IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA IDA TF-58319) ON A CREDIT IN THE AMOUNT OF SDR 24.7 MILLION (US$35 MILLION EQUIVALENT)

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1 Public Disclosure Authorized Document of The World Bank Report No: ICR Public Disclosure Authorized Public Disclosure Authorized IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA IDA TF-58319) ON A CREDIT IN THE AMOUNT OF SDR 24.7 MILLION (US$35 MILLION EQUIVALENT) AND ADDITIONAL FINANCING OF SDR 6.6 MILLION (US$10 MILLION EQUIVALENT) AND A GRANT IN THE AMOUNT OF US$20 MILLION TO THE REPUBLIC OF SENEGAL Public Disclosure Authorized FOR A AGRICULTURAL MARKETS AND AGRIBUSINESS DEVELOPMENT PROJECT Agriculture Global Practice AFCF1 Africa Region December 23,

2 CURRENCY EQUIVALENTS (Exchange Rate Effective December 16, 2015) Currency Unit = CFAF 596 = US$ 1.00 US$ = SDR 1.00 FISCAL YEAR July 1 June 30 ABREVIATIONS AND ACRONYMS ABBREVIATIONS AND ACRONYMS AAP AECID AEPP AF AFFS/AF1 AfD AGS ANCAR APL ARMP CAS CFAF CFAHS CIDA CP DO EC ERR EU EurepGAP FPCR MDTF FoMaed FOS-F&L Africa Action Plan Agence Espagnole de Coopération Internationale (Spanish Agency for International Cooperation and Development) Agriculture Export Promotion Project Additional financing Additional Financing for Food Security Agence Française de Développement (French Development Agency) Accelerated Growth Strategy Agence Nationale pour le Conseil Agricole et Rural (National Agency for Agricultural and Rural Advisory Services) Adaptable Program Loan Agence de Régulation des Marchés Publiques (Market Regulation Agency) Country Assistance Strategy CFA franc Coopérative Fédérative des Acteurs de l Horticulture (Federal Cooperatives of Horticultural Producers) Canadian International Development Agency Comité de Pilotage (Steering Committee) Development objectives European Community Economic rate of return European Union Euro-Retailer Produce Working Group for Good Agricultural Practice (equal partnership of agricultural producers and their retail customers) Food Price Crisis Response Multi-Donor Trust Fund Fond de Maintenance des Adducteurs et Emissaires de Drainage (Maintenance Fund for Irrigation Infrastructure in the Senegal River Valley) 2

3 GDF ICR IDA IRR ISR ISRA KPI M&E MDTF MTR MWRD NAIP NPV O&M OMVS PAD PASAEL/AF2 PCU PDIAIM PDMAS PDO PNAR PPEA PPP PPMP PRACAS PRSP PSAOP PSE QAG RPF SAED Fondation Origine Sénégal-Fruits et Légumes (Senegal Origin Foundation) Gare de Fret (Export Freight Facilities) Implementation Completion and Results Report International Development Association Internal rate of return Implementation Status and Results Report Institut Senegalais de Recherches Agricoles (Senegalese Agricultural Research Institute) Key Performance Indicator Monitoring and Evaluation Multi Donor Trust Fund Mid-Term Review Senegal River Basin Multipurpose Water Resources Development Program National Agricultural Investment Program Net present value Operations and Maintenance Haut-Commissariat pour la Mise en Valeur du Fleuve Senegal (High Commission Organization for the Development of the Senegal River) Project Appraisal Document Projet d Appui à la Sécurité Alimentaire et à l Elevage (Food Security and Livestock Support Project) Project Coordination Unit Programme de Développement Intégré pour l Agriculture Irrigée en Mauritanie (Integrated Development Program for Irrigated Agriculture in Mauritania) Programme de Développement des Marchés Agricoles du Sénégal (Agricultural Markets and Agribusiness Development Program/Project Project Development Objective Programme National d Autosuffisance en Riz (National Program for Rice Self-Sufficiency) Projet de Promotion des Exportations Agricoles (Agricultural Export Promotion Project) Public-private partnership Pest and Pesticide Management Plan Programme d Accélération de la Cadence de l Agriculture Sénégalaise (Senegal Agriculture Cadence Acceleration Program) Poverty Reduction Strategy Paper Projet des Services Agricoles et Organisation de Producteurs (Agricultural Services and Producer Organisations Project) Plan Senegal Emergent (Emerging Senegal Plan) Quality Assurance Group Resettlement Policy Framework Société Nationale d Aménagement et d Exploitation des Terres du Delta du fleuve Sénégal et des Vallées du Fleuve Sénégal et de la 3

4 SDE SME SODAGRI SOE SONES TPC Falémé (Senegal River and Faleme Delta Management Holding Company) Sénégalaise Des Eaux (National Water Distribution Company) Small and medium enterprise Société de Développement Agricole et Industrielle de l Anambé (Senegalese Agricultural and Industrial Company) Statement of Expenditures Société Nationale des Eaux du Sénégal (National Water Company) Total project cost 4

5 Regional Vice President: Makthar Diop Senior Global Practice Director: Juergen Voegele Practice Manager: Simeon Ehui Project Team Leader: Jean-Philippe Tré ICR Team Leader: Jean-Philippe Tré 5

6 Table of Contents B. Key Dates... 7 C. Ratings Summary... 8 D. Sector and Theme Codes... 8 E. Bank Staff... 9 F. Results Framework Analysis... 9 G. Ratings of Project Performance in ISRs H. Restructuring (if any) I. Disbursement Profile Project Context, Development Objectives, and Design Context at Appraisal Original Project Development Objectives (PDO) and Key Indicators (as approved) Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification Main Beneficiaries Original Components (as approved) Revised Components Other Significant Changes Key Factors Affecting Implementation and Outcomes Project Preparation, Design, and Quality at Entry Implementation Monitoring and Evaluation (M&E) Design, Implementation, and Utilization Safeguard and Fiduciary Compliance Post-completion Operation/Next Phase Assessment of Outcomes Relevance of Objectives, Design, and Implementation Achievement of Project Development Objectives Efficiency Justification of Overall Outcome Rating Overarching Themes, Other Outcomes, and Impacts Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Bank Performance Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Project Costs and Financing Annex 2. Outputs by Component for the PDMAS, AFFS, AND PASAEL

7 Annex 3. Economic and Financial Analysis Annex 4. Trends in Horticultural Exports from Senegal and the Role of PDMAS.. 68 Annex 5. Bank Lending and Implementation Support/Supervision Processes Annex 6. Summary of Borrower's ICR and/or Comments on Draft ICR Annex 7. Comments of Co-financiers and Other Partners/Stakeholders Annex 8. List of Supporting Documents A. Basic Information DATA SHEET Country: Senegal Project Name: Agricultural Markets and Agribusiness Development Project Project ID: P L/C/TF Number(s): IDA-41510,IDA ,TF ICR Date: 12/21/2015 ICR Type: Core ICR Lending Instrument: APL Borrower: Original Total Commitment: Revised Amount: USD 40.44M Environmental Category: B REPUBLIC OF SENEGAL USD 35.00M Disbursed Amount: USD 43.48M Implementing Agencies: Project Coordination Unit Cofinanciers and Other External Partners: Canadian International Development Agency (CIDA) B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 02/19/2004 Effectiveness: 03/05/ /05/2007 Appraisal: 06/27/2005 Restructuring(s): 05/10/ /31/ /26/ /09/ /10/ /11/2014 Approval: 02/28/2006 Mid-term Review: 11/02/2009 Closing: 12/31/ /31/2014 7

8 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Satisfactory Substantial Moderately Satisfactory Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Highly Satisfactory Overall Bank Overall Borrower Moderately Satisfactory Performance: Performance: Moderately Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: No No Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): None None Rating D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Agro-industry, marketing, and trade Animal production 3 5 Central government administration 11 7 Crops 4 4 Irrigation and drainage Theme Code (as % of total Bank financing) Export development and competitiveness 17 9 Micro, Small and Medium Enterprise support Other rural development 46 8

9 Rural markets Rural policies and institutions 17 9 E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Gobind T. Nankani Country Director: Louise J. Cord Madani M. Tall Practice Manager/Manager: Simeon Kacou Ehui Mary A. Barton-Dock Project Team Leader: Jean-Philippe Tre El Hadj Adama Toure ICR Team Leader: ICR Primary Author: Jean-Philippe Tre Franz M. Schorosch Jean-Philippe Tre F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objective of the Project is to increase non-traditional agricultural exports and farm revenues of project supported producers Revised Project Development Objectives (as approved by original approving authority) Improved competitiveness of selected domestic supply chains, increased non-traditional exports and increased rice production in project areas (a) PDO Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 1 : Horticultural and non-traditional agricultural exports reach 30,000 tons by the end of the project. Value quantitative or Qualitative) 13,000 30,000 85,000 Date achieved 02/01/ /31/ /30/2015 Comments (incl. % achievement) Indicator 2 : Value quantitative or Qualitative) Indicator was dropped at AF 1 because it did not distinguish between exports due to the project and overall exports of the country, i.e. from non-beneficiaries. Target achieved (283%). 60% Increase in farm revenues of producers supported by the project at the end of the project N/A 60% 50%-192% 9

10 Date achieved 02/01/ /31/ /30/2015 Comments (incl. % achievement) Indicator was dropped at AF1 because it could not be measured at the outset as beneficiaries were not known yet nor could they be measured at Mid-Term Review because the results of subprojects were not yet available Indicator 3 : Non-traditional agricultural exports in project areas reach 12,000 tons by the end of the project Value quantitative or Qualitative) NA 12,000 25,530 Date achieved 04/26/ /31/ /30/2015 Comments (incl. % achievement) Indicator 4 : Value quantitative or Qualitative) Indicator introduced at AF1 to replace original PDO Indicator 1. Target achieved (213%). More importantly, PDMAS revamped the horticulture industry by opening access to the European market; deepening supply chain logistics; and shaping national strategy Local production of onion covers 75% of domestic consumption NA 75% 70% Date achieved 04/26/ /31/ /30/2015 Comments Indicator moved from original Intermediate Outcome Indicator to PDO level (incl. % Indicator at AF1. Target nearly achieved (93%) achievement) Indicator 5 : Local production of banana covers 50% of domestic consumption Value quantitative or Qualitative) NA 50% 70% Date achieved 04/26/ /31/ /30/2015 Comments (incl. % achievement) Indicator moved from original Intermediate Outcome Indicator to PDO level Indicator at AF1. Target achieved (140%) Indicator 6 : Increased annual production of rice paddy by 52,000 tons at the end of the project Value quantitative or Qualitative) NA 52,000 87,000 86,660 Date achieved 04/26/ /31/ /31/ /30/2015 Comments (incl. % achievement) Indicator 7 : Value quantitative or Qualitative) Indicator introduced at AF1 and revised at AF2. Target achieved (166%). Rice production reached 111,000 tons in December 2015 for an achievement rate of 127 percent Small ruminants productivity reaches 20 percent in targeted farms at the end of the project N/A 20% Data not yet available Date achieved 04/09/ /31/ /30/2015 Comments Indicator added at AF2. Data on this indicator will only become available in (incl. % 2016, once subprojects have been operating for two years achievement) 10

11 Indicator 8 : Value quantitative or Qualitative) Swine productivity reach 40% in targeted farms at the end of the project - Indicator added for 2nd AF NA 40% Data not yet available Date achieved 04/09/ /31/ /30/2015 Comments Indicator added at AF2. Data on this indicator will only become available in (incl. % 2016, once subprojects have been operating for two years. achievement) Indicator 9 : Total number of direct project beneficiaries (of which % women) from PDMAS and the two additional financings Value quantitative or Qualitative) 0 2,500 12,000 13,081 Date achieved 02/01/ /31/ /31/ /30/2015 Comments (incl. % achievement) Target achieved (109%). The targets were 2,500 beneficiaries under PDMAS, 6,000 beneficiaries under AF1 and 3,500 beneficiaries under AF2. Of the total number of beneficiaries, 4,299 were women (33%). (b) Intermediate Outcome Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years At least 5 Subprojects for each of the five targeted supply chains in the domestic Indicator 1 : market have been funded through the Matching Grant Mechanism and implemented Value (quantitative or Qualitative) Date achieved 02/01/ /31/ /30/2015 Comments (incl. % achievement) Indicator 2 : Target achieved (642%). This overachievement is due to the fact that with AF1 and AF2, the closing date was extended several years and many subprojects could be implemented toward the end of the project. 3,500 additional tons of quality meat (red meat and poultry) are produced and sold Value (quantitative or Qualitative) NA 3,500 5,553 Date achieved 04/26/ /31/ /30/2015 Comments (incl. % Indicator introduced at AF1. Target achieved (159%) achievement) Indicator 3 : One-third of farming families engaged in exports have implemented "Origin Senegal" good agricultural practices guide based on GlobalGAP Protocol Value (quantitative NA 33% 55% 11

12 or Qualitative) Date achieved 02/01/ /31/ /30/2015 Comments (incl. % achievement) Indicator was revised from "One-third of farming families engaged in exports crops have implemented Senegap Protocol" at AF1. Target achieved (167%) Indicator 4 : At least 2,500 ha have been developed or improved by small farmers and agribusinesses (SMEs) Value (quantitative or Qualitative) NA 2,500 4,062 Date achieved 02/01/ /31/ /30/2015 Comments (incl. % Target achieved (162%) achievement) Indicator 5 : Hectares of irrigated area rehabilitated for rice production Value (quantitative or Qualitative) NA 7,000 17,180 17,744 Date achieved 04/26/ /31/ /31/ /30/2015 Comments (incl. % achievement) Indicator was introduced at AF1. Target was revised at AF2. Target achieved (103%) Indicator 6 : At least 80% of operation and maintenance (O&M) are recovered from project beneficiaries Value (quantitative or Qualitative) NA 100% 80% N/A Date achieved 02/01/ /31/ /26/ /30/2015 Comments (incl. % achievement) Indicator 7 : Value (quantitative or Qualitative) Target for project beneficiaries not measured. Government has put in place the Delta Irrigation Infrastructure O&M Fund to deal with this issue in a global manner and has hired a private contractor to help put in place an action plan. At least 2 consolidation markets are upgraded - 4 Date achieved 02/01/ /31/2011 Comments Indicator was dropped at AF1. It was no longer relevant for project impact (incl. % assessment achievement) Indicator 8 : Local production of onion covers 75 percent of domestic consumption Value (quantitative or Qualitative) NA 75% 70% Date achieved 02/01/ /31/ /30/2015 Comments (incl. % achievement) Indicator 9 : Indicator moved from original Intermediate Outcome Indicator to PDO level Indicator at AF1. Target nearly achieved (93%). Local production of banana covers 50% of domestic consumption 12

13 Value (quantitative or Qualitative) NA 50% 70% Date achieved 02/01/ /31/ /30/2015 Comments (incl. % achievement) Indicator moved from original Intermediate Outcome Indicator to PDO level Indicator at AF1. Target achieved (140%). Indicator 10 : The Fondation Origine Senegal-Fruits & Legumes is satisfactorily implemented Value (quantitative or Qualitative) NA X X Date achieved 02/01/ /31/ /26/2010 Comments (incl. % Indicator was dropped at AF1. It was already achieved at AF1 achievement) Indicator 11 : 2000 farming families are engaged in exports crops Value (quantitative or Qualitative) NA 2,000 8,689 Date achieved 02/01/ /31/ /30/2015 Comments (incl. % Target achieved (434%) achievement) Senegal has received EU accreditation related to EC No on check on Indicator 12 : conformity to the marketing standards applicable to fresh fruits and vegetables Value (quantitative or Qualitative) NA 1 Date achieved 02/01/ /31/2011 Comments (incl. % Indicator was dropped at AF1 achievement) Indicator 13 : Tons of agricultural exports certified conform to EC No Value (quantitative or Qualitative) 26,500 38,500 67,597 Date achieved 04/26/ /31/ /30/2015 Comments (incl. % Target achieved (255%) achievement) Indicator 14 : Total length of water catchment dikes constructed (m) Value (quantitative or Qualitative) NA 7,500 NA Date achieved 04/26/ /31/ /30/2015 Comments Target was not achieved (0%). This activity could not be implemented on time (incl. % due to contract award complaints that involved a long arbitration process. The achievement) 13

14 contract was later cancelled and dam works were ultimately stopped from being executed. Indicator 15 : Number of vaccinated and dewormed small ruminants in project areas Value (quantitative or Qualitative) NA 186, ,450 Date achieved 05/10/ /31/ /30/2015 Comments (incl. % Indicator was introduced at AF2. Target nearly achieved (95%) achievement) Indicator 16 : Number of vaccinated and dewormed swine in project areas Value (quantitative or Qualitative) NA 37,000 14,500 Date achieved 05/10/ /31/ /30/2015 Comments (incl. % Indicator was introduced at AF2. Target achieved 39 percent achievement) Indicator 17 : Number of improved breed swine introduced. Value (quantitative or Qualitative) NA Date achieved 05/10/ /31/ /30/2015 Comments (incl. % Indicator was introduced at AF2. Target achieved (162%). achievement) Indicator 18 : Number of livestock slaughtering infrastructures constructed Value (quantitative or Qualitative) NA 5 0 Date achieved 05/10/ /31/ /30/2015 Comments (incl. % achievement) Indicator was introduced at AF2. Target not achieved (0%). All feasibility studies were completed but works could not be executed before project closing as national procurement agency did do provide timely clearance of contracts G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 06/30/2006 Satisfactory Moderately Satisfactory /04/2006 Satisfactory Moderately Satisfactory /28/2007 Satisfactory Satisfactory /13/2007 Satisfactory Satisfactory /28/2008 Satisfactory Satisfactory /22/2008 Satisfactory Moderately Satisfactory /04/2009 Satisfactory Satisfactory

15 8 12/22/2009 Satisfactory Satisfactory /29/2010 Satisfactory Satisfactory /26/2011 Satisfactory Satisfactory /15/2011 Satisfactory Satisfactory /26/2012 Satisfactory Satisfactory /09/2013 Satisfactory Satisfactory /15/2014 Satisfactory Satisfactory /01/2014 Satisfactory Satisfactory H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO IP Amount Disbursed at Restructuring in USD millions Reason for Restructuring & Key Changes Made 05/10/2010 Y S S Change in PDO to include rice production objective of Additional Financing. Changes in KPI for improved measurability and realism. New components added with approved additional financing 08/31/2010 S S Funds Reallocation 12/26/2012 S S Extension of closing date 04/09/2013 S S Revision of KPI targets and addition of intermediate outcome indicators with approval of Second Additional Financing 12/10/2014 S S Extension of closing date of Second Additional Financing 12/11/2014 S S Funds reallocation If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below: Outcome Ratings Against Original PDO/Targets Modest Against Formally Revised PDO/Targets Substantial Overall (weighted) rating Substantial 15

16 I. Disbursement Profile 1. Project Context, Development Objectives, and Design 1.1. Context at Appraisal 1. Senegal s relatively robust economic growth since 1994 was not driven by the agriculture sector. Instead, its economic growth was led by non-labor-intensive sectors and marginally benefited rural areas, where 58 percent of the population lives, 70 percent of whom rely on agriculture for their livelihood. During the two decades before the Agricultural Markets and Agribusiness Development Program s (PDMAS) appraisal, agriculture in Senegal experienced stagnant production and declining productivity and remained largely dominated by rain-dependent, smallholder-produced crops and extensive animal husbandry. 2. The sector showed signs of recovery after 2000, notably in horticultural exports, cereals production, and the poultry industry. This improvement was a direct result of the Government of Senegal s commitment to support the sector and implement reforms through the World Bank-supported Agricultural Services and Producer Organizations Project (Projet des Services Agricoles et Organisations de Producteurs - PSAOP). 3. Numerous constraints continued to dampen the country s potential for accelerated agricultural growth. At the time of PDMAS appraisal, Senegal s Poverty Reduction Strategy emphasized wealth creation, capacity building, social services, and assistance to vulnerable groups (PRSP ). In response to the growing concentration of poverty in rural areas, it highlighted the need for increased investment in 16

17 agricultural systems, rational use of natural resources, reinforcement of rural development, and development of diversified agriculture. In this context, the government designed an Accelerated Growth Strategy (AGS) and, more specifically, a strategy for agricultural export development. This strategy identified the key constraints to development of the country s agricultural growth potential as: (a) food safety and quality issues; (b) lack of access to investments and working capital; (c) poorly functioning market infrastructures; (d) inefficient distribution channels; and (e) weak irrigation infrastructures, which covered less than 4 percent of Senegal s total arable land Original Project Development Objectives (PDO) and Key Indicators (as approved) 4. The PDMAS s Project Development Objective (PDO) was to contribute to sustainable increase of nontraditional agricultural exports and revenues for project beneficiaries/participants. The end-of-project outcome indicators were as follows: (i) (ii) The volume of horticultural and nontraditional agricultural exports have increased from 13,000 tons (in 2004) to 30,000 tons; and, Producers revenues for project participants have increased by 60 percent by the end of the first phase Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification 5. Project Development Objectives. The PDO was formally revised on May 10, 2010, upon approval of the First Additional financing for Food Security (Credit No. 4720). It was revised to Improved competitiveness of selected domestic supply chains, increased non-traditional agricultural exports and increased rice production in project areas. 6. While the PDO wording was changed to focus on supply chains competitiveness, the substance of the overall development goal remains the same. Project activities aimed to improve the performance of domestic supply chains through interventions such as matching grants to develop partnerships between agribusiness and small-holders; provision of water-efficient irrigation technologies and improved irrigation services; adoption of good agricultural practices; better access to post-harvest infrastructures and high value markets; and development of marketing strategy and information system. This was expected to improve producers productivity and secure access to higher prices, thus resulting in increased incomes. 7. The PDO was also modified to incorporate the AF1 development objective, Increased rice production in project areas. Hence, the final revised PDO was: Improved competitiveness of selected domestic supply chains, increased nontraditional agricultural exports, and increased rice production in project areas. An additional outcome indicator for this PDO was added: Increased annual production of rice paddy by 52,000 tons by end of the project. 17

18 The original PDO indicators were also revised to be more realistic and more measurable. The first key performance indicator (KPI) initially stated that: Horticultural and nontraditional agricultural exports reach 30,000 tons by the end of the project. While this KPI showed satisfactory progress (with 27,409 tons in against a target of 26,000 tons for the same period), it was unclear how observed increases in agricultural exports could be attributed to project performance. A more outcome-focused performance indicator was developed to better capture the project s contribution and to differentiate increases in exports directly generated by project interventions from those resulting from private investments outside project areas. Thus the KPI was revised to: Nontraditional agricultural exports in project areas reach 12,000 tons by the end of the project. This formulation was also aligned with the PDO whose definition referred to nontraditional agricultural products. 8. Furthermore, as there were no baseline data on farm revenue and no information on the growth in farm revenues at MTR (subprojects by beneficiaries had only just started), it was decided to drop this indicator and analyze it as part of the economic analysis at the end of the project. As a result, the KPI 60 percent increase in farm revenues of producers supported by the end of the project was dropped and replaced with Local production of onion and banana covers 75 percent and 50 percent of domestic consumption, respectively. This indicator was originally designed as an intermediate outcome indicator. It allowed the direct monitoring of consolidation and competitiveness of key domestic supply chains. The two selected commodities, onion and banana, were maintained. 9. In light of the first Additional Financing for Food Security (AFFS) in preparation at that time, the original PDO was also modified to incorporate the AFFS development objective, Increased rice production in project areas. Hence, the final revised PDO was: Improved competitiveness of selected domestic supply chains, increased nontraditional agricultural exports, and increased rice production in project areas. An additional outcome indicator for this PDO was added: Increased annual production of rice paddy by 52,000 tons by end of the project. The PDO was formally revised on May 10, 2010, upon approval of the First AFFS (Credit No. 4720). 10. Other intermediate outcome indicators were modified, dropped, or added as needed. These changes were made to better align indicators with what was feasible and necessary to measure project progress towards achieving the PDO. They were also revised to take into account the two Additional Financings (AFs) approved during the project life: the First Additional Financing for Food Security (AFFS) and the Food Security and Livestock Support Project (PASAEL). Table 1 shows changes in main intermediate outcomes indicators. 18

19 Table 1 Changes in project development objectives and indicators Original Project With Additional Financing 1 With Additional Financing 2 Project development objectives Contribute to sustainable increase in nontraditional agricultural exports and revenues growth of projectsupported producers Project Outcome Indicators Horticultural and nontraditional agricultural exports reach 30,000 tons by the end of Phase I. 60% increase in farm revenues of producers supported by the project at the end of Phase I. (Dropped) Improved competitiveness of selected domestic supply chains, increased nontraditional agricultural exports and increased rice production in project areas (Revised) Nontraditional agricultural exports in project areas reach 12,000 tons by end of project (Target revised) Local production of onion and banana covers 75% and 50% of domestic consumption respectively (Moved from Intermediate Outcome Indicators) Increased annual production of rice paddy (tons) by 52,000 tons at the end of the project (Added) Improved competitiveness of selected domestic supply chains, increased nontraditional agricultural exports and increased rice production in project areas (Continued) Nontraditional agricultural exports in project areas reach 12,000 tons by end of project (Continued) Local production of onion and banana covers 75% and 50% of domestic consumption respectively (Continued) Increased annual production of rice paddy (tons) by 87,000 tons at the end of the project (Target revised) Small ruminants productivity reach 20% in targeted farms at the end of the project (Added) Total number of direct project beneficiaries (of which % women) Total number of direct project beneficiaries (of which % women) (Continued) Swine productivity reach 40% in targeted farms at the end of the project(added) Total number of direct project beneficiaries (of which % women) (Target revised) 1.4. Main Beneficiaries 11. The PDMAS had 13,082 direct beneficiaries. The targets were 2,500 beneficiaries under the original project, 6,000 additional beneficiaries under AF1, and 3,500 beneficiaries under AF2 for an overall target of 12,000 beneficiaries. Of these, it is estimated that well over 9,000 were small-scale farmers (mostly rice and vegetable growers), some 500 were medium-scale farmers, and 36 were commercial enterprises. Out of the total number of beneficiaries, 4,299 were women (33 percent). Beneficiaries benefitted from: (a) rehabilitation and improvement of irrigation infrastructure; (b) subprojects financed with matching grants, mostly drip irrigation and livestock improvement projects; (c) rehabilitated rice irrigation fields; and (d) improvements in animal production due to vaccination campaigns. Producers and consumers benefitted from improvements in agricultural marketing infrastructure and better food safety standards. 19

20 12. Exporters of horticultural products benefited from agricultural export infrastructures and better access to export markets. Hundreds of farmers received advice and were trained on new irrigation techniques and production, marketing, and conservation technologies for fruits and vegetables. Selected staff of executing agencies (Senegal River and Faleme Delta Management Holding Company - SAED and National Agency for Agricultural and Rural Advisory Services - ANCAR) benefitted from intensive training courses abroad and several study tours outside the country. The Fondation Origine Sénégal Fruits et Légumes (FOS-F&L) and the Coopérative Fédérative des Acteurs de l Horticulture (CFAHS) received operational support. It is estimated that the project also generated additional employment due to agricultural intensification and new jobs in agricultural marketing and processing along the value chain Original Components (as approved) The PDMAS consisted of four components, namely: 13. Component A: Improving Domestic Marketing Conditions aimed to improve food safety and the performance of domestic distribution channels for crop and livestock products. The target beneficiaries were producers, producers associations, trade associations, local authorities, and small and medium enterprises (SMEs) engaged in crop and livestock. This component consisted of four subcomponents: 14. Subcomponent A1 - Domestic Supply Chains Consolidation, which focused on three main activities: (a) testing innovative partnership business models adapted to small producers and SMEs in key promising supply chains for domestic and regional markets; (b) assisting eligible small producers and SMEs interested in applying these innovations to implement business development plans (subprojects); and (c) conducting related diagnostic assessments and studies. Funding for subprojects included beneficiaries contributions and project grants set at different levels for smallholders and SMEs. 15. Subcomponent A2 - Rural Market Infrastructure, which supported: (a) the design and building of innovative rural collective platforms for handling key products such as onions, bananas, and tubers; and (b) development of innovative management systems for collective facilities and promotion of better quality of services in such facilities. 16. Subcomponent A3 - Knowledge Management, which aimed to: (a) develop and implement an overall marketing and communication strategy for domestic supply chains; (b) generate and disseminate domestic market knowledge and information; and (c) promote knowledge sharing by disseminating results of tests conducted by the project as well as the achievements of and lessons learned from funded subprojects. 17. Subcomponent A4 - Development of Animal Products Markets, whose activities focused on modernizing the domestic supply chains for animal products. They aimed to: 20

21 (a) improve food safety in the marketing of animal products; (b) modernize marketing channels for red meat; and (c) modernize marketing channels for poultry products. This implied capacity building of key participants, strategies for development and promotion of products, building of model market infrastructure for animal products, and provision of grants to support the implementation of innovative business models. 18. Component B: Development of Agricultural Exports aimed to expand nontraditional agricultural exports (horticultural products) with an emphasis on beneficiaries participation. The project helped develop a public-private partnership (PPP) with target beneficiaries: producers, exporters, trade associations, and FOS-F&L. This component consisted of three subcomponents: 19. Subcomponent B1 - Innovation and Quality Management, which undertook activities to: (a) diversify products and production zones, following mechanisms developed under the Agriculture Export Promotion Project (AEPP); (b) develop centers of innovation and training using existing training institutions in key regions; (c) establish good practice guidelines benchmarked with the quality standard for fresh agricultural produce required by EU s importers, the Euro-Retailer Produce Working Group for Good Agricultural Practice (EurepGAP; and (d) assist Senegal in its effort to obtain European Union (EU) accreditation for its fruits and vegetables destined for export, which will allow it to measure the country s vegetables chains compliance with European Community (EC) Regulation No. 1148/ Subcomponent B2 - Agricultural Export Infrastructure aimed to develop collective post-harvest infrastructure and services in production zones. To support these activities, the project financed technical assistance for designing the facilities and their management model. 21. Subcomponent B3 - Building Agricultural Export Institutions consisted of supporting capacity-building activities for producers/exporters associations and assistance for further development of FOS-F&L. It also supported the consolidation of a market information system through an integrated and dynamic database, market intelligence on export markets, and the successful publication I-FLEX, developed under AEPP. 22. Component C: Development of Private Irrigation aimed at promoting demanddriven, pro-poor investments in irrigation to support the expansion of agribusiness. The target beneficiaries were primarily small-scale farm families, but also included SMEs as well as larger local and foreign enterprises. Activities under this component were conducted in close collaboration with the World Bank-funded Senegal River Basin Multipurpose Water Resources Development Program (MWRD). It included four subcomponents: 23. Subcomponent C1 - Construction of Public Irrigation Infrastructures in the Senegal River Delta in support of: (a) recalibration and rehabilitation of works on the 21

22 Lampsar River; and (b) creation of secondary canals to connect to tertiary canals of private investors (including smallholders). The project also supported technical studies for the recalibration and construction of works on the Gorom-Aval River, rehabilitation of Boundoum s structure on the Lampsar River, and the opening of the Krankaye Canal. These critical infrastructures were needed to attract private investors to develop innovative irrigation schemes for crop diversification. 24. Subcomponent C2 - Promotion of Irrigation for Crop Diversification in the Senegal River Delta supported smallholders, SMEs, and agribusiness enterprises in establishing innovative irrigation schemes adapted to their business plans, and provided technical advisory services to ensure the schemes viability. The project complemented investors capital with matching grants set at different levels for family farms, SMEs, and agribusiness enterprises. The grants supported consultant services, civil works, and irrigation equipment. 25. Subcomponent C3 - Promotion of Micro-Irrigation for Crop Diversification in the Niayes Zone, the Groundnut Basin, and Senegal Oriental. This subcomponent: (a) carried out demonstrations of irrigated activities adapted to each region; (b) helped smallholders in these regions establish innovative irrigation schemes adapted to their business plans; and (c) supported technical advisory services to ensure the schemes viability. In the Groundnut Basin in particular, the project focused on the use of excess water from existing village boreholes and small water-catchment dams (basins de retention) to diversify production away from traditional crops. The project provided target beneficiaries (smallholders) with grants for local consultants, civil works, and irrigation equipment. 26. Subcomponent C4 - Knowledge Management and Strategic Studies supported the: (a) design of a master management plan for the Lac de Guiers; (b) assessment of the irrigation and diversification potential of the mid and upper valleys of the Senegal River; (c) design of the National Development Plan for Irrigation; and (d) strengthening of SAED s capacity in monitoring and evaluation (M&E). 27. Component D: Project Coordination and M&E established a Project Coordination Unit (PCU) for overall project coordination and implementation. This included the consolidation of annual work plans and budgets, oversight of financial management and procurement, and monitoring of all implementing agencies activities. A technical assistance firm with experience in agribusiness was recruited to provide assistance on specific issues. Under this component, the project financed: (i) the PCU s staff and operating costs and supplemental costs incurred due to project activities carried out by executing agencies; (ii) technical assistance provided by the technical assistance firm and audits; and (iii) equipment, software, and consultant services, the cost of M&E including information and communication (ICT) systems, mapping of out-growers and service providers in the project areas, and monitoring of safeguards and social impacts. 22

23 1.6. Revised Components 28. With the approval of the AF1, the following additional components were added to the parent project (PDMAS) by providing an additional US$10 million (equivalent of SDR6.6. million) through the Food Price Crisis Response Multi-Donor Trust Fund: 29. Component E: Rehabilitation of Irrigation Schemes in the Senegal River Valley (US$8.0 million), which supported rehabilitation of 7,000 ha of village and private irrigation schemes for rice production. This component was referred to as Part E of the parent project in the Financing Agreement. 30. Component F: Promotion of Intensive Rice Production in the Bignona Valley (US$2.0 million), which aimed to enhance rice production in the Bignona Valley through the exploitation of desalinated lands protected by the Affiniam Dam. This component was referred to as Part F in the Financing Agreement. 31. AF2 (PASAEL) added the following components by providing an additional $US20 million through the Food Price Crisis Response Multi-Donor trust Fund: 32. Component E (revised): Promotion of Intensive Rice Production in the Senegal River Valley and the Anambé Basin (US$17.1 million). This component aimed to support rehabilitation of small-scale irrigation perimeters and improvement of domestic rice marketing conditions in project areas. It included: (i) rehabilitation of 7,400 hectares of small-scale irrigation schemes in the Senegal River Valley and provision of 135 water pumps; (ii) rehabilitation of 3,180 hectares of small-scale irrigation perimeters in the Anambé Basin and 200 hectares of lowlands for rice production in the Department of Velingara with the provision of agricultural equipment and materials and development of an operations and maintenance (O&M) strategy for hydro-agricultural infrastructures in the Anambé Basin; and (iii) improvement of domestic rice marketing conditions for locally produced rice. This component was included in Component E defined above under AFFS. 33. Component G: Improvement of Livestock Production in the Casamance (US$2.1 million). This component aimed to provide support to the national livestock production capacity in the Ziguinchor and Sedhiou regions of the Casamance and to help increase competitiveness of the domestic livestock sector (small ruminants and swine). It provided funding to: (i) restock the livestock population through provision of matching grants; (ii) expand existing animal health and disease control programs, such as animal vaccination and systematic deworming, through technical assistance; and (iii) provide essential infrastructure, including enhanced farm animal housing. This component was referred to as Component G of the parent project in the Financing Agreement Other Significant Changes 34. The project was first restructured with the approval of AF1 on May 10, This was a Level 1 restructuring with a change in PDO and project development indicators 23

24 as discussed in Section 1.3. On August 31, 2010, a reallocation of funds was processed to support the completion of key project activities. With the approval of AF2 on April 9, 2013, the project was further restructured to include the new AF components and related intermediate indicators. An extension of closing date from December 31, 2014 to June 30, 2015 was granted in December 2014 to allow for completion of AF2 activities. A final restructuring was approved on December 11, 2014, with a reallocation of proceeds to cover higher than expected operating costs and large demand for subproject financing. 35. The two AF operations built on the PDMAS s institutional setup for their implementation. They added a new emphasis on domestic rice and livestock production in the parent project. 36. First Additional Financing for Food Security (AFFS). Senegal is one of the largest rice importers in Sub-Saharan Africa and relies heavily on these imports for its food security. During , the country experienced a series of domestic and external shocks. Given the severe food crisis and rising costs of fuel and food observed during this period, the government adopted several fiscal measures to alleviate the effects of the crisis. In 2008, the government increased public investments in agricultural inputs and irrigation infrastructure and launched the Grand Offensive for Food and Abundance (Grande Offensive Agricole pour la Nourriture et l Abondance). Its key program was the National Program for Rice Self-Sufficiency (Programme National d Autosuffisance en Riz/PNAR). The PNAR aimed at national rice self-sufficiency by The Bank responded to the food crisis by approving the AFFS, which was built on the ongoing PDMAS s institutional arrangements. The rationale for AF1 was to provide supplementary funding to increase national rice production and improve national food security. 37. Food Security and Livestock Support Project (PASAEL). In 2011, agricultural output declined drastically (by 21 percent) due to adverse weather conditions. In that year, a joint assessment by local authorities, the World Food Programme, and the Food and Agriculture Organization (FAO) revealed that at least 850,000 people were facing food insecurity. Agricultural production levels decreased between percent across regions. 38. The government and the Bank concurred that more resources were needed to contribute to improved food security in the country. This decision was further supported by AFFS s satisfactory progress despite its limited resources. Additional funding was allocated as more resources were needed to rehabilitate rice-growing perimeters, improve rice marketing conditions, and strengthen livestock production systems. This led to preparation and approval of AF2 (PASAEL). Its outcome indicators were: (i) annual production of rice paddy in project areas (tons); (ii) livestock productivity in project areas; and (iii) number of direct project beneficiaries (of which percent women). 2. Key Factors Affecting Implementation and Outcomes 2.1. Project Preparation, Design, and Quality at Entry 24

25 39. The PDMAS reflected the existing government s economic and sector strategies. It was fully aligned with the Poverty Reduction Strategy Paper (PRSP) to contribute to the country s objectives of poverty reduction and economic growth among the rural poor. It also acted as an implementation tool for the CAS (Country Assistance Strategy), particularly in agricultural export promotion, in small-scale and private irrigation, and in the commercialization of agricultural products. In addition, agribusiness was one of the five focal sectors in the country's AGS, which aimed at a 7-8 percent average annual economic growth over a 10-year period based on development of the export-oriented, labor-intensive sectors of: (i) agriculture and agribusiness; (ii) textile and clothing business; (iii) information and communication technologies and services; (iv) tourism, arts, and crafts; and (v) fisheries. 40. The project was in line with the Bank s Africa Action Plan (AAP). The prime objectives of the AAP were to strengthen the private sector, expand exports, substantially increase investment to close the infrastructure gap, scale up regional integration, build skills for growth and competitiveness, and make agriculture more productive. The PDMAS focused on these objectives by expanding Senegal s private-led agricultural exports through upgrading irrigation and market infrastructures, building public and private sectors capacities for competitiveness, and making irrigated agriculture more productive. 41. In addition, the PDMAS s design was well anchored on lessons learned from the Bank s past involvement in agricultural export promotion and irrigation investment. It reflected: (i) the Bank s overall experience in implementing projects in Senegal; (ii) the findings of recent Economic Sector Work; and (iii) lessons learned in previous projects, including AEPP, the Integrated Development Program for Irrigated Agriculture in Mauritania (PDIAIM), and the Tunisia Export Development Project particularly its mechanisms for effective support to small and medium private initiatives using public resources. Other lessons learned were that: (i) a bottom-up, inclusive approach, rather than a top-down approach, is key to building capacity and assuring sustainability; (ii) the standard four to five year project period is too short to build sustainable institutional capacity; (iii) foreign firms with business know-how are an effective means of providing hands-on demonstration of the skills necessary to shift institutional/business paradigms; (iv) accumulation of soft assets is critical for triggering private sector investment growth; and (v) the infrastructure investment process can be an important tool for institutional development, institutional capacity building, and sustainability. 42. The PDMAS was designed as the first phase of a 10-year Adaptable Program Loan (APL) consisting of two phases, each lasting five years. The second phase, with its triggers to move from the first to the second phase, was not developed in detail. The project concept and components were similar to those of AEPP. The project components were comprehensive and well-chosen so as to allow achievement of the PDO. At the same time, the project was ambitious and had many innovative features, the most salient of which were its: (a) value chain approach, and (b) encouragement of PPPs. The PDMAS sought to change the way Senegalese authorities approach agricultural development and especially 25

26 how they deal with agricultural export promotion. It tried to unlock the potential for private sector involvement in agricultural development, built new partnership/business models between the public and private sector, and tried to mobilize private capital for agricultural development. Finally, the project put considerable emphasis on the introduction and promotion of new technologies (drip irrigation) and software, including for knowledge management. 43. The Senegal Sustainable and Inclusive Agribusiness Development Project (SSIAP/PDIDAS) builds on PDMAS-supported analytical work and sector strategy. While a specific phase 2 of the APL was not prepared per se, the SSIAP/PDIDAS, a followup operation of the PDMAS approved in December 2013, confirms the Bank s commitment to a long-term vision in its support to agribusiness in the country. This project directly supports the National Accelerated Growth Strategy (Stratégie de Croissance Accélérée SCA), which was prepared under the PDMAS with a focus on the promotion of horticultural exports and value chain development. The SCA is fully embedded in the Emerging Senegal Plan (Plan Sénégal Emergent PSE), the government s medium- and long-term development strategy. 44. To ensure that infrastructure constructed under AEPP would be well managed, the Project Appraisal Document (PAD) included as a condition of effectiveness that: (a) the Borrower would take all necessary actions to put the infrastructure built under AEPP under private management; and (b) as a dated covenant that not later than December 31, 2006, the Borrower would establish the FOS-F&L, and that by June 30, 2008, this foundation would implement some of the activities to be carried out under Part B of the project component Development of Agricultural Exports. 45. The PDMAS s design was therefore comprehensive and aligned with sectoral policies and Bank operational experiences. Key project risks were appropriately identified and rated at design phase. Proposed mitigation measures proved effective and were adequately monitored during implementation. The only weakness of project preparation was the overly optimistic assumption about the timeframe necessary to accomplish certain actions, especially related to the abovementioned legal undertakings and the execution of subprojects by family farms, SMEs, and agribusiness enterprises, mostly related to production of horticultural crops with micro-irrigation. 46. Similarly, the two AFs (AFFS and PASAEL) were well prepared. Their designs were kept simple and limited essentially to irrigation rehabilitation and some livestock activities. They were prepared in the context of the rapid response needed to address the prevailing food security crisis in the country. They responded directly to the country s needs and were clearly in line with its food security priorities. Both projects preparation benefited from the PDMAS s PCU staff, who were experienced with the implementing arrangements already in place. Anchoring these two activities in the ongoing PDMAS was deemed appropriate in order to hasten the implementation of food security activities using 26

27 existing PDMAS implementations arrangements. The technical and organizational designs of these AFs were straightforward, as it was only a matter of extending activities that had already been completed or were ongoing under the PDMAS using the same executing agencies Implementation 47. The project was affected by a slow start-up. Effectiveness was declared one year after Board approval. It took a long time to meet the effectiveness condition regarding private management of agricultural export facilities built under the PPEA (Agricultural Export Promotion Project), as the process of selecting a private operator was lengthy and initially unsuccessful. Despite completion of technical studies for the irrigation-related works, the bidding process launch was delayed for about one year to address environmental safeguards issues, as the project intervention areas in the Senegal River Valley included two protected areas (Djoudj and Ndiael). The project also faced delays in the implementation of subprojects for small-scale farmers as a result of beneficiaries difficulty in mobilizing their contribution (set at 50 percent of subproject costs). In addition, average subproject costs, estimated at CFAF 2 million per hectare at design phase, were found to average CFAF 3.5 million per hectare during implementation. This cost increase impacted the number of subprojects that could be financed and therefore the original target coverage of 1,400 hectares for small-scale farmers. Otherwise, the project progressed as planned. 48. The MTR was instrumental in ensuring project focus through restructuring and addressing key issues that could impact project development outcomes. Conducted in November 2009, the MTR found that overall project implementation as well as safeguards and fiduciary aspects were satisfactory. The Results Framework was revised to clarify and more sharply define some of the PDO and intermediate outcome indicators to better capture the project s development impact. The PCU s proactive efforts and extensive consultations with local communities helped moved execution of subprojects forward. The contribution required of beneficiaries was decreased from 50 percent of subproject costs to 20 percent. The PCU also worked with local financing institutions to help mobilize beneficiaries contributions, helping to boost the approval of subprojects and installation of small-scale farmers in the developed perimeters. IDA and MDTF funds were reallocated across components to make up for expected shortfalls in physical investments scheduled under Component C Development of Private Irrigation. The procurement process underway for the restructuring of the Beer Thialane irrigation water network revealed that the allocated envelope for this activity was not sufficient to allow for works completion. Around US$6.5 million was reallocated to the works category from matching grants and unallocated funds, which also ensured that the expected development impact was not affected due to lack of funds. 49. The MTR laid the groundwork for preparation of the two AFs for food security. Since the PDMAS constituted a well-established instrument for swift project execution, the government and IDA decided not to create a stand-alone operation but to use the PDMAS s existing institutional arrangements for the two new AFs aimed at 27

28 improved food security (AFFS and PASAEL). This was also in part due to the fact that most project activities were to be carried out by SAED, a well-experienced agency already under implementation agreements with the PDMAS. The implementation of AFFS and PASAEL proceeded without major difficulties. Despite a very short implementation period (original closing date December 31, 2014), PASAEL did not pose major challenges to the PCU s management capacity. 50. Major infrastructure investments procedures were processed smoothly. Under the PDMAS, AFFS, and PASAEL, several major infrastructure works were related to construction of irrigation canals and irrigation networks as well as agricultural market infrastructure. The procurement process for these physical investments (with the exception of the construction of small water-catchment dikes and irrigation perimeters) was conducted efficiently and works carried out as expected. The main difficulties partly laid in finding private management for these facilities and ensuring adequate O&M for the irrigation canals. For subprojects started under the PDMAS, the pace of installation of users/beneficiaries was slow. The requirement that beneficiaries had to first mobilize their own financial contribution (20 percent of total subproject costs for small producers) delayed the process. Granting access to land for subprojects to operators from outside the community (nationals as well as foreigners) was also a time-consuming process. 51. Despite a simple design and a good project preparation, a major part of a component under AF1 could not be implemented on time due to procurement issues. Under AF1 Component Promotion of Intensive Rice Production in the Bignona Valley (US$2.0 million), a candidate firm not selected for execution of the works contested the procurement process. This triggered a long arbitration process, which concluded in a relaunch of the bidding process. The decision, made six months before project closing, ultimately stopped the execution of the associated dam works despite completion of all detailed feasibility studies. 52. Some issues remained at project closing. Despite the effective transfer of management responsibilities for export infrastructures to the FOS-F&L, the project still faced difficulties in placing one of the export facilities (Gare de Fret - GDF), built under PPEA and located at the Dakar airport, under private management. The construction of a new airport equipped with a similar infrastructure increased the level of uncertainty about the future of this infrastructure. In addition, the Beer Thialane irrigation network, though completed, still does not have the appropriate management structure. During the Implementation Completion and Results Report (ICR) mission, the issue was raised to the Borrower. The mission team was assured the Société Nationale des Eaux du Sénégal (SONES) will cover the costs of the study that will provide private management options for the network. In the meantime, the National Water Distribution Company (SDE) will be temporarily entrusted with the network s operation and management Monitoring and Evaluation (M&E) Design, Implementation, and Utilization 53. Design. The PDMAS M&E system relied to a large extent on what was already in place under AEPP. The indicators were designed to measure project development and 28

29 component performance, assess project compliance with environmental and safeguards standards, and monitor effectiveness of project management. Impact evaluation studies were planned and expected to provide an annual assessment of project outcomes. 54. Implementation. Specialized staff were recruited and a system of collecting and analyzing data from the executing agencies was put in place. With the addition of AFFS and PASAEL, new indicators were added. The only weakness of the M&E system was that some of its indicators (e.g., increase in beneficiaries incomes) could not be measured at the outset as beneficiaries were not yet known nor could they be measured at the MTR because the results of subprojects were not yet available; one indicator (increase in horticultural and nontraditional agricultural exports) did not distinguish between increased exports as a result of project interventions and overall national exports (i.e., from nonbeneficiaries). 55. Utilization of the M&E system. For the Borrower, the PCU, and the executing agencies as well as IDA, the M&E system was crucial in judging project progress and taking corrective action when needed. The quarterly and especially yearly progress reports that reviewed in detail all outcome and output indicators were well done. They provided a clear picture of project status at all times. During the MTR, the abovementioned weaknesses were corrected. Also, as part of the AFFS approval package, the following intermediate outcome indicators were dropped as they were no longer relevant for project impact assessment: (i) The Fondation Origine Senegal Fruits & Legumes is implemented ; and (ii) Senegal has received EU accreditation related to EC No on check on conformity to the marketing standards applicable to fresh fruits and vegetables. This indicator was critical for development of the whole agricultural export industry as it allowed access to the European market and attracted foreign direct investment. The M&E system was improved during the course of implementation to adjust for better measurability and realism. Difficulties and delays faced by the project during implementation were promptly identified and informed the adoption of the necessary remedial measures. The M&E system was adjusted to take into account new outcomes expected from the two AFs Safeguard and Fiduciary Compliance 56. Environmental and Social Safeguards. The PDMAS was an Environmental Category B project. No additional safeguards policies were triggered under the two AFs. The following safeguard policies were applicable: (a) Environmental Assessment; (b) Natural Habitats; (c) Pest Management; (d) Involuntary Resettlement; (e) Safety of Dams; and (f) Projects on International Waterways. 57. A detailed Environmental and Social Management Framework (ESMF), which included the potential environmental and social impacts of small dams, a Pest and Pesticide Management Plan (PPMP), and a Resettlement Policy Framework (RPF), was prepared, reflected in the Project Implementation Manual, and subsequently implemented. An environmental and social evaluation specialist was part of the PCU s core staff and corresponding focal points within the executing agencies were trained. All subprojects 29

30 were screened for environmental and social impacts and an additional criterion was added to ensure gender mainstreaming. 58. No resettlement was necessary during project implementation. Only small dams were financed, and the OMVS High Commissioner informed the Government of Senegal that it had no objections to the proposed irrigation in the Senegal River Delta. Farmers who lost trees due to rehabilitation works were compensated. Also, plants that serve as wind breakers along the horticultural irrigation perimeters were planted as part of the environmental measures. To avoid conflict between agriculturalists and herders, special access routes (couloirs de betail) were provided for herders with animals in these irrigated areas. 59. The project supervision mission in April 2008 even had as a special focus an indepth review of all safeguards measures. During the whole project implementation period, specialized IDA staff supervised all safeguards aspects and rated them as satisfactory. 60. Financial Management and Audit. As a condition of credit effectiveness, the PDMAS PCU: (i) recruited a qualified and experienced financial management specialist; (ii) set up an accounting software; (iii) developed an administrative and accounting manual; and (iv) recruited an external auditor. Disbursement methods at the beginning were based on Reimbursement, Special Account Advance, and Direct Payment and later shifted to disbursements based on quarterly unaudited financial reports. All supporting documentation for statements of expenditures (SOEs) was retained at the PCU and made available for review by periodic World Bank review missions and external auditors. The special Designated Account was managed by the PCU. With the addition of the two AFs, the PDMAS s financial management system was adjusted to integrate the AF activities and a multi-project computerized accounting system was customized to fit project needs. The financial management system worked well, was regularly reviewed by a specialist on supervision missions, and at all times satisfied the Bank s requirements. Independent external auditors annually examined project accounts and the audit reports were always unqualified. In 2013, the auditors recommended improvements to the internal controls that were acted upon. 61. Procurement under the project was carried out according to World Bank guidelines. The PDMAS and the executing agency SAED as well as AFFS and PASAEL counted on experienced procurement staff that had full knowledge of the Bank s procurement rules and procedures. Detailed procurement plans and procurement actions were regularly reviewed by procurement specialists as part of supervision. With the exception of one or two contracts where national and Bank procurement rules came to different conclusions, procurement overall went smoothly, albeit slowly Post-completion Operation/Next Phase 62. In an unusual step, the government decided to maintain the PDMAS s core PCU staff with its own financing until the end of December 2015, six months after project closing, to allow the team to wind down activities and finalize activities that were started 30

31 but not yet completed. It should be noted that the PCU staff was instrumental in preparing the IDA-financed Sustainable and Inclusive Agribusiness Development Project (approved on November 22, 2013), which is a follow-up project to the PDMAS. Furthermore, the PCU was actively involved in the preparation of all key agricultural strategy documents. These strategies have made promotion of agricultural exports and development of irrigated agriculture based on private sector involvement and innovative water-saving technologies two of their central themes. In addition, the government is well aware that maintenance of irrigation infrastructure was neglected in the past and is crucial in the future; to this effect, the government established a maintenance fund in its budget for irrigation infrastructure in the Senegal River Valley (Fond de Maintenance des Adduteurs et Emissaires de Drainage FoMAED). Finally, under the ongoing Sustainable and Inclusive Agribusiness Development Project, IDA will have the possibility of following up on institutional issues that are important for the long-term success of activities started under the PDMAS, AFFS, and PASAEL. 3. Assessment of Outcomes 3.1. Relevance of Objectives, Design, and Implementation Rating: Substantial 63. The relevance of the PDO is high. The PDMAS reflected the government s economic and sector strategies at the time of preparation. It was in line with the existing PRSP to contribute to the country s objectives of poverty reduction and economic growth among the rural poor. The PDO focused on agricultural export promotion, on small-scale and private irrigation, and on commercialization of agricultural products, focus areas of the CAS and the country's AGS. At the time of this ICR, the objectives of the PDMAS, AFFS, and PASAEL remain highly relevant. 64. Project objectives continue to be consistent with the country s current development priorities. In the most recent national strategy documents: (i) Plan Senegal Emergent (PSE), (ii) the National Agricultural Investment Program (NAIP), and (iii) the Programme d Acceleration de la Cadence de l Agriculture Senegalaise (PRACAS), structural transformation of the Senegalese economy, food security (increased rice production), and development of agricultural exports are considered major pillars. The latest strategy (PRACAS) has two major objectives: (i) promotion of family farming through agricultural intensification, better marketing conditions, and better management of the quality of agricultural products; and (ii) emergence of agricultural and rural enterprises based on an intelligent synergy between agribusiness and family farms. Its specific objective is increased production of rice, onions, groundnuts, and fruits and vegetables. 65. The objectives of this operation are also in line with the Bank s FY13 FY17 Country Partnership Strategy, which supports increased agricultural productivity and marketing under Pillar 1, Accelerating Growth and Employment & Creating Fiscal Space, 31

32 and contribute to the foundation Strengthening Governance Framework and Building Resilience through support to sustainable land and water management. 66. The relevance of design and implementation is rated substantial. The design of PDMAS activities addressed key bottlenecks in agricultural productivity and export promotion while aiming to unleash the potential for private sector involvement in agricultural development. Activities were designed to build innovative partnership/business models between the public and private sector to mobilize private capital for sustainable agricultural development. Taking into account the constraining production factor of limited access to water, the project put considerable emphasis on the introduction and promotion of new technologies (drip irrigation) and software aspects, including knowledge management. It was also designed to support major structural irrigation infrastructures that would facilitate the establishment of small-scale farms and medium and large agriculture enterprises adopting water-efficient irrigation technologies. Overall, the project design put a strong emphasis on: (i) a value chain and institutional strengthening approach based on exports quality promotion in compliance with European Community (EC) Regulation No. 1148/2001; (ii) promotion of PPPs; (iii) introduction of new water-saving technologies; and (iv) matching grants that required beneficiaries to assume part of the investment costs based on their capacity to pay. The two AFs (AFFS and PASAEL) corresponded to the recurring food crises and associated food insecurity. Their main focus on increased rice production and rehabilitation of small-scale irrigation perimeters both in the Senegal River Delta and in the south (Casamance) and with Senegal River Delta Management Holding Company (Société Nationale d Aménagement et d Exploitation des Terres du Delta du Fleuve Senegalet de la Falémé SAED) and the Senegal Agricultural and Industrial Development Company (Société de Développement Agricole et Industriel de l Anambé SODAGRI) as executing agencies was the appropriate response to changing circumstances and the prevailing food insecurity in vulnerable households. 67. Project implementation stressed the inclusion of beneficiaries in the decisionmaking process to ensure continuous ownership and impact sustainability. O&M models for irrigation and drainage system were discussed and agreed with beneficiaries. Water users groups were made responsible for O&M of secondary irrigation infrastructures. These arrangements assigned ownership of the project among beneficiaries. Land allocation for the establishment of irrigation perimeters was handled jointly with local communities throughout the project to ensure a transparent process and to provide secure access to land for beneficiaries outside the community. 68. The project implemented the introduction of innovative technologies through a dynamic consultative process with stakeholders. Technical requirements and financial implications of innovative irrigation kits required extensive information and training sessions for small beneficiaries. Recognizing the underlying challenges along the way, the project allocated appropriate resources in terms of staffing and technical assistance. This helped strengthen smallholders capacity in acquiring advanced irrigation technology. 32

33 Constant consultations with beneficiaries were critical in determining the appropriate kits or combinations of kits adapted to specific farm business plans. 69. With the relevance of objectives rated as high and the relevance of design and implementation rated as substantial, the overall relevance is rated substantial Achievement of Project Development Objectives Rating: Substantial 70. The Project Development Objective was modified at approval of the First Additional Financing on May 10, The PDO was revised from to contribute to sustainable increase of nontraditional agricultural exports and revenues for project beneficiaries/participants to Improved competitiveness of selected domestic supply chains, increased non-traditional agricultural exports and increased rice production in project areas. 71. At approval stage, original PDO indicators included the following: (i) Horticultural and nontraditional agricultural exports reach 30,000 tons by the end of the project; and (ii) 60 percent increase in farm revenues of producers supported by the project at the end of the project. They were revised and dropped, respectively, at restructuring upon approval of the First Additional Financing on May 10, Original project activities aimed to improve the performance of domestic supply chains through interventions such as matching grants to develop partnerships between agribusiness and small-holders; provision of water-efficient irrigation technologies and improved irrigation services; adoption of good agricultural practices; better access to post-harvest infrastructures and high value markets; and development of marketing strategy and information system. This was expected to improve producers productivity and secure access to higher prices, thus resulting in increased incomes. 73. Pre-AF1 PDO indicators achievement. At restructuring, horticultural exports attained 27,409 tons for the growing period versus a project target of 26,000 for the same period (105 percent achievement rate). At project closing, horticultural exports reached 85,000 tons. Data for national horticultural exports are derived from Eurostat database which reports Senegalese fruits and vegetables exports to Europe and from the National Directorate for Plant protection (DPP), responsible for certifying the conformity of agricultural products prior to exports, in line with EC No on check on conformity to the marketing standards applicable to fresh fruits and vegetables. This indicator positive achievement is directly linked to PDMAS support to the certification of private exporters through the production of various tools, namely: a registry of all exporters of fruits; a database that allows the origin of products to be traced; and a manual on SeneGAP for smallholders that is benchmarked with EuroGAP to allow exports to the EU. PDMAS support to the capacity building of DPP in exports certification helped ensure that commodities shipped to Europe were not rejected at destination ports. In addition, PDMAS provided support to the renewal of the certification of Ceres Locustox (a reference chemical 33

34 laboratory) for the monitoring of pesticide residues to ensure conformity of Senegalese horticulture with international market standards. This support directly contributed to the improved quality of local horticultural production intended for exports. 74. While this indicator shows satisfactory progress, before and at project closing, it was revised at restructuring. It did not distinguish between exports due to project interventions and overall exports of the country, including those generated from nonproject beneficiaries. Nevertheless, it can be noted that the volume of horticultural exports directly attributable to PDMAS intervention was 25,530 tons at project closing, or 30% of national horticulture exports. In addition, the indirect positive impact of the project on the overall horticultural industry is considerable as existing agricultural exporters in the Senegal River Delta would not have operated continuously without the PDMAS investment in structural irrigation infrastructures. 75. The project interventions resulted in a significant increase in beneficiaries revenues. Table 4 summarizes average increases estimates in revenues for rice and selected horticultural crop producers Interviews were conducted with project beneficiaries in the targeted zones in order to collect on-farm data. Data were collected from a stratified sample of 180 beneficiaries (small-scale and medium) across project areas on induced effects of interventions, such as increases in cropped area, livestock herds, productivity and production, diversification in farm activities, production costs, labor costs, projectsupported investments, irrigation water use and fees, products market prices. Figures show average incomes before and after project interventions for small-scale and medium-size producers. For small-scale producers, increases in income ranged from 53 percent for banana growers to 192 percent for small-scale vegetable growers. Medium-size producers experienced income increases from 50 percent in banana production to 192 percent in vegetable production. Table 4: Increases in beneficiary farmers revenues as a result of PDMAS interventions Small-scale producers revenues (CFAF) Before After % project project increase Medium-size producers revenues (CFAF) Before After % project project increase Region/type of activity Senegal River Valley Vegetable cropping 683,000 1,993, ,400 2,215, Rice cropping 164, , , , Anambé Basin,,,, Rice cropping 87, , , , Niayes zone Vegetable cropping 491, , ,119,509 2,030, Gouloumbou area,, Banana cropping 249, , , , Casamance region Small ruminants rearing 55, , , , Groundnut Basin Vegetable cropping 39,150 87, , ,

35 76. Pre-AF1 PDO indicators achievement is rated Modest. The indicator 60 percent increase in farm revenues of producers supported by the project at the end of the project was dropped at restructuring. The indicator could not be measured at the outset as beneficiaries were not yet known nor could they be measured at the MTR because results of subprojects were not yet available. The indicator on horticultural and nontraditional exports could not distinguish between exports due to project interventions and overall exports of the country, including those generated from non-project beneficiaries. 77. Post-AF1 PDO indicators achievement. The subsequent evaluation illustrates project achievements based on the revised PDO indicators after restructuring. They include the following indicators: (i) Nontraditional agricultural exports in project areas reach 12,000 tons by the end of the project; and (ii) Local production of onion and banana covers 75 percent and 50 percent of domestic consumption respectively. 78. Original project activities after restructuring remain the same as before the restructuring. Additional components for improved rice and livestock production were simply added to the parent project with AF 1 and AF2. The achievement of the PDO was linked to the following activities/components: (i) Improved domestic marketing conditions. As a consequence of investments in rural market infrastructure and encouragement of innovative business models adapted to small producers and SMEs, local production of onions and bananas increased considerably, reaching 70 percent (93 percent of target) and 70 percent (140 percent of target) of local consumption, respectively. These indicators are derived as the ratio of local production over the aggregate of imported products and locally marketed production. The PDMAS contributed largely to increased local onion and banana production as it targeted the main production areas for onion production (Senegal River delta, the Niayes zone and the Groundnut Basin for onion) and banana production (Gouloumbou and Sedhiou). In the onion sector, the project supported increased production through the financing of 365 sub-projects for small-scale farmers, of which 215 in the Senegal River valley. In addition, producers capacity building on good agricultural practices from nurseries to field and on post-harvest handling has been instrumental in expanding marketed production. To this should be added the construction of the PALMM of Guia, a main onion storage and handling infrastructure in the Senegal River valley. In the banana sector, project interventions included the construction of the PLAZA of Tambacounda (Gouloumbou), a logistics platform for banana collection, cold storage and handling before reaching urban markets; the construction of 54,5 km of access roads for the opening up of 700 ha of banana farms for better accessed to markets; the upgrade of 7 existing banana processing facilities and construction of 4 new processing units. (ii) Development of nontraditional exports. Non-traditional exports by project beneficiaries reached 25,530 tons (213 percent of target). They mainly consist in green beans, mango, sweet potato, tomato and processed foods such as dried mango and dried tomato. The volume of nontraditional exports reported is derived from total exports originating from actual project beneficiaries. The latter include small-scale producers 35

36 and SMEs who benefited from matching grants and/or support along the value chains as well as existing agribusiness which benefited from improved access to water through PDMAS irrigation infrastructures. They are: Soleil Vert (1,440 tons), Bursine (346 tons), GPE (767 tons) which were granted installation on the 2,500 ha perimeters developed by the PDMAS for horticulture production; the Federative Cooperative of Horticulture Actors in Senegal-CFAHS (13,536 tons) which benefited from financing for support along selected value chains; agribusinesses along the Socas canal, (Agroval, Tensen and Agrinord) which benefited from improved access to water with the construction of the Canal of Krankaye accounted for 7,298 tons. Matching grant beneficiaries exports amounted to 2,142 tons. The development of these exports was made possible by investment in irrigation structural infrastructure including the construction of the Krankaye canal, provision of matching grants for export promotion, introduction of export quality standards, advice to participants along the value chain, and agricultural export infrastructure covering all aspects from: (a) post-harvest infrastructure and services (warehousing/packaging/cold storage facilities at farm gate level; to (b) container handling/freight facilities; to (c) strengthening the capacities of producers/exporters organizations. (iii) Development of private irrigation under the PDMAS and irrigation rehabilitation under the two AFs. Under the PDMAS, over 2,400 ha of drip irrigation were developed for small farm families (600 ha), small and medium-scale enterprises (500 ha), and larger agribusiness enterprises (500 ha). Intensive horticultural production is now being practiced on these plots. The two AFs rehabilitated some 7,000 ha and 7,400 ha of village and private rice irrigated perimeters, respectively in the Senegal River Valley and 3,380 hectares in the Anambe basin. (iv) Improved rice production in Senegal River valley and Anambé basin. Rice production was added to the project development with the two AFs with the objective to rehabilitate 7,000 ha in the Senegal River valley under AF1 and 7,400 ha in the Senegal River valley and 3,380 ha in the Anambe basin under AF2. During the 2013/2014 cropping period, SAED reported 5,571 ha cropped in the dry season and 7,000 ha in the rainy season. This resulted in an additional rice production of 86,660 tons in 2014 with an average yield of 6.76 and 7.0 tons/ha in both cropping cycles respectively. At this time, the project had completed the first phase of rehabilitation of 7,000 ha under AF1. The rehabilitation of the 10,780 ha under AF2 was completed in June SAED estimates rice production in project areas in the Senegal River valley at 111,000 tons in December Overall, project targets are fully achieved, with an achievement rate of 127 percent. (v) Improvement of livestock production. Indicators on increased small ruminants productivity (20% target) and swine productivity (40% target) were not available at the time of project closing as related activities were carried out in the last year of the projects and indicators can only be informed two years thereafter. Nevertheless, project activities contributing to these objectives were carried out: (i) re-stocking of the swine population with flocks of higher genetic potential for growth and disease resistance; (ii) expansion of animal health and disease control programs such as animal vaccination and systematic 36

37 de-worming; and, (iii) provision of essential infrastructure including enhanced farm animal housing and slaughtering facilities. Sixty-five improved breed swine of higher genetic potential were introduced against a target of 40 (achieved at 162%), 14,500 swine were vaccinated against (achieved at 39%) and 176,450 small ruminants were vaccinated and dewormed (achieved at 95%), 45 sheep shelters and 45 swine shelters were constructed. The five planned slaughtering facilities could not be completed due to delayed contract clearances from the national procurement agency. 79. The achievement rates of intermediate outcome indicators further demonstrate the project s good performance in attaining its quantitative objectives. Achievement of the quantitative project outcome indicators was made possible by project investments in domestic supply chain consolidation, rural market infrastructure, knowledge management, and development of animal products markets. The development of agricultural exports was made possible by introduction of export quality standards and agricultural export infrastructure. The development of private irrigation with its accompanying increases in horticultural production is a direct result of the construction of public irrigation infrastructure in the Senegal River Delta, the promotion of microirrigation for crop diversification, and the promotion of micro-irrigation in the Senegal River Delta and the Niayes zone. The project contributed to additional quality meat sold through support to Senegalese Slaughterhouse Management Company (SOGAS) for improved sanitary inspection and control of existing slaughterhouses and clandestine slaughtering areas. The volume of marketed meat from slaughterhouses in norms as a result of project support is reported in the intermediate indicator. To this, is added the volume of marketed meat from butcheries which benefited from sub-projects financing. Intermediate outcome indicators achievements by component are presented in Table 2: Table 2: Intermediate outcome indicators achievements by component No Intermediate Outcome Indicator Targets Actual % Achievemen t Component : Improving Domestic Marketing Conditions 1 At least five subprojects for each of the nine % targeted supply chains in the domestic market have been funded through the Matching Grant mechanism and implemented 2 3,500 tons of quality meat (red meat and poultry) are produced and sold 3,500 5, % Component : Development of Agricultural Exports 3 2,000 farming families are engaged in export 2,000 8, % 4 One-third of farming families engaged in 33% 55% 167% export crops have implemented Origine Senegal good agricultural practices guide based on GlobalGAP Protocol 5 Tons of agricultural exports certified conform to EC No ,500 67, % Component : Development of Private Irrigation 37

38 No Intermediate Outcome Indicator Targets Actual % Achievemen t 6 At least 2,500 ha have been developed or 2,500 4, % improved by small farmers and agribusiness SMEs 7 At least 80% of operation and maintenance 80 N/A N/A costs are recovered from project beneficiaries 8 Number of kilometers of canals constructed % Component : Promotion of Intensive Rice Production in the Senegal River Valley, Bignona Valley, and the Anambé Basin 9 Number of hectares of irrigated area rehabilitated in Senegal River Valley 10 Number of hectares or irrigated area rehabilitated in Anambé Basin 7,400 7, % 3,180 3, % Component : Improvement of Livestock Production in the Casamance 11 Number of vaccinated and dewormed small 186,00 176,45 95% ruminants in project areas Number of vaccinated and dewormed swine 37,000 14,500 39% in project areas 13 Number of improved breed swine introduced % 14 Number of livestock slaughtering infrastructures constructed 5 0 0% 80. Innovative business models were introduced in commercial partnerships, irrigation technology, and livestock production across nine value chains (bananas, green beans, mangos, onions, tomatoes, sweet potato, red meat, poultry, and processed foods). Several drying, cold storage, and rural produce collection centers (Poles agricoles logistiques et de mise en marche PALMM) were built to handle horticultural products. In the livestock sector, food safety of animal products was improved through construction of a modern slaughterhouse in Mbour and elimination of unsupervised slaughter of animals. 81. In addition, the PDMAS supported renewal of the certification of Ceres Locustox (a reference chemical laboratory) for the monitoring of pesticide residues to ensure conformity of Senegalese horticulture with international market standards. To support the certification of private exporters, the project produced various tools, namely: a registry of all exporters of fruits; a database that allows the origin of products to be traced; and a manual on SeneGAP for smallholders that is benchmarked with EuroGAP to allow exports to the EU. Three centers of innovation and training for horticulture crops in key regions were also created using existing training infrastructure. 82. Furthermore, the project contributed significantly to building a sustainable horticulture industry for both export and domestic markets. This was done through: 38

39 (i) building up and enforcing food safety and quality standards; (ii) creating the physical conditions for gradual relocation of horticulture-producing centers from the area around Dakar, which is threatened by urbanization and soil salinization, to the Senegal River Delta; and (iii) continuously and positively inspiring the government s policies and strategies for horticultural development. The agribusiness pillar in these documents was designed by the PDMAS PCU team. Last but not least, the PDMAS and its pilot operation facilitated private investment in the industry, resulting in around a 20 percent annual increase in export volume during its implementation period (see Annex 4). 83. Yields of horticultural crops. Table 3 summarizes the average productivity (tons/ha) for selected horticultural crops before and after the PDMAS. Table 3: Yields of major crops before and after the PDMAS Before Project (tons/ha) After Project (tons/ha) Onions Banana Before the PDMAS, the majority of family farmers owned between ha of horticultural crops and about 1 ha of irrigated rice. With access to irrigation, inputs, agricultural advice, and improved marketing conditions, all brought about as a consequence of the project, many farmers were able to increase their landholdings and/or farm cropping intensity. A significant number invested in livestock activities. 85. Overall PDO achievement rating is rated Substantial. At restructuring, project disbursement amounted to US$18.3 million, or 30% of total project disbursement at closing. Using a four point scale 1 rating Pre-AFI and pre-af2 achievements are rated 2 (Modest) and 3 (Substantial) respectively. Applying the corresponding disbursement weights of 30% and 70% respectively, overall PDO achievement is rated 3 or Substantial Efficiency Rating: Substantial 86. The ex-post evaluation done as part of this ISR (Implementation Status and Results Report) estimated an overall economic rate of return (ERR) of 34 percent, demonstrating the project s soundness. At completion, the project s estimated net present value (NPV), discounted at a 17 percent annual interest rate was CFAF 42 billion 1 Negligible (1), Modest (2), Substantial (3) or High (4) 2 0.3*2+0.7*3= 2.7 or 3 to the rounding 39

40 or US$84 million. The project s economic impact is similarly robust across all regions of project interventions (Table 5). Table 5: Economic analysis at regional level (NPV in US$ million) Region Economic Financial ERR NPV IRR NPV Senegal River Valley 57% % 36.5 Anambé Basin 30% % 5.8 Gouloumbou area 32% % 4.4 Niayes zone 31% % 14.0 Casamance region 24% % 3.7 Groundnut Basin 25% % These economic analysis results compare favorably to the ex-ante evaluation performed at approval stage. High ERRs are observed across all regions of interventions, ranging from 24 percent to 57 percent. Although lower than the ex-ante analysis s estimates, results remain strong across all regions of interventions, indicative of the economic and financial profitability of PDMAS investments. The highest returns are observed in the Senegal River Valley and the Niayes zone, as anticipated at appraisal. The profitability of investments in the Groundnut Basin are in line with the promising estimates of the economic analysis at appraisal stage. 88. The project also brought efficiency in water use by introducing new waterefficient irrigation technology, such as drip irrigation and improved hydraulic infrastructure. This resulted in an increase in field cropping intensity as well as an increase in cropped area. 89. Project efficiency might very well be rated as high were it not for the delays observed in the establishment of small and medium-size producers in irrigation perimeters. Taking into account delays observed in the implementation of subprojects for small-scale farmers in the Senegal River Valley and the Niayes zone, efficiency is rated as substantial Justification of Overall Outcome Rating Rating: Satisfactory 40

41 90. Overall the project outcome is rated satisfactory. With Relevance of PDO, PDO achievements and Efficiency rated substantial, the overall outcome rating is Satisfactory. This is also in line with project s major outcomes outlined above, intermediate outcomes achievements, and the project s contribution to shaping a sustainable horticulture industry through appropriate policy orientations and introduction of modern innovative irrigation technology in export-oriented agriculture Overarching Themes, Other Outcomes, and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development 91. The project had an important impact on poverty through its outcome on increased farm revenues. The improved access to water for beneficiary farmers in project areas made an important contribution to poverty reduction. The PDMAS helped increase agricultural productivity and cropping intensity in areas where only rainfed cropping was possible. With better access to water, beneficiary farmers could increase their farm areas and their cropping intensity, with agricultural production now possible in dry seasons. Although no poverty data are available for comparison purposes, the project is believed to have had an impact on poverty, with higher revenues from farming activities compared to those that would have been realized without the project. 92. The impact study conducted by the Senegalese Agricultural Research Institute- Macroeconomics Analysis Unit (ISRA)/BAME revealed that the project had a significant social impact. Matching grants provided to beneficiaries helped modernize their farming activities with the acquisition of water-efficient technology and agricultural equipment that afforded higher productivity and thus revenues. Increases in farming revenue allowed beneficiary farmers to invest in household equipment, thus improving their families well-being. Increased farming activities as a result of better access to irrigation water directly impacted job creation in rural communities, where farmers employed more agricultural workers. With greater income generation, beneficiary farmers could also enter new subsectors, such as livestock rearing, which contributes towards more secure revenues and improved food security. Furthermore, it is believed that the project contributed to improved nutrition outcomes among beneficiary farming households with its contribution to agricultural diversification. 93. The project targeted women and youth beneficiaries and an output indicator was included to monitor the participation of women and young people. At completion, the project had benefited 3,639 women and 2,120 youth,, representing achievement rates of 126 percent and 156 percent, respectively. These women and youth directly benefited from matching grants that financed farming, marketing, or processing subprojects. They also benefited from training activities in best agricultural practices, produce certification programs, and participation in international fairs and study tours. 41

42 (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) 94. With its emphasis on software aspects (export quality standards, food safety, introduction of innovations) and the creation of agricultural export infrastructure, the PDMAS opened the door for export-oriented commercial agriculture by family farmers and SMEs, which hardly existed before. This is gradually changing the perception of agriculture as an activity practiced by poor farmers for subsistence purposes to that of agriculture as a market-oriented, profitable business. While the future of FOS-F&L is uncertain, the many other institutions supported under the project and that need to work in a coordinated manner to allow agricultural exports into the EU are steadily advancing and horticultural producers are becoming better organized as part of their federation (CFAHS). (c) Technological Change 95. The project introduced a major new technology (drip irrigation) that revolutionizes the way agriculture is practiced. It impacts water use and use of agricultural inputs, including labor, and increases production efficiency manifold. Given the huge underutilized potential for irrigation development in Senegal, it is expected this new technology will be adopted much more widely in the future and should lead to a much more productive agriculture sector. In addition, the project introduced and tested many new varieties of fruit trees and horticultural crops for export and new livestock-related husbandry practices that other farmers are expected to replicate in the future Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 96. No beneficiary surveys and/or stakeholder workshops were carried out for the PDMAS, AFFS, or PASAEL. At the request of the PCU and IDA, however, ISRA followed a sample of beneficiaries in the different project areas during 2012 to determine their economic characteristics. These regional exploratory studies were used during 2014 to estimate the economic impact of the project on participating farm families (see section on efficiency). 4. Assessment of Risk to Development Outcome Rating: Substantial 97. Over the past few years, attitudes toward the agriculture sector changed fundamentally as the sector became more open to foreign investment. Production of irrigated rice and horticultural crops, especially for export, is increasingly looked upon as a profitable economic activity that attracts wide interest. Meanwhile, improved understandings with rural communities allow access to secure land ownership for outsiders (from within the country and foreigners). As more and more enterprises (small, medium, and large) make long-term investments to take advantage of market opportunities, a network effect should be expected. This trend was observed in the PDMAS and is currently 42

43 being observed in the ongoing Senegal Sustainable and Inclusive Agribusiness Project (SSIAP/PDIDAS) The SSIAP/PDIDAS is already registering a large interest of foreign investors as well local communities willing to allocate land for outside private investors. 98. The supply chain approach developed under the PDMAS can further strengthen the interactions between different actors in the sector. With the support to the renewal of the certification of Ceres Locustox for the monitoring of pesticide residues to ensure conformity of Senegalese horticulture with international market standards and the provision of good agricultural practices to small-scale farmers, efforts have been made to increase the quality of agricultural products originating from small-scale famers. However it is not clear how long large operators facing highly demanding international markets will continue their contractual arrangements with smaller operators if the latter do not maintain adequate produces quality standards and good agricultural practices. A continuous capacity building and monitoring of small-scale famers in full collaboration of large agribusinesses will be necessary. The SSIAP/PDIDAS is supporting the CFAHS and the Directorate of Horticulture in these efforts. 99. Improved rural and market infrastructures built under the PDMAS together with increased organizational and managerial capacities combined with better market information will enhance this movement. The PDMAS supported the construction of rural collective platforms agricultural for products handling (Guia for onions, Gouloumbou for banana, Bignona for fruits and vegetables). With these infrastructures, innovative private management models were established with the involvement of local stakeholders and producers for their operation and management. In the livestock sector, local livestock markets (Dahara and Dinguiraye) are managed by the local herders association. All managing entities received capacity building in management capacities in order to ensure the durability of the operation of these infrastructures. The Mbour slaughterhourse is also privately managed by a recruited management team overseen by the management committee composed of the local butchers association and the municipality. The development of these innovative management systems for collective facilities is critical for their sustainability. At project closing, they already proved to be efficient and successful. The national agency for roads management, Ageroute, is responsible for the maintenance of rural access roads constructed as part of its national mandate Developing sustainable commercial agriculture requires securing access to land for all. The PDMAS experience in the Senegal River Delta with the development of 2,500 hectare in the rural commune of Diama, has highlighted the importance to adopt inclusive land allocation models that put local communities at the center of the negotiation process in order to reduce the risk of reticence from local communities. In an effort to develop such models, the Government, together with the Bank, are implementing a lease/sublease land allocation model which provides full rights to the communities (through a land lease to the community) to enter into negotiations with investors based on agreed expectations from both parties. This innovative land allocation model is evolving as a new legislation that will secure access to land in the country by private operators. This approach is being implemented under the Senegal Sustainable and Inclusive Agribusiness 43

44 Development Project (SSIAP/PDIDAS). It is also being used as the foundation for ongoing land reform consultations led by the National Land Reform Commission. The Government has confirmed its full commitment to this approach through an inter-ministerial agreement endorsed by the Senegalese Prime Minister To ensure the sustainability of rehabilitated irrigation infrastructure, the government established a maintenance fund for irrigation infrastructure in the Senegal River Valley (FoMAED) and will use a similar approach with SODAGRI in the Casamance. In the Sengal River region, SAED is responsible for the maintenance of structural hydraulic infrastructures and maintenance of primary canals. With PDMAS, support was provided for the elaboration of the National Plan for Irrigation Development In addition an action plan for operation and maintenance of irrigation with detailed annual program of activities infrastructures is being implemented. Before project closing, SAED received maintenance funds allocations as part of their overall annual operational budget. There was not good visibility of the use of funds for actual operation and maintenance activities. In 2014, the government decided to allocate the O&M funds through a dedicated budget line separate from SAED overall operational budget. This was done to ensure a better monitoring and efficiency of these funds, in line with agreed annual programs of the O&M action plan. This will contribute to improved sustainability of irrigation operations. Water users associations were also set up to look after the tertiary canals linking their fields to the irrigation system. Nevertheless, it should be pointed out that the 2014 allocation of CFAF1 billion (US$2 million) needs to be increased in the following years in order to ensure that required annual O&M activities costs are fully covered. Further efforts are also needed for fees recovery from water users associations. The latter often fail to apply required sanctions to water users who do no remit their fees. Capacity building and close monitoring of waters users associations are being conducted. 44

45 5. Assessment of Bank and Borrower Performance 102. In this section, the PDMAS, AFFS and PASAEL are not addressed separately as the two AFs were always treated as additional components to the original PDMAS Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory 103. Project preparation started under the PPEA and took into account all lessons learned. The value chain approach and emphasis on PPPs that underlies this operation was of strategic relevance. The project concept included several components and subcomponents that were well chosen and mutually reinforcing. Environmental and fiduciary aspects were appropriately dealt with and the executing agencies well chosen. For an APL, the elaboration of the second phase with its triggers was rather general. The two AFs were well prepared with the help of the PCU. The highly focused interventions allowed for very short preparation periods Project preparation also benefited from knowledge, experience, and expertise accrued under the pilot project, and technical assistance and funding from the Canadian International Development Agency (CIDA), complemented by a Project Preparation Facility extended by the Bank. This resulted in: (i) high-quality analytical support (including a long-term profile for Senegal horticultural exports, and an Agriculture Markets Infrastructure Investment Plan); (ii) detailed feasibility and technical studies for irrigation infrastructure in the Senegal River Delta; and (iii) food safety action plans for horticulture and livestock, positioning the project for swift implementation Bank performance in ensuring quality at entry is rated Marginally Satisfactory. The project could have been readied for implementation by undertaking the transfer to private management of agricultural export facilities at preparation stage and avoided effectiveness conditions that delayed some activities implementation. Small-scale farmers capacity to mobilize their contribution could have been better assessed at preparation. Under AF2, the time was insufficient to inform the livestock component indicator on expected productivity improvements at project closing. (b) Quality of Supervision Rating: Moderately Satisfactory 106. Implementation support missions were always appropriately staffed and had the required specialists to supervise all fiduciary and safeguards policies. Some 45

46 support missions concentrated on close supervision of specific topics and the third supervision mission concentrated primarily on reviewing in depth all safeguards aspects. Issues were identified, dealt with in a timely manner, and brought to management attention for resolution as needed. The MTR dropped or reformulated some of the outcome and output indicators by making sure that they were measurable and that what was measured could be unequivocally attributed to the project. Supervision missions were also proactive in realizing that FOS-F&L was no longer central to achieving project objectives. Supervision of AF1 and AF2 was unproblematic as the PCU and the two executing agencies were performing well. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory 107. This project as designed was very ambitious and took a comprehensive approach to agricultural market and export development. It introduced many farreaching technical and institutional innovations. As such, it marked a new beginning for involving the private sector (different forms of PPPs) in the development of irrigated agriculture and the production and export of horticultural products. AF1 and AF2 are well designed and focused on solving one critical issue: how to increase rice production. Project delays were outside the control of IDA Borrower Performance (a) Government Performance Rating: Moderately Satisfactory 108. The government fully supported the project, addressed counterpart issues when they arose, and did not interfere in the day-to-day management of the PCU. Remarkably, it is funding the core PCU staff from its own resources until December 31, Its performance is nevertheless considered as moderately satisfactory for the following reasons: (a) it took a long time to deal with and decide on covenants and issues that affected project execution but were beyond the PCU s scope or ability to handle; and (b) its participation on the Steering Committee (which was supposed to validate yearly reports, annual work plans, and budgets) was unsatisfactory as the Committee only met once per year and attendees from the different ministries changed constantly and were not sufficiently well-informed of project activities to provide oversight and useful advice to the PCU. 46

47 (b) Implementing Agency or Agencies Performance Rating: Highly Satisfactory 109. The PCU was well staffed and had the necessary expertise to cover all technical, fiduciary, safeguards, and monitoring aspects of the project. Its management was competent and proactive, worked closely with IDA staff, and adhered to all relevant Bank rules. The PCU always looked for ways to solve problems as they arose. The whole team was remarkably stable, with very few staff changes. The project manager remained the same from beginning to the end (i.e., over a nine-year period). Project reporting was regular, clear, comprehensive, and transparent. SAED and SODAGRI, the irrigation agencies, satisfactorily fulfilled their roles as executing agency for irrigation rehabilitation. ANCAR, in charge of technical advice to beneficiaries, was overstretched, however. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 110. Based on the above, overall Borrower performance is rated as moderately satisfactory. 6. Lessons Learned (both project-specific and of wide general application) 111. Increasingly involving the private sector in irrigation development (especially with innovative water-saving technologies) is key to achieve a commercial agriculture that is competitive and able to reduce rice imports and to increase production and export of nontraditional agricultural products. This also requires foremost resolving the issue of access to land by foreigners, be they Senegalese from other parts of the country or investors from abroad It is easier to build agricultural export facilities with project funds than to find private entrepreneurs willing and capable to take them over and run them. This holds true even when project management is aware of this fact and tries from the beginning to prepare for handover Horticultural production and exports, especially in the greater Dakar area, are situated in a fast-changing environment, where factors such as rapid urbanization and relative costs of different modes of transport (air, sea, and road) can quickly change the optimal location of export facilities and render some of them no longer useful or financially viable. 47

48 114. In the agricultural export sector, the relative strengths of different producer and export organizations can change rapidly. Therefore, institutional arrangements can be overtaken by events and must be constantly monitored so that adjustments can be made accordingly in a timely manner In supporting agricultural exports, government policy must systematically and periodically evaluate the following issues: (i) What is the degree of concentration among exporting firms? Do small and medium-sized producers have equal access to the export market? What would happen if one or two big exporters left the field for whatever reason?; and (ii) Is the agricultural export regime benefitting to the maximum the national economy in terms of value added, foreign exchange earnings, and employment generation? 116. The classical project set-up, with its institutional and implementation arrangements consisting of Steering Committees (Comite de Pilotage CP), a PCU, and implementing agencies, is not a satisfactory solution if one seeks sustainable project outcomes. In most cases, CPs do not play the role they are expected to as their members meet very infrequently, change constantly, and are not well prepared or informed. The link with agricultural policy making is often very weak and PCUs act in a policy vacuum. At a minimum, CPs should have clear terms of reference and their members should be nominally selected Projects that seek to introduce game-changing institutional and technical innovations and that depend for their success on the buy-in of people who cannot be identified in advance (auto-selection) must have a first-class, professional, interactive communication strategy that uses all forms of media, including the internet, and from the very beginning. And the public must be able to easily access updated information about how to participate in the project, otherwise implementation delays are unavoidable Whenever assets are created through project investments, especially if they have to be recreated through rehabilitation, the government must ensure that sound policies regarding O&M are in place and operationalized and implemented on the ground Lessons learned from the PDMAS were critical in designing the Senegal Sustainable and Inclusive Agribusiness Development Project (SSIAP/PDIDAS) for better efficiency. The latter aims to promote inclusive commercial agriculture and sustainable land management through investments in irrigation infrastructure and support to the private sector, including small-scale-farmers. Matching grants mechanisms were carefully adapted to targeted beneficiaries propensity to mobilize their contribution and avoid delays in project implementation. An inclusive model in the land allocation process, putting communities at the center of negotiations with large private investors, will reduce the risk of reticence from local communities members. SSIAP/PDIDAS also puts a strong emphasis on interactive communication and local community awareness. 48

49 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies None (b) Co-financiers 120. The Canadian International Development Agency (CIDA) recognized the project as well-designed while highlighting weaknesses regarding ANCAR s role in providing support to farmers and collecting data for the M&E of innovative irrigation tests/pilot activities. As previously noted in the ICR, ANCAR was overstretched during project implementation. The agency suffered a serious loss of experienced staff through the course of project execution as a result of weak salary incentives. This had a direct impact on the coverage of quality advisory services and monitoring of activities in project areas. In addition, a lack of coordination between actors (ANCAR, individual consultants, beneficiaries, and equipment supply firms) was observed in the delivery and installation of test irrigation equipment. Delays in input delivery and occasional mismatches between acquired hydraulic equipment and required water pressure specifications led to the implementation of tests the results of which could not be fully exploited. These issues were promptly identified during supervision. In light of this, the MTR recommended to reduce the number of planned irrigation tests and pilot activities carried out by ANCAR and to only focus on sites that guaranteed tangible results. It was also recommended that ANCAR develop more realistic budgets and work programs in line with its capacity while working in partnership with existing institutions such as the Regional Directorates for Rural Development and the Directorate for Basins of Retention and Artificial Lakes CIDA pointed out the delay in launching some program activities because of complex administrative procedures and procurement processes. This relates to the lengthy time observed to meet the effectiveness condition regarding the transfer to private management of agricultural export facilities built under PPEA. In addition, delays in the implementation of subprojects for small-scale farmers were observed given beneficiaries difficulty in mobilizing their contribution (initially set at 50 percent of subproject costs). These issues were identified during implementation and remedial measures were appropriately applied The Spanish Agency for International Cooperation and Development (AECID) mentioned issues related to implementation of Component Improvement of Livestock Production in the Casamance. In AECID s view, subprojects were overdesigned, with animal shelters sometimes built to better quality than that of beneficiaries own lodging. The Bank believes that the good design of these infrastructures should rather be commended, attesting to the quality of required technical specifications and respect of these requirements by civil works firms. AECID also pointed out that beneficiaries selection was left to locals themselves, which could have led to a biased 49

50 selection based on political criteria. On the contrary, this approach ensured an inclusive participation process within local communities. The PDMAS included a communication and awareness campaign at local level with several workshops held in the targeted areas AECID perceived little coordination between the Livestock Directorate (DIREL), the regional development agency, and the PDMAS. DIREL was the executing agency in charge of implementing field activities at regional level for the livestock component. Implementation arrangements were agreed between the PDMAS PCU and the regional Directorates of Livestock. These conventions guided the execution of vaccination campaigns and infrastructure constructions under the supervision of the PDMAS livestock expert. Meanwhile, the PCU was responsible for all fiduciary matters related to these activities. All of these required constant interaction between the PCU and DIREL. It naturally implied a strong coordination between the two agencies, and therefore the two line ministries AECID expressed that its contribution to the project was not made sufficiently explicit and that the agency was not given adequate recognition for its financing. AECID was interested in participating more actively in project supervision missions involving its technical staff in Dakar. It should be noted that PASAEL was funded through the Food Price Crisis Response Multi-Donor Trust Fund (FPCR MDTF) under the Global Food Response Program Facility (GFRP). Contributions to the FPCR MDTF were received from Australia (AUD 50 million), Spain ( 80 million), Korea (Korean won 3 billion), Canada (CAD 30 million), and the International Finance Corporation (US$0.15 million). Senegal was a recipient of the Spain financing window as one of the 10 eligible ECOWAS (Economic Community of West African States) countries. 50

51 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent) Components Appraisal Estimate Revised Estimate Actual/ Latest Estimate % of Appraisal Estimate % of Revised Estimate Total Baseline Cost Component A, Improving Domestic Market Conditions Component B, Development of Agricultural Exports Component C, Development of Private Irrigation Component D, Project Coordination and M&E Component E, Intensive Rice Production in the Senegal River Valley and the Anambé Basin Component F, Intensive Rice Production in the Bignona Area Component G, Improvement of Livestock Production in the Casamance Project Financing Facility Total Baseline Cost Physical Contingencies Price Contingencies Total Project Costs (b) Financing (USD million) Source of Funds Type of Cofinancing Appraisal Estimate Revised Estimate 1 Actual/ Latest Estimate % of Appraisal Estimate % of Revised Estimate IBRD/IDA IDA MDTF Borrower Counterpart Funding ACDI Co-financier Local Farmers Organizations Beneficiaries Total project Financing Revised Estimates include all Additional Financings (USD10 million IDA and USD20 million MDTF) and co-financing from ACDI (USD18.25 million). System-generated datasheet in ICR shows Revised Amount of USD million which is not actual revised estimates. 51

52 Annex 2. Outputs by Component for the PDMAS, AFFS, AND PASAEL 1. PDMAS Financing US$35.0 million 1. Component A: Improving Domestic Marketing Conditions (TPC US$10.10 million, IDA US$6.35 million) aimed at improving food safety and the performance of domestic distribution channels for crop and livestock products. Subcomponents were: (i) domestic supply chain consolidation; (ii) construction of rural infrastructure; (iii) knowledge management; and (iv) development of animal products markets. The degree of achievement of intermediate outcome indicators as revised under PASAEL for Component A was as follows: No. Intermediate Outcome Indicator Target Actual 1 At least five subprojects for each of the five targeted supply chains in the domestic market have been funded through the Matching Grant mechanism and implemented 2 3,500 tons of quality meat (red meat and poultry) are produced and sold 3,500 5, Innovative business models were introduced and three categories of subprojects funded: (i) commercial partnership projects; (ii) irrigation subprojects; and (iii) livestock subprojects. Nine value chains were supported: bananas (19), green beans (4), mangoes (11), onions (66), tomatoes (49), sweet potato, red meat (139), poultry (8), and processed foods (5). All subprojects were selected by regional selection committees and underwent a technical and financial feasibility study as well as environmental screening. 3. Several drying, cold storage, and rural produce collection centers (Poles agricoles logistiques et de mise en marche PALMM) were built to handle horticultural products. In the livestock sector, food safety of animal products was improved through construction of a modern slaughterhouse in Mbour and elimination of unsupervised slaughter of animals. Meat production was increased through implementation of livestock subprojects. 4. Component B: Development of Agricultural Exports (TPC US21.35 million, IDA US$12.02 million) aimed at expanding nontraditional agricultural exports by leveraging the results achieved under the pilot AEPP. Subcomponents were: (i) innovation and quality management; (ii) agricultural export infrastructure; and (iii) building agricultural export institutions. The degree of achievement of intermediate outcome indicators as revised under PASAEL for Component B was as follows: 52

53 No. Intermediate Outcome Indicator Target Actual 1 2,000 farming families are engaged in export 2,000 8,689 crops 2 One-third of farming families engaged in export 33% 55% crops have implemented Origine Senegal good agricultural practices guide based on GlobalGAP Protocol 3 Tons of agricultural exports certified conform to EC No ,500 67, In addition to the above achievements under this component, the PDMAS supported renewal of the certification of Ceres Locustox (a chemical laboratory) to monitor pesticide residues to ensure that Senegalese horticultural products are admitted onto international markets. To support the certification of private exporters, the project produced various tools, namely: a registry of all exporters of fruits; a database that allows the origin of products to be traced; and a manual on SeneGAP for smallholders that is benchmarked with EuroGAP to allow exports to the European Union. Also, three centers of innovation and training for horticultural and nontraditional crops in key regions were created using existing training infrastructure. In addition, as part of its efforts to build agricultural export institutions, the PCU supported FOS-F&L and a cooperative that represents all horticultural producers - Cooperative Federative des Agriculteurs de l Horticulture (CFAHS). Finally, the PDMAS produced a whole series of agricultural extension and communication materials, covering such topics as: good phytosanitary practices, how to fight fruit flies and termites, quality characteristics of onions, bananas, and other topics. 6. Component C: Development of Private Irrigation (TPC US$23.00 million, IDA US$11.57 million) aimed at promoting demand-driven, pro-poor investments in irrigation to support the expansion of agribusiness across Senegal. Subcomponents were: (i) construction of public irrigation infrastructure in the Senegal River Delta; (ii) promotion of irrigation for crop diversification in the Senegal River Delta; (iii) promotion of micro-irrigation for crop diversification in the Niayes zone; and (iv) knowledge management and strategic studies. The degree of achievement of intermediate outcome indicators as revised under PASAEL for Component C was as follows: No. Intermediate Outcome Indicator Target Actual 1 At least 2,500 ha have been developed or 2,500 4,062 improved by small farmers and agribusiness SMEs 2 At least 80% of operations and maintenance 80 N/A costs are recovered from project beneficiaries 3 No. of km of canals constructed Of the originally planned 2,500 hectares of innovative irrigation schemes, mainly with drip irrigation adapted to the business plans of smallholders, SMEs, and 53

54 agribusiness enterprises, not all were fully covered with equipment paid under the matching grant scheme. The establishment cost per hectare was higher than originally estimated and the contribution of smallholder beneficiaries had to be revised downward from 50 percent to 20 percent. Distribution of these newly developed irrigated areas was a complicated and lengthy process. Villagers that applied were given priority access to irrigation fields and outsiders (from within and outside Senegal) were only granted access once applications by locals had been satisfied. Even so, the relationship between locals and newcomers was tense at times. Overcoming these land tenure issues is one of, if not the most, critical limiting factors to private irrigation development in Senegal. The PDMAS carried out a series of strategic studies as originally planned. 8. Component D: Project Coordination and M&E (TPC US$4.45 million, IDA US$3.86 million) had the following two subcomponents: (i) project management and coordination; and (ii) monitoring and evaluation. The PCU carried out all of its duties in a professional manner and respected all fiduciary and safeguards obligations. 2. Additional Financing 1 (AFFS) - US$10 million 9. Component A: Rehabilitation of Irrigation Schemes in the Senegal River Valley (US$8.0 million) was added to the PDMAS under AFFS. The intermediate outcome indicator chosen was No. of hectares of irrigated area rehabilitated for rice production, with a target of 7,000 ha. By the end of the project, 6,964 ha were rehabilitated, or nearly 100 percent of the original target. 10. Component B: Promotion of Intensive Rice Production in the Bignona Valley (US$2.0 million) was included under AFFS to enhance rice production in the Bignona Valley through exploitation of desalinated lands protected by the anti-salt dam of Affiniam. The intermediate outcome indicator chosen was Number of meters of water catchment dikes constructed, with a target of 7,500 meters. This component could not be implemented on time due to procurement issues. A candidate firm not selected for execution of the works contested the procurement process, which awarded the works contract to another firm. This triggered a long arbitration process involving the national contract regulation agency (Agence de Régulation des Marchés Publiques- ARMP) in which the Bank procurement team advised the Bank not to interfere. ARMP s final decision was to relaunch the bidding process from the beginning despite the approaching closing date of the project six months later. This ultimately stopped the dam works from being executed. However, all detailed feasibility studies were completed and can be readily used if the government and/or other partners financings are available. 3. Additional Financing 2 (PASAEL) - US$20 million 11. Component A: Promotion of Intensive Rice Production in the Senegal River Valley and the Anambé Basin (US$17.1 million) aimed at supporting rehabilitation of small-scale irrigation perimeters and improvement of domestic rice marketing 54

55 conditions in project areas. The degree of achievement of intermediate outcome indicators for this component was as follows: No. Intermediate Outcome Indicator Target Actual 1 No. of ha of irrigated area rehabilitated 7,400 7,400 in Senegal River Valley 2 No. of ha or irrigated area rehabilitated in Anambé Basin 3,180 3, The irrigation perimeters were rehabilitated as planned and the needed motor pumps and agricultural equipment delivered. 13. Component B: Improvement of Livestock Production in the Casamance (US$2.1 million) aimed at providing support to the national livestock production capacity in the Ziguinchor and Sedhiou regions of the Casamance. The project provided support to: (i) restock the livestock population; (ii) expand existing animal health and disease control programs; and (iii) provide essential infrastructure, including enhanced farm animal housing. The project outcome indicators chosen were productivity increases for small ruminants (20 percent) and pigs (40 percent) in targeted farms at the end of the project. The activities were carried out as planned; i.e., a vaccination campaign was carried out and subprojects for livestock production were financed. 14. Component C: Support to Project Coordination and Implementation (US$0.8 million), under which the PCU carried out all its duties in a professional manner and respected all fiduciary and safeguards obligations. 55

56 Annex 3. Economic and Financial Analysis 1. Summary. The PDMAS aimed to increase nontraditional agriculture and livestock production as well as enhance the quality of production in targeted zones. While ex-ante studies were conducted in 2006 and 2010, this annex assesses the PDMAS s impacts expost, after eight years of project implementation. The treatment effect approach is used in conjunction with a cost-benefit analysis, assuming that trends observed before the project would continue and comparing those to the actual trends observed with the project. The overall calculated economic internal rate of return (ERR) for the project was 34 percent for the period , assuming an opportunity cost of capital of 17 percent. The net present value (NPV) was CFAF 42 billion (US$84 million), or 30 percent more than the initial investments over the eight-year project life. Thus the project was a satisfactory use of funds vis-à-vis alternative investment options. Calculated at market prices, the financial internal rate of return (IRR) was 25 percent, with a NPV of CFAF 35 billion (US$70 million), or CFAF 2.9 billion more than the initial investment. These indicators demonstrate the project s economic and financial soundness. A. Main Assumptions for Project Benefits 2. Area considered for project benefits. PDMAS interventions areas consisted of the Senegal River Valley, the Anambé basin, the Casamance region, the Gouloumbou area, the Niayes zone and the Groundnut Basin. Interviews were conducted with project beneficiaries in the targeted zones in order to collect on-farm data. Data were collected from a stratified sample of 180 beneficiaries or 30 beneficiaries (small-scale and medium) by intervention areas. The questionnaire focused on induced effects of project interventions, such as increases in cropped area, livestock herds, productivity and production, diversification in farm activities, production costs, labor costs, project-supported investments, irrigation water use and fees, products market prices. For each of the main farming activities, farm budgets were elaborated before and after project. Farming activities included mainly rice and vegetable cropping in the Senegal River valley, rice in the Anambe Basin, livestock in the Casamance, banana in the Gouloumbou area, vegetables in the Niayes and cereals and vegetables in the Groundnut basin. Similarly, a sample of 5 to 10 non-beneficiaries involved in the same activities as sampled project beneficiaries were interviewed in each intervention area on their activities for the last seven years. Data at local on farming activities 7-year market level were also collected during field visits. 3. Project costs. All project investment costs were included in the analysis. In the Senegal River Valley, the project aimed to promote private investment and small-scale farming of nontraditional crops on 2,400 hectares. Out of this, 600 hectares were allocated to small-scale family farms that benefited from matching grants up to 80 percent of their installation costs, 500 hectares to small and medium enterprises (SMEs) with matching grants up to 50 percent, and 500 hectares to large agribusiness firms. The rest of the perimeter was developed by individual operators without direct support from the project. In addition, 7,000 hectares and 7,400 hectares of irrigated rice perimeters were developed under the two additional financings (AFs), respectively. Total hydraulic infrastructure costs 56

57 and matching grants costs in this area were estimated at CFAF 17 billion, of which 3.9 billion were for the first AF and CFAF 5.8 billion for the second AF for rice production. In the Anambé basin, the cost of rehabilitation of 3,180 hectares for rice production was estimated at CFAF 2.7 billion. In the Niayes zone, project costs were estimated at CFAF 5.4 billion for the construction of boreholes and the financing of drip irrigation subprojects over 30 hectares for small-scale and medium producers. In the Gouloumbou area, the project supported the rehabilitation of rural access roads, the construction of a banana storage platform, and the financing of drip irrigation subprojects for small-scale farmers for a total cost of CFAF 1.8 billion. In Casamance, project costs were estimated at CFAF 1.96 billion for the promotion of small ruminants, swine, and poultry rearing. Project investments in the Groundnut Basin were estimated at CFAF 388 million for small-scale farmers subprojects and 474 million for irrigation infrastructure. 4. Cropping intensities and agricultural production. Estimated incremental crop productions due to the project, as well incremental livestock production, are shown in Table A3.1 and Table A3.2. Table A3.1: Incremental cropping area estimates (ha) Region/Crops/Livestock Senegal river valley Rice 6,625 27,668 28,375 31,390 23,936 17,199 18,919 Tomato Onion Anambé basin Rice Gouloumbou Banana 1,556 1,634 1,716 1,802 1,892 1,986 2,086 Groundnut Basin ( 000) Millet Sorghum Maize Okra Tomato Eggplant

58 Table A3.2: Incremental production estimates of main crops (000 MT) Region/Crops/Livestock Senegal river valley Rice Tomato Onion Anambé basin Rice Gouloumbou Banana Niayes zone Cabbage, onions and others Groundnut Basin Millet Sorghum Maize Okra Tomato Eggplant Casamance ( 000 head) Sheep Goats Swine Poultry Prices. The financial and economic prices used in the project analysis were based on 2015 constant prices. Farm budgets and incomes were based on prevailing market prices. However, the economic prices of traded goods and production factors were deflated using the prevailing Manufacture Unit Value Index (MUV). 6. Farm incomes. The financial and economic analysis was based on farm budgets. Two farm models, small- and medium-scale farms, were used for the analysis in each project intervention area. In the Senegal River Valley, a small-scale farm consists of an average 0.5 hectares of rice and 1.5 hectares of nontraditional crops. A medium-size farm covers 1.5 hectares of rice and 2.5 hectares of nontraditional crops. In this area, rice is cropped during the rainy season while tomato and onion are the main nontraditional crops planted in the cold dry season. In the Anambé Basin, the models take into account rice production, with 0.5 hectares for small-scale producers and 1 hectare for medium producers. For the Niayes zone, key crops targeted by the project are cabbage, green bean, and tomato. Farm sizes average 1.25 hectares and 2.5 hectares for small- and medium-scale producers, respectively. In the Gouloumbou area, small farms average 0.25 hectare of banana while medium size farms average 1 hectare. In the Groundnut Basin, small farms consist of 0.25 hectares of vegetables and 2 hectares of cereals. Medium-size farms comprise 0.5 hectares of vegetables and 4 hectares of cereals. In the Casamance region, livestock production is characterized by small farms with an average of 5 small ruminants, 3 swine, and 20 poultry birds and medium farms with 10 small ruminants and swine and 50 poultry birds. Gross revenues and production costs were computed by using the commodity prices at farmgate or at nearest market point of sale or purchase. 58

59 7. In the targeted areas, PDMAS investments proved to be profitable at farm level. Net margins varied depending on the area and type of investment, as follows: 8. In the Senegal River Valley, small rice farmers earned an average net income of CFAF 331,000/ha and medium-size producers up to CFAF 393,000/ha. The beneficiaries of these public investments increased their production area due to the availability and flow of water through PDMAS interventions. Small- and medium-size rice producers gained an additional net operating income of CFAF 166,000 and CFAF 216,000, respectively, during the rice cropping season. 9. Investments in crop diversification schemes in the Senegal River Valley provided a net income of between CFAF million/ha for small- and medium-size onion producers and CFAF ,000/ha for tomato producers. This induced an additional gain in net income of CFAF 1.3 million and CFAF 1.4 million for small- and medium-size farmers in this area, respectively. 10. On small-scale irrigation in the Senegal River Valley, medium-size farmers high-valued crops earned an average income of CFAF 3 million, with an operating cost of CFAF 125/kg. With a potential cultivated area of 500 ha each, medium-sized producers collectively earned CFAF 1.5 billion, and produced a value added of CFAF 2.7 billion, paying labor wages of nearly CFAF 246 million per year. Small producers cultivated mainly tomatoes and onions, and earned an average annual income of CFAF 975,000 with an operating cost of CFAF 46/kg per year. On an assumed potential of 600 ha each, small producers produced a total income of CFAF 585 million and generated CFAF 1.5 billion in value added, paying CFAF 165 million in wages annually. Overall, PDMAS investments in the Senegal River Valley generated CFAF 2 billion in income and CFAF 4.2 billion of value added per year, an impressive outcome given that the land in this area was previously undeveloped. 11. In the Anambé Basin, the PDMAS induced an increase in small and medium-size rice farmers cultivated area from 462 ha in 2013 to 956 ha in The net margin was CFAF 189,000 per year for small farmers and CFAF 247,000 for medium-size farmers. This induced an additional gain in net operating income of CFAF 100,000 and CFAF 138,000 for small and medium-size rice farmers, respectively. Thus, both models remained profitable but had relatively low margins. 12. In Niayes, the PDMAS introduced not yet operational drilling and small-scale irrigation, which generated a net operating income of CFAF 828,000 for small producers. All small producers combined generated CFAF 39 million in value added and paid wages for labor of CFAF 1.5 million per year. Medium-size farmers earned CFAF 2 million producing bean and onion crops on an average 2.5 ha each. The combined induced value added was CFAF 67 million, with CFAF 5 million paid for wages. 13. In the Gouloumbou area, small banana producers had a net margin of CFAF 381,000 per year, or a gain of CFAF 131,000 over the without project situation. All small producers combined earned CFAF 5.7 million of income and produced an overall value 59

60 added of CFAF 60 million, while generating CFAF 4.2 million in wages. Medium-size producers in Gouloumbou area received a net margin of CFAF 610,000, with an induced additional net income of CFAF 200,000. Together, medium-sized producers generated CFAF 69 million in added value and paid CFAF 4.8 million in wages. 14. In the Casamance, small husbandry farmers earned an income of CFAF 217,500, with an additional net profit of CFAF 162,000 compared to the without project situation. Together, these smallholders earned CFAF 22 million with an added value of CFAF 122 million. Medium-size producers received an annual net margin of CFAF 845,000. All medium-size livestock holders combined earned a net margin of CFAF 84 million and generated an added value of CFAF 241 million. 15. In the Groundnut Basin, smallholders net income averaged CFAF 87,000 versus CFAF 108,000 for medium-size producers. Although the individual annual margin was low, all beneficiaries combined earned CFAF 9 million in net income, produced CFAF 12 million of cash flow, and created CFAF 128 million in value added to the sector. 60

61 Table A3.3: Farm income by business model Small-scale producers revenues (CFAF ) Medium size producers revenues (CFAF ) Without Without Region/Type of activity project With project project With project Senegal river Valley Vegetable farming Gross revenue 1,750,000 2,180,000 2,125,000 4,819,000 Production costs 1,067,000 1,205,214 1,367,600 1,796,484 Net revenue 683,000 1,993, ,400 2,215,000 Rice farming Gross revenue 600, , , ,300 Production costs 435, , , ,978 Net revenue 164, , , ,323 Anambé Basin,,, Rice farming Gross revenue 262, , , ,500 Production costs 350, , , ,872 Net revenue 87, , , ,628 Niayes area Vegetable farming Gross revenue 1,715,625 2,023,750 4,537,500 5,450,000 Production costs 1,224,153 1,194,983 3,417,990 3,419,778 Net revenue 491, ,767 1,119,509 2,030,222 Gouloumbou area, Banana farming Gross revenue 3,300,000 3,675,000 3,750,000 4,200,000 Production costs 3,050,188 3,293,916 3,342,288 3,590,019 Net revenue 249, , , ,981 Casamance region Livestock farming Gross revenue 935,000 2,040,000 Production costs 717,500 1,195,000 Net revenue 55, , , ,000 Groundnut Basin Vegetable farming Gross revenue Production costs Net revenue 39,150 87,350 41, ,138 61

62 B. Economic and Financial Analysis 16. The project s investments were profitable at the scale of local economies, although they could have been higher if some achievements had not experienced administrative bottlenecks in implementation: Of all target areas, the Senegal River Valley recorded the highest ERR (57 percent) and an NPV of CFAF 21 billion (US$42 million). This performance is due to several forms of project interventions since 2007, including a strong rice selfsufficiency program and diversification of vegetable production in irrigated areas and small-scale irrigation in areas that were historically rainfed. With two years of activity on realized project investments, Anambé Basin produced a financial IRR of 21 percent and an ERR of 30 percent. Its economic NPV exceeds by 31 percent initial investments of CFAF 2.7 billion. In Gouloumbou Basin, investments in banana induced an ERR of 32 percent. The NPV was CFAF 2.6 billion (US$5.3 million), relative to an initial investment of CFAF 1.8 billion. The financial IRR of the Niayes zone is 25 percent and the ERR 31 percent. The zone s economic NPV was 32 percent over initial investments. Although the achievements associated with drilling have not yet materialized, PDMAS interventions on small-scale irrigation and institutional quality support in Niayes zone have already induced a satisfactory level of performance. In the Casamance, the ERR was estimated to be 46 percent. The NPV was CFAF 2.9 billion. The Casamance produced the lowest ERR (24 percent) on the livestock sector, but this is largely satisfactory given the assumed opportunity cost of capital of 17 percent. Thus, on an initial investment of CFAF 1.5 billion, the Casamance realized a NPV of CFAF 2.4 billion (US$4.9 million). The project s soundness in this region could have been higher had the anti-salt dams for rice intensification not been stopped for procurement procedure problems. In the Groundnut Basin, the CFAF 2.7 billion of investments in small-scale irrigation and market infrastructure subprojects induced a 25 percent ERR and NPV of CFAF 3.7 billion (US$4.9 million). 62

63 Table A4.4: ERR, financial IRR, and NPV by region Region Economic Financial ERR NPV IRR NPV (US$ million) (US$ million) Senegal River Valley 57% % 36.5 Anambé Basin 30% % 5.8 Gouloumbou area 32% % 4.4 Niayes zone 31% % 14.0 Casamance region 24% % 3.7 Groundnut Basin 25% % The economic and financial assessments are sound, and combined with farm gatelevel results, demonstrate the viability of the PDMAS. 63

64 Appendix A: Financial Analysis Data Estimates Year Revenues (CFAF) Senegal River Valley Anambé Basin Gouloumbou area Niayes zone Casamance region Groundnut Basin Overall ,103,222, ,103,222,161 10,275,501, ,481,945, ,745,746, ,745,746,639 12,232,349, ,535,608,213 79,259,450, ,158,961, ,158,961,575 20,711,121, ,098,367 71,870,724, ,561,867, ,759,325, ,759,325,855 27,681,123,702 2,595,434,822 49,247,080, ,042,290, ,074,544, ,306,495 25,567,851,286 29,543,749,191 4,633,266,705 64,389,420, ,702,139, ,246,208, ,799,032 17,732,007,897 30,745,844,042 8,310,818,708 58,501,783, ,022,461, ,763,495, ,203,780 23,622,699,683 33,219,093,011 13,743,241,533 61,165,724, ,373,458,693 Year Investment Costs (CFAF) Senegal River Valley Anambé Basin Gouloumbou area Niayes zone Casamance region Groundnut Basin Overall ,465,248, ,052 2,903,592 4,727,554 19,206,295 5,493,016, ,264,041, ,273,940,465 18,680,002, ,815, ,421,322 47,624,221, ,964,348, ,574,805,342 19,929,915,768 11,151,117 9,182,924,646 68,663,145, ,357,761, ,376,575,360 26,718,877, ,598,929 18,631,491, ,344,305, ,119,543, ,429,274,282 31,847,052,860 1,064,837,416 19,018,113, ,478,821, ,205,157, ,644,124 38,435,982,516 28,902,422,132 1,937,839,931 20,454,109, ,210,155, ,330,849, ,352,740 40,619,528,021 29,192,874,688 3,011,204,211 19,682,632, ,218,441, ,187,838,064 3,112,642,859 42,142,447,633 29,742,195,969 5,048,630,683 20,580,760, ,814,515,832 64

65 Year Net Margin (CFAF) Senegal River Valley Anambé Basin Gouloumbou area Niayes zone Casamance region Groundnut Basin Overall ,465,248, ,052-2,903,592-4,727,554-19,206,295-5,493,016, ,839,181, ,170,718,303-8,404,501, ,815, ,421,322 4,857,724, ,602, ,829,058,702-7,697,566,594-11,151,117 32,352,683,567 10,596,305, ,801,199, ,217,613,785-6,007,756, ,499,439 53,239,232,818 49,217,562, ,639,782, ,669,948,427-4,165,929,159 1,530,597,406 30,228,966,556 24,563,468, ,869,386, ,662,372-12,868,131, ,327,060 2,695,426,774 43,935,311,459 41,491,983, ,915,359, ,446,293-22,887,520,124 1,552,969,354 5,299,614,497 38,819,150,161 27,804,019, ,575,657,838-2,253,439,079-18,519,747,950 3,476,897,043 8,694,610,850 40,584,964,160 35,558,942,862 Senegal River Valley Anambé Basin Gouloumbou area Niayes zone Casamance region Groundnut Basin Overall IRR 36% 21% 24% 25% 19% 20% 25% NPV (CFAF) 18,263,748,859 2,930,788,746 2,208,796,281 7,075,998,273 1,882,442,467 2,874,710,715 35,236,485,341 NPV (US$) 36,527,498 5,861,577 4,417,593 14,151,997 3,764,885 5,749,421 70,472,971 B/C

66 Appendix B: Economic Analysis Data Estimates Year Revenues (CFAF) Senegal River Valley Anambé Basin Gouloumbou area Niayes zone Casamance region Groundnut Basin Overall ,889,858, ,889,858,986 15,527,689, ,307,407, ,858,368, ,556,845,210 20,601,445, ,455,310, ,471,969, ,635,531, ,271,220,136 18,119,612, ,252,360 62,877,797, ,483,413, ,679,368, ,679,368,244 24,816,250,752 2,326,818,884 44,150,226, ,652,033, ,035,530, ,911,569 60,272,441,721 28,319,544,001 4,441,277,898 61,721,314, ,027,019, ,003,813, ,844,223 55,432,602,863 30,313,711,338 8,194,010,187 57,679,540, ,483,522, ,763,495,903 5,119,965,000 41,359,329,903 33,219,093,011 13,743,241,533 61,165,724, ,370,850,133 Year Investment Cost (CFAF) Senegal River Valley Anambé Basin Gouloumbou area Niayes zone Casamance region Groundnut Basin Overall ,432,202, ,622 3,216,813 5,237,533 21,278,149 4,462,816, ,945,267, ,135,526,462 12,196,939,724 82,839, ,337,577 53,621,910, ,456,367, ,286,162,963 19,430,930,147 14,309,499 12,417,586,739 87,605,357, ,280,593, ,467,210,924 15,380,489, ,359,823 15,485,012,567 76,824,666, ,199,096,394 1,007,478,960 32,160,709,890 20,831,787, ,686,805 16,167,118,588 92,252,878, ,337,423, ,830,143 35,301,334,900 26,194,557,471 1,719,179,521 18,520,091, ,875,417, ,343,333, ,175,641 38,308,659,772 27,262,127,477 2,781,703,069 18,426,820, ,490,820, ,852,429,511 2,587,539,836 40,390,607,333 31,742,195,969 4,737,776,886 19,551,722, ,862,272,128 66

67 Year Net Margin (CFAF) Senegal River Valley Anambé Basin Gouloumbou area Niayes zone Casamance region Groundnut Basin Overall ,432,202, ,622-3,216,813-5,237,533-21,278,149-4,462,816, ,408, ,245,667,477 3,330,749,858-82,839, ,337,577-26,314,502, ,000, ,270,682,248 1,170,514,947-14,309,499 49,037,723,328 52,866,611, ,354,937, ,804,009,212 2,739,122, ,892,537 47,392,784,733 72,658,746, ,480,271,850-1,007,478,960 16,518,658,354 3,984,463,261 1,440,132,079 27,983,108,328 54,399,154, ,698,106, ,918,575 24,971,106,821 2,124,986,530 2,722,098,378 43,201,222,530 78,151,602, ,660,479, ,668,582 17,123,943,092 3,051,583,861 5,412,307,118 39,252,719,823 67,992,702, ,911,066,392 2,532,425, ,722,570 1,476,897,043 9,005,464,647 41,614,002,191 59,508,578,006 Senegal River Valley Anambé Basin Gouloumbou area Niayes zone Casamance region Groundnut Basin Overall ERR 57% 30% 32% 31% 24% 25% 34% NPV (CFAF) 21,009,445,203 3,586,827,367 2,675,675,119 8,540,644,039 2,434,580,198 3,724,304,807 41,971,476,732 B/C

68 Annex 4. Trends in Horticultural Exports from Senegal and the Role of PDMAS ( ) 1. Horticultural exports from Senegal are a relatively recent phenomenon. Until 2000, horticultural exports totaled less than 9,000 tons, mostly green beans and cherry tomatoes, and only one or two exporting companies operated. This started to change with the World Bank-financed Agricultural Export Promotion Project (AEPP) and exports accelerated under the Agricultural Markets and Agribusiness Development Project (PDMAS). The PDMAS influenced government policies towards the sector and created a conducive environment for international companies to start producing horticultural products for export. 2. The project put in place a whole series of measures that encouraged small and medium-scale producers to get involved in horticultural production for internal and external markets. These measures included inter alia improving domestic marketing conditions such as construction of rural infrastructure for drying, cold storage, and produce collection centers. It also included construction of agricultural export infrastructures and building of agricultural export institutions. In addition, the PDMAS provided market intelligence and supported the renewal of the certification of Ceres Locustox (a chemical laboratory) to monitor pesticide residues to ensure that Senegalese horticultural products are admitted onto international markets. To support the certification of private exporters, the PDMAS produced various tools, namely: a registry of all exporters of fruits; a database that allows the origin of products to be traced; and a manual on SeneGAP for smallholders that is benchmarked with EuroGAP to allow exports to the European Union. In addition, as part of its effort to build agricultural export institutions, the project supported the Fondation Origine Sénégal-Fruits et Légumes (FOS-F&L) and a cooperative that represents all horticultural producers Coopérative Fédérative des Agriculteurs de l Horticulture (CFAHS). 3. At the same time, the PDMAS promoted development of irrigation schemes, especially private irrigation, to support the expansion of agribusinesses across Senegal. This irrigation development also benefitted large commercial exporters as it gave them access to year-round irrigation. Without investments in irrigation development, especially the promotion of micro-irrigation (drip irrigation) for crop diversification, exports of horticultural crops would not have taken off. 4. The interplay of (i) big commercial firms increased production and export of horticultural products given the favorable policy environment and (ii) PDMAS investments that encouraged small and medium-sized producers to join in this endeavor led to a dramatic increase in horticultural exports. Over the period 2000 to 2014, the volume of horticultural exports increased nine-fold, from 9,300 tons in 2000 to 81,600 tons in 2014 (an annual increase of 17 percent). Figure A4.1 shows the rise in exports of horticultural products to Europe between : 68

69 Figure A4.1: Trends in main horticulture crops exports from 2000 to 2014 (in tons) 5. More specifically, the average annual increase in volume of horticultural exports to Europe between was: 14 percent for cherry tomatoes 29 percent for melons 32 percent for sweet corn (since 2005) 4 percent for green beans Significantly diversified in 2014 with the appearance of butternut squash (1,900 tons), green onions (1,960 tons), and radishes (1,000 tons). 6. The value of horticultural exports to Europe in 2014 was estimated at 75 million (CAF). The main horticultural products exported in order of importance were: melons and watermelons; cherry tomatoes; sweet corn; and green beans. Particularly noteworthy is the increase in mango exports by 25 percent in 2014 to reach 10,200 tons. 69

70 7. In addition to exports to Europe, Senegal exported horticultural products to the regional market. In 2014/15, some 4,740 tons of fruits and vegetables were exported to the subregion (Mauritania, Morocco, and Ivory Coast). The main export crops for the subregion were cabbage (2,000 tons), squash (770 tons), carrots (740 tons), onions (610 tons), sweet potatoes (410 tons), and watermelon (118 tons). 8. According to data from the PDMAS M&E system, in ,530 tons (31 percent) of Senegal s total exports of horticultural products of 81,600 tons came from producers directly supported by the PDMAS. These beneficiaries were supported through matching grants for subprojects, extension advice, provision of market intelligence, introduction of improved irrigation techniques, export certification, and improved market infrastructure. While some 80 percent of horticultural exports are handled by four big exporters, the number of smaller exporters is increasing and with it the ease of access of smaller producers to export markets. With an export growth rate for horticultural products of +/- 10 percent per year, Senegal should be able to export 100,000 tons by

71 Annex 5. Bank Lending and Implementation Support/Supervision Processes (a) Task Team Members Name Title Unit Lending Amadou Oumar Ba Senior Agricultural Specialist GFADR Ousmane Badiane Lead Rural Development Specialist AFTA1 - HIS Demba Balde Senior Social Development Specialist GSURR Bourama Diaite Senior Procurement Specialist GGODR Bleoue Nicaise Ehoue Senior Agriculture Economist GFADR Ronald J. Kopicki Consultant GFM01 Marie Ndiaye Lixi Senior Program Assistant DECDB Ismael S. Ouedraogo Consultant GFADR Leopold Sarr Consultant GEDDR Maimouna Savane Consultant GSURR Seynabou Thiaw Seye Program Assistant AFCF1 Fily Sissoko Practice Manager GGODR Supervision/ICR Amadou Alassane Senior Agricultural Specialist GFADR Demba Balde Senior Social Development Specialist GSURR Magueye Dia Senior Private Sector Development Specialist GTCDR Bourama Diaite Senior Procurement Specialist GGODR Anta Tall Diallo Program Assistant AFCF1 Saidou Diop Senior Financial Management Specialist GGODR Ibou Diouf Senior Transport Specialist GTIDR Yvette Laure Djachechi Senior Social Development Specialist AFTCS - HIS Olivier Durand Senior Agriculture Economist GFADR Maimouna Mbow Fam Senior Financial Management Specialist GGODR Abdoulaye Keita Senior Procurement Specialist GGODR Elisabeth Mekonnen Program Assistant LCC3C Renato Nardello Senior Rural Development Specialist GFADR Nyaneba E. Nkrumah Senior Natural Resources Management Specialist GENDR Ismael S. Ouedraogo Consultant GFADR Yves Andre Prevost Environmental Advisor GENDR Christophe Ravry Senior Industry Specialist CMGAF Robert A. Robelus Consultant GENDR Osval Rocha Andrade Romao Financial Management Specialist AFTMW - HIS Ibrah Rahamane Sanoussi Senior Procurement Specialist GGODR Manievel Sene Senior Rural Development Specialist GFADR Fily Sissoko Practice Manager GGODR Cheick Traore Senior Procurement Specialist GGODR Jean-Philippe Tre Senior Agriculture Economist GFADR Boury Ndiaye Program Assistant AFCF1 71

72 (b) Staff Time and Cost Stage of Project Cycle Lending Staff Time and Cost (Bank Budget Only) US$ thousands (including No. of staff weeks travel and consultant costs) FY FY Total: Supervision/ICR FY FY FY FY FY FY FY FY FY FY Total:

73 Annex 6. Summary of Borrower's ICR and/or Comments on Draft ICR 1. Introduction The PDMAS was implemented over the period. It benefited from two cycles of national sector policies characterized by: (i) the National Economic and Social Development Strategy (Strategie Nationale de Développement Economique et Social- SNDES), the Agriculture Forestry and Livestock Orientation Law (Loi d Orientation Agro- Sylvo-Pastorale -LOASP), and the Accelerated Growth Strategy; and (ii) The Emerging Senegal Plan (Plan Sénégal Emergent-PSE). The PSE provides a comprehensive framework for efficient public policies through which the national strategy in the horticulture sector aims: (i) to reach onion self-sufficiency by 2016 with a local production of 350,000 tons; and (ii) to promote the development of offseason fruits and vegetables with an export target of 157,000 tons. The PDMAS contributed to this objective with a target of nontraditional exports of 12,000 tons by The project aimed to promote investments as well as public-private partnerships (PPPs) for innovation in the agriculture sector at the national level. Specific objectives were to: (i) improve the competitiveness and diversification of agricultural and livestock products with high added value; and (ii) strengthen the capacity of producers, namely small-scale farmers, to sustainably enter promising national, regional, and international markets to generate durable incomes. 2. Project description The project consisted of the following seven components: Component A: Improving Domestic Marketing Conditions, which aims at improving food safety and the performance of the domestic distribution channels for crop and livestock products. Component B: Development of Agricultural Exports, which aims at expanding nontraditional agricultural exports and leveraging the results achieved under the pilot AEPP. Component C: Development of Private Irrigation, which aims at promoting demand-driven, pro-poor investments in irrigation to support the expansion of agribusiness across Senegal. Component D: Project Coordination and M&E, which comprises the following two subcomponents: (i) Project Management and Coordination; and (ii) Monitoring and Evaluation. Component E: Rehabilitation of Irrigation Perimeters in the Senegal River Valley and the Anambé Basin, which aims to rehabilitate: (i) 7,000 ha in the Senegal River Valley under the National Rice Self-sufficiency Program; (ii) 7,400 ha in the Senegal River Valley; and (iii) 3,380 ha in the Anambé Basin under the PASAEL. Component F: Promotion of Intensive Rice Production in the Bignona Valley, which aims to enhance rice production in the Bignona Valley through the exploitation of desalinated lands protected by the anti-salt dam of Affiniam. 73

74 Component G: Improvement of Livestock Production in the Casamance, which aims to provide support to the national livestock production capacity in the Ziguinchor and Sedhiou regions of the Casamance. 3. Project s physical achievements The PDMAS s main physical achievements include: Rehabilitation of 7,000 ha of irrigated perimeters in the Senegal River Valley for rice production under the PNAR; Rehabilitation and equipment of 7,400 ha of irrigated perimeters in the Senegal River Valley under the PASAEL; Rehabilitation and equipment of 3,180 ha in the Anambé basin; Development and equipment of 200 ha of lowland in the Southern part of the Anambé basin; Support provided to local producers for rice marketing in Casamance, with construction of three warehouses and capacity strengthening of 200 local producers; Drip irrigation tests conducted on a total of 72 ha; Development of 4,062 ha of irrigated perimeters in the Senegal River Valley for horticultural crops; Financing of 293 ha for irrigation subprojects implemented in the Delta; Financing of 339 ha for irrigation subprojects for crop diversification in the Niayes zone, Groundnut Basin, and Casamance; Financing of 27 projects through commercial partnership matching grants (including for packaging plants, processing plants, and improved seeds); Funding of 184 subprojects in cattle and sheep fattening as well as improved processing practices and distribution of red meat and poultry; Construction of two Agricultural Logistics and Marketing Poles (PALMM); Construction of a modern slaughterhouse and butchery in Mbour; Construction of livestock markets in Dahra; Construction of two Rural Centres for Innovation and Quality (CRIQ); Construction of two Logistics Poles in Agricultural Zone (PLAZA) Rehabilitation of the export freight facility (Gare de Frêt) and its transfer to the Fondation Origine Sénégal-Fruits et Légumes (FOS-F&L); Rehabilitation of the Sangalkam Feltiplex and its transfer to the FOS-F&L; Completion of 55 km of rural access roads in the banana production area of Gouloumbou (Tambacounda region); Rehabilitation of the Beer Thialane irrigation network with: (i) 6 boreholes constructed and 5 equipped; (ii) 24 km of irrigation pipes installed; and (iii) 250 ha developed; Support for livestock production in the Casamance regions of Ziguinchor and Sédhiou through capacity building of local producers and livestock directorate agents; construction of 60 swine shelters and 131 sheep shelters; livestock deworming and vaccination campaign; Matching grants financing for irrigation subprojects. 4. Institutional assessment 74

75 The project management structure was composed of: (i) a Steering Committee (SC), chaired by the Ministry of Agriculture and Rural Equipment (MAER) and composed of different ministries and state agencies, as well as representatives of farmers' organizations; (ii) a Project Coordination Unit (PCU); and (iii) implementing agencies (SAED ANCAR). In addition, four Regional Selection Committees (CRS) were established in each project area (Niayes, Senegal River Valley, Groundnut Basin/Casamance). In some specific areas, the PCU collaborated with other partners, such as associations of exporters/producers, the Directorate of Livestock, Veterinary Services Directorate, the Directorate of Plant Protection, CERES/LOCUSTOX, SONES, the Directorate of Rural Engineering, the Senegalese Agency for Export Promotion (ASEPEX), and the Agency for Investment Promotion (APIX). The PCU was well-organized and efficient. The PCU was well managed until the end of the project with committed staff, who even stayed after project closing, some without salaries, to oversee final project coordination activities. The project was audited in the second quarter of 2014 by a mission of the State General Inspectorate (IGE) and the Court of Accounts of Senegal. The Bank s financial management team conducted a thorough supervision mission from September 22-26, 2014, that included a review of project financial transactions, field visits to meet with project beneficiaries and implementing agencies, and tours of facilities built under the project (CRIQ of Ndiaye in St-Louis and PALMM of Guia in Podor). The Bank s conclusions were overall positive and confirmed the borrower s positive perception of PDMAS achievements. In the borrower s opinion, the project contributed to the structural and socioeconomic transformation of Senegal s rural areas in line with Axis 1 of the Emerging Senegal Plan (PSE). 5. Project results End-of-project performance indicators show a strong project performance. Indeed, with regard to the overall objective of increasing nontraditional horticultural exports in the project areas, the planned target of 12,000 tons was by far exceeded, with a completion rate of 141 percent. The overall target of national onion consumption coverage by 75 percent was achieved at 93 percent. The banana supply chain coverage increased 140 percent (compared to the target of 50 percent). With regard to the target of increased annual paddy production of 52,000 tons at the end of the project, the achievement rate was far beyond, at 232 percent. In 2014, a record production of 86,660 tons was observed. Double cropping of rice paddy is becoming a reality in the region with the construction and operation of structural infrastructure such as the Krankaye Canal. Marketing conditions have largely improved. Indeed, it was expected that at least five subprojects of each targeted supply chain in the domestic market would be funded by the matching grant mechanism and implemented. By December 2013, no less than 247 subprojects had been funded, for an achievement rate of 391 percent. By December 2014, the achievement rate was 549 percent. Targeted supply chains were: bananas, green beans, mango, onion, sweet potato, tomato, red meat, poultry, and processed foods (dried banana, dried mango, and dried tomato). An achievement rate of 159 percent was observed in additional quality meat marketed (red meat and poultry). It was also expected that at least 75

76 one-third of beneficiary producers would implement the Good Agricultural Practices Guide "Origin Senegal" based on Global Gap standards. In 2014, approximately 881 producers were using the Good Agricultural Practices and other precision irrigation guides. Furthermore, the target volume of 14,000 tons of certified agricultural export products in compliance with EC Directive No was largely exceeded, with 67,720 tons of fruits and vegetables exported to Europe in By adding exports of fruits and vegetables to the region (squash, onions, and mangoes), the achievement rate reached 665 percent, with 93,000 tons. With regard to private irrigation development, the total number of hectares developed for horticulture production far exceeded the target of 2,500 ha (at 4,062 ha). Overall maintenance of irrigation perimeters remains an issue, however. The MAER is closely monitoring the situation. For this, an interministerial decree establishing the FOMAED (Adductors and Drainage Canals Maintenance Fund) was signed and an operator hired to assist the government in implementing the Action Plan for maintenance of irrigation infrastructures in the Delta and the Senegal River Valley. Meanwhile, 52 km of linear canals were created or rehabilitated. Major adductors were also recalibrated in the Senegal River Valley, in Lampsar (24 km) and Gorom Aval (8 km). In terms of rehabilitation of rice perimeters, 6, ha were rehabilitated, for an achievement rate of 99.5 percent. With regard to intensive rice cultivation in the Bignona Valley, technical feasibility studies of the first phase were finalized but works for the development of 1,000 ha of irrigated land could not be completed as a results of a procurement-based complaint and a long arbitration process that cancelled the contract award. The target of 7,500 meters of water catchment was not achieved (0 percent). 6. Economic and financial analysis ISRA/BAME conducted an impact analysis of the PDMAS s economic and financial profitability, using a before and after project approach. The economic internal rate of return (ERR) was estimated at 30 percent by 2013 and 42 percent by the end of the project in 2014, with a net present value (NPV) of CFAF 7.4 billion by 2013 and CFAF 9.4 billion in The financial internal rate of return (IRR) was 31 percent by 2013 and 49 percent by 2014, with a NPV of 1.8 billion CFAF by 2013 and CFAF 741 million by These rates of return are well above the opportunity cost of capital of 12 percent used. At the horticultural farm level, with the adoption of new improved irrigation technology, the rate of return was estimated at 24 percent with an NPV of CFAF 2.3 billion for the duration of the project. These figures vary depending on the farm type (area and amount of funding). The average IRR for small and large producers was estimated at 26 percent. These indicators show the attractiveness of the investments compared to the opportunity cost of capital of 12 percent in the agriculture sector. These results confirm the accuracy and efficiency of the PDMAS s financial and economic investments in the horticultural industry. In addition to increasing production and productivity, project investments led to an increase in producers incomes and overall profitability. The investments were also financially profitable from the point of view of the 76

77 individual farm. In other words, the PDMAS produced an efficient use of national resources with the generation of national income produced through its various components. 7. Project impact Project overall impacts stem from the overall vision of structural transformation of PDMAS. The economic and financial impact is largely presented above. The improved access to remote production areas through the construction of rural roads, and more access to existing markets, has significantly improved the lives of rural population. The establishment of storage and marketing infrastructure has opened a path toward agricultural modernization through the horticultural sub-sector. 8. Conclusions and lessons learned On the managerial level, the professionalism and commitment of the PCU team must be noted. The team s commitment did not fail at any time, even after project closing and even when wages were not paid for some time. The main lesson learned is the need to focus on sustainable models that the Government of Senegal, through its decentralized structures, must implement to preserve all physical investments made. (i) With regard to the maintenance of large hydraulic structures in the Senegal River Delta and Anambé Basin, as well as primary and secondary canals, the establishment of endowment funds seems unavoidable. (ii) For the maintenance of tertiary canals, management modalities should be discussed with the concerned water users projects. (iii) The FOS-F&L is still slow to take on its role in the sector. An urgent need exists for the MAER to play an arbitration role and assess the measures to be taken to unlock the situation. (iv) Rehabilitation of the network Beer Thialane was made possible with PDMAS funding, but the irrigation remains unused due to the absence of a management entity. Meanwhile, the Ministry of Water Resources has planned, pending the recruitment of the entity responsible for managing the complex, to entrust the network s management to the SDE to allow the exploitation of targeted areas. Key observations regarding procedures and deadlines relate to: (i) the excessive length of bidding processes (between 4-6 months); (ii) the difficulty in using national procedures on donors procurement methods, illustrating the need to harmonize them; (iii) the unilateral management of complaints, particularly those from candidate firms, by the Dispute Resolution Committee of ARMP. It is essential to listen to both parties to decide cases in a fair and transparent manner and to mitigate abuse of the dispute resolution mechanism. Annex 7. Comments of Co-financiers and Other Partners/Stakeholders 77

78 Canadian International Development Agency - CIDA 1. In CIDA s view, the project was well designed. The situational analysis was pertinent, research and development activities were appropriate, and irrigation test/pilot activities on a large scale were also sensible. They highlighted the following weaknesses: (i) the execution of some of the components was not very satisfactory; (ii) advice and support to farmers at the local level did not work very well; (iii) ANCAR extension agents did not perform as expected as they did not collect the information necessary to evaluate the tests that were carried out; (iv) the program was put in place too slowly, in part because of the complicated administrative procedures to access funding for subprojects and the procurement rules. 2. CIDA raised the issue of rapid urbanization of the Niayes vegetable-growing zones at early stage of the project. Concerning FELTIPLEX and the Gare de Fret, they felt that support to these two facilities made sense. They also highlighted the problems of water availability and O&M in the Anambé Basin. It was suggested that a national plan for O&M of irrigation perimeters together with a procedures manual be prepared. In light of these weaknesses, they believe that the project s impact was good but could have been greater. French Development Agency- AfD 3. AfD expressed a positive opinion of the project, highlighting the approach taken by the Bank concerning the co-financing mechanism with project beneficiaries. Previously, things were done clé a main and beneficiaries did not contribute anything. AfD is now following the project model in its own irrigation project along the Senegal River, where it introduced subsidies based on categories of beneficiaries. They indicated that the support to vegetable growing makes sense and results are visible. Senegal is exporting more and the production has become more abundant, diversified, and accessible to Senegalese consumers. They lauded the introduction of new technologies (drip irrigation) and new varieties. Finally, they expressed their conviction that plenty of opportunities still exist for agricultural export promotion in Senegal. Spanish Agency for International Cooperation and Development - AECID 4. AECID financed the Food Security and Livestock Support Project (PASAEL). Comments focused on observed weaknesses of the project: a) Subprojects were overdesigned and expensive. For instance, pig shelters included zinc roofs and cement walls for pork, which may tempt beneficiaries to move in case of destruction of their own thatched roofs by strong winds. b) Selection criteria for beneficiaries were left to locals, who may have chosen them based on political criteria. 78

79 c) Outcomes of vaccination campaigns are not clear. Vaccines were distributed to private veterinarians but it is unclear how many animals were actually vaccinated. d) Little coordination occurred between local actors; e.g., the Livestock Directorate (DIREL), the regional development agency, and the PDMAS. Also, the collaboration between the Ministry of Agriculture and the Ministry of Livestock was insufficient. e) AECID s contribution to the project was not made sufficiently explicit and the agency was not given adequate recognition for its financing. It was interested in participating more actively in project supervision missions involving its technical staff in Dakar. 79

80 Annex 8. List of Supporting Documents 1. Appraisal document for PDMAS, February 1, Appraisal document for1 st Additional Financing for Food Security of Phase I of PDMAS, April 26, Appraisal document for 2 nd Additional Financing for Food Security and Livestock Support Project of PDMAS. 4. Implementation Status and Results Reports (ISRs): 15 ISRs from June 2006 to October Implementation Support Mission Aide Memoires (AM). 6. Restructuring Paper on a Proposed Project Restructuring of PDMAS of July 13, PDMAS, Rapport Annuel d Activités ISRA-BAME, Suivi des exploitations agricoles familiales (Casamance naturelle, Valle du Fleuve Sénégal, Exportateurs de Produits Horticoles), Aout ISRA-BAME, Impacts du financement de PDMAS sur les exploitations agricoles familiales, Rapport de synthèse, Décembre Analyses prévisionnelles pour la mise en opération des unités existantes du FELTIPLEX, Cabinet Access Finance Gestion, Juin Fall, A.A (2015). Impact Economique et financier du projet de r Programme d appui à l Autosuffisance Alimentaire en Riz du Sénégal du Programme de Développement des Marchés Agricoles du Sénégal (PDMAS 12. Fall, A.A. (2005). Evaluation économique et financière du programme des marchés agricoles au Sénégal. Juin. Rapport Consultation, PDMAS/Banque Mondiale. 23 pages +annexes. 13. Institut Sénégalais de Recherches Agricoles (2008). Plan stratégique de la recherche, Rapport Banque Mondiale, Juin 14. ISRA.BAME (2008). Interprofession au Sénégal, Ouvrage collectif/unival, Mars 15. Martin, F. (1991). Budget de Culture au Sénégal. Annexe 1 et 2 Vol 4 et 5, Etudes et Documents, Institut Sénégalais de Recherches Agricoles (ISRA) et Michigan State University. Pp annexes. 16. Ministère de l Agriculture et de l élevage, Statistiques Agricoles. (2008). Rapport général du recensement de l agriculture pluviale, Volume 4 du Recensement National de l Agriculture , Rapport du projet GCP /SEN?048 /NET/FAO. Septembre. Pp Ministère de l Agriculture et de l Hydraulique, Direction de l Analyse, de la Prévision et des Statistiques. (2006). Loi d orientation Agro-Sylvo-Pastorale, Loi no du 4 juin 2004 publié au journal officiel de la République du Sénégal du samedi 14 Août 2004, Pp 43. (2). 18. Ministère de l Agriculture et de l Hydraulique, Direction de l Analyse, de la Prévision et des Statistiques. (2006). Document de Projet Phase 2. Version Provisoire. Janvier. Pp

81 19. William Masters and John Sanders (1994) The Impact of Agricultural research in West and Central Africa: Concept and Evidence- SPAAR/USAID Workshop on Regionalization of Agricultural Research March, Banjul, The Gambia; 20. World Bank (2004) «Senegal Public Expenditure Review (PER)», PREM4, Africa region, Washington

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