FILE COPY. Agricultural Development Senegal. Appraisal of Sine Saloum. 1 RET lr RETUORN T WITHIN Project ONEWESC. Not for Public Use

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Report No. 661a-SE Appraisal of Sine Saloum Agricultural Development Senegal May 5, 1975 Westem Africa Regional Office Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Croup authoriation. The Bank Croup does not accept responsibility tor the accuracy or completeness of the report. 1 RET lr RETUORN T WITHIN Project ONEWESC FILE COPY

2 CURRENCY EQUIVALENTS US$ 1 CFAF 225 CFAF 1 = US$0.004 CFAF 1 million US$4,4144 WEIGHTS AND M'EASURES 1 hectare (ha) = 2.47 acres 1 kilogram (kg) = 2.2 pounds 1 metric ton (ton) = 2,204.6 pounds 1 square kilometer (km 2 ) = square miles ABBREVIATIONS BNDS = National Development Bank (Banque Nationale de Developpement du Sénégal) CCCE = Caisse Centrale de Cooperative Economique (France) CETAD = Training Center for Agricultural Development Techniques FED = European Development Fund FAC = Fonds d'aide et Cooperation (France) IRAT = Institut de Recherches Agronomiques Tropicales ONCAD = Office for Cooperative and Development Assistance (Office National de Cooperation et d'assistance pour le Developpement) PA = Agricultural Credit and Extension Program (Programme Agricole) SATEC = Societe d'aide Technique et de Cooperation (France) SODEFITEX = Cotton Development Agency (Societe pour le Developpement des Fibres Textiles) SODEVA = Agricultural Development Agency (Societe de Developpement et de Vulgarisation Agricole) USAID = United States Agency for International Development FISCAL YEAR Government - July l-june 30 SODEVA - April 1 - March 31

3 SENEGAL APPRAISAL OF SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS i - iv I. INTRODUCTION II. BACKGROUND... 1 A. General 1... B. Rural Sector... 2 C. Agricultural Development Strategy. 5 D. SODEVA and the Pilot Project.5 III. THE PROJECT A. Project Area 7... B. Project Description... 8 C. Detailed Features D. Organization and Management.. il IV. COST ESTIMATES AND FINANCIAL ARRANGEMENTS A. Cost Estimates..13 B. Proposed Financing C. Credit Arrangements D. Procurement E. Disbursement F. Accounts and Audit V. YIELDS AND OUTPUT, MARKETS, FARMERS' BENEFITS AND GOVERNMENT REVENUES.18 A. Yields and Output.18 B. Markets and Prices.19 C. Farmers' Benefits.20 D. Government Revenues.21 This report is based on the findings of a joint Bank Group/CCCE appraisal mission composed of Messrs. A. Cole, J. Brown, J. Pelissier, and J. Tillier (Bank), and J. Cantournet (CCCE) that visited Senegal in July 1974.

4 TABLE OF CONTENTS (Cont'd) VI. BENEFITS AND JUSTIFICATION Page No. VII. AGREEMENTS REACHED AND RECOMMENDATION ANNEXES 1. Progress of Agricultural Projects 2. ONCAD 3. Technical Aspects of Crop Production Table - Crop Yield Development 4. SODEVA Table 1 - Budget for Fiscal Year Table 2 - Sources of Finance Table 3 - Audited Balance Sheet Chart (9264), Project Organization 5. Pilot Project 6. Land Tenure and Social Structure 7. Technical Aspects of Animal Production Table 1 - Feed Supplement, Composition, and Requirements Table 2 - Feed Supplement Costs Table 3 - Development of Livestock Numbers and Milk Production Table 4 - Farm Benefits and Costs 8. Credit and Cooperatives in Senegal 9. Reporting Requirements Table 1 - Administrative Section Table 2 - Quarterly Project Disbursement Summary Table 3 - Quarterly Project Expenditure Summary Table 4 - Preliminary Work Program Table 5 - Implementation of Project Table 6 - Final Results 10. Draft Terms of Reference for a Cereal Marketing Study 11. Terms of Reference for Expatriate Staff 12. Project Costs Table 1 - Summary of Project Costs Table 2 - Construction Table 3 - Vehicles and Furniture Table 4 - Equipment Table 5 - Personnel Costs (Expatriates)

5 TABLE OF CONTENTS (Cont'd) Table 6 - Personnel Costs for Senegalese Staff Table 7 - Personnel Unit Costs Table 8 - Operating Costs Table 9 - Tree Nurseries, Livestock and Training Table 10 - Incremental Seasonal Inputs and Farm Implements 13. Disbursements Table 1 - Table 2 - Disbursements of the IDA Credit and the Bank and CCCE Loans Semi-Annual Disbursements of the IDA Credit and the Bank Loan 14. Crop Production Table 1 - Zone 1 Table 2 - Zone 2 Table 3 - Total Production and Average Yields 15. Markets and Prices Table 1 - Table 2 - Table 3 - Table 4 - Price and Marketing Structure for Maize Price and Marketing Structure for Millet and Sorghum Price and Marketing Structure for Groundnuts Price and Marketing Structure for Cotton 16. Farm Budgets Table 1 - Farm Plan - 20 ha Table 2 - Cash Flow - 20 ha Table 3 - Farm Plan - 13 ha Table 4 - Cash Flow - 13 ha Table 5 - Farm Plan - 7 ha Table 6 - Cash Flow - 7 ha Table 7 - Summary of Results 17. Government Cash Flow 18. Economic Rate of Return Table 1 - Economic Rate of Return Calculation Table 2 - Sensitivity Analysis CHART (9237) - Farm Input Purchases for the Groundnut Basin CHART (9238)- Production of Groundnuts and Millet in the Groundnut Basin CHART (9239)- Rainfall and Yields of Groundnuts and Millet in the Groundnut Basin MAP (11251) - Project Area

6

7 SENEGAL APPRAISAL OF SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT SUMMARY AND CONCLUSIONS Background i. The Government of Senegal has requested the Bank Group and the French Caisse Centrale de Cooperation Economique (CCCE) to help finance an agricultural development project in one of Senegal's most heavily populated regions. The objectives would be to increase and diversify agricultural production and thus raise the incomes of about 34,000 farm families. The project is based on improved farming practices tested successfully by a pilot project financed by CCCE and Government. It was identified by an RMWA mission in April 1973, and prepared by the Agricultural Development Authority for the central regions of Senegal (Societe de Developpement et de Vulgarisation Agricole - SODEVA), with funds provided under the second agricultural credit project financed by IDA. The project would further Government's national agiçicultural credit and extension program (Programme Agricole) that has formed the basis of its agricultural development strategy since the early 1960's. This program has been financed in part by two IDA credits approved in 1968 and The Project ii. The project area would be the region of Sine Saloum, in the south of Senegal's Groundnut Basin. It has a rural population of some 700,000, equivalent to about 20% of the country's total, and accounts for about 50% of Senegal t s groundnut and 30% of its cereal production. Per capita farm incomes including subsistence range from US$60 to US$150. iii. The proposed project would carry agricultural development in Sine Saloum beyond the plateau reached by Programme Agricole. Increases in output of groundnuts, cereals, and livestock would be achieved by training some 34,000 farmers in the improved farming practices tested by the pilot project. The proposed project would be carried out by SODEVA over the five-year period 1975/76 to 1979/80 and would involve: (a) strengthening SODEVA by providing it with buildings, equipment and staff; (b) constructing and renovating training facilities, and providing courses for extension workers; (c) demonstrating and disseminating improved husbandry techniques for cereals, groundnuts and cotton;

8 - ii - (d) introducing improved animal husbandry practices for draft oxen, beef cattle, and breeding cows; constructing and operating an animal feed plant; (e) supplying implements and seasonal inputs and providing medium-term and seasonal credit; (f) establishing a tree nursery and distributing trees for windbreaks and future fuel supplies and demonstrating soil conservation techniques; (g) monitoring and evaluating the results of project activities; and (h) hiring consultants to review grain marketing policies, procedures and facilities. iv. Project Execution. Government has designated SODEVA as the regional development agency for the Groundnut Basin, where it has been responsible for extension services under Programme Agricole and for carrying out the Sine Saloum Pilot Project. SODEVA is well managed and effective and would be responsible for implementing the proposed project. It would provide extension services and coordinate with other agencies in supplying inputs and credit to the farmers. Since extension service support for Programme Agricole would be phased out in Sine Saloum, the proposed project would occupy all of SODEVA's extension effort and thus would finance all of SODEVA's staff, operating, building, and equipment costs in Sine Saloum for the five-year project period. v. Seasonal Inputs, Farm Implements and Credit - Seasonal inputs and implements would be supplied by ONCAD, against orders from cooperatives. Since there have been delays in ordering and delivering farm inputs, SODEVA's field staff would prepare lists of goods required by farmers, to help the cooperatives and ONCAD in placing orders and planning deliveries. The National Development Bank (Banque Nationale de Developpement du Senegal - BNDS) would channel credit to project farmers using in part the roll-over fund created by the two IDA credits and funds borrowed on favorable terms from the Central Bank. Farmers would purchase seed, fertilizers and pesticide with short-term credit, and implements on medium-term credit. To cover the increased credit requirements of the project, the present limits imposed by BNDS on borrowing by cooperatives may need to be liftèd or arrangements made to increase the guarantee funds of cooperatives. This issue would be monitored carefully during project implementation. Cost Estimates and Financial Arrangements vi. The estimated cost of the project is US$30.9 million, including taxes and duties (US$2.9 million). The foreign exchange component would be about US$3.9 million or 13 percent of total cost. Physical contingencies and expected price increases would amount to 30 percent of base cost estimates, which are at mid-1975 prices.

9 - iii - vii. The Bank would make a loan of US$7.0 million for a term of 20 years, including a five-year grace period, and IDA a credit of US$7 million on standard terms. Additional financing of US$8.9 million would be provided by the CCCE. The proposed Bank loan and IDA credit would cover the foreign exchange costs (US$3.9 million) and US$10.1 million (42%) of the local costs for a total of 50% of project costs, net of taxes and duties (US$28 million). The CCE loan would be for a term of 20 years, including a five-year grace period, with interest at an annual rate of 3.5%. viii. Since SODEVA would not have its own revenues and would carry out the project on Government's behalf, the IDA credit and the Bank and CCCE loans (US$22.9 million) plus Government's contribution to SODEVA's costs of US$4.2 million would be passed on to SODEVA as grants. In addition, Government would provide SODEVA with CFAF 200 million (US$889,000), equivalent to about three months of its expenditures, as working capital for the project. ix. Incremental farm inputs would be financed jointly by Government and BNDS. Government's contribution would be US$2.1 million and would be in the form of subsidies for fertilizers and insecticides. BNDS would finance short- and medium-term credit totalling US$1.8 million. Procurement x. Vehicles, equipment and civil works expenditures would total about US$2.15 million. Contracts for buildings, equipment and vehicles for more than US$50,000, aggregating about US$400,000, would be awarded on the basis of international competitive bidding in accordance with the Bank Group's guidelines for procurement. Locally manufactured goods would be allowed a preferance of 15% or the level of applicable import duty, whichever is lover, when comparing domestic with foreign bids. Contracts for less than US$50,000, totalling US$1.6 million, including the bulk of civil works contracts which are small and widely scattered, would be awarded on the basis of competitive bidding advertised locally and in accordance with local procedures, which are satisfactory to the Bank Group. The remaining equipment purchases, in amounts less than US$10,000 and totalling US$150,000, would include office and house furnishings and equipment for agricultural demonstrations and would be purchased chiefly from local sources. Consultant services, totaling about US$200,000, would be obtained according to the Bank Group's normal procedures. The balance of projects costs would be for personnel and management, US$24.9 million, and for farm inputs, US$3.69 million, and would be unsuitable for competitive bidding. Disbursements xi. The proceeds of the IDA credit and the Bank loan would be disbursed to cover 60% of: (a) the costs for project buildings, vehicles, equipment and furnishings-- US$1.0 million;

10 - iv - (b) the salaries of staff employed under contract by SODEVA and allowances for all project staff--us$7.5 million; and (c) SODEVA's other project operating costs--us$2.0 million. The IDA credit and the Bank loan would be disbursed pari passu with the CCCE loan in the ratio 60:40 so that the credit and the two loans would together cover 100% of the costs of the above items. The balance of the IDA credit and the Bank loan would cover 100% of the foreign exchange costs of the consultants (US$160,000), and a contingency reserve of US$3.3 million. Benefits and Justification xii. The project's direct benefits would be the increased output of groundnuts, cereals, cotton, and livestock products that it would generate. At full development in PY5, the net value in 1974 terimis of this incremental production would be about US$8.5 million, representing also a contribution of about US$7.5 million to Senegal's net foreign exchange earnings. xiii. The economic rate of return of the project would be 25% over 10 years. Benefit decreases or cost increases of 25% would lower the rate of return to 12% and 13% respectively. The project is expected, therefore, to have a satisfactory rate of return. xiv. About 80% of beneficiaries would have pre-project per capita incomes between US$60 and US$90; under the project incomes would be increased by about 35%, bringing the average up to about US$115 per capita. xv. In addition to the directly quantifiable benefits derived from increased production, the project would help reduce the threat of soil erosion, and the resulting lonr term losses in productive capacity, which accompanies increasing population pressure. It would demonstrate efficient farming techniques that could be adopted by many of Senegal's farmers to increase their incomes and would create a nucleus of some 34,000 farmers who could be expected to expand the application of these techiiques on their own farms and serve as an example for other farmers. It would also help develop in SODEVA an experienced extension service capable of expanding the scope of the proposed project to include even more farmers, or of carrying out future development projects in Sine Saloum or other regions. Recommendation xvi. With the assurances and conditions set out in Chapter VII, the project is suitable for a Bank loan of US$7.0 million, and an IDA credit of US$7.0 million.

11 INTRODUCTION 1.01 The Goverument of Senegal has asked the Bank Group and Caisse Centrale de Cooperation Economique (CCCE) of France to help finance an agricultural project in Sine Saloum, one of Senegal's most heavily populated regions. The objectives would be to increase and diversify agricultural production and, thereby, raise the incomes of some 34,000 farm families The proposed project is based on a pilot scheme financed jointly by Government and CCCE since It was identified for possible Bank Group financing by a RMWA mission in April 1973, and prepared by a Governnent agency, the Agricultural Development Authority for the central regions of the country (Societe de Developpement et de Vulgarisation Agricole - SODEVA), under the Second Agricultural Credit Project financed by IDA This report is based on the findings of a Bank Group appraisal mission, comprising Messrs. A. Cole, J. Brown, J. Pelissier, and J. Tillier, that visited Senegal in July Mr. J. Cantournet appraised the project at the same time for CCCE The Bank Group has made one loan and six credits for agricultural development in Senegal: an agricultural credit program financed by Loan 584-SE (US$3.5 million) and Credit 140-SE (US$6.0 million) in 1969, and by Credit 404-SE (US$8.2 million) in 1973; rice development in Casamance by 252-SE (US$3.7 million) in 1971; resettlement in Eastern Senegal by 254-SE (US$1.3 million in 1971); rice development in the Senegal River delta by 350-SE (US$4.5 million) in 1973, and drought relief by 446-SE (US$3.0 million) in With the exception of the first agricultural credit project, and notvithstanding frequent delays in Government's project funding, the projects have been completed or are progressing satisfactorily (Annex 1). In the case of the first agricultural credit project, demand for farm implements developed more slowly than foreseen because of droughts and a sharp reduction in the producer price for groundnuts; since disbursements would have been delayed beyond a reasonable period, Loan 584-SE was cancelled in After demand for implements resumed, IDA provided a second tranche for Government's farm credit program in 1973 (Credit 404-SE); and disbursements of the latest IDA credit are now expected to be made faster than estimated at appraisal. The two agricultural credits also provided for technical assistance for the reorganization of ONCAD; this activity has been unsuccessful and Government and IDA are examining steps to remedy the situation. II. BACKGROUND A. General 2.01 Senegal is located mostly within the Sudano-lahelian zone on the coast of West Africa and has a land area of 196,700 km. Population is about 4.2 million and is growing annually at about 2.2%. Urban areas account for

12 - 2 - about 25% of total population, the largest being around the capital, Dakar (pop. 0.6 million). Per capita GNP in 1974 was estimated at US$310 (Bank Atlas method) while rural per capita incomes average about half that amount In 1972, the economy came under severe strain as a result of the worst series of droughts in this century. In 1973 there was another though less severe drought, and by the end of the year total reserves had reached an all time low of minus US$31 million; the real standard of living in rural areas had declined to early 1960 levels; and Government's financial situation had become very precarious. Faced with this situation, Government resorted to heavier external borrowing and assistance to avoid a slowdown in its investment program. During 1974, the economic situation improved markedly as a result of sharp price increases for groundnuts and rock phosphate. In addition, satisfactory rainfall in 1974 improved crop production, and Government took steps to improve its financial situation by reducing substantially the level of subsidies on food for consumers (para 2.12). B. Rural Sector 2.03 Despite relatively poor soils and erratic rainfall, the agricultural sector is central to Senegal's economy. It accounts for about 35% of GDP, up to 70% of Senegal's exports, and 70% of all employment. Moreover, as Senegal has few known economic alternatives, agriculture will continue to be the largest source of employment for the foreseeable future There are several important sectoral characteristics: small-scale farms account for 95% of all production; groundnuts account for almost 70% of agricultural exports; 60% of rural population is concentrated within about 100 miles of Dakar in the Groundnut Basin; and large areas in the north and east of the country are suitable only for livestock production under extensive grazing. There are thus significant variations in the distribution of population, but with smaller differences in cropping patterns Government's efforts to develop agriculture have been directed to (a) increasing groundnut and millet production, especially in the Groundnut Basin, and (b) diversifying production by promoting rice and cotton in Casamance and Eastern Senegal, and developing the irrigation potential of the Senegal river. Programme Agricole 2.06 A central feature of Government's rural development strategy has been "Programme Agricole" (PA), which has been supported by Credits 140 SE and 404 S}-. Starting in the early 1960s, it aimed at increasing the production of millet and groundnuts by making animal- drawn implements, fertilizers and improved seeds available to farmers on credit, providing extension services to promote the correct use of these inputs, and by developing cooperatives to

13 facilitate the distribution of inputs and crop marketing. The main organizations involved in PA are the National Office of Cooperatives and Development Assistance (ONCAD, Annex 2) and the cooperatives, which ONCAD supervises and assists In addition to supporting the cooperatives, ONCAD procures and distributes farm inputs, administers the associated subsidies, and maintains and distributes the stock of groundnut seeds. It is also responsible for marketing groundnuts, domestic cereals and imported rice. Because of its role in groundnut marketing, ONCAD is the agency primarily responsible for the recovery of credit under PA. Finance for this credit is provided by National Development Bank of Senegal (BNDS), which also provides short-term financing of the groundnut purchases and input inventories of ONCAD, short- and medium-term credits to cooperatives and loans to individual farmers. The amounts lent to cooperatives are governed by the past volume of groundnuts marketed Cooperatives (Annex 8) form the basic structure in Government's plan for organizing the rural sector. Senegal has about 2,200 cooperatives, some 500 of which are in Sine Saloum; the average cooperative has about 120 members. In exchange for a membership fee of CFAF 1,000, the member is entitled to credit for fertilizer, insecticides and agricultural implements distributed under PA. In addition to serving as a channel for collectively guaranteed credit, the cooperatives serve as the focal point for the distribution of seeds and for the marketing of the output of members and non-members alike. In order to enable the cooperatives to be more self-sufficient, ONCAD plans to reorganize the cooperatives into basic units or unions that will market at least 1,500 tons of groundnuts per year, the minimum it considers necessary to pay for the full-time cooperative manager PA's goals were ambitious and its targets included rapid increases in cultivated areas as well as yield increases. During the early 1960's groundnut and millet production reached record levels, at least in part due to the promotion of fertilizers and animal traction under PA. In the last half of the 1960's, however, yields and production of these crops declined sharply with the onset of the droughts. In the 1970's production has fluctuated with rainfall (Charts 9238 and 9239), but even in good rainfall years output has not exceeded the record levels of the mid-1960's. This leveling off, together with the fact that some 80% of the farmers in the Groundnut Basin now participate in PA, suggests that the Program may have reached the limits of its development potential. Regional Development Agencies 2.10 Semi-autonomous development agencies, organized on either regional or product lines and reporting to the Ministry of Rural Development, have begun to supplant the Ministry in the provision of extension services to farmers (although the latter still maintains direct responsibility for extension in part of Casamance and for small scale vegetable projects, generally near Dakar). SODEVA (para 2.17) has been given overall responsibility for extension in the Groundnut Basin and has been primarily concerned with the introduction

14 - 4 - of improved farming techniques under Programme Agricole in which it has been quite successful. SAED is responsible for rice development in the Senegal River Delta, and may become the Regional Development Agency for the whole valley, while SODEFITEX is responsible for cotton production, mainly in Eastern Senegal. In addition to providing technical extension services, these two agencies are responsible for distributing inputs procured by ONCAD to the farmers and for the commercialization and processing of farm output. A fourth agency, the Societe des Terres Neuves (STN), is responsible for settlement projects, primarily in Eastern Senegal. The activities of these agencies have shown that new techniques can be effectively introduced when PA is supported by projects comprising close extension supervision. Financing Agricultural Development 2.11 A key problem in development activities lies in assuring adequate financing. The regional development agencies have no revenues to finance their extension activities and must rely on Government support, either directly from the budget or from external donors. ONCAD is theoretically self-financing, with its marketing activities paid for out of the differential between the price paid to producers for groundnuts and that received from the oil mills and the cost of input distribution included in the price paid by farmers for the inputs. However, the lack of appropriate procedures to provide funds to cover the costs of subsidies on farm inputs and consumer purchases of cereals has contributed to ONCAD's current severe financial difficulties. Subsidies 2.12 Until recently, subsidies for imported foodstuffs have discouraged local production and caused serious financial problems. Recognizing the harmful effects of these policies, Government in November 1974 eliminated the subsidy for imported rice, which had reached a value of about CFAF 7.5 billion per year, and reduced the subsidies on sugar and vegetable oil. At the same time, producer prices for groundnuts were raised by 40% and for cotton by 37% to reflect more closely their world market value. Fertilizers are still subsidized, however, while ONCAD has been selling farm implements below cost. In addition to contributing to the financial problems of ONCAD, this policy encourages the uneconomic use of inputs In spite of rising costs for farm implements, the prices paid by the farmer have been frozen at 1973 levels, resulting in ONCAD losses of about CFAF 150 million in Given the recent increases in producer prices, the farmer should be able to pay full cost for the implements. Government has raised the prices charged to farmers by 15% for the 1975 campaign and during negotiations an assurance was obtained that Government would continue to follow a policy of progressive adoption of prices reflecting the full cost of implements Credit 404-SE provides for annual consultations between IDA and Government on the level of fertilizer subsidies. The goal of these consultations was to be the progressive reduction in the level of the subsidy. However,

15 - 5 - the maintenance of a constant price to farmers in light of higher world market prices has led to an increase in the subsidy which covered about 80% of costs and amounted, in total, to about CFAF 2 billion in The first of the consultations was held during the negotiations for the proposed project and Government informed the Bank Group that the price paid by farmers was raised from CFAF 12/kg to CFAF 16/kg for the 1975 campaign (increases in cost, however, kept the subsidy at about the same percentage). An assurance was obtained that Government would follow a policy of progressive adoption of prices reflecting the full cost of fertilizers and that consultations would be held between the Government and the Bank Group in October/November of each year to discuss prices to be set for the following campaign. C. Agricultural Development Strategy 2.15 Because of the heavy concentration of population in the Groundnut Basin, the improvement of productivity for groundnuts and cereals in that region is the only practical short-term means for improving the livelihood of most of the rural population. However, the agricultural potential of the Groundnut Basin is severely limited by its unreliable rainfall, and Government's plans to develop irrigation in the Senegal River Region, and agriculture in the higher rainfall areas of Eastern Senegal and Casamance are sound and would give the country some measure of protection against the most severe effects of droughts In recognition of the success of projects to diversify and intensify production in specific geographical areas, Government has designated SODEVA as the regional development agency with primary responsibility for planning and implementing agricultural development projects in the Groundnut Basin, and intends to establish similar development agencies for each of the country's regions. This strategy is sound because PA is not designed to provide the intensive supervision required to move farmers to new levels of productivity, and because these semi-autonomous development agencies have managerial and administrative advantages over Government departments. These agencies are not revenue earning, however, and Government has so far relied heavily on external assistance to cover their costs. Exclusive reliance on external finance would be imprudent. Government should therefore plan the budgetary measures (including the review of subsidies) necessary to assure adequate financial support for these agencies. D. SODEVA and the Pilot Project 2.17 SODEVA (Annex 4) was established in 1968 by Government and Societe d'aide Technique et de Cooperation (SATEC) of France as an agricultural development agency to take over and expand the activities of SATEC in the regions of Sine Saloum, Thies and Diourbel that comprise most of Senegal's Groundnut Basin (Map). SODEVA operates as an arm of Government, has no revenue earning

16 - 6 - activities, and is financed in part from the budget of the Ministry of Rural Development, but mostly through external aid agreements (Annex 4, Table 1). Its staff includes civil servants seconded from and paid by the Ministry of Rural Development, personnel employed under direct contract, and expatriate staff provided by SATEC. SODEVA is well-managed and effective. In addition to providing basic extension services under Programme Agricole to all farmers in the Groundnut Basin, an important activity since 1971 has been a pilot project in Southern Sine Saloum (para 2.18). This project, financed in part by CCCE, is the basis for the project proposed in this report and for a similar project to the north of Sine Saloum (Thies and Diourbel) for which Government has received assistance from USAID The pilot project (Annex 5) was designed to test the applicability of research results that have shown that further improvements above the levels reachecl under Programme Agricole could be achieved with more intensive farming practices. The new technology involves (a) stump and root removal to complete land clearing; (b) the use of oxen for plowing; (c) comprehensive use of fertilizers for cereals and other crops; (d) the introduction of sorghum, maize, cotton, and livestock on a larger scale in the farming system; and (e) the correct timing for farming operations. The introduction of this technology required the concentration of extension services on a relatively small number of farmers for a limited period of time Progress was slower than expected because many farmers were reluctant to or did not understand the need to clear fields of stumps and roots, a prerequisite for effective plowing. However, the rate of clearing increased when uprooting was made a precondition for receiving free phosphate and the full support of SODEVA's extension staff. Late delivery of farm inputs by ONCAD also proved a problem and SODEVA's field staff had to intervene to assure supplies. The first meaningful results (based on a partial sample of some 1,700 farms) available are for the 1973/74 crop year and show the following yields: Groundnut Millet Sorghum Maize Under Pilot Project Recommendations 1,260 1, ,960 Under Normal Recommendations of P.A Although limited, these results indicate that the improved farming techniques recommended and SODEVA's extension methods are sound for application in a larger project.

17 - 7 - III. THE PROJECT A. Project Area 3.01 The project area covers the administrative region of Sine Saloum that comprises the southern part of the Groundnut Basin (Map). The region has six districts, with a commercial center at Kaolack, the largest town (pop. 100,000) The climate is characterized by a dry season of eight to nine months and a rainy season of some three to four months, with generally 40 to 60 days of rain. To the north, the rainfall averages mm and to the south 800-1,000 mm. Average monthly temperatures range between 25 and 30 C Three soil types prevail. In the north, the soils are sandy, permeable, and easy to work when wet; they are well suited to groundnut and millet and are heavily cropped. In the northwest they have a high clay content and are difficult to work and are best suited to sorghum, and where rainfall is sufficient, to maize and cotton. In the south and east, the soils have a variable clay content and are reasonably easy to work when moist; they are suitable for groundnuts, millet, sorghum, maize and cotton. The traditional rotation consists of one or two years of groundnuts, followed by millet; after three or more years of cropping, the land reverts to a bush fallow for one to several years. But fallow is being drastically reduced, thus increasing the danger of soil erosion, in the heavily populated northwestern section of the project area The area's agriculture accounts for 40-60% of Senegal's groundnuts and 33% of its millet production. Livestock consist of about 470,000 cattle, 460,000 sheep and goats, and 8,000 pigs. The cattle are mostly N'dama, a trypano-tolerant breed, in the south, and zebus in the north The rural infrastructure consists of a road network comprising some 450 km of main roads and about 1,500 km of secondary roads that are passable throughout the year. The area is also served by a port on the Saloum River at Kaolack and by the Dakar-Bamako railroad. Village water supplies generally depend on wells, and Governnent has initiated a program for well improvement supported by the European Development Fund (FED) Total population of the Sine Saloum Region is about , of whom about 90% live in rural areas. Population density averages 34/km and ranges from about 9/km 2 in the east to 85/km 2 in the northwest, and the area's 70,000 farms range in size between 6 ha and 20 ha, and average about 11 ha. Families vary from individual households with about 6 members to compounds with several households totaling 20 to 30 members. Traditionally, agricultural land belonged to the family and cultivation rights were allocated to individual farmers by family chiefs. This system is changing and, under a law passed in 1972, all agricultural land is in the national domain, with individual rights

18 -8- allocated by rural community leaders and reinforced by law (Annex 6). Although no serious land tenure problems are foreseen for the project, SODEVA's study group would be asked to monitor the transition from one system of allocation to the other during project implementation. B. Project Description 3.07 The proposed project would carry agricultural development in Sine Saloum beyond the plateau reached by Programme Agricole (para 2.09). Increases in output of groundnuts, cereals, and livestock would be achieved by training some 34,000 farmers in the improved farming practices tested by the pilot project i(para 2.18). The proposed project would be carried out by SODEVA over the five-year period 1975/76 to 1979/80 and would involve: (a) strengthening SODEVA by providing equipment and staff; it with buildings, (b) constructing and renovating training facilities, and providing courses for extension workers; (c) demonstrating and disseminating improved husbandry techniques for cereals, groundnuts and cotton; (d) introducing improved animal husbandry practices for draft oxen, beef cattle, and breeding cows; constructing and operating an animal feed plant; (e) supplying implements and seasonal inputs and providing medium-term and seasonal credit; (f) establishing a tree nursery and distributing trees for windbreaks and future fuel supplies and demonstrating soil conservation techniques; (g) monitoring and evaluating the results of project activities; and (h) hiring consultants to review grain marketing policies, procedures and facilities. C. Detailed Features 3.08 Strengthening SODEVA - The project would finance the construction of an office block, garage, and central store for the project's headquarters in Kaolack. The project would also finance construction and equipment for

19 - 9 - five district offices, 28 subdistrict offices and stores, four senior and 34 junior staff housing units, and one central and three field staff training and meeting facilities. Four existing training centers would be renovated and SODEVA would be equipped with 25 pickup and heavier trucks Since PA is now firmly established in Sine Saloum (para 2.09), SODEVA's extension efforts in its support would be phased out. The proposed project would therefore occupy all of SODEVA's farm level staff for Sine Saloum which, including the pilot project, currently comprises some 370 field extension workers. By project year (PY)3, this level would be increased to 500, giving an overall ratio of one field worker to about 150 farms for the project area. During the same period, middle level technical staff, including animal husbandry assistants, would be increased from 115 to about 170, and senior staff would remain at about Training - The 55 new middle level staff would be recruited from the Ministry of Rural Development's training schools, and about 130 literate farmers would be selected as new field extension workers. All new middle level and field staff would undergo six months of further training for the project at the Training Center for Agricultural Development Techniques (OETAD) at Thies. CETAD, which is operated by SODEVA with a budget from the Ministry of Rural Development, is well run and its graduates are proving to be effective field workers. Classes would be followed by practical sessions, including a training assignment with an experienced field officer Improved Farm Practices - Under the project, SODEVA's extension workers would encourage farmers to clear their fields, plow their land every three to four years, and begin the basic crop rotation with a cereal crop, preferably maize or sorghum. Seed varieties and fertilizer rates would be those recommended by Senegal's research organizations (Annex 3). Fertilizer economics are being studied by a SODEVA team financed under Credit 404-SE, and assurances were obtained that SODEVA would consult the Bank Group on the study findings with a view to agreement on recommended changes for the project. Project staff and cooperating research institutes would also: (a) test new varieties of groundnuts, sorghum and maize; (b) investigate the possibility of plowing during the dry season and assess prospects for minimum tillage; and (c) develop soil conservation practices Farmers satisfactorily using the crop management practices and basic inputs provided under PA (Annex 3), owning and training a pair of draft oxen, and clearing at least 1 ha of all roots and stumps would receive the concentrated support of SODEVA's field staff who would make farm visits about twice a month and would hold regular group meetings. By PY 5 the project's staff would supervise closely about half of farmers in the project area and production practices would be intensified on about 1/5 of the cultivated land Improved Animal Husbandry Practices (Annex 7) - To develop oxtraction, SODEVA has promoted stall feeding of crop residues, and many farmers have expanded into beef fattening as an extra source of income. By PY 5,

20 farmers would be helped to fatten 16,000 cattle annually. Mature oxen, three years and over, would be kept in stalls for 150 to 180 days and would gain about 75 kg. Also, SODEVA would cooperate with the Ministry of Rural Development's Veterinary Department to reduce calf mortality and raise the calving rate by improved feeding and health care. Since the development of stall feeding would expand the demand for water, the project would finance 22 sets of ox-drawn water lifting equipment for demonstrations in the project area. To meet the requirements for feed supplements, the project would also finance the construction of a small animal feed mixing plant at Kaolack to be owned and operated by SODEVA. The mill would produce about 6 tons/day of feed concentrates and minerals, which SODEVA would distribute and sell at cost to project farmers Seasonal Inputs and Implements - Seasonal inputs for cereals and groundnuts and all implements would be supplied by ONCAD, on the basis of orders from cooperatives. Tle Cotton Development Agency (Societe pour le Developpenent des Fibres Textiles - SODEFITEX, para 2.10) would supply farmers with seasonal inputs for cotton. Since deliveries from ONCAD have often been late, SODEVA's field staff would prepare lists of goods required by farmers. These lists would provide a basis for cooperatives and ONCAD to make orders and plan deliveries, and would be part of a joint effort by the two agencies (para 3.23). Since maintenance and repairs of farm equipment have proved difficult, SODEVA would purchase 16 welding sets to start a training program for blacksmiths Soil Conservation and Tree Planting Program - As a result of stump removal and plowing, the soil would lose its natural cover of trees and bushes, and the danger of erosion would be increased. To minimize this danger, and to protect against erosion which would arise from the reduction of fallow due to population pressures in the northwestern part of the project area, SODEVA would introduce a program of soil conservation, involving contour plowing and strip cropping, and promote the planting of trees for windbreaks and fuel through the free distribution of planting materials Project Monitoring and Evaluation - Initially, much of the record keeping would be done by extension staff, but farmers would be taught to keep their own records, and SODEVA's main objective would be to evaluate results from a 1% sample of project farmers. An important task of the evaluation unit would be to accurately sample crop yields in the project area and to establish a base line for the situation without the project. An assurance was obtained that SODEVA would provide the Bank Group with a detailed evaluation report on the project's progress within six months of the end of each cropping season. Requirements for this report and for semi-annual progress reports are detailed in Annex 9. SODEVA would employ consultants for a total of about 9 man-months spread over the five years of the project, to help design the evaluation system and to analyse the data. An assurance vas obt :ne that the consultants' experience, qualifications and terms of reference would be acceptable to the Bank Group.

21 - il Cereal Marketing Study - The project would finance a study by consultants to examine marketing arrangements for domestic cereals and to recommend any needed changes. Since subsidies for imported rice were abolished in November 1974, the prospects for increased sales of locally grown cereals have improved and it will be necessary to examine marketing, storage, and processing facilities and determine their capacity to handle an increased domestic crop. Government's present position is that ONCAD should have a monopoly on marketing domestic cereals. However, in order to ensure adequate marketing facilities, Goverument agreed during negotiations to take all necessary steps to utilize as and when needed all available marketing channels. Governaent al8o agreed to discuss vith the Bank Group the implications of the stud; for the marketing system as the findings become available. The consultant team would be employed by the Ministry of Planning and vould comprise a marketing specialist, a grain storage/processing specialist, and an economist. The study would require a total of 9 man-months, and an assurance vas obtained that the qualifications, experience, and terms of reference for the consultants would be acceptable to the Bank Group. Draft terms of reference are in Annex 10. D. Organization and Management 3.18 Project Management (Annex 4, chart) - SODEVA's regional director for Sine Saloum would be the Project Manager. A technical director in charge of all field operations would be deputy project manager and would have an organizational specialist as his principal assistant. There vould be three technical divisions reporting directly to the technical director: crop husbandry, animal husbandry and training; credit would be the responsibility of the administrative officer. The technical divisions would be assisted by specialists in farm machinery, seed production and forestry. A civil engineer vould supervise the project's building program, and an internal auditor would inspect project accounts Field Organization - The project area would be divided into six districts. Each district vould have an operational chief, reporting to the technical director, supported by representatives of the technical divisions. The districts would be broken down into a total of 17 sub-districts and 78 rural community offices. The farm level extension officers would be in groups of six and would report to an extension agent in the rural community office Staffing - The project manager and 190 of the senior and middle level technical staff (para 3.09), including counterparts for expatriates, would be seconded to SODEVA by Government and would be mostly from the Ministry of Rural Development; of these about 140 are already in post or under recruitment. SODEVA would employ about 30 senior and middle level staff on contract for accounts, stores, and the credit division.

22 Senegalization - Since 1968, SODEVA has made considerable progress in recruiting and training Senegalese staff, and has recently appointed Senegalese staff to all senior district positions in the project area. However, six senior positions at the regional level remain to be filled. At present, five of these positions are occupied by expatriates provided under an agreement with SATEC, which would be expected to continue to supply the expatriates required for the project. All expatriate staff would train counterparts as part of their assignment. Project costs make provisions for the appointment of the expatriate technical director for three years, with one additional year as an advisor to a Senegalese technical director. The organizational specialist, to assist in planning and evaluation, would be appointed for three years, and the administrative officer for two years. The expatriate chiefs of the crop husbandry, animal husbandry and training divisions would be appointed for the first two years, with full executive responsibi:lities for their divisions, and would remain as advisors to their Senegalese replacements for one additional year. While it is expected that Senegalization of all project positions would be completed by PY 4, there is already competition for good managers in the public and private sectors and a shortage of qualified managers with agricultural experience and it may take longer than 4 years to complete the Senegalization of all project positions. SODEVA's managerial performance would be monitored closely during project execution to ensure that its record of good administration would continue. Terms cf reference for the expatriate staff are in Annex During negotiations, assurances were obtained that Government vould: (a) provide SODEVA with suitable qualified senior and mi-ddle level staff and (b) allow SODEVA the opportunity to refuse and return Government staff it considers unsuitable for the project. Assurances were also obtained that SODEVA's appointments to the positions of project manager, technical director, administrative officer and his deputy for credit, organizational specialist and the chiefs of the crop, animal husbandry and training divisions during PY 1 and PY 5 would be of persons with qualifications, experience, terms of reference, and conditions of service acceptable to the Bank Group Coordination with Other Agencies - SODEVA would work closely with cooperatives in the project area, with the Ministry of Rural Development's Agricultural and Veterinary Departments and their associated agricultural and veterinary research organizations on crop and animal husbandry investigations, and with SODEFITEX for cotton production. SODEVA has already established effective working relations with these departments and agencies and no formal agreements would be required. With regard to input supplies, Government has agreed to cause ONCAD to appoint a senior manager to be responsible for deliveries to the project area.

23 IV. COST ESTIMATES AND FINANCIAL ARRANGEMENTS A. Cost Estimates 4.01 Project cost estimates are based on mid-1975 prices. A physical contingency of 10% is allowed on all costs except personnel and consultants. A total price contingency of 26% is included to cover expected price increases on local and foreign cost items, including physical contingencies. Costs include direct taxes and import duties amounting to US$2.9 million or 9% of total costs. The total expected cost of the project is US$30.9 million with a foreign exchange component of US$3.9 million or 13%. The following table summarizes project costs; further details are in Annex 12.

24 -14- SUNMARY OF PROJECT COSTS Local Foreign Total Local Foreign Total Foreign (CFAF Million) (US$ '000) A. SODEVA I. Fixed Investment Buildings and Infrastructure Vehicles Equipment and Furniture II. Personnel Costs Subtotal , Epatriate , Contracted Senegalese Staff 1, , ,979-7,979 - Civil Servants 1, , Subtotal 3, , , ,980 j III. Operating Cost Administration , , Maintenance Tree Nurseries, Training & Demonstrations Trials and Evaluation B. CONSULTANTS Subtotal , , TOTAL SODEVA 4, , ,059 1,868 20,927 9 Cereal Marketing and Storage Study Project Evaluation Subtotal C. INCRENETAL FARM INPUTS Rock Phosphate ,044-1,044 - Fertilizers Inplements Seeds and Insecticides , Subtotal , , Base Cost Estimate 4, , ,901 2,923 23, Physical Contingencies Expected Price Increases 1, , , , TOTAL PROJECT COST 6, , ,039 3,910 30,949 13

25 B. Proposed Financing 4.02 The project financing plan, which was discussed during appraisal with Government and CCCE, is summarized below: US$ Million IDA/ Government IBRD CCCE BNDS Total A. SODEVA I. Fixed Investment II. Personnel Costs Civil servants' salaries Other personnel costs II. Operating Costs Total SODEVA B. Consultants C. Incremental Farm Inputs Rock phosphate Fertilizers Implements Seeds/insecticides D. Contingencies Total Percentage The Bank would make a loan of US$7.0 million for a term of 20 years, including a five-year grace period, and IDA a credit of US$7 million on standard terms. Additional financing of US$8.,9 million would be provided by the CCCE. The proposed Bank loan and IDA credit would cover the foreign exchange costs (US$3.9 million) and US$10.1 million (42%) of the local costs for a total of 50% of project costs, net of taxes and duties (US$28 million). The CCCE loan would be for a term of 20 years, including a five-year grace period, with interest at an annual rate of 3.5%. A condition of effectiveness of the Bank loan and IDA credit would be that the CCCE loan had been declared effective.

26 Since SODEVA would not have its own revenues and vould carry out the project on Government's behalf, the Bank and CCCE loans and the IDA credit (US$22.9 million) plus Government's contribution to SODEVA's costs of US$4.2 million would be passed on as grants. In addition, Government would provide SODEVA with an interest-free loan of CFAF 200 million (US$889,000); equivalent to about three months of its expenditures, as working capital for the project. Conditions of effectiveness would be that Government and SODEVA had entered into an agreement satisfactory to the Bank Group under which SODEVA is charged with the responsibility of carrying out the project and that SODEVA had received the loan of CFAF 200 million Over recent years SODEVA has been successful in obtaining foreign assistance and, as a consequence, Government financing for its budget declined from 43% to 30% between 1973 and 1974 (Annex 4). However, most of the external assistance has been for relatively short periods, two to four years, and its continuation is uncertain. If SODEVA is to extend its activities beyond the five-year period of the proposed project -- in order to increase output from project farms beyond the levels achieved by this project and to assist additional farmers -- it would need an assured source of financing. Assuming its activities to continue at the level reached by the end of the project, the amounts required would be on the order of CFAF 850 million (US$3.8 million) in 1975 terms or CFAF 1.2 billion (US$5.3 million) in 1980 prices. An assurance was obtained from Government that by PY3 it would review with the Bank Group, in the light of plans for SODEVA's future operations, the finance that would be required for this purpose and the means of providing it, including regular Government budgetary support as may be necessary (para 2.17) Incremental farm inputs would be financed as follows: Governnent would contribute US$2.1 million in the form of subsidies for fertilizers and insecticides; and BNDS would finance short- and medium-term credit totalling US$1.8 million. C. Credit Arrangements 4.07 Credit to farmers would be channelled through cooperatives. The amount of credit available to each cooperative is limited by its average level of marketed groundnuts. As the number of project participants increases, their incremental credit requirements may, in the short run, exceed the ceilings set for individual cooperatives. An assurance was obtained that, should BNDS's limits on cooperative indebtedness prevent BNDS from providing financial assistance to any cooperative under the Project, the Government would review these conditions with the Bank Group and make arrangements to ensure adequate financing of the cooperative concerned BNDS would finance the credit to farmers, using in part the rollover fund created by Credits 140-SE and 404-SE and funds borrowed on favorable terms from the Central Bank of the West African Monetary Union (currently

27 %). Medium-term loans (five years), and short-term loans vould finance all costs, respectively, of implements for animal traction and of seasonal inputs. Under the terms of Credit 404-SE, the loans would bear interest at 2.0% above the Central Bank rate. The effective interest rate for seasonal loans would be on the order of 12% to 16% since the nominal rate is charged on an annual basis while the loans must actually be repaid within six to nine months. An assurance was obtained from Government that it would cause BNDS to provide sufficient funds and to lend them to project farmers on these terms and conditions. D. Procurement 4.09 Vehicles, equipment and civil works expenditures vould total about US$2.15 million. Contracts for buildings, equipment and vehicles for more than US$50,000, aggregating about US$400,000, would be awarded on the basis of international competitive bidding in accordance with the Bank Group's guidelines for procurement. Locally manufactured goods vould be allowed a preference of 15% or the level of applicable import duty, whichever is lover, when comparing domestic with foreign bids. Contracts for less than US$50,000, totalling US$1.6 million, including the bulk of civil works contracts which are small and widely scattered, would be awarded on the basis of competitive bidding advertised locally and in accordance with local procedures, which are satisfactory to the Bank Group. The remaining equipment purchases, in amounts less than US$10,000 and totalling US$150,000, would include office and house furnishings and equipment for agricultural demonstrations and vould be purchased chiefly from local sources. Consultant services, totalling about US$200,000, would be obtained according to the Bank Group's normal procedures. The balance of projects costs would be for personnel and management, US$24.9 million, and for farm inputs, US$3.69 million, and would be unsuîtable for competitive bidding. E. Disbursements 4.10 The proceeds of the IDA credit and the Bank loan would be disbursed to cover 60% of: (a) the costs for project buildings, vehicles, equipment and furnishings--us$1.0 million; (b) the salaries of project staff employed under contract by SODEVA and allowances for all project staff--us$7.5 million; and (c) SODEVA's other project operating costs--us$2.0 million.

28 The IDA credit and the Bank loan would be disbursed pari passu with the CCCE loan in the ratio 60:40 so that the credit and the two loans would together cover 100% of the costs of the above items. The balance of the!da credit and the Bank loan would cover 100% of the foreign eychange costs of the consultants (US$160,000), and a contingency reserve of US$3.3 million. Disbursements would be against contracts and certified statements of expenditures prepared by SODEVA and would include a charge for SODEVA's Dakar headquarters calculated as 10% of all project personnel and other operating costs. It would be a condition of disbursement against this item that SODEVA's annual headquarters expenditures and financing arrangements would be acceptable to the Bank Group, and an assurance was obtained that SODEVA would submit its headquarters budget to the B`ank Group, at least three months prior to the beginning of the financial year. Any funds remaining undisbursed upon completion of the project would be cancelled. Government's contribution to project costs would be in the form of civil servants' salaries paid directly from the central budget, and subsidies for farm inputs. Details of disbursements are in Annex 13. F. Accounts and Audit 4.11 SODEVA would keep records consistent with sound accounting practices and adequate to reflect is operations and financial conditions and would employ independent auditors. Assurances were obtained that: (a) SODEVA would appoint auditors with qualifications and experience acceptable to the Bank Group; (b) SODEVA would maintain separate accounts for the project; and (c) copies of SODEVA's accounts and the auditors' reports thereon would be submitted to the Bank Group within six months of the end of the financial year; the auditor's report would be of such scope and in such detail as the Bank Group may reasonably have requested. V. YIELDS AND OUTPUT, MARKETS, FARMERS' BENEFITS AND GOVERNMENT REVENUES A. Yields and Output 5.01 Cos. Farmers in the two project zones (para 3.02) are expected to develop their crop yields and production as follows:

29 Crop Yield (kg/ha) Production ('000 tons) South North Annual Incremental PYO PY5 PYO PY5 PY5 Groundnuts 900 1, , Cotton 800 1, Maize - 2, S*rghum 850 1, ,300 9 Millet 900 1, It is expected that, without the project, yields would not exceed those for PYO (para 2.09). Estimates of incremental production are based, therefore, on yield improvements between PYO and PY5, and on the phasing outlined in Annex 14. Yield and output estimates also allow for a drought every fourth year Livestock - Under the project, growth rates for stall fattened cattle would be about 500 grams/day, compared to an average of about 150 grams/day under traditional grazing methods. Calves weaned and reared on the project would have a mortality rate of about 20% compared to about 35% outside the project, and breeding coews would produce about 350 liters of milk per annum, some 200 liters more than the present average for the project area, and their calving rate would increase from 60% to 80%. The project's annual incremental output by PY 5 would be 1,500 tons of beef, 6,000 calves, and 1,600 tons of milk (Annex 7). B. Markets and Prices 5.03 Cereals - Most of the 400,000 to 500,000 tons of domestically produced cereals are for subsistence consumption. Urban requirements are met largely from rice and wheat imports of between 300,000 and 400,000 tons annually. Local production has been encouraged by the withdrawal of the consumer subsidy for imported cereals (para 2.12), which has greatly improved the prospects for marketing surpluses. The official farmgate price for millet and sorghum is CFAF 30/kg and for maize CFAF 35/kg. These prices are about CFAF 5/kg below their current economîc value based on import substitution. However, project financial calculations have been based conservatively on 1980 farmgate prices of CFAF 28/kg for millet and sorghum and CFAF 30/kg for maize. Further details on the cereal market are in Annex Groundnuts - ONCAD has a marketing monopoly for groundnuts, which it buys through cooperatives and sells to domestic processors. After processing, all the groundnut cake and 80% of the groundnut oil is exported. Over the last 10 years, the crop has fluctuated between about 500,000 and 1 million tons. Marketing arrangements are satisfactory, and world market prospects are fair, despite expected declines in prices over the next three years, from about US$580/ton to about US$300/ton (in 1974 terms). The current farmgate

30 price is CFAF 41.5/kg. At this level, and after taking account of production costs and subsidies, the amount retained by the stabilization Fund represents about 1/3 of the farmers net income from groundnuts. However, in line with the sharp decline expected in world market prices, it is expected that farmgate prices will have to decline in real terms to about CFAF 27/kg by 1980; this price would continue to provide adequate incentives to project farmers and has been used for the project's financial projections (Annex 15, Table 3) Cotton - SODEFITEX has a marketing monopoly for cotton and all project output would have a ready local or export market. During the boom in commodity prîces, world market prices for cotton fiber reached USi83.6/lb and seed about US$160/ton. In response to the improved prices, Government raised the official farmgate price for seed cotton from CFAF 30/kg in 1973 to CFAF 46.5/kg in Even so, the effective tax rate on farmers is about 45%. However, by 1977, world prices for fiber and seed are expected to fall in 1974 terms to US,52/lb and US$140/ton respectively. As a result, it is expected that Government revenues will be allowed to fall in an effort to maintain the producer price in real terms at its current level, and to keep the taxation rates on cotton and groundnuts at similar levels. Project financial projections have been based, therefore, on a farmgate price continuing at CFAF 46.5/kg Livestock Products - Meat consumption in Senegal is about 76,000 tons, of which some 20% is made up of imported cattle, sheep, and goats from Mauritania. Prospects for increasing output of livestock over at least the next five years are poor, because of the losses in breeding herds during the recent droughts. These have already been reflected in Dakar cattle prices that have increased since 1970 from about CFAF 100/kg liveweight to about CFAF 145/kg liveweight. The farmgate prices used for beef cattle and milk for the project's economic and financial analysis are the current market prices and are equivalent, in 1974 terms, to CFAF 100/kg liveweight for beef cattle, CFAF 12,000 for a two-year old calf and CFAF 25/liter for milk Current official prices for cotton, groundnuts and cereals provide sufficient incentives to farmers. Adequate incentives would continue to be required for the project and, therefore, official farmgate prices would need to be monitored carefully. During negotiations, assurances were obtained that Government would follow a policy of fixing the prices of groundnuts and of cotton at levels advantageous to the growers, that it would promptly inform the Bank Group of any decision to establish subsidies on imported cereals, and that it would consult annually with the Bank and the Association on the prices to be paid to producers for groundnuts, cotton, and cereals. C. Farmers' Benefits 5.08 Project farmers would obtain substantially increased incomes. Because of the larger farm size and a more rellable rainfall, incomes are expected to

31 VII. AGREENEENTS REACHED AND RECOOENDATION 7.01 During negotiations, assurances were obtained that SODEVA would: (a) consult with the Bank Group on the fertilizer study findings and theit implications on the project (para. 3.11); (b) provide the Bank Group with a detailed evaluation report on the project's progress within six months of the end of each cropping season; and it would employ consultants with experience, qualifications and terms of reference acceptable to the Bank to design the evaulation system and analyze the data (para. 3.16); (c) appoint to the positions of project manager, technical director, administrative officer and his deputy for credit organizational specialist, and the chiefs of the crop husbandry, animal husbandry and training divisions during PY 1 to PY 5, persons with qualifications, experience, terms of reference, and conditions of service acceptable to the Bank Group (para. 3.22); (d) submit its headquarters budget to the Bank Group at least three months prior to the beginning of the financial year (para 4.10); and (e) appoint auditors acceptable to the Bank Group; it would maintain separate accounts for the project and copies of the accounts and auditors' reports thereon would be submitted to the Bank Group within six months of the end of the financial year; the auditor's report would be of such scope and in such detail as the Bank Group may reasonably have requested (para. 4.11) During negotiations, assurances were obtained that Government would: (a) follow a policy of progressive adoption of prices reflecting the full costs of implements and fertilizers and consult annually with the Bank Group on prices to be set for the next campaign (para ); (b) exploy consultants for the cereal marketing study with qualifications, experience and terms of reference acceptable to Government and the Bank Group (para. 3.17); (c) review the results of the cereal marketing and storage study with Bank Croup (para. 3.17);

32 (d) provide suitable qualified senior and middle level staff to SODEVA; SODEVA would have an opportunity to refuse and return Government staff it considers unsuitable (para. 3.22); (e) cause ONCAD to appoint a senior manager to be responsible for deliveries of inputs to the project area (para. 3.23); (f) review, with the Bank Croup, arrangements for providing regular Government financial support for SODEVA to maintain and/or expand i,ts activities (para. 4.05); (g) review BNDS' limits on cooperative indebtedness and make arrangements for adequate financing of project cooperatives should these limits prove to be an obstacle to project implementation (para. 4.07); (h) c:ause BNDS to lend to project farmers on terms and conditions agreed under Credit 404-SE (para. 4.08); and (i) promptly inform the Bank Group of any decision to establish subsidies on the retail price of imported cereals and consult annually with the Bank Group on the prices paid to producers for groundnuts, cotton, and cereals (para. 5.07) Conditions of effectiveness would be that: (a) t;he loan agreement between Government and CCCE had become effective (para. 4.03); and (b) Government and SODEVA had entered into an agreement to carry out t'ie project and Government had provided SODEVA with CFAF 200 million (US$889,000) as working capital for the project A condition of disbursement against expenditures for SODEVA's Dakar headquarters would be that SODEVA's annual headquarters expenditures and financing arrangements would be acceptable to the Bank Group (para. 4.10) I.'ith the above assurances and conditions, the proposed project is suitable for a Bank loan of US$7.0 million and an IDA credit of US$7.0 ndillion.

33 ANNEX 1 Page 1 SENEGAL SINE SALOUI AGRICULTURAL DEVELOPMENT PROJECT PROGRESS OF AGRICULTURAL PROJECTS FINANCED BY THE BANK A. Loan 584 SE - Agricultural Credit, US$3.5 million eauivalent (Feb. 10, 1969); Credit 140 SE - Agricultural Credit, US$6.0 million equivalent (Feb. 10, 1969). The project consists of improving groundnut and millet production in the Groundnut Basin area, by financing farm implements and by strengthening the National Development Bank of Senegal (BNDS), the Agricultural Development Authority for the Groundnut Basin (SODEVA), and the Office of Cooperatives and Development Assistance (ONCAD). The loan and credit became effective on June 25, The loan portion of the project was cancelled in 1971, when demand for farm implements declined sharply because of drought and reduced producer prices for groundnuts. Disbursements of the IDA Credit for farm implements should be completed in 1975, 2 years behind appraisal estimates. The performance of BNDS and SODEVA has improved during the project; the management of ONCAD has been weak, but assistance is continuing under the second agricultural credit project. B. Credit 404 SE - Second Agricultural Credit, US$8.2 million equivalent (June 25, 1973). The project comprises a countrywide extension of Government's farm credit program that was supported by Credit 140 SE. The Second Credit makes provision for medium-term credit through BNDS for the purchase by farmers of draft animals and animal-drawn implements, continuing technical assistance to ONCAD and SODEVA, and research and training programs. The credit became effective on October 30, Groundnut production is rising again after the disastrous drought of 1972/73, as is the output of food crops. The use of animal traction is spreading and the demand for medium-term credit is likely to be above appraisal estimates. ONCAD is being reorganized following serious cost control and financial difficulties. ONCAD's difficulties have arisen from over-staffing and weak management, Government's inadequate procedures to finance subsidies for farm inputs, and the failure on the part of ONCAD to stress the seriousness of its financial problems. Government has recently reviewed ONCAD's accounts. It is aware of the gravity of the situation and is working out measures with IDA to place ONCAD on a sound financial footing; principal among these, will be improvements in management and t'e establishment of appropriate financing procedures to cover the cost of subsidies. The abolition of the subsidy on imported rice in November 1974 should also reduce the burden on ONCAD's finances.

34 tinex rage 2 C. Credit 252 SE - Casamance Rice. US$3.7 million equivalent (June 18, 1974). Good management and adequate rainfalls ensured good crops for groundnut and rice, which are well above appraisal estimates. The number of farziers participating is expanding at a faster pace than anticipated and their response is good. Housing and offices were conmîssioned early in 1975, three months behind schedule. Road improvement program is in progress, but most of the improvement of bottomland for rice cultivation probably will not be implemented, because of lack of funds and of technîcal expertise. The proiect has incurred some cost overruns, mainly because extension staff were increased to cope with good farmers' response, and because of salary increases. In addition, changes in the US$ exchange rate would cause a loss equivalent to US$900,000. As a result, the project would be short of funds at the end of 1975, instead of Governnent intends to ask the BANK/IDA to finance a new project in the same area starting early CY Terms of reference for the preparation of this second project have been proposed to Governnment. RNWA would coordinate that preparation, and appraisal is tentatively scheduled for July, D. Credit 254 SE - Terres Neuves Resettlement, US$1.3 million ecquivalent (June 18, 1974). The project's settlement program was completed in 1974 as anticipated at appraisal. Adequate and evenly distributed rainfall ensured good crops last season. The project has been successful in providing higher incomes than expected for settlers and has attracted more active people than anticipated in STN has taken over project management from the management agency agreed upon at appraisal. This change, together with personnel shifts, have caused managerial and administrative problems that are not yet solved. The project's accounts have been audited recently. Government's contribution has been paid in full, and the previous financial difficulties encountered by the project are now overcome. E. Credit 350 SE - River Polders US$4.5 million (January 9, 1973) The project, as appraised, comprised expanding irrigated rice cultivation in the Senegal River Delta by constructing a fully controlled irrigation system at Dagana to increase the irrigated area by 2,730 ha, and by improving polder flood irrigation in Debi and Lampsar. The credit became effective on June 8, Progress on the Dagana polder is satisfactory, and the total area to be irrigated and double-cropped has been increased from 2,730 ha to 3,200 ha. At Government's request, the Debi and Lampsar polder components are being reformulated within the broader framework of integrated development of the Senegal River Basin and have been deleted from the ongoing project. An engineering credit for the Debi and Lampsar polder development was approved in April, The total cost of the expanded Dagana component, however, has increased overall project costs from

35 ANNEX 1 Page 3 US$7.4 to US$9.3 million because of the increased area irrigated and general inflation since appraisal. The rate of return for this component, nevertheless, remains satisfactory and IDA agreed on October 18, 1974 to reallocate savings from the Debi and Lampsar components to help cover cost increases for the Dagana polder. F. Credit 446 SE - Drought Relief Fund, US$3.0 million equivalent (December 7, 1973) This two-year project is part of an IDA credit to six West African countries severely affected by drought. In the Senegal project, individual subprojects are funded through a Drought Relief Fund account at BNDS; they include support for well repair brigades, veterinary services, fire-brigades, firebreaks, pump rehabilitation, and funding for a coordinating committee secretariat. The credit became effective on February 5, The project is being implemented satisfactorily.

36 ANNEX 2 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT THE NATIONAL OFFICE FOR COOPERATIVES A1iD DEVELOPMENT ASSISTANCE (ONCAD) Background 1. The Office National de Cooperation et d'assistance pour la Developpement (ONCAD) was established in 1966 to take over assistance to cooperatives from regional farmers' organizations, the Centres Regionaux d'assistance au Developpement (CRAD), which had been inefficient. In addition, in 1967/68 ONCAD was given responsibility for the procurement of farm inputs to cooperatives and the monopoly for purchasing groundnuts collected by cooperatives and selling them to the Office de Commercialisation Agricole du Senegal (OCAS), which was responsible for groundnut exports or delivery to local oil mills and for rice imports and commercialization in Senegal. In 1971 the Government decided to have all commercial groundnuts processed in local oil mills and, in November 1971, it dissolved OCAS and transferred its assets and its responsibilities for rice import and marketing to ONCAD. Objectives and Organization 2. ONCAD is a public corporation supervised by the Ministries of Rural Development and Finance. It is governed by a Board of Directors with 19 members including representatives of the President of the Republic, of the Ministries of Commerce, Rural Development and Finance; of the Governors of the seven regions; and four representatives of cooperatives. Its Director General is appointed by decree of the President of the Republic and the Minister of Rural Development. ONCAD's objectives are presently: (a) to assist and supervise cooperatives and pre-cooperatives, (b) to commercialize groundnuts and basic agricultural products, (c) to supervise rice imports, storage and distribution, (d) to transport and commercialize agricultural products collected by cooperatives and agricultural development agencies, (e) to procure and deliver to cooperatives fertilizers, farm implements and oxen, and (f) to handle, store and distribute groundnut seeds to farmers. ONCADReognization under the First and Second Agricultural Credit Projects 3. When the First Agricultural Credit Project was appraised, it appeared that ONCAD. which was overstaffed and inefficiently run, should be reorganized. Consequently, funds were provided under Credits 140-SE to help pay for the services of consultants to study and make recommendations on management and staff structure, training, accounting, transportation of groundnuts and inputs, and management of the groundnut seed stockpile.

37 ANNEX 2 Page 2 4. ONCAD's ability to carry out its functions has generally improved. It is now able to handle groundnut marketing, pay farmers on time, and recover credit adequately, although it still has difficulties in organizing the delivery of inputs to farmers. However, the more specific objectives of the reorganization have not been achieved: ONCAD continues to be overstaffed (more than 2,000 permanent staff); operating costs are high; accounting procedures recommended by the consultants have not been implemented; and accounts are incorrect and issued only after unacceptable delays. Moreover ONCAD?s resources have been run down to the point that it is presently very much dependent on the Central Bank's continued support. Recovery of outstanding claims against Government of CFAF 5.8 billion would reduce the current financial gap to an amount between CFAF 1.7 billion and CFAF 2.5 billion, depending on the status of certain receivables and inventory losses. 5. In effect the financial situation at ONCAD is the direct result of Government's price policy for cereals and fertilizers, which up to recently were sold below their market value. The Stabilization Fund and Government are supposed to reimburse ONCAD for the differences in prices and subsidies, but they are slow to do so, while ONCAD has to pay immediately a levy on groundnuts to the Fund. As a result, ONCAD had to bear high overdraft charges (CFAF 1.2 billion, i.e. US$5.0 million), which in strict sense should have been borne, that is paid, by the Stabilization Fund. 6. Credit 140-SE did not provide for an audit of ONCAD's accounts, and delays in implementing this requirement under Credit 404-SE meant that the magnitude of the problem was not revealed until mid-1974 when the Controller's Committee of the Supreme Court began to audit the accounts. Although the consultants could have been expected to provide some warning of the deteriorating financial situation, they never had executive power to enforce their recommendations on accounting procedures which went largely ignored by ONCAD's management. 7. Following the preliminary conclusions of the audit of ONCAD's account and the recommendations of the most recent IDA Supervision mission, the Government has taken a series of encouraging steps towards improving ONCAD's managerial and financial position: (a) As of November 1, 1974, the Government announced new consumer and farmgate prices for the principal agricultural commodities, substantially in line with the level of world market prices. In particular, it has fixed the consumer price of rice at CFAF 10Q/kg (compared with CFAF 52/kg previously), thereby eliminating the consumer subsidy on rice. This measure, which is in line with IDA's view, is a major and most encouraging step towards eliminating one of the important causes of ONCAD's financial difficulties since it should now require much less overdrafts and depend much less on timely payments of subsidies by Government;

38 (b) ONCAD has appointed a new chief accountant and has hired an expatriate chartered accountant to review accounting procedures which have been considerablv streamlined; and (c) more flexibility has been introduced in ONCAD's remiuneration system to put it in line with that of private enterprises, which should help in the recruitment and retention of competent local staff..a.nnlx 2 Page 3 8. IDA has confirmed its support of Government's action, especially the new agricultural commodity pricing which IDA has urged be extended to fertilizers and farm implements. IDA has also urged Governnent to promptly clarify ONCAD's financial situation, particularly as regards the settling of accounts due.

39 ANNEX 3 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT TECHNICAL ASPECTS OF CROP PRODUCTION A. Background 1. The agricultural economy of Sine Saloum is dominated by millet and sorghum for subsistence, and groundnuts as a cash crop; because of their relative drought tolerance, these crops are well adapted to the local ecology. The south of the project area (Zone 1) has good scope for diversification into cotton, rice, maize and tobacco. 2. Traditionally, groundnuts ahd millet were grown with hand tools and without fertilizer. Yields averaged 800 kg/ha for unshelled groundnut, and 400 kg/ha for millet. The most important early development was the improvement of groundnut seed (variety ). In the early 1960's, this was followed by a Government supported program to increase agricultural productivity. This program, known as Programme Agricole (PA), has evolved into a comprehensive system of farm support services. 3. heminimumacka! promoted under FA was derived from the results of agricultural research. The main components of the package are: (a) Improved seeds: Seed of the improved groundnut varieties is multiplied by the Ministry of Rural Development and distributed by ONCAD. Farmers apply fungicide to it after shelling and sow at the rate of 100 kg/ha. (b) DrawnImlements: Farmers obtain credit for seeders and hoes drawn by donkeys, horses or oxen. This equipment enables farmers to improve yields because of timely seeding and hoeing; extend the area under cropping; and reduce labor peaks during the critical period of seeding and first weeding. (c) Fertilization: The soils of Senegal are deficient in phosphorus; they become deficient in potassium after several years of cropping; and they lack nitrogen for non-legume crops. The extension services have been promoting the use of fertilizer as recommended by the Institute of Tropical Agricultural Research (Institut de Recherche Agronomique Tropicales - IRAT), to correct basic soil deficiencies and improve yields. These recommendations call

40 ANNEX 3 Page 2 for the application of 150 kg/hia of mixed fertilizers ( for groundnuts, for millet and sorghum). 4. PA has been successful in terrs of its adoption by farmers. SODEVA estimates that some 80% of farmers in the Groundnut Basin have benefited from the program; ONCAD now distributes about 100,000 tons of groundnut seed a year; and Senegal has also made more progress in draft animal cultivation than any other West African country. While fertilizer use has expanded, consumption fluctuates in response to both droughts and price changes (Graph 9237). Under PA, however, fertilizer recommendations have not taken sufficient account of the low response of groundnuts, particularly in drier areas, and with recent price increases, existing recommendations are not sufficiently flexible to take account of adjustments required by price fluctuations and droughts. 5. The impact of PA on cron yields and production is more difficult to assess. Craphs 9238 and 9239 show the production and yields of groundnut and cereals (millet and sorghum) in the Groundnut Basin from the inception of PA to date. Groundnut yields and production increased from 1960 to 1965, when average yields reached 900-1,000 kg/ha. This increase can be credited in part to PA, and in part to the gradual southward shift of cultivation in the Groundnut Basin to higher rainfall areas. Ilowever, yields and production dropped, concurrently with fertilizer use, with the onset of droughts and a reduction in groundnut prices. Subsequently, groundnut yields have fluctuated with rainfall (Graph 9239), and the droughts and price reductions have blunted the earlier impact of PA. Recent studies suggest that groundnut yields may be declining irrespective of fluctuations of weather and input use. If this is true, the explanation is not clear. Two possible causes are: (a) soil depletion under increasing population pressure; and/or (b) the failure of farmers to fully apply all the recorurendations of PA. Contrary to groundnut yields, however, millet and sorghum yields (Graph 9239) show a slight gradual increase, possibly reflecting an increase in fertilizer use and improved technology. 6. This evidence suggests that productivity under PA may have reached a ceiling for groundnuts, and may soon reach a ceiling for cereals. Increases in productivity require further advances in farm management and technology. The need for such advances is particularly pressing in the northwest of the Sine Saloum, where population pressure has led to a decrease in fallow, and to a deterioration of farm revenues that are already among the lowest of the country. The elements of new farm recommendations have been successfully tested by SODEVA, especially in the pilot project (Annex 5). B. The New Package 7. Ihe proposed package has two main components: plowing, and a more comprenensive fertilization program. It requires a major investment in draft

41 ANNEX 3 Page 3 animals, implements, and stump removal. Farmers adopting this new package also have to follow the basic recommendations of the minimum package of PA. Plowing 8. The sandy and sandy loam soils of the Sudanian zone are characterized by poor tilth, as they harden during the dry season (the small clay fraction acts as cement). As a result, crops develop a shallow root system when grown with superficial land preparation, and they are poorly equipped to withstand drought. Moreover, the poor tilth of the soil limits its capacity for storing available water, and IRAT has shown that plowing does increase yields by encouraging a deeper root system and promoting better utilization of rainfall. The following average yields were achieved with plowing (for farmers that follow the minimum package) in research plots set up on farmers' fields: Increased Gross Crop and Zone No Plowing Plowing Revenue CPAF/ha / kg/ha Maize Z 1 (South) 1,200 2,500 45,500 Millet Z 1 1,200 1,500 10,000 Z 2 (North) 900 1,200 10,200 Sorghum Z1 1,500 1,800 10,200 Z 2 1,300 1,500 6,800 Groundnut Z 1 1,600 1, Z 2 1,150 1,250 4,500 /1 Based on 1975 economic-farmgate prices (Annex 15, Table 1-3). 9. The major obstacle to the adoption of plowing is the presence of stumps. The number of stumps, bushes and small trees ranges from practically nil, in certain areas of northwest of Sine Saloum, to an average of 3,000/ ha in the south. Besides preventing correct plowing, the stumps slow down the work of animal-drawn implements for seeding and weeding, cause more frequent breakdowns, and encourage pest infestations by providing shelters for parasites. Stump removal is thus a prerequisite to the adoption of the new package. It requires 50 to 100 mandays/ha and the cost is CFAF 3,000-6,000 if supplemental labor has to be hired. The land tenure implications of stump removal are discussed in Annex Because the soil hardens during the dry season, plowing is possible only at the end of the cropping season immediately after harvest, or

42 ANNEX 3 Page 4 after the first rains before seeding at the beginning of the cropping season. Plowing is recommended once every three or four years, as the residual effects are felt for several years. It is best to plow ahead of a grain crop, because grain gives a better response to plowing than groundnuts. It is possible that several plowing cycles might change the soil structure sufficiently to make it possible to plow during the dry season. Prospects for dry season plowing would be investigated in cooperation with IRAT as part of the project. Recent developments in Nigeria under comparable ecological conditions suggest that minimum tillage could give similar yields as plowing but at lower cost. Under the project, SODEVA would investigate minimum tillage, as an economical alternative to plowing, in liaison with IRAT. Fertilization 11. Fertilizer recommendations under PA require adjustments to optimize returns. IRAT has found that the main soil deficiency, which is phosphorus, can be minimized by a basic application of 400 kg/ha of rock phosphate before the first plowing of fields after stump clearing. This application of low cost, unprocessed phosphate which is produced in the country, supplemnented by regular applications of soluble phosphate in the regular fertilizer, assures correction of the deficiency. It rernains to be determined whether regular applications of phosphate in fertilizer will always be necessary, at least at current levels. The maintenance fertilization program recommended by IRAT is as follows (with the compound fertilizer applied at seeding, and urea side dressed at the early stages of growth). Crop and Zone New Package Minimum Package kg/ha Maize Z 1 (South) 300 kg kg urea Sorghum Z1 150 kg kg kg urea z 2 (North) 100 kg kg kg urea Millet Z kg Z kg kg kg urea Cotton Z kg kg urea Groundnut Z 1, Z kg kg , then 150 kg

43 ANNEX 3 Page Fertilizer recommendations for groundnuts have undergone a succession of adjustments. In 1973 they called for the application of 150 kg/ha of under the minimum package, and 150 kg/ha of under the new package. In early 1974, the Ministry of Rural Development decided to switch to a uniform recommendation of 150 kg/ha for both packages. In the light of recent results obtained by IRAT, SODEVA is reducing the fertilizer application on groundnuts from 150 kg/ha to 100 kg/ha of The main difference between the former minimum package (150 kg/ha of ) and the present intensification program (100 kg/ha of ) in terms of nutrients (in kg/ha of N-P2 O5-K20) for groundnuts is: - former minimum package / - present intensification The change is insignificant for nitrogen; the phosphorus rate is decreased, but phosphorus requirements of groundnuts are low and the soil receives a corrective dose of rock phosphate; the rate for potassium, to which groundnut is most responsive, is increased substantially. The new package thus better reflects the fertilizer requirements of groundnuts. In the case of grain crops, the new package emphasizes nitrogen, which also better reflects the fertilizer requirements of these crops. The programn also gives more flexibility: it makes allowance for the drier environment of the north (Zone 2) and enables farmers to cut down on urea applications if the early season rains fail. 13. Data from experiments on farmers' fields indicate the following average yields brought about by different rates of fertilization (for plowed crops with improved practices): Crop and Zone Light Fertilization Intensive Fertilization (Minimum package) (New Package) kg/ha kg/ha Maize Z 1 2,500 2/ 4,000 Millet Z 1 1,500 1,800 Z 2 1,200 1,600 Sorghum Z 1 1,800 2,500 Z 2 1,500 2,000 Groundnut Z 1 1,700 3/ 1,8004/ Z 2 1,250 3/ 1,4004/ 1/ Arrived at, for example, for nitrogen: 6% x 150 kg = 9 kg. 2/ 200 kg/ha plus 50 kg/ha Urea. 3/ 120 kg/ha / 150 kg/ha

44 ANNEX 3 Page 6 The yield increases brought about by the switch from light to intensive fertilization give`the following marginal cost benefit ratios: 1975 Prices 1980 Prices Economic Farm Gate Economic Farm Gate liaize Z Millet Z / /1 - /1 Sorghum Z / Z / /1 - /1 /1 Decrease or no increase in fertilizer cost. Groundnuts are not included, as the new fertilizer recommendation would represent a reduction in cost. These benefits suggest that the new fertilization program would be highly profitable. 14. Present fertilizer recommendations satisfy fertility requirements but may not maximize economic returns, and this aspect of the recommendation needs substantial review. In Zone 2 of the project area, which has low and irregular rainfall, fertilization may not always be economical. In Zone 1, the recommended rates of and urea on maize may not optimize returns and there is a need for a fertilizer program for this purpose, taking account of fertilizer and crop prices, and crop responses as affected by rainfall probabilities. This will be the subject of a study to be carried out by SODEVA and financed by IDA under credit 404-SE. While the fertilizer program formulated for the Sine Saloum project is reasonable, SODEVA would adjust its recommendations in the light of the findings of this study. Rotations 15. Farmers in the project area usually grow about 1.5 ha of groundnuts for every hectare of millet (or sorghum). This means that in many instances groundnuts follow groundnuts in the rotation. Under the program, this ratio would be reduced gradually to about 1:1, as experience has shown that the most desirable rotation is grain-groundnuts-grain-groundnuts, with plowing and rock phosphate application before the first grain crop. Cotton would substitute for groundnuts on part of the fields in Zone 1, and the rotation would be flexible, for farmers to take advantage of crop price fluctuations with the exception that groundnuts would not be grown for more than two years in succession because of the risks of soil erosion and pest attacks. The main rotations would be: (a) South (Zone 1) - maize-groundnut or cotton-sorghum-groundnut; and (b) North (Zone 2) - sorghum-groundnut-millet-groundnut

45 ANNEX 3 Page 7 Soil Conservation 16. Stump removal and plowing would increase the danger of soil erosion after groundnuts are harvested, as the soil would lose its natural cover of trees and bushes. To protect the soil against water erosion, which would become a problem on sloping land because of the high-intensity rains that fall before the new crops develop sufficiently to cover the soil, SODEVA would promote strip cropping and contour plowing. Farmers on sloping land would be required to alternate their crops on strips that would not exceed 30 meters in width and to plow following master contour lines constructed with the assistance of SODEVA at 60 meter intervals, using the standard plow. 17. To compensate for the increased possibilities of wind erosion, the project would finance a tree planting program. SODEVA would encourage farmers to plant neem, eucalyptus, and acacia trees as windbreaks and for fuel and forage. As an initial step, SODEVA would have its own tree nursery, but it would at the same time encourage farmers to establish their own small nurseries. The target would be to provide about 90 trees for each hectare of cleared land. Since the program would depend on the full cooperation of farmers in the project area, planting material would be provided free of charge. C. Farm Development 18. For farmers implementing fully the recommendations of Programme Agricole, the switch from the minimum package to higher levels to technology would be made in two stages: a. farmers would introduce ox-traction for seeding and weeding and use an intermediate level of fertilization for millet (150 kg/ha of ); land thus cultivated would be classified as "Semi-intensified" fields b. after about three years at the "semi-intensified" stage, farmers would move to the higher levels of technology in '"intensified" field by removing stumps, plowing, applying rock phosphate, increasing fertilization, and by introducing maize, sorghum, and cotton in crop rotations. Annex 14 gives targets for the number of farmers supervis~ed and the areas at the various stages of development. D. Crop Recommendations for Intensified Fields Groundnuts 19. The recommended variety would be , which is late maturing (120 days), and best adapted to Zone 1. For Zone 2, would be used only until IRAT completes development of a shorter cycle variety (105 days). During the recent droughts, farmers preferred the variety (90 days),

46 ANNEX 3 Page 8 which gives greater assurance of a crop under marginal rainfall, However, as this variety sprouts if the raîn continues after maturity, SODEVA would not recommend its use for the project. 20. Soil Preparation and Fertilization. The fields would receive 100 kg/ha of before land preparation. Land preparation would consist of cross hoeing before the start of the rainy season. 21. Seed Preparation and Seeding. Seeds would be shelled and sorted by hand, and treated with an insecticide-fungicide mixture (Thiram and DDT) at the rate of 200 grams/100 kg of seed. The seed would be planted within three days following the first rain (20 mm minimum), 3 to 5 cm deep, in rows 60 cm apart, with a seeder equipped vith dises with 24 or 30 notches. 22. Weeding and Harvesting. The first hoeing would be made some 10 days after seeding, the second about 15 days later. Further weedings would be according to need. The crop would be lifted days after seeding, by a hoe or an animal-drawn lifter, and allowed to dry by turning the plant upside down. The dry crop (after 3-4 days) would be stacked in the field, to be threshed by hand in December-January. Millet 23. Pearl millet would be grown in rotation before groundnuts, or continuously in fields fertilized with cattle droppings. This short cycle crop ( days) is well adapted to the short rainy season in Zone 2. Farmers in Zone 1 would grow grain crops with longer cycles and higher production potentials. An improved variety, Souna 2, was recently released by IRAT, and would be used for the project. 24. Soil Preparation and Fertilization. Soil preparation would consist of cross cultivation with a hoe, or, preferably plowing in Zone 2. Fertilizer recommendations would call for: kg/ha of in semi-intensification; and kg/ha of and 50 kg/ha of urea in intensification in Zone 2. The mixed fertilizer would be broadcast before soil preparation; urea would be side-dressed at the time of thinning. 25. Seeding. The seed would be treated with the same fungicide-insecticide mixture used for groundnuts at the rate of one matchbox full for 3--4 kg of seed. Seeding would take place in June, before the start of the rains, at the rate of 3-5 kg/ha, in rows 0.9 m apart, and spacing of 0.9 m on the row. This would be done by seeder equipped with a 4 hole disc, and placing the seed 4-5 cm deep.

47 26. Thinning aad Weeding. Some 6 to 20 days after emergerce, thie seedings would be thinned down to three per clump (farmers rarely fol[ow this recommendation, lor fear that drought or pest damage will reduce the stands). The first weeding would be needed at about the samne time, and the second would follow after 15 days. Further weedings would &eoend on need. 27. Harvesting. The panicles would be harvested by hand at full maturity, at least 90 days after seeding. Intensified plots could be plowed immediately after harvesting, when the soil is moist. 28. White-grain sorghum has a day cycle. IRAT has developed the improved varieties labeled CE - 90 for Zone 2 and for Zone 1. This crop is well adapted to the more humid Southern part of Sine Saloum (minimum rainfall of 800 mm) and would be promoted by the project. In cooperation with IRAT, SODEVA would pursue adaptation trials of slhort stem varieties. Sorghum would follow groundnuts and would be followed by groundnuts in the rotation. 29. Soil Preparation and Fertilization. Soil preparation would be similar to that required for millet, but it could be done after the first rains, and in this case the field could be plowed. Recommended fertilization would be: - Zone 2: 150 kg/ha and 100 kg/ha of urea - Zone 1: 100 kg/ha and 50 kg/ha of urea 30. Seeding. Sorghum seed would be treated with the same fungicide (at the same rate) as millet seed. Seeding would be done between June 15 and July 15, 2 or 3 cm deep, with spacing of 0.9 and 0.45 cm (8 hole plate), corresponding to 5 to 7 kg/ha of seed. 31. Thinning, Weeding, Harvesting. Same as for millet, but later in the season. Because of later harvesting, post harvest plowing may not be possible. Maize 32. The high yielding hybrid BDS 1, a double hybrid with white grain developed by IRAT, has a 90 cycle and a yield potential of 5 tons/ha. This hybrid would play an important role in the intensified rotation of Zone 1 (minimum rainfall of mm), where the crop would be grown. SODEVA would pursue variety trials, in cooperation with IRAT. One of the objectives of the maize research program would be to develop hybrids that would be more widely accepted for local consumption. Maize would be grown at the beginning of the rotation, before groundnuts, preferably on plowed land.

48 ANNEX 3 Page Land Preparation. Maize responds well to plowing, which can be done at the end of the previous cropping season, or just before seeding. The plowed land would be smoothed by hoeing. 34. Seeding. The seed would be treated with the same fungicide-insecticide mixture as millet and sorghum; it would be planted between June 20 and July 5, with 0.90 x 0.25 cm in spacing (16 hole plate), giving a rate of 20 kg/ha wïth three seeds per hole; depth is 3 to 4 cm. 35. Thinning, Weeding, Fertilization, Harvesting. Some 10 days after seeding the stand would be thinned down to one plant per clump; the field would be hoed immediately afterwards, and furrowed 20 to 30 days after seeding. Hatrvesting would begin 75 days after seeding for urgent food needs, and the main harvest begins 90 days after seeding. The ears would be stored with the husk after treatment with 300 grams of DDT per 100 kg of crop. Cotton 36. SODEFITEX has been promoting BSA 592, a medium staple variety, which requires at least 120 days to mature and a minimum of 900 mm of rainfall. Cotton gives a high response to plowing. For this reason it is best grown after a short cycle cereal, allowing plowing after harvesting, before the soil hardens. The preferred place in the rotation is after maize. 37. Soil Preparation and Fertilization. The fields would be prepared by hoeing, to complete plowing or in lieu of plowing. Cotton would receive 150 kg/ha of broadcast before soil preparation, and 50 kg/ha of urea side-dressed one month after seeding. 38. Seeding. SODEFITEX supplies seed already treated with 500 grams/ grammoram per 100 kg. Cotton would be seeded after the first heavy rain, at the end of June or the beginning of July. Seeding would be 2-3 cm deep, in rows 0.90 m apart, with spacing of 0.20 m on the row and 6-8 seeds per hole (40 kg/ha of seed). Farmers still practice hand seeding, but an animal drawn seeder is being developed. 39. Thinning, Cultivation and Pest Control. The first hoeing is needed 10 to 15 days after seeding, then the crop would be thinned down to one plant per clump, three weeks after seeding. The second hoeing would be done two weeks aft:er the first. The field would be furrowed 35 days after seeding. Insecticide (preprothion) would be sprayed about six times, the first about six weeks after seeding, and the others at two week intervals. 40. Harvesting. Picking would start 120 days after seeding; several pickings are needed, in order to select only the fully open capsules. After the last picking the stems would be pulled and burned to control pests.

49 ANNEX 3 Page 11 E. Expected Yields 41. Considering the data developed by research tests on farmers' fields, and by the pilot project, the expected yields under normal rainfall brought about by the improved technology are summarized in Table 1 (the incidence of drought on production is taken into account in the calculation of the farm budgets; it is estimated that a drought would occur every four years and would reduce yields by 60%). F. Demonstrations 42. A key factor in the adoption of the new package is the training of draft oxen and training in the use of a plow. For this purpose each extension field worker would operate a demonstration center to show farmers how to train a pair of oxen, to plow, and to handle and care for ox-drawn implements. The center would also be a gathering place where other farmers would be shown the technique of training oxen and of plowing. The demonstration centers would be rotated so as to reach a maximum number of farmers. Once a farmer has adopted the new package, his fields would become demonstration fields for other farmers of the village.

50 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT Crop Yield Development _/ Minimum Years of Involvement in the Program 2/ Development Package Crop Stage Yield Zone 1 Maize 3-1,800 2,200 2,500 2,70.0 2, Millet ,000 1,100 1,100 1,100 1, ,300 1,500 1,500 1,700 1,700 Sorghum ,500 1,600 1,700 1,800 2, Groundnut ,200 1,200 1,200 1,200 1, ,400 1,400 1,500 1,500 1,600 Cotton ,000 1,100 1,100 1,200 1,300 Zone 2 Millet ,000 1,000 1,100 1,200 1,300 Sorghum ,000 1,000 1,000 1,000 1, _ ,200 1,300 1,400 1,500 1,600 > Groundnut _ x 1-1,000 1,000 1,000 1,000 1, w 2 _ ,100 1,100 1,200 1,200 1,300 1/ Yield development takes account of the probability of droughts occuring every fourth year that would result in a 60% reduction in increments. Average yields have, therefore, been estimated at 15% below those expected in years of normal rainfall. 2/ It is estimated that on average farmers would move to Step 2 after three years at Stepl.

51 ANNEX 4 Page 1 SENEGAL SINE SALOUI AGRICULTURAL DEVLLOPM'ENT PROJECT AGRICULTURAL DEVELOPMENT AGENCY FOR THE GROUNDNUT BASIN Societe de Developpement et de Vulgarisation Agricole (SODEVA) Background 1. SODEVA was created in 1968 to take over the extension services of SATEC, a French consulting firm, in Senegal's Groundnut Basin. Government has made SODEVA the regional agricultural development authority for the Groundnut Basin, covering the regions of Sine Saloum, Thies and Diourbel. SODEVA has concentrated on: i. improving agricultural production at the farm level; ii. iii. iv. increasing the yields of groundnuts, Senegal's main cash crop; promoting maize, millet, and sorghum cultivation to overcome the country's cereal deficit, and integrating livestock development with smallholder crop production. Or~ani zation 2. SODEVA is a "societe d'economie mixte,"' a joint venture in which Government owns 90% and SATEC 10% of the capital. The Director General, SODEVA's senior executive, is appointed by a Board of 11 directors representing Government i4inistries, ONCAD, BNDS and SATEC. The chairman of the Board is the Director of the Cabinet in the Ministry of Planning and Cooperation. SODEVA is responsille to the Ministry of Rural Development through the office of the Director of Agricultural Production. 3. SODEVA's headquarters, in Dakar, is divided into two divisions: management, which oversees general administration and reports to Government, and technical which is responsible for supervising ongoing field operations and for planning new activities. The planning and developtnent unit, in the technical division, is preparing to study fertilizer recommendations for Senegal, and is responsible for evaluating the impact of PA and SODEVA's other field operations. SODEVA also has a training section that provides 15 to 120-day staff courses on field activities. Financial accounts are kept in Dakar for all SODEVA operations. These accounts are audited by a Government commission. 4. Most of SODEVA's 1,100 personnel, of whom 13 are expatriate, are attached to three regional field offices at Kaolack (Sine Saloum), Thies and

52 ANNEX 4 Page 2 Diourbel, which have direct responsibility for implementing projects. Each field office is headed by a delegate with an administrative and technical staff for the region. Day-to-day activities are directed by operations chiefs, who coordinate all field activities, at the district level. 5. SODEVA recruits its personnel from three sources. Staff above the level of field extension workers are usually seconded to SODEVA from Government's civil service. Field workers are recruited on the basis of regional examinations, and the majority have at least primary school education. Most expatriates are provided by SATEC under a technical assistance agreement with SODEVA. Operations 6. In addition to providing agricultural extension throughout the Groundnu 2 t Basin and to implementing a pilot intensification project in Sine Saloum financed by CCCE (Annex 5), SODEVA is also responsible for coordinating: (i) a project directed by the Research Institute for Oil Crops (Institut de Recherche des Huile et Oleagineaux - IRHO) to increase the output of edible groundnuts to 28,200 tons by 1975; (ii) a cotton program implemented by SODEFITEX to increase the cotton acreage in Sine Saloum to 6,500 ha; and a program to disseminate high yielding seed varieties. USAID has been asked to provide US$4 million for an agricultural intensification program to be implemented by SODEVA in the districts of Thies, Bambey and Diourbel; this project will comprise strengthening of extension services, a limited construction program, equipment for training and demonstrations, an applied research unit, and credit for on-farm storage facilities. SODEVA is also responsible nationally for implementing a project supported by finance from Iran to develop audio-visual facilities in rural areas. 7. SODEVA coordinates its activities with other organizations active in agriculture, including: ONCAD; BNDS; the cooperatives, Government Ministries dealing with crop production, livestock, and rural infrastructure; and private and semipublic organizations that supply agricultural equipment and fertilizers. SODEVA's Role as a Model Regional Development Agency 8. Government's agricultural development policy includes both functional organizations providing services on a national level and geographical agencies which concentrate on regional development. National organizations include BNDS fo-r credit; ONCAD for cooperatives, marketing and farm inputs; and SODIFITEX for cotton development. SODEVA is the largest regional development agency and Government is using it as a model for similar organizations for other regions of the country. While extension services are often performed directly by Government Ministries in other countries, the establishment and strengthening of regional development agencies in Senegal has its own merits. However, the permanent effectiveness of semi-autonomous regional agencies will depend on reliable financial support from Government.

53 ANNEX 4 Page 3 9. Management - The expansion of SODEVA's activities, particularly as a result of the projects proposed for assistance by the Bank/CCCE, USAID and Iran, will place a burden on the management capability of SODEVA, especially SODEVA's headquarters. While Government is confident that it can provide sufficient field personnel and headquarters staff for the proposed project, it must be recognized there is already in Senegal competition for good managers in Government and in private industry; and there is also a lack of qualified managers with agricultural experience. SODEVA's managerial performance should be closely monitored during project execution to ensure that the past record of good administration continues. Coordntionof_npu 10. SODEVA's intensification and diversification schemes depend on the timely provision of seed, fertilizer, 'implements and credit. In the past, one or more of these critical inputs has sometimes been unavailable. For example, due to lack of ONCAD transportation, seeds and fertilizer sometimes arrive too late for planting. SODEVA, therefore, has an important coordinating role: aggregating the needs of individual farmers and working with ONCAD to deal with bulk suppliers such as Societe Industrielle Senegalaise de Constructions Mechaniques et de Mlateriels Agricoles (SISCOMA) for implements, and Societe Industrielle d'engrais du Senegal (SIES) for fertilizers, and with cooperatives to ensure that farmers receive their requirements. Financing 11. Working Capital - SODEVA has suffered in the past from shortages of working capital, particularly to prefinance expenditures that are reimbursed either by external development institutions like the Bank, or by Government. To finance its operations, SODEVA has increased the length of its accounts payable to an average of six months while some accounts are a year and a half overdue. In addition, SODEVA has borrowed short-term money from banks at high interest rates. The substantial increase in SODEVA's operations over the next few years will only exacerbate its financial problems. Government is increasing SODEVA's capital from US$40,000 to US$400,000, the estimated minimum amount required to provide working capital for an annual budget of US$4.0 million (Table 1). This capital increase will provide only temporary relief for SODEVA's problem since the approved 1974/75 budget is US$4.1 million and will rise to at least US$8.0 million within the next two years. To ensure the effective itnplementation of the project proposed in this report, SODEVA will need additional long-term financing for working capital of about CFAF 200 million (US$889,000). 12. Long-Tern - The percentage of SODEVA's activities financed by the national budget declined fron 43% in 1973/74 to 30% in 1974/75 (Table 2). SODEVA's ability to attract external assistance is a compliment to its past

54 ANNEX 4 Page 4 record of effective project implenentation. liowever, much of the external assistance has been for relatively short-periods--two to four years--and its continuation is never certain. In the long run, SODEVA needs a permanently sound financial base. This could be provided by finance for five-year planning periods from regular budgetary allocations or by a levy on groundnut production in the area where SODLVA does extension work. In view of the fluctuations in the groundnut crop, a levy on production would need to be supported by Governrment or the crop stabilization fund in low crop years.

55 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT SODEVA Budget for Fiscal Year / (CFAF '000) No. of National CCCE IBRD/IDA Iran FAC EDF National Budget Personnel Budget Sine Saloum Agricultural Audio-Visual Louga Seed Sefa Commercial Senegalese Foreign Contribution Pilot Project Credit II Program Project Project Proiect Operations Total I. Investment Costs Equipment 15,931 18,690 49,130 56,720 3, ,373 Construction - 24,100-27, ,504 Sub-total 15,931 42,790 49,130 84,124 3, ,877 II. Personnel Costs National Civil Servants ,583 40,025 6,202 7,229 13,101 9, ,122 other Administrative Staff ,328 15,219-3,282 4, ,464 Field Staff , ,545 III. Operating Costs Sub-total 222, ,942 11,997 11,402 43,171 50,909 1, ,131 Raw Materials 1,858 8,895 1, ,959 33,912 Taxes and Duties Rent, Insurance and other Services 26,880 29,158 31,385 9,522 4, ,848 Technical Assistance 13 36,002 77,415 11,550-10, ,455 Transport and Travel 2,932 3, ,492 Training 5,066 1, ,056 Office Expenses 15,363 9,916 1,250 1,537 1, ,016 Bank Interest 5, ,122 8,047 External Fiianoing for National Budget -(38,747) 27, ,819 5, Unallocated _ - 1-1, ,380 Sub-total , ,798 56,565 11,135 23,701 6, , ,959 1,085 IV. Total Costs , , , _9X7 VI Income Sources 293, , , ,661 70,774 57,771 1,946 27, ,384 VI. Net Income ,417 3,417 1/ April 1, 1974, through March 31, 1974

56 ANNEX 4 Table 2 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT SODEVA Sources of Finance (CFAF Millions) 1973/ /75 Actual Projected National Budget (42.7%) 296 (29.8%) FAC 69.4 (10%) 70 (7.1%) FED 45.4 (6.5%) 58 (5.8%) CCCE (40.8%) 321 (32.3%) IDA 117 (11.8%) Iran 107 (10.8%) Bank Credits 24 (2.4%) TOTAL (100%) 993 (100%)

57 Annex 4 Table 3 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPNENT PROJECT SODEVA Audited Balance Sheet ASSTS 6/30/1972 3/31/1973 3/31/1974 (CFAF Million) Fixed Assets Buildings Office equipmnent Housing Vehicles Agricultural equipment Anirals l Construction in progress Total Inventories Net Current Assets Currert receivable Cash Deposits Accounts Receivable Material ,1 Personnel Farmers Other Less current liabilities Accounts payable Bank loans _ Suppliers credit Pre-payrients _ Personnel Equipment subsidies Other Total (198.7) (284.1) (253.1) Net current assets 0.2 (13.9) (19,9) Total Net Assets Capital and Reserves Capital stock General Reserve Provision for general rules , 6.6 Provision for material Provision for bad debts Profit from FY Profit fron FY Profit from. FY74 _ 1.4 Total

58 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT SODEVA PROJECT ORGANIZATION CHART GEOGRAPHIC AREA OF RESPONSIBILITY PERSONNEL PROJECT MANAGER ADIITAINSEALT REGION TECHNICAL DIRECTOR (PROJECT AREA) I TRAINING I AGRONOMY ANIMAL HUSBANDRY CREDITSTORES PLANNING & EVALUATION DIVISION CHIEF I I DIVISION CHIEF I I DIVISION CHIEF DIVISION CHIEF SPECIALIST DISTRICT TRAINING ASSISTANT ANIMAL HUSBANDRY STORES i!department) ASSISTANT OPERATIONAL CHIEF.... ASSISTANT ASTANT I AG E NTS SUB-DISTRICT ("ARRONDISSEMENT") OPERATIONAL ASSISTANT ANIMAL HUSBANDRY r FIELD ~~AGENT RURAL... ON AGENT COMMUNITY I. I VIL LAG0EII I FIELD EXTENSION WORKER... World Bank-9264

59 ANNEX 5 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPIENT PROJECT PILOT PROJECT Background 1. Under Programme Agricole (PA), moderate amounts of fertilizer, improved seeds, and animal-drawn hoes and seeders have been supplied to farmers on credit, together with limited agricultural extension support provided by SATEC until 1968 and thereafter by SODEVA. Research has shown that further improvements in agricultural technology are possible by plowing and by a more comprehensive use of fertilizer, particularly in Sine Saloum, where the risks of drought are less than in the northern parts of the Groundnut Basin. A widespread and successful application of these measures depends, however, on strengthening farm support services. With these considerations in mind, SODEVA launched a pilot project in 1971 that involves intensive farmer supervision, coordination of agricultural support services, the expansion of ox-plowing, heavier fertilization rates for cereals, increased cropping of maize, sorghum and cotton, and the integration of livestock with crop farming. Detailed technical recommendations for this project are described in Annex The project is being carried out in the three southern districts of Sine Saloum: Nioro, Foundiougne and Kaffrine. Initially, it was planned that the project should cover a five-year period and benefit 25,000 farmers in these districts. Eowever, following successful implementation during the past two years, Government decided to expand the project after 1975, to cover the whole of the Sine Saloum Region. Organization 3. The pilot project is being implemented by SODEVA's regional administration for Sine Saloum. While the project comes under the regional director, his deputy is in charge of day-to--day operations. The project is administered through three district and 18 sub-district offices, and SODEVA's extension staff are supervising closely some 9,500 farms (1974 figures). SODEVA lias established ox-training centers for project farmers, and the Ministry of Rural Development provides animal health services. Project progress is evaluated each year by a team of 13 evaluation officers. Results 4. Crop Yields: The following yields were achieved in 1973/74:

60 :'inex 5 l'age 2 Groundnut Millet Maize Sorghum --- kg/ha Under nonnal recommendations of PA Under new - recommendations tested by the Pilot Project 1,260 1,010 1, The yields for groundnuts and millet were computed from records kept by extension agents for some 1,700 project farms, each of which had one plot grown under pilot project recommendations and a second following the recommendations of Programme Agricole. Results for maize and sorghum, which were grown on a much smaller scale, were computed from detailed measurements made on the entire operations of a sample of 60 farms. Sorghum yields were low because of a premature end of the rains, but other crop yields were satisfactory. The results show that plowing and higher levels of fertilization under good management can result in substantial yield increases, even in a somewhat unfavorable cropping season. 5. Crop Production : The project's production goals for groundnuts and millet were surpassed, but the early end of the rains prevented a good sorghum harvest. Fewer farmers grew maize than had been projected because of an initial reluctance to clear fields of stumps and roots. Additional crop production attributable to the pilot project is calculated from the yield increases obtained by project farmers over yields they would have achieved without the project and is estimated as follows: Crop Target Actual Production (1973) Actual as % of Target (tons) (tons) Groundnuts 8,800 15, Millet 2,820 5, Maize 1, Animal Production: Farmers were prepared to buy young animals for ox-traction without requiring credit. Thirty-five percent of farmers trained oxen themselves, and by the end of 1973, 6,000 pairs of oxen had been trained, some 124% of the project's target. It was also found that draft animals gain an additional 60 to 80 kg a year when they are kept in enclosures and fed groundnut hay and other crop residues. These animals are in high demand for traction and command good prices for beef. As a consequence, farmers are keeping oxen for beef fattening as well as for traction. In order to meet the growing demand for young animals, SODEVA has started a feeding program for calves and breeding cows among farmers to reduce calf mortality and raise calving rates.

61 ANNEX 5 Page 3 Problems Encountered 7. The main obstacle to the prompt adoption of improved cropping was stump removal. A substantial number of farmers who had enlisted in the program failed to destump their fields, and thus plowing was difficult and only partially effective. To correct the situation, SODEVA now insists on destumping as a prerequisite to receiving free rock phosphate and to receiving the support of its staff to intensify production techniques. 8. As a second problem, in some cases the higher credit requirements of project farmers were not at first approved by cooperatives because some loan committees were reluctant to assume liability for the debts of individual farmers requesting higher than average loans. Following the intervention of SODEVA's staff, loan requirements were approved by cooperatives and SODEVA expects this to be a short-term problem that will be resolved as familiarity with the project increases (Annex 8). 9. As the third problem, project farriers encountered difficulties in obtaining prompt delivery of implements and fertilizers required in excess of supplies normally provided under the PA program. SODEVA's staff now prepares lists for the materials required and coordinates their delivery with ONCAD and cooperatives. Implications for the Proposed Project 10. The pilot project has demonstrated that stump removal is the main bottleneck to intensification. It confirmed the need for a high ratio of extension workers to farmers at this stage of development, and highlighted the need to improve arrangements for input supplies. It has demonstrated that farmers could achieve reasonably high yields by following the recommendations given by the extension staff, and that the improvements in livestock husbandry have been well received by farmers.

62 ANNEX 6 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT LAND TENURE AND SOCIAL STRUCTURE Land lenure 1. Much of the population of the Groundnut Basin is of recent and mixed origin, the result of large migrations from other regions in Senegal and from Mali and Upper Volta between 1890 and The division of land is based on inalienable and irrevocable user rights which families descended from the first occupants are acknowledged to possess. The "lamanes" are the descendents of heads of familles who first burned off the forest and are accordingly the guardians and administrators of the land. However, the farmers whose perogatives are the closest to property rights are the inheritors of the "axe right" granted to those who first cleared the land of trees and bush. Farmers with axe rights cannot sell their land but often lend surplus land at nominal rent to families with spare labor or to young men. 2. Government is attempting to play a larger role in land use. The law on national property of June 17, 1964, makes the State the successor to all ancient rights and the sole owner of the land. Under this law, land is, in principle, allocated to the members of rural communities with the power to allocate being transferred from the families to an elected rural council, Law 7202 of February 1, 1972, provides for the division of each district into rural communities; this reform of administrative units has started in Sine Saloum and is to be completed throughout the country by A certain amount of uncertainty now exists as to land use rights arising from Government's intervention, and many farmers have ceased lending land outside their immediate family. However, while this uncertainty over land tenure is having some adverse effects on the redistribution of land that has previously been lent, it is not expected to be a major constraint for the project. Under the project, farmers with surplus land would be assisted to exploit it more fully through increasing animal traction, and those with land constraints would be helped to farm more intensively. The uncertainty may, however, explain part of the reluctance to destump fully (Annex 5), as farmers who have borrowed land have no long term user rights. Nevertheless, since only about 10% of land is borrowed, this problem should not seriously impede the stump removal program. Social and Economic Relations 4. The basic social unit in the project area is the compound where the compournd chief, the oldest active male, lives with his wives and children. Relatives and seasonal workers are attached to the compound. Married younger

63 ANNEX 6 Page 2 brothers of the compound chief form separate households within the compound, eating separately and farming as a semi-independent unit; younger brothers may also form separate compounds. By administrative definition, a family head becomes a compound chief when his name is entered on the tax list and he ceases to pay taxes through an elder brother. The basic economic unit is, however, in most cases the household rather than the compound, although there is a tendency to consider household heads as compound heads. Seasonal workers are mostly young male relations (sourgas) and sometimes outsiders (navetanes) whose main interests are accumulating money to establish their own households and earning a living. 5. The compound chief is responsible for providing food and shelter for all members, owns livestock and implements, and allocates land within the compound, some 40-60% of which he farmis himself. The chief is usually the only member of the compound registered in the cooperative and the ONCAD collection point (secco); it is he who has access to credit for seeds, fertilizer and implements. In return for guaranteeing the subsistence of the compound -- the chief is usually the sole cereal producer -- all members of the compound perform services for the chief. For the women, this work is mainly of a domestic nature, plus agricultural chores such as sowing, winnowing and shelling groundnuts after the harvest. Male relatives, as well as seasonal workers, after helping to plant the chief's field, work about four mornings per week for the chief during the rest of the season. On some farms just beginning intensive agriculture, a new pattern of work is emerging under which the men work continuously together under the chief as a coordinated work team that makes full use of animal traction. The work relationship is flexible, depending very much on personal relationships that vary from compound to compound. 6. All members of the compound over the age of about 15 have individual fields which they cultivate with the assistance of others. Since the compound chief grows sufficient food to support the compound, the individual members can concentrate on and are motivated to cultivate cash crops: women to purchase spices, clothes and household goods, and men to earn money for marriage and to carry their families over until the next year. Since most benefits for intensification are from cereals, not traditionally a cash crop, improved markets for cereals is critical to promote cereal production among farm members other than the chief. 7. The compound chief receives the majority of direct benefits from development schemes; surveys have shown that the level of mechanization on the chiefs' fields is usually twice that of other members of the compound. In addition, the chief, through his membership in the cooperative obtains and distributes agricultural implements and fertilizers. Equipment is used communally by the compound after the chief's fields have been finished, and increasingly, because of animal traction, men are plowing and planting not only their own fields but those of women. The amount of fertilizer and pesticide used on individual's fields depends very much on the chief's willingness to extend credit to his own compound members. Moreover, as the provider of

64 ANNEX 6 Page 3 food and lodging, his requirements for these materials are paramount. However, there is considerable evidence that the direct and indirect benefits oe intensification are, in fact, shared by the compound. Implements are used by many members; food supplies are more certain, a-id since more food is grown with Less labor-intensive farming on the chief's plot, individual members of the compound can spend less time working for the chief and more time on their own fields increasing their personal revenue. The economic relationships of compound members strikes a reasonable balance between individual self-interest and communal insurance, in the form of obligations to and from the compound chief, and against harvest failures. Conclusion 8. Although no serious land tenure problems are foreseen for the project, SODEVA's study group would Be asked to monitor the transltion from one system of allocation to the other during project implementation. Also, while working through family heads, the benefits of the project would be distributed to famnily members and their associated workers (sourgas and navetanes).

65 ANNEX 7 Page 1 SENEG.AL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT TECHNICAL ASPECTS OF ANIMAL PRODUCTION Traditional Grazing 1. Most of the farmers in the project area own beef cattle, sheep and goats. Cattle herds comprise between 10 and 60 head; they are kept as reserve capital, and as a source of milk for family consumption. They graze crop residues during the dry season, and fallow fields or uncultivated areas during the cropping season. In addition, migratory cattle herds from the dry north of Senegal graze residues from cultivated fields of the Groundnut Basin during the dry season. In the northwest, where almost all the available land is cropped, local cattle graze on crop residues, mainly groundnut hay and millet stalks during the dry season, and with the exception of milking females and calves, are moved to the Sine Saloum delta area during the wet season. Under this system the cattle make small weight gains to 60 kg liveweight/year; the calving rate is about 60%, calf mortality 25%, and milk production about 150 liters/year. Practically all animals are regularly immunized against rinderpest, pleuropneumonia, anthrax and blackleg by Government's veterinary services. However, internal parasites (helminthiasis and coccidiosis) are widespread and contribute to low calf weaning rates. Development of Mixed Farmin 2. The traditional open grazing system is undergoing a radical change with the introduction of animal traction and improved animal care under which animals are kept in shelters and fed crop residues, especially groundnut hay. This change results in an improved utilization efficiency for the crop residues when compared to the traditional nomadic grazing system. The net result is an increase in the carrying capacity of the land and crops. 3. A stall fed animal requires a mixed ration of about 3 tons/year of groundnut hay and 1.5 tons/year of sorghum/millet stalks, or about 3.5 tons/ year of groundnut hay alone. The current practice of farmers is to feed groundnut hay mostly by itself. The production of groundnuts under the project (assuming the same yield for dry hay as for unshelled seed for the typical 13-hectares farm described in Annex 16) would enable the average farmer to feed the following animal units on groundnut hay alone: Y O Y 1 Y 2 Y 3 Y 4 Y 5 South North

66 ANNEX 7 Page 2 With the inclusion of sorghum/miilet stalks in the ration, the carryinr capacity would be increased by 25 percent. 4. Draft Oxen. Draft oxen are now fed mainly with groundnut hay (10-12 kg/ day) and under the project SODEVA would encourage farmers to make more use of sorghum/millet stalks, and thus save groundnut hay to stall fatten steers. A daily ration of 8 kg of groundnut hay, 4 kg of cereal straw and 50 grams of mineral supplement would allow mature oxen to work and gain kg liveweight/year. 5. Cattle Fattening. Cattle would be fattened under a system that would include: (a) simple stables; (b) basic supplements of groundnut hay and millet/sorghum stalks at the saire rates as for draft oxen; (c) feeding troughs; (d) drugs for internal parasites; and (e) mineral supplements (50 grams/day). A three-year old animal weighing 175 kg would be expected to gain 500 grams/day, or 75 kg for a 150-day period of feeding, some 50 kg nx)re than under open grazing (Table 3). 6. Calf Rearing. Under the project's calf weaning program, calves would receive a treatment for internal parasites, and a daily ration for 100 days of 100 grams of feed concentrate rich in protein and minerals. Under this regime, about 85% of the calves would survive one year. During the second year and half of the third year (up to the marketable stage) the calves would receive 20 grams/day of mineral supplement. They would also receive a deworming treatment during each of the 2nd and 3rd years and under the project about 80% of the calves would survive to three years of age, compared to about 60% without the project. This calf rearing operation would help to satisfy the rapidly increasing demand for draft animals and feeder steers. Details are in Table Improved Feeding of Dairy Cows. Dairy cows normally produce about 150 liters of milk over about 100 days, and give birth to two calves in about three years (birth rate of 60%). The causes of the low calving rate would be investigated by the SODEVA's animal husbandry specialist, together with veterinarians from the Ministry of Rural Development with a view to recommending measures to improve the rate. Nevertheless, with drugs to control internal parasites, supplementary feeding of 200 grams/day of concentrate for 200 days, and feeding of groundnut hay and millet bran, cows would produce an additional 200 liters of milk per year, and the calving rate is expected to improve by about 30% to one calf about every 15 months (birth rate of 80%). 8. Traction Cows. Small farms that can only feed a few animals would use cows for traction. There cows would receive the same drug treatments and feed supplements as draft oxen, plus an additional mineral supplement of 50 gramis/day to improve the calving rate. 9, Sheep, Goats and Pigs. In addition to improved care for cattle, SODEVA would demonstrate improved production methods for sheep and goats including control of internal parasites, and supplementary feeding with

67 ANNEX 7 Page 3 groundnut hay. In cooperation with animal husbandry research services, SODEVA would introduce rams of the improved "Djalonke" breed to upgrade the sheep population in selected villages, and the results of the crosses would be kept under close observation. Traditionally Serere farmers in the northwest of the project area raise pigs on millet bran, and kitchen residues. Under the project, SODEVA would supervise pig husbandry demonstrations including deworming and feeding of concentrates and minerals. Since SODEVA's major activity in livestock would be with cattle, and would be linked to demonstrations for other animals, no benefits are assumned in project calculations for increases in sheep, goat and pig production that could arise from the demonstrations. Animal feed mill mixiné_plant 10. To meet the requirements for feed supplements (minerals and concentrate), SODEVA would build and operate a mixing plant at Kaolack. Details on ingredients, and requirements of the project are shown in Table 1, and Table 2 gives a breakdown of tule costs of the mixing plant. The plant would produce about 2,000 tons per year by Development of livestock production costs and benefits 11. Table 3 gives the numbers of animals that would be reached by the project, and the expected increases in production that would result. The corresponding farm costs and benefits are shown in Table 4.

68 Annex 7 Table l SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT TECHNICAL ASPECTS OF ANIML PRODUCTION Feed Supplement Composition and Requirements of the Project Unit Cost Mineral i/ - Concentrate - CFAF Composition - Cost/ - Composition - Cost - kg % CFAF 100/kg % CFAF 100/kg A. Ingredients and Cost Salt Bone meal il 220 Groundnut cake 40 - _ 75 3,000 Fish meal Others _ 100 Packing Total 100 2, ,024 Total per 100 kg 2,310 4,024 B. Feed Requirements for the Projiect 2/ Concentrate Concentra te ts ~~~ tons --_-_-- Calves Mineral Câlves Dairy cows Draft cows Draft oxen ,080 Beef fattening Total Minerals , , , ,754.0 Total Feed Requirements Per year ,114,0 1,_ , ,079.4 Per day / The mineral supplement contains also a protein concentrate (fish meal) 2/ Based on animal numbers and feed requirements in tables 3 and 4.

69 Annex 7 Table 2 SENEGAL SINE SALOUM AGRICULTURAL DEVELOP]SENT PROJ3CT TECHNICAL ASPECTS OF ANIMAL PRODUCTION Feed Supplement Costs (CFAF '000) Cost of Ingredients Minerals 1/ 3,053 3,613 6,197 i,619 13,094 Concentrate 2/ 17,592 26,68U0 29,512 34,93, 40,517 qperating Costs Labor 3/ 2,500 2,500 3,000 3,000 3,500 ElectrJcity 4/ ,050 1,275 1,575 Plant Maintenance 5/ 750 koo 900 1,000 1,200 Plant Depreciation 5/ 1,000 1,G00 1,000 1,OOG 1,000 Transport 7/ ,00 1>400 1,700 2,000 Sub-total 26,325 36,618 43,059 51,532 62,FE6 Contingencies 20% 5,265 7,323 8, ,577 Total Cost 31,590 43,941 51,670 61,`3' 75,463 Revenues fron Sales Concentrate (CFAF 50/kg) 3,830 4,490 7,700 10,710 16,270 Mineral (CFAF 40/kg) 30,464 41,004 51, ,160 Total 34,294 45,494 58,796 71,210 86,430 Surplus 2,704 1,553 7,126 9,372 10,967 l/ CFAF 23.10/kg (Table l) 9/ CP^.-0.2)/kq (Table 1) 3/ 2.5 man-days/ton plus CFAF 1,000 for sudervision 4/ CFAF- OO/ton 154 initially, increasing to 25% of ecuipment cost by 1979-'0 Over 5 years 7/ CFAF 1,000/ton

70 SENEGAL SINE SALOUM ACRICULTURAL DEVELOPMENT PROJECT TECHNICAL ASPECTS OF ANIMAL PRODUCTION Development of Livestock Numbers, and Milk Production Project Years I. Calves Il. Dairv Cows Calves participating in project 6,000 6,000 12,000 18,000 30,000 30,000 30,000 3,900 3,900 7, ,500 Calves weaned with project (one-year old) 1/ 5,100 5,100 10,200 15,300 25,500 25,500 25,500 Incremental calves (2-year old) due to projeet ,800 2,700 4,500 Cows participating in project 3,000 4,500 6,000 7,000 8,000 8,000 8,000 Calves born 2/ 2,400 3,600 4,800 5,600 6,400 6,400 6,400 Incremental two-year old calves reared under the pçoject 2/ ,200 1,400 1,600 Incremental milk production (Tons) 3/ ,200 1,400 1,600 1,600 1,600 Im. Draft Cows Cows participating in project ,000 1,000 Calves born 2/ Incremental two-year old calves reared under the project 2/ IV. Draft Oxen and Ox Fattening Pairs of draft oxen 14,000 17,250 20,500 24,000 27,000 30,000 30,000 Pairs under training 5,220 5,990 6,820 6,810 6,680 9,440 9,440 Culled fattened draft oxen 4/ 1,160 2,370 3,380 4,290 15,430 16,340 19,500 1/ Calf survival rates: Without Project With Project Increment after one year 75% 85% after two years 65% 80% 15% Incremental weight gain due to project 25 kg per 2-year old animal 2/ Survival rates of calves born from dairy cows and draft cows as % of breeding cows. Without Project With Proiect Increment calves born 60% 80% survivina after 45% 63% ane year4563 surviving after two years 42% 62% 20% Incremental weight gain due to project = 25 kg per 2-year old animal 3/ Incremental production of 200 liters per year 4/ uraft oxen replaced every 4 years;22% of oxen under training rejected.

71 Anses 7 Table 4 SENEGAL 0168E SALO11M AGRICULTUREAL DEVELoPMeNT PR0JECT TECHNICAL ASPECTS Or ANIMAL PRODUCTION Fare Benafitr a-d Cneta INCREMENTAL BENEFITS 1/ Additional rainas reared by projeot (1,540) (1,870) (3,100) (4,230) (6,260) at CFAF 12,000 18,480 22,440 37,200 50,760 75,120 Incrasantal valaht gain ondes atall feeding Ctaia kg pea asisal150 dayo) (5,180) (5,840) (10,400) (14,760) (23,020) or CFAF 100/kg 2/ 12,950 14,600 26,000 26,900 57,550 oxer - 50 kg par anla1(150 daye) (5,320) (8,170) (11,460) (12,770) (15,438) (16,340) (19,500) at CFAF 100/kg 26,600 40,850 57,300 63,850 77,150 81,700 97,500 Milk 000 litera (600) (900) (1,200) (1,400) (1,600) (1,600) (1,600) at CFAP 25/liter , Total Benefits 41,600 63, , , , , ,170 INCREMENTAL COSTS 3/ Clveas 4/ Year nld - CFAF 1,050 6,300 6,300 12,600 18,900 31,500 31,500 31,500 Tvn-yeas nid - CFAF 870 4,437 4,437 8,874 13,311 22,185 22,185 Threa-ear nld - CFAF 510 2,448 2,448 4,896 7,344 12,240 Snb-total 6,300 10,737 19,485 30,222 49,707 61,029 65,925 1airv nova CFAF 2,100 pe,rtear 5/ 6,300 9,450 12,600 14,700 16,800 16,800 16,800 Calvea CFAF 1,050 - y-ar 0 2,520 3,780 5,040 5,880 6,720 6,720 6, y-ar 1 1,644 2,466 3,289 3,837 4,385 4, year ,423 1,897 2,213 2,550 lob-total 8,820 14,874 21,055 25,292 29,254 30,118 30,455 Oraft noe CFAF 820 per ye- 6/ Year ld calvrs - CFAF 1, Tvn-ya.a nid salves - CFAF Thsee-year nid calvea - CFAF Sob-total ,083 1,464 1,842 2,303 2,461 Draft oses 7/ Oses at v-rk - CFA 900 pas year 25,200 31,050 36,900 43,200 48,600 54,000 54,000 Os fattening - CFAF 360 pas y-enr 1,915 2,941 4,125 4,597 5,555 5,882 5,882 Slb-total 27,115 33,991 41,025 47,797 54,155 59,882 59,882 Total Cnet 42,567 60,293 82, , , , ,723 1/ Fros Tabla 1 3talve v.osd gain 50 kg /150 daye with the prtjent, ard 25 kg vithout; osen wpuld gais 75 kg/150 dayo vith the projeot, nad 25 kg/15 dayo withont.!/ Dit conte in-loda CPM i50/yens for raterisnry drogo. 4/ Caf fend reqsinante Yees O 100 graes/day.n.enetrate for 180 days = 18 kg.sit cnet CPMAF 50Total ceot CFAF e r aimerai 365 =18 n 40,,n n" n "180 n n = 9 40 ",,n 360 5/ Dairy nove Pr year: 250 6/ Draft soya " '" ' 200 " = 50 "" " " 40 " " 2,000 P- Year, 100 " " 200 " =18 " O r". 40 " " 720 7/ Draft oen4 P-ryeas IOO " n n" 200 n =20 "" " 40 n n n 800 On fattening Pr ya-a 50 n n 1800 = 9 n 40 n 360

72 ANNEX 8 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPIENT PROJECT CREDIT AND COOPERATIVES IN SENEGAL 1. The basic structure in Government's plan for organizing the rural sector is the cooperative systen. Senegal has about 2,200 cooperatives, of which about 77% are connected directly with groundnuts. Groundnut cooperatives have about 200,000 members, but the number of farmers who use collection points and, directly or through relatives, the other services of the cooperatives, has been estimated at about 1.2 million. 2. The philosophy of the cooperative movement, expressed by Government shortly after independence, is "to set up a mode of organization which makes it possible to preserve the old community values and promote modern development". 1/ First priority was to replace the trader-based system and thus halt the "usurious" indebtedness of farmers. Since 1967/68, groundnuts have been marketed through the cooperatives at official Government prices; and in the last 13 years. Programme Agricole (PA) has provided CFAF 11.7 billion (US$49 million) in credit to cooperative members. 3. The average cooperative has about 120 members and markets about 400 tons oi groundnuts annually. Each cooperative member, usually the chief of a compound, pays CFAF 1,000 as a membership fee and is entitled to obtain credit for fertilizer, insecticide and agricultural implements. 4. The membership votes for a board of directors, and one third of the directors are replaced each year; the chairman of the cooperative is appointed by the directors. ONCAD supervises and provides technical assistance to cooperatives through its Directorate of Cooperation, and BNDS finances their credit requirements. A cooperative's borrowing limit set by BNDS is either 10 times its membership fees or, since this amount rapidly becomes insufficient, about 75% of the average value of marketed groundnut production over the past three years, less outstanding medium and short-term debt. Credit is formally backed by the joint and several guarantee of all members, and in monetary terms bv the membership fees and groundnut production bonuses paid to cooperatives: these funds, now amounting to about CFAF 1.8 billion (US$7.5 million), are held in blocked accounts in BNDS. 5. This collective form of credit has been oriented toward the minimum credit needs of large numbers of farmers, and thus neglects farmers who require above-average credit for fertilizer and implements. In fact, even under 1/ Government Instruction Circular No. 032/PC of May 21, 1962.

73 ANNEX 8 Page 2 the pilot intensification project (Annex 5), project farmers beginning intensification occasionally had difficulty in securing credit because of the unfamiliarity of cooperative credit committees with the project and their reluctance to increase the cooperatives' debt load. Credit for progressive farmers under the herein appraised project could be assured in the future by using funds now held for the cooperatives in the BNDS as a guarantee for the CFAF 54.3 million additional credit which the proposed project would involve. 6. In the pilot project, SODEVA's field staff aggregate the requirements for fertilizer and implements for farmers and provide lists to ONCAD, which distributes inputs on faith that retroactive approval for the credit from individual cooperatives will be forthcoming. In the future, SODEVA intends to deal directly with cooperatives to ascertain credit requirements. Procurement and credit specialists would be employed by SODEVA to (i) work wit}l cooperatives and ONCAD, (ii) prepare lists of seasonal inputs and implements for which credit is needed, (iii) arrange for increases in cooperative guarantee funds, and (iv) coordinate the distribution of inputs. 7. ONCAD is planning to reorganize cooperatives into units that will market at least 1,500 tons of groundnuts per year, the minimum it considers necessary to pay for a permanent cooperative manager. This reorganization represents a major change for the cooperative movement and may not be supported by farmers. It should tnerefore be closely followed during project implementation.

74 A?NEX 9 S EILGAL SINE SALOUM AGRICULTURAI DEVELOPIAENT PROJECT REPORTING REQUIRENENTS 1. SODEVA would be required to supply detailed quarterly reports. Under the pilot project SODEVA prepared periodic reports for CCCE. The reports were of two types: (a) a progress report on the implementation of the program in September, and a final report on the cropping season in March; and (b) a tentative program of the coming season in December, and a final program in June. The same schedule and similar forms as suggested by CCCE would be kept for the project. In addition all reports would include an administrative section. The suggested formats of reports are shown in Tables 1 to,'. These formats would be discussed with SODEIVA in the course of the first supervision mission.

75 ANNEX 9 Table 1 S ENE GAL SINE SALOUI AGRICULTURAL DEVELOPOENT PROJECT REPORTING REQUIREMENTS Format for Progress Report. Administrative Section (This section to be added to both of the reports to oe prepared each year) 1. General 1.01 Summary of project actions, highlighting progress made in implementation, e.g. number of farmers engaged in program, crop and animal production, staffing Sunmary of important factors (if any) affecting the progress of the project: weather, government policy decisions, etc. Identify bottlenecks Summary of disbursements of loan Estinated Disburse- Disbursements Total % of total Total Disburse- meents Re- Received Disburse- Disbur- Loan ment for quested for from Bank ment from sement Current_year this Period this Period Bank to date (By Category) The quarterly breakdown for the above should be at Table 2, and actual expenditures at Table Action taken or required 2.01 Summarv of governnent action required or taken to overcome major problems as indicated in Section Summary of requests to Bank and response by Bank or action required or taken.

76 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT REPORTING REQUIREMENTS Quarterly Project Disbursement SumearY US$ 000 Project Colendar Fiscal Year Year Year Deisbursemu t - Actual Disbursements - Accomulated Total Total Bank bfrome _9 Total to Loan Percentage Cost Estimate Loan Disbursement Previous Year Ist Quarter 2nd Quarter 3rd Quarter 4th Quarter Date Balance Disbursed Catregory. D W~ 50

77 SENEGAL. S INE SALOUM AGRICULTURAL DEVELOPMENT PROJECT REPORTING REQUIREMENTS Quarterly Pro1ect Expenditure Su inary CFAF'000 Project Year Calendar Year_ Fiscal Year Cost up to Fiscal Year 197 Fiscal Year 197_ Accumulated Total Estlmated End of Revised Cost Estimates Actual Expenditures Totals to Cost Over Project Previous Year lst Quarter 2nd Quarter 3rd Quarter Last Quarter lst Quarter 2nd Quarter 3rd Quarter Last Quarter Date Balance Category

78 Annex 9 Table 4 SENEGAL SINE SALOUIM AGRICULTURAL DEVELOPMENT PROJECT REPORTING REQUIREMENTS Fornat for Progress Report - Preliminary _Tork Program Preliminary work program - 19 Cropping Season (to be subriitted in December) Extension Field 2nd Step Farmers 3rd Step Farmers Workers Pre sent/planned Present/Planned Presert/Planred (ry operation and district)

79 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT REPORTING REQUIREMENTS Format for Progress Report - Implementation of Project Final Work t>rogram - 19 Cropping Season (to be submitted not later than September lst) A. Extension personnel and farmers Extension Field workers 1st Step Farnrers 2nd S&ep Farmers 3rd Ste Farmers Present Planned Present Planned Present Planned Present Planned (by operation and by district) If the figures differ significantly for those forecast in December, explain the reason. B. Crops, ha Total Ares Groundnuts Millet asize Semi-intensified Intensified (by operation and by district) C. Animals, heads HJko Calf feeding Beef fattening Breeding cow feeding (by operation and by district)

80 D. Inputs (tons and units) Pr3evious Season This S 3ason Fertili7zers and pesticides Rock pnosphate Groundnuts Fertilizer I1il: t Fertilizer Maize Fertilizer Sorghum Fertilizer Urea DDT Fungicide Implerients Plows Hoes Seeders C arts Draft Animals Steersa Hei fers r Feed Concentrates Mineral Herbivon

81 SENEGAL SINE SALRT4 AGRICULITURAL DEVELOP}=T PROJECT REPORTING REQUIREMENTS Forniat for Progress Report - Final Results Annual Report on Results - 19 Cropping Season (to be submitted no later than April l) A. Extension personnel and farmers - Sar.e format as in Table 4. A. Crop production Groundnut IvIillet Sorghum Maize -Cotton ha yield production ha hield ield production oduction production ha production ha vield proojctiof (by operation and by distiict) B. Animal Production (heads) Calf feeding Beef fattening Breeding cow feeding cx, (hy onerntion and by district)

82 C. Characteristics of Season: Rainfall, incidence of pests. ANNEX 9 Table 6 Page 2 D. Production Costs and Returns: Give details on cost of inputs and farm gate price of products. E. Training Program: Number of traininig sessions by category. Evaluation of the impact of the program. F. Status and results of project monitoring program. G. Status and results of studies. fi. Project Organization and Management: Brief report on project management, detailing any problems. 1. Project buildings. J. Vehicles and Equipment: An inventory of project vehicles and equipment should give relevant data on delivery dates, and state of repair.

83 ANNEX 10 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT Draft Terms of Reference for a Cereal Mlarketing and Storage Study The purpose of the study would be to determine the policies, procedures, and investments required to promote local cereal production to help Senegal grow more of its cereal requirements. The study would involve an analysis of the present cereal production and marketing situation, mediumterm consumption and production projections, and proposals for marketing procedures, price policies, investments, and qualified personnel. 1. Analysis of-present situation: (a) Production trends by crops and geographical areas. (b) Consumption trends. (c) Trading pattern for domestic cereals. (d) Trading pattern for imports. (e) The trading systens and impacts of Government regulations. (f) Analysis of marketing constraints for domestic production. (g) Inventory and condition of storage facilities. 2. Demand and upply Proections: (a) Estimated demand for cereals by crop and origin including demand for animal food and processing. (b) Estimated domestic supply projections by crop and origin of supply. (c) Estimated need for imports. (d) Market constraints on substituting imports by local products, including inter alia consumer taste preferences and processing convenience.

84 ANNEX 1 0 Page 2 3. Marketing Procedures and :tora e: (a) Recommendations for improving the marketing system. (b) The role of private traders in marketing, storage and processing for domestic and imported cereals. (c) The responsibility of Goverriment and state controlled institutions in future market, storage, and processing operations. (d) Need for improved storage facilities including types and location. (e) Links with marketing arrangements for olher crops. (f) Links with credit supply for cereal production. (g) Need for and means of enforcing grading systems and other market controls. (h) Means for collecting and disseminating marketing information. 4. Price Policies: (a) Consumer price policies for imported cereals. (b) Price policies for domestic cereals. (c) Impact of price policy variants on s pply and demand projections. (d) Need for and means of maintaining a price stabilization fund. (e) Need for and means for maintaining a strategic reserve of cereals to cover emergencies. 5. Investment Proposals (a) Based on the institutional arrangements proposed in 3, the supply and demand projections and the evaluation of existing facilities, determine (i) the financial requirements for stocks, facilities, equipment, and qualified personnel required by the public sector over the next five years; (ii) the need and means for providing credit to private traders, millers, and processors to finance stocks, equipment and facilities; and (iii) the needs, means and costs for improving on-farm storage.

85 ANNEX 10 Page 3 6. SODEVA would employ consultants to carry out the study during the first project year. A short list of consultant firms would be invited to submit proposals for the study based on the above draft terms of reference. The study team would include an economist, storage/processing specialist, and a marketing specialist. Field work and report writing would be completed within a total of nine man months.

86 ANNEX 11 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT TERMS OF REFERENCE FOR EXPATRIATE STAFF Technical Director 1. The Technical Director would report to the Project Manager, and would be deputy project manager. He would be responsible in particular for: (a) planning the project's program of work; (b) reviewing and establishing all technical recommendations for project activities; (c) coordinating activities of the technical divisions; (d) coordinating day-to-day activities with other Government agencies operating in the project area; (e) supervising all senior technical personnel; and (f) training a successor. He would be appointed for a four-year term. During the first three years, he would have executive responsibility and in the fourth year, he would act as an advisor to a Senegalese replacement. He would have a degree in agriculture or equivalent scientifîc qualification and have experience in West African agriculture, preferably for five years in a senior supervisory position in a Government extension service or equivalent. Organizational Specialist 2. The Organizational Specialist would report to the Techniral Director. He would be responsible for: (a) evaluating the effectiveness of the project extension program; (b) supervising a survey team to obtain results from a sample of project farms; (c) recommending changes in technical recommendations based on the experience gained in project implementation;

87 ANNEX 11 Page 2 (d) assisting the technical director in making a work program for each cropping season; (e) assessing the cost effectiveness of the project at the farm and national levels; and (f) making an assessment of the impact of the project on production. He would be appointed for a period of three years. During the first two years, he would have executive responsibility, and in the third year, he would be an advisor to his Senegalese replacement. He should have a degree in economics, preferably with an additional qualification in statistics. He should also have experience of supervising farm surveys. Animal Husb_nayj Div _ion Chief 3. The Animal Husbandry Division Chief would report to the Technical Director. He would be responsible for: (a) implementing all animal production aspects of the project; (b) providing technical supervision and training for field staff in animal production; (c) with the Planning and Evaluation Specialist and District Chiefs, preparing annual work programs; (d) with the Planning Officer, reviewing technical recommendations for animal production; (e) coordinating project annual husbandry investigations with the Ministry of Rural Development's Veterinary Department, and Research Institutes in Senegal, (f) supervising the project's livestock marketing facilities; and (g) providing technical supervision for the animal feed mill. He would be appointed for three years and would have executive responsibility for two years, during which he would train a Senegalese replacement. lie would be an advisor to his replacement in the third year. He should have a degree in animal husbandry or equivalent science, and should have experience in animal production in West Africa, of which about five years should be in a supervisory position, preferably with a Government extension service or its equivalent.

88 ANNEX 11 Page 3 Crop _usbandry Division Chief 4. The Crop Husbandry Division Chief would report to the Technical Director. Re would be responsible for: (a) implementing crop production aspects of the project; (b) assuring the technical supervision and training for field staff in agronomy; (c) preparing annual work programs for each district with the planning specialist and district operational chiefs; (d) reviewing technical recommendations with the planning officer; (e) coordinating project trials with the Ministry of Rural Development's Agricultural Department and associated research organizations; and (f) assisting the planning and evaluation specialist with the evaluation of project results. H1e would be appointed for three years and would have executive responsibility for two years during which he would train a Senegalese replaceinent. He would be an advisor to his replacement during the third year. He should have a degree in agronomy or equivalent science, and experience in West African agriculture, preferably with five years in a supervisory position in a Governient extension service or equivalent. Train& Division Chief 5. The Training Division Chief would report to the Technical Director. He would be responsible for: (a) courses for new project staff; (b) supervising in-service training; (c) coordinating training activities with CETAD and the Ministry of Education; (d) recruiting staff with technical division chiefs and district operations chiefs; and (e) assuring technical supervision of district training assistants.

89 ANNEX 11 Page 4 He would be appointed for three years. During tlhe first two years, he would have executive responsibility and would train a Senegalese counterpart. During the third year, lie would be an advisor to his replacement. He would have an appropriate basic degree preferably with an additional qualification in education. He should have experience in West African agriculture, preferably including a supervisory position in a training school. Administration and Accounts Specialist 5. The Administration and Accounts Specialist would report to the Project Manager, and would liaise with the administration department in SODEVA's Dakar headquarters. He would be responsible for: (a) supervising all project financial and staff administration; (b) preparing annual budgets; (c) preparing quarterly cash flow projections; (d) checking accounts maintained at Dakar and preparing final accounts; (e) preparing reimbursement claims for the Bank loan; (f) maintaining disbursement records; (g) overseeing stores and credit activities; and (h) supervising project procurement including the preparation of lists of farnm inputs required by project farms from ONCAD, and coordinating orders and deliveries with ONCAD. he would be appointed for three years. During the first two years, he would have executive responsibility and would train a Senegalese counterpart. lie would be an advisor to his replacement in the third year. He would have an appropriate accounting qualification and would preferably have five years experience in a senior supervisory position in Africa.

90 SENSGAL Annex 12 Table 1 SINE SALOUM AGRICULTURAI. DEVELOPMENT PROJECT PROJECT COSTS 1/ Suna,ry CFAF '000 Taxes Foreign Exchange Total 7. Total % Total A. SODRVA 1. Capital Costs Permanent Buildings 128,300 22, _ 150, , ,250 Temporary Buildings 2,800 8,500 8,500 - _ 19, ,980 Vehicles 17,800-2,800 23,500-44, , ,260 Equipment 62,300 37,700 24,400 3,900 2, , , ,600 Furniture 16 3,200,00 2,001,900 il 3, ,0 Sub-total 227,900 71,600 37,700 27,400 2, , , ,850 II Personnel Costs Civil Servants 263, , , , ,165 1,566, , Contracted Senegalese Staff 300, , , , ,985 1,795, , Expatriaten 81, , ,166 1II. Oper.ting B. Consultants Sub-total 645, , , , ,150 3,595, , ,166 Conts Head Office 71,400 80,100 85,000 80,300 77, , , ,460 Regional Office 20,300 17,100 14,000 11,000 10,200 72, , ,260 Tree Nurseries ,000 4,000 4,400 10, Training 5,350 5,350 5, ,350 26, ,350 Demonstration 7,300 12,900 8,200 11,500 5,700 45,600 Msintenance 22,600 26,900 28,800 27,100 27, , , ,750 Planning and Evaluation 13, D 12,500 12, ,600 Sub-total 139, , , , , , , ,420 Total SODEVA 1, , , , ,708, , ,436 Cereal Marketing and Storage - 18, , ,000 Pr-jert Evaluation ,500 3,000 3, Sub-total ,500 3,500 3,000 3,000 36, ,000 C. Incre,ental Fara Inputs D. Contingencies Rock Phosphate 29,600 38,600 46,700 55,800 64,300 23, , Other Fertilizers 38,100 11,400 34,700 38,200 46, , , ,280 Equipaent 64,200 11,900 21,200 51,000 31, , , ,100 Seeds 3,850 1,250 3,480 4,040 4,860 17, Inecticide , , ,024 Sub-total 138,000 63, , , , , , ,404 Total 1,156, _ , Physical 50,590 29,040 30,370 33,150 29, , , ,170 Price /2 (a) Buildings 11,540 7,800 3, , , ,376 (b) Other , , , ,200 1,407, ,522 Sub-total 75, , , , ,200 1,430, , ,898 Total Preject Cost 1,282,190 1,247,580 1,407,190 1,495,280 1,532,710 6,963, , ,908 1/ Mid 1975 prices. Figures.,ave-beeo upda~cd frm base tables, which are mid 1974, by adding 17.7% to the cost's of buildings and 13.4% to all other costs, except personnel costa for nhicih base tables already reflect 1975 prices. 2/ Price contingencies ansume inflation rates of 16% in 1975, 14% in 1976 and 12% in 1977 for buildings,and 12% in in 1976 and 87. in succeeding years on all other costs.

91 Anr,ex 12 Table 2 `-e'gai, SALuUIP AGRICULtULJ7AL DI,V2LOPmZNT PRCJïCT?ROJECT COST Construction Cost CFAF I. C0N ShEUCTION (a) Kaolack - Office BuildinLg 660 m2 19,800,000 - Garage 4o m 2 800,000 - Store 150 Ir.2 3, e - Animal Feed ',itll 100 m2 2,000,000 H.ousing I-Iroject IM1an1ager 120 m 2 14,200,000 - Operation Chief 100 m 2 3,500,000 - Guest House 50 m 2 1,750,000 - Site Preparation lo,oo0 2,000,000 - Parking 2 240,000 - Fencing 3140 mn 2,380,000 Total Kaolack 39,670,000 (b) District (1) - Office 115 rm 2 3,450,000 - Store, Garage 80 rn 2 1,820,000 - Housing 100 m2 3,500,000 - Site Preparation & Fencing 1,000,000 Total Distr,ict (1) _ Total Districts (4) h8, 8o,o0o (c) Sub-districts - Store-Offices (1) 45 m 2 1,350,000 Total 3ub-districts (28) 37g800,000 Total a, b and c 126,320,000 - Architect Fees 2% 2,480,000 Total 2,1480,000. _orctru,l n 128,300,000 -j>'-, 109,900, e900,000

92 ANNEX 12 Table 3 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT PiOJECT COST Vehicles and Furniture Unit 1/ TOTAL Cost (CFAF 000) T, VEH-ICLES Headquarters Trucks 3.5 ton 2,511,000 (2) 5,022 (3) 7,533 (5) 12,555 Pickup 1,183,500 (2) 2,367 (2) 2,367 (4) 4,734 districts -TSCffiiér (7) 8,285 (7) 8,285 (14) 16,570 Trucks 3.5 ton 1,133,500 (1) 2,511 (1) 2,511 (2) 5,022 15,674 2,511 20,696 38,881 II. FURNITURE eadquarters Housine (2) 2,170 2,170 Office Equipment h,810 4,810 as triot.s Office Equipment 7,749 2,799 1,800 12,348 14, ,32E 1/ ail taxes included

93 ANNEX12 Table 4 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMRENT PROJECT PROJECT COST Equipment (CFAFt 000) Total a) Livestock - Feed Mill Equil>ment 5,000 5,000 - Feed Mill Materials 5,000 5,000 10,000 - Livestock Assistants Equipment 2, ,400 - Demonstration Wells 4,400 8,400 4, ,36: r _' - Farm Demonstration Equipment 2, ,400 4,190 - Livestock Marketing 3,000 3,000 b) Storage Equipment 4,900 4,900 9,80C c) Welding Equipnient 9,600 8,400 8,400 26,400 d) Training Centers 8,180 8,180 e) Animal Husbandry and Agronomy Trial Equipment 5, ,500 2,600 10,300 f) Evaluation 5,300 5,300 g) Forest Nursery Pumps 5,200 5,200 _ ` i , , ,660

94 SENEGAI SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT PROJECT COST Personnel Cost (Expatriate) (CFAF' 000) Unit Salary and Travel Expenses 1/ (UNIT) AND COST CFAF' ( ) Technical Director 17,000 17,000 (1) 17,000 (1) 17,000 (1) 17,000 (1) Agronomist 12,500 12,500 (1) 12,500 (1) 12,500 (1) - Other Specialist 2/ 9,920 39,680 (4) 39,680 (4) 29,760 (3) - Farm Machinery Consultant 13,000 6,500 (i) 3,250 (i) 3,250 (i) - Storage Specialist 6,000 TOTAL 81,680 72,430 62,510 17,000 1/ Travel expenses amount to CFAF1,218,500 for in-country travel, and SFAF 6h5,hhO for the annual leave. 2/ Animal husbandry, training, administration, planning. CD

95 SRNEGAL Annex 12 SIN8E SALOM AGRICULTUBAL DEVELDPMEIT PROJECT Table 6 PROJEIT COST Personnel bocts for Senegalese Staff 1/ -Unit C-st Salaries Allon...es Toti Total CFAF S. Civil Servants Pro-eot Director 1,760 2,149 3,909 (1) 3,909 (1) 3,909 (1) 3,909 (1) 3,909 3,909 19,545 Regional Office Staff 1,760 2,031 3, Senegalese Counterparts (5) 18,955 (5) 18,955 (5) 18,955 (5) 18,955 (5) 18,955 94,775 Agronnisnt _ - - (1) 3,791 (1) 3,791 (1) 3,791 (1) 3,791 (1) 3,791 18,955 Veterinarina (1) 3,791 (1) 3,791 (1) 3,791 (1) (1) 3,791 18,955 Acouantant - (1) 3,791 (1) 3,791 (1) 3,791 (1) 3,791 (1) 3,791 18,955 Senior Assistants 1,100 1,152 2,252 (11) 24,772 (12) 27,024 (11) 24,772 (11) 24,772 (11) 24, ,112 Distriot Staff 1,100 1,152 2, District Chiefs and Deputies (12) 27,024 (12) 27,024 (12) 27,024 (12) 27,024 (12) 27, ,120 Ainal Eusbandry Officers - - (6) 13,512 (6) 13,512 (6) 13,512 (6) 13,512 (6) 13,512 67,560 Trsining Officers (7) 15,764 (7) 15,764 (7) 15,764 (7) 15,764 (7) 15,764 78,820 Adninistrative Offi-ers (6) 13,512 (6) 13,512 (6) 13,512 (6) 13,512 (6) 13,512 67,560 Exteosion 8ervinea (22) 49,544 (22) 49,544 (22) 49,544 (22) 49,544 (22) 49, ,720 Field Staff Agricultural Entena1 on Agents ,120 (40) 44,800 (60) 67,200 (78) 87,360 (78) 87,360 (78) 87, ,080 Ani=al Rnsbandry Assistants 655 1,031 1,686 (26) 40,464 (33) 55,638 (40) 67,440 (40) 67,440 (40) 67, ,422 Costs Financed by the Governrent 2/ , , , , , ,005 Finan-ed by SODEVA 3/ , , , , , ,574 0,b-total , , , , ,165 1,566,579 II. Contracted Personnel Regional Office Staff Administrative Officar 2,040 1,929 3, (1) 3,969 (1) 3,969 (1) 3,969 11,907 Proonresset Officer 2,040 1,929 3,969 (1) 3,969 (2) 7,938 (1) 3,969 (1) 3,969 (1) 3,969 23,814 Credit Officer 2,040 1,929 3,969 (1) 3,969 (1) 3,969 (1) 3,969 (1) 3,969 (1) 3,969 19,845 Accoantants and Adninistrative Staff ,132 (4) 4,528 (4) 4,528 (4) 4,528 (4) 4,528 (4) 4,528 22,640 Accountants and Adrinistrative Staff (13) 12,480 (13) 12,480 (13) 12,480 (13) 12,480 (13) 12,480 62,400 Prororeaeat Clark (1) 564 (1) 564 (1) 564 (1) 564 (1) 564 2,820 Drivera (8) 4,688 (8) 4,688 (8) 4,688 (8) 4,688 (8) 4,688 23,440 Clerks (7) 3,157 (7) 3,157 (7) 3,157 (7) 3,157 (7) 3,157 15,785 Statistical Assistant (13) 8,671 (13) 8,671 (13) 8,671 (13) 8,671 (13) 8,671 43,355 Social Assistant 1,100 1,152 2,252 (1) 2,252 (1) 2,252 (1) 2,252 (1) 2,252 (1) 2,252 11,260 loiae Efonanios (2) 944 (2) 944 (2) 944 (2) 944 (2) 944 4,720 Store - abarers (2) 818 (2) 818 (2) 818 (2) 818 (2) 818 4,090 Diotrict Staff Secretary (7) 6,720 (14) 13,440 (14) 13,440 (14) 13,440 (14) 13,440 60,480 Storekeepers (30) 16,920 (44) 24,816 (44) 24,816 (44) 24,916 (44) 24, ,184 Statistical Assistant (25) 16,675 (25) 16,675 (25) 16,675 (25) 16,675 (25) 16,675 83,375 Drivers (6) 3,516 (6) 3,516 (6) 3,516 (6) 3,516 (6) 3,516 17,580 liessengers (6) 2,706 (6) 2,706 (6) 2,706 (6) 2,706 (6) 2,706 13,530 Field Extension Workera (369) (439) 207,208 (500) 236,000 (500) (500) 236,000 1,089,376 Sub-total , , ,162 1, Total _ , ,327 3, / Details in Table 7. 2/ Bosie salaries paid dirent fra,s Govermsent budget. 3/ Allavances paid by SODEVA.

96 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT PROJECT COST Personnel - Unit Cost Breakdown Allowances Social Costs Annual Salaries Bonus Total Transport Housing Air Travel Social Security Medical Expenses Total Cost CFAF '000 I. Expatriates Technical Director - 15,136 1, ,000 Agronomist - 10,636 1, ,500 Other Specialists - 8,056 1, ,920 Farm Equipment Specialist ,136 1, ,000 Il. Civil Servants Project Director 1, ,490 1, ,909 Regional Office Staff 1, ,437 1, ,791 District Staff 1, , ,252 Animal Husbandry Assistants ,686 Agricultural Extension Agents ,120 III. Contracted Staff Administrative Officer 2, ,210 1, ,969 Accountants ,132 Typist - Secretary z D Drivers O'D Clerks e x Statistical Assistant ' Storekeeper Field Extension Workers

97 Annex 12 Table 8 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT PROJECT COST Dakar Operating Costs (CFAF'000) Total Head Office 1/ 71,400 80,100 85,000 80,300 77, ,400 Sine Saloum Rent 2/ 8,900 6,100 3, ,000 Stationary 2,800 2,800 2,800 2,800 2,800 14,000 Communications 1,200 1,200 1,200 1,200 1,200 6,000 Administrative Cost 5,000 5,000 5,000 5,000 5,000 25,000 17,900 15,100 12,300 9,700 9,000 64,000 Maintenance Buildings 3/ - 3,300 4,290 4,290 4,290 16,170 Vehicles 15,175 15,650 16,350 14,850 14,850 76,875 Equipment ,760 4,760 4,760 4,760 23,800 19';935 23,710 25,400 23,900 23, ,845 Planning, Evaluation and Trials Trials: -Operating Cost 6,200 5,700 5,700 5,700 5,700 29,000 Evaluation: -Computer line 2,500 2,500 2,500 2,500 2,500 12,500 -Stationary 1,400 1,400 1,400 1,400 1,400 7,000 -Operating Cost 1,400 1,400 1,400 1,400 1,400 7,000 11,500 11,000 11,000 11,000 11,000 55,500 1/ 10% of project salaries and operating costs, from table 1. 2/ For expatriates and Kaolack offices in and 6 months in / 3% of investment.

98 ANNEX 12 SENEGAL Table 9 SINE SALOUlM AGRICULTURAL DEVELOPMENT PROJECT PROJECT COST Tree Nurseries, Livestock and Training (CFAF 000) TOTAL A. TREE NURSERIES Infrastructure Nursery Site Preparation 5,000 5,000 L0,000 Fencing 1,000 1,000 2,000 Stores 1, ,400 Subtotal 7,200 7,200 L4,400 Equipment Pumping Equipment 5,000 5,000 L0,000 Tools Vehicle Trucks 3.5 tons 2,511 2,511 5,022 Personnel 2,390 4,770 4,770 4,i,70 16,700 Operating CGst B. LIVESTOCK Seeds, Bags, Fertilizers ,750 Transport cost 1, ,400 7, ,800 3,500 3,900 9,450 TOTAL L5,040 21,481 10,781 8,670 '5,972 Demonstration (animal food) 4,799 9,419 4,799 9,419 4,799 23,235 Training Center 1,300 1, ,381 Drugs , _2,424 Subtotal 6,424 11,402 7,214 10,154 5,046 40,240 C. TRAINING TOTAL 6,424 11,402 7,214 10,154 5, Infrastructure New District Centers (3) 1,560 1,560 Existing District Center (4) Regional Center (1) Subtotal 2,380 2,380 Equipment and Farniture New Centers 4,800 1,800 Existing Centers 2,720 2,720 Regional Centar Subtotal 8,180 3,180 Salaries and Allowances Extension staff 12,770 7,421 7,891 5,826 5,826 39,734 Farmers 16,304 17,525 19,218 19,609 17,904 9(0,560 Labor Subtoaal 33,396 29,268 31,431 29,757 28,052 15,904 Operating Costs Maintenance District Centers 3,605 3,605 3,605 3,605 3,605 18,025 Maintenance Regional ,575 Audio Visual,Aid ,000 Subtotal 4,720 4,720 4,720 4,720 4,720 23,600 TOTAL 48,676 33,983 36,151 34,471 3g, ,064

99 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT PROJECT COST Incremental Seasonal Inputs and Farm Implements Unit Total Cost Total (Tons) CFAF CFAF ' I. Rock Phosphate 2,120 2,960 3,780 4,600 5,400 18, II. Fertilizers ,170 3,138 43,000 8,420 13,954 24,422 34,000 46, , ,000 1,072 2,038 3,640 5,846 8, urea , ,700 24, Sub-total 650 1,125 1,907 2,839 3,938 10,459 33,590 43,664 74, , , ,249 Incremental Requirement ,099 33, ,600 33, ,805 III. Farm Implements (UthIts) Hoes 1,200 1,480 1,600 1,435 1,435 7,150 11,800 14,160 17,464 18,880 16,933 16,933 84,370 Plow plus implement frame ,890 40,600 12,180 15,022 16,240 16,646 16,646 76,734 Plow , ,773 35,772 71,545 Carts ,890 26,000 7,800 9,620 10,400 10,660 10,660 49,140 Silos ,500 45,000 4,500 9,000 13,500 18,000 22,500 67,500 Maize cribs ,340 1,640 2,820 7,500 20,000 18, ,800 56, Sub-total 56,640 67,106 85, , , ,289 Incremental Requirement R q97 27 n9o SR 911 IV. Seeds (Tons) Maize ,000 2,775 3,450 5,775 8,475 11,700 32,175 Sorghum , ,500 2,220 3,000 8,160 Millet , Sub-total 3,385 4,490 7,555 11,115 15,400 41,945 Incremental Requirement 3, , V. Insecticide (Kg) DDT 8,000 14,000 24,000 36,000 51, , ,600 2,800 4,800 7,200 10,200 26,600 Fungicide 707 1,240 2,277 3,178 4,438 11, , Sub-total 1,988 3,482 6,052 8,947 12,641 33,110 Incremnetal Requirement , ,641 -

100 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT Annex 13 Table 1 DISBURSEMENT SCHEDULE A. IBRD/IDA Total (CFAF million) (a) Commitments Fixed Assets _ Personnel Costs ,697.0 Operating cost Consultants Contingencies Total ,150.0 (b) Disbursement Annual ,150.0 Cumulative , , , , B. CCCE (a) Commitments Fixed Assets Personnel Cost ,131.3 Operating Cost Contingencies Total ,000.0 (b) Disbursement Annual ,000.0 Cumulative , , ,000.0

101 Annex 13 Table 2 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT DISBURSEMENT SCHEDULE Semi-annual Disbursements of the IDA Credit and the Bank Loan Bank FI Period EndinR Disbursement Cumulative -~~~US$- IDA Bank IDA Bank 76 June 1,300,000-1,300, Dec. 1,350,000-2,650,000 - iune 1,350,000-4,000, Dec. 1,400,000-5,400,000 - June 1,400,000-6,800, Dec. 200,000 1,250,000 7,000,000 1,250,000 June - 1,450,000 7,000,000 2,700, Dec. 1,450,000 7,000,000 4,150,000 June - 1,450,000 7,000,000 5,600, Dec. 1,400,000 7,000,000 7,000,000

102 SENEGAL S=B SALCOUN AGRICULTURAL DEVELOPMPNIT PROrECT CROP PRODUCTION Zone 1 (South) _ ~~~~~~~~~~~~~~~~~~~py. Py 1 PY2?13 PY : B hO 19570T5 Number of farm.ers supervised l8-50o 21,600 2h,000 26,000 AREAS - ha Total semi-intensified (SI) 1/ 60,600 71,L90 81,495 86, v9F5 intensified (I) 2/ 5j ,360 22,600 31,20', Groundriuts SI 40,h00 47,660 54,330 57,660 59,990 Groundnuts I 2,210 3,800 6,4oo 9,450 13,000 Millet SI 20,200 23, ,165 28,82$ 29,995 Sorghum I 1,330 2,280 3,840 5,670 7,800 IMIaize I 1,330 2,280 3,840 5,670 7,800 Cotton I ,280 1,890 2,600 PRODUCTIX (tons) Incremental Production--- Groundnuts SI 2, ,944 12,083 13,724 Groundnuts I 954 2,735 4,724 7,335 10,379 Millet SI ,426 4,396 5,100 5,695 Sorghun I 798 2,278 3,976 6,îh2 8,846 Maize I 1,672 4,336 7,682 11,784 16,776 Cotton I h9 1,247 1/ Land prepared by hoeing with oxen on which ail basic recommendations of PA that are described in Annex 3 are followed. 2/ Ox-plowed land fron which stunpps and roots have been removed that has received 400 kg/ha of rock phosphate, and for which cereals receive the comprehensive fertilizers described in Annex 3. 3/ Incremental production as result of previous yearts extension work, ase(o on yields under average rainfall; econo idc and financ~ < c cluations include or<v LQr1 for dronivih+ reducing -rieid increment- by 60y everr four yrears.

103 SENEGAL SINE SALOUM AGRICUTUJRAL DEVELOPMENT PROJECT CROP PRODUCTION Zone 2 (North) Ff Py 1 PY 2 PY 3 PY 4 PY : N.umber of farmers supervised 2,750 3,250 4,000 5,390 6,300 AREAS - ha Total semi-intensified (SI) 1/ 7,095 ioe ,980 18,990 " intensified (I) 2/ 1,000 1,9401 2,540 4h 8,540 Groundnuts SI 4,730 6,990 9,260 11,320 12,660 "r I ,770 2,870 4,270 Millet SI 2,365 3,495 4,630 5,660 6,330 "l I ,435 2,135 Sorghum I ,435 2, PRODUCTICN (tons) - Incremental Procdctiof Groundnuts SI 998 1,832 2,996 3,778 4,531 ni I ,112 3,124 Millet SI ,015 Il I ,295 Sorghum I ,425 2,147 1/ Land prepared by hoeing with oxen on which all basic recomendations of PA that are described in F Annex 3 are followed. (D X 2/ Ox-plowed land frcm which stwmps and roots have been remaoved, that has received 400 kg/ha of PO rock,phosphate and for which cereals receive the comprehensive fertilizers described in Annex 3. 3/ Incremental production as result of previous yearls extension work, based on y-elds under avnrage rainfal1; econoiec and financial calculations include provision for a drought reducing yield increments by 60» every four years.

104 SENEGAL SINE SALOUM AGRICUITURAL IEVELOPMENT PROJECT CIROPRODUCTION Total Production and Average Yields ps PY 1 PY 2 PY 3 PY 4 PY 5 6-io W : w _ PRODUCTION (tons) Millet 19,000 24,226 30,875 30, ,080 41,220 Cotton ,312 2,,050 2,929 4.,003 Groundnuts e27L 75,850 89, , ,862 Maize 2,660 4,694 8,128 12,938 18,7L44 25,800 Sorg1n 1,372 3,357 6,808 10,957 16,082 22,428 YIELDS ton/ha Millet ,01 Cotton Groundnuts o l.1l 1.18 Maize Sorghum '

105 ANNEX 15 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT MARKETS AND PRICES Livestock 1. Current Market Situation - Meat consumption in 1973 totaled about 76,000 tons comprising 41,000 tons of beef from doimestic cattle, 11,000 tons of beef f rom cattle imported from Mauritania, 14,000 tons of meat from sheep and goats, and 10,000 tons of pork. Per capita consumption of meat was about 20 kg of which beef accounted for 13 kg. Following the recent droughts beef prices have risen sharply, and the national herd has been reduced by deaths and an increased offtake. Liveweight cattle prices in Dakar that were CFAF /kg in 1970 are now CFAF /kg, and the total number of cattle slaughtered rose from about 142,000 in 1970 to 180,000 in Between 1972 and 1973, the average carcass weight of animals slaughtered in Dakar declined from about 160 kg to 120 kg and thus, despite increased slaughter, meat supplies have remained relatively stable. These developments illustrate the short-term impact of the drought on the meat supply situation and the longer term need to rebuild the national herd for future supplies of beef. In addition, recent beef price increases have led to substitution of fish for meat; it is estimated that coastal people now eat kg of fish annually, and the fish consumption in Dakar alone has risen from 48,000 tons in 1970 to 62,000 tons in Future Trend for Beef - The main factors that will determine future demand for beef will be population growth and the relative price of beef among other sources of protein. Assuming that the present relatively high prices for beef are maintained while the national herd is restocked, demand for beef will probably grow in line with annual population growth of 2.2%. Consequently, an additional 6,000 tons of beef will be required by 1980 to maintain consumption at present levels. 3. The immediate constraints on the market will be restrictions on domestic supplies and imports. Mauritania, which has consistently supplied about 20% of Senegal's beef requirements, has been severely hit by the recent droughts; and given the general shortage of livestock in West Africa, it is unlikely that beef supplies will rise above the present level for the foreseeable future, and if anything may decline. Medium-term prospects for increasing domestic production rest largely on Government's plans for the higher potential grazing areas of Eastern Senegal and Casamance and on increasing output from the predominantly arable areas of the country through mixed farming as proposed for the project described in this report. The combined incremental production from these two activities is expected to reach about 4,000 tons between 1980 and 1985, and this production could be absorbed easily on the domes tic market even if prices remain at their present levels.

106 ANNEX 15 Page 2 4. Erices - In view of the supply restrictions, it is assumed for project appraisal purposes that liveweight prices on the Dakar and Kaolack markets will average about CFAF 145/kg. After taking account of marketing costs, the farmgate price for beef cattle in Sine Saloum will average CFAF 100/kg liveweight. Two-year-old cattle suitable either for training as oxen or for fattening are expected to maintain their current market value of CFAF 12,000, and milk prices are expected to be maintained at about CFAF 25/liter, the present market price. 5. Marketing - The livestock trade is controlled by private wholesale dealers who purchase through middlemen. Transactions are frequent and costly. In an effort to increase the bargaining power of producers and reduce intermiediaries, the project would establish selling points in each of the six project districts, with weighing scales controlled by project staff. Farmers would be encouraged to bring their animals to these points, where they would be able to sell direct to wholesale dealers and thus bypass the small bush traders. Cereals 6. Cereal marketing in Senegal is more concerned with distributing imports than with trade in local production. In normal years, over one third of Senegal's cereal requirements are imported, averaging some 315,000 tons per year. In 1972, the height of the drought, 400,000 tons were imported. On average, imports include about 190,000 tons of rice, 100,000 tons of wheat, and 25,000 tons of maize. 7. Millet and sorghum comprise the most important domestic cereals, with combined production of just under 500,000 tons per year. Most is produced for subsistence consumption; only 30,000 tons were purchased by ONCAD in 1973/74. Maize production is about 30,000 tons per year, of which some 12,000 tons were purchased by ONCAD in 1973/74. ONCAD's producer price for millet and sorghum, which had been considered too low to encourage production of a marketable surplus, was recently raised from CFAF 25/kg to CFAF 30/kg, while that of maize was set at CFAF 35/kg. With world market prices for these commodities doubling between 1972 and 1974, the new producer prices are about CFAF 5/kg below their economic value based on import substitution, and about equal in 1974 terms to the corresponding prices projected for 1980 (Tables 1 and 2). There is a possibility for some substitution of millet for wheat in bread (up to 25% of the flour). The main prospect, however, lies in its substitution for urban consumption of rice, two thirds of which must be imported. There is a strong preference for rice in Senegal because of taste and because it is easy to prepare, in contrast to millet. In addition consumption of imports by the urban population has been encouraged by recent consumer price subsidies. Prior to 1972, the wholesale cost of imported rice was about CFAF 29/kg while that of domestic rice was CFAF 39.51kg. To encourage local production, domestic rice was subsidized from taxes on imported rice and both were sold at a wholesale price of CFAF 37/kg, which was about half the price of processed millet couscous.

107 ANNEX 15 Page 3 However, the world market price of rice tripled between 1972 and 1974 and, although some decline is expected, it should remain considerably higher than the 1972 level for the rest of the decade. With this increase, the wholesale price of rice was raised to CFAF 58/kg, which meant the previous tax on imported rice was replaced by a subsidy equivalent to about half the wholesale cost. At these prices, rice was cheaper than processed millet couscous, and there was no incentive to substitute the domestic produce for the imported grain. Recognizing the severe strain imposed on its finances and the adverse conditions it imposed for the domestic market, Government withdrew the subsidy in November, 1974, and announced that prices would follow the world market in future. This decision should bring the multiple benefits of (i) reducing imports and the burden on the Government budget, (îi) enabling domestic rice production to become more attractive, and (iii) allowing millet to become more competitive for a share of the urban cereal market. Export Crops 8. Groundnut marketing is a Government monopoly. The marketing agency, ONCAD, buys groundnuts from the cooperatives at a fixed price, provides handling and transport services, and sells the groundnuts to oil millers at a price based on the world market price. The total marketed production, ranging from 500,000 to 1 million tons per year, is processed locally; and virtually all of the groundnut cake and about 80% of the oil is exported. Oil is sold on the domestic market at a subsidized price of CFAF 200, compared to a total wholesale cost of about CFAF The price of shelled groundnuts, which fluctuated around US$190/ton through the 1960's, reached US$610/ton in April-May of As a result of the world price trend, ONCAD's selling price to oil millers increased from CFAF 34/kg in 1971/72 to CFAF 80/kg in 1973/74. Only a fraction of the recent increases was at first passed to farmers, as the producer prices for unshelled groundnuts were increased from CFAF 23.1/kg in 1971/72 to only CFAF 29.5/kg in 1973/74. But Government has now raised the price for the 1974 crop to CFAF 41.5/kg. The world market price for groundnuts in constant terms is expected to decline through 1980 to the extent that, if the producer price is maintained at CFAF 41.5/kg in 1974 terms, no transfers would be made to the price stabilization fund, but to the contrary, this fund may be required to support the farmgate price. To maintain positive and adequate balances--for price stabilization and revenues for Government sufficient to cover the costs on behalf of groundnut farmers--the producer price may have to be lowered to about CFAF 27/kg in 1974 terms (Table 3). This price has been used in all financial analysis in this report Cotton marketing and ginning is the exclusive monopoly of SODEFITEX. About 55% of the cotton fiber is exported, with the rest sold to local textile factories; this proportion is likely to change as production increases faster than local demand. All seed not required for planting is sold to oil mills, and most of the oil is exported.

108 ANNEX 15 Page World market prices for medium staple cotton have almost doubled in the last two years, rising from about US$0.38/lb in 1972 to US$0.70/lb in The proportion of the proceeds of sales transfered to the stabilization fund increased from about 25% of the selling price in 1972/73 to 60% for the 1973/74 campaign. Coupled with a 40% increase in production, stabilization fund revenues increased from CFAF 300 million to about CFAF 2 billion over the same period. Governnent has increased the net producer price for seed cotton by 55%, from CFAF 30/kg in 1973/74 to CFAF 46.5/kg for the 1974 crop, and with the expected decline in world market prices the stabilization fund revenues will fall substantially. But even so, it should be possible to retain a farmgate price of CFAF 46.5/kg in 1974 terms, and leave adequate revenues for Government (Table 4). Therefore, this,price has been used for the projects financial calculations.

109 Annex 15 Tab'e 1 S3NEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJ3CT I1ARIETS AND PRICES Price and Marketing Structure for Maize (in 1974 terms) US$ CEAF (1) Average World Market Price 1/ M4aize per ton (FOB Gulf IM'exico) ,000 22,320 (2) Per Netric Ton of' Maize in Senegal Freight, Insurance and Port Charges - 10,450 10,450 CIF Senegal value of one ton of naize 4o,450 32,770 (3) Transportation within Senegal 2,400 2,400 (4) Econcmic Farmgate Value 2/ 38,o50 30,370' 1/ Corrverted at the exchange rate of US$1 - CFAF 240, which prevailed at the - time price projections were made. 2/ The official price to the farmer set by Governnent is CEAF 30,000/ton.

110 hnnex 15 Table 2 SEIEGAL SINE SALOUM AGRICULTURAL JEVELOPNENT PROJECT ll&rkets AMD PRICES Priice and MIarke:ing Structure for Millet and Sorg'num (in 1974 terms) US$ CFAF (1) Average,Nlorld IMarket 1/ IUllet/Sorghum per ton (FCOB Gulf Maxicu) ,600 19,680 (2) Per Metric Ton of i4illet/sorghnin in Senegal Freight, Insurance and Port Charges 10,450 10,450 CIF Senegal value of one ton MEllet/Sorghum 38,050 30,130 (3) Transportation within Sene,gal 2,400 2,400 (4) Econoeiic FarmZate Value 2/ 35,650 27e730' l/ Con-rerted at the exchange rate of US$1 = CFAF 240, which prevailed at the time price projections were made. 2/ Official price to the farmers set by Governnent is CFAF 30,000/ton.

111 ANNE_X 15 Table 3 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT MARKETS AND PRICES Price and Marketing Structure for Groundnuts (in 1974 terms) US$ CFA? (1) Average World Market Price 1/ - Groundnuts per ton (CIF Europe) ,040 64,o80 (2) Per Metric Tons of Groundnuts in Senegal - Equivalent unshelled basis (70 percent) 58,128 44,856 - Freight Insurance ,670 - Export Price FOB Dakar unshelled 5 36,186 (3) ONCAD expenses (transportation & handling) 2/ h4,300 (4) Eccnomic Farmgate value 45,l58 3l,886 - To the Stabilization Fund 8,108 4,886 - To the Farmer 3/ 37,050 27,000 1/ Converted at the exchange rate of US$ = CFAF 240, which prevailed at the time price projections were made. 2/ Incremental cost of which: - transport cost... CFAF 3,000/ton - storage... OFAF 500/ton - fixed cost... CFAlF 800/ton 3/ Official price was CFAF 4l.5/kg for the 1974 crop and is expected to be maintained in current terms through 1979.

112 ANNEX 15 Table 4 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPIMENT PROJECT MARKETS AND PRICES Price and Marketing Structure for Cotton (in 1974 terms) (1) Average World Market Price -/ TJs$ CFAF - Lint per ton (CIF Liverpool) 1,323 1, , ,04( - Cotton seed per ton (CIF Europe) ,160 33,600 (2) Per Metric Ton of Seed Cotton in Senegal percent of the CIF Liverpool value of one ton of lint 116, , percent of the CIF Europe value of one ton of cotton seed 19,296 20, , ,375 - Marketing, Freight and Insurance (Lint and oil) 12,121 12,121 - FOB Senegal value of one ton seed cotton 124h ,254 2/ 3/ (3) Ginning, Transportation and Productio. Costs 38,601 38,601 (4) Econonic Farmgate value 85,421 70,653 - To the Stabilization Fund 39, To the Farmer 46,5oo h6;5o6 1/ Converted at the exchange rate of US$1 = CFAF 240, which prevailed at the time price projections were made. 2/ Ginning costs =CFAF 11,200/ton of seed cotton 3/ Farm inputs, about CFhF per ton of cotton -re Dai d by SODEFITEX and the farmer receives the net producer price of GFAF 46,5090/ton of cotton.

113 OINt SA2.OUM AGOICIJLTUIRAL PROIECT P.AR0 BUDGET Pari Plan - Moici No I 20 ha - Oaa i Year Tsa O Befa.e traient Year i Year 2 Yu- 3 TYc 4 YrSTaac A en ea Parie Oevtp-. PA 2_ Total Laad Pattas, ~~~~~~~~~~6' ~~~ NON INTENSIIFID ~ ' T-' Millet 5 a.85 z a a.85 o n.085 a a a a.05z a t % Gr-adcut 10 e n.9 * a.9 a c.9 a a.9z a.9 c a n z.9 z.4 SEMI-INlTENSIFIED- Millet 2.5 a o 1.1 * a n : n 1.1 : a a18.6a Oreodndatu 5.0 a 1.2 : n c1.3 z a a 1.3 : n 1.3: a 1.3 : LA INTENOIPIED Millet Oe-udnta 0.7 a 1.5 : a 1.5 z a 1.6: n 1.6 a z1.7 e3.91 S.rghuin 0.5 a a n n 2.0c t 2.2o 3.08 ceins 0.5 a 2.0 : n 2.4 e e n 3.0 z z 3.0 a.20 Catten 0.2x.1.0: n n 1.2: a 1.3 z a l~ Total Production (lace) Millet Groaduvts , Maise S-rghco ctatio V/ PA tercet that folos PAn~ ninica package. Otage 1: faraera uha have aqair.d apair cf anen -nd wbar inpcovig their eanogaoan tachctquea oader FA. Stage 2: farc-r mh are fall1wing the.o package ne part ai th.ir tond (stunp renava, application ai conk phosphate. plavicg, noce ccnpr-hne.ivc ertlzt 2/ tod le hectares n yiedlis lulan/ha squale prodoction in tan.- A = area; T = yisld; P = production F/iPlda cf:ia) tercets r uho ia11o FA and-i ara.ecaccgnd ta f.11cm it cac c1sely lapoorto for tlop 1;(h) forcer ha hav ra..chel stop I or step 2 but still fnllaa PA an part cf their tend. F/ielis af forcer (a) ah. have nova ta oetp I by hetternaaema pcacticeu nu rcccrasced ceint FA a.d hav acquitsd c pair ai u.e...ued for.. sdiing d hceiag;(h) vba hov ca-d ta step 2 but spply theno package au aaa..ther part of their 1e..d P/Fatice cf the.lnd uh.ra lar-rra uho have cacahai atnp 2 apply the practices ci the uta pockage. Y/ icli.. ccpcted fran table ta A.can 3.

114 SLNE SALOUM AGRICULTURAL DEVELOPMENT PPO_ECT FARM BIJDGET 0/ Coa- Flon - n4omde t - 20 ha - Zone CFAF Unit Peice A. VaiLe cf Prfdantian CFAE /kg Cear O Befote Nabolet Seat 1 Year 2 Year 3 Year 4 Yean 5 Yenr 6 Year 7 Yea- 8 Millet , , , , , , , , ,440 GC.andnais , , , , , , , , ,210 Mdcc ,000 54,000 84, , ,000 Sarghum 2R ,400 35,840 50,400 67,200 86,240 Cotta, ,300 18,135 27,900 36,270 45,570 2.Rnneiack 12,000 12,000 12, ,000 60,000 12,000 TOTAL 374, , , , , , , , ,460 Net oe Drooght Effect 317, , , , , , , , ,641 UCit Cnet B. Poad-tonia Caste 3/ Raie CFAF/kg Seed. - Millet 4kgp/h Groandn-ts 100 kg/h ,750 38,813 38,813 38,813 37,463 37,632 37,800 38,475 37,463 Maiaa 20 kg/ha Saihoa 7 kg/ht Peeticodes eaed tretment 200 gm/100 kg nand ,078 1,083 1,089 1,108 1,081 Maire teed teeatment 300 gm/100 kg need Maite DDT 250 ga/100 kg neap ,215 1,418 Fertili.er Millet h- latintfied kg/h,a 24 4,800 2,880 2,800 2,800 2,8B0 2,880 2,880 2,880 2,880 Millet - Seni intenaified kg/ha 24-9,000 9,000 9,000 7,920 7,200 6,480 5,760 5,040 Millet aorghum - 1ntensifieù kg/hn 24 - _ - - 1,800 2,700 3,600 4,320 5,040 Groundnats - Non intennified kg/ha 24 9,600 6,240 6,000 5,760 5,760 5,760 5,760 5,760 5,760 CIe..daaie - Seni & 8tensif kg/h. 24 _ 12,000 12,600 13, ,360 12,400 19,340 12,240 Meite - Tat-naifitd kg/ha ,600 5,400 7, ,080 Maiee - annaei ified 7raa 200 kg/ha ,400 3,600 4,800 5,760 6,720 Sargham - Intensified UCea 100 kg/ha 24 - _ 1,200 1,000 2,400 2,880 3,360 HRnd taals 2,000 2,000 2,000 2,00 2,000 2,000 2,000 2,000 2,000 Maintenance an nnptaoeeeat cf farm eqopelmen 4/ 6,740 8,750 11,570 11,570 16,240 16,240 16, ,600 Liveetaek ,000 TOTAL 57, ,299 86,479 86, , , , ,320 C. Net Saita ofpduction Befone Fenilo Cansumptino + Ste 260, , , , , , , , ,321 D. Patitîn Canneemttan +T=ent Millet 210 kg/pocern 70,560 70,560 70,560 70,560 70,560 70,560 70,560 70,560 70,560 Gon..dnuts 15 kg/pereon 6,300 6, , ,300 6,300 6,300 6,300 6,300 Tanes 590 CFAFtactive , TOTAL 80,360 80,360 80,360 80,360 80,360 80,360 80,360 80,360 80,360 E. Net Cash tentme Befal e Debt Servioc 180, , , , , , , , ,961 F. Debt eo-vice 5/ On-Cant ,000 7,800 7,800 Flaw attakhei ant too hnl b ,820 l ,700 Unoe attachmnent ana tnan ban TOTAL ,000 7,B0O 29,620 13,700 13,700 6,060 - C. Net Cash lncome Aftle Debt Servics 180, , , , , , , , ,961 tl. Sotenennat Net Cash Incone (a) Feetilie.e taot (a CFAF 24/kg 4' - 28,599 40,005 69,274 89, , , , ,871 (b) feltili,ee /kg 6U/ - 36,459 48,045 77, , , , , ,231 (o) Oentilien CFAP 36/kg 6/ - 20,739 31,965 61,054 78,206 96, , , ,511 1/ 2hie faon nagal tn ah' soonhyee Oint taload han 12 pe,on, (cqtnotcn to 2 vorklng adolta), 7 ratte, 3/ A daroght eveey fooelh; Ttar -y 4, simual:td tpcetaetb the -1-no of nodutno hy 15 porcent anoatty. In boet, 3 anedeen, 3 haes nd ooc horen tant. 3/ Coeeoon0 notnctnlded becauae peodonnien nosts anc huit ita Onen gate peine. 4/ 104 cf p _eotastnast. 5/ Ineludea 20'h da= payment. 6/ Tht fate gate peina of CFAF12/kg -epre,entt the turaen peine; CFAF 24 a-odnts tn 2/3 of tht nepected 001 coct, end CFAY 36 tn tht fuli lost.

115 ONNECAL lime SATOUM AGRIoeflTURAL DEVE10L001EN PROflct FASSM BUDGEIT Fara Plan - Modal No ha - Zon 1. Pa- D lop e- oetprilen Tao 1 Year 2 Y-a 3 Test 4 Test 5 Y.ar 6 Tsar 7 Test 8 Otace - ~~PA TOTAL LAND ha FALIDW ha NN0-nflTSI8IPIED 3 2! A Y P A y P A T P A T P A T P A T P A y P A Y- y P A y P Millet 4 K K 5.83= K 0.85 = K 0.85 = K 0.83 = K 0.85 = K 0.85 = K K Groondnots 7 K K X K K 0.9 = K 0.9 = K K 0.9 = K Sn4I-I8TUSIEKD Millet 21 Xt.0 ~2.0 2KX1.1 = 2.2 2KX1.1 = KX1.1 = KX KX1.1 = XK1.2 = KX Groundauts 4KX 1.2 = K 1.2 = K 1.3 = K K 1.3-= K 1.3 = K 1.3 = K 1.4= 2.66 INITENSIFPKO 1 mai» X 2.0= K K 2.8 = K K S-tghcn Y 3,6 = K 3.7 = K 1.8 = KX 2.0 = K 2.2= 2.75 Crood.ote K 1.5 = K 1.5 = K K K Cottn K KX 1.1 = K K 1.3 = K TOTAL PPODICTI1O5 <Tons) Millet Oround.ots Malte Serghoa Cotton / Pt11 Esraers that Pel1on PA'. niniso package. Stop 1: Farner he hav a pnurd pir ci oxen and Ite ara lopreving their -aaganet tachniquaa ndar PA. Stn! Ferners te. ara fell1cteg tha.e package orn port cf thair 1end (steap r-noal, applicatîna cf teck phosphata. plening, -t necprehanslva atlnto) 2/Land in hectares K yield le tons/ha = prodortion Pc tons. A = Ares; T = Yield; P = Prod.ctien 3/Fields ni (a) Pansas sahi ollon PA end are encooragad to fellon it enta clo...ly le preparatien fer.tp (b) Par,sera oho hava raac.hsd step I or stop 2bot atill Pollew PA on part ne thair Tond. 4/Fialde cf fanera (a) teo hava cevad te stp t ky bercer cangosiet prectîces se raeaad d-ete PA ond and hava acquirad s pair of esen..oad Pot seeding an heatng (b) he have noved te stop 3 bot opply tha nas package. onanother part cf thair laod. 5/Portion cf tha Isnd share Perer sho have reached stp I apply th. practi.sa ai the cec package. Y/ ields cospotad froc tabla in A-.c 3.

116 S ENEGCAL SINE SALOOM AGRICOLTURAL DEVELOPMENT PROJECT FARM BUDGET '/ CEuh Flou - Model N. 2-13ha - Zone yeur S _eforo'e roieu lyeur E Ytar 2 oued 3 Year 4 Yeur 5 Y-or 6 ue 7 Year 3 A. V.1ue of PruduEtion CFAF/ kg MillEt 26 95, ,G00 103, ,200 92,400 86,800 81,200 75,600 67,200 Groundeuts , , , , , , , , ,300 Maite ,000 51,000 66,000 90, ,000 Sorgham , ,00 39, ,000 Cottrn ,000 9,300 14,000 23,300 34,100 Ltvetuehk 12,000 12,000-12,000 60,000-12,000 60,000 12,000 TOTAL 277, , , , , , , , ,600 Nut Eftse D-ought Effuet 2/ 235, , , , , , , , ,760 Unit CEnt. Pr-d-ution Costs Rute R/ CFAF/kR Seedu - Millet 4kg/ht G-oud.ts 100 kg/ha ,625 27,000 27,000 27,000 25,481 24,975 24,806 24,300 23,288 MuiEe 20 kg/hk Slrgh-un 7 kg/ha Pstiuides Seed Tres.teet 200 gm/100 kg se.d _ Maire Seed Tres-et-t 300 g0/100 kg aeed Maite DDT 250 gm/100 kg autd ,013 1,282 Fert Biter Mtlie - Non UeeentEled 14.,07 40 kg/ha 24 3, ,020 1,900 1,536 1,536 1,536 1,536 1,536 Millet - S1i Iets-ifed kg/hu 24-1,200 7,200 7, ,760 $,040 4,140 3,240 Millet horghne - Iet.ns.iied kg/hk ,160 2,000 3,000 4,300 Groundnuts - NMu Itn-eified kg/ha 24 6,720 3,000 3,600 3,360 3,072 3,072 3,072 3,072 3,072 Uroundnu. e-.lt Semi 6 itaif kg/ha 24-9,600 10,800 10,800 10,440 10,080 9,960 9,60e 9,360 Mai ten Eifiud kg/hk ,240 5,040 5,760 7,200 9,000 Malie - Iute.sified Ures 200 kg/ha 24-2,160 3,360 3,840 4,800 6,000 Onrghoe - InTeisefled Urea 100 ko/ha ,080 1,440 1,020 2, Ysd toomi 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Folnuenance or Replacement nf Fat Equimpet 4/ 4,730 6,740 9,560 9,560 14,230 14,230 14,230 14,230 15,586 Livestock - 33,000 3,000 3,000 33,000 3,000 36,000 36,000 6,000 TOTAL 40,363 90,708 64,528 64, ,131 77, , ,368 g8,819 C. Nut V.1aue ni Froduetion Befor Fmmil, toesoeeiou + Tlte. 195, , , , , , , , ,941 D. Familv Coeeuselon + Inca Millet 210 kg/persoe 58,800 58,800 58,800 58,800 58,800 58,800 58,800 58,800 58,800 Grznndtu 15 kg/peeson 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 Tes 500 ZFAF/nctiSv 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 TOTAL 67,050 67,050 67,050 67,050 67,050 67,050 67,050 67,050 67,050 E. Nlt Cash Une-ee Before Debt 8erSice 128, , , , , , , , F. Debt te-ice Oe-CErt ,000 5/ 7,800 7,800 5/ PlFv Artatheent and tool bat ,820 13,700 13,700 Hon ttegh e..t ted tnol bhr , ,000 7,800 29,620 13;700 13,700 6,060 - G. Nte Cssh IncqRRt Afte- Debt Seryie- 128, , , , , , , , ,891 H. Sereectal Net Cash IJnet (a) Fertilier CFAF 24/kg 6/ 0,050 i3,025 42,i40 44,6/Ê 57,009 58, , ,599 (b) Fertili..e Co te CFAF 12/kg 6/ ,505 48, , ,173 (e> F-rtiliea- CFAF 36/k 0 6/ ( ,545 35, ,025 1/ This fee model i th ouihuer 8iea Oîton hog 10 pertons (equivaiet En 6 vorking adolts), 7 attle, I horgu, 1 dnukey, 2 suedes, 2 hots, mod I hotte u,tr All Cotus ted prîies in 1974 ten.- 2/ A drought ete-y Fouet!1 ora 1s ioeiated by detteane the onl-t ne prod=cte by 0 percnun senli-y - 3/ Cette rot included be-auée production -ont sre ebilt into thu fr= gate prien nf the trop. J 10% nf p-rchase ente. 5/ Includes 207, dote p.osetu. 6/ Tht Pare gate peine nf CFAI 12/kg repeusuens the. ettet peite CFAF 24 Ientes to 2/3 nf the expected full ent, and CFAF 36 te the foli cst. + u

117 3PMlEOAL SINE SALOUM AGRICU2ITURAL PROJTEÇT FAIM BUDGET Fan Plan Modal No 3-7 han - Zon 2 Befave Pro 1001 Cen i Year 2 Tant 3 Y-a 4 Tant 5 Tant 6 Vent 7 Ta DeveIleret PA O TOTAL Lnnd NON0-INTEN0IPOED Millet 3.5 a 0, o n 0.5 =0, o a 0.3 = n 0.3 = o 0.5 = n 0.3 = z 0.5 = 0.75 Oronoda.to 3.5 n 0.7 = n n a 0.7 = n a 0.7 = e n t.? 0 = 1.05 Millet 1.75 e a 0.7 = n 0.8 = a I1.05 a 0, n 0.9 = xe 0.9 = r.6 =~ 0.54 Grn... ecta 1.25 o n 1.0 = a 1.1 = n a 1.1 = e t 1.2 = 1.20 Millet 0.3 o 1.0 = ol1.0 = a. 1 2 = aî1.3 = = 1.6 =0,04 lroandnate 0.60 o 1.2 = 0.72' 0.8 n a n 0.3 = z S-gh-ne 0.3 n 1.3 = a 1.4 = 0.56, 0.43 e n x31.7 =1.02 TOTAL PFOODUTIOTS <Tee.> Millet Gro... daat ,5 Sotghan ( 1.02 VPA: tormate that Co1low PAs- cielee package. Stage 0: fntact ho have arqtred npair ai once ard cho ar in,prootng thait -nogenent t.ehbiqoa cadet PA. Otage 2: t.eres che ar fei1o.eisg th. p.cbage 2/ Na fallon. anpart cf thein 1.d (staap reoteppli.ntina af raclk pheeph.te, plnwing. ot aap-ah-aoe etioat 3/ Lend On hectares e yilid On tans - predortio- ta ton A. ornes (h.) Y. plads (t/bs) F = prod-tion (t) F ie1os ni (o) fanot vho Collno FA nnd ar eaaoragod ta tal1on it onr rlo...ly On proparatoon Cor otogo I (b> Corner hbn hav rraahed atap O or atp 2 b.t atol f.l-ne PA on Part cf their 1=sed F/ i1de of Cfatte (a> cho hava nvd tn atep i hy battet onagenot p-actinea os rcroeeded cod-r FA and hav arorinpair ai... o.ai fnt eedieg aad hoeing (b) wa have nvd ta stop 2 but qply the -m p.okg on noathar part of their 1ai. 6/ Fartino ai the Onnd er.bt Coo- rabo bava ran-hai srap 2 opply tb. prooticoo of the nec package. 7/ Yielde.oapatrd Cran tabla la An... 3.

118 SENEGAL SINE SALOIUM AGRIGULT17kAL DeVELOPMLNT PROJECT FARM BUDGEI 1/ Cash FloY - Model No. 3-7 ha - Zone 2 CFAF Unit Price A. Valoe of Production CFAF/kg Year O Before Profleci Teor I bear 2 Year 3 Year 4 Toar 5 Year 6 y«a 7 Ygear 8 Millet 28 49,000 59,080 59,080 63,840 64,680 63,560 62,440 61,880 63,280 Groundnuts 27 66,150 76,410 78,300 85,320 93,150 94,500 98, ,710 93,150 Sor-hnA ,920 15,680 19,040 22,400 28,560 Livestock TOTAL 115, , , , , , , , ,990 Net of D-ought Effet 2/ 97, , , , , , , , ,242 Unit Coat B. Production Colts RPata /k Sends - Millet 4 kg/ha Groundnuts 100 kg/ha ,813 11,813 11,813 11,813 12,319 12,319 12,488 12,656 12,488 Sorghu= 7 kg/ha Pesticides se_d tre,atant 200 gm/lo kg seed Oentiliaar Millnt - Non intencified 14, kg/ha 24 3,360 1,680 1,680 1,680 1,440 1,440 1,440 1,440 1,440 Millet - 8a=i intensified kg/ho 24-6,300 6,300 6,300 4,500 3,780 3,240 2,700 2,160 Millnt So-gh-m - Int.neified kg/ha ,440 1,920 2,160 2,400 2,880 Groundnutt - Non intensified kg/ho 24 3,360 2,160 1,920 1,680 1,488 1,440 1,440 1,440 1,440 Gtoundnuta - Seni and inte-aif.8, kg/ha 24-3,000 3,600 4,200 5,040 5,160 5,280 5,376 5,280 Millet - Iniennifted -rna 50 kg/ho 24 _ Sorghu= - Intsnenfied -rna 50 kg/ho 24 _ - -_ hand tools Maintenan.e.of fate eqaip,aent 3/ 2,010 2,010 4,830 4,830 9,500 9,500 9,500 9,500 9,500 T. iveeionh s 33t000 3o000 3ck , TOTAL 21,435 60,855 34,035 34,395 70,590 40,750 40,902 71,024 41,035 C. Net Vale nf Production Before OsetilO Conaumptlan + Teaea 76,443 74,712 82,738 92, , , , , ,207 D. FTiOn- ConsusoLion i3 Millet 210 kg/perian 35,280 35,280 35,280 35,280 35,280 35,280 35,280 35,280 35,280 Groundnuts 15 kg/p.tsoe 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 Tance 500 COA7/netivO 1, , TOTAL 39,930 39,930 30,930 39,930 39,930 39,930 39,930 39,930 39,930 E. Net Cash enante Before Debt Servica 36,513 34,782 42,808 52,461 94,118 66,999 82,394 97,288 76,277 F. Debt Service Ox-cart / ,0004/ 7,800 Plan attohmient and tol hat, ,820 13,700 13, G. Net Cash Aftet Dnne Debt Service 36,513 34,782 42,80û 52,461 72,298 53,299 68,694 84,238 68,4777 t h. lncte=hental_set Uaei Inconm (o) Perii-er CFAi' 24/kg 5/ - (1,731) 6,295 15,948 35,785 16,786 32,181 47,775 31,964 (b) Fertilizer Cot (a CFAF 12/kg 5/ - 1,479 9,685 19,518 39,739 20,776 36,141 51,693 35,924 ( Fertili-e -) CFAF 36/kg 5/ _ (4,941) 2,905 12,378 31,831 12,796 28,221 43,857 28,004 1/ This f-re nadl ij the northers Sin S1a1ou has six parsona equivalent ta hree oktng 0d1lt,, five,taile, ena donkey, ann seed-r -ne aoc h-o. 2/ A draaght evety ftutth ye-r is almontattd by dece-laiag the valne o 0 Po-d-ct-an h' 15 p-elat --nt ally. 3/ 107. nf gant. 4/ nel-1dee 207 dtoe payment, 5/ The fore gotr prict af CFAF 12/kg teptenc-ts thecurent prie; CFAF 24 nota ta 2/3,f the cap-ct.d Cul 1 c-lt, and CFAF 36 te the flal cat.

119 Annex 16 Table 7 SEN~EGA:[ SINE SAL,OUM AGRICULTURAL DEVELOPMENT PROJECT FARTA BUDGETS Suïniary of Results Average farm size, ha PY C PI 5 Gross value Farm Production 20 1/ 318 4U'U (CFAF 1000) 13 9/ Produc',ion Cost (CFAFIVODO) 13 0W , Net Farm Incomre 4/ (OFAF' oco) Fam.ily Labor Required 20 1,150 1,1497 (IS12n-dazs ) , Per Cqnita Incorne (CFAF'( CM) Tncomne per ran-day (CFA F) (OFAF) 1~~~~ La9 7 1h1 162 Cash Incom:e (CFAF tugo) / Represents the south and east of the project area. 2/ R.epresents the center of the project area. _ Reprasents the northwest Of the project area. _,/ Cash plus v\1ue o,c subsistenc_o

120 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT GOVERNMENT CASH FLOW 2! _ _ Project Yetrs_--_ il (CFAF Million) SOtTRCES _ IBRD Loan CCCE Loan Export Duties. Taxes and Stabilization Fund Groundnut 2/ Cotton 3/ Livestock Import Duties and Taxes on Pro ject Cost Total Sources , , ,368.8 APPLICATIONS Project Cost 4/ 1, , , , , Subsidies Rock Phosphate 5/ Seeds Other Fertilizers 6/ Financial Char es IDA Credit IBRD Loan CCCE Loan , Total Applications 1, , , , , Surplus 'Deficit) (546.5) (85.2) (90.7) (25.8) (97.4) ,884.9 Cumulative (Surplus/Deficit) (546.5) '631.7) (722.4) (751.2) (848.6) (360.2) (204.7) , , ,50q.2 1/ Current terms (Inflation at rates of international index to PY 11 anud i5/, thereafter). 2/ Based on IBRD price projections and a farmgate price declining between jy 1 and PY 5 tioia CFAF 41.5/kg to CtFAF 27/kg in 1974 terms. 3/ Based on IBRD price projections and a farmgate price equivalent in 1971 terms to CFAF 46,5 kg. 4/ Includes physical contingencies and expected price increases. 5/ Given as grant to farmers. 6/ Subsidy equivalent ta 50% of cost between 1975/76 and 1980/81 and 25% of cost 1981/ / Figures shown represent annuel average of total inflation over nine-year period; surplus and cumulative amounts are nine-year totals. / Armounts of IDA Credit remaining to be paid aiter 20 yearu is CFAF 1,417.5 million (US$6.3 million).

121 ANNEX 18 Page 1 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT ECONOMIC RATE OF RETURN CALCULATION -/ 1. The project is designed to take farmers through a four-year crop rotation cycle and an intensification process which would gradually expand until all of the land cultivated by a given farmer would be included. However, the nature of the techniques involved is such that any farmer participating in the project would be able to maintain the level of production reached during the project period. Thus farmers participating for the full five years (or as long as eight years if covered by the pilot project) would have removed stumps from, and spread intensive cultivation techniques to, a much larger portion of their total areas than would farmers entering the project at a later stage, but all farmers would retain the benefits of the areas actually uprooted, and of the introduction of ox-drawn plowing and comprehensive fertilization beyond the project period. The economic rate of return calculation makes the conservative assumption that extension activities do not continue beyond the five-year project period and that farmers trained during this period would be able to maintain the levels of production reached by PY5 for an additional five years. 2. Costs - Cost figures include all project investment and operating costs for SODEVA. No incremental extension costs are included after full development in PY 5, as project benefits would be obtained with expenditures at pre-project levels. 3. All labor would be provided by the families of project farmers and the incremental needs of the project are valued at zero, as the additional time spent on project activities would not otherwise be used for productive activities. 4. Costa exclude all direct taxes, duties, and provisions for expected price increases. 5. Costs include incremental seasonal farm inputs; the purchase cost and maintenance for farm implements; farm costs for draft oxen, steer fattening, calves and breeding cows; and physical contingencies. 1/ All economic and financial calculations were based on 1974 prices, exchange rates, and commodity projections. Checks were made using revised 1975 figures and the net effects were negligble.

122 ANNEX 18 Page 2 6. Benefits - Benefits are calculated on the incremental production attributable to the project, and output is stabilized by PY 5, the assumed full development of the project. Estimates include a provision for drought in PY 2, 6 and 10, that would reduce increments expected in average years by 60%. The calculation assumes that, without the project, farmers' productivity and productivity per hectare would not change. Details of incremental project crop production are in Annex 14 and livestock production in Annex Groundnut and cotton output is treated as exports and cereals and livestock output as import substitution. The economic farmgate prices for crops used in the rate of return calculation are based on the Bank's projections and details are in Annex 15. Prices for livestock and livestock products are based on current market prices and are also detailed in Annex Sensitivity Analysis - The sensitivity of the rate of return has been tested against changes in costs and benefits due to price and drought effects and the results indicate that the project would be justified economically under most conceivable circumstances. Details of the sensitivity analysis are in Table A rate of return has also been calculated to allow for the estimated substitution of maize and sorghum by groundnuts that might occur if the market for cereals did not develop as expected. In these circumstances it is estimated that the rate of return would be 16%.

123 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT ECONOMIC RATE OF RETURN (CFAF Million) R PROJECT YEAR BENEFITS COSTS Incremental Crop Production Croundnuts , , , , ,140.0 Cotton 1/ Maize Millet/Sorghum Sub-total , , , , , , ,256.1 Livestock Production Sub-total Benefits , , , , , , , ,526,3 Provision for Drought 2/ SODEVA's Costa Total Benefits , , , , , ,147,3 Investment Costs 3/ Salaries 4/ Operating Costs 4/ Incremental Sub-total Farm Costs Rock Phosphate _ - Equipment 5/ Seassnal Inputs 6/ Livestock 7/ Sub-total Total 1, , , , Physical Contingencies 8/ Total Costs 1, , , , , NET BENEFITS (1,057.0) (784.7) (369.0) (81.2) , , , , ,738.8 Economiec Rate of Return: 25% 1/ Cotton benefits are expressed net of production costs, see details in Annex 15. 2/ Calculated as an average benefit loss of 15% per year on an annual basis which is equivalent to a 60% loss of benefits in PY 2, 6 and 10. 3/ Net of 23% taxes. 4/ Net of 8% taxes. 5/ Net of 20% taxes on purchase price in PY 1-5. Maintenance in PY 6-10 is calculated as 20% of total equipment cost. 6/ Consiats of other fertilizer, seed, and insecticide. 7/ Annex 7, Table 4 8/ 10% on all costs except salaries. a

124 Annex 18 Taule 2- SENE GAL SINE SALOUM AŒRICULTURAL DEVELOPMNT PROJECT ECONOM::C RATE OF RETURN Sensitivity Analysis % of Appraisal Estimates Costs Benefits---- ROR Development Annual Groundnuts Cotton Cereals Livestock / 100 1/ 100 1/ 100 1/ / 100-2/ -2/- - 2/ 2/ / 65 3/ 65 3/ 653/' 19 1/ Asswues a drought every fsurth year that reduces benefits bv oeé. 2/ The development period is extended by 1 year and developmeft costs inereased by 15%. Benefits are delayed by 1 year. 3/ Assumes droughts over seven years which reduce benetits by 50 o/o in each year,

125 SEN EGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT FARM INPUT PURCHASES - GROUNDNUT BASIN x GROUNDNUT FERTI LIZER 25 D 0 gd ocd u1 20 zuj WjN w- LL ~~~~~~~~ World Bank-9237

126

127 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT PRODUCTION OF GROUNDNUTS AND MILLET - GROUNDNUT BASIN GROUNDNUTS 800 _b v500 L 400 _t o 200 1X X World Bank-9238

128

129 SENEGAL SINE SALOUM AGRICULTURAL DEVELOPMENT PROJECT RAINFALL AND YIELDS OF GROUNDNUT AND MILLET - GROUNDNUT BASIN 1000 / 900 _ n ' * Y1EL, 'Sw.,. ' W /GROUNDNUT YIELDS ii 700 æ l r -Xtx 1~~~~~~l < ~~~~~~~SORG UM aaa YIELSa a a a ae a w~~~~~~~~~~~~~~~~~~~~~~~~~~ 300 aa a 200~~~~~~aaa OJ 100~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~a a a~~~~~~~~~~~~wol ak93

130

131 Daa.... -J.f,T SENEGAL,.~ 8 g MAURITANIA Sine-Saloum Agricultural Development Pro'ject S E N EGAL PROJECT AREA 15, - -Regional boundaries Departmental boundaries..... District (Arrondissement) boundaries <a'a Mop ç 'L o Regional capital GAMBI~ K. skilometers 10p 0 Departmental capitals GAMBBIA', 5,1 03 0S 0 District (Arrondissement) capitals. O \- -U JI- NE8 A MILES Main roads ~~~ BISSA9 GUI N-~~~~~~~~~~~~~~~~~A,~~~~~> ~~Rivers T l 7C P G' '- - Intermittet streams In millimeters ~Rainfall To Dakar RFG/ON DE DIOUREL _International -- r-,/,/. \ REGION DE DIOURBEL 7 6<~~~~~~~~~~~ ~~--i "-~---tt-' -\\>\' -/ -, " / / '. /,DIOURBEL 0 2~~~~ \N'iakhorjka ty ToDkrq«XtJun O 0L,iakh. iour% Gosso NI- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ N To Daa -tc) -- f^-t -8 0-\<X\- -1j~~~~~~~~~~~~~~~~~i - %a \ _g *ff2~~~~~diaye l./ r v8e', fume a ~~~~~~~~~~~~Birkelane' / -f:omela~~~~~~~~~~~~~~~~m Hodr ) r 4~nd;ougne AK~Kfrn,0 _ ' 5 fk C' )= 14~~~~~~~~À1 N'Doffane q.gniod,, "' \ itiv O~~~~~~~~~~N'Ganda ~Z 0~~~~~~~~ }t» To rgubakoua., Paos Koto _- ack- N'Gouna o l// 2 AN 16 a Médina-/ 2 \ / f v =- >h G A<< > t \ ~~~~~~~~~~~~~S b5 k< 00 -)n0