtue of their geographical locations on the River Gambia have portions which are upstream of the saline front and where the river banks have the influence of the tidal reaches and are thus the most suitable for tidal irrigation. The project would complement and capitalize on activities WAAPP as well as that of other donor funded activities, e.g., Nema, FASDEP, in the target areas. This offers an opportunity for synergy and complementarities with the proposed project and other donors’ projects.

8. The project direct beneficiaries are all actors along the value chain, as a priority the small farmers, but also the processors, marketers and service providers catering for small agriculture needs. These beneficiaries would be targeted through their associations and groups. The project will directly support small-holder production and as well seek to provide opportunities for the entrepreneurial poor (with attention to gender) by leveraging private investments in agricultural processing from commercial investors that provide immediate and identifiable improvements in input and output marketing opportunities for small holders. The criteria for selecting households, generally organized around “village kafos”, farmer-based organizations and professional associations of other agribusiness interest groups will be based on their willingness, their needs and readiness to adhere to the cost-sharing principles of the project. Since the amount of adequately irrigated land is one of the most limiting factors of income increase, the direct benefits of improved infrastructure combined with better production technology and marketing would go to the poorer section of the rural population. The investments in irrigation development

39

will significantly reduce agriculture’s vulnerability to rainfall, thereby removing the single most important constraint to private sector involvement in agricultural enterprise. This project will trigger and unleash private sector interests and investments in agribusiness. As stated above, women are predominant in the activities of the selected value chains. Women, are, thus, considered as the main beneficiaries of the proposed project; and women’s participation in the detailed design and implementation of the subprojects to be funded by this project would be closely monitored. In addition to mainstreaming gender in all components and activities of the project, there will be targeted interventions to enhance the capacity of women and to remove the constraints on women’s participation in agricultural enterprise. Other beneficiaries include government and non-government institutions that are critical for the development of the sector as well as individuals and groups who avail themselves of new income generating opportunities through formal sector employment in commercial agricultural ventures and improved opportunities for participating in remunerative value chain activities resulting from stronger market linkages with input and/ or output markets.

9. The project is expected to benefit directly (i) at least 40,000 farmers in Central River Regions (CRR - North and South) and the North Bank and West Coast Regions (NBR and WCR), of which at least 60 percent are women, comprising of small-scale rice and vegetable famers through access to irrigated land; (ii) 300 young people to establish off-farm micro-small-medium enterprises (MSMEs) services providers ; and (iii) processing and marketing entrepreneurs12. The project will also directly support various Government and private sector agencies playing a key role in the Agricultural and Natural Resources Sector, and the targeted value chains in particular: Ministry of Agriculture; Water Resources and Fisheries; Trade, Regional Integration and Employment, Land and Regional Governments; as well as agencies such as the National Agricultural Research Institute (NARI); and Department of Water Resources; National Environment Agency, etc., capacity building and equipment support. Indirect beneficiaries include members of smallholders’ households, value chain stakeholders, and wage workers engaged in new activities. Total direct and indirect beneficiaries would reach a total of 80,000 people.

10. Other actors along the supply chains will also benefit from project interventions. Agribusiness firms will enjoy an increased supply of better quality products from small farmers, and benefit from project intervention as well as from the better overall governance and management of the value chains.

Project Description 11. The proposed project of an estimated cost of about US$19.27 million would be implemented over a period of five years. It would support interventions designed to help the agricultural sector improve productivity and build resilience against weather-related shocks, while improving market access to provide incentives for farmers to produce more. It will seek to maximize the limited Grant resources by: (i) focusing project support on limited number of commodity value

12 It is expected the project will rehabilitate 2500 ha for rice of which 8 women/ha, 100 ha for vegetable of which 40 women/ha; 60 groups of 5 young people for an average matching grant of US$ 15,000; and at least 3 large scale processors.

40

chains that are both important in terms of food security and nutrition, and have significant development potential to respond to market opportunities, and in limited geographical areas with suitable agro-climatic conditions; (ii) focusing project activities in each selected value-chain on resolving the binding constraints on productivity, quality, value-addition and market linkages; (iii) ensuring a fair balance between required hardware as well as software investments to adequately address identified constraints; (v) leverage strategic private investors in key productive investments, particularly downstream the targeted value chains, in productive partnerships to reduce postharvest losses, improve product quality, enhanced competitiveness of locally produced commodities and link farmers to market; and (vii) coordinating with similar projects supported by other development partners, in terms of design and implementation, to leverage support in critical areas on the value chains and avoid duplication and enhance development outcomes of interventions.

12. By its design, the project seeks to lay the foundation for a private sector led agricultural development program in The Gambia, and serve as a catalyst for the portfolio to deepen partnership with other stakeholders including development partners in the sector. The proposed project will focus on the following activities: (i) improving on-farm productivity through reduced weather related risks and production intensification; (ii) increase value addition and market access; and (iii) support institutional development for value chain integration/coordination by strengthening producer organizations and promoting/public private partnerships. It would include three components as follows:

Component 1: Support for development of irrigation and key productive infrastructure--$13.56 million (IDA Grant $3.75; IDA Credit $7.20 million; and Beneficiaries $2.61 million).

13. This component will support critical public and private infrastructure needs to enhance the resilience and competitiveness of the agricultural sector. The objective of this component is to support the rehabilitation and improvement on tidal irrigation schemes as well as key small-scale productive infrastructures to address critical constraints in the agricultural production system in order to improve productivity. In furtherance of this the project will support and promote private sector investments for improving value-adding infrastructure and support services to increase marketed output and reduce postharvest losses. The objectives of this component will be pursued under the following two subcomponents: (i) irrigation development and farm production improvement support; and (ii) leveraging private sector investments in agri-business and supporting access to key productive assets.

14. Sub-component 1.1: Irrigation Development and farm production improvement$9.19 (IDA Grant $1.99 million; IDA Credit $7.20 million). The sub-component will seek to: (i) improve basic irrigation infrastructure facilities and required management systems to strengthen the country’s resilience to climatic shocks for enhanced production of rice, and (ii) enhance the producers’ access to improved technologies (including climate-smart technologies, bio fortified varieties with iron, carotene etc.) which increase productivity and competitiveness. It would complement on-going donor support and public sector investments in land and water management so as to reduce the country’s vulnerability to climate change induced risks, and raises the productive potential of the limited supply of agricultural land and to boost rice productivity. Currently, only about 3 percent of the country’s irrigable land has been developed

41

out of the 80,000ha of irrigation potential. The GNAIP targets to bring 25,000ha under improved soil and water management practices.

15. Under this sub-component, the project will finance: (i) the rehabilitation of 2,500ha of existing tidal irrigation schemes for intensive rice cultivation, to improve household nutrition around CRR (North and South), where tidal irrigation is most suitable, and (ii) the equipment of 100 ha of women-community groups vegetables gardens schemes with modern irrigation facilities (borehole, complete solar-water pumping system, drip irrigation system, overhead galvanized tank, fencing) in WCR and NBR. Candidate sites for the tidal schemes to be rehabilitated have been identified (see Appendix 2.1). The selection of specific areas would be carried out after detailed analysis of technical, financial, economic, institutional, environmental and social aspects of the investments.

16. In the Central River Region-North, there are 389 ha of existing tidal irrigation areas, additional adjacent areas totally 192 ha for possible expansion. These areas are currently cultivated to rainfed rice. In Central River Region-South, there exist 2,318 ha of tidal irrigation areas which could also be expanded to cover additional areas of 400ha. In total, there are 2,707 ha of tidal irrigation areas and 592 ha for possible expansion. Rehabilitation works on these schemes would include re-leveling, reconstruction of water control structure (canals, bunds, field roads and dikes) mechanically, reconstruction of inlet/outlet structure with concrete retaining walls, de-silting canals, repair of cracked concrete structures.

17. The sub-component activities will also include the preparation of management and maintenance programs for irrigation facilities and equipment. The activities to be financed will include: (i) physical rehabilitation of existing tidal irrigation works, including main and secondary canals and drainage structures (works and goods); and (ii) institutional support for a more efficient and sustainable operation and maintenance of the infrastructure and the land and water resources for irrigated agriculture (technical assistance and training). These will comprise inter alia: (i) technical studies leading up to the preparation of Detailed Project Designs (and bidding documents); (ii) environmental and social impact assessments; (iii) work execution through local contractors; (iv) establishment and capacity building of Water User Associations (WUAs), as well as capacity building of the local technical agencies supporting WUAs; and (v) preparation, with all stakeholders, of a management and maintenance program for related facilities and equipment. The related civil works are expected to be conducted with high intensive labor input, thereby generating local employment and leaving behind local capacity to undertake routine maintenance.

18. Detailed design of irrigation and drainage schemes will be developed. The Ministry of Agriculture will work closely with the Ministry of Water Resources to design and appraise these schemes, with participation from the water users. The sites would be selected based on: (i) proximity to markets, (ii) cost and quality evaluation, and (iii) interest expressed by farmer groups/cooperatives to undertake the development of tertiary network and take subsequent responsibility for management and maintenance.

19. Acceptable appraisal of these schemes includes the willingness of households to participate in Water Users Associations (WUA), and compliance with technical, environmental, economic sustainability criteria. The formation, strengthening and functioning of capable water user

42

association is a necessary condition for irrigation investments, to drive both the planning of interventions and the subsequent maintenance of installed assets. WUAs will be responsible for the maintenance of tidal irrigation systems on-farm, including cleaning of secondary and tertiary canal, which contributes to keeping necessary water flow.

20. The project would ensure that that targeted beneficiaries are involved in the rehabilitation so as to pass on skills in scheme maintenance. It is expected that engaging the farmers in the elements of rehabilitation will leave skills behind and strengthen the farmers technically for the operation and maintenance of the schemes. The Project Implementation Manual would present the detailed arrangements.

21. The farm production improvement activities will strengthen the capacity of National Agricultural Research Institute (NARI) and Department of Agriculture (DoA) to make technically sound and environmentally friendly agricultural technologies available to producers and value adders. Under this sub-component the project will coordinate with and leverage WAAPP support in the identification, implementation of applied research and the dissemination of proven technologies which are cost-efficient, responsive to market demands and incentives, and enhance the environmental sustainability of farming practices in the irrigation schemes. The project through WAAPP will promote the implementation of applied research and the development and extension of technological packages to improve productivity and quality. It would also foster partnership and coordination with other Bank and non-Bank projects in the country to leverage interventions supporting technology development and dissemination to increase access of rice and vegetable farmers to improved planting materials and knowledge on good agricultural practices. Technology packages will include: propagation and use of improved exotic quality seedling, high yielding varieties of crops, pest and disease resistant varieties, as well as improved agronomic practices including System of Rice Intensification (SRI) in the tidal schemes to be rehabilitated. This subcomponent will target smallholder farmers, both within and outside of productive partnerships, to improve their product quality, productivity and cost efficiency. Agriculture in The Gambia is very much dominated by women and therefore labor saving technologies appropriate to women would be identified and extension approaches designed to target support for women. Technologies addressing nutrition issues such as nutrient-high varieties, as well as those addressing climate change issues (such as adaptation and resilience) would be deliberately promoted for adoption. The project would also leverage on seed distribution schemes of WAAPP to increase access of farmers to improved seed and seek to extend the WAAPP funded Innovation Platforms to the irrigation perimeters.

22. The project will finance limited training, learning events and other forms of knowledge sharing and studies to identify and test the feasibility of new market opportunities (e.g. commodity value chain assessments, market feasibility studies, proprietary brand development studies, access to specific food product distribution channels studies, etc.). Staff of the CPCU and participating agencies, producer-based organizations and associations of PIEGs will benefit from a program of training of trainers and subject-matter specialists. In-country training will be delivered through TA, individual training, workshops and study tours. Public extension services by the DoA will comprise participatory demonstration, household/on-site visits, group discussions, technical training, agro-dealer-led training and extension. The CPCU will, through WAAPP, engage (in the framework of an Engagement Agreement (EA) or Memorandum of Understanding (MoU), the National Agricultural Research Institute, to undertake problem-

43

solving applied research with the aim to identifying, developing and adapting relevant low-cost technologies to solve specific problems to facilitate implementation and enhance benefits from the project activities.

23. The sub-component will Coordinate/collaborate with World Bank funded Health and Nutrition Project (GHNP) in addressing food and nutrition security issues. It would contribute to household food and nutrition security by promoting safe food of high nutritional value and help to diversify local production, processing, packaging and consumption of food rich in micronutrients. It will further coordinate with GHNP to promote inter-sectoral collaboration in addressing food and nutrition security issues. The project will promote vegetable consumption among households in beneficiary communities. Available statistics indicates that the Gambian diet is low in vegetables: FAO estimates that Gambian per capita vegetable consumption was only 6.2 kg in 2005. Annual per capita consumption for the same year in neighboring Senegal, by comparison, was 34.8 kg. Still, however, an estimated minimum 50 percent of vegetables consumed in The Gambia are imported and therefore the potential for import substitution exists.

24. Sub-component 1.2: Promoting private sector investment in agribusiness and supporting access to key productive equipment $4.37 million (IDA Grant US$1.76 million; Beneficiaries $2.61 million): The sub-component will seek to: (i) improve postharvest management infrastructure downstream the value chains to improve quality and enhance competitiveness of domestically produced rice, in particular; and(ii) to enhance the mechanization of the agricultural works (field preparation, harvesting, threshing, milling etc.) by building the capacity of the various stakeholders in the private sector, particularly producer and young groups, and the facilitation of start-up businesses supplying these services to the producers in the tidal irrigation schemes to be rehabilitated.

25. The project will support activities designed to address some of the key constraints to realizing the value addition potential of Gambian agriculture. These include: insufficient agribusiness capacity of smallholders and processors, limiting competitiveness; low access to financial capital; undeveloped access to markets; weak market information systems; limited processing and storage facilities; huge post-harvest losses (estimated at 10-30 percent); The focus of the subcomponent would be critical infrastructure needs for improved postharvest management of the targeted commodities. The project would achieve this by leveraging private resources to improve basic agro-processing and value addition infrastructure for enhancing post-harvest value and performance of agricultural markets and improve competiveness. The sub-component would facilitate private investment through demand-driven, public-private partnerships with targeted beneficiaries, including producers’ organizations, agro-processors and other relevant Small and Medium agribusiness Enterprises (SMEs) to increase domestic production and milling capacities for high-quality rice for urban markets. The project would also promote private sector investments mango processing facilities and related services. This would be essential for connecting farmers to markets. The project’s support would entail facilitating the establishment of high efficiency and high quality-yielding milling enterprises that would ensure competitiveness, particularly of domestically processed rice and absorb marketable rice surpluses for the urban market.

26. A matching grant financing mechanism will be used to leverage private investments into the sector. Funding for selected subprojects would be allocated through a competitive process that

44

will include a beneficiary's contribution in the form of equity in a Matching Grant-cum-Equity-Loan approach. Access to the matching grant will be on a competitive bidding process driven by clearly defined selection criteria such as evidence of pre-existing adequate financial, management and technical capacity, successfully managing horticulture production and marketing and processing operations, and access to market networks in key export countries. Eligible beneficiaries will include private actors operating in the supply chains of the targeted commodities for domestic and regional markets, particularly focusing on high quality rice milling and marketing as well as fruit (mango) and vegetable storage and processing. To this end, the project will make available advice, mentoring and development funding for economic common interest groups, including private SMEs wishing to engage in rice and horticulture value addition and marketing activities. The subcomponent will particularly seek to complement the interventions of the GCP in the mango subsector. In coordination with GCP, a range of business development opportunities, required skills training and start-up capital will be identified that respond to the specific needs of the target operators. It is envisaged that through farming contracts with producer organizations, which may necessitate provision of seeds, fertilizers, and advisory services to producers, the rice milling and commercial horticulture enterprises would collect farm produce (e.g., paddy) and be responsible for processing and distribution.

27. The investments to be supported by the project include support to upgrading or construction of multi-pass rice processing facilities; processing units and postharvest management of fruits (mango) and vegetables, cold chain equipment, warehouses, packaging units etc. The sub-component will focus on (i) processes leading to identification, preparation, selection and implementation of investment sub-projects; (ii) construction, rehabilitation or up-grading of agricultural product processing, storage, conservation/preservation infrastructure facilities; (iii) promotion of quality standards; and (iv) capacity-building/strengthening support to promote partnerships and to improve the organizational capacity of professional associations of the value chain participants (farmers, agro-dealers, agro-processors and other agro-enterprises). The Bank funded GCP will provide grants to support soft investments including capacity building, consulting services, workshops, surveys, marketing initiatives and other non-capital goods investments particularly for mango processing firms associated with the project’s out-grower scheme.

28. Experience suggests that the two necessary conditions for promoting viable businesses in the context of general market failure are sufficient investment/working capital and adequate management capacity. Funding for selected subprojects would be allocated through a competitive process that will include a beneficiary's contribution in the form of equity capital. Project grants would be set at different levels for smallholders and small and medium enterprises. Eligible subprojects would include commercial partnerships with traders and local agro-industries, technical assistance for introduction or development of new product lines, packaging, and logistic improvements.

29. For Marching Grants for SMEs for the establishment of processing centers, the beneficiary contribution will be initially set at 65 percent of the asset value (including at least 10 percent equity and 55 percent debt financing from financial intermediaries (FIs) including venture capital, commercial bank financing, etc.), while the project contributes up to 35 percent.

45

30. Participating SMEs will receive technical assistance and capacity building support from project sponsored business development service (BDS) providers, to develop and submit financially-viable business plans to pre-identified FIs for scrutiny and consideration for financing.

31. The FIs will apply their own rigorous criteria to analyze the submitted SME and PO business plans and, commit to financing those plans they consider viable. The FIs will provide direct monitoring and supervision of the borrowers and collect repayments for the loans at their own cost. The assets financed will be considered as collateral for the loans. The participating FI would draw down the Grant funds (on-behalf of SMEs), which it would pull together with the SME’s equity contribution (savings/deposit) and their own resources to pay for the capital asset.

32. Eligibility criteria and detail arrangements for its implementation is elaborated in the PIM.

33. Furthermore, this sub-component will complement the project’s major infrastructural investments to boost productivity in each tidal irrigation areas by addressing key challenges and priority needs identified by women in the production of rice in The Gambia. These challenges relate to land preparation, input supply, harvesting and post-harvest handling, transport, processing, and marketing. In helping to addressing these challenges, the project would promote the mechanization of the agricultural works (field preparation, harvesting and threshing etc.), by building the capacity of the various stakeholders in the private sector, particularly youth groups, and the facilitation of start-up businesses supplying these services to the farmers in the tidal irrigation schemes to be rehabilitated under Sub-component 1.1. In this vein, the sub-component will support sub-projects that largely consist of equipment that requires a business-type use and management to be sustainable and profitable, for which the matching grant ratio would (initially) be set at 55 percent project contribution (for partial funding of the productive investment in agricultural production) and 45 percent beneficiary contribution (including equity and debt), under the condition that the beneficiary group has a contractual agreement with its members to use and manage the equipment as a microenterprise, providing services to the whole group and or community.

34. Assistance provided under this sub-component will include support for the establishment of sustainable services supply models that could include the establishment of agri-business centers to provide essential services and inputs to smallholder rice farmers. The project will sponsor the establishment of about thirty enterprises providing services to communal production, harvesting, and post-harvest handling and domestic marketing of rice and vegetables. The intervention would provide support appropriate to the particular needs of emergent enterprises and intermediation between the POs/SMEs, off-takers and financing entities. Priority will be given to young entrepreneurs who would setup farm service centers to provide services to farmers. Currently, youth interested in starting off-farm businesses to provide services like ploughing, harvesting, threshing and processing face severe constraints related to access to credit and marketing skills.

35. Eligible categories of productive equipment would include: (a) small scale agricultural production equipment such as animal traction equipment, power tillers, seeders for sowing, spraying, etc.; (b) harvest and postharvest management equipment and facilities, e.g., mobile harvesters, mobile threshers, tarpaulins, drying floors, dryers, etc.; and (c) agricultural marketing

46

equipment, such as transport equipment (ox-cart,), etc. The modalities for accessing funding support from the project would follow the tripartite financing mechanism outlined above. For youth, the beneficiary contribution will be set in consultation with the beneficiaries and the community.

36. The Project Implementation Manual (PIM) details a negative list of activities that will not qualify for funding support, this would include:

Sub-projects that would disturb or distort the market and its development. For instance, farm inputs, such as seeds and agro-chemicals;

Sub-projects that have a negative impact on the environment and/or do not comply with the Environmental Safeguards;

Sub-projects for private or non-agriculture related use, such as houses, schools, health centers, etc.; and sub-projects in which the beneficiaries are members or staff of: (i) the Project Coordination Committees at all levels.

Matching Grant Scheme

37. The Project support under the Matching Grant Scheme (MGS) will largely consist of matching grants for capital inputs directly related to investments in establishing and managing multi-pass rice milling facility as well as establishing mango processing (pulping, freezing or drying) facilities, and on-farm production equipment.

38. The project will implement a MGS as means to stimulate private sector investment in The Gambia. This is borne from the need to address investment constraints due to the high interest rates in The Gambia that result in high financing costs, especially in case of loans with longer duration needed for financing lumpy investments. These high financing costs would render many potential investments unviable that would otherwise be profitable if the invested capital was valued at opportunity costs, thereby squeezing out investors with insufficient equity. Furthermore banks are perceived to have limited appetite to venture into rural lending for micro-, small and medium enterprises given the opportunity to invest in Government bonds and import trade investment with short payback period, and at much lower risks.

39. Matching Grant Approach. The project will implement the MG-cum-Equity-Loan approach, as is the case to Nema, with a dual purpose. In addition to investment promotion, the aim is to enhance access of the entrepreneurial poor to sustainable financial services (primarily loans) and incentivize financial institutions to offer medium term loans to an underserved rural clientele. Hence, the matching grants are expected to serve as “matchmakers” between rural MSMEs and banks by reducing the entry barriers for both sides. Conceptually, by reducing bank’s and client’s risk exposure, MGs could enhance access to investment finance. It is hoped that the MGs and co-financing loans, if deemed successful by both parties, would facilitate MSME’s future access to loans for working capital and investment purposes.

40. The matching grant-credit activities under the project will be implemented through Participating Financial Institutions (PFIs) including commercial and community banks accredited by the Central Bank in accordance with specific criteria closely related to compliance

47

prudential regulation. The basic financial schemes proposed consisted of a MG (of 35 - 40 percent) of the investment costs, for MSEs establishing processing facilities, subject to an equity contribution (of 10 percent) and the willingness of a bank to finance the remaining (60-65 percent) as a loan. The MG (35 percent) of the investment cost is expected to considerably reduce the debt burden and related financing costs for the borrower and an equity contribution (of 10 percent) would be much more affordable to borrowers, allowing the productive poor to participate. At the same time, the combination of loan and equity contribution would keep the gearing ratio and bank exposure at a more prudent level (of 50 -55 percent) which banks would be more comfortable with. Moreover, the disbursement of a MG is subject to the willingness of a PFI to provide a loan (of 50-55 percent) from its own resources bearing the full credit risk. Hence, while the MG would reduce the risk exposure of bank and borrower, the 50- 55 percent exposure would still provide enough incentives for the bank to conduct proper due diligence and loan appraisal.

41. Matching Grant Operation. The matching grant-credits will operate in accordance with the following criteria: (i) presentation of a bankable proposal for an investment related sub-projects under Sub-component 1.2 (i.e., Rice or Mango processing, mechanization service centers, etc) by an applicant to an accredited PFI; (ii) principle approval of the application by a PFI at its own terms and conditions, and risks, covering of the proposed investment amount: 50 percent in case of processing facility; and 40 - 45 percent for on-farm production support equipment; (iii) an equity contribution by the proponent of at least 10 percent of the investment amount – bringing the beneficiary matching contribution to at least 60 percent (for SMEs in food processing) and 55 percent (for MSMEs in farm production support services); (iv) approval of the grant by the Matching Grant Review Committee; and (v) procurement of the main investment goods – mostly equipment needed for rice and fruits (mango) processing, on-farm productive equipment13. Applicants should not have been in default of any loan with a financial institutions and be willing to undergo training in, finance and business management etc. to be sponsored GCAV. Groups should have a membership between 5 and 25, operate from an identifiable location, have at least three officers and agree to be jointly and severally liable for external debts incurred. The equity- loan - grant formula will be initially set at 10:55:35 (for processors) and 10:45:45 (FSS) for farm production support services based on bankable business plans. The PIM outlines details of governance and implementation of matching grants scheme.

42. PFI autonomy. The GCAV leaves the decisions on terms and conditions entirely to the participating PFIs. This is to avoid the phenomenon of seeking providing cheap loans, as these are generally understood by many as loans that should not have to be paid back.

43. Procedure for matching grants. Upon receipt of a loan application from a potential investor into selected value chains, IFC or PFIs check compliance with their own terms and conditions, and autonomously decide whether to approve a loan in principle. In case the potential investor is aware of the facility, s/he could obtain support from a BAC to prepare bankable loan applications to PFIs; the costs are supported under the GCAV. In case the loan officer of a PFI assumes that investment might be eligible for a MG, the bank would submit, upon preliminary approval of a loan, an application for a MG to the Project on behalf of beneficiary. The proposal will be evaluated by a MGS Review Committee consisting of representatives from the public and private

13 To the extent possible, payments by PFIs were to be made directly to suppliers.

48

sectors. It is anticipated that representatives from the Ministry of Agriculture (including the RDA of concerned region applications from Grass Root organizations), Trade and Industry, the CPCU and Ministry of Finance and GIEPA. From the private sector, a representative from the Gambia Chamber of Commerce and a major food processor or food processing expert are expected to be invited to participate in the review committee.

44. Decision on the grant is taken by the MG Review Committee. The overall responsibility for monitoring of activities PFIs and beneficiaries lies with the grants sub-unit of GCAV project management. Upon approval, the MGS Review Committee is requested to notify the CPCU of the approval of the grant amount and to initiate the disbursement procedure for the grant amount. GCAV management would then send the approved files to the World Bank (WB) Task Team for no objection. Upon receipt of the no objection clause from WB, the GCAV would instruct the Central Bank to disburse the funds to the concerned PFI. Upon receipt of the amount, the PFI would disburse the loan to the borrower and use the entire funds (loan, equity contribution and MG) to pay suppliers directly, thus avoiding direct disbursements into the account of the borrower. In case the bank would already have disbursed the loan to the client, it would either redo the loan agreement by reducing the loan amount and charging interest on the MG amount only for the respective period, or keep the MG amount in trust for the borrower until full repayment of the full loan.

45. Detailed operational modalities of the Matching Grant Scheme, including its management and disbursement arrangements are contained in the PIM.

Component 2: Support to value chain management (IDA Grant: $3.15 million). 46. The objective of this component is to link key stakeholders, such as smallholders, agribusinesses, public sector (government organizations) and knowledge providers (research and training institutions, technical experts), into public-private partnerships to enhance the performance of the agricultural sector. To achieve this, the project would develop and strengthen the institutional capacity of farmer-based organizations, the professional associations of private sector participants in the value chain so as to scale up best practices and support farmers and private sector participants to address key constraints and exploit the opportunities to improve the productivity, processing, and marketing of selected commodities; and to promote marketing and enhance agri-business development through engagement with private sector stakeholders.

47. The project will facilitate the establishment, development and operation of productive partnerships among producer organizations, processing and marketing entrepreneurs, as well as public and private sector agencies providing development support services to the target value chains (through public support provided on the basis of transparent procedures), to improve private service delivery supporting such partnerships. In doing so, the project will strengthen the technical, institutional, managerial capacities of three constituent parts of the targeted community value chains: (i) primary producers and the groups; (ii) entrepreneurs providing business support services through production to marking; and (iii) public and private sector agencies providing development support services. It is expected that the capacity building efforts will help the beneficiary smallholders and their organizations, as well as of services providers and other stakeholders involved in agricultural production and value chains, to more effectively

49

operate in a market-driven environment. The component will take a gender and vulnerable group sensitive approach to capacity building and provide support to improved nutritional status among rural households in project affected districts. The support under this component will be provided through the following three sub-components: (i) strengthening the capacity of the associations of value chain participants; (ii) linking producers to markets, and (iii) support to improving agricultural investment climate.

48. Sub-component 2.1: Institutional strengthening and value chain coordination (IDA $1.25 million): Under this sub-component, the project will strengthen the technical and management capacity of producer groups, professional associations and other stakeholders benefiting from sub-projects (rehabilitated tidal schemes and other interventions supported under Component 1) to adopt effective organizational approaches to improve governance, cohesion and efficiency of the respective commodity value chains. A focus of the project will be to strengthen the management and performance of farmer groups as they are seen as the key element to overcome problems of economies of scale and quality assurance. The sub-component will improve coordination and dialogue between the actors in the value chain, through the establishment of professional institutions and through support of partnerships between actors, including private-public partnerships. Institutional capacity development would also be organized for the Cooperative and Agribusiness Service Unit of DoA to enhance its capacity and deepen knowledge on agricultural value-chains, and market analysis.

49. The sub-component will also support the following activities: (i) capacity building of professional associations or groups benefiting from sub-projects; (ii) capacity building of public partner institutions, supporting sub-project beneficiaries, and (iii) organizational development and institutional strengthening as well as coordination and upgrading of the priority value chains. This support will be contracted out to private service providers (e.g., NGOs or private consultants). The project will aim at equipping the associations with required skills and expertise to operate sustainably. Sub-component activities will also include facilitating and reinforcing the organization and management of value chains by the chain actor associations, and also facilitating the development and deepening of public-private partnerships for value chain management. It will conduct awareness, information and training campaigns with the aim of facilitating the regrouping of actors within the V/C professional organizations. These organizations, thereafter, are to be institutionalized with defined legal status.

50. Capacity-building activities will include PO training in deal negotiation and the conduct of business, market-making interventions to link farmers with off-takers, and support to the establishment of national producer groups/bodies, including cooperatives, concentrated on the domestic production and marketing of rice and vegetables. The sub-component will also strengthen the capacities of private and non-governmental agricultural services providers including cooperatives. The managerial and business capacities of local micro-enterprises that support farming activities (small processors, craftsmen and local traders) will be strengthened in areas such as contract management, management of business accounts, networking and formation and sustaining professional organizations.

51. The project will deliberately build capacity of women groups to deepen their participation in every aspect of agricultural enterprise; increase presence of women in decision-making positions in producer-based organizations and other associations of agricultural entrepreneurs; increase

50

voice and representation of women in local self-governance institutions; strengthen poor women’s asset base, livelihood security and economic opportunities; and reduce gender-specific risks and vulnerabilities in the practicing agriculture as a business.

52. The project will also fund learning events and other forms of knowledge sharing and studies to identify and test the feasibility of new market opportunities (e.g. product-market chain assessments, market feasibility studies, proprietary brand development studies, access to specific food product distribution channels, studies, etc.). Staff of the PCU and participating agencies, producer-based organizations and associations of project economic interest groups will benefit from a program of training of trainers and subject-matter specialists. In-country training will be delivered through TA, individual training, workshops and study tours.

53. As far as the eligibility and selection of private and non-governmental agricultural services providers are concerned, preference will be given to those who have the relevant experience, skills, and mandate to work with local communities and smallholder farmer groups or associations.

54. Sub-component 2.2: Linking Producers to Market (IDA $1.52 million): The sub-component aims at enhanced access of farmers to markets. The subcomponent will facilitate farmers’ access to market by creating and supporting productive partnerships between farmers’ organizations and private agribusiness enterprises to foster the integration of a greater number of smallholder producers in performing and remunerative value-chains, through the development and implementation of public-private alliances in the project areas for improving market linkages. Productive Partnerships are one key link within a longer value chain which helps to organize farmers in groups and to strengthen their horizontal production cooperation, while at the same time establishing vertical linkages to agribusinesses that undertake further processing and marketing of the produce. Because formalizing long-term relationships with smallholder farmers involves considerable transaction costs on the part of agribusiness, in terms of time and effort spent identifying producers, establishing farmer groups, introducing good agricultural practices, and supporting a business model that is of mutual interest to the partners involved.

55. The challenge is to foster a long-term, voluntary and commercial relationship and implement a detailed partnership business and investment plan that will help the participating partners to improve their competitiveness in terms of productivity, quality and sales volume. This subcomponent would finance result-oriented partnerships which improve the profitability, quality and sustainability of smallholder in the targeted value chains. Project support will be provided to at least two (2) partnerships for eligible expenditures including technical assistance for the establishment of those partnerships; advisory services and training in support of farmer organizations (and their members) and the respective agribusiness partner, as well as goods, materials and on-farm works to allow improved production and post-harvest management to be undertaken by smallholder farmer organizations (and their members). These partnerships would be initiated, first through the SMEs and other processing entrepreneurs supported under Component 1. This support will be provided on an incremental basis to commercially viable partnership business plans. Under this subcomponent, special effort will be made to strengthen the management and performance of farmer organizations. The sub-component would also extend these partnerships to include existing value chain initiatives in the project region, such as those being implemented under Nema, FASDEP, and MDG-1c and supported by other

51

development partners: IFAD, AfDB, and EU, respectively, to create the critical mass that would enhance the viability of processing investments.

56. The component would finance the preparation and implementation of Productive Partnership business and investment plans through: technical support services, training, goods, identification and testing of the feasibility of new market opportunities, including product-market chain assessments, market feasibility studies, proprietary brand development studies, and access to specific food product distribution channels, provisioning of advisory services, organizing knowledge management and sharing best practices. To facilitate this, platforms for value chain actors would be established and supported. In addition, technical and managerial services would be provided to support: (a) the establishment and development of smallholder farmer organizations, (b) the establishment and development of partnership relations between farmer organization and agribusiness enterprises; (c) the development of a network of local service providers, and (d) interaction between regional governments, business associations and other support institutions to facilitate market-led agricultural growth. Through the platforms, the project will fund periodic beneficiary assessment surveys to gage the satisfaction of producer groups with the partnership mechanism in terms of benefit sharing and win-win results that can ensure a long term commitment of all parties.

57. Eligibility. The Project funding would be channeled through partnerships with legal entities in the private sector and civil society. The partners would need to have a demonstrated capacity to manage contracts and activities of the scope and nature identified in the proposed partnership. To be eligible, private entities would need to be legally registered in The Gambia. The lead partner must be a legally incorporated company or business group registered under the GIEPA or a cooperative society registered with the Cooperative Societies of The Gambia or a registered Association. The other partners and participants need not be legally registered or incorporated. Eligible activities will generally be restricted to the geographic target areas/communities defined by the lead partners through linked farmer groups. The PIM will detail the eligible activities and expenditure categories for financing under the project, as well as cost sharing arrangements.

58. Sub-component 2.3: Improving the agricultural investment climate and service delivery (IDA $0.38 million). The public sector plays a critical role in strengthening smallholder agricultural competitiveness through supporting better technology transfer, improved organization and the provision of critical infrastructure. To do so in a way that responds to market demands entails identifying better forms of consultation between the public authorities, agribusiness enterprises and smallholders. It also requires public support for private service provision, of start-up support to value chains by carefully promoting partnerships between agribusinesses, farmer organizations and its members, and of critical infrastructure. The effectiveness of public-private collaboration can be improved by identifying needs and implementing activities that would enable faster and more effective responses to local opportunities and constraints. The objective of this component is to support the operationalization of GNAIP’s objective of private sector-led agricultural value chain development, by creating forums/platforms to provide a voice on key policy issues and to create enabling environment for leveraging private sector investment for agricultural value chains development in The Gambia. The sub-component would facilitate this through the organization of policy dialogues with key stakeholders, especially the private sector through public-private round tables so as to broaden and deepen the agricultural commercialization. In doing so, the

52

project would support MoA, the Public Private Partnership (PPP) unit of MoFEA and GIEPA to organize participatory policy dialogues to review and improve the agribusiness regulatory environment, institutional conditions and service delivery systems. The process will lead to the review of: (a) the current situation relative to investment and financing in major agricultural value chains; (b) the constraints to further investment and financing; and finally (c) the opportunities for Government to stimulate private sector-led agricultural value chain development. These business forums would also contribute to the formulation of national agricultural competitiveness strategies, based on market opportunities and comparative advantage.

59. MoA will be supported, through the PCU, to organize and coordinate semi-annual public-private agriculture roundtables for intensifying the dialogue with the agribusinesses. These forums would be conducted at two levels: (1) horizontally, bringing together key stakeholders from farmers’ organizations, agribusiness, government agencies, R&D organizations and service providers in the agricultural sector; and (2) vertical- commodity specific forums as a platform for key stakeholders within the value-chain(s) of a specific commodity. The horizontal forums (akin to the Innovation Platforms) would identify, analyze and strategize to overcome key commodity value-chain constraints, R&D needs, infrastructure needs etc. Emphasis would be put on reviewing the domestic agribusiness regulatory environment, institutional framework conditions and service delivery systems and discuss and decide on improvement measures. In the first years of the project the forums would be convened twice a year, and the frequency afterwards would be modified based on project progress.

60. In light of the findings of the recently completed Land Governance Assessment Framework (LGAF), in the Gambia, the project will provide technical advisory services for: (i) the full mapping and demarcation of all land used under the project; and (ii) the implementation of transparent and participatory land use procedures in project areas. This will involve providing support to perform a mapping of project beneficiaries’ farms using geographical information system as well as the preparation of a local cadastral plan showing the allocation of land rights to project beneficiaries. Such rural cadastral plans will be used as a pilot for scale-up at national level when the opportunity arises.

61. Land: The Land Governance Assessment Framework (LGAF) carried out in 2013 showed that the existing legal framework recognizes land rights held by more than 70-90 percent of the population, including customary rights. It shows discrepancy between Banjul, where land rights are registered, and the rest of the country, where land rights fall under customary tenure and are rarely registered. This often leads to customary rights alienation. Despite its recognition in the legal framework, customary law is too informal, with a high reliance on traditional structures that have eroded over time and do not correspond to current economic needs and local realities. Less than 10 percent of customary land boundaries are surveyed and demarcated. This leads to frequent boundary disputes. Besides, the formal law is completely silent on women land rights. The Constitution reinforces customary practices that deny women ownership and control over land. Less than 15 percent of land registered to physical person is registered in the name of women. There is no record of public participation in the legislative process relating to the enactment of land laws and people are unaware of them. Accordingly, the main land governance priorities include: (i) the development of a clearly articulated and integrated national land policy; (ii) a legislative review of all land acts and their implementation; (iii) the selection of a national

53

consultative committee on women’s land rights to develop national policy on women’s land rights; (iv) the codification of customary law principles; and (v) the full mapping and demarcation of all lands.

62. Gender equity principles will be mainstreamed in all the components of the project, particularly the capacity-building support interventions. Women are by far the leading actors in the selected rice and horticulture value chain and are active in both upstream and downstream activities. Women farmers and youth will be consciously targeted. Consistent with the recognition of gender equity and youth inclusiveness as a basic founding principle of this project, a training module on gender-inclusion and-youth empowerment will be implemented.

63. The Government has undertaken a full gender assessment as part of the preparation of this project. The assessment took into account the complementarity of gender roles and the synergies in the division of labor between men and women in Gambian agriculture. The information from this study would be used to develop mechanisms to channel appropriate technical and financial assistance to women groups and ensure their participation in every aspect of this project. The strategy, which will be outlined in detail in the PIM, would include making provisions for targeted gender-sensitive approaches in the project, including: (i) special dissemination mechanisms in the CPCU to ensure that women are adequately informed of the project; (ii) culturally-appropriate and gender-friendly technical and extension support and training to ensure that the demand-driven subproject are prepared with the full participation of women groups; (iii) specific criteria for subproject appraisal, to stimulate subproject proposals from women; and (iv) development of mechanisms for coordination with other programs and agencies working in rural and peri-urban space. The CPCU will work closely with the National Women Farmers Association (NAWFA). This partnership will proactively seek to: increase women’s access to financial services and land resources with right of ownership; empower women by providing training on relevant entrepreneurial and leadership skills, technical support and targeted sensitization programs; and support for research on gender-friendly technologies. The project will disseminate key messages and support interventions that will: enhance participation of women in every aspect of agricultural enterprise; increase presence of women and youth in decision-making positions in producer-based organizations and other associations of agricultural entrepreneurs; increase voice and representation of women in local self-governance institutions; strengthen poor women’s asset base, livelihood security and economic opportunities; and reduce gender-specific risks and vulnerabilities in the practicing agriculture as a business.

64. Through NAWFA, the project will support training of women groups in food fortification including the promotion of rice parboiling techniques to increase micro-nutrient levels in local foods to improve household nutrition.

Component 3: Project Administration and Institution Building--$2.56 million (IDA Grant: $1.82 million; GOTG $0.74 million). 65. The objective of this component is to develop and strengthen the overall implementation capacity of the central project coordination unit (CPCU), while providing support to the MoA for the overall coordination of the GNAIP. This component comprises the following two key sub-

54

components: (a) Project management, monitoring and evaluation; and (c) Support to Ministry of Agriculture (MoA) for the implementation of the Gambia National Agricultural Investment Plan (GNAIP).

66. Sub-component 3.1: Supporting Project Management, Monitoring and Evaluation - $2.39 million (IDA$1.65 million; and GOTG $0.74 million). This subcomponent would support all activities necessary to ensure that the project is implemented in accordance with the project implementation manual. This subcomponent would: (i) finance the incremental expenses incurred by the Government in implementing the project through the CPCU and the participating field implementing agencies and various service providers; and (ii) provide technical assistance and training to enhance implementation capacity of the CPCU; (iii) communication and outreach programs to enhance project visibility.

67. The sub-component will also finance the various monitoring and evaluation activities, including (i) support to the design and implementation of the various surveys and other tools for monitoring and evaluating the progress of project implementation and the results of the project; (ii)updating project key performance indicators; (iii) compiling and editing periodic reports; and (iv) carrying out impact evaluations (economic, social, environmental).

68. This sub-component will finance office equipment, vehicles, training, and operating costs to ensure effective coordination and good project management at CPCU including safeguards, financial management and audits, reporting and supervision; consultant services for technical assistance, training, and operating costs.

69. Sub-component 3.2-- Support to Ministry of Agriculture (for implementation of GNAIP)—(IDA $0.17 million). Under this subcomponent, the project will provide support to the Ministry of Agriculture to develop strategies and policy frameworks to adequately coordinate and the implement the GNAIP. Particularly, the project support will consist of (i) support to improve agriculture and rural development policy and strategy formulation and analysis at all levels of government as well as to enhance national capacity to implement the GNAIP; and to streamline interagency coordination in delivering public services to the rural sector; and (ii) support to the GNAIP Steering Committee in conducting strategic studies, performing external monitoring and evaluation, and ensuring appropriate articulation and alignment of donor-funded operations, including the Proposed Project, with the GNAIP program areas. It is envisaged that, within the framework of the GNAIP, the Government will establish a pathway for setting-up a Sector-wide Approach (SWAp) in agriculture. The legal framework and regulations would be in place to allow for the SWAP to survive political changes. The roles and responsibilities of all actors in the sector would be defined and accompanying measures to build their capacity identified. The GNAIP will be linked to the national budget through an improved Mid-Term Expenditure Framework, thereby linking it to the national budget with realistic projections. It would include principles which create conditions for sustainability of public expenditure, including: cost effectiveness and results-based framework, transparency. Mechanisms for the review of efficiency and transparency of public expenditure disbursements would be in place. In addition, key tools for future harmonization and consultations would be prepared and ready for negotiation with donor agencies and national partners. The project would finance the incremental operating costs for MoA to perform this coordination function. MoA will carry out this mission through a multi-stakeholder committee to be named the Central Project Coordinating Unit

55

(CPCU), whose membership comprises: MoA, Ministry of Trade, Industry and Regional Integration and Employment (MoTIE), Ministry of Finance and Economic Affairs (MoFEA), Ministry of Fisheries and Water Resources (MoFWR), Ministry of Forestry and Environment (MoFEN), the private sector represented by Gambia Chamber of Commerce and Industries GCCI), and civil society, represented by Action Aid the Gambia.

Table A2.1: Project Financing (US$’000)

IDA Grant

IDA Credit

GVT Beneficiaries Total Amount

A. Support for Development of Irrigation and Key Productive Infrastructure

Irrigation Development and Farm Production Improvement

1.99 7.20 9.19

Promoting Private Sector Investments in Agribusiness and Access to Key Productive Equipment

1.76 2.61 4.37

Subtotal 3.75 7.20 2.61 13.56 B. Support to Value Chain

Management

Institutional Strengthening and Value Chain Coordination

1.25 1.25

Linking Producers to Markets 1.52 1.52 Improving the Agricultural Investment Climate and Service Delivery

0.38 0.38

Subtotal 3.15 3.15 C. Project Administration and

Institution Building

Supporting Project Management 0.86 0.74 1.60 Support to MoA 0.17 0.17 PPF 0.79 0.79 Subtotal 1.82 0.74 2.56 Total 8.72 7.20 0.74 2.61 19.27

56

Appendix 2.1: Potential sites for rehabilitation (including possible expansion of current tidal irrigation areas)

Place (region) Area of current tidal irrigation (ha)

Area for potential expansion (ha)

Current condition Proposed intervention

Wassu (CRRN) 35 42 Silting in canals, Cracks in concrete facilities, overtopping of perimeter dyke

Rehabilitation

Sukuta(CRRN) 105* 100 -

Keyayi(CRRN) 52* -

Toubekoto(CRRN) 30* -

Fulakuda(CRRN) 112 50 Silting in canals, Cracks in concrete facilities

Rehabilitation

Jakaba(CRRN) 31 Rehabilitation Toubekuta(CRRN) 24 Rehabilitation Sub-total (CRRN)

389

192

Pacharr (CRRS) 1,200 140 Dilapidated gates, inundation of plots

Rehabilitation

Jahally (CRRS) 765 240 Silting in canals, dilapidated gates Rehabilitation Sapu (CRRS) 38 Dilapidated. Inundation of plots. Rehabilitation Touba Demba Sana (CRRS)

95 Different type of gates (all are slide gates) from temporal tidal irrigation in the Gambia.

Rehabilitation

Kununku (CRRS) 37 20 Developed by Small Scale Water Control Project (SSWCP) in 1993 and 1994. Since 10 years ago, cultivation was abandoned due to difficulty of access in rainy season, salt intrusion and inundation of water.

Rehabilitation

Karantaba (CRRS) 10 Developed by SSWCP in 1993 and 1994. Since 10 years ago, cultivation was abandoned due to difficulty of access in rainy season, salt intrusion and inundation of water.

Rehabilitation

Tuba (CRRS) 45 Not cultivated. Rehabilitation Sanbelly Kunda (CRRS)

58 Not cultivated. Rehabilitation

Kudang (CRRS) 70 Not cultivated. Rehabilitation Sub-total (CRRS)

2,318 400

Total 2,707 592 * FAO is planning to rehabilitate.

57

Annex 3: Implementation Arrangements

GAMBIA: Commercial Agriculture and Value Chain Management Project I. Project Institutional and Implementation Arrangements A. Institutional 1. Project implementation will take place over approximately five (5) years with a project mid-term review envisaged two years after effectiveness. The Ministry of Agriculture will be the implementing agency. Project Coordination 2. The project will be implemented within existing public sector structures while adopting an appropriate private sector orientation to deepen the agriculture commercialization agenda of the project. It terms of implementation therefore the project would: (i) utilize existing institutional mandates and capacity –however limited – and would not create project-specific duplicates; (ii) put particular efforts into institutional coordination across ministries, departments and agencies through strong mutually beneficial partnerships between the responsible Ministry and other units of Government; and (iii) ensure that project management incorporates private sector perspectives essential for long-term private sector involvement in the development and commercialization of The Gambian agricultural sector. 3. The Ministry of Agriculture will have the institutional responsibility for the project, and will be responsible for the project’s proper execution and supervision, in close collaboration with other relevant public and private sector agencies. 4. Strategic oversight and orientation function will be played by an inter-ministerial Project Steering Committee (PSC) whose membership would also include non-public actors. The PSC will be headed by the Ministry of Agriculture (MoA), with membership comprising MoA, Ministry of Trade, Industry and Regional Integration and Employment (MoTIE), Ministry of Finance and Economic Affairs (MoFEA), Ministry of Fisheries and Water Resources (MOFWR), Ministry of Lands and Regional Government, Ministry of Forestry and Environment (MoFEN), National Nutrition Agency (NaNA) private sector (represented by Gambia Chamber of Commerce and Industries), representative of the farmer-based organizations, representatives respectively of the apex organizations of women and youth; and civil society, represented by the coalition of civil society groups in The Gambia. 5. The main responsibilities of the PSC will include: i) providing strategic and policy guidance to ensure effective implementation and coordination of Project activities; (ii) ensuring conformity with all applicable policies and guidelines; (iii) reviewing Project progress reports and assessing performance indicators; (iv) approving the annual work plan and budget; (v) providing support for the prompt and efficient resolution of challenges or conflicts that arise during Project implementation; (vi) facilitating effective collaboration with and among Project

58

stakeholders and implementers; and (vii) such other responsibilities as set forth or elaborated in the Project Implementation Manual. The CPCU will act as the Secretariat for the Project Steering Committee (including preparing the meetings, elaborating the documents for the meeting, recording the minutes of the meeting, etc.).

B. Project administration mechanisms

Chart A3.1: Organogram of Project Coordination

6. At the National Level: The CPCU, under the responsibility of MoA will coordinate the overall implementation of the project on day-to-day basis. The head of the CPCU will be the national project coordinator (NPC) of this project, and the unit will have all necessary fiduciary staff, adequate monitoring and evaluation capacity and project accountants. These will be supported by a Technical Team from comprising an Agribusiness Officer from the Agribusiness Unit of DoA, Gender and social Inclusion Offer from DoA, Soil and Water Management Officer from DoA and Safeguards Officer from the National Environment Agency (NEA). The CPCU will coordinate and consolidate the annual work plans and budgets and oversee the financial management and procurement of all other technical implementing agencies. It will be responsible for all fiduciary aspects of the project including procurement, disbursement, accounting, financial reporting and monitoring, and evaluation of the project, and for ensuring

59

the auditing of project account. The CPCU will prepare quarterly and annual reports recording the progress of the project. Project implementation support by the World Bank will be carried out twice a year and a midterm review will take place in 2017 with the objective of assessing progress to date and if necessary to re-direct the project by integrating additional lessons learned and realities on the ground. All project accounts will be audited annually by independent auditors acceptable to IDA and should be submitted to IDA no later than six months after the closing of the fiscal year in The Gambia. 7. The Project Implementation Manual details the implementation modalities and procedures. It includes: (i) description, organization and functioning of project coordination and management bodies, (ii) eligibility criteria and procedures for implementing the project’s support including the matching grants, (iii) implementation modalities for each component and activity (iv) M&E arrangements and procedures, and (v) social and environmental mitigation plan implementation. Implementation of project components 8. The management and implementation of individual project components/project subcomponents will be mainstreamed the selected technical implementing agencies – Ministries, Departments and Agencies (MDAs) - and beneficiary private sector agencies designated focal points who will work closely with the CPCU. The CPCU will retain all fiduciary responsibilities. The role of the partnering MDAs is two-fold: they will be responsible as service providers for managing specific aspects of the project activities, as defined in the workplan, and they will also be beneficiaries of capacity building efforts of the project. As the implementation of activities will be directly undertaken by project beneficiaries, including: i) private actors, with the support of specialized operators and many service providers; and, ii) the relevant public services involved in the project. 9. At the technical and operational level a Project Technical Committee (TC) to be chaired by a Permanent Secretary of Agriculture with membership of senior technical personnel of key implementing partners (agencies) will be established to assist the CPCU in day to day project management and coordination. The ToR of the Technical Committee will be elaborated in the PIM. 10. Technical implementing agencies will be responsible for the execution of specific project activities as defined in the work plans. Funding for the operational costs associated with this function will be provided under the project. In light of capacity constraints, these agencies will also be beneficiaries of capacity building efforts by the project. In particular, the CPCU will be responsible for all aspects of the management, including:

i. The management of the timely implementation of all activities under Project;

ii. The preparation of annual work programs and budgets, for submission to the PSC; iii. The management of the project designated account; iv. Procurement activities and reporting; v. Ensuring compliance with the project’s ESMF , including the Resettlement Policy

Framework and Integrated Pest Management Plan, in coordination with NEA;

60

vi. The management of M&E activities at industry level; and vii. The preparation of semi-annual progress reports.

11. A Memorandum of Understanding (MOU) will be the framework of contractual relationship between the CPCU and the key implementing public agencies (Ministries, Directorates, Agencies, and Institutions), such as the DoA, NARI, NEA, GIEPA, RDA, Department of Lands, Department of Water Resources, etc., but formal contracts will be entered into with other non-public service providers.

12. Component 1 will be coordinated through the CPCU and executed by both public and private service providers, on the basis of agreed annual work plans, budgets and deliverables which will be governed by MoUs signed between the CPCU and various public sector agencies, and by contracts with private firms and consultants. The component will be implemented in close coordination with the MoA, MoTIE, MLRG, and MoFWR. Specifically, implementation of Subcomponent 1.1 will be led by the Soil and Water Management Service Unit of DoA in coordination with Lands Department of the Ministry of Lands and Regional Governments and the Department of Water Resources of the MFWR. Together these agencies will identify suitable areas for tidal irrigation and lead in the community sensitization exercises; prepare ToRs for the engagement of Consultants/firms for the design, supervision, and construction/rehabilitations works. Land and Water management unit of DoA will take the overall supervisory responsibility for this activity. The Water Users Associations (WUAs) will be closely involved in sub-component 1.1 activities. Acceptance of irrigation designs by WUAs would be a precondition for the execution of the related works: this is to give beneficiaries voice and instill ownership. Irrespective of the nature, scope, and size of primary investments, beneficiaries will be involved in the rehabilitation/construction of the tertiary irrigation network, and subsequent operation and maintenance of this network. As much as practicable members of local beneficiary communities will be engaged in labor for the works. Production enhancement activities under this sub-component will be executed through NARI, DoA’s extension and horticulture service units. With the support of NARI high improved varieties of rice and vegetables will be introduced, adapted and transferred to farmers. Agricultural Extension and Horticulture service units will be supported to train farmers in Good Agricultural Practices, including the SRI. 13. Sub-component 1.2 will be Implemented though Matching Grants (MGs) on competitive basis to leverage private investments in rice and fruit processing, and to help micro/small rural enterprises to establish and provide farm level production services to farmers in the irrigation perimeters. The investment promotion aspect will be led by the Agribusiness service unit of DoA with support from GIEPA. A MG Review Committee chaired by MoA consisting of the Project Coordinator and representatives of the key Ministries including Agriculture, Finance, Trader, and will perform an oversight role and review and approve grant applications periodically. Agribusiness Specialist will be appointed by the CPCU to coordinate the overall implementation of the productive investments support.

14. The sub-project implementation arrangements include the following steps and elements:

i. Identification. Sub-project identification originates at the beneficiary level, through a facilitated participatory development planning exercise, resulting in an identified sub-project proposal. Component 2 will support the formation and capacity building of

61

smallholder groups and associations to identify and prepare subprojects, and will strengthen the capacity of service providers, to facilitate participatory planning exercises. The sub-project proposals are submitted to the respective RIA at the RDA;

ii. Appraisal. Selected service providers prepare the respective sub-project documentation for submission to the PSU, mobilizing technical assistance from the CPCU. All sub-projects are screened for technical, financial, social and environmental feasibility. The CPCU submits subprojects that pass the evaluation criteria for evaluation;

iii. Evaluation. All sub-project proposals are evaluated by a MG Review Committee. This includes verification of all eligibility and feasibility criteria. Based on the dimension, and following due procedure;

iv. Approval. Depending on the project cost, and based on criteria described in the PIM, the sub-projects will be approved by the grant review committee;

v. Implementation, monitoring and evaluation. Depending on the classification of the sub-projects, the CPCU will be responsible for the administrative procedures (financial and procurement) of sub-project implementation. Whenever possible and justifiable, procurement will be done with the full involvement of the beneficiaries. The CPCU will monitor the implementation of the sub-project agreements. The CPCU would carry out regular visits to subprojects implemented, supervise implementation, monitor that all the terms of the agreement are being complied with, and advise partners on project policies and procedures as needed.

15. Component 2 will be coordinated by the CPCU and executed through various stakeholders, both public and private service providers. Services to be provided would concern (i) support to sub-projects, (ii) capacity building of project partner institutions, and (iii) organizational support for priority value chains professional and inter-professional structures. The selected service providers will be responsible for provision of the technical and management services required for sub-project implementation, all along the sub-project cycle. As required, the CPCU will sub-contract these services to qualified consulting and local service providers. The service providers will work in close liaison with the professional and inter-professional V/C organizations and any other private or public entities with which the project will pass implementation agreements. 16. The implementation of Sub-component 2.2 will be led by DoA’s Agribusiness Services Unit and coordinated by CPCU’s Agribusiness Officer. The agribusiness Officer will facilitate the establishment of Production Partnerships, assist in preparation of their proposals an in the subsequent development of their business plans and investment plans (which could be supported under Sub-component 1.2), as well as to coach and facilitate training of partnership programs during implementation of their business plans. The agribusiness officer will also provide advice regarding technical aspects of the partnerships, organize knowledge management, align the partnerships with national policies and strategies, and prepare a rolling out of best practices developed in the partnerships. Sub-component 2.3 will be implemented by Ministries of Agriculture, GIEPA and the Ministry of Lands and Regional Government. 17. Responsibility for the implementation of all activities under a demand-based support, including reaching the agreed outcome would rest with the partners. The agreements would

62

define their financial and technical responsibilities, activities to be supported and cost-sharing, agreed target results, implementation plan, disbursement procedures and financial reporting arrangements, procurement mechanisms, and monitoring and reporting requirements. 18. Implementation at the community level: The point of entry as a beneficiary of this project will be Farmer-Based Organizations (FBOs) and/or Private Sector Associations (PSAs). FBOs/PSAs are organizations of economic interest groups (EIGs) which have a common interest in deriving their livelihood from their area of specialization/interest in agriculture and allied agricultural enterprises. The FBO/PSA will establish a management committee, consisting of a chair person, secretary and treasurer, who would be democratically elected. Consistent with the project’s emphasis on a more balanced treatment of women, at least fifty percent of the management team of the FBOs/PSAs is expected to be women. The management structure will include rules, procedures, and guidelines for performance incentives and penalties as well as a system of checks and balances to prevent possible elite capture or abuse of office. The FBOs/PSAs will identify, prepare, implement, operate and maintain their subprojects, assisted by Facilitators and technical specialists whom they contract either through the RIAs or directly; and by technical assistance and training made available by the project. Once subprojects are FBOs/PSAs can access a share of the costs for design and implementation. 19. Some communities already have relatively advanced levels of organization, either traditionally or from previous or ongoing development projects in their local government area, and may be quicker to form a FBO or PSA in order to be ready to benefit from the project. However, for those less organized and unfamiliar with the project approach, the project will implement a social mobilization program during the first year to provide sensitization and appropriate training. In order to be eligible to receive funding under this project, potential beneficiaries must form legally constituted economic interest groups as indicated above. The operating guidelines of these organizations, the structure of the organs for screening and then review and approval of subprojects will be incorporated in the PIM. 20. Monitoring and Evaluation: The CPCU will have overall responsibility for monitoring and evaluation, working in close collaboration with the RDAs, DoA, and other participating agencies. The monitoring and evaluation (M&E) system will be in line with the proposed implementation structure of the Project and therefore fully mainstreamed into the Gambia Agricultural Information Management System (GAIMS). The GAIMS structure in the MoA envisions three levels of M&E activity: Lead M&E Specialist (International Expert Technical Assistant) in the MoA. The Lead M&E specialist supports the development of and oversees the overall GAIMS of the MoA operating from the CPCU; (ii) Project M&E Specialist coordinated by the Lead Expert; and (iii) M&E Assistant overseeing the site-level M&E activities at the regional/ district levels. The lead M&E specialist would be responsible for the training of the M&E team to ensure that the responsible staff have the expertise to collect the required information and that they adhere to a uniform reporting process Monitoring evaluation will occur: (a) through internal controls incorporated into the M&E/MIS liked to the GAIMS, which would generate Monthly Implementation Reports (MIRs), to be reviewed by the CPCU and provided to the Bank for review; (b) through semiannual progress reports (SAPs) covering implementation during the first six months and second six months of each calendar year which describes progress against output objectives stipulated in PCUs AWP&B and key monitoring

63

and evaluation indicators; (c) through annual external financial audit; (d) bi-annual joint Bank/Government supervision missions; (e) through annual implementation evaluations of activities funded under the project and (f) through mid-term and end-of-project external evaluations which would assess project environment, objectives, implementation performance, and progress towards PDOs. 21. Mid-term Review: A formal Government/Bank joint Mid-term Review (MTR) is planned for the end of the second year of the project. It would be the responsibility of the CPCU to prepare and mount the MMTR. The review would be structured to include field trips to project sites and beneficiary FBOs/PSAs and other stakeholders in the project zone. The purpose of the MTR would be to assess implementation progress and to identify needed adjustments, if any, to the design of the project. The Review will assess progress: (a) in the adoption of the key innovations being promoted under the project, including the PPP and demand-driven approaches; (b) the performance of the matching grant mechanisms; (c) progress towards achievement of quantum increases in productivity and value-added output of the target value chain commodities; (d) in meeting the gender equity objectives of the project; and (e) actual impact of the project and its sustainability. The Final Report of the MTR would be submitted to the Bank three weeks after the completion of the MTR exercise.

22. Implementation Completion Report (ICR): Preparation of the ICR is a mandatory requirement under the provisions of the General Conditions. Two ICRs are prepared-one by the government based on which an IDA ICR mission prepares the final IDA ICR. The project task leader writes to the government for preparation of the ICR about 3 to 6 months before the project is due to close, providing a detailed format. Details of the preparation of the ICR will be set forth in the PIM.

II. Financial Management, Disbursements and Procurement Financial Management 23. It was agreed with the Government of the Gambia (GoG) that the CPCU will be in charge of the financial management activities of the Commercial Agriculture and Value Chain Management Project. 24. The objective of the Financial Management assessment was to determine whether the CPCU has adequate Financial Management (FM) arrangements in place to ensure that the Project funds will be used only for the purposes for which the financing was provided, with due attention to considerations of economy and efficiency. 25. The FM assessment considers the degree to which (a) the budgeted expenditures are realistic, prepared with due regard to relevant policies, and executed in an orderly and predictable manner, (b) reasonable records are maintained and financial reports produced and disseminated for decision-making, management, and reporting, (c) adequate funds are available to finance the Project, (d) there are reasonable controls over Project funds, and (e) independent and competent audit arrangements are in place.

64

26. The CPCU financial management system is weakened due to the inexistence of a FM function: the FM staff is not yet in place and FM procedures have not yet been established. A. Financial Management arrangements

1. Internal control

27. The PIM will include FM procedures, which will be set out with a clear description of the approval and authorization processes and internal controls and should be approved by the Ministry of Agriculture before becoming effective.

2. Budgeting

28. The budgeting process (preparation, approbation and execution monitoring) will be clearly defined in the PIM. The annual work plan and budget should be submitted to the IDA’s review and approved by the PSC before the beginning of the year.

3. Disbursement

Disbursement Methods 29. The project will use the transaction-based disbursement procedures, i.e., replenishment, direct payment, reimbursement, and special commitments (see Chart A3.2 below). Chart A3.2: Funds Flow Chart

IDA Washington -Credit Account

Central Bank Three (3) Designated Accounts – DA – A, DA-B, DA-C

CPCU

Suppliers

Supporting documents

Direct payments

Special Commitment

65

Designated Account 30. Three (3) designated accounts will be opened at the Central Bank of the Gambia and managed by CPCU. These designated accounts will be held in US Dollar. The designated accounts ceiling will be indicated in the disbursement letter once it has been agreed upon during negotiations. Monthly replenishment applications 31. The designated accounts will be replenished through the submission of withdrawal applications on a monthly basis by the CPCU and will include reconciled bank statements and other documents as may be required.

4. Accounting

32. Project accounts will be maintained on a cash basis, supported with appropriate records and procedures to track commitments and to safeguard assets. Annual financial statements will be prepared by the CPCU in accordance with the Financial Reporting Act, 2013 of The Gambia. The Country Portfolio Performance Review (CPPR) on May 2, 2013 decided that all new Projects must use the GIFMIS. As the CPCU is not located within the Ministry of Agriculture, the rolling out of the GIFMIS requires more time and the Borrower agreed to do it by fifteen (15) months after effectiveness. Before the GIFMIS becomes operational, the Project will buy and set up a standalone computerized accounting system. Currently, the accounting system of the Project Preparation Advance is managed through the accounting software of the West Africa Agriculture Production Project – Project Coordination Unit.

5. Financial Reporting Interim reporting 33. The CPCU would submit Interim Un-audited Financial Reports (IFRs) to the Bank on a quarterly basis. IFRs should be submitted within forty-five (45) days following the end the calendar quarter. The IFRs will include (i) sources and uses of funds by project expenditures classification, (ii) a comparison of budgeted and actual project expenditures (commitments and disbursements) to date and for the quarter, and (iii) other document as may be required. Annual reporting 34. The CPCU will produce Annual Financial Statements, and these statements will comply with the Gambian law and World Bank requirements. These Financial Statements 14 will consist of:

a statement of sources and uses of funds; a statement of commitments; accounting policies adopted and explanatory notes;

14 It should be noted that the project financial statements should be all inclusive and cover all sources and uses of funds and not only those provided through IDA funding. It thus reflects all program activities, financing, and expenditures, including funds from other development partners.

66

a management assertion that project funds have been expended for the intended purposes as specified in the relevant financing agreements.

6. Audit

35. The Financial Agreement will require the submission of Project Audited Financial Statements to IDA within six months after year-end. 36. External auditor with qualification and experience satisfactory to the World Bank will be recruited to conduct an annual audit of the project’s financial statements. A single opinion on the Audited Project Financial Statements in compliance with International Standards on Auditing (ISA) will be required. The single audit opinion covers the review of the project financial statements, the review of the statement of expenditures used as a basis for the submission of loan withdrawal applications, and the review of the activities of the Designated Account associated with the Project. 37. The external auditors will prepare a Management Letter giving observations and comments, and providing recommendations for improvements in accounting records, systems, controls and compliance with financial covenants in the Financial Agreement. Table A3.1: Auditing requirements

Audit report Due Date

Financial Statements Management letter

End of June

B. Financial Covenants

(i) The Borrower shall establish and maintain a financial management system including records, accounts and preparation of related financial statements in accordance with accounting standards acceptable to the Bank;

(ii) The Financial Statements will be audited in accordance with international auditing standards;

(iii) The Audited Financial Statements for each period shall be furnished to the Association not later than six (6) months after the end of the project fiscal year;

(iv) The Borrower shall prepare and furnish to the Association not later than forty-five (45) days after the end of each calendar quarter, interim un-audited financial reports for the Project, in form and substance satisfactory to the Bank;

(v) The Borrower will be compliant with all the rules and procedures required for withdrawals from the Designated Accounts of the project.

67

Table A3.2: Financial Management Action Plan ACTION When By whom 1. Appoint (by the GoG) a Financial Management Officer:

By the effectiveness Ministry of Agriculture

2. Prepare and adopt the Project Implementation Manual (PIM), including FM procedures.

By the effectiveness Ministry of Agriculture

3. External Audit Six (6) months after effectiveness

Ministry of Agriculture Selection of the auditor

4. Roll out of the GIFMIS at the CPCU Fifteen (15) months after effectiveness

Ministry of Agriculture

C. Implementation Support Plan 38. Based on the outcome of the FM risk assessment, the following implementation support plan is proposed. The objective of the implementation support plan is to ensure that the project maintain a satisfactory financial management system throughout the project’s life. Table A3.3: Implementation support plan

FM Activity Frequency Desk reviews Un-audited financial reports review Quarterly Audited financial statement reports review Annually On site visits Review of overall operation of the FM system Semi-annual Monitoring of actions taken on issues highlighted in audit reports, auditors’ management letters, and other reports

As needed

Transaction reviews (if needed) As needed Capacity building support FM training sessions During implementation and as

and when needed. Conclusion 39. The conclusion of the financial Management assessment is that the financial management arrangements will meet the Bank’s minimum requirements under OP/BP10.00 once the mitigation measures implemented (see Table A3.2: FM action plan). 40. The residual risk rating for the CPCU will be Substantial. Procurement 41. The proposed project will be coordinated by an existing Central Projects Coordination Unit (CPCU) under the responsibility of Ministry of Agriculture (MoA). To strengthen the CPCU, the project will engage procurement, financial management, agribusiness and monitoring

68

and evaluation specialists who would, as much as practicable, be government staff drawn from existing structures, but could be engaged as consultants to build up capacity of their respective units over a specific period of time. The CPCU would coordinate implementation by respective public and private sector technical agencies. 42. Procurement activities for the proposed project will be conducted by the CPCU procurement unit through the contract committee of MoA, which will be backstopped by the existing capacities in similar projects also coordinated under the CPCU (WAAPP, FASDEP, Nema). The CPCU coordinates the implementation of all donor funded projects in the MoA, with teams well versed in the IDA procedures, and have handled procurement under previous and on-going IDA programs as well as all other donor operations. The CPCU has been in existence for over six years15 . This experience and the expertise that has developed in the CPCU is expected to greatly benefit the arrangement of the new project and will help mitigate the residual risks that are: i) the lack of Project Coordinator, ii) the need to update the manual of procedures to take into account the proposed project, iii) the need of training of the staff to be drawn from the existing ministries and departments and iv) the need of space to permit a better filing system.

43. Procurement risk is considered Substantial and is expected to be moderate once the following mitigation measure are implemented: i) recruit a Project Coordinator following a competitive process, and inform the Bank; ii) update the manual of procedures to take into account the activities of the proposed project; iii) train the staff drawn existing ministries and departments in World Bank procurement procedures; and iv) find sufficient office space to permit to organize and secure procurement files inter alia. The Government prepared a procurement plan which has been reviewed and approved by IDA during appraisal. National Competitive Bidding (NCB) method 44. The Borrower will ensure that procurement of goods, works and non-consulting services under National Competitive Bidding will be carried out through an open tender as set forth in the Gambia Procurement Act 2001, subject to the provisions of the Procurement Guidelines and the following additional provisions:

i. prospective bidders shall be provided four weeks, from the date of publication of the invitation to bid or the date of availability of the bidding documents, whichever is later, for the preparation and submission of bids;

ii. bidding documents acceptable to the Association shall be used, and shall be prepared so as to ensure economy, efficiency, transparency, and broad consistency with the provisions of Section I of the Procurement Guidelines;

iii. invitation for bids shall be advertised in national newspapers with wide circulation, or in the official gazette provided that it is of wide circulation, or on widely used website or electronic portal with free national and international access;

iv. bids shall be submitted in a single envelope;

15 First started as Project Implementation and Management Unit (PIMU) in 2007 and then restructured into a CPCU into 2010.

69

v. bid evaluation criteria, bidder qualifications criteria, and the contract award criteria shall be clearly specified in the bidding documents;

vi. no margin of preference shall be granted to domestic bidders; vii. eligible bidders, including foreign firms, shall not be excluded from the bidding;

viii. the procedures shall include the publication of the results of evaluation and of the contract award;

ix. The bidding document and contract as deemed acceptable by the Association shall include provisions stating the Association’s policy to sanction firms and individuals found to have engaged in fraud and corruption as defined in the Procurement Guidelines; and

x. each bidding document and contract financed out of the proceeds of the Financing shall provide that bidders, suppliers and contractors, and their subcontractors, agents, personnel, consultants, services providers, or suppliers, shall permit the Association to inspect all accounts, records and other documents relating to the submission of bids and contracts performance, and to have them audited by auditors appointed by the Association. Acts intended to materially impede the exercise of the Association’s inspection and audit rights provided for in the Procurement Guidelines constitute an obstructive practice as defined in the Procurement Guidelines.

45. In addition, any other adjustment determined by the Bank as necessary, will be taken into account during the project execution in order to assure economy, efficiency, transparency, and broad consistency with the provision included in Section I of the Guidelines. 46. Procurement of Works: Works procured under this project would include but are not limited to: land clearing and leveling, construction of main, secondary and tertiary canal, field road construction, dike/ bund construction, fencing of community gardens drying floor and rice storage, etc. Given the new thresholds applicable for The Gambia, it is not expected to use ICB, but rather NCB and shopping. The procurement will be done using Bank’s SBD for all NCB subject to any adaptation as required. Small contracts for works may be procured using the shopping procedures as per paragraph 3.5 of the Procurement Guidelines.

47. Procurement of Goods: Goods procured under this project would include but are not limited to: purchase of vehicles and motorcycles, accounting software, etc. Given the new thresholds applicable for The Gambia, it is not expected to use ICB, but rather NCB and shopping, particularly for contracts with small value (IT and multimedia equipment, office equipment, office furniture, etc. The procurement will be done using Bank’s SBD for all NCB subject to any adaptation as required. Small contracts for goods may be procured using the shopping procedures as per paragraph 3.5 of the Procurement Guidelines.

48. Procurement of non-consulting services: These services may concern operating expenses such as office maintenance, equipment maintenance, and non-consulting services related to the organization of workshops. The related contracts will be at small value and they may be procured using the shopping procedures as per paragraph 3.5 of the Procurement Guidelines.

70

49. Selection of Consultants: Consulting services will include studies and supervision missions, financial audits, baseline survey, technical assistance and consultants’ services, training and workshops; producing and updating manuals, etc.; support to the CPCU for financing any consultant position needed to reach the Project objectives.

50. Short lists of consultants for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

51. Operational Costs: These costs may include office furniture, office maintenance, equipment maintenance and cost related to the Project coordination nee\ds; they are either goods or non-consulting services and they may be procured using the shopping procedures as per paragraph 3.5 of the Procurement Guidelines. The Project operational manual should describe the procurement process for the related goods or non-consulting services.

Procurement Implementation Arrangements 52. An assessment of the capacity of the Implementing Agency to handle procurement actions for the project was carried out by Mamadou Mansour Mbaye, Procurement Specialist STC, based in the Dakar Office and designated for the project on the side of the Bank. The assessment reviewed the organizational structure for implementing the project and the interaction between the project’s staff responsible for procurement and the Agency’s relevant central unit for administration and finance. 53. Procurement activities will be carried out by the CPCU through the contract committee which is overseen by the MOA and receives its political mandate from that Ministry. This Agency is currently not sufficiently staffed especially in the Procurement Section regarding procurement activities of the proposed project.

54. Most of the issue concerning the procurement component for implementation of the project have been identified and include: i) the lack of Project Coordinator, ii) the need to update the manual of procedures to take into account the proposed project, iii) the need of training of the staff to be drawn from the existing ministries and departments and iv) the need of space to permit a better filing system. The corrective measures which have been agreed are: i) recruit a Project Coordinator following a competitive and inform the Bank; ii) update the manual of procedures to take into account the activities of the proposed project; iii) train the staff drawn from existing ministries and departments in World Bank procurement procedures; and iv) find sufficient office space to permit to organize and secure procurement files inter alia. The CPCU will prepare before appraisal, a procurement plan which will be reviewed by IDA. 55. The overall project risk for procurement is Substantial. However, given the mitigations measures envisaged, the residual risk will be Moderate.

56. Procurement Plan: The Borrower prepared a draft procurement plan for the first 18 months of project implementation. This plan will be updated annually in agreement with the Project Team annually or as required to reflect the actual project implementation needs and

71

improvements in institutional capacity to reflect the latest circumstances. It will be available in the project’s database and in the Bank’s external website.

57. The Procurement Plan covering activities planned for the first eighteen months after project effectiveness is as follows:

Table A3.4 Format of a procurement plan for the first 18 months of the project

(a) Goods and Works and non-consulting services: List of contract packages to be procured

1 2 3 4 5 6 7 8 9

Ref. No. Contract

(Description)

Estimated

Cost (US$) 000

Procurement Method

P-Q Domestic

Preference (yes/no)

Review by Bank (Prior / Post)

Expected Bid-

Opening Date

Comments

Component 1: Support to development of Irrigation and Key Productive Infrastructure GCAVCMP/W/001

Land Clearing by bulldozer and land leveling

868.9 NCB NO NO PRIOR 3-Oct-14 1LOTS

GCAVCMP/W/002

Main Canal Excavation, Secondary Canal Excavation and tertiary Excavation, Field Road Contraction and Dike/Bund Construction Sliding and flap gate, Corrugated Culverts and Installation of gates and culvert

2,805.0 NCB NO NO PRIOR 20-Dec-14 3 LOTS

GCAVCMP/W/003/

Drying Floor and Rice Storage facilities

124.3 NCB NO NO PRIOR 13-Jan-15 2 LOTS

GCAVCMP/W/004

Fencing of Community Gardens with Chain-link, Set of concrete pillar and steel post and Gates and Binding wires

37 NCB NO NO POST 20-Dec-14 1 LOTS

GCAVCMP/W/005

110mm ID distribution pipes and 50mm

49.6 Shopping NO NO PRIOR 5-Jan-15 1 LOTS

72

1 2 3 4 5 6 7 8 9

Ref. No. Contract

(Description)

Estimated

Cost (US$) 000

Procurement Method

P-Q Domestic

Preference (yes/no)

Review by Bank (Prior / Post)

Expected Bid-

Opening Date

Comments

Distribution-pipes and Drip system

GCAVCMP/W/006

Multipurpose Center (for Shorting and grading), Nursery shed

100.9 NCB NO NO POST 15-Jan-15 2 LOTS

GCAVCMP/W/007

Sanitary facilities for Community garden

7.5 Shopping NO NO POST 14-Feb-15 1 LOT

GCAVCMP/W/008

Water Source for 5ha community garden, overhead tank and solar power water lifting devices

277.7 NCB NO NO POST 26-Jan-15 L LOT

GCAVCMP/W/009

Office Rehabilitation (civil work)

52.9 Shopping NO NO POST 26-Dec-14 1 LOT

Component 2: Support to Value Chain Management

Component 3: Project Administration and Institutional Building

GCAVCMP/G/001

Procurement of Accounting Software

26.4 Shopping NO NO PRIOR 31-Jun-14 1 LOTS

GCAVCMP/G/002

Procurement of Vehicles and Motocycle

135.0 NCB NO NO PRIOR 26-July-14 3 LOT

GCAVCMP/G/003

Procurement of Office Furniture

11.0 Shopping NO NO PRIOR 16-AUG-14 1 LOT

GCAVCMP/G/004

Procurement of Office Equipment

11.0 Shopping NO NO POST 12-AUG-14 1 LOT

GCAVCMP/G/005

Procurement of Multi-media Equipment

14.3 Shopping NO NO POST 4-OCT-14 2-LOTS

GCAVCMP/G/006

Garden Tools for community Garden

3.2 Shopping NO NO POST 6-MAR-14 1 LOT

GCAVCMP/G/007

Seedbed Preparation equipment -power tiller

60.3 NCB NO NO PRIOR 9-APR-15 1 LOT

73

(i) ICB contracts estimated to cost above US$3,000,000 per contract for civil works and US$300,000 for goods and non-consultancy services, the first 2 contracts irrespective of the cost estimate and all direct contracting will be subject to prior review by the Bank.

(b) Consulting Assignments contracts with short-list of international firms:

1 2 3 4 5 6 7

Ref. No. Description of Assignment Estimated Cost (US$)

Selection Method

Review by Bank (Prior / Post)

Expected Proposals Submission Date

Comments

Component 1: Support to development of Irrigation and Key Productive Infrastructure GCAVCMP/C//002

Technical Assistant Consultancy Services

110.3 CQS PRIOR 30-SEP-14 1 LOT

GCAVCMP/C//004

Design and Construction Supervision /f

47.9 CQS PRIOR 30-SEP-14 1 LOT

Component 2: Support to Value Chain Management GCAVCMP/C//003

Support to Strategy Development and Reviews /b

20.3 LCS PRIOR 5-NOV-14 VARIOS

Component 3: Project Administration and Institutional Building GCAVCMP/C/001

Annual Audit of the Project 25.5 LCS PRIOR 20 DEC-2014 1 LOT

GCAVCMP/C/005

Baseline Survey 26.4 CQS PRIOR 29 JULY 2014

1 LOT

GCAVCMP/C/006

Support to improved agriculture and rural development police and strategy formulation

21.1 LCS POST 23-DEC 2014 1 LOT

(iii) Consultancy services estimated to cost above US$200,000 per contract for firms and US$100,000 per contract for individual consultants, the first 2 contracts irrespective of the cost estimate and every single source selection of consultants (firms) for assignments will be subject to prior review by the Bank.

(iv) Short lists composed entirely of national consultants: Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

58. Prior review: For ICB contracts estimated to cost above US$3,000,000 per contract and for works, US$300,000 per contract for goods and non-consulting services, the first contract irrespective of the cost estimate and all direct contracting will be subject to prior review. Consultancy services estimated to cost above US$200,000 per contract for firms and US$100,000 per contract for individual consultants, the first contract irrespective of the cost

74

estimate and every single source selection of consultants (firms) for assignments will be subject to prior review by the Bank. 59. Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

Table A3.5 Prior Review Threshold:

(a) Goods and Works and non-consulting services: List of contract packages to be procured

(b) Consulting Assignments contracts with short-list of international firms:

Selection Method Prior Review Threshold Comment

1. Selection of firms US$200,000.00 Prior review

2. Selection of individual consultants

US$100,000.00 Prior review

3 Single source for firms and individual consultants

All contracts Prior review

60. Procurement supervision: In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended supervision missions at least every six (6) months to visit the field and to carry out a post review of procurement actions during one of these missions.

Environmental and Social (including safeguards) 61. The disclosed safeguard instruments (the ESMF, RPF and PMP) set forth mechanisms and precautionary measures: (i) the ESMF includes a comprehensive screening process of any eligible sub-project or activity to identify whether it would be subject to environmental

Procurement Method Levels Comments

1. Goods = or > US$300,000.00 Prior review

2. Works (if any) = or > US$3,000,000.00 Prior review

3 Direct Contracting All contracts Prior review

75

assessment or induce the preparation of a resettlement action plan or not; (ii) the RPF sets guidelines and procedures to apply in the event involuntary land acquisition for creation of public infrastructure emerges, and to handle potential grievances linked to the situation; (iii) the PMP provides comprehensive precautionary measures for managing agriculture chemical inputs (pesticides, fertilizers) to prevent and avoid acute intoxication or residues beyond the maximum tolerable limits in treated crops. 62. Screening process. Prior to its commencement, as soon as the implementation site is identified, each subproject or eligible activity under Components 1 and 2 will systematically be processed through the environmental and social screening procedure as detailed in the ESMF. The screening is executed by the part-time safeguard specialist within the National Coordination Unit. This process will result in the environmental classification of each subproject in category B or C; category A subproject are not eligible for financing under the project. For category B micro-project/activity, an Environmental and Social Impact Assessment (ESIA), including a concise and accurate Environmental and Social Management Plan (ESMP) will be prepared , processed according to the national procedures, submitted to the Bank’s comment and then disclosed in-country and at the Bank’s Infoshop; the ESMP’s relevant measures are integrated in the subproject planning, costing (bidding documents) and implementation (contracts, annual workplan and budget structure, report). With category C activities that are likely to induce minor concerns on environmental or social aspects, a simple ESMP will be prepared and integrated to the implementation activities. 63. Roles and responsibilities: The ESMF, the RPF and the PMP include institutional arrangements, outlining the roles and responsibilities for the various stakeholder groups involved, for screening, review and approval of sub-projects, as well as implementation and monitoring of their mitigation measures. The key role players will be:

• The Ministry of Agriculture (MoA): As the proponent, the MoA will have the overall responsibility to: (i) ensure compliance with the safeguard instruments, through the Central Project Coordination Unit (CPCU) and its regional representatives, in collaboration with relevant stakeholders; (ii) oversee the implementation of specific mitigation measures as approved through the subproject ESMPs and RAPs; (iii) monitor and report on through the project periodic implementation reports. At the early stage of the project implementation, the PCU will disseminate the quintessence of the safeguard requirements and objectives to the key stakeholders and beneficiaries, and report on. • The Regional Implementation Agencies (RIA): they will be responsible for screening and the subsequent preparation and implementation of sub project ESIAs and ESEMPs, in collaboration with the National Environmental Agency (NEA) regional offices (REPO), and under the supervision of the Regional Directorates of Agriculture (RDA). They will further ensure that services provider and/or beneficiary of subprojects execute adequately the approved measures. The RIA report on their safeguard due diligences to the RDA. • The Regional Agricultural Directorates (RAD): as the representative of the MoA in the Region, they will take the lead role to prepare and implement ESIAs/ESMPs based

76

on community driven interventions and subprojects. The RDA will supervise the RIA, in collaboration with the REPOs, and report periodically to the CPCU. • National Environment Agency (NEA): through the regional offices (REPO) NEA will take the lead in: (i) the approval of the screening results; (ii) the review of Environmental and Social Impact Assessments (ESIA); and (iii) the monitoring Environmental and Social Management Plan (ESMP) implementation. In this role NEA is supported by the ANR/EIA sub Committee. Further, NEA will ensure coordination among the sector Ministries and Departments, as well as ANR sub-committees at the offices of the Regional Governors, all of these to be facilitated by the CPCU.

64. Follow up and reporting of the mitigation measures. The environmental and social mitigation measures summarized in the ESMF as well as the specific mitigation measures approved for the subprojects will be executed, monitored and reported in: (i) the Screening records approved by the NEA/REPO; (ii) the specific Safeguard Monitoring Reports; and (iii) the Environmental and Social Safeguards section of the overall project periodic report. The responsibility of the follow up is with the CPCU and its regional representatives, while the Minister of Environment will be copied to all related reports. The indicators below will be monitored, as part of the project global monitoring system:

Percentage of eligible subprojects processed through the screening procedure; Effectiveness of the implementation of approved specific ESMPs and/or RAPs; Number of sensitization sessions held on pesticides management best practices, and integrated pest management; Number/ Frequency of Safeguard supervision and annual project reviews undertaken; Number of trainees on the implementation and requirements of the Bank’s safeguard policies; Section on the safeguards implementation in the project periodic reports.

65. Further, bio-physical and social changes (both negative and positive) from the baseline – such as changes in biodiversity both flora and fauna; land resource management, improvements in agricultural activities – in the natural environment in project intervention area should be measured, as part of the project global monitoring system. : Table A3.6: Summary of the key safeguard due diligences No. Actions Timeline Responsible

Appointment of the safeguards specialist for PCU By Effectiveness PCU

Dissemination of the safeguard instruments (ESMF, RPF and PMP)

3 months after effectiveness

PCU / RDA

Safeguard processing of any sub-project prior to its implementation

3 months after effectiveness

RIA

Implementation and follow up of the specific ESIAs, ESMP, RAPs

Recurrent RDA/REPO

77

Capacity building of relevant stakeholders as approved in the safeguard documentation and budget

Recurrent PCU/NEA

Mid-term and final audits of the implementation of environment and social recommendations and measures

Two years after effectiveness

PCU

Monitoring & Evaluation 66. The monitoring and evaluation of the project will be critical for assessing its effectiveness, as well as continuously improving it during its duration. Identifying and tracking through time manageable but relevant indicators is essential to measure the projects’ achievements and outputs and inform its implementation. Measuring impact through rigorous methods will allow for expanding future investments, as well as guide future projects in the Africa Region and beyond. In addition to a significant focus on best-in-class M&E during implementation, particular attention will be paid to building sustainable monitoring capacity beyond the life of the project. It will be built on existing M&E capacity in the MoA and mainstreamed in into the Gambia Agricultural Information Management System (GAIMS). 67. The Results Framework and Monitoring is outlined in Annex 1, including the projects’ Key Outcome and Intermediate Indicators. The objective of the project is to improve production systems and access to market of targeted agricultural commodities for smallholders in rural Gambia. The main outcomes of interest of this project would be; (i) an increased agricultural production of participating smallholder farmers; (ii) improved smallholder access to markets; and (iii) improved infrastructure and productive assets for rural smallholders. (iv) a better organization and coordination of actors all along the selected supply chain. These will be tracked through regular enterprise and household surveys as part of the impact evaluation of this project, through an effective M&E system. 68. The PCU would be responsible for M&E of project activities and related reporting requirements. A monitoring and evaluation section will be set up within the PCU, and a management information system will be prepared to the satisfaction of the World Bank, as well as procedures for data collection and reporting. The project M&E system would link technical and financial data as a means to provide overall measurement of project progress. It would work both as a day-to-day management tool and a mechanism for assessing project impacts. It would support project supervision by ensuring that baseline data on performance indicators are updated and available on a regular basis. 69. Result monitoring will include two main components: (i) impact assessment surveys, focusing primarily on the degree of achievement of the project’s overall development objective; and (ii) ongoing management information system (MIS) for assessment of the intermediate results of the project components. It is envisioned that two impact evaluations will be integrated into the project. The impact analysis will be able to capture intended and unintended benefits of project interventions, with a specific interest in investigating differences in program impact by gender. The empirical analysis for both impact evaluations will primarily be built on survey data

78

deliberately collected for this purpose: (1) a baseline survey which will be carried out prior to respondents' exposure to any relevant intervention activities; (2) conditional on sufficient implementation, a mid-term survey; and (3) an end-line survey which will be administered prior to project completion. Information will be collected from representatives of both the treatment and comparison groups at multiple levels (households and farmer’s associations/enterprises). The mid-term review would be conducted no later than two years after project effectiveness. While the empirical analysis will be carried out by impact evaluation experts from the World Bank in collaboration with the PCU, the data collection will necessarily be contracted out to an organization/firm with extensive experience and capacity in the administration of large-scale surveys. In addition, an effort will be made to integrate other data sources such as the administrative records compiled through the M&E system. 70. Result monitoring will be complemented by outputs and activities monitoring. Monitoring will focus on changes on key variables, such as production and surpluses marketed by participating smallholders, including breakdowns by gender before and during implementation. M&E reports, including environmental and social monitoring results, would be prepared semi-annually. 71. The MIS would include environmental monitoring indicators to: (i) determine whether or not the mandatory environmental screening for sub-projects and other project investments have been completed as per the Bank procedures; and (ii) assess the effectiveness of the environmental mitigation measures implemented, including the extent to which subprojects are prepared and subsequently managed in an environmentally and socially sustainable manner. The data collected through the M&E system on management and impact indicators would be disaggregated, and allow for proper assessment of impact on vulnerable groups and of gender impacts. 72. The joint Bank-Government semi-annual supervision missions would assess the status of key project outcomes and update legal covenant compliance. The management of the impact evaluations will be a responsibility of the project. It will fund and contract out the surveys needed for the impact monitoring and evaluation. It will be responsible for overseeing, designing, implementing, analyzing, and disseminating the impact evaluations studies. An Implementation Completion Report (ICR) will be prepared following project closing.

79

Annex 4: Operational Risk Assessment Framework (ORAF)

Gambia, The: Commercial Agriculture and Value Chain Management Project (P125024).

.

Project Stakeholder Risks

Stakeholder Risk Rating Moderate

Risk Description: The project will involve different sectors and stakeholders in its implementation. Conflict of interest could arise if the project vision is not shared, and that would affect delivery. There is also a risk of conflicts over resources among the different public sector institutions involved in the project, and between government and private sector/producer organizations; Low participation of private sector, and Smallholders inability to participate in cost sharing demand-driven sub-projects. Beneficiaries unable to provide sufficient matching funds; Risk of elite capture of matching grants: The processes for identifying Sub-project, partnerships and infrastructure could be captured by powerful local interests;

Risk Management:

The project design allocated responsibilities among key project partners and would further facilitate coordination and consolidation of results during the implementation stage. Sharing of responsibilities between the CPCU and implementing partners will be done gradually according to IP’s capacity which will be strengthened with the project support over time. Implementation support missions will closely monitor how the matrix of responsibilities work and adjustments will be made as necessary; The stakeholder risk would be mitigated by regular and intensive stakeholders’ consultation started project design, preparation and that will be continued and intensified during implementation to ensure project ownership and mutual accountability. The project design and implementation approaches would be participatory. During project preparation, a project steering committee including key ministries, donors, ongoing agricultural projects and farmers’ organizations was set up and updated regularly through consultations on the project preparation progress to share their views and guidance. This broader consultation will be maintained during project implementation.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Both In Progress Both

Risk Management:

The evaluation committee for the business proposals will include representation of the commercial banking sector. The depth of business plans will help to provide a strong basis for loan applications; In-kind contribution could be encouraged. Cost sharing criteria and levels will be reviewed and recalibrated to create opportunities for the rural poor to fairly participate;

Resp: Status: Stage: Recurrent: Due Date: Frequency:

80

Risk Management:

The project has developed an independent and transparent approach in providing matching grants with mechanisms to ensure participation of vulnerable groups Processes designed provide transparent and clear criteria for the selection of all project investments. There must be strict adherence to procedural rules. This will be closely monitored by the CPCU throughout project implementation; The project creates a voice for beneficiaries, particularly decision making, including choice of sub-projects. Emphasis on education and information campaigns including public radio, public announcements of beneficiaries.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Implementation

Implementing Agency (IA) Risks (including Fiduciary Risks)

Capacity Rating High

Risk Description: Frequent institutional changes and high turnover of ministers and senior government officials in The Gambia which increase uncertainties over coordination, especially at the policy level. This migration of skilled staff and capacities continue to weaken the capacity of the Ministry of Agriculture (MoA) to adequately implement project using its (national) systems. Weak procurement systems have often resulted in delayed implementation of works related to agricultural projects. Risk related to weak/inadequate internal capacities (at national and local levels) to implement activities, compounded by complexities in procurement and contract management under the project. Weak capacity of project implementation agency may undermine implementation; Low fiduciary capacity may trigger elite capture and grant mis-allocation.

Risk Management:

The Government’s project preparation team, including the Central Projects Coordination Unit (CPCU), is fully engaged and has overcome a steep learning curve during project preparation. IFAD and AfDB have ongoing projects committed to developing capacity for monitoring and evaluation at the Ministry of Agriculture. This project would work very closely with these efforts which have already started. The CPCU will receive training in project management skills in order to create and track implementation of work plans and monitoring of activities and outputs. NGOs can also be contracted by the Government to provide additional services.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Implementation

Risk Management:

Robust selection criteria are designed with awareness campaigns. Training would be undertaken to strengthen capacity at all levels.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Risk Management:

81

Regular training and supervision would be provided to strengthen capacities to all project actors. Regular evaluation would be carried out to ensure the knowledge sharing objective is reached.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Both Not Yet Due Implementation

Governance Rating Substantial

Risk Description: Risk Management:

Weak oversight of CPCU by the Government (migration of technical skills due to frequent staff changes) and inadequate supervision of executing agencies and the CPCU leading to lack of transparency in the management of project resources through funding mechanisms established.

A project technical committee with representations from key implementing partners and chaired by a permanent secretary will be set to support the CPCU in day-to-day implementation of the project. The project will also draw on procurement capacity built in order Bank funded projects within MoA to beef up procurement capacity at the CPCU. On the other hand, Bank will ensure intensive formal implementation support missions for the first year (quarterly) based on the draft quarterly project execution and Interim financial reports (IFRs) and will maintain regular virtual reviews of implementation progress, and provide safeguards to ensure efficient fiduciary management.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Bank Not Yet Due Implementation

Risk Management:

Stringent World Bank procurement and financial management procedures will be applied to mitigate this risk

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Implementation

Project Risks

Design Rating Moderate

Risk Description: Risk Management:

The project implementation design is simple and its technical complexity is low. The number of activities the project supports may be ambitious compared to the resources available.

During project preparation, careful costing will allow to better understand the resource needs for each project activity, and, thus, better size and focus the project, if needed. Intensive consultations will be conducted with the Government to align with their priorities, and with partners to leverage the resources, to avoid duplication and find area where the project can add more value and impact. The project attempt to be more focus as much as possible.

82

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Both

Social and Environmental Rating Moderate

Risk Description: The project impacts are likely to be small-scale and site-specific, typical of category B projects. The proposed project would benefit from environmental and social management capacity established under WAAPP. However, there is a need to further strengthen this capacity to ensure that the planned investments do not have adverse social and environmental impacts.

Risk Management:

The client has prepared an Environmental and Social Management Framework (ESMF), Resettlement Policy Framework and a Pest Management Plan (PMP). Close monitoring of safeguards will be supported during implementation. The project will identify from the directorates, social and environmental focal points to support the project. The project will strengthen their capacity in implementing safeguard activities.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Both

Risk Management:

The Borrower would hire qualified consultants who would take into account experience gained under WAAPP and provide relevant recommendations for further strengthening environmental and social management capacity under the proposed project.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Program and Donor Rating Low

Risk Description: Risk Management:

Donor coordination in The Gambia is relatively weak. However, coordination with other development partners involved in the agricultural sector has been initiated early on in the Project preparation process, and potentials for complementarities, synergies and scaling-up have been identified and discussed.

The FAO, the Bank, IFAD, World Bank and other development partners have established an informal agriculture donor group for enhanced collaboration and coordination. The close coordination with other donors involved in the agricultural sector is expected to continue throughout project preparation and implementation, through joint missions and/or coordination with the donors’ resident missions. The project will support the coordination of the implementation of the GNAIP for a better alignment of donors’ interventions to the key national priorities and an accurate monitoring of the progress. The Bank task team will actively engage and support the creation of thematic working group on agriculture and food security under the leadership in The Gambia for better coordination, harmonization and development impact of donors’ interventions. Initial discussion was made during project preparation. IFAD is initiating an M&E system to help the Government to better monitor the different interventions in the agricultural sector. The Country Projects Coordination Unit which will be established by the Government would be helpful.

83

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Bank In Progress Both

Delivery Monitoring and Sustainability Rating Moderate

Risk Description: Risk Management:

Risks of project team not having sufficient capacity to monitor and provide implementation support

The project will require sufficient monitoring and implementation support, in line with other projects in the country portfolio. M&E system will be complemented by a rigorous impact evaluation system to be fully integrated into the project design and implementation in order to capture the projects impacts including spillover effects. This will provide real-time feedback mechanisms for corrective actions throughout the life of the projects. The project's M&E systems will be integrated into the Overall monitoring tool setup monitor progress of implementation of the GNAIP.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Implementation

Other (Optional) Rating Moderate

Risk Description: Risk Management:

Lack of interest in productive partnerships since the concept is new to The Gambia and involves an element of risk for agribusinesses and farmers. Smallholders may also be reluctant to form groups given past negative experiences;

Funds are allocated for communication and outreach campaigns. Public-private sector fora on agribusiness would strengthening stakeholder interest in the concept

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Implementation

Other (Optional) Rating Moderate

Risk Description: Risk Management:

Agribusinesses may be cautions before entering into regular and sustainable commercial partnerships with producer organizations/cooperatives for risk of non-conformance to contract terms

Capacity building will be provided to develop their entrepreneurial skills, bargaining power, and adherence to contract - timely delivery and ensuring product quality.

Resp: Status: Stage: Recurrent: Due Date: Frequency:

Client Not Yet Due Implementation

Overall Risk

Overall Implementation Risk: Rating Substantial

84

Annex 5: Implementation Support Plan

GAMBIA: Commercial agriculture and Value Chain Management Project

Strategy and Approach for Implementation Support 1. The strategy for implementation support plan aims to: (i) kick-start project implementation of project even before effectiveness, and keep disbursement ratio above the project disbursement profile at any time during project life; (ii) prevent occurrence of key project risks (technical, fiduciary and environmental and social risks) or reduce at minimum level their potential impact when unavoidable; (iii) adequate monitoring and evaluation of project implementation progress and results - including a rigorous impact evaluation study of project interventions. 2. The strategy involved three level responsibilities and actions:

At project level: to minimize the risks associated with project design and capacity risk,

core CPCU will be strengthened with key technical staff, particularly, in agribusiness, soil and water management, gender and social inclusion and safeguards officers, who will be responsible for the coordination of the Technical operations of the project, to complement the administrative team made up of the coordinator, fiduciary, and M&E officers. The CPCU will also rely on, as and when it becomes necessary, support from competent government bodies, including the Department of Agriculture (DOA) and its Service Units; Department of Water Resources; GIEPA; Lands Department, etc., in their respective areas of expertise. Duration and scope of such support will depend on specific needs of value chain actors and their associations as assessed during project preparation. Such support will allow the CPCU and the chains actors and their respective associations to will hire qualified consulting firms, individuals and providers of good and services to deliver quality products and services for the project.

At the Government level, the Donor Coordination Unit of the Ministry of Finance, Project Steering Committee, and MoA may carry periodic or unscheduled mission whenever necessary. It is also expected the project’s progress will be keenly followed by the State house and included in the usual ‘meet the people’ visits which the presidency uses to follow up on-going interventions.

The Bank Task team will provide continuous implementation support, through a core team composed of the TTL, the fiduciary specialists (FM and PS), and a Program assistant based in the Country office. Frequency of formal implementation support mission (ISM) would be as follow (i) an ISM every four month for the first sixteen month following project approval, and one ISM every six months. In between ISMs, virtual ISM will be agreed on with the Government as the need arises. ISM missions scheduling and TORs would be agreed on with the Government. A mid-term review will be conducted two years after project effectiveness to assess project progress toward achieving the PDO. The private sector orientation of the project places additional burden on the supervisory responsibilities of the Bank. The combination of skills and competencies required by the CPCU and technical implementing agencies must be

85

mirrored by the supporting Bank team. Skill mix of mission teams will be crafted taking into account Bank internal strength of expertise, and as necessary additional support from FAO Investment Center, and independent consultants.

3. As successfully experienced during project preparation, ISM will include as much as possible at least a day’s workshop involving all project stakeholders for information sharing, to enhance the visibility of the project to the wider public through local medias, and reduce governance risk, while enhancing participation, inclusion, and accountability of all parties in project success and failures. 4. Particular emphasis would be put on the following aspects during project the ISM:

• Institutional capacity and management of Project Agreements/Conventions with the PIAs, to ensure that adequate capacity are in place at all times within the CPCU and the PIAs to carry out efficiently project activities;

• Targeting of beneficiaries, and M&E: regular update of the project result framework and issuance of implementation progress reports and IFRs. This entails support to the implementing agencies in upgrading their M&E systems, and Management Information systems Bank will provide technical assistance through its Impact evaluation support program (DIME) to design and implement a rigorous impact evaluation study of project interventions;

• Environmental and social safeguards instruments: Implementation support should ensure that safeguards aspects are properly taken care of as per the ESMF, PMP and RPF. Safeguards team will supervise timely preparation, when and wherever required, of Environment and Social Impact Assessments (ESIAs) and Resettlement of Action Plans (RAPs) of specific activities, and adequate implementation, monitoring and documentation of mitigation plans;

• Fiduciary management : supervision plan of FM aspects of the project is detailed earlier in Annex 3, and will focus on safeguarding Project resources while providing technical support to CPCU and PIAs. As for procurement, prior reviews will be conducted based on set threshold values for different procurement categories for The Gambia. Annual post reviews will be conducted by the Procurement Specialist. Both the CO-based FM and PR specialists working on The Gambia will be core members of the periodic implementation support missions.

Implementation Support Plan 5. A project readiness check-list table has been initiated at PCN stage with regular updates since then. The following Project Implementation Support Plan has been prepared and will be finalized before project effectiveness. The tables below indicate the main focus of support to implementation during the first 48 months, skill mix requirements, and involvement of other partners. 6. Technical Support. Most of the investments contemplated under the Project are technically relatively complex especially in terms of ensuring that the activities to be funded

86

actually result in the expected efficiency improvements. A number of consultants will be provided in the form of technical assistance hands on-training and mentoring to implementing agencies. 7. Fiduciary Support. The CPCU already has a weak fiduciary management capacity, and there will be the need to continuously strengthen of key staff to be engaged to meet Bank requirement. Fiduciary teams (Procurement and Financial specialist) overseeing The Gambia will closely supervise project fiduciary management. They will participate twice a year in the supervision missions, participate in capacity building of fiduciary staff and the procurement specialists will organize at least once a year a post review of procurement activities. 8. Safeguard support. The social and environmental safeguard specialists based in the Dakar Office will continue to have responsibility for supervision of safeguard activities. They will conduct once a year, a comprehensive supervision of safeguard activities of the project, and draft an action plan to improve implementation.

Table A5.1: Focus of support to project implementation

Time Focus Skills Needed Resource Estimate (US$)

First twelve months

Constitution and capacity strengthening of CPCU and IAs; Launching of project; Implementation of Agreements and covenants; Drafting and implementation of MoUs with SMEs PBOs; Validation of implementation plan for Y1; Training of project and Bank safeguards instruments; Setting baselines for baselines for M&E and impact assessments; Procurement support for processing of first contracts and management of project funds; Technical support on specifics of the implementation plan; Technical assistance to producer organizations implementing the Project; Reporting on implementation progress

Agribusiness specialists; Social safeguards; Environmental safeguards; Financial Management Specialist; Disbursement Specialist; Procurement Specialist; Institutional development Specialist; Ag. Economist; Operation Officer; Program Assistant; Communication Specialist;

60,000

13-24months Technical support for implementing activities per component, and sub-component; Routine FM and Procurement reviews; Management of Safeguards and monitoring of implementation of safeguards related; measures; M&E Conduct MTR and Support MTR action plan follow up: Adjust plan for implementing activities per component, and sub-component;

Agribusiness specialist ; Agricultural Economist Social safeguards; Environmental safeguards; Financial Management Specialist; Procurement Specialist; Institutional development specialist; Operation Officer; Communication Specialist; Team Assistant

70,000

25-36 Technical support for implementing;; Routine FM and Procurement reviews;

Agribusiness Specialist Agricultural Economist

100,000

87

Management of Safeguards and monitoring of implementation of safeguards related measures; M&E MTR- elaboration of MTR action plan;

Social safeguards; Environmental safeguards; Financial Management Specialist; Procurement Specialist; Institutional development specialist; Operation Officer; Communication Specialist; Legal Advisor; Team Assistant

37-48 Follow-up on MTR action plan ; Adjust implementation plan; FM and Procurement reviews; Management of Safeguards and monitoring of implementation of safeguards related measures; M&E

Agribusiness specialist; Agricultural Economist Social safeguards; Environmental safeguards; Financial Management Specialist; Procurement Specialist; Institutional development specialist; Operation Officer; Communication Specialist; Team Assistant

50,000

49-60 Technical support for implementing;; Routine FM and Procurement reviews; Management of Safeguards and monitoring of implementation of safeguards related measures; M&E Implementation Completion and Results (ICR) Report

Agribusiness specialist; Agricultural Economist Team Assistant ICR TTL and assessment team

40,000

Other TOTAL COST 320,000 Table A5.2: Skills Mix Required Skills Needed Number of

Staff Weeks Number of

Trips Comments

Task Team leaser 10 2 Accra Agricultural Economist 5 2 Dakar or in the region Irrigation specialist 4 2 Based in Washington DC Agribusiness Specialist 4 2 Based in Dakar or in the region Environmental Safeguards. Specialist 2 2 Based in Dakar or in the region Social Development Specialist 2 2 Based in Dakar or in the region Institutional Development Specialist 4 1 Consultant Financial Management Specialist 4 2 Based in Dakar Procurement Specialist 4 2 Based in Dakar M&E Specialist 4 2 Communication Specialist 4 2 Based in Dakar or in the region Disbursement Officer 1.5 Nairobi/HQ Lawyer 2 1 HQ based Team Assistant 10 CO based

88

Table A5.3: Partners Name Institution/Country Role Ada Mariama Gaye Permanent Secretary, Ministry of

Agriculture Principal Government Counterpart, and overall coordination of projects under GNAIP

Alberta Mascareetti Director /FAO Investment Center, Rome, Italy

Technical support to the Task Team under the Bank/FAO Collaboration Program (FAO/CP)

Moses Abukari IFAD Country Portfolio Manager, The Gambia

Support donor coordination and help to foster complementarity among donor funded interventions.

89

Annex 6: Details of the Financial and Economic Analysis

GAMBIA: Commercial Agriculture and Value Chain Management Project Background and assumptions 1. The aim of the economic and financial analysis is to determine whether the project is financially and economically profitable and sustainable in relation to the investments made, or not. Market price is used for the financial analysis while for the economic analysis the economic cost is used corresponding to the financial cost from which value added taxes and other transfers such as personal income taxes, corporate income taxes, import duties, and production subsidies are deducted. The project is targeting mainly rice and vegetables production. The analysis assumes a stable macroeconomic environment with price and exchange rate stability. 2. Others assumptions are that under the project, rice and vegetables would be produced with a technology package including high yielding varieties of seed, fertilizers, appropriate pest management and labor-saving technologies or equipment. The modest average expected yields are 25 tons per hectare for vegetable like onion and tomato, and 4 tons per hectare for rice which are the already achieved by a minority of farmers under similar production conditions and using more or less same improved technologies. It is thus assumed that, on average, these yields should be readily achieved by adopting farmers and we expect a quick technology adoption rate among participating farmers. At least, rice and vegetables producers can produce two crops a year; this will lead to a production of 8 tons of rice and 50 tons of vegetables (onion and tomato) per hectare and a year. However, the most optimistic option would be a triple cropping per year to generate an annual average yield of 12 tons of rice. The use of medium maturating varieties of rice (90-100 days) under minimum tillage conditions would facilitate a triple cropping. Most of the improved varieties used in the country have a potential of yield of 6 – 8 tons per hectare for rice and 20 – 30 tons for vegetables. A rate of 67 percent is considered for the milling of the paddy. Markets prices per ton of Dalasi 15,000 (US$390) for paddy rice, Dalasi 23,000 (US$ 598) for milled rice, Dalasi 25,000 (US$ 650) for onion and Dalasi 30,000 (US$ 780) for tomato were considered. The production cost per hectare and per season is estimated at Dalasi 10,350 (US$ 270) for rice and 14,580 (US$380) for vegetable (onion and tomato). The investment costs are estimated at Dalasi 173,000 (US$ 4,500) to rehabilitate a hectare of rice perimeter and Dalasi 629,600 (US$16,370) to upgrade vegetable garden irrigation scheme and equipment including fencing, borehole, complete solar pump system, drip system (table A1). Results of the financial and economic assessment 3. The estimation of the financial and economic benefit was based on the cash flows (revenue) with a five-year and a ten-year projection as the project’s maximum time period for making both social and economic impacts, and to be sustainable. The project impact is expected to start materializing in the second year of project implementation given the works and equipment needed. Finally, using a discount factor of 12 percent, the financial net present value (FNPV) and the economic net present value (ENPV) were computed for the project.

90

The results of the financial analysis showed that, given the available financial cash inflows as derived, the project would create enormous wealth for the communities. The project is financially sound and would generate significant financial profits as shown by the FNPVs estimated at US$ 12.4 million in a five-year horizon and 32.5 million in a ten-year horizon and respective financial internal rate of return (IRR) of 49 percent and 61 percent much higher than the interest rate in the financial market (table A6.1). This result met the expectations as numerous evidences have shown that agricultural activities and particularly rice and vegetables production are profitable. 4. The economic analysis displays a NPV of US$12.7 million and US$33.7 million respectively, in a five-year and a ten-year time horizon. The economic IRR are estimated at 50 percent and 62 percent for the five and ten year’s horizon. The economic IRR are much higher than the opportunity cost of capital in large public investments (17-25 percent). This result suggests that the project is economically sound. Table A6.1: Financial and economic analysis results Items Financial Analysis Economic Analysis

Time Horizon 5 years 10 years 5 years 10 years Net Present Value (US$) 12,403,854 32,534,282 12,765,496 33,034,004 Internal Rate of Return (percent)

49 61 50 62

Sensitivity analysis 5. A sensitivity analysis was carried out to test the robustness of the financial and economic assessment results. Agricultural production is typically a risky business with risk related to price (input and output price) and to production (draught, inundation, disease, pests such as bird invasion and desert locust, and post-harvest losses etc.). To take into account these risks, the sensitivity analysis was conducted by varying the yield level, the output price (rice and vegetable), and the production cost to take into account the worse cases scenarios. Four adverse scenarios were considered:

i) a decrease by 50 percent of rice yield (2 tons/hectare, two times a year) or a decrease by 50 percent of millet rice price (US$ 299/tonne);

ii) a decrease by 50 percent of vegetables yield (12.5 tons/hectare, two times a year) or 50 percent of post-harvest losses or 50 percent decrease of price (US$ 325/ton for onion and US$ 390/ton for tomato);

iii) a combined decrease by 50 percent of rice and vegetable yield or prices; iv) an increase by 50 percent of rice and vegetable production costs, and v) a-two year lag of the completion of the works of the rehabilitation of the schemes meaning

starting the production in the third year of project implementation instead of the second year as assumed.

6. Except the scenario (iii) combining decrease by 50 percent of rice and vegetable yield or prices, the financial and economic returns to the project remain positive under the other adverse scenarios (i, ii, iv and v). In fact, under these adverse scenarios, the financial IRR varies between

91

13 percent and 43 percent in a five-year time horizon and between 20 percent and 55 percent in a ten-year time horizon while the economic IRR varies between 14 percent and 44 percent and between 21 percent and 56 percent respectively in a five and ten-year horizons. On the other hand, the worst adverse scenario (iii) combining a decrease by 50 percent of rice and vegetable yield or prices lead to a negative net present value and a financial IRR of 2 percent and an economic IRR of 3 percent in a five-year horizon. However, at the ten-year time horizon, the net present value would become positive with a financial IRR of 22 percent and an economic IRR of 23 percent (table A6.2). Table A6.2: Sensitivity analysis results

Scenario Factors Financial Analysis Economic Analysis

Time Horizon 5 years 10 years 5 years 10 years Decrease by 50percent of rice yield or price

Net Present Value (US$)

1,539,228 13,475,085 1,900,870 13,974,807

Internal Rate of Return (percent)

17 34 18 35

Decrease by 50percent of vegetables yield or price or 50percent post-harvest losses

Net Present Value (US$)

7,996,985 24,803,563 8,358,627 25,303,285

Internal Rate of Return (percent)

37 50 38 51

Decrease by 50percent of rice and vegetables yield or price

Net Present Value (US$)

(2,867,640) 5,744,366 (2,505,997) 6,244,088

Internal Rate of Return (percent)

2 22 3 23

Increase by 50percent of rice and vegetable production costs

Net Present Value (US$)

10,477,144 29,154,364 10,655,715 29,332,935

Internal Rate of Return (percent)

44 56 45 57

A two-year lag of completion of rehabilitation schemes works

Net Present Value (US$)

4,558,206 24,688,635 4,866,033 25,134,542

Internal Rate of Return (percent)

23 41 24 42

Analysis of the matching grant system 7. Furthermore, the project intends to establish a matching grant facility to enable the development of the value chain by funding activities related to agricultural services and processing of rice, vegetables and fruits. The project would build up as much as possible on IFAD matching grant experience implemented through the Gambia National Agricultural Land and Water Management Development Project (Nema) which consists of a model based on (i) a grant of 45 percent from the project, 10 percent own funds and 45 percent of loan from micro-finance institution at an incentive rate of interest (10 percent a year), (ii) an annual repayment of

92

25 percent of the loan from the end of year 3 and (iii) a provision for capital replacement at 15 percent a year. Financial study done by IFAD16 showed financial soundness of matching grant supporting small and medium enterprises managed by group of five youth, and such as: land preparation services (tractor and implements) and mobile rice milling service business (grain cleaning machine, mini-mill, packing machine and vehicle) with respective financial IRR of 23.5 percent and 26 percent from the second year (table A6.3). Table A6.3: Financial analysis of matching grant system for value chain development Business Investment

cost (US$) Recurrent cost (US$)

Revenue (US$)

Gross Margin (US$)

Net Present Value (US$)

Financial Internal Rate of Return (Percent)

Land preparation services

35,000 20,400 26,900 6,500 9,941 23.5

Mobile rice milling services

25,000 20,640 24,750 4,110 9,941 26.1

Data source: IFAD, Republic of The Gambia, 2012. National Agricultural Land and Water Management Development Project (Nema), Final project design report. Report No. 2850-GM Other expected social and economic impacts of the project 8. Furthermore, the project may change many lives by giving individuals and communities and particularly, women and youth lifeline that will outlive the project. Better food security in rice and more vegetables at household level for consumption and market are expected from the project with positive impact on household members’ nutrition and so health. From the 2,500 hectares of rice perimeters rehabilitated and 100 ha of vegetable garden furnished with labor-saving irrigation equipment will result in an additional production of 20,000 tons of rice and 5,000 tons of vegetables (onion, tomato, eggplant) per year. Given the national rice production is estimated at 38,8000 tons in 201217, the project will help to increase it by 52 percent and will complement the expected incremental production of about 18000 ton of rice through Nema to contribute significantly to country self-sufficiency in rice, one of the major challenge. The additional vegetable production would consist of an increase by 40 percent of the domestic production estimated at 12,200 tons18. 9. As vegetable is the main source of income for women, the project would have a great impact on women’s income with expected positive impacts on household welfare. Rice is cultivated mainly by women and for household consumption mainly because of the low yield and

16 IFAD, Republic of The Gambia, 2012. National Agricultural Land and Water Management Development Project (Nema), Final project design report. Report No. 2850-GM 17 Source: Joint CILSS/FEWSNET, FAO, WFP GOTG, 2013. Pre-Harvest Assessment of the 2012/2013 Cropping Season Food and Nutrition Outlook, The Ex-post and Provisional Cereal and Food Balance Sheet) 18 IFAD, Republic of The Gambia, 2012. National Agricultural Land and Water Management Development Project (Nema), Final project design report. Report No. 2850-GM

93

the high dependency on rainfall. By increasing rice productivity and production by controlling water and allowing the use of improved technologies (high yielding varieties of seeds and fertilizers), the project would help rice producers and mainly women to move from a subsistence farming system to a commercially sound system with an excess of production to sell to the market. A better control of water would make rice producers and the country to be less vulnerable to climate change with the recurrent drought or inundation impacting negatively the rice production. The project would contribute to build resilience at household and country level. In coordination with the West Africa Productivity Program, the project would help rice producers to have better access to improved and adapted varieties and production techniques. 10. Furthermore, by making rice and vegetables production more productive and profitable, it is expected that the project would make agriculture more attractive to the youth. The project anticipates to create green job for the youth by getting them involved in production or in delivering agricultural services (land preparation, harvesting etc.) or in processing rice (mobile rice milling services), processing vegetables and fruits through the matching grant facility. Although, rice and vegetables are so far female crops, it will be not surprising that men would also develop interest in these crops, as usual, when a production becomes commercialized and profitable. The project would take care of gender equity issues and would make sure that men would not get women out from their business by taking over the new rehabilitated perimeters. 11. By helping women to get access to labor-saving irrigation equipment as complete drip system using solar energy, the project would alleviate women’s burden related to fetching water from the wells and using bucket for manual irrigation of their vegetables plots. Women would enlarge their cropped plots and have more time for domestic work or leisure. It is also expected that the Government to take advantage of opportunities to be created through the project to help women to have better control and proper ownership of the lands they cultivate by initiating a registration of the rehabilitated rice perimeters and vegetable gardens for their benefits. 12. Women are usually working in community groups very committed to their local development. By providing these female community groups and the youth groups with improved and modern means of production, the project will be contributing to re-enforcing the local intuitional dynamism, commitment to local development and within group solidarity. The project would contribute to better organized female producers’ community groups as well as mobilize young producers and link them to market. 13. The project investments in improving agricultural water systems will contribute to addressing one of the major constraints to agricultural production in The Gambia, by reducing the high risk of crop failure due to draught and floods and creating incentives for private sector investments in the rural Gambia.

94

Annex 7: Details of Social and Environmental safeguards Issues

GAMBIA: Commercial Agriculture and Value Chain Management Project 14. Introduction and background: The project will be implemented by the Ministry of Agriculture in coordination with ministries of Regional Administration, lands and traditional authority, water resources, trade and industry. The proposed interventions will be implemented primarily in Central and Upper River regions of the Gambia. The project will also extend to other areas with justified economic potential for women groups to engage in vegetable cultivations. The priority commodities proposed to be covered by the project are rice and vegetable. The project scope in terms of specific crop vegetables to be covered could evolve depending on farmers’ needs and market potential. The project is expected to rehabilitate about 2500 ha of irrigable land and expected to reach 60,000 rice and vegetable farmers over the duration of the project. The irrigation investment to be financed by the proposed project will focus on water use efficiency through rehabilitation of existing tidal irrigation facilities, and training users on efficient water use and management systems. 15. Safeguard category: The project is rated category B as it is not expected to induce significant adverse environmental and social impacts. Some of the planned activities such as rehabilitation of tidal irrigation schemes, construction of processing facilities, and productive sub-projects may, however, have localized, remediable environmental impacts. Three safeguards policies are triggered: Environmental Assessment (OP/BP 4.01); Pest Management (OP 4.09); Involuntary Resettlement (OP/BP 4.12); and Projects on International Waterways OP/BP 7.50. .Table A7.1: Safeguards Policies

Safeguard Policies Triggered? Explanation (Optional)

Environmental Assessment OP/BP 4.01 Yes This policy is triggered because the project is going to implement activities that will have some impact, however minor on the environment. The irrigation activities, infrastructure development for ago-processing facilities and other civil works, as well as the agriculture activities and the use of land could have some environmental considerations. The borrower will prepare an Environmental and Social Management Framework (ESMF) since the specific sites are not going to be identified prior to project preparation.

Natural Habitats OP/BP 4.04 No.

Forests OP/BP 4.36 No

95

Pest Management OP 4.09 Yes The Pest Management policy is triggered because of the potential use of fertilizer. The Government hasprepared the necessary pest management plan.

Physical Cultural Resources OP/BP 4.11 No.

Indigenous Peoples OP/BP 4.10 No

Involuntary Resettlement OP/BP 4.12 Yes The project may require additional land for the irrigation rehabilitation activities, and the other civil works outlined in this project t document. The development of infrastructure and agro-processing facilities by the private sector, as well as the development of tidal irrigation system may all require land acquisition or expansion of existing facilities that could have impact on assets, access and livelihoods. Since the project intends to select these sites and the private sector will be coming on board after project approval, it is likely that specific locations for these civil works may not be known and therefore the borrower has prepared a resettlement policy framework to outline the mechanism for addressing involuntary resettlement related impacts from project activities.

Safety of Dams OP/BP 4.37 No

Projects on International Waterways OP/BP 7.50

Yes Project activities will involve investments to maintain tidal irrigation infrastructure along the Banks of the River Gambia. The River Gambia, from which the water would be drawn for irrigation, takes its source from the Futa Jallon highlands in the Republic of Guinea, and travels through The Gambia into the Atlantic Ocean. It is thus an international waterway for purposes of OP 7.50. However, interventions were found to fall within notification

96

exception provided for in paragraph 7(a) of OP 7.50. According to that subparagraph, an exception to the riparian notification requirement may be provided when the proposed activities are: (a) for any ongoing schemes, involving additions or alterations that require rehabilitation, construction, or other changes that in the judgment of the Bank (i) will not adversely change the quality or quantity of water flows to the other riparians; and (ii) will not be adversely affected by the other riparians’ possible water use. The subparagraph explains further that this exception applies only to minor additions or alterations to the ongoing scheme; and that it does not cover works and activities that would exceed the original scheme, change its nature, or so alter or expand its scope and extent as to make it appear a new or different scheme. An exception to the riparian notification requirement was provided by the RVP on February 11, 2014.

Projects in Disputed Areas OP/BP 7.60 No

16. Being targeted at smallholder farmers and promoting more of surface water and limited groundwater irrigation development as well as small-scale processing and marketing infrastructure facilities, the environmental impact of the project is not expected to be too adverse. The environmental category (B) is based on the potential impacts that could result from irrigation expansion. Including: (a) water use control and management problems; (b) land and soil erosion; (c) soil, water and air pollution from agro-processing; (d) spread of waterborne disease; (e) spread of HIV/AIDS; (f) possible depletion of the groundwater resources, and, therefore, the need for continuous monitoring of the recharge characteristics of aquifers; and (g) possible adverse effects on socially-disadvantaged groups, such as women. 17. Because the sites of the specific sub-projects and activities are not yet known, safeguard framework instruments were prepared, consulted upon, approved and disclosed in-country on January 28, 2014 and at the Bank Infoshop on January 27, 2014: an Environmental and Social Management Framework (ESMF), a Resettlement Policy Framework (RPF) and a Pest Management Plan (PMP). Riparian notification was not done for Projects on International Waterways OP/BP 7.50, because project interventions were determined to fall within the

97

notification exception under paragraph 7(a) of OP 7.50. A riparian notification exception was provided by the RVP on February 11, 2014.

18. To prevent and manage the risks and impacts associated to the project, these instruments set forth mechanisms and precautionary measures: (i) the ESMF includes a comprehensive screening process of any eligible sub-project or activity to identify whether it would be subject to environmental assessment or induce the preparation of a resettlement action plan or not; (ii) the RPF sets guidelines and procedures to apply in the event involuntary land acquisition for creation of public infrastructure emerges, and to handle potential grievances linked to the situation; (iii) the PMP provides comprehensive precautionary measures for managing agriculture chemical inputs (pesticides, fertilizers) to prevent and avoid acute intoxication or residues beyond the maximum tolerable limits in treated crops. Capacity building support to the stakeholders about environmental and social management will be provided, including (iv) equipment and tools, (v) trainings, (vi) sensitization and education. Further, the Project Implementation Manual (PIM) includes a negative list of activities that will not qualify for funding support, among which subprojects with significant negative impact on the environment and/or which do not comply with the Environmental Safeguards. 19. Screening process. Prior to its commencement, as soon as the implementation site is identified, each subproject or eligible activity under components 1 and 2 will systematically be processed through the environmental and social screening procedure as detailed in the ESMF. The screening is executed by the part-time safeguard specialist within the National Coordination Unit. This process will result in the environmental classification of each subproject in category B or C; category A subproject are not eligible for financing under the project. For category B micro-project/activity, an Environmental and Social Impact Assessment (ESIA), including a concise and accurate Environmental and Social Management Plan (ESMP) will be prepared , processed according to the national procedures, submitted to the Bank’s comment and then disclosed in-country and at the Bank’s Infoshop; the ESMP’s relevant activities are integrated in the subproject planning, costing (bidding documents) and implementation (contracts, annual workplan and budget structure, report). With category C activities that are likely to induce minor concerns on environmental or social aspects, a simple ESMP will be prepared and integrated to the implementation activities. 20. Safeguard Roles and responsibilities. The ESMF, the RPF and the PMP include institutional arrangements, outlining the roles and responsibilities for the various stakeholder groups involved, for screening, review and approval of sub-projects, as well as implementation and monitoring of their mitigation measures. The key role players will be:

The Ministry of Agriculture (MoA): As the proponent, the MoA will have the overall responsibility to: (i) ensure compliance with the safeguard instruments, through the CPCU and its regional representatives, in collaboration with relevant stakeholders; (ii) oversee the implementation of specific mitigation measures as approved through the subproject ESMPs and RAPs; (iii) monitor and report on through the project periodic implementation reports. At the early stage of the project implementation, the CPCU will disseminate the quintessence of the safeguard requirements and objectives to the key stakeholders and beneficiaries, and report on.

98

The Regional Implementation Agencies (RIA): they will be responsible for screening and the subsequent preparation and implementation of sub project ESIAs and ESEMPs, in collaboration with the National Environmental Agency (NEA) regional offices (REPO), and under the supervision of the Regional Directorates of Agriculture (RDA). They will further ensure that services provider and/or beneficiary of subprojects execute adequately the approved measures. The RIA report on their safeguard due diligences to the RDA. The Regional Agricultural Directorates (RAD): as the representative of the MoA in the Region, they will take the lead role to prepare and implement ESIAs/ESMPs based on community driven interventions and subprojects. The RDA will supervise the RIA, in collaboration with the REPOs, and report periodically to the CPCU. National Environment Agency (NEA): through the regional offices (REPO) NEA will take the lead in: (i) the approval of the screening results; (ii) the review of Environmental and Social Impact Assessments (ESIA); and (iii) the monitoring Environmental and Social Management Plan (ESMP) implementation. In this role NEA is supported by the ANR/EIA sub Committee. Further, NEA will ensure coordination among the sector Ministries and Departments, as well as ANR sub-committees at the offices of the Regional Governors, all of these to be facilitated by the CPCU.

21. Follow up and reporting of the mitigation measures. The environmental and social mitigation measures summarized in the ESMF as well as the specific mitigation measures approved for the subprojects will be executed, monitored and reported in: (i) a specific Safeguard Monitoring Report; and (ii) the Environmental and Social Safeguards section of the overall project periodic report. The responsibility of the follow up is with the CPCU and its regional representatives, while the Minister of Environment will be copied to all related reports. The indicators below will be monitored, as part of the project global monitoring system:

Percentage of eligible subprojects processed through the screening procedure; Effectiveness of the implementation of approved specific ESMPs and/or RAPs; Number of sensitization sessions held on pesticides management best practices,

and integrated pest management; Number/ Frequency of Safeguard supervision and annual project reviews

undertaken; Number of trainees on the implementation and requirements of the Bank’s

safeguard policies; Section on the safeguards implementation in the project periodic reports.

22. Further, bio-physical and social changes (both negative and positive) from the baseline – such as changes in biodiversity both flora and fauna; land resource management, improvements in agricultural activities – in the natural environment in project intervention area should be measured, as part of the project global monitoring system. 23. Summary of the key safeguard due diligences:

99

Table A7.2: Key Safeguard due diligence No. Actions Timeline Responsible Appointment of the safeguards specialist

for CPCU By Effectiveness PCU

Dissemination of the safeguard instruments (ESMF, RPF and PMP)

3 months after effectiveness

PCU / RDA

Safeguard processing of any sub-project prior to its implementation

3 months after effectiveness

RIA

Implementation and follow up of the specific ESIAs, ESMP, RAPs

Recurrent RDA

Capacity building of relevant stakeholders as approved in the safeguard documentation and budget

Recurrent PCU/NEA

Mid-term and final audits of the implementation of environment and social recommendations and measures

Two years after effectiveness

PCU

24. The assessment carried out at the National Environmental Agency (NEA) level, including its regional offices, revealed several constraints to the execution of its responsibilities of enforcing EIA procedure, overseeing compliance to ESMPs, advising and supporting sectors and proponents in sustainability management. These constraints include, among others, limited technical and logistical capabilities, inadequate provisions for the conduct of field audits and limited EIA experience. Therefore, the project will provide capacity building support to the key stakeholders involved with the implementation of the safeguard instruments, including the NEA and REPOs. The support will cover activities such as (i) equipment and tools, (ii) trainings, (iii) sensitization and education. An estimated amount of two hundred forty thousand US dollars (US$ 240,000) is earmarked and incorporated into the project budget to finance the environmental and social measures apart from eventual resettlement costs covered by Government resources if occur. 25. The table below summarizes the key activities for the implementation of the ESMF with associated estimated costs. Table A7.3 Implementation of ESMF Activity Description Unit

Cost ($)

Frequency

Total Cost ($)

Dissemination of the approved safeguard instruments

Organizing sensitization workshops on the screening process for the key stakeholders, and make the reports available at relevant offices at national and local levels

Capacity building of EIA Working Groups at both central and regional, RADs, and Regional TACs

Training workshops on EIA procedures, implementation of the ESMF, conduct of environmental audits, and on the relevant World Bank policies (OP 4.01

5,000

2

10,000

100

and OP 4.04, OP 4.09, and OP 4.36) Capacity building of project MOA/Project Coordinator and staff

Training workshop on the national EIA procedures, guidelines, Regulations, implementation of the ESMF, and monitoring and evaluation

4,000

1

4,000

Capacity building for MDFT members, and VDCs

Regional training workshops on EIA procedures and their roles in the implementation of the safeguard measures

5,000

2

10,000

Supporting the design and approval of specific EIAs and ESMPs of eligible sub-projects (estimates)

Some eligible sub-projects classified B through the screening process may be subject to elaborated ESIA. The project will support the consultant and validation costs

5000

20

100,000

Staffing the project coordination with an environmental and social safeguard expert

Recruitment and full salary of the expert over the project lifetime

Capacity building of central and regional NEA staff in monitoring and evaluation of ESMP (consultant and workshop costs).

Among the key constraints to the NEA performance in the enforcement of EIA procedure is the lack of appropriate tool to follow the effective implementation of the approved ESMPs by project developers. The activity will consist in training the staff on the ‘’DR-ESMP’’ database

30,000

1

30,000

Mid-term independent review of the implementation of the ESMF

15,000 1 15,000

Provision of equipment for the NEA five regional offices

Chemical and microbial test kit 1,000 5 5,000

Field computer

3,000 5 15,000

Printer 500 5 2,500

Photo copier 1,500 5 7,500

LCD Projector 700 5 3,500

One motorbike

5,000 5 25,000

Total 240.000

101

Annex 8: Map of Project Area

GAMBIA: Commercial Agriculture and Value Chain Management Project