INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION. RESTRICTED Report No PA- IZZa

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1 RESTRICTED Report No PA- IZZa Thus report is for official use only by the Bank Group and specifically authonzed orgarnzations or persons It may not be pubhshed, quoted or cited without Bank Group authonzation The Bank Group does not accept responsibiity for the accuracy or completeness of the report INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION SECOND LIVESTOCK DEVELOPMENT PROJECT TURKEY March 15, 1972 Agriculture Projects Department

2 CURRENCY EQUIVALENTS US$1 = TL 14 TL 1 - US$0.071 TL 1,000,000 = US$71,429 WEIGHTS AND MEASURES (Metric System) 1 kilogram (kg) = 2.20 pounds 1 metric ton (m ton) - 1,000 kg 2,200 pounds 1 kilometer (km) = 0.62 mile 1 square kilometer (km 2 ) ha square mile 1 hectare (ha) = 10,000 m = 2.47 acres 1 meter (m) = 1.09 yard 1 millimeter (mm) = inch GLOSSARY OF ABBREVIATIONS ABT - Agricultural Bank of Turkey ASO - Agricultural Supply Organization LDP - General Directorate of Livestock Development Projects SPO - State Planning Organization TL- - Turkish Lira GOVERNMENT AND ABT FISCAL YEAR March 1 - February 28

3 TURKEY.~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SECOND LIVESTOCK DEVELOPMENT PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS... i-iii I. INTRODUCTION... 1 IT. BACKGROUND... 1 * A. General... B. The Agricultural Sector... 2 Contribution to the Economy Agricultural Growth... 3 Village Organization... 3 The Livestock Subsector... 4 C. Agricultural Credit... 6 III. THE PROJECT. 8 A. General Description.. 8 B. Detailed Features.. 8 Village Sub-Project Fattening Sub-Project Consultants and Technical Services Technical Studies and Training C. Cost Estimates D. Financing E. Procurement F. Disbursement G. Accounts and Audit IL. Organization and Management I. Lending Operations IV. MARKETS, PRICES AND PRODUCER BENEFITS A. Markets B. Prices C. Producer Benefits D. Revenue Generation This appraisal report is based on the findings of an IDA mission to Turkey in June/July 1971, composed of Messrs. J. Fransen and D. B. Argyle (IDA) and T. Bodkin and D. Mitchell (Consultants). Mr. Argyle had primary responsibility for its preparation.

4 -2- Page No.. V. ECONOMIC BENEFITS AND JUSTIFICATION VI. AGREEMENTS REACHTED AND RECOMMENDATIONS ANNEXES 1. The Livestock Subsector 2. Agricultural Bank of Turkey 3. Development Projections Village Livestock Development Sub-Project Private Farms 0 Table 1 - Investment Projection Table 2 - Herd Development Projection Table 3 - Flock Development Projection Table 4 - Income and Operating Exnenses Projection Table 5 - Financial Projection Irrigation Groups Table 6 - Investment Projection Table 7 - Income, Operating Expenses and Cash Flow Table 8 - Benefits to Members Common Meadow Groups Table 9 - Investment Projection Table 10- Income, Operating Expenses and Cash Flow Table 11- Benefits to Members Machinery Sub-borrowers Table 12- Investment Projection Table 13- Income, Operating Expenses and Cash Flow Purebred Bull Stud Groups Table 14- Investments, Income, Operating Expenses and Cash Flow Projection Fattening Sub-Project Cattle Fatteners Table 15- Investment Projection Table 16- Income and Operating Expenses Proiection Table 17- Financial Projection Sheep Fatteners Table 18- Investment Projection Table 19- Income and Operating Expenses Projection Table 20- Financial Projection

5 Project Cost by Major Investment Items 5. Estimated Quarterly Schedule of Disbursements of a US$16 Million Credit 6. Management and Technical Services Table 1 Cost Projections Appendix 1 Organization Chart Appendix 2 Duties and Responsibilities of the Consultants Appendix 3 Duties and Responsibilities of the Sub-Project Managers 7. Sources and Application of Funds Table 1 Projected Source and Application of Funds of ABT's Second Livestock Project Account Table 2 Project Cash Flow Forecast 8. Financial and Economic Rates of Return Table 1 Financial Rates of Return MAP Table 2 Appendix 1 Project Areas Economic Rate of Return Assumptions Relating to the Economic Rate of Return Calculations 0

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7 TURKEY SECOND LIVESTOCK DEVELOPMENT PROJECT SUMMARY AND CONCLUSIONS i. This report appraises a Second Livestock Development Project in Turkey. It consists of two interrelated subprojects: one for village livestock development in Northeastern Highlands of Turkey (Northeast); the other for livestock fattening, mainly in the adjoining Anatolian Plateau. The Project is part of Turkey's Second Five-Year Plan (1968 to 1972 inclusive). The Plan's objectives in the livestock subsector are to meet the growing demand for milk products and meat, and to gradually expand the currently small exports of live animals and meat. Milk production will be assisted by the US$4.5 million IDA Credit (236-TU of February 22, 1971), the :tntensive Dairy Production Project. The proposed Project aims at augmenting both meat and milk production by increasing both cattle and sheep breeding herds and offtake in the Northeast, and through fattening this underfinished offtake eand other available animals, mainly in the adjacent lnatolian Plateau, to heavier weights prior to slaughter. A third project is currently under preparation and would feature additional facilities for processing and marketing meat. ii. Government has selected the Northeast to initiate the meat and secondary milk products production phase because the greatest single concentration of breeding animals is located here. The objectives would be achieved through subloans and technical services to small farmers under the Village Livestock Development Sub-Project (Village Sub-Project). Rural life there centers around the village. Farmers live in the villages and produce subsistence crops (mainly wheat) and graze their animals (their only real source of eventual cash -- through sale of milk products and live animals) on surrounding small farms and Government-owned communal grazing lands. During the past two decades, the need for more wheat for local human consimaption and the resulting encroachment on some of the better grazing and forage production lands, caused livestock production to suffer. At the same time livestock numbers increased, but inadequate forage and grazing resulted in little increase in meat and milk output. Through the Village Sub-Project, the goal would be to increase forage production through better varieties, fertilizer use, increased wheat yields, reduction of fallow aad other improved practices. Increased wheat yields could free additional land for more forage production. iii. The Village Sub-Project would involve about 250 villages. Subloans would be made to about 5,000 individual farmers. These would finance: purchase of livestock; purchase of fertilizer and seeds for cereal and forage crops, and for improvement of permanent pasture land; and purchase of animal drawn machinery and construction of livestock barns. Subloans would also be made to about 100 cooperatives or groups of farmers to improve the infrastructure of existing small irrigation works; about 80 cooperatives or groups of farmers for fertilizer and seed to improve communally utilized pasture land and meadow land; and about 50 cooperatives or groups to