PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB3188 Project Name. Niger Agro-Pastoral Export and Market Development Project Region

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB3188 Project Name Niger Agro-Pastoral Export and Market Development Project Region AFRICA Sector Agricultural marketing and trade (40%); Animal production (20%); Agricultural extension and research (20%); Crops (20%) Project ID P Borrower(s) GOVERNMENT OF NIGER Implementing Agency Ministry of Agriculture Development BP 323 Niamey - Niger Tel: (227) Fax: (227) dpv@intnet.ne Government of Niger Niger Environment Category [ ] A [] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared September 17, 2007 Estimated Date of February 19, 2008 Appraisal Authorization Estimated Date of Board June 17, 2008 Approval 1. Key development issues and rationale for Bank involvement Country and Sector Context: The agricultural sector in Niger accounts for more than 90% of the population s livelihoods. Poverty level remains high and concentrated in rural areas where about 80% of the population lives. With 40% of the country s GDP (Gross Domestic Product), agriculture remains the driving force of Niger s economy, and agricultural products are prominent among Niger s major exported commodities, particularly to its regional trade partners. In spite of being landlocked and located in the heart of the Sahel draught-prone belt, the country has a potential to play a major role in revamping the WAEMU (West African Economic and Monetary Union) and ECOWAS (Economic Community of West African States) markets for selected products for which it has proven comparative advantage. Key Strategic Elements: The Government s PRSP laid out the country s strategy for economic growth and poverty reduction around four key pillars, one of which includes development of productive sectors, especially in rural areas, to mitigate vulnerability and stimulate income generation. Niger s RDS confirms the importance of the agricultural sector and provides guidance in the way it will contribute to future economic growth through identified programs along which detailed action plans have been elaborated. The proposed operation is in line with RDS s objectives and strategic axes, and especially sub-programs 3.3, which states the need to develop the potential of agro-sylvo-pastoral products as they present promising opportunities for growth. Finally, the proposed operation is in line with Niger s latest Country Assistance Strategy and will respond to the second pillar of the CAS that aims at the development of productive

2 sectors, especially in rural areas, to mitigate vulnerability and stimulate income generation. The GoN is looking forward to Bank s support for elaborating and implementing the project. It has demonstrated the willingness to draw lessons from past operations and is eager to benefit from the Bank recent experience in the area of Supply Chain (SC) development and export promotion in African countries, especially Senegal, Mali and Burkina Faso. Past Portfolio Experience and Knowledge-Base: The Agro-Pastoral Export Promotion Project APEPP ( $US 10 million), which closed two years ago, supported export promotion of agro-pastoral products and aimed at helping producers and exporters to efficiently supply the agro-pastoral export market, react to market changes, seize commercial opportunities. However, the APEPP s outcomes were unsatisfactory and overall achievements very limited, as it suffered from serious misconceptions (PDO too broad, inefficient institutional design, weak M&E system, etc.) and from significant shortcomings during implementation, such as: (i) the lack of clear strategies for the development of selected SCs; (ii) the lack of selectivity in terms of beneficiaries and agricultural products to support; (iii) the inability for producers to establish strong linkages with the export market; as well as (iv) the absence of a M&E system and the inability to measure outputs, as a result. However, the project did contribute to initiate a SC approach in Niger, based on commercial orientation and market-signal implementation. It succeeded in promoting professional organizations and in involving private operators (despite a strong State-led management of the project), with the creation of ANIPE, an umbrella organization that assembles private and professional operators from various export sub-sectors. The proposed operation is not a follow up project to APEPP per se, but it will build upon lessons learned from that project, while taking advantage of the recent findings and recommendations of the on-going DTIS. This study focuses on export opportunities and SC development in the agricultural and livestock sector, and promotes a participatory and common consensus on priority export commodities (filières) among professionals, the government and donor community. The DTIS SC analyses will be the key project s framework in implementing specific action plan for priority commodities such as onions, cowpeas, souchet, sesame, Arabic gum, and animal products. Linkages with Current Interventions and Donor Coordination: The proposed operation will benefit from the lessons learned and experiences of on-going projects in Niger - as their objectives do present synergies with those of the proposed operation. In particular, the Community Action Program seeks to assist GoN to establish an operational framework for decentralized, participatory, and transparent financing mechanisms that empower poor communities and local governments to take charge of their own development. The Private Irrigation Promotion Project seeks to increase production and profitability of high-value, irrigated crops by smallholder farmers with simple, low-cost technologies. Regarding donor coordination, the European Union (EU) has expressed interest in possible contribution to or collaboration with the proposed project. Possible areas for future collaboration include: (i) the creation of a SC investment fund set up as a national financing mechanism by which donors may pool additional resources, (ii) the strengthening of the livestock subsector (animal health, infrastructures, capacity building for livestock organizations), (iii) the improvement of access to credit, in line with action currently undertaken under the Small Scale Irrigation for Food Security Project (ASAPI Appui à la Sécurité alimentaire par la petite irrigation ). Collaboration with IFAD will be explored through its rural finance development project.

3 2. Proposed objective(s) The proposed project development objective is to increase access to domestic and regional/international markets for selected agricultural commodities. This would result by the end of the project, in a 25% increase in value in three commodities out of the country s five major exported commodities (Onions, Cowpeas, Souchet, Sesame, and Arabic Gum) as identified in the DTIS report; and at least a 50% increase in revenues for project-supported beneficiaries (both traders and producers) in the supply chains of these three commodities. Key intermediate performance indicators would include : (a) 30% increase in agricultural export volumes by end of project 2013 for the following major commodities: Onion, from the current 2006 estimate 1 of 125,000 tons; Cowpeas, from the current 2006 estimate of 200,000 tons ; Souchet, from the current 2006 estimate of 18,000 tons. Sesame and Arabic gum are other options to consider during appraisal. (b) Improved marketing of animal products such as red and processed meat (kilichi) both in the domestic and regional markets, and hides and skins for international markets. Poultry would also be looked at during appraisal; and (c) Enhanced marketing conditions and institutional development: reduced shipping/delivery time with ECOWAS/WAEMU country s partners; percentage of supported beneficiaries who comply with Good Practices standards etc. With the proposed project, Niger would take advantage of its comparative advantage in these identified products by tackling key constraints such as inefficient supply chain organization, poor coordination and efficiency, weak capacities among professional organizations and public services, insufficient market information and intelligence, lack of capital and limited access to financing for producers, lack of commercial and marketing infrastructures. 3. Preliminary description 1. Overall approach: As agreed with the GoN at the pre-identification mission, the project will primarily focus on SC coordination and marketing of products. Project interventions will thus be market-oriented, helping participating players to better respond to market signals and to comply with international business standards. This means that the project will see the SC ( filière ) in a comprehensive way, analyzing all segments of the vertical coordination from production, post-harvest operations (processing, packaging and storage) to commercialization. Interventions will be identified and implemented based on the comprehensive SC analysis carried out under the DTIS. The approach will also ensure full participation of all stakeholders along the supply chains to promote inter-professional collaboration and coordination, as a key element to achieve sustainable outcomes. 2. Cross-cutting issues: three cross-cutting issues will be addressed for all SCs: (i) capacity building of trader associations, producer and inter-professional organizations; (ii) access to 1 Source: Niger-DTIS draft report, August 2007.

4 finance for business investment and marketing of improved inputs (seed and fertilizers) and products; (iii) development of markets infrastructure. 3. Primary target group: the project will focus on private operators, including traders and producer organizations, as key actors for SC development. They will be the primary beneficiaries of project interventions and put at the center of decision making mechanisms. Among private operators, ANIPE could be a potential champion to lead project implementation. Specific support will be provided to public services or private providers of advisory services that are required to improve supply chain performances (statistics, quality control, compliance with sanitary and phyto-sanitary SPS standards, advisory services, market information and intelligence, etc.). 4. Targeted supply chains: based on lessons learned from the previous operation (APPEP), the project will focus its interventions on a limited number of sub-sectors where it will concentrate investments and support to ensure concrete results and tangible impacts. The DTIS has identified five promising commodities with comparative advantages and high potential for growth and incomes for producers: onions, cowpeas, souchet, Sesame, Arabic gum. Red meat and poultry have also been identified as presenting strong potential for domestic and regional markets. Additionally, hides and skins may be considered for their export potential. 5. Project components: based on the approach and implementation strategy described above, the project would be organized along the following three components: 1. Improvement of Marketing Conditions and Institutional Support for Supply Chains Development. This component will (i) Facilitate a dialogue between SC private operators and financing institutions (commercial banks and microfinance institutions) through technical assistance to both lenders and borrowers to develop and adapt new financing instruments, and if required provide limited financial support to participating financial institutions for a limited number of demonstrative operations to cover part of the associated risks. Based on similar experiences in Africa, financing innovations could include leasing for equipment acquisition and or warehouse receipts financing for commercialization of commodities; and (ii) Identify and monitor major hurdles along the supply chains that prevent efficient trade across borders, and tailor appropriate responses in collaboration with WAEMU and ECOWAS authorities ; and (iii) Institutional and technical support to ANIPE through savvy international technical assistance in the areas of business plan, sector coordination and promotion of business development Services. The appraisal mission will assess ANIPE s ability to host the coordination unit for the project and will identify the conditions for the sustainability of such an arrangement. 2. Capacity-building and Strengthening of Professional Organizations: this component aims at strengthening the weakest links along the SCs through capacity building both on demand and supply sides. In particular the project under this component will (i) Support knowledge sharing and management through the dissemination of analytical works, facilitation of multi-stakeholders dialogue to develop strategic development or business plans for each SC, which will be translated into annual operational plans. It will also support the promotion of market

5 information / intelligence and SC monitoring and evaluation systems, as critical tools to increase performances. (ii) Provide extensive training and advisory services to strengthen capacities of private operators with a specific focus on producer organizations, usually the weakest link along the SCs. Training will be critical to build a new culture to promote private investments and market orientation; (iii) Build capacity for concerned public services through specific training, technical assistance and adequate equipment to better support private operators to overcome critical constraints and market failures (statistics, quality control, training and advisory services) in a view of increase bargaining power of private operators, management of cooperatives and POs and services to their members, knowledge of market requirements, SPS standards, etc. 3. Agribusiness Development Investment Facility (for storage, processing and packaging, etc.): will support (i) the carrying out of due diligence reviews of targeted SCs, and the implementation on a private-public-partnership basis of pre-selected business plans that address weak links along the chains; (ii) the funding of innovative and competitive proposals for non-targeted SCs and; (iii) the financing of key commercial infrastructure that are critical for consolidating the overall supply chains. Such investments can be justified as a way to remove major constraint to the development of performing agricultural SCs. The critical aspect is however to ensure that these facilities are operated as efficiently and professionally as possible. Publicprivate partnership will thus be at the center of the project approach in that area, where management and operation of such infrastructures will be delegated to private operators. Infrastructure characteristics and design will be identified using international expertise to ensure full compliance with international market requirements.

6 4. Safeguard policies that might apply Applicable Safeguard Policies Yes No TBD Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Cultural Property (OPN 11.03) Indigenous Peoples (OP/BP 4.12) Involuntary Resettlement (O/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60) The project as a whole will be subject to an environment and social impact analysis that will include a sound pest management plan. Although procurement of pesticides is not envisaged under the project, it is expected that the necessary intensification of cultivation techniques and the diversification into marketed crops will possibly lead to an increased use of pesticides, as well as that of inorganic fertilizers. The project will assess ways of mitigating this potential impact by the use of alternative crop protection techniques (biological and integrated control techniques). And other "market" mitigating measures lay in the more and more stringent restrictions on pesticide use imposed by consumers and importing countries in the global food markets. 5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 0 International Development Association (IDA) 15 Total Contact point Contact: El hadj Adama Toure Title: Sr Agricultural Economist. Tel: (202) etoure@worldbank.org

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