Report No. 1307a-LBR FILE COPY Liberia: Bong County Agricultural Development Project February 11, 1977 Western Africa Regional Office Agriculture Projects Division I FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY Currency Unit = United States Dollar WEIGHTS AND MEASURES 1 acre (ac) = 0.405 hectares (ha) 1 mile = 1.61 kilometers (km) 1 square mile = 640 ac = 259 ha I ton = 2,240 pounds (lb) = 1,016 kilograms (kg) ABBREVIATIONS AETC - Agricultural Extension Training Center AGRIMECO - Agricultural Mechanization and Land Development Company ALiT - Agrar-UND-Hydrotechnik BPMU - Bong Project Management Unit BWI - Booker Washington Institute CAES - Central Agricultural Experiment Station ERR - Economic Rate of Return FTC - Farmer Training Center GDP - Gross Domestic Product GNP - Gross National Product GOL - Government of Liberia ICA - International Coffee Agreement ICO - International Cocoa Organization LBA - Licensed Buying Agents LBDI - L,'berian Bank for Development and Investment LlEC - Liberian Electricity Corporation LIPA - Liberian Institute for Public Administration LISCO - Liberian Iron and Steel Corporation LPMC - Liberian Produce Marketing Corporation LPMU - Lofa Project Management Unit MA - Ministry of Agriculture MH - Ministry of Health and Social Welfare MPW - Ministry of Public Works NSA - National Seed Association PCC - Project Consultative Committee PMU - Project Management Unit PSC - Project Steering Committee UL - University of Liberia UNDP - United Nations Development Program USAID - United States Agency for International Development WARDA - West Africa Rice Development Association WHO - World Health Organization FISCAL YEAR January 1 - December 31 FOR OFFICIAL USE ONLY CURRENCY EQUIVALENTS The official monetary unit is the Liberian dollar, with a par value to the US dollar. The US dollar is legal tender in Liberia. GOVERNMENT OF LIBERIA - FISCAL YEAR July 1 - June 30 GLOSSARY OF ABBREVIATIONS BPMU Bong County Project Management Unit GDP Gross Domestic Product IDA International Development Association LBDI Liberian Bank for Development and Investment LPMC Liberian Produce Marketing Corporation USAID United States Agency for International Development. This document has a restricted distribution and my be used by recipients only in the performance of their official duties. Its contents may not othefwia be discboed without World Bank auionriution. LIBEt'IA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Table of Contents Page No. SUMMARY AND CONCLUSIONS .... ......... ... .. ......................... i-iv I. INTRODUCTION .................... ...... ........ .......* 1 II. BACKGROUND ......... ........... ,.... 1... .. A. The Macroeconomic Setting .. ....................... 1 B. Agriculture ............... ....... ............................. 2 - Sector Characteristics ............... . ........ 2 - Sector Objectives, Strategies and Policies .... 3 - Sector Institutions ....... so* ... ... ............ 4 - Other Institutions ................ ............ 5 III. THE PROJECT AREA ................ .......................... 6 General .................................................. -o... 6 - Topography, Hydrology and Climate . ............ 6 - General Infrastructure ................ ...... 6 Institutions ................................................. .... .... 6 IV. THE PROJECT ............................. . 7 A. General Description . .............................. . 7 - Farm and Crop Development .... .............. 8 - Development of Physical Infrastructure 8....... - 8 - Institutional Support .......................... 8 - Other Assistance . ....................... a .... . 8 B. Detailed Features .............................................. 9 - Farm and Crop Development . ..................... 9 - Physical Infrastructure .........ia....str.......s 9 - Institutional Development ..................... 10 - Other Assistance .0 .. ......................... 11 V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS ............... 12 A. Project Costs ............... O..* .................... 12 B. Proposed Financing . ............ . . . . ........... ...... 14 C. Procurement .. ............... . .. . . .. ...................... . 15 D. Disbursement .. . ........................................ 16 E. Budgetary Control, Funding Procedures, and Accounting Records ..... ... . .. . .. . .. . . . ........ ............. 17 -2- Page No. VI. ORGANIZATION AND MANAGEMENT ...... ................... .a. . ...... 18 A . In st itut ions . . . . . . . ..... .... . .......... . .... . ....... . ...... ..1 18 B. Staffing .o .... o ... ...o* ...... * * * * **......... **...* *..* 20 C. Training . .o .... * o * ....... 20 D. Farm Inputs - Procurement and Distribution 21 E. Credit Arrangements .........00000006............... 22 F. Post-Project Administration o ............. 23 VII. PRODUCTION, MARKET PROSPECTS, FARM INCOME AND COST RECOVERY .... . ... .. .. ...o....... ,. 24 A. Plroduction ..... o..oo- o- ........ o... ao.. 24 B. Markets, Marketing and Prices o ....... ...... 24 C. Farmer Benefits ... . ..... ... . . ...... . . . . . . . ......... .. . . ... . 26 D. Cost Recovery .....o ... . 27 VIII. BENEFITS AND JUSTIFICATION ....o...... .................... 27 IX. AGREEMENTS REACHED AND RECOMMENDATIONS o .................. 29 ANNEXES 1. The Project Area 2. Farm and Crop Development 3. Farm Support Services: Research, Seed Multiplication and Extension 4. Farm Support Services: Cooperatives, Credit, Input Supply and Marketing 5. Roads 6. Health Services 7. Organization and Management 8. Project Cost 9. Market Prospects and Prices 10. Economic Analysis MAPS IBRD 12367 - Project Area IBRD 12366 - Liberia Rural Development Projects CHARTS World Bank 16393 - Project Organization LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT SUMMARY AND CONCLUSIONS i. The Government of the Republic of Liberia (GOL) has requested Bank Group and USAID assistance in financing a rural development project in Upper Bong County. The project was identified by GOL, and prepared by Agrar- UND-Hydrotechnik with funds provided under Liberia Agricultural Development and Technical Assistance Project (Credit 306-LBR). This report is based on the findings of a joint IBRD-USAID appraisal mission that visited Liberia during May/June 1976. ii. The modern sector of the Liberian economy, composed of the conces- sions (rubber, forestry, iron ore mining), commercial agriculture, manufac- turing, construction and services, generates nearly 86% of GDP while the traditional sector (primarily smallholder agricultural production) supporting 70% of the population generates the remaining 14%. GOL has embarked on a conscious effort to diversify its economy and reduce sectoral imbalance by promoting development of the non-enclave sector with a greater emphasis on the development of the agricultural sector (to reduce imports of rice and increase exports of cocoa, coffee, palm products and non-concession rubber). Government strategy is to rapidly increase agricultural production through development of large-scale public sector plantations (oil palm and rice) simultaneously with smallholder development. iii. Pursuant to the above strategy, GOL has initiated a number of highly capital-intensive, large-scale projects, and though some short-term increases in rice output were obtained, costs have been high and have resulted in some uneconomic investments. An alternative strategy, involving simple, relatively inexpensive technologies, expanded use of rural labor and develop- ment of infrastructure and institutions to provide farm support services, is being developed under the Lofa County Agricultural Development Project (Credit 577-LBR). A similar strategy is proposed for Bong County. iv. The project area, consisting of Gbarnga, Kokoya and Sanoyie districts in Bong County, has an area of 600,000 ha and a population of about 140,000 persons. Seventy-five percent of the households practice subsistence farming and have average farm sizes of about 2 ha. Seventy percent of the cultivated area is under tree crops, mostly rubber, and the remaining area is under rice, cassava and other field crops. Ecologically, the area is suitable for the profitable cultivation of coffee, cocoa, upland and swamp rice, besides a wide variety of minor crops, vegetables and fruits. However, development of smallholder farming has been inhibited by inadequate support services and infrastructure. - ii - v. About 9,000 farm families would participate and would be provided with farm support services (extension advice, input supply, credit arrange- ments, land development, soil selection) for development of 5,750 ha of upland rice, 3,000 ha of cocoa, 1,500 ha of coffee and 2,050 ha of swamp rice. The project would construct about 170 km new farm-to-market roads, recondi- tion an existing 130 km and maintain 540 km; expand and improve the training center and other related facilities at the Central Agricultural Experiment Station (CAES) at Suakoko; construct offices, storage facilities and housing for project staff, and assist villages in constructing 300 village wells. The project would strengthen related institutions and promote new ones; it would establish six chiefdom cooperatives to facilitate inputs, credit supply and marketing for smallholders; provide technical and administrative staff support to Ministry of Agriculture (MA); provide financial assistance for development of rural banking; improve research facilities and capabilities at the CAES; promote smallholder land registration; assist the Ministry of Health in the surveillance of schistosomiasis; strengthen GOL capabilities for project monitoring and evaluation; and would provide consultant services for project preparation and reorganization of the MA. vi. The project would be implemented by the Bong Project Management Unit (BPMU) established as a semi-autonomous entity within the MA. The BFMU would be responsible through a Project Steering Committee to the Minister of Agriculture. Coordination at the county level would be through the Project Consultative Committee. The feeder road program would be implemented by a special feeder road unit to be established within the Ministry of Public Works; schistosomiasis surveillance would be through a special unit created within the Ministry of Health, and evaluation and monitoring through a project monitoring and evaluation unit established within the Ministry of Agriculture. Project headquarters would be at Suakoko. The project provides for recruitment and training of Liberian staff; additionally, funds have been provided for seven internationally recruited staff to fill senior management and technical positions for which qualified Liberians are unlikely to be available. vii. Total cost of the project is estimated at US$20.3 million, net of all identifiable taxes and duties, and including US$5.2 million for physical and price contingencies. Foreign exchange costs are estimated at US$9.7 million (48% of total costs). IDA would contribute US$7.0 million (34%), USAID US$6.0 million (30%) and GOL US$7.3 million (36%). The proposed IDA credit would finance 55% of total foreign exchange costs and 15% of local costs, while the USAID loan would finance 45% of foreign exchange and 15% of local costs. The IDA credit would be on standard terms. viii. Vehicles, equipment for offices, research laboratories, workshops, and other items would be procured through international competitive bidding in accordance with Bank guidelines for contracts valued over US$50,000; contracts of less than US$50,000 but more than US$5,000 would be through local competitive bidding procedures satisfactory to the Association; items costing less than US$5,000 would be procured through local customary procedures satisfactory to the Association. Such procurements are estimated at a value of US$1.5 million. Domestically manufactured goods would be allowed a 15% - iii - preference when comparing domestic bids with those of foreign manufacturers. Contracts for construction of buildings, houses and purchase of construction materials, etc. (US$0.7 million), would not be attractive to foreign contrac- tors, and contracts would be awarded on the basis of local competitive bidding procedures satisfactory to the Association. International staff (US$1.6 million) would be recruited and consultants for project preparation and studies (US$0.4 million) would be retained on terms and conditions and with qualifications acceptable to the Association. Other items to be financed include local staff salaries (US$0.7 million), vehicle operating and general services costs (US$0.9 million) and assistance for LBDI branch development (US$0.1 million). USAID financed goods and services covering road building equipment, materials and labor, farm inputs, local staff salaries, vehicle operating and general services costs estimated to have a value of US$4.2 million would be procured in accordance with USAID procedures. ix. The IDA credit of US$7.0 million would be disbursed over five years and would cover (a) 100% of the CIF costs of directly-imported vehicles and equipment (other than farm equipment and road building vehicles and plant), or 90% of the total cost if locally procured (US$0.8 million); (b) 80% of the cost of buildings and furnishings (US$0.4 million); (c) 100% of foreign expenditure (including recruitment charges) for internationally recruited staff, consultants, feasibility studies and overseas training of local staff (US$2.15 million); (d) 70% of expenditures for vehicles' operating costs, general services materials for village wells, local costs of LBDI branch (US$1.1 million); (e) 20% of expenditures for local staff (excluding those financed by USAID) (US$0.6 million); (f) 100% of foreign expenditure and 50% of local expenditure for improving the CAES research facilities at Suakoko (US$0.45 million); and (g) an unallocated amount of US$1.5 million. x. An advance of up to US$200,000 has been granted under the Project Preparation Facility and would finance expenditure in connection with project start-up activities, e.g., office buildings, recruitment of key expatriate staff and vehicles. xi. Direct benefits from the project would, qt maru,ity (Year 13), be the incremental production of 8,740 turis of rice, 3,000 tons of cocoa and 1,500 tons of coffee annually, representing nec annual foreign exchange earnings/savings of US$6.7 million. The project would cause substantial mobilization of labor in the project area, particularly the seasonally unemployed. By 1990 the project would raise the net annual income of the participating farmers from US$360 (US$68 per capita) to about US$850 (US$160 per capita). The economic rate of return is estimated at 21%. Intangible and nonquantifiable benefits would accrue to the community as a whole from road improvements, banking facilities, health services, better marketing infrast'ucture, etc. Development of the cooperatives would create rural capabilities for institutional farm support services while strengthening the technical, managerial capabi]itices of the MA and other related GOL agerncies would help futute planning and implemtatation of rural development projects. - iv - xii. On the basis of the assurances, actions and recommendations obtained at negotiations and set out in Chapter IX, the project is suitable for a IDA credit of US$7.0 million. I. INTRODUCTION A. General 1.01 The Government of Liberia (GOL) has requested Bank Group and USAID assistance in financing a rural development project in the Upper Bong County. This report appraises a project designed to increase the cash income and improve the quality of life of the smallholder peasant farmers in the Gbarnga, Kokoya and Sanoyie districts by providing a range of farm support services and other infrastructural and institutional improvements. Approximately 9,000 farm families would directly benefit from production increases in upland and swamp rice, cocoa and coffee. 1.02 The project was identified by GOL and prepared by Consultants, Agrar-UND-Hydrotechnik, financed under Liberia Agricultural Development and Technical Assistance Project (Credit 306-LBR). The Lofa County Agricul- tural Development Project (Credit 577-LBR), which was also prepared under Credit 306-LBR is being financed by IDA (US$6.0 million), USAID (US$5.0 mil- lion) and GOL (US$6.0 million). The institutional arrangements for the Lofa County Project have been formalized without any difficulties; Government con- tribution to date to the project fund has been satisfactory and the proj- ect has received the requisite cooperation and response from the farmers and local leaders. There were initial delays in staff recruitment but there have been no major implementation difficulties and none are foreseen. 1.03 The report is based on the findings of a joint IBRD/USAID appraisal mission which visited Liberia from May 9 - June 3, 1976 consisting of Messrs. Farruk, Hachero, van de Poll (IBRD) and de Verteuil (Consultant), and Messrs. Dawson, Spears, Guiot (USAID) supported by USAID Consultants Hatch, Jackson and Honadle. II. BACKGROUND A. The Macroeconomic Setting 2.01 Liberia has a total area of about 111,000 km and a population of 1.5 million growing at 3.3% per annum. Average per capita GNP in 1975 was US$410, nearly 60% higher than 1972. GDP (monetized sectors only) at current prices in 1975 amounted to US$662.0 million, an increase of 22% over 1974 resulting primarily from higher contract prices for iron ore. In real terms, however, GDP growth in 1975 was negative, iron ore shipments were 30% lower than previous years, earnings from other exports declined and consequently the declining trend on trade balance continued. There has not been any significant change in the structure of the economy; agriculture and mining still account for 24% and 31% respectively of GDP. The modern sector composed of concessions (rubber, forestry, iron-ore mining), commercial agriculture, manufacturing, construction, and services generates 86% of GDP while the traditional sector -2- (primarily agricultural production) supporting about 70% of the population generates the remaining 14%. Concession or enclave sector contributes nearly 37% of the GDP with iron ore mining being the single largest activity in the group. Income distribution still remains skewed; however, recent analysis shows that since the early seventies, substantial redistribution of income in favor of the traditional sector has taken place. Despite significant improvements in Government's concession policy, tariff reform and tax admin- istration, there is further need to improve overall fiscal management partic- ularly in the field of expenditure control, resource planning and budgeting. B. Agriculture Sector Characteristics 2.02 Liberia is a part of the tropical rain forest of Africa but large parts of the country are now covered with secondary forest due to slash and burn agriculture. The climate is warm and humid with rainfall ranging from 4,600 mm on the coast to about 1,600 mm inland. The soils are adequate for the cultivation of perennial crops (rubber, cocoa, coffee and oil palm) but less suitable for annual crops because of rapid soil degradation and risks of erosion. Therefore, soil fertility can be maintained only through the tradi- tional system of shifting cultivation. However, valley bottoms and swamps, consisting of alluvial overflow plains and low terraces can be continuously cultivated with rice and other minor crops given proper water control and fertilizer application. (Annex 1) 2.03 The agricultural sector is characterized by (a) foreign concessions, (b) Liberian owned commercial farms, and (c) traditional smallholder farms; the latter comprise more than 90% of agricultural holdings in Liberia. Foreign concessions are limited principally to large rubber plantations and timber exploitation. These enterprises have highly trained expatriate managerial and technical staff, extensive capital investment, use large scale modern technology and consequently, enjoy high levels of efficiency. The Liberian- owned commercial farms primarily produce rubber but they are increasingly expanding into poultry, livestock, coffee, cocoa, oil palm and some rice and vegetables. They are moderately capital-intensive and have relatively easy access to capital and other resources, often against the security of their own interests in other sectors. Most owners are absentee and manage- ment is poor, except in cases where the farm is large enough to support an experienced professional manager. The traditional sector is largely outside the monetized economy, is located in areas with minimal infrastructure, and is composed of farms where less than 4 ha are cultivated each year. There is little or no adoption of modern innovation, and the sector primarily produces rice, cassava, yams and other subsistence crops along with some coffee, cocoa, oil palm and sugarcane as cash crops. - 3 - 2.04 Agricultural output in 1975 (at current prices) totalled US$197.0 million of which US$71.0 million originated in the monetized sector composed of rubber (US$36.0 million), coffee, cocoa, palm products, etc., and US$126.0 million in the subsistence sector. Average growth in value of all agri- cultural output during the period 1964-1974 has been over 5% per annum in real terms. However, the traditional agricultural sector grew at only 2.4% while increases in the concessions and commercial sectors have been larger. 2.05 Ecologically, Liberia is suitable for profitable production of a wide variety of annual and perennial crops. Rice, cassava, and other food crops are grown extensively all over the country, cocoa and coffee primarily in the Upper Lofa, Upper Bong, and Nimba and parts of Grand Gedah Counties, while rubber is grown in Montserrado, Bong, and parts of Nimba County. Oil palm is indigenous and widespread, while coconuts are grown mainly in the Coastal areas. However, profitable cultivation of oil palm and coconuts is limited to the coastal belt (50-60 miles wide). Rubber, coffee and cocoa are the major cash crops for the farmers and important sources of Liberian export earnings. The total cultivated area is estimated at 510,000 ha, of which 37% (191,000 ha) is under rice comprising 171,000 ha of upland rice and the rest swamp rice. Average yields for upland and swamp rice are estimated to be 1,000 kg and 1,400 kg per ha respectively, and total production of rice during 1975 was about 230,000 metric tons. Other crops cover some 300,000 ha of which cocoa and coffee cover about 22,000 ha each. Due to unsuitable climatic conditions, total absence of natural pastures, and endemicity of trypanosomiasis, livestock production is of very minor importance in tradi- tional agriculture. Sector Objectives, Strategies and Policies 2.06 Prior to 1971, GOL's role in the development of Liberian agricul- ture was focused on the rubber and timber concessions and commercial planta- tions. Problems relating to traditional agriculture, rural poverty, and inequality of incomes were not the major concern of the policy makers. In recent times, however, development of non-enclave agriculture has been em- phasized by the Government, budgetary provisions have been increased (3.8% of total expenditure in 1970 to 7.8% in 1974), and some policy changes in- troduced (e.g., new pricing formulae for export crops, establishment of price stabilization and agricultural development funds, support price for paddy, renegotiation of rubber concession agreements, etc.). 2.07 GOL objectives for agriculture are aimed at diversifying and mod- ernizing the sector. Three basic strategies have been adopted: (a) estab- lishment and operation of large plantations for oil palm, coconut, coffee, cocoa, sugarcane, and rice by public sector corporations; (b) integrated rural development projects whereby productivity, income and living condi- tions of the small traditional farmer would be improved by providing a range of farm support services and infrastructural improvements; and (c) implemen- tation of special projects, expanded rice programs, etc., featuring fully mechanical land development, and cultivation of cleared areas by smallholders with support services provided by GOL. Under the National Development Plan, FY77-80, allocations of US$33.0 million for large-scale farming, US$22.0 mil- lion for integrated projects and US$16.0 million for special projects are budgeted. 2.08 It is apparent that both (a) and (c) above reflect Government's desire to rapidly increase agricultural output and offset the labor shortage. However, experience from large-scale, mechanized projects in Lofa, Bong and Nimba counties have raised some concern about their economic viability. Fully mechanical land development has proved to be expensive (about US$1,000/ha); serious damage had been caused to the fragile top soil; support services are inadequate; and consequently production targets have not been reached and the economic and financial costs may therefore not be justified. 2.09 The strategy for smallholder development being implemented and first introduced under the Lofa project and proposed for the Bong project requires: (a) introduction of simple, relatively inexpensive, technical innovations that allow for better use of rural labor; (b) on-farm measures to increase subsistence smallholders' yields of upland food crops and cash incomes through development of upland tree crops and swamp rice; (c) develop- ment of a low-cost delivery system for inputs, credits and other farm support services; and (d) price incentive improvements for farmers by providing better marketing facilities and pursuing appropriate pricing and marketing policies. Sector Institutions 2.10 The Ministry of Agriculture (MA) is responsible for planning and implementing agricultural development programs. MA budgetary allocations have increased since 1971, but their impact has been limited by low field staff standards and inadequate management. The budget primarily covers salaries and wages, provides minimal logistic support for field staff, and fiscal management is highly centralized. MA is aware of the need to stream- line its activities and is currently analyzing its needs with the help of consultants financed under Credit 306-LBR (para. 4.17). 2.11 Liberian Produce Marketing Corporation (LPMC). All export crops, excluding rubber are marketed exclusively by LPMC, established in 1962 by GOL in partnership with the Danish East Asiatic Company (EAC). In December 1975, GOL acquired EAC's 50% shareholding but retained EAC as managers until December 31, 1977. LPMC still has autonomous status within MA and the Board of Directors (five Liberians, two EAC representatives) is unchanged. In addi- tion to marketing coffee, cocoa and oil palm products, LPMC is responsible for farmer support services for these crops and for establishing commercial plantations. Two LPMC subsidiaries, Liberian Palm Produce Corporation and Liberian Cocoa and Coffee Corporation, have been established for the commer- cial development of oil palm, coconut, and coffee and cocoa respectively. 2. 12 The Agricultural Mechanization Co. Inc. (AGRIMECO) is a wholly- owned Government corporation established in 1972 to implement large-scale land clearing and farm mechanization schemes. It is operated as a commercial company and is empowered to provide services to anyone; however, since incep- tion AGRIMECO has cleared nearly 4,000 ha in the Lofa, Bong, Nimba, Grand - 5 - Gedah and Cape Mount counties for MA-sponsored projects, its principal clients. Despite operational efficiency, the technology is not considered suitable for smallholder agricultural development on financial and economic grounds (see para 2.08 and 2.09). Accordingly, assurances were obtained at negotiations that as of June 30, 1977 MA would not undertake any new large-scale mechanized land clearing activities for tree crop development in the project area until the proceeds of the credit have been fully employed. Other Institutions 2.13 Liberia has not succeeded in creating and sustaining institutional credit for the traditional agricultural sector. The Government-owned Agricul- tural Credit Corporation, established in 1957, ceased in 1963, burdened with heavy financial losses. Only about 20% of commercial bank lending is for agri- culture and then mainly for concessions and commercial farms. The Liberian Bank for Development and Investment (LBDI, established in 1965 with IFC assistance) made 42% of its loans to the agricultural sector, but almost all for rubber, timber and wood processing. Thus the only institutional and extremely limited source of smallholder credit have been the Cooperative, Credit and Marketing Division of the Ministry of Agriculture and LPMC. MA provides credits for seasonal inputs but administration of the program is poor, and credit recovery has been unsatisfactory. LPMC has recently intro- duced a program of providing free seedlings for up to 10 acres to any farmer willing to plant tree crops and, in the special project areas (see para 2.07), a cash grant of US$30 per family per month until the trees come to maturity. Such a policy is not considered to be consistent with efficient management and use of resources and in the long run could impose undue burdens on the Government's finances, besides hindering development of appropriate credit institutions. These matters were discussed at negotiations and GOL agreed to discontinue this policy with effect from September 30, 1977 and September 30, 1978 in the Bong county and Lofa county special project areas, respectively. 2.14 The College of Agriculture and Forestry in the University of Liberia (UL) is the sole institution for graduate training in agricultural sciences, while its Agricultural Extension Training Center (AETC) provides facilities for the training of extension and other field staff. Additionally, the Booker Washington Institute offers a four-year vocational training program in agricul- ture. Agricultural research activities in Liberia, primarily carried out at the Central Agricultural Experiment Station at Suakoko, suffer from a lack of direction and coordination besides having poor physical facilities (Annex 3). Besides Ministry of Agriculture, the Ministries of Action for Development and Progress and Local Government, Rural Development and Urban Reconstruction - are involved in rural development in Liberia, but their impact has been minimal. -6- III. PROJECT AREA 3.01 General. The project area consists of the Gbarnga, Kokoya and Sanoyie districts in the Bong County 1/, and has a total area of 650,000 ha and a population of about 140,000 of which 100,000 (19,000 farm families) are engaged in farming. The people primarily belong to the Kpelle Tribe and most of them are small farmers cultivating between 1 and 3 ha with average per capita income of about US$68 per annum (see Annex 2 and para 7.07). 3.02 Topography, Hydrology and Climate. Eighty percent of the area consists of dissected rolling uplands, 12% are swamps (poorly drained valley bottom), and the rest are isolated high hills or mountains. The climate is tropical with a mean annual rainfall ranging from 1,600 mm in the central parts to 2,200 mm in north and south. Most of the upland consists of deep ferralitic soils with a high laterite gravel content and low fertility. The valley bottom soils have textures varying, from loamy sand/sandy clay to sandy clay loams and iron-toxicity in soils is a major problem. 3.03 General Infrastructure. Social and related services are limited. Roads are poorly maintained. The few small airstrips in the area are used by GOL and private light aricraft only. Telecommunications between the area and other parts of Liberia are limited. Liberia Electricity Corporation (LEC) runs the power station in Gbarnga (rated capacity of 2,280 kw) which supplies the town and neighborhoods. There are 45 elementary schools (32 in the Gbarnga district, 6 in the Kokoya district and 7 in the Sanoyie district), 14 junior high schools and 1 college for graduate studies. Under the Bank's Second Education Project 12 community schools will be constructed in the county. Medical services are limited to the Phebe Hospital and a few govern- ment clinics (details in Annex 1). Institutions 3.04 As in other counties of Liberia, two types of institutions - the traditional and the modern public sector - dominate local administration. There are six chiefdoms divided into 28 clans (based upon traditional lineage categories), the clans in turn being divided into towns (geographic considera- tion) and towns into quarters. There are four development councils (consisting of paramount and clan chiefs and other leading persons) which have advisory functions to GOL (through county superintendents) for development activities and represent a formal link between Government and traditional institutions. 3.05 Land tenure arrangements form another important traditional institu- tional link. Although the state is officially the ultimate owner of all land, individual family right of usufruct is ruled by traditional laws and customs and traditional tribal control in their respective areas is honored. The 1/ Administratively, Liberia has nine counties and five territories. - 5 - Gedah and Cape Mount counties for MA-sponsored projects, its principal clients. Despite operational efficiency, the technology is not considered suitable for smallholder agricultural development on financial and economic grounds (see para 2.08 and 2.09). Accordingly, assurances were obtained at negotiations that as of June 30, 1977 MA would not undertake any new large-scale mechanized land clearing activities for tree crop development in the project area until the proceeds of the credit have been fully employed. Other Institutions 2.13 Liberia has not succeeded in creating and sustaining institutional credit for the traditional agricultural sector. The Government-owned Agricul- tural Credit Corporation, established in 1957, ceased in 1963, burdened with heavy financial losses. Only about 20% of commercial bank lending is for agri- culture and then mainly for concessions and commercial farms. The Liberian Bank for Development and Investment (LBDI, established in 1965 with IFC assistance) made 42% of its loans to the agricultural sector, but almost all for rubber, timber and wood processing. Thus the only institutional and extremely limited source of smallholder credit have been the Cooperative, Credit and Marketing Division of the Ministry of Agriculture and LPMC. MA provides credits for seasonal inputs but administration of the program is poor, and credit recovery has been unsatisfactory. LPMC has recently intro- duced a program of providing free seedlings for up to 10 acres to any farmer willing to plant tree crops and, in the special project areas (see para 2.07), a cash grant of US$30 per family per month until the trees come to maturity. Such a policy is not considered to be consistent with efficient management and use of resources and in the long run could impose undue burdens on the Government's finances, besides hindering development of appropriate credit institutions. These matters were discussed at negotiations and GOL agreed to discontinue this policy with effect from September 30, 1977 and September 30, 1978 in the Bong county and Lofa county special project areas, respectively. 2.14 The College of Agriculture and Forestry in the University of Liberia (UL) is the sole institution for graduate training in agricultural sciences, while its Agricultural Extension Training Center (AETC) provides facilities for the training of extension and other field staff. Additionally, the Booker Washington Institute offers a four-year vocational training program in agricul- ture. Agricultural research activities in Liberia, primarily carried out at the Central Agricultural Experiment Station at Suakoko, suffer from a lack of direction and coordination besides having poor physical facilities (Annex 3). Besides Ministry of Agriculture, the Ministries of Action for Development and Progress and Local Government, Rural Development and Urban Reconstruction - are involved in rural development in Liberia, but their impact has been minimal. -6- III. PROJECT AREA 3.01 General. The project area consists of the Gbarnga, Kokoya and Sanoyie districts in the Bong County 1/, and has a total area of 650,000 ha and a population of about 140,000 of which 100,000 (19,000 farm families) are engaged in farming. The people primarily belong to the Kpelle Tribe and most of them are small farmers cultivating between 1 and 3 ha with average per capita income of about US$68 per annum (see Annex 2 and para 7.07). 3.02 Topography, Hydrology and Climate. Eighty percent of the area consists of dissected rolling uplands, 12% are swamps (poorly drained valley bottom), and the rest are isolated high hills or mountains. The climate is tropical with a mean annual rainfall ranging from 1,600 mm in the central parts to 2,200 mm in north and south. Most of the upland consists of deep ferralitic soils with a high laterite gravel content and low fertility. The valley bottom soils have textures varying, from loamy sand/sandy clay to sandy clay loams and iron-toxicity in soils is a major problem. 3.03 General Infrastructure. Social and related services are limited. Roads are poorly maintained. The few small airstrips in the area are used by GOL and private light aricraft only. Telecommunications between the area and other parts of Liberia are limited. Liberia Electricity Corporation (LEC) runs the power station in Gbarnga (rated capacity of 2,280 kw) which supplies the town and neighborhoods. There are 45 elementary schools (32 in the Gbarnga district, 6 in the Kokoya district and 7 in the Sanoyie district), 14 junior high schools and 1 college for graduate studies. Under the Bank's Second Education Project 12 community schools will be constructed in the county. Medical services are limited to the Phebe Hospital and a few govern- ment clinics (details in Annex 1). Institutions 3.04 As in other counties of Liberia, two types of institutions - the traditional and the modern public sector - dominate local administration. There are six chiefdoms divided into 28 clans (based upon traditional lineage categories), the clans in turn being divided into towns (geographic considera- tion) and towns into quarters. There are four development councils (consisting of paramount and clan chiefs and other leading persons) which have advisory functions to GOL (through county superintendents) for development activities and represent a formal link between Government and traditional institutions. 3.05 Land tenure arrangements form another important traditional institu- tional link. Although the state is officially the ultimate owner of all land, individual family right of usufruct is ruled by traditional laws and customs and traditional tribal control in their respective areas is honored. The 1/ Administratively, Liberia has nine counties and five territories. -7- system provides satisfactory tenurial arrangements at this stage of develop- ment. However, an individual can secure registered title to his land under GOL laws (the Aborigines law, Public Land law No. 30 and Registered Land law). The procedures are complicated by bureaucratic intricacies, and at present only large, well-to-do farmers and Monrovia-based elite have been registering land (Annex 2, para 13). 3.06 Important communal labor groups known as KIU are formed among people of different households (to ease the labor burden by working with friends and neighbors). Cooperative saving societies, sometimes referred to as SUSU, formed by pooling resources, also exist. Thus, an environment of traditional cooperative action is present and this might be exploited to establish modern service cooperatives (Annex 2, para 12). 3.07 Approximately 10% of the project area is under cultivation of which 70% is tree crops (mostly rubber) and 30% annual crops (mostly rice and cassava). Distribution is rather uneven with only one-third of the cultivated land being shared among 75% of the households (smallholders) having average farm sizes of about 2 ha. However, land scarcity does not limit agricultural production; rather, expansion and improvement on small farms have been inhibited by lack of support services and infrastructure. Upland rice, occupying nearly 55% of the smallholder's cultivated area, is the predominant subsistence crop. Upland farming, under a system of extensive shifting cultivation, consists of rice intercropped with vegetables and minor cereals in the first year, followed by root crops and some sugarcane in the second year; thereafter the land is left fallow for five to ten years. Swamp rice is grown by about 10% of the farmers, cassava by 70%, corn by 25%, sugarcane by 22%, cocoa by 29% and coffee by 14%. Coffee and cocoa are the most important long-term cash crops. Farm management and husbandry standards are generally inadequate, land and labor are the primary inputs, while use of fertilizers, improved seeds (local varieties are morphologically uneven and of low genetic potential), pesticides, etc. is rare. Maintenance of tree crops is substandard and many stands are indistinguishable from secondary forests. Yields are low and returns to labor unattractive. Details are at Annex 2. IV. THE PROJECT A. General Description 4.01 The principal objective of the project would be to increase and sustain farm incomes by providing farm inputs and strengthening and develop- ing farm support services to the small farmers (see para 3.01). The project would be implemented over a five-year investment period 1977/78-1981/82 as follows: -8- Farm and Crop Development Provide farm inputs, including fertilizers, insecticides, seeds and seedlings, farm equipment (power tillers, chain saws, hand winches, threshers, etc.) for cash or credit to increase production of 5,750 ha of upland rice, 3,000 ha of cocoa, 1,500 ha of coffee and 2,050 ha of swamp rice; of which 300 ha will be for double cropping), improve on-farm processing of coffee and cocoa; establish seed mul- tiplication farms and seedling nurseries and seed gardens; assist farmers in the selection of appropriate soils for different crops through soil survey and soil analysis; and assist farmers, where required, in land clearing and land development. Development of Physical Infrastructure Construct about 170 km new farm-to-market roads, recon- dition/upgrade an existing 130 km and maintain 540 km; construct offices, stores and houses; expand the training center and related facilities at Suakoko; and construct 300 village wells. Institutional Support Establish the Bong County Project Management Unit (BPMU) for project implementation; provide technical and adminis- trative staff for project implementation; establish cooperatives to facilitate input, credit supply and market- ing; provide financial assistance to LBDI for establishing banking facilities at Gbarnga; improve the research facil- ities and capabilities at the CAES; promote the smallholder land registration process; assist the Ministry of Health in the surveillance of schistosomiasis in the project area; and strengthen the evaluation and monitoring unit set up under the Lofa County Project for effective project evaluation. Other Assistance Financing consultants for the preparation of an integrated agricultural development project, tentatively identified in Grand Gedah county, and for a small survey to explore the citrus industry; and finance a more detailed study for the reorganization of MA. B. Detailed Features Farm and Crop Development 4.02 Details of phasing and scheduling for crop development are at Annex 2, para 48. During the first year of the project, development would be confined to upland and swamp rice; thereafter, the tree crop program would be incorporated. 4.03 Upland Rice. Improvements to about 5,750 ha of upland rice produc- tion (existing yields - 1,000 kg/ha) would be obtained through the use of improved seeds (primarily LAC 23 with TOS 2581, 2583 used for late plant- ing) supplied to participating farmers every fifth year, compound fertilizer (22-40-0), and better farm management practices (details at Annex 2, paras 17-20). 4.04 Cocoa and Coffee. The project would develop 3,000 ha of cocoa and 1,500 ha of coffee for smallholders. Development would primarily consist of new plantings with (a) high yielding materials; (b) appropriate fertilizer applications, disease and pest control and other husbandry practices; and (c) improved on-farm and commercial processing. Participating farmers would be encouraged to group together and develop their coffee/cocoa in single blocks to facilitate administration of support services including phytosani- tary measures and quality control (details at Annex 2, paras 21-36). 4.05 Swamp Rice Development. The project would reclaim 1,650 ha of in- land swamps and improve about 400 ha of existing swamps. Of this approximately 300 ha would be developed for double cropping of rice where simple inexpensive (about US$700/ha) earthen barrages and other rudimentary structures would be constructed for storing run-off from catchment areas for use during the dry season. Land clearing on virgin swamps would be done manually with the help of small hand equipment; flood protection and water control would be through peripheral drains, field bunds and levelling. The project would provide assistance in preparing simple topographical surveys and soil analyses to select swamps for development. On-farm measures would focus on proper water management, timely planting and fertilization, and use of varieties resistant to iron toxicity (details at Annex 2, paras 37-46). 4.06 Supply of Inputs and Equipment. The project would supply improved rice seeds (560 tons), coffee and cocoa seedlings (7 million), fertilizer (5,000 tons), insecticides, chemicals, shade crops, additionally, power tillers for double cropped swamps, knapsack sprayers, hand winches, chain saws, cocoa fermentation boxes, etc., would be provided (see Annex 2, para 45). All farm inputs and farm equipment would be rented or sold at full commercial cost with provision for credit (see para 6.17 and Annex 4). Physical Infrastructure 4.07 Feeder Road Development. Only 55% of the population has direct access to a road and the estimated road density is about one km for every 18 km2. This is considered inadequate for timely delivery of inputs, services to farmers and marketing of produce. The project would provide funds for - 10 - equipment and personnel for constructing 170 km of new farm-to-market roads, reconditioning/upgrading about 130 km of existing ones and maintaining about 540 km (including the newly constructed ones) of farm-to-market roads in the project area. At the end of project development, road density in the project area would be about 1 km for every 7 km2. The Ministry of Public Works would have the primary responsibility for the feeder road program but would work in close liaison with project management. Construction/upgrading/ maintenance would be done under MPW force account. No detailed engineering would be done for these roads (details at Annex 5, para 6.06). 4.08 Buildings. The BPMU offices (15,000 square feet) would be con- structed at Suakoko and six zonal offices at different locations; eight senior staff houses, a schistosomiasis laboratory and crop research laboratories would also be constructed to be staffed and equipped under the project. The training center, now being built (Credit 306-LBR) at CAES, would be expanded. The project would provide materials and other assistance to villagers for construction, on a self-help basis, of 300 village wells for improved water supply (details in table 2, Annex 8.) Institutional Development 4.09 Cooperatives. The project would develop cooperative societies to supply farm inputs and credit and for marketing farmers' crops. These would be developed within the traditional KUUS and SUSU systems (details at Annex 4). 4.10 Rural Savings. Funds would be provided for LBDI to establish banking facilities at Gbarnga including office space, staff and equipment. In addition to customary banking services, LBDI would manage the project's revolving credit fund (para 6.20). An assurance was obtained at negotiations that LBDI would establish the Cbarnga facilities by June 30, 1977. 4.11 Health. Urinary and intestinal schistosomiasis are endemic in the project area and therefore a rise in the prevalence of this disease, particularly among those who develop swamp rice is not improbable. Monitoring of project farmers is therefore important and the project would strengthen the Shistosomiasis Surveillance Unit established under Credit 577-LBR (para 6.07). Apart from monitoring the Unit would also undertake limited testing of vector control techniques. An assurance was obtained at negotiations that the findings of the Unit would be reviewed with the Association by December 31, 1978 and that GOL would promptly act to institute the required preventive and curative measures in the event of a marked increase in the incidence of schistosomiasis in the project area (details at Annex 6). 4.12 Project Management. MA's capability to implement the project would be strengthened through the establishment of the Bong Project Management Unit (BPMU) which would be located at Suakoko. BPMU would have responsibility for project implementation including recruitment and training of field staff. (details at Annex 7). An assurance was obtained at negotiations that MA would provide the necessary land for establishing project headquarters and constructing staff houses and other facilities. - 11 - 4.13 Research. The project would finance the short term improvement of research facilities at the Center including continuation of rice research initiated under 306-LBR, the initiation of cocoa and coffee reseach and improvement of laboratory facilities for the agronomy and soil section. In addition, funds have been provided for two consultant-months for an in-depth analysis of existing research facilities in Liberia, the required organiza- tional changes, physical improvements, hiring of additional specialist staff, and training needs for research personnel. The initiation of the recommended program would be undertaken by the project. During negotiations, assurances were obtained that by December 31, 1977 GOL would prepare for review with the Association proposals for the reorganization of agricultural research for Liberia. A condition of disbursement of funds for the research component (except continuation of rice research initiated under 306-LBR) would be that this review, including detailed cost estimates is acceptable to the Association. 4.14 Land Tenure. Tribal land rights provide some tenurial security for farmers but with the expected increased competition for land due to increased yield and income potential arising from project measures, there is a need to promote land registration for smallholders. The project, which would work closely with the county land registration office, would provide a small survey team within BPMU to undertake surveys of land being developed by project farmers, and subsequently would assist farmers to complete the complicated procedures for obtaining title deeds (Annex 2, para 13 and Annex 7, para 15). 4. 15 The Monitoring and Evaluation Unit established under the Lofa Project (Credit 577-LBR) would be strengthened with additional staff and equipment to evaluate the Bong project (see Annex 7, para 17). Assurances were obtained at negotiations that no later than September 30, 1977, GOL shall amend the terms of reference of the existing unit enabling it to function for the Bong project. Other Assistance 4.16 Project Preparation. Funds have been provided for consultants to prepare a third rural development project identified by GOL in Grand Gedah County. Additionally a small survey to identify the potentials of a citrus fruit canning industry in Liberia would also be undertaken. 4.17 Reorganization of MA. Consultants were employed under Credit 306-LBR to review the adequacy of the present institutional arrangement for agricultural development in Liberia and to suggest specific proposals for reorganizing MA. The consultants' report, which is currently under review by GOL and the Association, recommends, inter alia, that a semi-autonomous Rural Development Authority be established to plan and inplement smallholder agricul- tural development projects. However, the study was not intended to provide details of the reorganization proposals (e.g., job descriptions, position classification, manpower planning, cost implications) that would allow imple- mentation of the proposals. In view of the urgent need for creating an institutional framework that would ensure continuity of farm support services during the post-investment phases of this and other projects being developed - 12 - within the agricultural sector, funds have been provided under this project for a follow-up study designed to provide more detailed proposals for reor- ganization, including specifics of implementation. However, this study will be contingent upon satisfactory review of the Consultants' report (under Credit-306-LBR) by the Association. 4.18 Assurances were obtained at negotiations that about 70 consultant man-months amounting to US$0.35 million would be employed for research (para 4.13), project preparation (para 4.16), and the MA reorganization (para 4.17) would be appointed with terms of reference, qualifications and condi- tions of employment satisfactory to the Association. V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS A. Project Costs 5.01 Project costs are estimated at US$20.3 million including US$0.2 million of identifiable indirect taxes but excluding all other taxes and duties. The foreign exchange component would be US$9.8 million or 48% of total costs. 1/ Details are at Annex 8 and are summarized below: 1/ Liberia uses US$ as its own currency. - 13 - Base Line Local Foreign Total Costs Total Costs -----US$'000… % Investment Costs Buildings, vehicles and equipment 325 1,076 1,401 9 7 Farm inputs and hired labor 2,034 1,402 3,436 23 17 Road construction and upgrading 297 1,074 1,371 9 7 Village wells 50 50 100 1 - Research improvements 130 520 650 4 3 2,836 4,122 6,958 46 34 Support Services to Farmers Development of banking institution 60 90 150 1 1 Local staff 3,849 - 3,849 26 19 Internationally recruited staff - 1,575 1,575 10 8 Vehicles operating costs general services and road maintenance 1,077 1,102 2,179 14 10 4,986 2,767 7,753 51 38 Technical Assistance Consultants for feasibility studies - 350 350 3 2 Base line costs 7,822 7,239 15,061 100 - Contingencies - physical 391 361 752 - 4 - price 2,310 2,132 4,442 - 22 Project Cost 10,523 9,732 20,255 - 100 Percentage 52 48 100 5.02 Estimates are based on prices obtained during appraisal, updated where necessary to reflect baseline costs expected at the end of 1976, and exclude all identifiable import duties on goods imported directly for the project. The present Government policy will exempt these goods from taxes and duties. Physical contingencies comprise 5% of baseline costs, and price contingencies allow for compounded cost increases of: (a) vehicles, equipment and farm inputs of 9% in 1977, 8% per annum 1978 to 1979 and 7% 1980 to 1981; (b) buildings, construction materials for roads and village wells of 13% in 1977, 12% per annum in 1978 to 1979 and 10% per annum in 1980 to 1981; (c) salaries, consultants, technical assistance and local costs of 7% from 1977 onwards. Analysis of baseline costs show 42% for production related invest- ments and 58% for GovernLment support services and technical assistance. Total contingencieC. are equivalent to 25% of total costs. - 14 - B. Proposed Financing 5.03 IDA would contribute US$7.0 million, USAID US$6.0 million and GOL US$7.3 million. The IDA credit of US$7.0 million (34% of total project costs) would finance US$5.4 million (55% of the total foreign exchange costs of US$9.8 million) and US$1.6 million (15%) of local costs. The USAID loan would finance US$4.4 million (45% of foreign exchange) and US$1.6 million (15%) of local costs. The IDA credit would be on standard terms and the USAID loan would be for 40 years including 10 years grace, repayable in 30 equal annual installments with interest at 2% during the grace period and 3% thereafter. It is recommended that a condition of credit effectiveness would be that the USAID loan of US$6.0 million had been formally ratified by the Governments of USA and Liberia. The proposed financing plan is detailed in Annex 8, Table 11, and summarized as follows: - 15 - Summary of Proposed Financing Total IDA USAID GOL -US-$- 000… Investment Costs Buildings 542 433 - 108 Vehicles and Equipment 859 773 - 86 Farm inputs and hired labor 3,436 - 2,082 1,354 Road construction and upgradingl,371 - 1,028 343 Village wells 100 70 - 30 Research improvements 650 585 - 65 6,958 1,862 3,110 1,986 Government Support Services to Farmers Development of banking institutions 150 105 - 45 Local staff 3,849 669 378 2,802 Internationall recruited staff 1,575 1,575 - - Vehicles operating costs, general services and road maintenance 2,179 866 706 607 7,753 3,215 1,084 3,454 Technical Assistance Consultants for feasibility studies 350 350 - - Base line Costs 15,061 5,427 4,194 5,440 Contingencies: Physical 752 270 209 273 Price 4,442 1,308 1,545 1,589 Project Costs 20,255 7,005 5,948 7,302 Percentage 100 34 30 36 5.04 In order to expedite initial implementation of the project, an ad- vance of up to US$200,000 has been granted under the Project Preparation Facil- ity. The advance would finance expenditure required prior to effectiveness of the proposed credit in connection with project start-up activities, e.g. office buildings, recruitment of key expatriate staff and vehicles. In accordance with normal terms and conditions of advances granted under the Facility, the advance and the service charge thereon will be fully repaid to IDA through reim- bursement under the proposed credit as soon as it becomes effective. C. Procurement 5.05 Procurement of vehicles, equipment for offices, research laboratories and workshops, and such other items through contracts of more than US$50,000 would be through international competitive bidding in accordance with Bank guidelines; contracts of less than US$50,000 but more than US$5,000 would be - 16 - through local competitive bidding procedures satisfactory to the Association; items costing less than US$5,000 would be procured in accordance with local customery procedures satisfactory to the Association. Such procurements are estimated at a value of US$1.5 million. Domestically manufactured goods would be allowed a 15% preference when comparing domestic bids with those of foreign manufacturers. Contracts for construction of buildings, houses and purchase of construction materials, etc. (US$0.7 million), would not be attractive to foreign contractors, and contracts would be awarded on the basis of local com- petitive bidding in accordance with procedures satisfactory to the Association. International staff (US$1.6 million) would be recruited and consultants for project preparation and studies (US$0.4 million) would be retained on terms and conditions and with qualifications acceptable to the Association. Local staff salaries (US$0.7 million), vehicle operating and general services costs (US$0.9 million), assistance for LBDI branch development (US$0.1 million) would be unsuitable for competitive bidding. USAID financed goods and ser- vices covering road building equipment, materials and labor, farm inputs, local staff salaries, vehicle operating and general services costs estimated to have a value of US$4.2 million would be procured in accordance with USAID procedures. The farm inputs and equipment to be procured under these pro- cedures would be competitive with international prices. D. Disbursement 5.06 The IDA credit of US$7.0 million would be disbursed over five years (see Annex 8, Table 13), to cover 34% of total project costs against the following categories: Category 1: 100% of the CIF costs of directly-imported vehicles and equipment (other than farm equipment and road building vehicles and plant), or 90% of the total cost if locally procured, totaling US$0.8 million; Category 2: 80% of the cost of the buildings and furnishings, totaling US$0.4 million; Category 3: 100% of foreign expenditure for internationally recruited staff, consultants, feasibility studies and overseas training of local staff totaling US$2.15 million; Category 4: 70% of expenditures for vehicles operating costs, general services, materials for village wells, local costs of LBDI branch, totaling US$1.1 million; Category 5: 20% of expenditures for local staff (excluding those fi- nanced by USAID), totaling US$0.6 million; Category 6: 100% of foreign expenditures and 50% of local expenditures for improving the CAES research facilities at Suakoko totaling US$0.45 million; Category 7: an unallocated amount of US$1.5 million. - 17 - 5.07 Disbursement would be fully documented for Categories 1, 2, 3, and 6 md certified records of expenditures for Categories 4 and 5. For disbursements made against certified records of expenditures, documenta- tion would be retained by BPMU for review by the Association/USAID super- vision missions. Any surplus funds at completion of the project would be cancelled. E. Budgets, Funding Procedures, and Accounting Records 5.08 BPMU would prepare its own annual budget and in consultation with the Feeder Road, Schistosomiasis and Monitoring Units prepare the annual budgets of these units. LBDI would prepare the annual budget of the LBDI branch at Gbarnga. All budgets, after approval by the Project Steering Committee, would be incorporated in the annual estimates of the Ministries of Agriculture, Public Health, Public Works, and LBDI. Budgets would be based on the cost estimates in this report but would be amended as required to reflect current costs and policy changes. BPMU would submit quarterly cash flow statements to the Project Steering Committee for approval in accordance with these budgets. 5.09 Funding Procedures. GOL has established a project bank account with a commercial bank with an initial deposit of US$150,000. The account would be replenished with funds from the Ministry of Finance quarterly in advance to finance forecast local expenditures. Overdraft facilities or any other interim measures would be arranged by GOL to cover any shortfall in GOL contribution to local costs for that quarter (para 5.08). Within the approved budgetary allocations BPMU would be given full authority to operate the project bank account. Both IDA and USAID reimbursement of local expenditures would be made directly to the Ministry of Finance. Reimbursement applications by the Minis- tries of Public Works and Health and LBDI would be channelled through BPMU. Assurances to these effects were obtained at negotiations. 5.10 Accounts and Audits. BPMU would maintain appropriate accounts in accordance with acceptable accounting practices to reflect the operations and financial position of the project and to provide evaluation data. The ac- counts of BPMU would be audited annually by an independent auditor acceptable to the Association. Audited accounts, balance sheets and operating statements would be submitted to the Association within four months of the end of the financial year. USAID would arrange for the annual audit of the revolving credit fund, Feeder Road Unit and the Schistosomiasis Unit. A copy of the audit reports would be furnished to the Association. 5.11 Cooperatives Records. GOL would ensure that farmer cooperatives, when operational, would maintain adequate credit and accounting records for each farmer. These would be available for review by the Association/USAID supervision missions and audited annually by the Registrar of Cooperatives. As trustee of the revolving credit fund (para 6.23), LBDI would maintain separate accounts and records of the fund, in accordance with an agreement to - 18 - be drawn up between LBDI and GOL. During negotiations, assurances were obtained that the requirements set out in paras 5.10 and 5.11 would be estab- lished to the satisfaction of the Association. VI. ORGANIZATION AND MANAGEMENT A. Institutions 6.01 Project implementation would require farm support services to be properly organized to ensure full cooperation and coordination within and between GOL agencies; adequate support to project staff without undue interference from bureaucratic procedures. As with the ongoing Lofa County Project, a special administrative entity, the Bong Project Management Unit (BPMU), would be created within MA (headquartered at Suakoko) with sole responsibility for implementing the project (see para 6.03). BPMU would be responsible to the Ministry of Agriculture through the Project Steering Committee (see para 6.02). BPMU, although a Government agency, would be structured and authorized to function as a semi-autonomous entity, with its own management, budget and financial control. Integration of the project into the institutional system would be achieved through the Project Steering Committee at the national level, and the Project Consultative Committee at the county level. To avoid duplication of effort and to follow a consistent and concerted aproach to crop development, BPMU would have, except for the "AGRIMECO" cleared areas at Kpartawee, sole responsibility for rice, coffee and cocoa extension services in the Project area with effect from September 30, 1977. An assurance to this effect was obtained at negotiations. 6.02 The Proiect Steering Committee (PSC) would, inter alia, determine project policy, exercise budgetary and financial control, approve the appoint- ment of professional staff, determine conditions of service, and ensure co- operation and coordination between other GOL departments. The PSC established for the Lofa County Project 1/ would also be responsible for Bong, and its composition has therefore been amended to include the Project Manager BPMU as an Executive Secretary. 6.03 The Bong Project Management Unit would take over those activities which cannot be effectively performed by existing institutions. These would include: (a) agricultural extension services; (b) assistance to farmers land clearing, swamp development, and management; (c) input supply and credit administration; (d) development of cooperatives and related rural institutions; (e) training of professional and technical staff and farmers. BPMU would in addition liaise with the Ministry of Public Works for farm- 1/ It consists of the Ministers of Agriculture (chairman), Finance, Planning, Local Government and Rural Development; the Project Manager of LPMU acts as executive secretary. - 19 - to-market road construction and maintenance; LPMC for input importation and produce marketing; with LBDI for credit administration; with CAES for field experimentation and seed multiplication; with the county land commis- sioner for smallholder land registration; with CAES, AETC and LIPA for staff training; and with the Ministry of Health for schistosomiasis surveillance. The BPMU with terms of reference and powers satisfactory to the Association has been established. 6.04 BPMU would be headed by a project manager and would comprise five divisions: administration and personnel, agricultural services, cooperative and credit services, training, and finance. The Agricultural Services Divi- sion would have three sections: extension and experimentation (responsible for technical advice on tree and field crop production, seed multiplication, seedling production, and field experimentation), land development (land clearing, farm equipment, hire service, swamp development, irrigation and water control), and survey and registration (topographic and soil surveys, land use planning, demarcation and measurement of farms, and assistance in land registration). The Cooperative and Credit Services Division would organize the delivery system for farm inputs and credit and would have three sections: cooperatives (development, guidance, and strengthening of coopera tives), credit (distribution and recovery of smallholder credit) and commer- cial services (procurement and distribution of inputs and assistance in crop marketing). 6.05 The Project Consultative Committee (PCC) would be established at Suakoko to promote cooperation with relevant agencies in the project area, and support for and participation in the project by local people. The Commit- tee would be chaired by the County Superintendent and would include the paramount chiefs of the six chiefdoms; the assistant county superintendent, local representatives of the Ministries of Education, Health, Public Works, Action for Development and Progress, and Land and Mines; chairmen of the cooperatives (when they are organized); and Project Manager and Deputy Manager of BEMU. As far as practical, informal links would be established with development councils (para 3.04) to ensure grassroot support for project activities. Assurances were obtained at negotiations that the PCC would be established not later than September 30, 1977. 6.06 The Ministry of Public Works would be responsible for constructing, reconditioning and maintaining farm-to-market roads in the project area. However, considering MPW's present financial and operational deficiencies, the program would be implemented through a Feeder Road Unit to be formed by September 30, 1977 (Details at Annex 5, Para 8). The unit would be in- dependently financed (equipment and personnel) and managed, and would operate only within the project area in support of project activities. Administra- tively, the unit would be responsible to the MPW resident engineer for Bong County; but annual budgets and operating plans would be developed jointly with BPMU. Assurances to this effect were obtained at negotiations. - 20 - 6.07 The Schistosomiasis Surveillance Unit established under Credit 577-LBR would be strengthened with additional staff, vehicles, and laboratory facilities to service the Bong project. The unit would be under the adminis- trative control of the Liberian Institute for Biomedical Research but the work program, budgeting and recruitment would be in consultation with BPMU. An assurance to this effect was obtained at negotiations. 6.08 The Monitoring and Evaluation Unit provided under Credit 577-LBR would be expanded to include the Bong County Project. The unit would be responsible to the Ministry of Agriculture through PSC, but would work close- ly with the Lofa County and Bong County PMUs as well as with the Economic Planning and Evaluation Division of the MA. B. Staffing 6.09 Because of the complexities inherent in a smallholder development project, successful implementation requires project staff with high levels of managerial efficiency, technical competence and innovation. Where possible BPMU positions would be filled by qualified and experienced Liberians, but a number of the senior key positions may need to be filled through international recruitment. The project would provide funds for international recruitment of a Project Manager, Managers of Finance, Agricultural Services, Training, and Cooperative/Credit Services Divisions, a Swamp Development Officer and a Land Use Planning Officer. Assurances were obtained at negotiations that these positions and the Manager of Administration would be filled by persons having experience, qualifications and terms and conditions of service satisfactory to the Association, and that the deputies to these positions will be filled with persons with adequate qualifications. To avoid delays in project implementa- tion GOL has appointed the Project Manager and Manager of the Finance Division; it was further agreed that appointment of the Agricultural Services Manager would be a condition of effectiveness. C. Training 6.10 Liberia does not have a pool of trained manpower, particularly at intermediate and lower technical staff levels, nor is it able to turn out trained personnel for immediate project needs. Substantial staff training facilities are provided under the Lofa Project, but it is too early for the Bong Project to draw staff from this source. The proposed project would provide training facilities for all extension, cooperative and credit field staff recruited by BPMU. In view of the general lack of coffee and cocoa expertise in Liberia, selected Liberian staff would be sent abroad for short specialized training. Additionally, senior Liberian technical and managerial staff would be trained in project management and rural development administra- tion. - 21 - 6.11 The Manager of the Training Division would be responsible for develop ng and implementing the training program. This would consist of short formal courses interspersed with practical field training. Technical training for field staff would be provided primarily at the CAES, where a training center financed under 306-LBR is under construction, and close cooperation would be maintained with AETC and WARDA. After initial training, staff would undergo short refresher training at suitable intervals. M4anage- ment training would be provided by the staff of the Liberian Institute for Public Administration. Furthermore, all expatriate staff would have re- sponsibility for training their Liberian counterparts and other senior staff working with them. 6.12 The project would organize training for farm families on village demonstration farms, at farmer training centers attached to the six zonal offices and project headquarters, and through farm visits and village/group discussion using audio-visual aids. D. Farm Inputs - Procurement and Distribution 6.13 The input supply and marketing section of BPMU's cooperative and credit services division would have primary responsibility for organizing the farm input delivery system. This would involve village group/coops who would be responsible for estimating requirements and distribution to individual farmers; the chiefdom cooperatives would collate village groups/ coops requirements, arrange delivery from LPMC, and provide temporary storage prior to distribution. LPMC would be responsible for importation, warehousing at Port (and, if necessary, at Suakoko or Gbarnga) and trans- portation to the chiefdom cooperatives storage facilities. However, until the chiefdom and village cooperatives are formed, BPMU would arrange at cost to the farmers for all input handling and delivery, with LPMC providing trans- portation to BPMU storage facilities (see Annex 4, paras 42-46). 6.14 Farm equipment, eg., pedal threshers, power tillers, chain saws, knapsack sprayers, tools, etc., would be procured locally or imported directly from overseas manufacturers by BPMU. Threshers would be sold at full cost to individuals and groups, while a hiring service for tillers, sprayers, chain saws, hand winches, etc., would be operated by BPMU's land development section (see Annex 2, paras 12 (b), 45 and Annex 4, para 48). 6.15 Improved varieties of rice seeds and coffee and cocoa seedlings, fertilizers, pesticides, etc., would be distributed to farmers by BPIU. Breeder seed for rice would be obtained from CAES, Suakoko and multiplied by selected farmers and on project seed multiplication farms. Hybrid varieties of coffee and cocoa seeds would be raised on project nurseries and by the participating farmers themselves under the supervision of the BPMU (Annex 3, paras 9-11). - 22 - 6.16 Farmers would pay the full delivered cost for all inputs supplied. LPMC would be entitled to 5% of the landed Gbarnga value of inputs they import (e.g., fertilizers, seeds, insecticides, chemicals, etc.) plus transport costs for deliveries to BPMU/cooperative storage in the project area. The chiefdom cooperatives would receive 5% commission calculated on the landed cost at Gbarnga (ex-LPNC) plus local transport costs for delivery to farmers (Annex 4, para 47). E. Credit Arrangements 6.17 Farm inputs and equipment, including rentals, would be available on credit, and cash loans would be available for hired labor. Medium-term credit of US$760 and US$680 per ha of cocoa and coffee respectively would be available to cover the costs of fertilizer, seedlings, plantain suckers, hand tools, land development service, spraying and processing equipment and US$1,030 and US$750 per ha of double and single cropped swamp rice respec- tively to cover the cost of hired labor for land development, construction of water control/storage structures and purchase of pedal threshers. Seasonal credit for upland and swamp rice development would cover the costs of rice seeds, fertilizer, spraying services, power tiller service (for double cropped swamps only), while seasonal credit for coffee and cocoa would cover costs of fertilizer, chemicals and replacement of equipment. 6.18 Cocoa and coffee development loans would be disbursed over a period of six and four years respectively, while most of the swamp development loans and cash loans would be disbursed over two to three years. Development loans would bear an annual interest rate of 10%, while 10% interest would be charged on all seasonal loans. Coffee and cocoa development loans would be for twelve years and for swamp rice eight years including a four-year and a two-year grace period respectively during which interest would be capitalized. All seasonal loans would be repayable at harvest. Loan terms, particularly the finance charges, have been determined on the basis of the debt servicing capacity, the recovery of credit operation costs and in consideration of the environmental realities of smallholder credit operations in Liberia. 1/ Nevertheless, the lending terms would be subject to review by BBMU as the project progresses and any amendments would be subject to prior approval by the Association. 6.19 As Bong County does not have any local credit institutions BPMU cooperative services division would be responsible for the project credit program, e.g., estimation of farmer/village group credit needs, distribution and repayment, documentation, etc. However, these functions would ultimately be taken over by cooperatives. Individual loan and credit applications would be screened by a credit advisory committee (to be established for each village group or clan) consisting of village/clan chief, and BPMU local cooperative staff. Individual credit requests would be scrutinized by village groups/ 1/ See Annex 7, para 12 of Report 744a-LBR. - 23 - coops, or by one of the chiefdom cooperatives; in the absence of the latter, by BPMU's respective zonal offices, and then passed on to BPMU. (Annex 4, paras 35-39). 6.20 A project revolving credit fund would be established under an agree- ment between LBDI and GOL, the former acting as administrator of the fund. An assurance was obtained at negotiations that the fund would be established by June 30, 1977 in accordance with a trust agreement satisfactory to the Associa- tion. All credit repayments including interest would be credited to the fund. The fund would charge farmer cooperatives (or BPMU) 7% per annum on loans onlent to farmers at 10%. LBDI would receive 2% of the disbursed funds as commission for administering the fund. At the end of project development in 1982 the fund would have an estimated US$570,000, and by 1995 development loans amounting to US$2.5 million would have been repaid and would be avail- able for further agricultural development as determined by the trust agreement. (See Annex 4, Table 1.) An assurance was obtained at negotiations that GOL would ensure that the fund's capital would be used exclusively for the purpose of smallholder credit. 6.21 Until the chiefdom cooperatives are functional BPMU would be respons- ible for loan recovery. Marketing of project crops (particularly cash crops) through these cooperatives (or through the marketing section of BPMU until the coops are formed) would be a condition of farmers' acceptance for project credit. The assistance of the credit advisory committees of the tribal autho- rities would be sought to recover bad debts. The BPMU cooperative credit division would have a very important role in developing the credit system as they would be responsible for (a) training and counseling project farmers in proper use of credit; and (b) supervising, advising and providing field support to the farmer cooperatives. An assurance was obtained at negotiations that the manager of BPMU cooperative/credit division would be designated assistant registrar of cooperatives for the Bong County. In the Kpartawee special project area, AGRIMECO cleared uplands are being planted with rice, coffee, cocoa, oil palm and rubber by smallholders with inputs and credit provided by MA and LFMC. To avoid conflict with the proposed project credit arrangements, an assurance was obtained at negotiations that all farm inputs and credit provided in Bong County by GOL or its agencies would be provided on the same terms as those provided by BPMU after September 30, 1977 (Details at Annex 4). F. Post-Project Administration 6.22 The creation of short-duration agencies such as BPMU raises the question of continuity when external finance and management cease. The risks should be minimized by: (a) ensuring that GOL would take action to make MA more effective in planning and implementing rural development projects and to take over field extension services at the end of the project period (para 4.17); (b) making arrangements for interagency coordination in rural develop- ment (para 6.02); (c) promoting local capabilities for some support services - 24 - to small farmers, e.g., commercial services and credit facilities to be pro- vided by farmer cooperatives, with appropriate support from LPMC and LBDI (para 6.13); (d) improving other rural development agencies, e.g., MPW and MH (para 6.06 and 6.07). Further, in order to foster creation of permanent institutions for agricultural credit, assurances were obtained at negotia- tions that Government would: (i) not later than June 30, 1977 prepare, for consultation with the Association, a proposal for the establishment of an agricultural credit system in Liberia; and (ii) within six months thereafter, prepare, for consultation with the Association, a detailed plan for the implementation of such proposal. In reviewing the reorganization of MA (para 4.17) the Association and GOL would pay particular attention to the post development phases of this and other projects being developed within the agricultural sector, to ensure the continued servicing of participating farmers. VII. PRODUCTION, MARKET PROSPECTS, FARM INCOME AND COST RECOVERY A. Production 7.01 Estimates of incremental production are difficult to make as: information on past yields is scanty; despite ecological suitability for crops, substantial yield variations within the project area are inevitable; and the rates and patterns of adoption of the new input package cannot be precisely predicted. Nevertheless, data from surveys, observations and experiments can be analyzed to provide reasonable estimates of project impact on crop production, and a summary of expected incremental produc- tion at full development is given below. For details see Annex 2. Area Average Incremental Crop Developed Yields Production (ha) tons/ha tons Upland rice (seed only) 4,250 1.3 1,275 Upland rice (+ fertilizer) 1,500 1.8 1,200 Swamp rice (rainfed) 1,750 3.0 4,690 Swamp rice (irrigated) 300 5.3 1,575 Coffee 1,500 1.0 1,500 Cocoa 3,000 1.0 3,000 B. Markets, Marketing and Prices Market Prospects 7.02 Rice. Total annual Liberian consumption is estimated at between 150,000 and 160,000 metric tons including annual imports of about 40,000 tons (with considerable year-to-year variations); however, since 1973, - 25 - imports have tended to decrease and in 1975/76 were 30,000 metric tons. Future growth a rice production in Liberia is likely to be higher than in the past due to the current GOL emphasis on national self sufficiency. However, consump- tion is expected to increase rapidly and the domestic market would have no difficulty in absorbing the project-induced rice pro- duction. 7.03 Coffee. Liberia is not a major coffee producer and exports of 83,000 bags (1968-75 average) are less than 0.2% of world production. However, ex- ports exceed domestic production because of smuggling from neighboring coun- tries (estimated to be 20-25% of total exports) 1/. Liberia's present coffee production and exports are well below the minimum quota of 100,000 bags (approximately 6,000 tons) established under the 1976 international coffee agreement. The incremental output from the project, although substantial in terms of existing domestic production, would be insignificant in terms of total world production, and would have no impact on world prices. 2/ However, during negotiations, the borrower was advised to carefully analyze the market constraints before proceeding with further expansion of coffee. 7.04 Cocoa. Liberia is not a member of the International Cocoa Organi- zation and has no quota restrictions. 3/ Its present exports are less than 0.2% of world production and project output should be marketed without dif- ficulty; with proper quality improvement demand may increase. 7.05 Marketing. The existing facilities for transport and storage would have to be extended to cope with the increased production but no major changes in the institutional structure would be required. Certain policy requirements initiated under credit 577-LBR (e.g., review of LPMC pricing policies for export crops, operation of a price support scheme for paddy and/or rice, appro- priate price differentials between cherry and clean coffee, quality improve- ments and price structures to reflect quality differences) should remove other marketing constraints. However, some steps would be taken to improve marketing practices and infrastructure in the project area including: creation of collection points where farmers would be paid full LPMC prices; introduction of more efficient farm-to-market transport; better market information promotion of cooperatives; and greater involvement of LPMC by establishing an office at Gbarnga (Annex 4, para 49-59). 1/ See para 34 Report No. 426a-LBR; Liberia - A Basic Economic Report, Vol. iv, Agriculture, May 1, 1975. 2/ International coffee organization has been informed and they have no objection to the proposed coffee development. 3/ International Cocoa Organization has been consulted and no objection was raised, however, it expressed the hope that Liberia would consider joining the organization. - 26 - Prices 7.06 Heavy frost in Brazil has destroyed most of its 1976/77 crop and consequently world coffee prices are at a record high of US$2,500 per metric ton (spot New York). According to Bank forecasts after a slight decline in 1977, prices in current terms would continue to rise and reach about US$3,150 per metric ton by 1985. However, in constant 1976 dollars prices will continue to decline, and projected 1985 prices in 1976 dollars would be about 15% lower than the 1969-72 average. The world market prices for cocoa (currently about US$2,100 per metric ton, spot New York) will continue to decline (until 1980) in current as well as in constant 1976 prices. The projected 1985 prices (constant 1976 dollars) would be about 15% lower than the 1969-72 average. The current world market price for clean rice (FOB Bangkok) is about US$260 per metric ton. In current as well as constant 1976 dollars, world market price is expected to increase to US$680 and US$360 respectively per metric ton. Economic and financial farmgate prices for project crops have been estimated on the basis of Bank forecast prices. In constant 1976 terms the prices are as follows: 1/ Economic Financial 1980 1985 1980 1985 ----- US$/Metric ton---------- Cocoa (beans) 991 814 744 613 Coffee (clean) 1,548 1,260 1,179 956 Paddy 237 239 248 253 C. Farmer Benefits 7.07 Most of the 19,000 farm families in the project area are in the target group (see paras 2.01 and 3.07) and it is estimated that approximately 9,000 of them would participate in the project and adopt the technology (see Annex 2, para 48). Since farm sizes, crop combination and land ownership patterns are diverse, development of a typical farm model tends to be largely theoretical. Crop budgets showing net returns per ha and per manday resulting from project-induced technology provide a more meaningful indica- tion of benefits accruing from the proposed innovations and are summarized below 2/. Assuming that an average farm presently produces about 1 ha of 1/ Paddy prices represent import substitution value; cocoa and coffee are equivalent to export value (details at Annex 9, Tables 2, 4, 6). 2/ Expressed at 1985 prices in constant 1976 terms; net return at full development after debt servicing. - 27 - upland rice, 0.25 ha of coffee and/or cocoa and 0.5 ha of other crops mainly cassava, the average per farm income is about US$360 (equivalent to US$68 per capita). Net average family income at full development for a project farmer, assuming a participant on average will grow 1 ha of swamp rice together with some upland rice or improved upland rice together with 0.75 ha of coffee and cocoa, would be about US$850 (equivalent to US$160 per capita which would still be quite low compared to the present national per capita income of about US$410). Depending on the crop combination individual farmers would adopt, it is therefore estimated that the average farm income for the participating families would be at least twice as high as their present income. Apart from the direct benefits, indirect benefits from infrastructural and institutional improvements would accrue to all project area farmers. Traditional Project Increment $/ha $/manday $/ha $/manday $/ha $/manday Cocoa 153 4.1 468 4.8 315 0.7 Coffee 191 3.8 855 4.2 664 0.4 Rainfed & Swamp 350 1.5 546 2.1 196 0.6 Irrigated Swamp - - 733 1.9 - - Improved Upland 235 1.7 298 2.1 63 0.4 Advanced Upland 235 1.7 386 1.9 151 0.2 D. Cost Recovery 7.08 Financial implications of the project to GOL are summarized in Annex 8, Table 12. The net annual average cost to GOL during Years 1 to 5 (before debt servicing) would be US$1.3 million; Year 6-10 US$0.6 million; Years 11-40 US$0.4 million. However, all input costs would be recovered from the farmers and the revolving credit fund's capital would be available for further credit operation (para 6.20). As in other rural development projects, the project's direct contribution to Government revenue is minimal because there are no Government taxes or cesses that can be applied; the present system of land taxation is completely inelastic to farm incomes; and project beneficiaries cannot be charged for technical services. However, there are likely to be substantial but unquantifiable increases in indirect revenues to GOL from indirect taxes (sales tax, excise duties) resulting from increased expenditure on imported and locally produced goods. LP4C, through increased market turnover should increase its revenues for coffee and cocoa by about 8% of FOB value annually; and additionally LPMC would receive a 7% levy on project generated export crops for its agricultural development fund. VIII. BENEFITS AND JUSTIFICATIONS 8.01 Direct benefits from the project would at full maturity be incre- mental production of 8,740 tons of paddy rice, 3,000 tons of cocoa and 1,500 tons of clean coffee annually. Project rice production would be consumed - 28 - internally while coffee and cocoa would be exported. The net foreign ex- change earnings/savings arising from increased exports and rice import substitution is estimated at US$6.7 million from Year 13 onwards. 1/ The project would cause substantial mobilization of labor in the project area, particularly the seasonally unemployed. Apart from this, employment opportunities would also be generated in the transportation, construction, rural industries, commerce and services sectors. 8.02 The overall Economic Rate of Return (ERR) based on the quanti- fiable part of incremental costs and incremental benefits is estimated at 21%. The principal assumptions used are at Annex 10. The project would have a number of important secondary benefits, largely unquantifiable. The County population would benefit from the general improvement in the infra- structure promoted by the project, e.g., road improvements, banking facil- ities, health services, improvement in drinking water supply, better mar- keting infrastructure, etc. Development of the cooperatives would lead to the creation of rural capabilities for providing farm support services. The project would strengthen the technical managerial capabilities of the MA, and to some extent of the MPW and MH resulting in improved planning and implemen- tation of future rural development projects. 8.03 Risks and Sensitivity. Smallholder agricultural development proj- ects are inherently and conceptually complex and in the absence of adequate relevant experience in Liberia full attainment of project benefits might con- ceivably be jeopardized by a number of risks and uncertainties. Implemen- tation problems could arise due to inadequate coordination and cooperation within and between GOL agencies. However, GOL has a considerable commitment to the development of smallholder agriculture and this has been confirmed to a certain extent by the seriousness with which MA has established the Lofa project organization, and related staff recruitment, procurement and project funding (see para 1.02). Likewise, GOL has agreed to proceed with immediate recruitment of key staff and the civil works necessary for the first year (see para 5.05), thus lessening the likelihood of serious delays. Risks due to technical weaknesses have been minimized since the packages are simple and have already been successfully tested in Liberia; similar technical improvements have also been successfully introduced in Sierra Leone (Credit 323-SL), which has ecological and social similarities. Pro- ject yield estimates and adoption rates have taken full account of these experiences and production assumptions are not over-optimistic. 8.04 Sensitivity tests have been used to analyze the potential impact of some of the above factors, e.g., delay in project implementation; de- creased project benefits due to lower than forecasted crop yields, adoption rates and prices; increased project costs; and a project life expectancy shorter than estimated. Details are at Annex 10, Table 2, where it is shown that the project has an attractive Economic Rate of Return even under less than optimal circumstances. However, ERR is quite sensitive to delays in implementation. 1/ Based on 1988 FOB/CIF values in 1976 constant terms. - 29 - IX. AGREEMENTS REACHED AND RECOMMENDATIONS 9.01 During negotiations assurances were obtained from Government that: (a) After June 30, 1977 MA would not undertake any new large- scale mechanized land-clearing activities for tree crop development in the project area until the proceeds of the credit have been fully employed (Para 2.12). (b) LBDI would establish banking facilities at Gbarnga by June 30, 1977 (para 4.10); (c) GOL would review with the Association by December 31, 1978 the findings of the schistosomiasis monitoring unit and promptly act to institute the required preventative and curative measures in the event of a marked increase in the incidence of schistosomiasis in the project area (para 4.11); (d) MA would provide the necessary land for establishing project headquarters and constructing staff houses and other facili- ties (para 4.12); (e) by December 31, 1977, Government would prepare for review with the Association proposals, including detailed cost estimates for the reorganization of agricultural research for Liberia (para 4.13); (f) consultants employed to undertake studies relating to reorganization of MA, research, and a further integrated agricultural development project would be appointed with terms of reference, qualifications and conditions of em- ployment satisfactory to the Association (para 4.18); (g) procedures satisfactory to the Association would be esta- blished for quarterly draw-down facilities from project account, including, interalia, overdraft facilities (para 5. 09); (h) annual accounts of BP4U, the Revolving Credit Fund, the Feeder Road, Schistosomiasis Surveillance and Monitoring Units would be audited by external auditors acceptable to the Association and such reports would be submitted to the Association within four months of the end of the financial year (paras 5.10 - 5.11); (i) BPMU would have except for the AGRIMECO cleared areas at Kapartawee, sole responsibility for rice, coffee and cocoa extension services in the project area starting no later than September 30, 1977 (para 6.01); - 30 - (j) the Project Consultative Committee would be established at Gbarnga by September 30, 1977 (para 6.05); (k) by September 30, 1977 GOL would establish a feeder road unit and would amend the terms of reference for the existing Lofa Project Schistosomiasis Surveillance and Monitoring and Evalua- tion units to service the Bong County project; the work program, budgeting and recruitment of these units would be in consulta- tion with the BPMU (paras 4.15, 6.06 and 6.07); (1) the Project Manager, managers of the Finance, Training, Agricultural Services, Cooperative and Credit Services and Administration Divisions, Swamp Development officer the Land Use Planning officer and a Tree Crop specialist would be appointed on terms, conditions and qualifications satisfac- tory to the Association. Deputies to such positions would be filled by persons with adequate qualifications (para 6.09); (m) a revolving credit fund would be established in accordance with a trust agreement to be entered into between GOL and LBDI, satisfactory to the Association by June 30, 1977, and that GOL would ensure that the Fund's capital would be used exclusively for the purpose of smallholder credit (para 6.20); (n) Manager of BPMU Cooperative Credit Services division would be designated assistant registrar of cooperatives for Bong County (para 6.21); (o) after September 30, 1977, all farm inputs and credit provided in the project area by GOL or its agencies would be provided on the same terms as that provided by BPMU (para 6.21); and (p) by June 30, 1977, the Government would present to the Bank for consultation a proposal for establishment of an agricul- tural credit system in Liberia; within six months thereafter, the Government would present to the Bank for consultation a detailed plan for implementation of an appropriate proposal (para 6.22); 9.02 Conditions of credit effectiveness would be that the USAID loan agreement of US$6.0 million had been signed by the Governments of USA and Liberia (para 5.03) and the Manager of the Agricultural Services division of BPMU has been appointed (para 6.09). 9.03 A condition of credit disbursement against the cost of establishment of improved research facilities at CAES Suakoko would be that the Association has approved the proposals for the reorganization of Agricultural Research (para 4.13). This would however, not apply in the case of expenses in respect of continuation of rice research initiated under Credit 306-LBR. ANNEX I Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT A. Description of Project Area 1. The project area consisting of three of five districts of Bong County, lies in the central part of LibSria. The districts Gbarnga, Kokoya and Sanoyie cover approximately 6500 km , (6% of Liberia's land area). Topographically, the area is characterized by moderately undulating uplands with some isolated hills, dissected by a dense pattern of valley bottoms. 2. The climate is characterized by moderately high temperatures of about 26 C with very little monthly variation, relatively high levels of humidity, and a wet season from March through November, with occasional showers during the dry season. The mean annual rainfall ranges from 1600 to 2200 mm per annum 1/, with the lower values more predominant in the central part of the project area. 3. Soil and water. The parent material that dominates the area is precaborium crystalline rock, resulting in ferrallitic soils that comprise most of the dissected uplands (80%) and high hills (8%). At present, these areas are used for upland rice cultivation under the traditional farming system of shifting cultivation and for some forestry and tree crops. The soils are generally of low fertility, are very acid, and have a high laterite gravel content. It is estimated that about 35% of these soils would be suit- able for cocoa and coffee development. 4. The valley bottoms or inland valley swamp comprise some 12% of the project area and consist of imperfectly to poorly-drained sandy to sandy clay loams, very acid and or relatively low fertility. However, an adequate amount of soil with a higher clay content can be found for irrigated rice cultivation in the valley bottoms. Some of these swamps are presently being used for rice cultivation during the wet season, and water availability is adequate to sustain thLe growth of rice varieties of medium. to long duration. Flooding in swamp areas occurs regularly during the months of July through September; however, very little is known about specific discharge and water levels of strearmis. 5. Population. The population of the project area is estimated (1974 population census figures inflated with a 2.1%o growth rate per annum) at 139,000 persons, about 9% of the total population of Liberia. Agricultural population is estimated at 100,000 persons. The average population density is 21 persons 1/ See Table 1. ANNEX I Page 2 per km , but varies according to individual clans. Census data for 1962 and 1974 shows that clans with high growth rates are in close proximity to roads, while clans with decreasing populations, are in areas that are less accessible. Furthermore, "urban" population in the project area has more than doubled in the last 15 years. Although migration is significant in Liberia, the project area seems to have only a slight migration surplus, as most migrants move only temporarily. 6. Based on the Agricultural Census of 1971 and the Population Census of 1974, and their own surveys in 1974 and 1975, the Research and Statistical Section of the Ministry of Agriculture has estimated the average household size at approximately 5.3, equivalent to 18,800 farm family households. 7. The main ethnic group is the Kpelle tribe and tribal relations play an important role in the farming community. A number of households are combined into a township, headed by an elected town chief, who is also chairman of the Council of Elders. In turn, the townships are formed respectively into clans and chiefdoms. The highest traditional authority of those three levels is vested in the Council of Elders of which the para- mount chief is the chairman. The project area consists of six chiefdoms. 8. General Infrastructure. Social and related services are limited. Fifty-five percent (55%) of the population lives within one mile of a road. Besides the primary (146 km), secondary (220 km), and farm-to-market (132 km) roads, there are numerous paths and tracks linking popu'ation centers. Primary and secondary roads have nominal maintenance while farm-to-market roads have virtually none; consequently, most of the roads are unuseable during the heavy rains. There are a few small air-strips which are used by GOL and private aircraft; no scheduled air services exist. Telecommunication between the project area and other parts of Liberia is limited to a Govern- ment wireless station in Gbarnga, a telephone link with Monrovia and some private radio sets. Liberia Electricity Corporation (LEC) runs the power station in Gbarnga (three-diesel generating sets with rated capacity of 2,280 kw) which supplies the town and neighborhoods. Additionally, there are several small private diesel generator sets in the area (e.g., CAES Cuttington College, Phabe Hlospital). 9. There are about 45 elementary schools (32 in the Gbarnga district, 6 in the Kokoya district and 7 in the Sanoyie district), 14 Junior high schools and one college for graduate students in the project area. 'Iedical services are limited to the Phabe Hospital and a few Government clinics while public health and sanitation measures are very rudimentary in the urban centers and non-existant in rural areas. 10. Marketing. There is a lively crop marketing system in the area through the well-established daily or weekly town markets for rice, palm oil, vegetables and fruit. Export crops such as coffee, cocoa, palm, kernels are usually sold through local traders who act as sub-agents for LPIIC's buying agents. Although most of the paddy is still hand pounded, machine milling is gradually increasing. Apart from the one ton/hour rice mill in Gbarnga, there are about 15 privately or cooperatively-owned 1/4 ton/hour mills in the area. LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT RAINFALL RECORDS LOCATION TO NO. OF STATION PROJECT YEARS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT N 1V DE TOTAL (Gbarnga centrally located in Project) Suakoko 1/ 5 km SW of Gbarnga 19 15 64 117 142 173 178 165 173 282 198 99 20 1626 Ganta Mission 2/ 35 km NE of Gbarnga 21 18 64 132 191 229 284 236 312 406 259 147 38 2316 Zorzor 2/ 90 km NW of Gbarnga 6 28 41 130 193 127 206 206 315 437 144 135 43 2105 Gibi Estate 2/ 80 km SW of Gbarnga 14 17 58 125 194 236 327 270 424 397 294 133 46 2521 1/ Data up to 1971. 2/ Data up to 1974; location outside project area. IIl ANNEX 2 Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Farm and Crop Development A. Present Situation 1. About 10% of the project area is under cultivation 1/ of which only a third is cultivated by about 75% of all farm families. The majority of these households have an average farm size of two hectares. Approximately 70% of the cultivated land is under perennial crops, mainly rubber, oil palm and some cocoa and coffee, and 30% under annual crops, mainly rice and cassava. 2. Farming systems. Nearly all households depend on shifting cultiva- tion of the uplands for the production of their food crops. The system consists of felling, burning and clearing of secondary forest followed by one and sometimes 2 to 3 years of cultivation, after which the land reverts to bush fallow for 7 to 10 years. The first cropping year is planted with upland rice and intercropped with vegetables, maize, etc. Where soil fertility is not depleted, a second or third crop of cassava and groundnuts may be planted in the uplands and sugar cane and sweet potatoes near the swamps. In certain inland areas, particularly with some of the clans in the Gbarnga district, a balanced system of shifting cultivation is disintegrating as the population pressure has lead to shorter rotations thereby reducing natural restoration of soil fertility. No suitable alternative to shifting cultivation for the growing of the basic annual crops has yet been found, and therefore, it is important that emphasis is given to certain perennial crops ecologically suitable to the area. 3. Valley bottom cultivation, although not yet very common in the Kpelle farming system, is more suitable for permanent rice cultivation. It is estimated that 10% of the present farm families are engaged in swamp rice cultivation on a semi-permanent basis, but without effective water control measures. 4. The perennial crops, presently grown by the smallholder near the villages, consist of coffee and cocoa. In general, cultural practices and maintenance are poor and for most of the year, these "orchards" cannot be distinguished from the secondary forest. 5. Animal production is severely restricted due to unfavorable climatic conditions, absence of natural grasslands, and the general occurence of Trypanosomiasis. 1/ 1971 Agriculture Census. ANNEX 2 Page 2 B. Farm Size and Land Use 1/ 6. The majority of households cultivate between 1-3 ha per annum. About 5% of the holdings have farm sizes between 20-200 ha, and take up 65% of all cultivated land in the project area. These are predominantly rubber farms and will not participate in the project. 7. Upland rice production is, for the Kpelle tribe, a way of life. Ninety-four percent of all smallholders grow an average of just over 1 ha of rice per household. The percentage of farmholders growing other major crops in the project area are: cassava 69%, coffee 14%, cocoa 19%, sugar cane 22%, and corn 25%. The crops seldom exceed 1/4 ha per holding. Most farmers grow vegetables, either inter-planted with the upland rice or planted in kitchen gardens. Citrus trees, mainly sweet oranges and some grapefruit, bananas and plantain, are also widespread. Sixty percent of the farm families are engaged in harvesting of the wild oil palm fruits, most of which are processed into oil to satisfy local cooking requirements. Farm Operations 8. Work on the Upland Rice Farms commences in January/February with brushing and tree felling. Trees are burnt and the field is cleared of major debris by May/June. These and other farm operations such as building temporary shelters and the construction of fences around fields to protect the crop against groundhogs are done by men. Women and children undertake all other farm operations on upland rice. The rice seed is broadcast in June/July. Weeding is not commonly practiced, particularly on holdings having short bush/fallow rotations. Inland valley swamp rice operations are basically the same as for upland rice, with the exception that pre-germinated seed is broadcast or in case of very wet swamps, seedlings are transplanted. Water control is rare. 9. The annual operations on the coffee and cocoa "plantations" consist of brushing the undergrowth once a year just before harvesting. Harvesting of coffee, consisting of stripping ripe and unripe cherries at one time, is undertaken between September and January. Cocoa harvesting occurs mainly from August to December. 10. Crop Production. The present production data given below is based on observations and discussions with farmers and extension workers and is considered more realistic than the 1975 Agricultural Production Statistics and the 1971 Agricultural Census. 1/ Information based on 1971 Agricultural Census, Socio-Economic Studies in Bong County respectively by: van Santen, Harteveldt & Gay, and 1975 National Rice Production Estimates. ANNEX 2 Page 3 Estimated Present Crop Production in Project Area Upland Rice Swamp Rice Coffee I/ Cocoa 1/ Hectares 19,500 1,500 800 1,400 Yield (kg) 1,000 1,300 200 250 Production ('000 kg) 19,500 1,950 136 300 1/ 85% of the area in production. 11. Farm Labor Availability. From statistical data available the potential labor force consists of 2.6 labor equivalents per average family. The average potential number of mandays is 600 per annum or 50 per month per farm holding. Assuming most farmholders will give priority to the culti- vation of over one hectare of upland rice (250 mandays), a balance of 350 mandays would remain for minor food crop cultivation, tree crops, and swamp development. Due to the seasonal restrictions imposed on the agricultural activities, the period from March to June and to a lesser extent from mid- August through November, may already require optimum monthly family labor uses. On analysis, the only labor constraint will occur in the initial phases of the proposed swamp development. The labor force required for the construction of water control devices and initial land leveling would exceed the farm labor capacity. Hired labor would therefore be required and a development loan would be provided for this purpose. 12. Due to the relatively high labor demand in and near the project area (e.g., rubber plantations, Swedish tree concession for pulp produc- tion), there may be some limitations in attracting labor; however, as long as commercial wages are paid, there is no reason why hired labor should not be available, particularly as the project area, due to its proximity to Guinea, may attract migrant labor. The project would also rely on two factors which could reduce labor constraints: (a) 80% of the households in the area participate in the Kuu system, consisting of cooperative work groups designed to provide the labor necessary for any task which is too much for one man or the members of his immediate house- hold to complete. Men and women normally form separate Kuus, depending upon the task. Large workgroups of 30 to 40 persons may be created for clearing forest or rice harvesting. The workgroups are always short term, designed to do a given task and then disband. ANNEX 2 Page 4 Although the Kuu System has reciprocal obligations and cannot therefore expect to increase the available mandays per holding, it tends to use labor more effi- ciently and may be more effective in overcoming the labor peak periods; and (b) the project will have a number of mobile development units, which will be equipped with hand winches and power saws that would assist in land clearing activities for tree crop and swamp development. 13. Land Tenure. The State is officially the ultimate owner of all land in Liberia, but tradition-based control, exercised by the tribes in their areas, is recognized. In addition, land can be held under private ownership. A recognized member of a traditonal group may occupy and use any piece of land which is not occupied by anyone else. Shifting upland cultivation is practiced, but priority of choice exists over land which has already been cultivated by a man or his ancestors, or that which is adjacent to his present field. Decisions about cultivating rainfed swamps and the selection of such sites are usually independent from upland site claims. Inheritance of an area where a man's priority of choice is re- cognized is quite common and permanent improvements on the land (e.g., tree crops) are recognized as being owned by the farmer by both tribal law and Liberian land law. Additionally, the GOL has instituted a procedure for freehold land registration which is being utilized in the project area mainly by large landowners (often absentee). Registration requires approval from both traditional and GOL authorities. When the land is finally registered, it becomes subject to real estate tax. 1/ C. Project Proposals Upland Development 14. The upland farm is the traditonal area of cultivation in Liberia and accounts for over 90% of national rice production and for tree crop production, which contributes to 20% of export earnings. Although no suitable alternative to shifting cultivation for the growing of annual food crops in the forest zone has been found, even marginal improvements in pro- ductivity per hectare over large areas of upland rice may, through the introduction of improved rice seed and fertilizer packages, have a signi- ficant effect on farmer's income and on overall national cereal production. 1/ The yearly rates are as follows: Unimproved farmland, 5i per acre; improved farmland, 64 per acre; modern structures, 25 percent of assessed value. There is an urban-rural differential which allows urban structures to be assessed higher. For example Gbarnga is considered an urban area for tax purposes. ANNEX 2 Page 5 15. Tree crop development is presently the only alternative to shifting cultivation and provides one of the few opportunities for smallholders to earn a cash income. Furthermore, tree crop development is likely to lead to a more stable upland farming system. Tree crops considered to be suitable for smallholder cultivation are coffee and cocoa, but coffee expansion is restricted in Liberia by regulations of ICA, which only allows an expansion of coffee exports by 5% annually over Liberia's present quota of 100,000 bags (6,000 tons). 16. Due to the possibilities of rather long periods of dry weather, the establishment of coconut and oil palm should be left to other more suitable ecological regions in the country. Rubber is regarded as a suitable tree crop for the area, but its development will fall under a separate scheme. Rice Production 17. Varieties. For upland rainfed conditions, the well-proven Liberia LAC 23, a variety of medium duration yielding under good managerial condi- tions between 2.0 and 2.7 tons/ha, is available to farmers to replace the local low yielding varieties. One of the early drawbacks of LAC 23, namely its red grain color, has been overcome with the production of a white grain, LAC 23 variety that has the same disease resistance and yield potential. Varieties TOS 2581 and 2583 which yield as well as LAC 23, should be useful for late plantings as they mature one to three weeks earlier. Improved dressed seed will be introduced on cash or credit terms to as many farmers as possible through selected villages. The seed will be replaced every fifth year with the most promising variety at that time. Seed will be obtained from the National Seed Association, the same agency from which the Lofa Project obtains its seed. 18. Fertilizer. As most of the upland rice is grown under shifting cultivation intercropped with vegetables and corn, the effect of fertilizer on rice yields is not fully known and may therefore prove to be uneconomic. Significant fertilizer response is only expected on farms with suitable soils, where the land will be more permanently cropped, and paddy is grown as a pure stand, within a planned rotation. The provisional fer- tilizer recommendations, based on urea and triple super phosphate, are 23 kg N and 46 kg P205 but as the project develops, this recommendation would be modified. 19. Pests and Diseases. Major problems in Liberia are caused by groundhogs (Thryonomys swinderianus) and the weaver birds (Ploceus cuculeatus). Control measures such as fences and bird scarers have only a limited effect. The most serious fungal disease in the project area is blast caused by Pyricularia oryzae. Other less important fungal diseases, such as brown spot, leaf scald and sheath blight also occur with higher incidence in late planted rice (August). The present rice breeding program (partly financed ANNEX 2 Page 6 under Credit 306-LBR), puts emphasis on making large-scale varietal introductions and screening them for resistance against these major diseases. Serious losses caused by insects seem to occur only sporadically in Liberia. The most important rice pests found in Liberia include: Stemborers; mainly, Maliarpha seperatella and Chilo zocconius, Diopsis, whorl maggot (Hydrellia) and caseworm (Nymphula dePunctalis), the latter mainly in swamp and irrigated rice. Although insect damage is not regarded as serious, it may become more serious in swamp development. It is assumed that about 25% of the crop will require annual spraying. Folior insecticide spraying has been included for the proposed swamp development. Until the benefits of crop spraying are properly evaluated, the project will operate a spraying service insurance at $2.49/ha (see Table 10). 20. Average upland rice yield is expected to increase from 3000 to 1300 kg/ha for farmers who use improved dressed seed under shifting cultivation, whereas rice yields in the more permanently cropped land, using improved seed and fertilizer are expected to increase from 1000 to 1800 kg/ha. The yield assumptions and input requirements for farmers receiving this package are given in Table 2. Coffee and Cocoa Production Present Status: 21. Coffee. Both Liberica, an indigenous variety, and Robusta coffee are grown on about 14% of the agricultural holdings in the project area. The standard of cultivation may be classified as semi-abandoned. Most of the present coffee trees appear to have been planted in the early fifties and were established from mediocre unselected seed. No attempt is being made to control pests and diseases, of which the most important one is the coffee berry borer (Stephanoderes cofeae), which results in a high proportion of defective beans. 22. Cocoa. Cocoa is planted on about 19% of all holdings and is grown as a forest rather than an orchard crop. Most plantings seem to have been established some 20 to 25 years ago, mainly from unselected seed. No disease control has, so far, been attempted. The processing of the crop hardly recognizes the need for fermenting and this coupled with improper drying, results in a poor quality product. Development Program 23. No rehabilitation of the present crop is envisaged. With regard to Robusta coffee most areas have old trees which are past their economic life and are in a state of semi-abandonment. The small amount of better cultivated cocoa orchards are in the hands of a few relatively large farmers who would not participate in the project. Rehabilitation would be ANNEX 2 Page 7 impractical and would virtually mean new planting. The development program of coffee and cocoa would therefore consist of new plantings based on the following technology: - planting of high yield varieties - application of appropriate fertilizer - good field sanitation - control of pest and diseases - improvement of processing facilities. 24. The tree crop program would be carried out from six centers. Each center will be the headquarters of a tree crop development zone consisting of about 500 farmers. Participants in each zone would either group together and develop their coffee and cocoa in one block, which would facilitate and make the agricultural supporting services more effective, or would grow their crops on their already-established holdings. Each center would have a number of production/extension agents who would be supervised by BPMU's tree crop specialist. Apart from being responsible for the farmers tree crop development program, the staff should operate at each center a demonstrat2ion farm where routine variety and fertilizer trials would be carried out. They would also supervise the production of cocoa and coffee seedlings located at either central nurseries or at farmer- owned nurseries. Each zone should also have fermenting and drying facilities to help to improve better produce quality. Technical Aspects 25. Varieties. Improved planting material is currently available from seed gardens in the Ivory Coast through SATMACI (Societe d'Assistance Technique pour la. Modernisation Agricole de la Cote d'Ivoire) and IFCC (Institut Francais du Cafe, du cacao et autres plantes stimulantes). The cocoa seed is either from selected clones including Upper Amazon or is GI seed from biclonal seed gardens using one Upper Amazon parent X Amelonado or other selections. Coffee seed is poly-cross seed derived from six clones expected to have hybrid properties and is imported from the Ivory Coast. Diseases and Pests 26. Cocoa. Most damage is caused by mireds or capsids, probably Sahlbergella singularis, which attack both young stem and pods. Heavy shade may reduce the incidence and good control can be maintained by spraying. Another pest is the cocoa "Bollworm" (Earias Biplaga) and is particularly active during the dry season. The most important disease is Black pod caused by the fungus Phytophtora palmivora; and as a result of this infection, regular chemical spraying would be recommended with cuprous oxide. ANNEX 2 Page 8 27. Coffee. The most serious pest is the coffee berry borer (Stephanoderes cofeae) which would be controlled with Bidrin. Soil Selection 28. A much neglected factor in the tree crop development in Liberia is the selection of suitable soils, in particular for cocoa which has demand- ing soil requirements. Only 9% of the total project area is estimated to be suitable for cocoa. Soil pits would be dug before allowing tree crop develop- ment on individual farm holdings. Farmers would be required to dig 3 or 5 soil pits per ha so that at least the soil depth can be assessed. For block development, more exact identification of the proposed area would be required and a soil survey should be carried out. Land Preparation 29. In the year preceding cocoa and coffee planting, selective clearing of the forest would be carried out, leaving some suitable trees to serve as permanent shade. Assistance in tree felling would be provided by BPMU's power saw service. Food and Shade Crops 30. After clearing and burning, narrow rows of plantain would be established for shade, followed by the planting of a rice crop for September harvesting, by which time the plantain stand should be doubled. Weeding, shade adjustment and harvesting of plantains are the main operations to be carried out in the initial years after coffee and cocoa are planted. Nurseries 31. LPMC would continue to import selected cocoa and coffee seed from the Ivory Coast and seedlings would be raised at the six tree crop centers and/or on individual farm holding nurseries. Costs of raising seedlings are given in Table 3. Planting and Maintenance 32. Cocoa. In the year following the rice harvest and planting of shade trees, cocoa is planted with each planting hole receiving a dressing at a rate of 350 kg of rock phosphate per ha. From Year 4 onwards, about 300 kg/ha NPK (15-15-15) would be applied annually. The main operations until Year 5 would be weeding, cleaning, disease control and shade adjust- ment. The temporary shade crops should be removed in Years 3 and 4. By Year 5, the cocoa canopy should close and weeds should therefore become a minor problem. During August-December of Year 5, the first crop (200 kg/ha) is expected. Cost and yield assumptions are given in Table 4. ANNEX 2 Page 9 33. Coffee. Basically, the same practices would be applied for coffee, except that more consideration would be given to the pruning of trees. The first harvest is expected in Year 4 (300 kg/ha). Cost and yield assumptions are given in Table 5. 34. The present recommendations for fertilizer application and disease control are not more than composite averages and may well have to be changed during project implementation as results are drawn from the tree crop research program to be established in Suakoko, and from the Lofa project. Processing 35. Cocoa. Adequate fermentation is very important to allow the proper chocolate flavor to be produced. Very little fermentation is done in Liberia, resulting generally in lower export prices compared to most other West African cocoas. In order to improve the quality of cocoa, the project would introduce fermenting baskets, trays and boxes, to farmers through the various development centers. More emphasis would be placed upon the drying of the fermented beans. Apart from sun drying on wooden trays, artificial drying would be introduced on a pilot basis at the centers using the Samoan-type dryer, with wood as fuel. 36. Coffee. The processing of coffee carried out by farmers would consist mainly of sun-drying the cherries. Artificial drying facilities (Samoan dryers) would also be available at the centers. The hulling of the dried cherries would be carried out by LPMC in Monrovia and later on when project production increases, LPMC would provide hulling facilities in Gbarnga. Inland Valley Swamps (Valley Bottoms) 37. Most inland valley swamps in the project area consist of narrow alluvial overflow plains with a very high groundwater table. Under the existing farming system, swamp rice cultivation takes place only if upland rice falls short of farmers' subsistence needs. There is evidence, however, that during the last 10 years, swamp rice cultivation has become somewhat more popular and since 1972, the Ministry of Agriculture has succeeded, through its "Expanded Rice Development Program," in developing 500 ha of swamp land in Bong County for permanent rice cultivation. 38. Due to the comparatively high population densities among certain clans (e.g., Jorquelle and Bonwein) in the project area, and for the clans in the proposed pulpwood concession area in Kokoya District, availability of upland for rice production will become a problem. For such areas, the ANNEX 2 Page 10 only alternatives would be swamp development, where annual crops can be cultivated more easily on a permanent basis than the uplands. It is felt that a modest small-scale swamp development program for rice cultivation would benefit a relatively large number of farmers. The most important aspects of the technological package are set out below. Rice Development 39. Flood water control is one of the key factors for successful swamp rice cultivation. Experience from the Ministry of Agriculture's "expanded rice projects" and the Agricultural Engineering Section in Suakoko, show that effective water control is possible using a low-level, labor-intensive technology. The decisive factors for determining swamp development are catchment, topography and soils. Farmers accepting the proposed technology would cultivate their land in the first year under traditional methods, but would use improved seed. During the first crop season, BPMU's land development unit would carry out simple topo- graphical surveys of the area, assess soils and water levels and related discharge, and based on these findings, design the technical layout for the swamp's development. 40. Since most of the proposed swamp development is based on producing only one rainy season rice crop, emphasis would be on flood control measures. These measures should consist of a central floodway channel, plus an up- stream flood protection dike to prevent flooding in the fields. Peripheral distribution and secondary drainage channels to secure a more controlled supply and outlet of water would be developed and assistance in bunding and leveling of farm plots would be provided. The areas to be developed may vary in size, but are expected to be less than 10 ha. The implementation of the proposed layouts would be the responsibility of the farmers supervised by the extension staff. Digging, construction of canals, bund making and leveling would be carried out by farmers to whom development loans would be extended (see Table 6). 41. Experience of reclaimed swamp has so far led to the coflclusion that it is usually impossible to grow a second crop because of lack of water in January/February. To allow for a small number of farmers to double crop rice it may be possible to construct small supplementary works (weirs) in the flood control channels, to lift and store water to make irrigation possible for 1 to 2 months. During the first two years of swamp development, each swamp earmarked for double rice cropping must be assessed on its suit- ability by BPMU through the collection of sufficient discharge, topographical and soil survey data. It is envisaged that under the guidance of the land development unit, implementation of supplementary structures would be carried out in the third year of development by farmers and additional development loans would be made available (see Table 6). ANNEX 2 Page 11 42. Varieties. The present recommended variety for general swamp land cultivation is IR 5 which matures in about 145 days and for iron toxic swamps, Gissi 27. Both varieties would be introduced. Although both have yielded under farming conditions between two to four tons/ha, depending upon the managerial level, they have a number of drawbacks which are important to overcome: IR 5 is susceptible to all major diseases, and Gissi 27 is photosensitive, has a long duration, and is susceptible to a number of diseases. In 1974, trials carried out at Suakoko indicated 2526 and IR 1416- 131-5 superior to IR 5 in moderately iron toxic swamps. IR 1416-131-5 was also found to be highly resistant to leaf and neck blast. Its superiority over IR 5 has been confirmed in 1975. Before these varieties can be re- leased for seed multiplication, they must first be proven under farmers' conditions. Another important aspect is to develop a high yielding, short duration variety, to intensify swamp rice cultivation by growing two crops in the rainy season without the need to provide supplementary irrigation. 43. Fertilizer. Nutrient status of the soils in the bottomlands of the project area are low and plot observations and trials have shown good responses to nitrogen and phosphate. The provisional recommendations, based on urea and triple superphosphate, are set at about 90 kg N and 40 to 50 kg P205 per hectare. It is expected that adjustments to these recommendations will be made as more information is obtained from the simple unreplicated (mini kit) trials presently being carried out on farmers' fields under the IITA program. Pests and Diseases (See para 21) 44. Iron toxicity is one of the main problems of inland valley swamps and is due to the swamp's high iron content, low pH, high organic matter, and poor drainage conditions. High concentrations of ferrous iron reduces phosphorous availability and/or damages the root system to limit nutrient uptake capacity. Although iron toxicity reduces yields, some varieties, such as Gissi 27 and 2526 are found to be moderately tolerant and should therefore be used in new reclaimed swamps with toxic conditions. Furthermore, it has been found that either burning of the rice straw or incorporating it directly and adding lime will alleviate toxicity symptoms. Rice Mechanization 45. Labor will be a constraint in double cropping on the swamps and could necessitate use of labor-saving equipment. Substantial labor can be saved in land preparation, and experience shows that a 7-HP, two-wheel tractor or power tiller, capable of cultivating between 5 and 7.5 ha for double cropping, is feasible. The project would therefore introduce a small number of such power tillers to farmers adopting the advanced swamp develop- ment farming system. The tillers would be provided under a loan and/or rental scheme and BPMU would organize a maintenance and a repair service. The pro- gram would work in close liaison with the present Agricultural Engineering ANNEX 2 Page 12 Division of the Ministry of Agriculture and with the (mobile) workshop fa- cilities which may be made available under the UNDP/FAO rice cultivation program. A considerable amount of labor is also required for harvesting. Rather than using the traditional labor-intensive method of harvesting each panicle individually, it is recommended that all farmers involved in swamp development should change to sickle harvesting and thresh with simple pedal threshers. 46. The above technological improvements are expected to result in an average yield increase from the existing 1400 kg/ha to 3000 kg/ha in the swamps' third development year. For the advanced swamp rice farmers a cropping intensity of 175% has been assumed, increasing their yield from 1400 kg/ha to 5250 kg/ha in Year 4. The yield assumptions and input requirements for the improved (one crop) and advanced (1.75 crop) packages are given in Tables 6 and 7. Rotational Crops 47. Sugar cane (rum) and vegetables are sometimes rotated with swamp rice. Since most of the swamps suitable for rice cultivation will only be dry around January/February, BPMU would encourage vegetable production as a second crop. Good results can be obtained from crops such as maize, cow- peas, groundnuts, watermelons, without supplementary irrigation. However, before this can be implemented, more basic information would be needed regarding suitable varieties, cultural practices and market potentials. Proposed Farm and Crop Development Program 48. From past experience of similar projects in West Africa, it has been found, that within the constraints of finance, management, and in particular the extension service, not more than 40 to 50% of the 19,000 project area farm families would participate in the project techical package. Although it is not known which individual or combination package will be selected by each farmer on this basis, it has been estimated that about 9,000 farm families would participate. Farmers' participation has been based on the assumption that most will be treecrop farmers (0.75 ha of cocoa or coffee together with some upland rice) and the remainder would be mainly engaged in swamp development (1 ha improved swamp rice and some improved upland rice). The proposed cropping program and acceptance rate of participating farmers is given below and production projections, based on yield assumptions (see Table 8) are given in Tables 9 and 10. ANNEX 2 Page 13 Year 1 2 3 4 5 Total Upland Upland Rice (semi-improved) 500 750 1000 1000 1000 4250 Upland Rice (improved) 100 200 300 400 500 1500 Coffee - 150 350 500 500 1500 Cocoa - 300 700 1000 1000 3000 Inland Valley Swamps (Valley bottoms) Swamp Rice (improved) - 250 500 500 500 1750 Swamp Rice (advanced) 100 100 100 - - 300 (Pilot irrigation) Number of Farmers 500 1400 2300 2600 2000 8800 D. Farm Budgets 49. While no attempt has been made to produce a typical farm budget, since farm sizes, crop combination and land ownership problems are diverse and unidentified; illustrative crop budgets (1 hectare) have been produced for upland rice, cocoa, coffee, and inland valley rice (see Tables 2, 11, 12, 13 and 14) and demonstrates both the economics and the improvements attainable. ANNEX 2 Table 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Swamp Rice Spraying Cost Spraying Requirements: Unit Year 1 Year 2 Year 3 Year 4 Year 5 Incremental hectares ha 100 350 600 500 500 Sprayed (25%) 1/ ha 25 88 150 125 125 Sprayers 2/ no 3 10 17 18 25 3/ Cost of Sprayers at $52/each $ 156 520 884 936 1,300 Cost of Insecticide at $4.06/ha 4/ $ 102 357 609 508 508 TOTAL COST 258 877 1,493 1,444 1,808 Spraying Cost per Total Hectares Capital $ 0.62 Repairs (100%) $ 0.62 Insecticide 1.02 Subtotal 2.26 Service Charge 0.23 TOTAL 2.49 per ha. 1/ Spraying requirements have been assumed at 25% of total hectares; spraying to be done within 10 days. 2/ One sprayer per ha/day plus 15% in reserve. 3/ Replacement of sprayers every 3 years. 4/ 1.25 kg dicarbam 50 per hectare. ANNEX 2 Table 2 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT One HectareFarm Budget Upland Rice (PHYSICAL) Unit Traditional Semi-Improved Improved Year 0 Year 1 Year 1 Year 2-5 OUTPUT Yield of paddy kg 1000 1300 1600 1800 INPUT Labor: Land clearing/preparation mandays 45 45 70 Planting/fertilizing " 15 15 20 Weeding/fencing " 30 30 50 Bird Scaring " 15 15 20 Harvesting/Threshing " 35 40 45 50 Total Labor 140 145 205 210 Crop Inputs: Seed kg 35 50 50 50 Fertilizer: urea kg -- -- 100 100 Triple super phosphate kg -- -- 50 50 Tools N/A -- -- -- (FINANCIAL) US - _ _ - - - - - - - - - - - - - - - - Price Year 0 Year 1 Year,l Year 2-4 Year 5 INCOME Sale of paddy 1/ 25U/kg 250 325 400 450 450 EXPENDITURE 254/kg 9 13 Seed j/ 384/kg 19 19 19 27 #/kg 27 27 27 Fertilizer 3/ 24 #/kg 12 12 12 Tools 4/ 6 6 14 -- -- Interest - 10% 2 7 5 6 Net return per ha 235 298 321 393 386 Net return per manday 1.68 2.06 1.57 1.87 1.84 1/ See Annex 9, Table 2. 2/ Improved rice seed would be provided on seasonal credit every 5th year and fertilizer every year. 3/ See Annex 2 , Table 18. 4/ Seasonal loan of $14 provided to farmers for improved tools (e.g., sickles). ANNEX 2 Table 3 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Cost of Seedlings 1/ COCOA Cost of cocoa pod ex-farm Ivory Coast $ .25 (US) Transport of truckload (10,000 pods) to planting site at $1,600 Cost of Transport per cocoa pod .16 Cost per pod in Bong County .41 Cost per seed (based at 35 seeds per pod with 60% success rate in nursery) .02 Polythene bags .01 Overhead shade .04 Filling/soil .01 Transport .75 Fertilizer and Pest Control .01 Watering .01 Cost per cocoa seedling (including 10% service charge) rounded .12 COFFEE Cost of seed from Ivory Coast to planting site $ 7.50/kg Cost per seed .005 Germinating seeds and transplanting .05 Polythene bags .01 Overhead shade .04 Filling/soil .01 Transport *75 Fertilizer and Pest Control .01 Watering .01 Cost per seedling (including 10% service charge) rounded .16 1/ Source: LPMC 1975 Planting Cost. ANNEX 2 Table4 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Cocoa Development and Production Costs (Per Na) OUTPUT (Yield in kg) YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 Cocoa 200 400 600 800 900 1000 Rice 1300 Plantains/Bananas 10,000 10,000 INPUTS Labor: (mandays) Land clearing & preparation 80 10 Rice cultivation 85 Staking 20 Planting Shade and Food crops 30 Weeding/Cleaning 5 35 28 21 14 14 14 14 14 14 Nursery 30 Holing 30 Planting Cocoa 20 Fertilizer 4 8 8 8 8 8 8 8 8 Disease control 12 14 14 12 8 8 8 8 8 Pruning/Shade management 10 14 15 10 10 10 10 10 Supplying cocoa 3 2 Harvesting/Processing 20 20 16 10 18 28 38 46 57 TOTAL Mandays 220 164 82 73 59 58 68 78 86 97 Other inputs: - -- us$… Rice Seed 384/kg 50 kg/ha 19.00 Plantain ghoots 1,300 26.00 Cocoa seedlings-: 1320/132 at O.A2U 158.40 15.84 Fertilizer: 2/ Rock phosphate 386kg/ha 69.48 Sulphate ammonia 60 kg 10.20 NPK 15-15-15 240/330 kg/ha 64.80 89.10 89.10 89.10 89.10 89.10 89.10 Endrin 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Cuprous Oxide 1.5 kg/ha 6.12 6.12 6.12 6.12 6.12 Spraying equipment 3/ 35.00 35.00 35.00 Hand tools 4/ 40.00 Land Development Service 5/ 40.00 Processing 6/ 70.00 30.00 TOTAL 125.00 263.88 27.04 65.80 195.10 126.22 96.22 131.22 96.22 96.22 Development Loan 7/ 106.00 264.00 28.00 66.00 195.00 126.00 - -- -- -- Seasonal Loan 7/ 19.00 -- -- -- -- -- 96.00 131.00 96.00 96.00 1/ See Annex 2, Table 2. 2/ See Annex 2, Table 18. 3/ Replacement every 4th year. 4/ 2 knives, 2 cutlass, 2 spades 5/ See Annex 2 , Table 16. 6/ See Annex 2 , Table 17. 7/ Figures Rounded. ANNEX 2 Table 5 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Coffee Development and Production Costs (Per ha) OUTPUT (Yield in kg) YR 1 YP 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 Coffee (Clean) -- -- -- 300 800 1000 1000 1000 1000 1000 Rice 1300 rlantains/Bananas 10 300 10 000 INPUTS Labor: (nandays) Land clearing & preparation 80 10 Rice cultivation 85 Staking 20 Planting Shade and FoGd crops 30 Weeding/Cleaning 5 35 35 35 35 42 42 42 42 42 Nursery 30 Holing 30 Planting coffee 20 Fertilizer 4 8 8 8 8 8 8 8 8 Disease control 12 14 14 14 14 14 14 14 14 Pruning/Shade management 10 18 18 20 20 20 20 20 Supplying coffee 3 2 Harvesting/Processing 20 20 40 75 120 120 120 120 120 TOTAL Mandays 220 164 89 115 150 204 204 204 204 204 - - - - - - - - - - - - - - - - - - - - - - - - US $ Other Inputs: Rice Seed: 38t/kg 50kg/ha 19.00 Plantain shoots 26.00 Coffee seedlings 1/ 1320/132 at 0.16/ 211.20 21.12 Fertilizer: 2/ Rock phosphate 386 kg/ha 69.48 Sulphate Ammonia 120/180 kg/ha 20.40 30.60 NPK 15-15-15 240/330 kg/ha 64.80 89.10 89.10 89.10 89.10 89.10 89.10 Chemicals: Endrin 2.5litors/ha 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Bidrin 0.1liters/ha 1.10 1.10 1.10 1.10 1.10 1.10 1.10 Spraying Equipment 3/ 17.00 17.00 17.00 Hand tools 4/ 40.00 Land Development Service 5/ 40.00 Processing Equipment 6/ 15.00 35.00 TOTAL 125.00 319.08 67.72 101.90 108.20 91.20 91.20 108.20 91.20 91.20 Development Loan 71 106.00 32n.0n 7n,nn 102.00 Seasonal Loan 7/ 19.00 -- -- -- 108.00 91.00 91.00 108.00 91.00 91.00 if See Annex 2, Table 2. 2/ See Annex 2, Table 18. 3/ Replacement every 4th year. 4/ 2 knives,2 cutlass, 2 spades 5/ See Annex 2, Table 16. 6/ See Annex 2, Table 17. 7/ Figures rounded. ANNEX 2 Table 6 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Rice Development Cost Swamp Rice Mandays & US$/ha Labor: Mandays Year 1 Year 2 Year 3 Traditional Improved Advanced Brushing, Burning and land clearing " 66 10 - Stump removal -- 25 - Irrigation Canal Construction -- 105 30 Drainage Canal Construction - - Bunding -- 20 5 Levelling and Land Tilling -- 90 40 Flood protection dikes -- 100 50 Small earthen dam construction -- - 90 for up to 10 acres Total mandays 66 350 215 less Farmers own labor 66 95 65 Hired Labor 0 255 150 Cost at rate of $1.50/day $ -- 382.50 225 Material: Tools 1/ $ 20 15 60 Total Development Cost $ 20 397.50 285 DEVELOPMENT LOAN (infrastructure) $ 20 400.00 285 1/ Tools will consist of shovels, wheelbarrows, planks, culverts, of which the latter three will only be issued for pilot irrigation schemes. LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT RICE PRODUCTION COST Swamp Rice ---------------IITROVED - ----------- ---------------ADVANCED---------------- Unit Yr I Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 OUTPUT: Crop intensity Crops/yr 1 1 1 1 1 1 1 1 1.2 1.75 1.75 1.75 Yield of paddy kg 1800 2500 3000 3000 3000 3000 1800 2500 3600 5250 5250 5250 INPUTS Labor: Land preparation mandays 45 60 65 65 65 65 45 60 75 30 30 30 Canal & Bund Maintenance -- 5 10 10 10 10 -- 5 10 15 15 15 Nursery & Transplanting 40 45 50 50 50 50 40 45 60 88 88 88 Fertilizing - 3 4 4 4 4 3 5 8 8 8 Weeding/Fencing 30 40 55 55 55 55 30 40 66 96 96 96 Bird scaring 15 20 20 20 20 20 15 20 30 40 40 40 Harvesting/Threshing 45 53 60 60 60 60 45 53 72 105 105 105 TOTAL 175 226 264 264 264 264 175 226 318 38Z 382 382 CROP INPUTS 1/ ----------------------------------US DOLLARS ------------------------------------- 0.254/kg -- 13 13 13 -- 13 -- 13 16 23 10 23 Seed 2/ 50 kg/ha 0.38j/kg 19 -- _- __ 19 __ 19 -- -- -- 19 -- Fertilizer:3/Urea 200 kg/ha -- 54 54 54 54 54 -- 54 65 95 95 95 Triple Super Phosphate 100kg/ha -- 24 24 24 24 24 -- 24 29 42 42 42 Spraying 4/ -- 2 2 2 2 2 __ 2 3 4 4 4 Power Tiller 5/ -- -- -- -- -- -- -- -- -- 270 270 270 Pedal Thresher 6/ -- 165 -- 165 -- -- 165 -- -- 165 -- Miscellaneous 7/ -- 14 27 27 12 27 _ 23 36 36 21 36 TOTAL 19 272 120 120 276 120 19 281 149 470 626 470 DEVELOPMENT LOAN 8/ (cultivation) -- 165 -- -- 165 -- -- 165 -- -- 165 __ SEASONAL LOAN 9/ 19 92 107 107 111 107 19 101 133 447 451 447 1/ Improved seed would be provided every 5th year. 2/ See Annex 9 , Table 2. 3/ See Annex 2 , Table 18. 4/ See Annex 2 , Table 1 5/ See Annex 2 ,Table 15. 6/ One pedal thresher at $300 plus 10% for spare parts annually for a two-hectare lot; replaced every 4 years for improved i-. advanced; cost plus spare part for first year given out as development loan; spare part subsequent years as seasonal loan. 7/ 50 bags at 0.60/bag or $30; replaced every 2-1/2 years at t12/year for inproved (C30-- 2.5) & *21 for advanced (1.75 X 12); 2 sickles at $1.00 each. 8/ Repayment over 3 years at 10% interest. 9/ Repayment at 10% interest. ANNEX 2 Table 8 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Estimated Crop Yields -kg/ha Project Year Coffee Cocoa Upland Rice Swamp Rice Semi- Improved 2/ Improved 3/ Improved4l/ Advancedt 0 1/ 200 250 1,000 1,000 1,400 1,400 1 - - 1,300 1,600 1,600 1,600 2 - 1,300 1,800 2,500 2,500 3 - 1,300 1,800 3,000 3,600 4 300 - 1,300 1,800 3,000 5,250 5 800 200 1,300 1,800 3,000 5,250 6 1,000 400 1,300 1,800 3,000 5,250 7 1,000 600 1,300 1,800 3,000 5,250 8 1,000 800 1,300 1,800 3,000 5,250 9 1,000 900 1,300 1,800 3,000 5,250 10 1,000 1,000 1,300 1,800 3,000 5,250 1/ Without project. 2/ Min. package: Improved seed. 3/ Min. package: Improved seed - fertilizer. 4/ Min. package: Improved seed - fertilizer. 5/ Min. package: Improved seed - fertilizer (cropping intensity: 1.75/year). ANNEX 2 Table 9 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Project Projection of Rice Production 1/ H E C T A R E P R O J E C T Y E A R Year of Non- Planting Cumulative Cumulative 1 2 3 4 5 6 7 8 9 10-30 1. Semi-Improved ----------------------------------'000 kg ------------------------------------------- Upland Rice 1 500 500 650 650 650 650 650 650 650 650 650 650 2 750 1250 - 975 975 975 975 975 975 975 975 975 3 1000 2250 - - 1300 1300 1300 1300 1300 1300 1300 1300 4 1000 3250 - - 1300 1300 1300 1300 1300 lISO ijuu 5 1000 4250 - - - - 1300 1300 1300 1300 1300 1300 Total Production 650 1625 2925 4225 5525 5525 5525 5525 5525 J5Z) Without Project 500 1250 2250 3250 4250 4250 4250 4250 4250 4250 Incremental 150 375 675 975 1275 1275 1275 1275 1275 1275 2. Improved Upland Rice 1 100 100 160 180 180 180 180 180 180 180 180 180 2 200 300 - 320 360 360 360 360 360 360 360 360 3 300 600 - - 480 540 540 540 540 540 540 540 4 400 1000 - - - 640 720 720 720 720 720 720 5 500 1500 - - - - 800 900 900 900 900 900 Total Production 160 500 1020 1720 2600 2700 2700 2700 2700 2700 Without Project 100 300 600 1000 1500 1500 1500 1500 1500 1500 Incremental 60 200 420 720 1100 1200 1200 1200 1200 1200 3. Improved Swamp Rice 1 - - - _ _ _ _ _ _ _ _ 2 250 250 - 400 625 750 750 750 750 750 750 750 3 500 500 - - 800 1250 1500 1500 1500 1500 1500 1500 4 500 500 - - - 800 1250 1500 1500 1500 1500 1500 5 500 500 - - - - 800 1250 1500 1500 1500 1500 Total Production - 400 1425 2800 4300 5000 5250 5250 5250 5250 Without Project 2/ - 70 210 490 560 560 560 560 560 560 Incremental - 330 1215 2310 3740 4440 4690 4690 4690 4690 4. Advanced Swamp Rice 1 100 100 160 250 360 525 525 525 525 525 525 525 2 100 200 - 160 250 360 525 525 525 525 525 525 3 100 300 - - 160 250 360 525 525 525 525 525 4 - _ _ _ _ - _ _ _ 5 - - - _ - _ _ _ _ _ Total Production 160 410 770 1135 1410 1575 1575 1575 1575 1575 TOTAL INCREMENTAL 370 1315 3080 5140 7525 8490 8740 8740 8740 8740 1/ For yield assumptions, see Annex 2 , Table 8. 2/ 400 hectares assumed to be rehabilitated, respectively 50,100,200,50. LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Project Projection of Cocoa and Coffee Production 1/ Year of Planting Hectare Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14-30 - - - - - - - - - - - - - - - - - - '000 kg COCOA - - - - - - - - - - - - - - - - - - - Yr. 1 - - - 2 300 60 120 180 240 270 300 300 300 300 300 3 700 - - - - - 140 280 420 560 360 700 700 700 700 4 1,000 - - - - - - 200 400 600 800 900 1000 1000 1000 5 1,000 - - - - - - - 200 400 600 800 900 1000 1000 TOTAL 3,000 - - - - 60 260 660 1260 1830 2330 2700 2900 3000 3000 - - - - - - - - - - - - - - - - - - '000 kg COFFEE - - - - - - - - - - - - - - - - - - Yr. 1 - - - - - - - - - - - - 2 150 - - - 45 120 150 150 150 150 150 150 150 150 150 3 350 - - - - 105 280 350 350 350 350 350 350 350 .350 4 500 - - - - - 150 400 500 500 500 500 500 500 500 5 500 _ - - - - 150 400 500 500 500 500 500 500 TOTAL 1,500 - - - 45 225 580 1050 1400 1500 1500 1500 1500 1500 1500 1/ For yield assumptions, see Annex 2, Table 8. 1H M IDC I-1I LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT One Hectare Farm Budget & Cash Flow Cocoa Year I Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 SOURCE OF FlNDS Cocoa I/ - _ _ _ 123 245 368 490 552 613 613 613 613 613 Rice 1/ 325 - - - - - - - - - - - - Plantains/Bananas 3,/kg - 300 300 - - - Development Loan 106 264 28 66 195 126 - - - - - - - Seasonal Loan 19 - - - - - 96 131 96 96 131 96 96 131 Total 450 564 328 66 318 371 464 621 648 709 744 709 709 744 APPLICATION OF FUNDS Development Cost 106.00 263,88 27.04 65.80 195.10 126.22 - - - - - - - - Seasonal Cost 19.00 - - - - - 96.22 131.22 96.22 96.22 131.22 96.22 96.22 131.22 Debt Service - - - Development Loan 2/ - _ _ _ 48.96 170.90 183.83 214.31 255.42 191.68 178.75 148.27 58.20 Seasonal Loan 3/ 20.90 -- - - - - 105.60 144.10 105.60 105.60 144.10 105.60 105.60 144.10 Total 145.90 263.88 27.04 65.80 244.06 297.12 385.15 489.63 457.24 393.50 454.07 350.09 260.02 275.32 Net Return 304.10 300.12 300.96 0.20 73.94 73.88 78.85 131.37 190.76 315.50 289.93 358.91 448.98 4t:8.68 Family Labor (mandays) 220 164 82 73 59 58 68 78 86 97 97 97 97 97 Net Return per Manday 1.38 1.83 3.67 - 1.25 1.27 1.16 1.68 2.22 3,25 2.99 3.70 4.63 83 1/ For financial farmgate price, see Annex 9, Table 6. 2/ Loan for 8 years with 4 years of grace at 10% interest. (at negotiations it was agreed for both cocoa and coffee that loans woold be repaid over 12 years). 3/ Repayment at 107 interest. cr 2 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT One Hectare Farm Budget and Cash Flow Coffee YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 YR 11 YR SOURCE OF FUNDS --- - -------------US DOLLARS…---------------------------------------------------- Coffee (clean) l/ 287 765 956 956 956 956 956 956 956 Paddy Rice I/ 325 Plantains/Bananas 34/kg 300 300 Development Loan 106 320 70 102 Seasonal Loans 19 108 91 91 108 91 91 108 91 Total 450 620 370 369 873 1047 1047 1064 1047 1047 1064 1047 APPLICATION OF FUNDS Development Cost 106.00 319.08 67.72 101.90 - - - - - - - Seasonal Inputs 19.00 - - - 108.20 91.20 91.20. 108.20 91.20 91.20 108.20 91.20 Debt Service: Development Loan 2/ - - - - 48.96 196.76 229.09 276.20 227.24 79.44 47.11 - Seasonal Loan 3/ 20.90 - - - 118.80 100.10 100.10 118.80 110.10 100.10 118.80 100.10 Total 145.90 319.08 67.72 101.90 275.96 388.06 420.39 503.20 418.54 270.74 274.11 191.30 Net Return 304.10 300.92 302.28 287.10 597.04 658.94 626.61 560.80 628.46 776.26 789.89 855.70 Family Labor (mandays) 220 164 89 115 150 204 204 204 204 204 204 204 Net return per Mandesy 1.38 1.83 3.40 2.50 3.98 3.23 3.07 2.75 3.08 3.81 3.87 4.19 1/ For financial farmgate price, see Annex 9, Table 4. 2/ Loan for 8 years, with 4 years of grace at 10% interest. (at negotiations it was agreed for both coffee and cocoa that loans would be repaid over 12 years). 3/ Repayment at 10% interest. CDZ r-Z LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT One ha Farm budget and Cash Flow Imp roved S Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Yield of paddy Rice 1600 2500 3000 3000 3000 3000 3000 3000 3000 Source of Funds…us$… Value of Paddy at 25k/kg 1/ 400 625 750 750 750 750 750 750 750 Development loan (infrastructure) 2/ 20 400 - - - Se4(cultivation) 3/ - 165 - - 165 - - 165 - Seasonal loan ( t i19 92 107 107 111 107 107 111 107 Total 439 1282 857 857 1026 857 857 1026 857 Application of Funds Development Cost (infrastructure) 20 398 - - - _ - - Developmert Ccst (cultivation) 5/ - 165 - - 165 - - 165 - Seasonal Inputs 19 107 120 120 111 120 120 111 120 Debt Service Development infrastructure 6/ - 102 102 102 102 102 102 Development cultivation 7/ - 73 73 73 73 73 73 73 Seasonal 8/ 21 101 118 118 122 118 118 122 118 Total 60 771 413 413 573 413 413 573 311 'et return 379 511 444 444 453 444 444 453 546 Family labor (mandays) 241 321 264 264 264 264 264 264 264 Net return per manday 1.57 1.59 1.68 1.68 1.71 1.68 1.6t 1.71 2.07 l/ For financial Farmgate price see Annex 9 , table 2. 21 See Annex 2 , table 6. See " 2, 7. 4/ See " 2, 7. 5/ Funds have been provided for threshing, but may not be required as demand is z uncertain. If not required, these funds will be used for additional onfarm development. 6/ Loan for 8 years including a two-year grace at 10% interest. 7/ Loan for 4 years at 10% interest. 8/ Repayment at 10% interest. LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT One Ha Farm Budget and Cash Flow Advanced Swamp Rice (Cropping Intensity = l75%) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6/7 Year 8 Year 9/10 Year 11 Yield of Paddy Rice 1600 2500 3600 5250 5250 5250 5250 5250 5250 - - - - - - - - - - - - - - - - - - - US $ - - - - - - - - - - - - - - - - - - - Source of Funds Value of Paddy at 25/kg 1/ 400 625 900 1312 1312 1312 1312 1312 1312 Development Loan (infrastructure) 2/ 20 400 285 -- -- --- (cultivation) 3/ -- 165 -- -- 165 -- 165 -- 165 Seasonal Loan 4/ 19 101 133 447 451 447 451 447 451 Total 439 1291 1318 1759 1928 1759 1928 1759 192 8 Application of Funds Development Cost (infrastructure) 20 398 285 -- -- -- -- -- Development Cost (cultivation) -- 165 -- -- 165 -- 165 -- 165 Seasonal Inputs 19 116 149 470 461 470 461 470 46i Debt Service -- - - -- -- Development Infrastructure 5/ -- -- 102 102 181 181 181 /9 -- Development Cultivation 6/ -- -- 73 73 73 73 73 73 73 Seasonal 7/ 21 111 146 492 496 492 496 492 496 Total 60 790 755 1137 1376 1216 1376 1114 1195 Net Return 3/9 501 563 622 552 543 552 645 733 Family Labor 241 321 382 382 382 382 382 382 382 Net Return Manday 1.57 1.56 1.47 1.62 1.44 1.42 1.44 1.68 1.91 1/ For financial farmgate price see Annex 9, Table 2. 2/ See Annex 2, Table 6. 3/ See Annex 2, Table 7. 4/ See Annex 2, Table 7. 5/ Loan for 8 years including 2 years grace at 10% interest. 6/Loan for 4 years at 10% interest. 7/ Repayment at 10% interest. ANNEX 2 Table 15 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Power Tiller Cost (Per ha) Assumptions: Depreciation 7 HP Power tiller : 4 years or 3000 hours Operation per year : Field preparation for rice cultivation 2 X 6 weeks (42 hours/week or 500 hours/year). Assistance in swamp development work, 250 hours/year Field preparation for rice cultivation: 40 hours/ha Cost of power tiller : $2,950 Power Tiller Cost Per Hour/ha: Depreciation : $ 0.98 Repair and Maintenance (150%) : 1.47 Fuel and Lubricants 1/ : 0.55 Operator 2/ : 0.50 $ 3.50 Service Charge .35 3.85 per hour or $154.00 per ha. 1/ 1.75 liters/hr; lubricant 30% of fuel cost. 2/ $3/day - 6 hours/day. ANNEX 2 Table 16 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Power Saw Service Cost (Per ha) Assumptions: Operation: One saw service team operating 6 chain saws (2 in reserve) for selective felling - 50 hectares/month or 2.5 hectares per day. Depreciation of saws: 1000 hours Cost of Equipment (8): $4,000 Power Saw Service Cost Per Hectare: Depreciation $ 4.00 Repair and Maintenance (150%) 6.00 Fuel and Lubricants 1/ 10.50 Operations: 1 Foreman - $5/day 13.00 1 Mechanic - $3.50/day 6 Operators $3/day 4 Servicemen - $1.50/day Transport Cost ($100/month) 2.00 35.50 Service Charge 3.55 $ 40.00 1/ 11 liters/day: Lubricant, 3 liters/day. ANNEX 2 Teble 17 LIBERIA BONG COUNTY AGRICULTURAL DEVLLOPMENT PROJECT Processing Equipment - Cocoa and Coffee Costs 24 wooden fermenting %.-s each tray 0.9 m x 0.6 m x 13 cml at $2.50 per tray 60.00 8 wooden drying trays, each tray 2.5 m x 1 m at $5.00 per tray 40.00 1 rainproof sheet to house the trays 3 m x 4 m at $50.00 50.00 150.00 Note: $100 to be charged against cocoa; $ 50 to be charged against coffee. LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Fertilizer Cost Triple N-P-K Ammonia Super Rock 15-15-15 Sulphate Phosphate Phosphate Urea - - ------------ -----------------US DOLLARS ---------------------------- -- F.O.B. Western Europe 1/ 118 38 90 45 115 Transport & Port handling 70 70 70 70 70 CIF Monrovia 188 108 160 115 185 Transport to Gbarnga 2/ 30 30 30 30 30 Landed cost Gbarnga 218 138 190 145 215 Finance Cost & Storage 3/ 22 14 19 15 22 Local Distribution & Handling Cost 7 7 7 7 7 Total Farm 247 159 216 167 244 10% markup 24 16 21 16 24 Cost per ton 5/ 271 175 237 183 268 Cost per kg 0.27 0.17 0.24 0.18 0.27 1/ Source: Commodity Division, IBRD. 2/ $0.26/ton/mile for 115 miles. 3/ LPMC Commission, 5% of landed Gbarnga, finance charges, H A storage cost. 4/ Transport at $0.30 per ton/mile for 20 miles. 5/ 5% cooperative commission, 5% to cover storage, etc. ANNEX 3 Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Farm Support Services: Research, Seed Multiplication and Extension A. Research 1. There are four major institutions -- two each in the public and private sectors -- that are involved in research activities in Liberia, of which the most important are: The Firestone Plantation Company, which is mainly involved in rubber; The Liberian Agricultural Company, which in the past had major programs in rice research and selected the upland variety LAC 23, but is now mainly occupied with its livestock program; The College of Agriculture and Forestry is mainly carrying out applied research on forestry and wood utilization with some experimental work in annual crops; and additionally, The West Africa Rice Development Association (WARDA) coordinates and oversees rice varietal and fertilizer trials in West Africa through CAES. The Central Agricultural Experiment Station (CAES), which is the main research center of the Ministry of Agriculture in the country, is located in Suakoko; the center of the project area. Most of the above organizations function rather independently and there is very little exchange of ideas. In an effort to improve coordination of all research activities in the county, the Liberian Agricultural Research Council was established in November, 1974, but so far it has been largely ineffective. Research Program and Recomendations Rice 2. Since the late fifties, CAES has been involved in applied rice research, however, no significant results were obtained until 1970 when the UNDP/FAO "Development of Rice Cultivation Project" came into being and a rice agronomist was stationed in Suakoko. Subsequently, in 1973 a rice breeder was appointed to the station under a consultative program with IITA and financed by IDA (Credit 306-LBR). Both these programs have provided definite recommendations on variety, cultural practices, and fertilizer appli- cations. To date, about 2,000 lines of upland rice have been tested and LAC 23 has been established as the most suitable one for Liberia's upland conditions. It seems, therefore, that future varietal improvement work on LAC 23 should focus more on crossing of local selections with early generation breeding material. 3. Future varietal improvement work for inland valley swamp conditions should emphasize the screening for disease resistance such as blast, leaf scald and brown spot, and for tolerance to iron toxicity, since these are the major limitations to the present recommended varieties. ANNEX 3 Page 2 4. Although fertilizer trials have been carried out, the past program was far too small to be significant. Furthermore, very few fertilizer replicate field trials were carried out under farmer's conditions, and it is not possible to give firm recommendations for the various rice-growing conditions in Liberia. Similarly, herbicide trials although of lower priority have not been given adequate coverage and are therefore excluded from the proposed packages. Coffee and Cocoa 5. Despite the fact that Government continues to implement annually a substantial tree crop development program in the country, no research on tree crops with the exception of rubber, is carried out in Liberia. The improved packages used so far by the Ministry of Agriculture and LPMC, have been based on the recommendations of SATMACI and IFFC in the Ivory Coast and have not been tested out under Liberian conditions. The present recommended package may therefore not be the most suitable one, since the climate and soils differ considerably in Liberia. 6. To remedy this situation, priority should be given for the establish- ment of a research program in coffee cocoa, oil palm and coconut. Accordingly, the coffee and cocoa research programs should be undertaken by CAES at Suakoko which should provide for: (i) testing of different varieties in different soil types, (ii) determining fertilizer requirements of these crops under different soil types, (iii) evaluation of the existing pest and diseases in the country and their control measures based on chemical and agronomical methods, (iv) evaluating the needs and benefits of shade trees (e.g., Gliricidia) and in particular, temporary shade crops like plantain and cocoyam. 7. In general, agricultural research in Liberia lacks proper direction, planning, implementation and coordination. Consequently, past efforts have been largely ineffective and constraints have been both organizational as well as financial. The CAES is poorly staffed, has limited physical faci- licies, is inadequately financed, and lacks the administrative and financial power to organize effective research. In order to alleviate some of the constraints, funds were provided under Credit 306-LBR for the improvement of rice research at the station. Some progress has been made and activities are likely to continue till August 1977 (the closing date of Credit 306-LBR). ANNEX 3 Page 3 8. It is intended that this project will provide finances to cater for some of Liberia's immediate research needs: a) continuity in the research efforts started under 306-LBR; b) initiating research activities in the field of cocoa and coffee; c) overall improvement of the physical facilities at CAES, in particular laboratory facilities for the agronomy and soil section. In addition, funds would be provided for two consultant man-months for a review of the present status of research, the required organizational changes which would make research more effective and the setting up of research priorities. B. Seed Multiplication 9. The project will depend to a large extent upon the provision of improved seeds to farmers. LAC 23 will be used for upland rice and IR 5 and Gissi 27 for inland swamp conditions. It is expected, however, that the latter two will be replaced by IR 1416-131-5 and 2526 within the project period. CAES will provide the breeder's seed. Since there are no seed mul- tiplication facilities available in the project area other than CAES, it is envisaged that the National Seed Association (NSA), a young private organi- zation established in 1973, will multiply initially the breeder's seed in the Foya area together with the seed required for the Lofa project. During project implementation, it is expected that NSA will establish a branch in the project area. The foundation seed produced by NSA, will be supplied together with other inputs, like fertilizer and insecticide, to a number of selected farmers. These farms should at the same time be used as demonstration farms, where also simple trials could be carried out under the supervision of the PMU extension staff. The registered seed produced by these farms will be bought by PMU and made available to farmers. 10. Based on a recommended seed rate of 50 kg/ha, provided every fifth year to rice farmers, the seed requirements in tons are given below. At the same time, based on a yield of 1,800 kg/ha for upland rice and of 3,000 kg/ha for inland valley swamps, the corresponding hectares for seed multiplication are given in brackets: PY 1 2 3 4 5 LAC 23 30 (17) 48 (27) 65 (36) 70 (39) 75 (42) IR 5/Gissi 27 1/ 5 (2) 18 (6) 30 (10) 25 (9) 3 (1) Coffee and Cocoa 11. Since the establishment of seed gardens would require about 5 years before sufficient seed material would be available for distribution to farmers, coffee and cocoa seed required for the project will be imported by LPMC from IFFC in the Ivory Coast. The following seed importation is anticipated under the project: 1/ 1 kg seed per ha. ANNEX 3 Page 4 Year 1 2 3 4 5 Coffee (kg) 150 350 500 500 - Cocoa ('000 pods) 1/ 20 50 66 66 - In the long term, dependence on sources outside the country for its seed supply is not realistic. Accordingly, it is recommended that the project would establish seed gardens to be controlled and operated by CAES. C. Extension Services 12. The successful implementation of the Project program will largely depend on the efficiency of the PMU extension personnel. This efficiency is to a great extent determined by the agent/farmer ratio, the mobility of the extension worker and by the level and type of training received by extension workers. 13. The Extension Service presently operating in the project area consists of about 19 staff members, supervised by the County Extension Agent who is based at Gbarnga. Most of these people are extension aides, dispersed over the area dealing directly with farmers in matters of agri- cultural production or home economics. Except for the county agents, who are graduates of the College of Agriculture and Forestry of the University of Liberia, the majority of extension workers have received a secondary education, but have received very little in-service training. About 5 "tpractical" aides (running demonstration farms) are illiterate and have received a short course at the Agricultural Extension Training Center (AETC) at the University Farm near Monrovia. In general, it can be said that the present extension service in the Project Area is understaffed (agent/farmer ratio is over 1:1000), lacks transport facilities and practical, on-the- Job training. 14. It is proposed that the project area would be divided into six development zones, each staffed by an extension officer and by 10 to 20 extension aides. They would be assisted and supervised by the field and tree crop specialists and other technical services, such as the Land Development Unit, provided by PMU headquarters in Suakoko. Depending on the type of phasing of the farm and crop development, the number of extension aides to farmers would be based on an average ratio of I to 50 in the first two years, increasing to 100 and 150 in the third and fourth development years. The most intensive ratio of 1:25 would be for the initial development years in the pilot irrigation and swamp development. Field staff would be provided with adequate transport facilities and their conditions of ser- vice would be improved. Extension aides would receive additional training. In general, however, they will be trained on the job by their immediate 1/ 1 pod = 20 seeds; 66 pods per ha. ANNEX 3 Page 5 supervisors and PMU's specialist officers. Short, specialized, in- service training courses would be given at the Training Center at Suakoko by personnel of PMU and CAES. Due to the lack of expertise in Liberia in coffee and cocoa development, some initial training in tree crop development would be necessary and a number of extension staff would, in the first year of the project, be sent for 2 to 3 months for a course at the SATMACI Training Center at Divo and Gagnoa in the Ivory Coast. ANNEX 4 Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Farm Support Services: Cooperatives. Credit, Input Supply and Marketing Section I: Past and Present Services and Institutions A. Cooperatives Background to Recent Developments in Liberia 1. The "Cooperative Society Act" was promulgated in 1936, with a revi- sion in 1956. To date, it has been the principal legislation under which Liberian cooperative societies function. However, the Act did not initiate any major cooperative formation for almost 25 years, until early in 1971 when the Cooperative, Credit and Marketing Division of the Ministry of Agri- culture became operational, and a number of amendments and By-Laws to the Act were formulated. Under the guidance of the Division the first three cooperative societies were registered in 1971. 2. The personnel of the Cooperative, Credit and Marketing Division of MOA has been static in recent years, and staffing is inadequate to give full support to all the newly registered societies. The number of personnel enlisted at the Division in 1974 was 19. The Cooperative Movement in the Project Area 3. In the project area the cooperative movement has not been success- ful so far. However, some initiative has emerged which shows that the idea has become popular among the farmers. Kapartawee - The only registered cooperative, it is completely controlled by the Ministry of Agriculture from Monrovia. Its members are mostly absentee landlords from throughout Bong County and elsewhere. The books of the cooperative are kept in Monrovia and there is no local autonomy. Sanoyie (Kilebei) - This group, like the first, is a non- autonomous undertaking. All entrance fees and share payments are deposited with the District Commissioner, who redeposits them with the County Superintendent. The group is not as yet registered and apparently keeps no books. It had a project last year in which ten acres of upland rice were grown. ANNEX 4 Page 2 Zointa (Wolota clan, Kpai Chiefdom) - This is the only positive cooperative undertaking. It is a pre-cooperative attempting to become registered. At present, it has 486 members. An initial share contribution of $16, which is kept locally, makes it the most expensive cooperative to join in the country. The coopera- tive buys members' produce for resale at a slight profit. The cooperative meets once a month in a different market town. Other original features of the group include the announcement of meetings over the radio in four clan dialects, and provision for Lebanese/ Mandingo traders to become members. This latter group mills and transports co-op produce on a commission basis. B. Credit 4. There is no formal system capable of supplying credit in sufficient quantity to small-scale farmers in Liberia. Borrowings occurs mainly under conditions prevailing in the traditional society. Local credit societies called suu-suus also exist. These flexible and informal groups are usually composed of the members of a clan or smaller unit, and rely on mutual trust and confidence. Usually all members make equal monthly contributions to a fund and generally a preselected member is able to borrow the entire amount for that month. 5. Since August 1972 the Cooperative, Credit and Marketing Division (CCMD) of the Ministry of Agriculture has made some funds available to pro- vide farmers with credit for productive purposes. The fund is limited and credit repayments are poor. CCMD is too weak and disorganized to serve as a channel for project funds. 6. Until recently LPMC supplied tree crop seedlings to all farmers on a long-term credit basis. However, since early 1976 it has introduced a pro- gramm of providing free seedlings for up to 10 ha to any farmers willing to plant tree crops. 7. The Government is aware of the present unsatisfactory state con- cerning agricultural credit. But the prospect of a proper lending institu- tion being built up in the near future is rather limited. Under the Lofa County Project, Liberian Bank for Development and Investment (LBDI), will operate a project revolving credit fund, and a similar development is pro- posed for Bong County. Such interim measures are only good for circumvent- ing prevailing institutional inadequacies; and it is of utmost importance that the Government give priority to establishing appropriate Credit system to service the long-term needs of the country. C. Input Supply 8. At present, the use and supply of material inputs is insignificant. Farmers depend largely on private traders for the purchase of these inputs. ANNEX 4 Page 3 In principle, traders are willing to sell all the goods for which there is a stable demand and which farmers can afford on cash terms. Hence, the simple tools commonly used, such as hoes, axes and knives are easily obtainable in local shops. The demand for fertilizers and chemicals, on the other hand, is small in the project area, and dealers are unwilling to store these items. During the project review survey, it was observed that input suppliers were becoming more willing to offer limited quantities of fertilizers. Several of the general trading stores along the road had small amounts of some com- pounds on hand. D. Marketing Collecting and Processing 9. The 1971 Agricultural Census indicates that 23% of Upper Bong farmers with under ten hectares sell agricultural products; three-quarters of them farm solely to meet their own needs, and only 5% sell their products on a regular weekly basis. Of the latter, 3% of all farmers who produce beyond their own needs sell on their own holding; 11% use a motor car for transport, and 86% deliver their goods by foot. 10. Farmers living in or near the larger locations sell coffee, cocoa and palm kernels usually to small village traders. Those farmers living in the vicinity of the buying stations of the two LPMC agents usually deliver their products direct. However, the majority of the farmers live too far from the next trader or buying point to be able to deliver the products there. They have two marketing options: If not too far from one of the weekly mar- ket places, they bring their goods to these markets. Here, products are bought by Lebanese or Mandingo traders who visit these markets with trucks or pickups. When even the weekly market place is too far away from the farm, the farmer is compelled to find an intermediary who will bring the goods to the nearest trader or LPMC agent. 11. After collecting and assembling the products, the two LPMC agents transport the products to the LPMC warehouse in Monrovia, where they are stored and processed before shipping. Until a few years ago the LPMC in Monrovia purchased produce from any trader. Today, however, only the deliv- eries of licensed agents are accepted. Cocoa 12. After harvest, the cocoa is sun dried and then sold to the traders. Only rarely are the wet beans fermented. The result is that most cocoa beans are slaty and of poor quality and result in lower prices. Coffee 13. Farmers deliver coffee in clean or cherry form. The processing of cherry by the farmers is done by the traditional method of handpounding with pestle and mortar. Coffee delivered in cherry form is hulled at the LPMC ANNEX 4 Page 4 coffee mill in Monrovia. The price differentiation between cherry and clean coffee is used by the LPMC to regulate the proportion of cherry to clean coffee. A relatively low price for clean coffee against cherry will in gene- ral increase the proportion of cherry coffee delivered by the farmers. The advantage here is that the cherry coffee will then be processed in the LPMC mill and the resulting clean coffee will be of better quality than that pro- cessed by the farmers. But because the cherry coffee must be transported to the mill in Monrovia for processing, transportation costs are relatively higher. LPMC currently has plans to increase its coffee milling capacity, and in future proposes to purchase only cherry coffee in an effort to upgrade quality. Rice 14. Rice, the main subsistence crop, is cultivated primarily for the provision of the farm householders' own needs and is sold only on a small scale. Statistical information indicates that on average, the project area has been self-sufficient in rice in recent years. In 1974, total rice pro- duction in the project area amounted to 8,700 tons of clean rice. The present annual per capita consumption in the whole of Liberia can be estimated at about 93 kilograms of clean rice. It can be assumed that per capita consumption in the project area is slightly below this average figure, especially as'the con- sumption of vegetables (particularly cassava) appears to be higher here than in other parts of Liberia. If a per capita consumption of 80 kilos is assumed for Upper Bong, this would mean a total annual consumption of approximately 9,000 tons of rice. 15. The limited market production is sold by farmers either on local markets or to traders. Part of the rice is transported to Monrovia and to the concessions. Another portion is stored by traders, to be sold later. Shortly before the new rice harvest, the price of rice is approximately one-third higher than it is after harvest. 16. Paddy for farmers' own consumption is generally hand pounded. As this operation is time-consuming, an increasing number of small, simple rice mills have begun'to spread throughout Upper Bong and about 24 are working as custom mills. They are part Engelberg type hullers and part rubber roller shellers. The average milling fee per 100 kilos of paddy rice in these small mills is $2.20. The small mills offer the advantage that they are generally located fairly near the farmer; in addition, milling costs are low. The disad- vantage is that the outturn of milled rice is low, in some cases not amounting to more than 50%. Storage of Produce 17. Storage is undertaken by farmers and traders. The farmers store rice for home consumption in the roof of the kitchen building, where it is dried by warmth and smoke and is largely kept free from pests. Cocoa and coffee are delivered directly to the LPMC agents or the traders, who have only limited storage facilities, and consequently store the products only for the brief transition period of product assembly. The main storage facilities for tree ANNEX 4 Page 5 crop products are the LPMC warehouses in Monrovia. The storage capacity of the LPMC rice-buying station in Gbarnga is not more than 70 tons. The Role of Market Towns 18. Market towns fill a key role in the project area. Each chiefdom in the area is serviced by an all-weather road which connects several popula- tion centers. They hold market days once a week for sellers from the sur- rounding villages to market their produce. In turn, each market center is the convergence of several foot trails leading from the villages. Village traders and subagents frequently arrive in these market towns on the estab- lished days to transact business. Price and Price System 19. In 1973 a new price formula for coffee, cocoa and palm kernels was prepared on the basis of world market prices. The farmgate price is estab- lished after the following deductions: - Costs of the LPMC; - Transfers to a newly established Reserve for Price Stabilization; - Subsidies to the Fund for Agricultural Development; and - LPMC profits. 20. Under the new system, the farmer is offered a more stable price, in view of fluctuating world market prices, and a more equitable share in the final value of his product. When prices rise on the world market, internal producer prices and LPMC profits will also be allowed to rise; but part of the f.o.b. price will be placed in the Reserve for Price Stabilization. When export prices decline, LPMC profits will decrease at the same time, transfers to the Reserve for Price Stabilization will be reduced and if prices fall below a certain level, the producer prices will be supported by withdrawals from the Reserve. On average, the producer prices received by farmers amount to 50-60% of the world market prices. The price system described here does not apply to rice, for which a fixed purchase price is determined. 21. LPMC pays uniform prices, regardless of the quality standard. Grad- uated price reductions are applied when the moisture content exceeds certain limits, but the quality of the variety and the processing quality are not taken into consideration. The farmer, therefore, is given no incentive to select better varieties or to ensure better varieties or to ensure better pro- cessing of his products; this is reflected in the low quality of clean coffee and cocoa. From time to time LPMC has attempted to institute additional price ANNEX 4 Page 6 differentials for quality produce, but until now, this policy has led to charges of discrimination, and differentials have been abolished. Fixed prices are paid to licensed agents at the LPMC warehouses in Monrovia. The agents are expected to pay the same price to the farmers. For their marketing activities they receive a handling allowance and commission which is 8% for cocoa, 6% for palm kernels and coffee, 5% for piassava and maize, and 6% for rice. In addition, the LPMC pays an allowance for the transport of produce from the agents' warehouses to the LPMC warehouses in Monrovia. 22. The system as described does not function properly in the project area. Unjustified quality discounts as well as fraudulent weighing methods serve to further reduce the farmers' share. High transportation costs must be paid by the farmers in delivering their produce to the purchasing agents. It is estimated that farmers receive a price of about 25% (for rice) and 20% (for cocoa, coffee and palm kernels) less than official LPMC prices. ANNEX 4 Page 7 Section II: ProPosed Project Strategy A. Cooperative Organization 23. The multi-purpose service cooperative is best suited to serve the needs of most farmers, and would grant credit, supply inputs, and market agricultural produce. Phasing of the Cooperatives 24. The following details two alternative systems of cooperative society development for the project area. Neither are exclusive, and in practice, both may exist side by side. 25. For concentrated groups. Suitable for the proposed block planta- tions and assumes that entire village groups would opt to enter the project at the same time in order to farm together. In this case the proposed upland rice (year one)/tree crops (following years) cycle would be pursued. Village- level primary societies would be formed, using traditional "kuu" working arrangements wherever possible. While each farmer would receive title to his individual plot, land clearing, input requests, credit extension, and marketing would all be done through the group. Likewise, the group would be responsible for input transport and storage, and credit repayment. This system assumes a minimum number of farmers per group (20, for example), and in order to maintain group trust and efficient, inexpensive management, pri- mary societies should be limited to no more than approximately 50 members. When several primary societies are functioning in a chiefdom (after the second or third year), a chiefdom cooperative would be established. Such cooperatives would then begin to take over many of the input supply, credit extension, and marketing services previously performed by the BPMU. The village societies would then become affiliates of the local chiefdom cooperative. 26. For dispersed membershig - not following the block plantation scheme. This would be particularly applicable to those areas where, due to sparse popu- lation concentrations, land quality, or the absence of communal working arrangements, small farmers choose to enter the project individually. The establishment of kuu-like village groups would have to wait until enough villagers in an area are ready to adopt. Thus, the chiefdom level cooperatives, composed of early but individual adopters, would have to be established first. 27. In a later stage of cooperative development the six chiefdom cooper- atives could unite to form a country-wide federation of cooperatives that might take over many BPMU functions during the phase out of project activities. ANNEX 4 Page 8 Cooperative Staffing 28. The Cooperative/Comercial Division of the BPMU would be headed by an expatriate manager and his Liberian deputy. The division would be divided into three sections: Cooperatives, Credit, and Commercial. When the project is fully staffed, the Cooperative Section would have 12 field officers, and the Credit and Commercial Sections three each. The cooperative field officers would act as managers and bookkeepers for the six chiefdom cooperatives; two officers would be assigned to each cooperative. Of the total number of ex- tension aides, one-third would be trained in grass roots cooperative and credit affairs. The latter would be assigned to the cooperatives under the direction of the cooperative manager (approximately one officer for each 300 members). 29. The cooperative field officers would handle day-to-day operations of the cooperatives, arranging for the provision and supervision of coopera- tive services. The co-op/credit extension aides would work in close coordi- nation with the agricultural extension aides, in drawing up the farm credit plans, supervising delivery and proper use of inputs, advising the farmers of their credit obligations, and supervising the delivery of produce to the market centers and/or cooperatives. Cooperative Location 30. At the start of project implementation, district offices of BPMU would be established in the six project area chiefdoms. The location of these offices should be selected according to the future proposed location of the chiefdom cooperatives. The following towns have been selected: - Kpai Chiefdom - Palala - Panta Chiefdom - Fokole or Belimu - Zota Chiefdom - Belefuani - Sanoyie Chiefdom - Sanoyie - Jorquelle Chiefdom - Suakoko - Kokoyah Chiefdom - Botota 31. With a proposed target population of 9,000 farmers, the chiefdom breakdown would be as follows: ANNEX 4 Page 9 ASSUMED MEMBERSHIP FIGURES OF COOPERATIVE SOCIETIES IN THE PROJECT AREA, 1980 No. of Farm Prospective Households Cooperative Chiefdom 1980 1/ Members 2/ Jorquelle 11,270 4,500 Sanoyie 3,526 1,400 Kpai 2,600 1,000 Zota 2,530 1,000 Panta 1,730 700 Kokoyah 1,860 800 Total 23,516 9,300 1/ Provisional figures, 1974 Population Census, in- flated to 1980 at 2.1% increase p.a. House- holds of 5.2 average membership. 2/ Forty percent of farmers assumed to join the coop- eratives. Cooperative Leadership 32. At the chiefdom level the cooperatives will be governed by a Board of Directors (titled the "lawmakers") which would be headed by the Paramount Chief, with tribal or clan leaders as other members. It is felt that the normal tribal leadership structure should be maintained at the outset to stimulate farmer confidence and that cooperative officers should not be elected for the first few years. Two representatives from each primary society would attend monthly meetings, in order to present the views of their constituents. The governing body of the primary societies would most likely be the same as that for the village -- i.e., the chief and his elders. Cooperative Financing 33. During the initial years many of the services provided by the project will be subsidized. It is expected, however, that over time the cooperatives will be able to assume most of this burden. To accomplish this, cooperatives must be placed on a sound financial footing from the outset, and it is proposed that cooperatives should receive at least three sources of income: seasonal and development loan interest, and commissions on agricultural inputs and produce channelled through the cooperatives. Ten percent interest to be collected on seasonal and development loans, hence, 3% should remain with the cooperatives, with the remaining 4% being paid into the Revolving Loan Fund. ANNEX 4 Page 10 34. The cooperatives would increase the price of supplied inputs by 5% to cover the costs of their services. As LBAs of the LPMC, the coopera- tives will also receive the normal marketing commission -- 4-8%, depending on the crop (see discussion on Prices and Price System, Section I). These percentages are merely estimates at this time and should be subjected to BPMU review to assess their adequacy in covering future costs. B. FARM CREDIT SUPPLY SYSTEM The Credit System 35. As Bong County does not have any local credit institutions, coopera- tive credit service division of the BPMU would have the primary responsibility of organizing project credit program. Farm inputs and equipment would be available on credit, and bank loans will be available for local labor. Before the cooperatives are formed, the BPMU would have the responsibility of credit allocation to the village primary societies and individual early adopters. The cooperatives, on becoming organized and viable, would be assigned this responsibility. Individual credit requests would be summarized by the village level societies and would be passed on to the chiefdom cooperatives where they in turn would be summarized and passed on to BPMU. For each village group or clan a credit advising committee (consisting of village/clan chief and BPMU local coop/credit staff) will be established which will scrutinize and approve individual credit requests. Responsibility for repayment would follow the same pattern. A project revolving credit fund would be established under an agreement between LBDI and GOL, the former acting as administrator of the fund. An assurance was obtained at negotiations that the fund would be established by September 30, 1977 in accordance with a trust agreement satis- factory to the Bank. All credit repayments including interest would be cre- dited to the fund. The fund would charge farmer cooperatives (or BPMU) 7% per annum on loans onlent to farmers at 10%. LBDI would receive 2% of the disbursed funds as commission for administering the fund. At the end of project development in 1982 the fund would have an estimated US$570,000, and by 1989 development loans amounting to US$2.5 million would have been repaid and would be available for further agricultural development as determined by the trust agreement (see Table 1). Planning Credit Needs 36. The planning of individual farmer credit needs would be the task of the cooperative and credit field officers but they will be assisted by the extension staff of BPMU. In the initial years, aides would be super- vised by Credit Officers working out of BPMU district officers. 37. The following four-step planning process assumes the project to be in an advanced phase with the cooperatives, primary village groups, and a full complement of personnel all in place would be as follows: ANNEX 4 Page 11 A. Farmer visited by extension aide/Credit officers. - Proper land clearance is verified; - Area of farm to be planted is determined; - Crops to be planted are specified according to hectarage; - Farm Credit Plan is completed. This form estimates input requirements, total costs, estimated yields, and income. One copy is left with the farmer, one is kept with the village primary society, and one is kept with the chiefdom cooperative; and - In the case of a new member a Farmer Appraisal Form is completed which details the farmer's inventory in terms of family labor supply, material resources, and past cropping experi- ence. B. Credit field officer collects credit plans by village and deli- vers them to the village groups and the chiefdom cooperative. The Cooperative Credit Officer then holds a meeting with each village group to check the plans. Village consolidated credit plans are prepared by the Cooperative Credit Officer and are taken to the chiefdom level cooperatives. A copy is left with the village group. C. The Village Consolidated Credit Plans are reviewed by the Coopera- tive Managers, consolidated into a Cooperative Credit Plan and sent to BPMU. If the block plantation system is utilized, the number of visits by the extension aides would be greatly reduced. Additionally, consolidated credit plans would be made for the entire block plantation as a first step, thus eliminating paperwork at the primary level. Selection of Credit Recipients 38. Although the elders of the village level groups would be responsible for the selection of credit recipients, they would be subjected to certain guidelines. A potential recipient would agree: - to accept input packages as specified by the project and to use them for the prescribed purposes; ANNEX 4 Page 12 - to deliver total market production to the cooperative; - that his credit will be deducted from the sales proceeds at agreed rates established by BPMU; and - to be responsible for the credit obligations of other primary groups members if they should de- fault on their loans due to circumstances other than crop failure. Credit Repayment Mechanism 39. The procedure for credit repayment would be a three-phased process staffed and directed as follows: - the extension aides with credit/cooperative training would visit the farmers prior to harvest to assess/estimate potential yields, provide sacks, and advise farmers of their credit obligations; - as the harvest progresses, the farmer would deliver his produce to the village marketing center, cooperative, or BPMU/LPMC facilities. At these points the produce would be weighed and graded with the amounts and values recorded on the records of the cooperative and in the farmer's passbook; and - when the value of the produce reaches the level of his loan, the debt would be cancelled and the farmer would begin to receive cash pay- ments. As the loan is in the process of being paid off, any outstanding interest owed would be cancelled first, followed by the principal. For village-level groups, no cash payments should be made until all members of the group have can- celled their loans. Terms of Loans 40. Two types of credit would be issued: - seasonal credits, repayable after harvest and with a rate of interest of 10% for a normal period of approximately eight months; and ANNEX 4 Page 13 - Medium-term investment credits for land develop- ment and planting of tree crops; coffee and cocoa loans would be disbursed over a period of six and four years respectively, while most of swamp deve- lopment loans would be disbursed over two to three years. There would be no grace period. Coffee and cocoa development loans will be for a period of twelve years and for swamp rice eight years in- cluding a four-year and a two-year grace period respectively during which interest would be capitalized. 41. Interest rates have been set in conformity with the Lofa County Development Project. Nevertheless, it would be the responsibility of the Evaluation Section of MA to periodically monitor the practicality of these rates. BPMU, along with hectarage limitations, would establish credit limit- ations per farmer. These limitations would vary according to the crops planted and the costs involved. C. INPUT SUPPLY SYSTEM Estimation of Project Input Requirements 42. As the lead time necessary for the international bidding, trans- portation, and importation of fertilizers can be 6-9 months, some system of early estimation of project needs must be implemented. The responsibility for this task should lie with the Land Survey Team and the Agricultural Manager. The team would identify the areas suitable for various crops. Based on project priorities and targets for each crop group, the manager would then calculate the estimated input needs for each year. Inputs would be ordered from foreign suppliers through LPMC. 43. Fertilizers and other chemicals will be obtained from overseas suppliers, while seedlings will come from LPMC nurseries already established in Liberia. Rice seed for swamp and upland would be obtained from the Seed Multiplication Scheme which has been proposed as part of the Lofa County In- tegrated Rural Development Project. Storage 44. Storage of inputs in Gbarnga would be provided by LPMC, which would make arrangements for providing additional storage as demand requires. 45. As the project develops, there will be a need for cooperatives to arrange for temporary storage facilities. Central points within the areas of the cooperatives would be chosen and rented storage procured. Adequate storage facilities are both available and reasonably priced. During the early years of the project and before the cooperatives become viable units, it would probably be necessary for BPMU District Offices to make storage arrangements. This service would be turned over to the cooperatives as soon as possible. At the village levels, storage facilities would be provided ANNEX 4 Page 14 by individual farmers in their huts. If any other type of facility becomes necessary, the village level groups would be instructed to arrange for it. Distribution Network 46. LPMC would be responsible for the delivery of inputs to its own or the BPMU's warehouses in Gbarnga. From that point on, final distribution would be carried out in two phases: a) From Gbarnga to the cooperatives' central points. Assuming that all of these points will be along a passable road, BPMU would be responsible for trans- portation to the warehouse of the cooperatives. It would utilize its own pick-ups, tractor trailers and rented vehicles when necessary. b) From the cooperatives' central points to villages. At the cooperatives, the input needs of each village group would be made and the villagers advised. Where road transport is possible, transportation would be arranged by BPMU. Where no road exists, head carriers would have to be used. Villagers would be encouraged to provide this service. Individual farmers would be responsible for the transport of inputs from villages to their farms. Input Pricing 47. As for the Lofa County Project, the LPMC would be entitled 5% of the lended Gbarnga cost of all inputs they import plus appropriate trans- port costs. The cooperatives would add an additional 5% markup, which at this time is estimated sufficient to cover their costs of input supply. As the cooperatives and/or BPMU incur transportation costs in the final delivery of the inputs to the village groups, these costs would also be added to a far- mer's credit record, so that he pays the full delivered cost of the com- modities. Machinery Provision 48. Smnall farm equipment, e.g., pedal threshers, power tillers, chain saws, knapsack sprayers, hand winches, etc., would be provided by BFMU. Threshers would be sold at full cost to individual farmers or groups while other equipments would be rented out or given under hire-purchase schemes. Eqrtpment uld also be leased out to cooperatives or private contractors for work on farmers' fields. BPMU would run short training programs for power t*'}ler operators and also provide maintenance facilities. An arrange- ment b-tweer BPMU and the contractors should ensure the following arrange- ,nts: ANNEX 4 Page 15 - ownership of the tiller and basic implements will remain with BPMU for the life of the project, then the owner- ship will automatically be transferred; - operators of the tillers must undergo training organized by BPMU; they must be able to read and write; - tillers must be presented at the project's workshop for inspection and repair regularly; - repair must be paid at cost covering prices by the contractor; - prices which the contractors are allowed to charge to the farmers will be fixed by BPMU; and - in addition to repair costs the contractor will pay an amount of 20% of the purchase value of the tiller in trust to BPMU per year. D. MARKETING SYSTEM 49. Improvements under the project would aim at increasing producer prices by decreasing the present margins between fixed LPMC prices and prices actually obtained by farmers. Under the conditions prevailing in the area this can be achieved through a four-pronged strategy: a. establishment of collection points where farmers are paid the full LPMC prices; b. introduction of more efficient means of farm-to-market transport; c. quality improvement incentives and controls; and d. better market information for the farmers. Creation of Marketing Center Collection Points 50. In general, the following institutional set-up for produce marketing is foreseen under the project: ANNEX 4 Page 16 - LPMC as ultimate purchaser would have a complete outstation in the project area; - cooperatives would act as licensed LPMC agents; - subagents would be directly commissioned to the cooperatives; and - additional produce collection points would be established in market towns. 51. LPMC outstation in Gbarnga should become the focal point and the backbone of all marketing operations in the area. For this purpose, the small warehouse existing at present would be developed into a full-fledged outstation such as the one in Voinjama in the Upper Lofa area. The basic principle underlying operation of the outstation in Gbarnga is that it would offer the full LPMC fixed prices without deductions for all products, and then the station would act as a price regulator which in itself would have a positive effect on the level of producer prices in the area. 52. The pattern of cooperation between LPMC and the project would depend in the early stages on the phasing of the cooperative struc- tures -- i.e., whether the village level societies or the cooperatives are established first. In the case of the former, the societies would arrange for transportation of their produce through BPMU. In the event that LPMC does immediately develop the Gbarnga station into a full-service agency, BPMU would accumulate the produce in rented warehouses until enough is available for bulk transport to LPMC in Monrovia. BPMU would be reimbursed by LPMC for all transport costs. 53. Where cooperatives are established, they would first act as LBAs and purchase produce directly from the farmers, either directly at the co- op door or in established market towns. The cooperatives, through BPMU, would then arrange for transport to LPMC in Gbarnga or Monrovia, if quantities merit. The cooperatives would be reimbursed for transportation costs by LPMC. 54. Farmers would be advised of their credit obligations and provided with sacks shortly before harvest. After harvest the farmers would bring the produce to pre-established market centers. There they would be met by commissioned subagents of the cooperatives, accompanied by a co-op/credit extension aide. The subagent would receive the produce and be responsible for its transport to the cooperatives (or to BPMU in the early stages before the cooperatives are established). 55. The crop officers would record the amount of produce from each farmer and calculate its value. This amount would be registered in the books of the cooperative, village society, and in the farmer's credit book. When the value of the produce delivered surpasses the amount owed by the ANNEX 4 Page 17 farmer, he would be paid off in cash by the aide. In the early stages of project development, this process should be closely supervised by the Cooperative Field Officers (manager and accountant of the cooperatives) in order to assure that both the farmer and cooperatives receive correct compensation for their efforts. Farm to Market Transport 56. With increasing production, the transport constraint may become even more pressing, as transport facilities in the area may not expand accordingly. During the initial phase of the project, the newly establ- ished cooperatives and/or village societies would refrain from under- taking extensive transportation operations and instead would use BPMU transportation which would consist of several tractors with trailers. These tractors would be available to the cooperatives and/or village societies for the transport of produce from the farms and market towns to the cooperative warehouses and to LPMC outstation in Gbarnga. The commissioned subagents and the extension aides would travel with these transport units. Nevertheless, after about the first year of project activity, transportation requirements would surpass BPMU's ability to provide it. At that time it is expected that the commissions earned by the cooperatives on the marketing of produce would be sufficient to pay for transportation on the commercial market. Quality Improvement and Controls 57. It is impossible that a comprehensive system of grading and quality control can be set up in the area within a short period. How- ever, at the cooperative level, existing regulations concerning moisture and foreign materials content would be enforced. LPMC would establish a price differential between fermented and sundried cocoa. As a further contribution to quality improvement, LPMC would fix its prices for cherry and clean coffee in such a way that farmers are encouraged to deliver their coffee in the form of cherries, for processing in LPMC's mill. Three produce inspectors would be added to the Cooperative/Commercial Division. Their function would be as much educational as supervisory, and they would be charged with setting quality standards for project produce, informing farmers as to these standards and how to meet them, and enforcing the standards. Additional Considerations Marketing Produce Restrictions 58. It was previously stated that non-members should not receive cooperative services. Nevertheless, it would be greatly beneficial to the cooperatives, both financially and in terms of experience gained, to be able to accept produce from any farmer in the project area. Given ANNEX 4 Page 18 the fact that most of the tree crops provided for under the project will not come into production until after BPMU has left the area, the ex- clusion of non-member produce (particularly coffee, cocoa, and palm kernels) would mean that the cooperatives would not have the benefit of supervision in the marketing of their most important crops, and would lose a valuable cash flow in their early years. Consequently, while only members would receive inputs on credit, cash sales would be allowed for any intending farmer and marketing services would be available to all farmers. Minor Equipment Requirements 59. It is estimated that in order for the cooperatives to maintain adequate weight and quality standards they should be provided with scales and moisture meters. Four of these units per cooperative should be suf- ficient, resulting in a total of 24 units. Additionally, a safe would be needed by each cooperative in order to secure the cash necessary to pay for produce. Approximately 200,000 20-kilo capacity sacks should also be made available to the cooperatives to aid in the head-carrying and transport of produce. ANNEX 4 Table I - 0-4 -* 00 0 00 010 0 1. 0N00 0 00 0 r.1 C 0- .4 * '0 00001000 a 0 0 10 .4 ON 00 ON I N NO 0 010 0 0 S. I . I. * ON 0 00 II 0 ON 0 0' 4 a 00 0 00 j N 40 4 - C - 0 0 "0 0 0 j 0 '-40 0 10  00 N .4N p.! I N 00 0 0 0 0 * 0 0.4 N NO j 0 00 0 - 0 ON N NO I 0 000 CNN I 2 00 0 000000 0  - 0 0 0 ON 0 00 ON C 0 .4 00 N 00 0 .40 .4 - 0 0 N -40 N N N 00 0 - 00 - N 0 OoIoOIOoo I. - . -1 p -0. * 00 0 N 0 001 0' 0 OSO 0 04000 0 00 I 0 -j 0 0 N lip O 00 .4 010 10 4 0 ON .' 00 0 00001004 * 40040 II I 0 0000100 0 a 00 0 00 0 00 0 04 0 0 0 0 00 .4 0 4 0 0 0 ON 0 00 0 001 0 Oj 0 0 0 .fl 40 ii p 0 0014 014 0 N 00 0 0 0 00 I 0 I 0 0 .4 0 4... 000 0' I c. I. 00 4 04 I p 00, 0 0 0 0 0 - . ' I 44 0' 00' 0 001 -40 0 0 0 0? 0 0 0' 0 Sc O0I4Ofl$ I 4014 010 Al N01401000 001 0 Ic-- J I-. NO I 0 P0 0 0 ] - .10 00 - 010 0 00 N 0 0 0 0 51-4 4 -O 00000 al oN 0 oJ 0 0 ON 0 N 0 0 I 00 0 0 0 40 0 0 0 0 8 001010 0 ON140000 ONloolo PP P 0 0010 0 0 4 0 21 .2 0010.04 4 00I00000 00 0 04 0 0010 010 0 4 I4OZIN 01000 000010 0 0-410 01 N P.4 0 44 0 10 0 -4410 10-oN 001 0 OJo 00 0 o 00 0 0 0 o 0 010 0.4] 0 0 ON 0 0 N 0 0 00 0 00 001 0 00 0 ON 0 4 0 0' 4 ON - 0 0 N 001 0 00 00 N o 00 0 N 0 o 0 @2 001000 NO 4 0 000 oN.40 001000 NO 0 0 NO 0 N 0 0 4 .4 0 0 0 0 ON 00000 0010 4 0000000 oa' o opn o.2 0 00 0 0 o 0 0 101 010 40 0 40 40 0 0 40 0 0 0 o 0 0 014 0 00 0 ON 0 0 -4Oj 0 0 N N 0 0' o oo 0 p. ool 0 o 0 -* 0 010 to .100 440 IONN c '0 0 00 0 4 0 040000 1 0 01 4 01 .4 0 *0 I I. Ca .4 ..-. . .4 IP 4 cOg @2311. cab-c 0.-I oaa 00 oa aIaLs a ccg .4 a I cc . 0 cc 4 .4 cc   S C Cl 00 0 -0 .4 00 0 0 4 00 0 0 * C Cc a 0 a, a a.4a CoatIa 0 aa .4 0 a a @2 0cc-C., 1.1 j .4 (4 01010141 4 C a aa 0 0 C @20 a. 0 cC pO C 00 0 5-c @2 00 >0 .4 Gpo a a .4 ca C 0 .4 0 - ooo. ANNEX 5 Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Roads A. Background 1. Liberia's transport system consists of about 7,250 km of roads, 480 km of privately owned railways, four seaports, and five airports of which two provide international service. Roads are the most important means of transportation in Liberia. Only iron ore is transported on private railway lines of the mines, coastal transport is negligible and river transport is practically non-existent. Thus all transport of goods and people from the hinterland to the seaports and from villages to urban areas (and vice versa)2 takes place by road. With an average road density of 1 km of road per 18 Km, the present road system is quite insufficient and large areas of the country have no road access. 2. The road network in the project area consists of about 498 km of roads. A short section of the private railway line from the mines also runs through the project area. Of the total of 498 km approximately 146 km are classified as primary roads, 220 km as all-weather secondary roads and 132 km as dry-weather farm-to-market roads. All these roads have inadequate surfaces with difficult grades and hazardous horizontal and vertical sight distances. The secondary roads have grades exceeding 7% and in some cases over 10%. Farm-to-market roads have grades varying between 12%-20% and very unsatisfactory horizontal and vertical alignments as most were constructed on old established footpaths or trails without a proper survey. In addi- tion there is a total lack of proper maintenance. Primary and secondary roads are partially maintained to permit all-weather traffic throughout the year, but farm-to-market roads receive practically no maintenance and con- sequently are not always useable during the rainy season. 3. The Government's Second Five-Year Road Maintenance and Development Program provides for restoration of the existing primary and secondary roads to an acceptable level of maintenance as well as for the construction of new primary and secondary roads. Though slightly behind schedule, the program is proceeding satisfactorily. Within the project area, upgrading work has already begun on the primary road from Totota to Gbarnga. By 1978, this road will have a two-lane bituminous concrete pavement, complete with shoulders and grades permitting safe speeds up to 80 km/hr. The secondary road network has been scheduled for upgrading and planned routine maintenance on an annual basis. ANNEX 5 Page 2 B. Project Proposal 4. In the project area, there is one km of road for every 18 Km of area on the average. Only 45% of the population has direct access to a road and this ratio is only slightly increased to 56% if one includes those who live within about 2 km of the road. In comparison 78% of the population in the Lofa county are within 2 km of a road. While it is not possible to determine exactly the desirable density of any future road network in the project area, it is reasonable to assume that successful implementation of the proposed project would require proper maintenance of the existing roads and construction of new farm-to-market feeder roads to make inaccessible areas more accessible. The project would therefore construct 170 km of new farm- to-market roads, (thereby extending the existing network by about 34%), recondition/upgrade about 130 km of farm-to-market roads and maintain all farm-to-market roads in the project area. 5. New Farm-to-Market Road Construction. The alignment for the 170 km of new road construction within the area would be determined in detail during project implementation in coordination with the MPW planning division and according to the needs and requirements of the project. No detailed engineering survey or design work would be made for these roads, although the responsible MPW road engineer would locate the alignments in such a way that they warrant optimum drainage conditions, soils conditions and laterite soils deposits. Road design standards for the new construction and the recondition- ing of existing farm-to-market roads have been developed in collaboration with the MPW. Selection of standards took into consideration expected traffic levels, annual volumes of goods to be transported, type of vehicles, type of terrain crossed, and availability of road-building materials. The recommended road design standards for the farm-to-market road network is shown on Table A. 6. Reconditioning of Existing Farm-to-Market Roads. In addition to the 170 km of new road construction in the area, the existing 130 km of farm-to- market roads require reconditioning of both their cross-section and their drainage structures to bring them up to the desired standards and make them accessible all year round. After reconditioning the typical cross-section of the roadway would be as shown in Table 1. 7. Maintenance of Farm-to-Market Roads. After the first year of new construction and reconditioning, maintenance operations on a regular basis would begin on about 180 km of farm-to-market roads. The schedule for con- struction, reconditioning, and maintenance is shown on Table 2. 8. Organization. The Ministry of Public Works would have the primary responsibility for the construction, reconditioning, and maintenance of the farm-to-market roads within the project area. Funding for the necessary equipment and a portion of the operating expenses is covered within the loan. Because of the required coordination between road improvement activities and the agricultural development activities of the project, the following organi- zational structure would be adopted: ANNEX 5 Page 3 (a) separate units from the MPW's Bureau of Construction and Bureau of Operations would be formed to manage and operate the equipment units under the "force account" method. The Bureau of Construction unit would be responsible for new construction of farm-to-market roads, and the Bureau of Operations would be responsible for reconditioning and main- tenance. Each unit would be supervised by a fully qualified and experienced foreman, who would be responsible to the resident engineer of MPW for Bong County. The two units together would form MPW feeder road unit for Bong County; (b) during the life of the project, the equipment units would be separated into integral and identifiable units, operating only within the project area for the purpose for which they were procured 1/. At the end of the project, the maintenance unit would be retained in Bong County to continue maintenance on the farm-to-market roads within the project area or trans- ferred to other rural development projects developed subse- quent to this project; (c) equipment of the feeder road unit would be serviced and main- tained by MPW district workshop at Wainsue, near Gbarnga; (d) construction, reconditioning, and maintenance priorities would be established by BPMU; and (e) annual budgets and operating plans would be developed jointly by BPMU and the resident engineer, and operational budgets for these units would be identified in the annual MPW budget as separate budget items. 9. Costs. A summmary of the costs for the construction, reconditioning, and maintenance for the first 3-1/2 years of work is given in Table 3. These costs are calculated on the basis that operations would be carried out by force account methods of PMW. There are no cost components such as import duties, interest, insurance, registration, overhead or profit included in the calculations. The total costs for the construction of the 170 km, the reconditioning of 130 km and the maintenance of an average 180 km per year for 3-1/2 years is US$2,066,000. The costs per kilometer for each type of activity would be: 1/ The bulk of the equipment in the reconditioning unit would become the maintenance unit after it has reconditioned existing farm-to-market roads. ANNEX 5 Page 4 (a) for construction - US$8,080; (b) for reconditioning - US$2,938; and (c) for maintenance - US$563. The construction and reconditioning operational units would have all new equipment. Since the maintenance unit would not be required until 50 km of new construction and 130 km of reconditioned roads have been completed, the equipment and personnel from the reconditioning unit would be trans- ferred over the maintenance unit. Total equipment costs of US$819,000 for the two operating units is shown on Table 4. The types and quantities of equipment and the amount of personnel for each operating unit is given in Table 5. A yearly expenditure estimate is included in Table 6. It is re- commended that equipment be procured through sole source procedures. MPW, through AID Loans 020 and 023, purchased large quantities of the type and size equipment which would be used on this project. The equipment of U.S. origin was purchased on the basis of competitive bidding and in accordance with AID guidelines. The quantities of equipment by manufacturer for this project are small and the maximum dollar amount which could possibly accrue to any manufacturer is not more than US$350,000. In addition, by pur- chasing like equipment which already exists in other equipment spreads used by MPW, savings are realized from the availability of spare parts and service facilities. ANNEX 5 Table 1 RECOMMENDED ROAD DESIGN STAIDARDS FARM-TO-MARKET ROAD t 10'_0" - l Select aterite material only vlere n eessary C4% _/e TYPICAL CROSS SECTION Design Speed - MPH 25 - 30 Pavement - min. thickness 2 - 3" laterite Width of Roadway (including shoulders) 20'-0" Maximum Grades 12% Minimum Curvre Radius (ft) 250 Right-of-Way Clearing - ft. 50 Drainage - (Galv. metal pipe) CMP ANNEX 5 Table 2 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Time Schedule for Construction, Reconditioning and Maintenance Farm-to-Market Roads I 'I ' ~ ~ ~~~I I 1st Year 2nd Year I 3rd Yearl 4th Year 5th Yearl 6th Year! Equipment Procurement I I I I New Construction - I I 4 km 48 km 4 km 21 km 170 km I 6 m Roadway I I Single Lane - Timber Bridge I I CMP Culvers I I I 1310 kmI II Recondition - 130 km I I I 6 m - Roadway I Maintenance - 540 km 1 78 km 2A5 km 1J7 km (Total) I I I 6 m Roadway I I I I . l l l l l I~~~~~~~~~~~~~~~~~~~ ANNEX 5 Table 3 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Summary of New Construction, Reconditioning and Maintenance Costs During First 3-1/2 Years Farm-to-Market Roads Unit Cost - $ ITEM Km (per km) TOTAL COST - $ Construction 170 8,030 1,365,000 Reconditioning 130 2,938 382,000 Maintenance 540 563 304,000 TOTAL 2,051,000 ANNEX 5 Table 4 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Equipment List and Costs - CIF Monrovia for New Construction, Reconditioning and Maintenance Units New Cons- Recondi- Item truction tioning Maintenance 1 D8 BuIldozer $ 142,800. - 2 D6 Bulldozer (1) 72,100. (1) 72,100. * 2 12E Motor Grader (2) 112,000. - 1 120G Motor Grader - 52,000. * 2 Pneu. Compactor (1) 20,000. (1) 20,000. * 2 Wheel Loaders (1) 32,000. (1) 32,000. * 1 Backhoe 74,000. - 1 Tractor/Trailer 60,000 ** ** 4 Dump truck - 6 cu.yd (2) 30,000. (2) 30,000. * 2 Water Tankers (1) 18,000. (1) 18,000. * 2 Pickups - 3/4 t (1) 6,000. (1) 6,000. * 2 Vehicles - 4 WD (1) 8,500. (1) 8,500. * 2 Water Pumps (1) 2,500. (1) 2.500 * Subtotal 577,900. 241,100. GRAND TOTAL 819,000 * Equipment for maintenance unit will come from reconditioning unit. ** Tractor/Trailer unit will also be used for hauling reconditioning or maintenance equipment. ANNEX 5 Table 5 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Equipment and Personnel Requirements Farm-to-Market Roads OPERATING UNITS: Reconditioning -New Construction -Existing Roads - Maintenance* 1 D8 Bulldozer 1 D6 Bulldozer 1 120G Motor Grader 1 D6 Bulldozer 1 120 Motor Grader 1 Pneu. Compactor 2 12E Motor Grader 1 Pneu. Compactor 1 Water Tanker 1 Wheel Loader 1 Wheel Loader 1 Dump Truck 1 Pneu. Compactor 2 Dump Trucks - 6 cu.yd 1 Pickup - 3/4 t 1 Backhoe 1 Water Tanker 1 Vehicle - 4 WD 1 Tractor/Trailer Unit 1 Pickup - 3.4 t 1 Water Pump 2 Dump Trucks - 6 cu.yd 1 Vehicle 1 Water Tanker 1 Water Pump 1 Pickup - 4 WD 2 Chain Saws 1 Vehicle - 4 WD 1 Water Pump 3 Chairn Saws 1 Mobile Radio Unit 45 Personnel (Engineer 49 Personnel (Foremen, 32 Personnel (Foremen Foremen, Operators, Operators, Craftsmen, Operators, Crafts- Craftsmen,and Laborers) and Laborers) men, and Laborers) Construction Unit produc- Reconditioning Unit pro- Maintenance Unit pro- tion capacity - 3/4 mile/ duction capacity 2 miles/ duction capacity - 3 week or 30 miles/year. week or 80 miles/year. miles/week or 120 miles/ year. * Maintenance Unit will receive all equipment and personnel requirements from Reconditioning Unit. Maintenance operations will start after reconditioning unit's work is completed. Based on maintaining 105 miles of new road's construction and 80 miles reconditioned road over a 3-year period. ANNEX 6 Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Health Services in the Project Areas Background 1. GOL allocates a little over 9% of its total expenditures for health services. The ratio of doctors and para-medical staff to population are about 1:10,000 and 1:1,000, respectively. There is significant imbalance between urban and rural health services with nearly 75% of Government employed physicians working in and around Monrovia. Government hospitals and clinics in rural areas are in poor condition, lacking minimum facilities, supplies and staff. In the rural areas the ratio between doctors, hospitals, and hospital beds to population are about 1:22,000, 1:54,000 and 1:1,200 respec- tively. The result of these regional imbalances in health services are manifested in the fact that death rates, including infant mortality, in rural areas are about 1.5 times higher than those in the urban areas. 2. The common health problems in the project area are directly related to low income, poverty, unsanitary environment, malnutrition and dietary in- sufficiency, lack of health education, and inadequate disease prevention programs. The population is suceptible to various infectious diseases common to tropical Africa (malaria, measles, diarrhea, dysentery, pneumonia, neonatal tetanus, hookworms and other intestinal parasites), the outcome of which often is fatal due to lack of curative medical services. Apart from these common infectious diseases, leprosy, onchocerciasis and schistosomiasis are endemic to the area. Incidence of oncho have been found in certain parts of Lofa County, but their consequences have not been serious (such as blindness and severe dermatoses). However, the Liberian Research Unit of the Tropical Institute of Hamburg, Germany, has been undertaking active research and sur- veillance of this disease in the project area. The proposed project is most unlikely to activate and itensify the causes of this infection. Schistosomiasis in the Project Area 3. From all the various sources it emerges that urinary as well as intestinal schistosomiasis is widespread in the project area and that many people are suffering from the disease. Analysis of data from laboratory tests recorded in 1975 indicates a 17.6% incidence of "schistosomiasis haemabilm" in urine samples and a 4.5% occurence of "schistosomiasis Mansoni" in stools. ANNEX 6 Page 2 Phebe Hospital Laboratory Tests - 1975 Urine Stool Number Number Number Number Month of tests Positive of tests Positive January 836 135 800 53 February 988 233 960 57 March 568 89 988 68 April 1,110 148 909 29 May 909 95 - 37 June 1,210 107 909 42 July 1,025 150 1,385 44 August 923 92 902 33 September 913 95 1,716 47 October 761 508 986 66 November 711 142 1,018 35 December 842 107 794 43 Total 10,796 1,901 (17.6%) 11,367 517 (4.5%) Swamp Rice Production and Schistosomiasis 4. The production of swamp rice in irrigated fields causes on the one hand an increase of the waters suitable for the breeding of the vector snails, on the other hand, once these waters are colonized by the snails, the work in the irrigated fields will considerably enhance the contact between man and the cercariae-shedding snails. This may alter the present schistosomiasis situation with regard to the following factors: - the percentage of infected people may increase; - the intensity of infection may increase, when more people acquire much higher worm infestation and this may result in a conversion from inapparent infection to manifest disease in many people, and to a further reduction of the working capacity of the population concerned; - the large number of worms carried by the population means an increase of the numbers of worm eggs excreted with urine and faeces. Thus more snails will become infected, stimulating a vicious circle of increasing transmission. As a consequence, with the considerable expansion of swamp rice production in the project area, a rise in the prevalence of the infection and an increase of the morbidity caused by schistosomiasis is not improbable. However, it must ANNEX 6 Page 3 be clearly stated that whether an increase really will occur, to which degree and how soon it will develop cannot be forecast. 5. However, given the knowledge that (1) there already exists a sig- nificant infection of schistosomiasis in the project area, and (2) that the project may increase it, and given the desire not to introduce a "careless technology" in the haste to promote higher productivity, constant and care- ful vigilance is therefore essential during the project implementation period. These same considerations lead to the setting up of a schistosomiasis sur- veillance unit under Credit 577-LBR (Lofa County Agricultural Development Project). This project would strengthen that unit with more personnel and logistic support so that the unit would be able to monitor for the Bong Project area as well. The terms of reference of the unit would be the same as detailed in Annex 2 of Report No. 744a-LBR. However, administratively it will now be under the Ministry of Health and Social Welfare and a greater degree of cooperation will be sought with the Liberian Institute of Biomedical Research. The unit will function as a separate entity within the Ministry of Health; it would have its own budget and personnel management but will work in close liaison with the Bong and Lofa Project Management Units. The field unit in Bong will be attached to the Phebe Hospital and the one in Lofa will be with the Voinjama Hospital. 6. No single ideal method for the control of the disease or of the infection is yet available. Moreover, control activities must be maintained consistently for many years to produce satisfactory results and such activi- ties cannot be initiated until adequate baseline epidemiological data are available. Hopefully, the proposed surveillance unit would be able to collect the required baseline data, undertake limited field testing of vector control techniques and develop specific recommendations for control measures by the Government. Rural Water Supply 7. Due to widespread incidence of water-borne disease in rural and semi-urban areas, GOL wishes to establish rural water supply and sewerage system as a component of its overall rural development programs. Through bilateral assistance from the Federal Republic of Germany investigations, planning and feasibility studies were completed in six county towns for the supply of treated piped water, and bids have been invited from contractors for implementing three such schemes, one of which will be at Gbarnga. Apart from this, a well-drilling program was conducted in the rural areas with UNDP assistance (LIR/73/021) and another UNDP/WHO study has recently been started to identify pilot projects in four rural communities. However, it is unlikely that in the near future any significant undertaking for the improvement of rural water supply will be forthcoming (the Five-Year National Development Plan does not have any provision). A rural water supply pro- gram of any significant scale is beyond the scope of this project, but BPMU will appraise the situation in the project area and encourage local inhab- itants to improve the water supply through wells constructed on a self help basis. BPMU would work in close consultation with the Project Advisory Committee and local health authorities and, where necessary, supply materials and other assistance for well construction. ANNEX 7 Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Organization and Management Background 1. The Ministries of Local Government, Action for Development and Progress, Agriculture and Public Works are agencies which are directly or indirectly involved in rural development activity in Bong County. The Ministries of Finance, Lands and Mines, and the Liberian Institute of Public Administration provide support services, while both the Ministries of Health and of Education pursue activities which encourage rural development. 2. At the county level, an attempt is made to coordinate the work of the various ministries by ad-hoc meetings of the consultative staff of the county superintendent, the president's representative within the county, who works through the Ministry of Local Government. His own consultants and administrative staff (including an assistant superintendent for rural develop- ment), and the district commissioners report directly to him. 3. Fiscal management is highly centralized. Budgetary allocations for all ministries emenate from Monrovia, and all purchase requisitions are forwarded to Monrovia for approval and action. Ministry of Finance pay- masters stationed in county headquarters make monthly payroll disbursements. 4. The Ministry of Agriculture bears responsibility for the planning and implementation of agricultural development programs in Liberia. It falls under the overall direction, supervision and control of a Minister, supported by a Deputy Minister. Operationally, it consists of five bureaus (adminis- tration, agriculture, forestry, ad-hoc projects, and planning) each headed by an Assistant Minister. Smallholder farm support services (extension, credit, marketing, etc.) for field crops are entrusted to the Assistant Minister of Agriculture; a county agent, supported by other field staff, organizes field activities in each of the nine counties. The Assistant Minister for ad-hoc projects provides smallholder support services for cocoa, coffee, oil palm through the Liberian Produce Marketing Corporation (LPMC) and for rubber, through the rubber advisory service. The Deputy Minister directly controls the Central Agriculture Experiment Station (CAES) at Suakoko, which conducts public sector agricultural research (field crops, rubber, livestock). ANNEX 7 Page 2 5. Budgetary allocations for the Ministry of Agriculture have in- creased, both relatively and absolutely since 1971. However, effectiveness and impact of the Ministry has been limited due to low standards of the field staff as well as poor management of available resources. The Ministry's budget is primarily for personnel and provides minimal logistic support for the field staff. 6. Proposed Proiect Organization. In view of the complexity and intensity of the project, it is obvious that its organization requires mea- sures which themselves must include some degree of complexity and innovation. It is therefore proposed to: - entrust the implementation to a special project administration within the Ministry of Agriculture to be called the Bong Project Management Unit (BPMU), with headquarters at Suakoko; - make this Project Management Unit (BPMU) solely responsible for a number of farm support measures in the whole project area; - make the BPMU responsible to a Project Steering Committee, the chairman of which would be the Minister of Agriculture; and - give the BPMU a largely independent status within the Government sector. 7. Three main reasons favor this organizational set-up. First, the integrated nature of the project and tight control for at least the core of project measures require a single agency in charge instead of the responsi- bility being distributed among various agencies. Second, a separate project administration outside ministerial structure would be less hampered by bureaucratic procedures and delays and would thus be more effective in handling a complex project. And third, in view of the intensity of the development measures and the necessary adaptation of these measures to the requirements of the region, a specially created regional project administra- tion would be more suitable than a national body. 8. BPMU established according to these lines would be a Government agency; however, it would be structured and authorized to function as a commercial enterprise and would be free from regular Government Civil Service and budgetary regulations. The desirable status for the BPMU could be described as a balance between the freedom of action necessary for the efficient running of the project and the integration into the Government sector by means of control in general policy matters. 9. The independence of the project would be achieved primarily in that it would have its own management, financial control and recruitment ANNEX 7 Page 3 and procurement procedures. Management would be on the project site and would be in charge of the daily operations. All project personnel would be responsible to the project manager. They would either be transferred to the project from the Ministry of Agriculture with the approval of the project manager or the project would hire them directly. 10. The necessary integration of the project into the overall institu- tional system would be achieved by means of the Project Steering Committee at the national level, the Project Consultative Committee at the county level and development councils at the local level, (the latter would be informal rather than formal bodies). The internal organization of the project would thus be characterized by the interplay of these two committees and the Project Management Unit. 11. Management would be responsible to the Project Steering Committee. The terms of reference of the Lofa County Project Steering Committee would be amended to include the implementation of the Bong Project. Supervision would entail determination of the general policy guidelines and the exer- cising of budgetary control. The Project Steering Committee would approve the annual project budget and would coordinate the project activities with overall Government policy and would mobilize the cooperation of other Government agencies. The committee would meet several times a year as-required. 12. The Project Consultative Committee would act as an advisory body to the project management and would coordinate the activities of BPMU with those of other institutions in the project area. It would meet at least quarterly and its members would include: - Superintendent, Bong County (Chairman); - Assistant County Superintendent, Bong County; - Project Manager; - Deputy Project Manager (Executive Secretary); - Paramount chiefs; - Local representatives of the Ministries of: Agriculture (county agent) Education (county supervisor of schools) Health (medical director of county hospital) Public Works (resident engineer). Lands and Mines (land commissioner) - Cooperative chairmen. 13. BPMU would have three functions : (1) organization and coor- dination of farm-support measures; (2) planning and evaluation of project activities; and (3) guidance and strengthening of rural institutions (coopera- tives). ANNEX 7 Page 4 14. BPMU itself would take over the organization of all those support measures for which there are no efficient institutions available and where tight coordination and competent management is vital. Activities belonging to this category are: (1) organization and management of an agricultural ex- tension service; (2) assistance to farmers in swamp reclamation and land registration; and (3) administration of a revolving credit fund for the supply of credit to the farmers via the cooperatives. BPMU would coordinate the activities of the existing institutions as well as those proposed as support services, and integrate them into the project. This would involve: - road construction and maintenance (responsible agency: Ministry of Public Works); - input supply (responsible agencies: LPMC, co- operatives); - produce marketing (responsible agencies: co- operatives and LPMC); - credit distribution (responsible agencies: co- operatives); and - experimentation (responsible agency: CAES). BPMU will also service its own needs through staff training (with LIPA and AETC assistance), fiscal management and vehicle maintenance. 15. Internal Organization of BPMU. The project manager would be the head of the unit, and would be assisted by a deputy project manager. BPMU would have five divisions: Administration and Personnel, Agricultural Ser- vices, Cooperative and Credit Services, Training and Finance. The Agricul- tural Services Division would have three sections: Extension and Experimen- tation (responsible for technical advice on tree and field crop production, seed multiplication, seedling production, field experimentation), Land De- velopment (land clearing, farm equipment, hire service, swamp development, irrigation and water control), and Survey and Registration (topographic and soil surveys, land use planning, demarcation and measurement of farms, and assistance in land registration). The Cooperative and Credit Services Divi- sion would have the responsibility for organizing the delivery system for farm inputs and credit and would have three sections: Cooperatives (devel- opment, guidance and strengthening of cooperatives), Credit (distribution and recovery of smallholder credit) and Commercial Services (procurement and distribution of inputs and assistance in crop marketing). 16. The roads program and schistosomiasis surveillance would be imple- mented through the Feeder Road Unit and Schistosomiasis Surveillance Unit to be established within the Ministries of Public Works and of Health respectively (see Annexes 5 and 6). ANNEX 7 Page 5 17. Monitoring and Evaluation Unit. Under the Lofa County Agricultural Development Project a small project evaluation and planning unit has been established within the Project Management Unit. Monitoring and evaluation of large rural development projects can be costly in scarce resources, par- ticularly in the human talent to collect and analyze large amounts of data. Thus, creation of monitoring units for each separate project may be wasteful and inefficient. It is therefore proposed that the monitoring and evaluation of both Lofa and Bong (and any future) projects be handled as one operation. It would be directly responsible to the Minister of Agriculture (through the PSC) and would work in close liaison with the Economic Planning and Evaluation Division of the Ministry. The overall purpose of the monitoring/ evaluation operation would be to identify and measure project results, and to point the way to specific recommendations in project approach, priorities or implementations which would improve both subsequent project design and current project performance. 18. Staff Selection and Job Description. Because of the complexities inherent in a smallholder development project, successful implementation re- quires project staff with high levels of managerial efficiency, technical com- petence, innovativeness and above all, high commitment to project clientele - the small farmers. Liberia's problem of trained manpower is both a qualita- tive as well as a quantitative one. Where possible, BPMU positions would be filled by qualified and experienced Liberians, as this would ensure staffing continuity and institutionalization of the program, but a number of the senior key positions will have to be filled through international recruitment. The project, therefore, would provide for international recruitment of a Project Manager, Managers of Finance, Agricultural Services, Training and Cooperative/ Credit Services Divisions, a swamp development officer and a land use planning officer. Funds for international recruitment of the Director of Monitoring and Evaluation Unit and the Scbistosomiasis Surveillance Unit have been provided under Credit 577-LBR. Assurances were obtained at negotiations that these positions, their deputies and other senior technical posts would be filled by persons having experience, qualifications and terms and conditions of services satisfactory to the Bank. To avoid delays in the start of the project, GOL has agreed to appoint the Project Manager and Managers of the Finance and Agricultural Services Divisions of BPMU prior to Board presenta- tion. Retroactive financing for this purpose will be provided. 19. As the local manpower pool is rather limited, even with substantial salaries and benefits, the possibility of the project settling for less than outstanding Liberian personnel is not unlikely. Moreover, a project staff position may be viewed by local professionals as a stepping stone offering good salaries and a springboard for career and financial advancement. To ensure that sufficient staff are made available, an assurance will be obtained at negotiations that project staff recruitment would be given priority and that once appointed, an officer would not be transferred unless approved by BPMU. Job descriptions are in Annex 7, Appendix 1. ANNEX 7 Page 6 20. Training. Liberia does not have a pool of trained manpower, par- ticularly at intermediate and lower level technical staff, nor does it have an institutional set up capable of turning out trained personnel for the immediate needs of the project. Substantial staff training would be provided under the Lofa Project; however, it is too early for the Bong Project to draw on those trained personnel as they will not be released until about 1980 (see para 6.11, Report 744a-LBR). BPMU would absorb the county extension staff in the present area. The project would provide training facilities for all extension, cooperative and credit field staff recruited for BPMU. In view of the general lack of knowledge and expertise in Liberia on coffee and cocoa development selected Liberian staff would be sent to the Ivory Coast and Ghana for short specialized training. Additionally, senior Liberian tech- nical and managerial staff would be trained in project management and rural development administration. 21. The manager of the Training Division would be responsible for devel- oping and implementing the training program. The program would consist of short formal courses interspersed with practical field training. The curricula would focus on improving the technical knowledge of the staff, and also on the development of motivation and dedication of these staff. Technical training for the field staff would be provided primarily at the CAES where a training center financed under 306-LBR is under construction, which will be expanded under this project. Close cooperation would be obtained from the AETC and WARDA. After initial training field staff would undergo refresher training at suitable intervals. Management training would be provided by the staff of the Liberian Institute for Public Administration. Furthermore, all expatriate staff would have the explicit responsibility of training their Liberian counterparts and other senior staff working with them. ANNEX 7 APPENDIX 1 Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Job Decra for Project Senior Staff Appointments I. Project Manager 1. Experience would be the main criteria for the selection of the pro- ject manager, although a formal qualification in agriculture would be impor- tant. At least 10 years experience in agricultural development oriented pro- jects, preferably in Africa, would be required. A high degree of administra- tive ability, experience in dealing with high level Government agencies and previous involvement in extension to smallholder farm communities would all be necessary. The responsibility of the project manager would be the overall control of all project activities and coordination of the same with those of other Government agencies and local authorities. 2. His duties would include: a) Control and accountability for all project funds with the assistance of the financial controller; b) establishment of a cost analysis and record keeping system which would enable project progress and achieve- ments to be monitored and would allow a meaningful evaluation of the project's impact for which he will be assisted by the director of the Planning and Evalu- ation Unit; c) responsible for project personnel matters with the assistance of the administrating officer; d) coordination of all project activities; e) reporting project program to Government through written reports and through the various project committees; f) training project staff. ANNEX 7 APPENDIX 1 Page 2 II. Finance Manager 1. The officer would have a degree in accounting or CPA together with training and/or experience in business management. He would have had extensive experience in a senior position in a large public corpora- tion or commerical company. Knowledge of credit procedures and experience in working with high-ranking Government officials would be advantageous. 2. His duties would include: a) Managing the Accounts Division and responsible for the control of project funds; b) preparing budgets, cash flows and estimates of expendi- tures; c) establishing accounting procedures to ensure the correct application of project funds; d) assisting the credit manager in establishing an effective accounting ystem for credit transactions; e) maintaining store accounts and project bank accounts and managing the project's liquidity; f) maintaining close working relations with the heads of other departments, and advising them regarding appro- priate budgeting and accounting procedures; g) liaising with external auditors to ensure timely con- tract of interim and year end audits; and h) training of staff having accounting relation functions (e.g., credit, stores' accounts) initiating and super- vising the development of project accounting systems (credit, stores' accounts) aimed at providing manage- ment with adequate and timely information, producing periodic financial and statistical reports. He would be responsible to the Project Manager. 3. The project manager would carry out his responsibilities under the overall policy direction of the Project Steering Committee and would be directly responsible to the Committee Chairman (The Minister of Agri- culture). ANNEX 7 APPENDIX 1 Page 3 III. Head, Agricultural Services 1. The officer would be a qualified agriculturalist and would have a thorough knowledge of tropical tree crop production in particular coffee and cocoa and preferably some knowledge in rice production. He would have at least six years experience in smallholder tree crop development and would be able to advise on the tree crop nurseries, rice seed multiplication and processing techniques of cocoa and coffee. 2. His duties would include: a) Organizing research through CAES and organizing and over- seeing the coffee and cocoa seed nurseries, seed gardens and rice seed multiplication and its distribution with the assistance of the crop specialists and extension staff through the senior extension officer; b) in liaison with the Land Use Planning and Swamp Develop- ment officer, selecting and delineating areas suitable for tree crop and inland swamp development; c) organize and ensure the effectiveness of extension ser- vices among the smallholders particularly in relation to the technical aspects of tree crop development in- cluding the drying and fermenting of the crop; d) close liaison with the cooperative and credit services section; e) training of extension staff personnel in the technical aspects of cocoa and coffee development; He would be directly responsible to the project manager. ANNEX 7 APPENDIX 1 Page 4 IV. Swamp Development Officer 1. The officer would be a professionally qualified irrigation engineer or a civil engineer with additional experience in land planning and irriga- tion and water control schemes. He should have at least five years of prac- tical experience, preferably in Africa, and should have held senior positions in Government and/or commercial organizations. 2. His duties would include: a) In liaison with the land use planning officer select and delineate areas suitable for inland swamp rice cultivation; b) survey, design, and construction of project drainage systems, water catchments and irrigation, and water con- trol facilities for swamp rice cultivation; c) gathering of hydrological basic data and conduct hydro- logical studies and assess which areas may be suitable for double rice cropping under supplementary irrigation; d) training of project staff in topographical surveys and layout, and construction of irrigation and water control works. He would be directly responsible to the Manager, Agricultural Services. ANNEX 7 APPENDIX 1 Page 5 V. Land Use Planning Officer 1. The Land Use Planning officer would have had formal training in soil science, agricultural land classification, land use survey techniques, and aerial photo interpretation. Previous experience in land resource work and associated land and agricultural development planning would be essen- tial, and experience in the construction of small water storage works would be an advantage. 2. His duties would include: a) Reconnaissance land use surveys in order to delineate areas suitable for crop development; b) intensive soil and contour surveys to allow the detailed planning of farming zones and farm holdings, in parti- cular with respect to tree crop development and swamp development for double rice cropping; c) land surveys of tree crop holdings for purposes of land registration d) proposals for new farm-to-market roads in project area in liaison with MPW Planning Department; e) training of project staff in land use survey techniques; f) if required, to assist in the construction of small water storage works for supplementary irrigation. He would be responsible to the Manager, Agricultural Services. ANNEX 7 APPENDIX 1 Page 6 VI. Head Cooperative/Credit Services 1. Professional qualifications in accounting is desirable but exper- ience in a managerial capacity in commercial undertakings, preferably in agro-business, encompassing credit supply and marketing services is more im- portant; additionally experience in the administration of cooperative/credit programs in developing countries will be an advantage. 2. His duties would include: a) Establish three sections within the Division: Cooperatives, Credit and Marketing delineating the responsibilities and obligations of each and supervising and controlling their operations; b) to assist LBDI in administering the Revolving Credit Fund and maintain close liaison with LPMC in the ordering, handling and delivery of input supplies; c) to perform the duties of assistant registrar of coopera- tives for the Bong County; d) in coordination with the Training Division, plan and execute training programs for division personnel; e) in coordination with the Monitoring and Evaluation Unit establish a system of ongoing two-way monitoring and evaluation for the division; and f) maintaining close working relations with the Finance Manager in establishing an effective accounting system for credit transactions and with the Head Agricultural Services to ensure timely input supply arrangements and assistance in loan recoveries. He would be directly responsible to the Project Manager. ANNEX 8 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Project Cost 1. Project costs for the five-year development period are estimated at US$20.3 million including a foreign exchange component of US$9.8 million or 48% of total costs. 2. Estimates are based on prices prevailing during appraisal, updated where necessary to reflect baseline costs expected at the end of 1976, including US$0.2 million of identifiable indirect taxes but excluding all other taxes and duties. Physical contingencies are computed at 5% of baseline costs. Although this may appear low for the road component (US$1.4 million or 9% of baseline costs), experience in West Africa projects indicates that overall 5% is adequate. Price contingencies allow for compounded cost increases of: (a) vehicles, equipment and farm inputs of 9% in 1977, 8% per annum from 1978 to 1979, and 7% from 1980 to 1981; (b) buildings, construction materials for roads and village wells of 13% in 1977, 12% per annum from 1978 to 1979 and 10% in 1980 and 1981; (c) salaries, consultants, technical assist- ance and local costs of 7% from 1977 onwards. Total contingencies represent 26% of total costs. LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Summary of Project Cost (US$'000) Foreign Exchange Local % to Total Year 1 Year 2 Year 3 Year 4 Year 5 Total 7% Cost Cost Project Cost Buildings 372.3 169.7 - - - 542.0 70 379.5 162.5 3 Vehicles 212.2 47.0 4.7 22.9 201.3 488.1 80 390.4 97.7 2 Furniture and Equipment 274.0 69.0 22.0 6.0 - 371.0 82 305.8 65.2 2 Salaries & wages 923.0 1,039.6 1,140.8 1,176.8 1,143.8 5,424.0 29 1,575.0 3,849.0 27 Vehicles - Operating cost 111.3 140.5 141.7 141.7 141.7 676.9 70 473.9 203.0 3 General services 161.0 100.0 100.0 100.0 100.0 561.0 6 36.0 525.0 3 Farm inputs 74.3 306.1 600.2 884.2 910.9 2,775.7 51 1,401.8 1,373.9 14 Hired labor - 38.2 156.3 251.9 213.7 660.1 - - 660.1 3 Road construction,Upgrading & Maintenance 719.0 370.3 452.2 374.5 396.5 2,312.5 72 1,665.8 646.7 11 Research - 150.0 200.0 150.0 150.0 650.C 80 520.0 130.0 3 Consultants 30.0 30.0 30.0 30.0 30.0 150.0 100 150.0 - 1 Feasibility study - - 200.0 - - 200.0 100 200.0 - 1 Village wells - 25.0 25.0 25.0 25.0 100.0 50 50.0 50.0 - Development of banking institutions 40.0 40.0 40.0 30.0 - 150.0 60 90.0 60.0 1 Base cost 2,917.1 2,525.4 3,112.9 3,193.0 3,312.9 15,061.3 48 7,238.2 7,823.1 ( 74) Contingencies - Physical 145.9 126.3 155.6 159.5 165.6 752.9 48 361.4 391.5 4 - Price 297.1 462.1 862,4 1,203.7 1,616.3 4,441.6 48 2,132.0 2,309.6 22 Subtotal 443.0 588.4 1,018.0 1,363.2 1,781.9 5,194.5 48 2,493.4 2,701.1 ( 26) Total Project Cost 3,360.1 3,113.8 4,130.9 4,556.2 5,094.8 20,255.8 48 9,731.6 10,524.2 100 mx July 29, 1976 O LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Buildings Foreign Exchange Local Unit Cost Year I Year 2 Year 3 Year 4 Year 5 TOTAL % Cost Cost Housing 1/ 25.0 (2) 50.0 - - - - 50.0 70 35.0 15.0 Administrative Services Office space 2,000 sq.ft. 2/ 15.0 15.0 15.0 - - - 30.0 70 21.0 9.0 Motor pool 800 sq.ft. 15.0 6.0 6.0 - - - 12.0 70 8.4 3.6 Subtotal 21.0 21.0 - - - 42.0 70 29.4 12.6 Finance Housing 25.0 (1) 25.0 - - - - 25.0 70 17.5 7.5 Office space 2,000 sq.ft. 15.0 15.0 15.0 - - - 30.0 70 21.0 9.0 Subtotal 40.0 15.0 - - - 55.0 70 38.5 16.5 Agricultural Services Housing 25.0 (3) 75.0 - - - -- 75.0 70 52.5 22.5 Office space 5,500 sq.ft 15.0 41.3 41.2 - - - 82.5 70 57.8 24.7 Small buildings 2,000sq.ft. 15.0 15.0 15.0 - - - 30.0 70 21.0 9.0 Subtotal 131.3 56.2 - - - 187.5 70 131.3 56.2 Training Housing 25.0 (1) 25.0 - - - - 25.0 70 17.5 7.5 Office space 1,000 sq.ft. 15.0 7.5 7.5 - - - 15.0 70 10.5 4.5 Training Centers - 4,000 sq.ft 3/ 15.0 30.0 30.0 - - - 60.0 70 4.0 18.0 Subtotal 62.5 37.5 - - - 100.0 70 70.0 30.0 Cooperative - Credit Services Housing 25.0 (1) 25,0 - - - - 25.0 70 17.5 7.5 Office space 2,000 sq.ft 15.0 15.0 15.0 - - - 30.0 70 21.0 9.0 Subtotal 40.0 15.0 - - - 55.0 70 38.5 16.5 Planning & Evaluation Office space 1,500 sq.ft 15.0 12.5 10.0 - - - 22.5 70 15.8 6.7 Schistosomiasis Unit Office space and laboratory 2,000 sq.ft 15.0 15.0 15.0 - - - 30.0 70 21.0 9.0 TOTAL 372.3 169.7 - - - 542.0 70 379.5 162.5 1/ Housing provided for expatriates and Deputy Project Manager. 2/ Project Manager alloted 600 sq.ft.; Deputy Project Manager and Heads of Divisions 200 sq.ft.; all others 100 sq.ft. Cost spread out during first and second year. 3/ Includes dormitories, classrooms, kitchens, etc. July 23, 1976. C ...o C .OC C -t C.4C'0 0.-ac CCCCC I- -4?--,-. C C.IOaCN - CO C Ct. *fl r- C CCC C NC4O.t0 N -* Can Co Ctfl C C C 0 CCCN - C  N NO C CC C CC C C CCan.4 CCCN CCCCC C CCC C CCCCC C CC 0 Ct. C C CC C CC C C aCCa-aCCo CCCC CCNCCtC C CCC N CCNC C Cr-. C af%C - 0 - C - C .OC - -- - C CC C 0NCo-. 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C C COCaa)C0 '4 CPa CCC CO. ) 0 COO. )4C 9 ).O C o : Pa 0 -ao Ca 0 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Furniture and EquiPment (USS '000) a.b.ne Loa FE.r&1gn-VE-Jin&e Local Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL % Ca/; Cost Administrative Services Office furniture I/ 5.0 - - - 5.0 50 2.5 2.5 Office equipment 2/ 3.5 - _ - - 3.5 80 2.8 0.7 Radio communication set 5.5 - - - - 5.5 90 5.0 0.5 Workshop equipment 15.0 15.0 - - - 30.0 90 27.0 3.0 Generator 45.0 - _- - 45.0 90 40.5 4.5 Subtotal 74.0 15.0 - - 89.0 87 77.8 11.2 Finance Office furniture 1/ 5.0 - - - - 5.0 50 2.5 2.5 Office equipment 2/ 11.0 - - 11.0 80 8.8 2.2 Other equipment 5.0 - - - - 5.0 80 4.0 1.0 Subtotal 21.0 - - - - 21.0 73 15.3 5.7 Agricultural Services Office furniture 1/ 12.0 - - - - 12.0 50 6.0 6.0 Office equipment 2/ 3/ 25.0 - - - - 25.0 80 20.0 5.0 Mechanical hand winches 14.0 14.0 - - - 28.0 90 25.2 2.8 Miscellaneous lab and field trial equipment 20.0 15.0 - - - 35.0 90 31.5 3.5 Mapping & Surveying equipment 12.0 8.0 - - - 20.0 90 18.0 2.0 Clearing equipment 10.0 - - - - 10.0 90 9.0 1.0 Subtotal 93.0 37.0 - - 130.0 84 109.7 20.3 Training Office furniture 1/ 4.0 - - _ - 4.0 50 2.0 2.0 Office equipment 5.0 - - - - 5.0 80 4.0 1.0 Dormitory equipment 20.0 - - - - 20.0 80 16.0 4.0 Training aids 15.0 - 5.0 - - 20.0 80 16.0 4.0 Audio visual aids 15.0 5.0 5.0 - - 25.0 80 20.0 5.h Subtotal 59.0 5.0 10.0 - - 74.0 78 58.0 16.0 Cooperative-Credit Services Office furniture 1/ 5.0 - - _ - 5.0 50 2.5 2.5 Office equipment 2/ 5.0 5.0 - - - 10.0 80 8.0 2.0 Subtotal 10.0 5.0 - - - 15.0 70 10.5 4.5 Planning & Evaluation Office furniture 1/ 3.0 - - - 3.0 50 1.5 1.5 Office equipment 2// 6.0 - - - - 6.0 80 4.8 1.2 Subtotal 9.0 - - - - 9.0 70 6.3 2.7 Schistosomiasis Unit Office furniture 1/ 2.5 - _ _ _ 2.5 50 1.3 1.2 Office equipment 2/ 5.5 - - - - 5.5 80 4.4 1.1 Laboratory equipment - 7.0 12.0 6.0 - 25.0 90 22.5 2.5 Subtotal 8.0 7.0 12.0 6.0 - 33.0 86 28.2 4.8 TOTAL 274.0 69.0 22.0 6.0 - 371.0 82 305.8 65.2 1/ Desks, conference tables, chairs. 2/ Typewriters,calculators, filing cabinets g a 3/ Includes drafting equipment, , .2 2-~22I22~2 .2.2 12 22 ic y ...2 9 5 9i 6 ' - 2 V ’ g H y W | 6 ' X § ^ q n N . 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OO . . . . . . . . . . . . . lOOOOUWOOOOOO100UOO, - - - - -- - - - -_ - - - > - - ----- - -- - - - -------- C"CC'CC- - -- - CC-' - - - -_ - - 8 * - ~9~s W s >_ W .__M__@__ _--SS_~M_ - _oy>9__ He--w-- ~."e.>ee>W>t-~ -_ - _-e -~ Q -*- uy~_MS,_ - _- - X ru ossy,> > e Fua S _ oeQu_ ~_~sSFS f -Dwuu …- F-* - F - NF''OS>3 9tUfFFl - F F zM * FtSF-o : tw__?ss g St-F99'F@8 - 8F@8 a F F >b1F FF WF ° | OW wS8>oWS r SWF uSF I | 0O oosuoo o u _ -w9-F ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~88 a _ ~~~~~W 38 SF S ° |o r nCe~~~~~~~~~. O~~~~~~~~~~~~~~~~~~~C u ' CC C' C' C' u0000M>OwOOOOOO ,LIBERIA BOG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Vehicle operatine Cost (US$'000) Foreign Exchange Local Unit Cost Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL 7. Cost Cost Saloon cars 2.1 (2) 4.2 (2) 4.2 (2) 4.2 (2) 4.2 (2) 4.2 21.0 70 14.7 6.3 Administrative Services Saloon cars 2.1 (1) 2.1 (1) 2.1 (1) 2.1 (1) 2.1 (1) 2.1 10.5 70 7.4 3.1 Pick-up 2.3 (2) 4.6 (2) 4.6 (2) 4.6 (71 4.6 (2) 4.6 23.0 70 16.1 6.9 Subtotal 6.7 6.7 6.7 6.7 6.7 33.5 70 23.5 10.0 Finance Saloon car 2.1 (1) 2.1 (1) 2.1 (1) 2.1 (1) 2.1 (1) 2.1 10.5 70 7.4 3.1 Pick-up 2.3 (2) 4.6 (2) 4.6 (2) 4.6 (2) 4.6 (1) 4.6 23.0 70 16.1 6.9 Subtotal 6.7 6.7 6.7 6.7 6.7 33.5 70 23.5 10.0 Agricultural Services Saloon cars 2.1 (2) 4.2 (2) 4.2 (2) 4.2 (2) 4.2 (2) 4.2 21.0 70 14.7 6.3 4 wheel drive 3.2 (3) 9.6 (3) 9.6 (3) 9.6 (3) 9.6 (3) 9.6 48.0 70 33.6 14.4 Pick-up 2.3 (7) 16.1 (7) 16.1 (7) 16.1 (7) 16.1 (7) 16.1 80.5 70 56.4 24.1 Motorcycles 1.2 (15) 18.0 (171 20.4 (1R) 21.6 fig6 21.6 (ig1 21.6 103.2 70 72.2 31.0 Subtotal 47.9 50.3 51.5 51.5 51.5 252.7 70 176.9 75.8 Training Saloon car 2.1 (1) 2.1 (1) 2.1 (1) 2.1 (1) 2.1 (1) 2.1 10.5 70 7.4 3.1 Pick-up 2.3 (1) 2.3 (2) 4.6 (2) 4.6 (2) 4.6 (2) 4.6 20.7 70 14.5 6.2 Mini-bus 2.6 (1) 2.6 (2) 5.2 (2) 5.2 (2) 5.2 (2) 5.2 23.4 70 16.4 7.0 Subtotal 7.0 11.9 11.9 11.9 11.9 54.6 70 38.3 16.3 Cooperative - Credit Services Saloon cars 2.1 (1) 2.1 (2) 4.2 (2) 4.2 (2) 4.2 (2) 4.2 18.9 70 13.2 5.7 Pick-up 2.3 (4) 9.2 (5) 11.5 (5) 11.5 (5) 11.5' (5) 11.5 55.2 70 38.6 16.6 Trucks 3.1 (1) 3.1 (2) 6.2 (2) 6.2 (2) 6.2 (2) 6.2 27.9 70 19.5 8.4 Motorcycles 1.2 (9) 10.8 (15) 18.0 (15) 18.0 (15) 18.0 (15) 18.0 82.8 70 58.0 24.8 Subtotal 25.2 39.9 39.9 39.9 39.9 184.8 70 129.3 55.5 Plannine & Evaluation Mini-bus 2.6 (1) 2.6 (1) 2.6 (1) 2.6 (1) 2.6 (1) 2.6 13.0 70 9.1 3.9 Motorcycles 1.2 (3) 3.6 (7) 8.4 (71 8.4 (7) 8.4 (7) 8.4 37.2 70 26.0 11.2 Subtotal 6.2 11.0 11.0 11.0 11.0 50.2 70 35.1 15.1 Schistoso_iasis Unit Mini-bus 2.6 (1) 2.6 (1) 2.6 (1) 2.6 (1) 2.6 (1) 2.6 13.0 70 9.1 3.9 Motorcycles 1.2 (4) 4.8 (61 7.2 (61 7.2 (61 7.2 (61 7.2 33.6 70 23.5 10.1 Subtotal 7.4 9.8 9.8 9.8 9.8 46.6 70 32.6 14.0 TaTAL July 23, 1976 111.3 140.5 141.7 141.7 141.7 676,9 70 473.9 203.0 LIBERIA B0NG COUNTY AGRICULTURAL DEVELOPMENT PROJECT General Services Cost (US$'000) Foreixn ExChange L,,}1 Unit Cost Ye"r I Year 2 Year 3 Year 4 Year 5 TOTAL % Coat Coat Administrative Services Rent - House 3.0 3.0 - - - - 3.0 3.0 Office space 10.0 10.0 - - - 10.0 - - 10.0 Other expenditures 1/ 10.0 5.0 10.0 10.0 10.0 10.0 45.0 10 4.5 40.5 Subtotal 18.0 10.0 10.0 10.0 10.0 58.0 10 4.5 53.5 Finance Rent - House 3.0 3.0 - - - 3.0 - - 3.0 Office space 10.0 10.0 - - - - 10.0 - - 10.0 Other expenditures 1/ 10.0 5.0 10.0 10.0 10.0 10.0 45.0 10 4.5 40.5 Subtotal 18.0 10.0 10.0 10.0 10.0 58.0 8 4.5 53.5 Agricultural Services Rent - House 3.0 9.0 - - - - 9.0 - - 9.0 Office space 10.0 30.0 - - - - 30.0 - - 30.0 Other expenditures 1/ 20.0 10.0 20.0 20.0 20.0 20.0 90.0 10 9.0 81.0 49.0 20.0 20.0 20.0 20.0 129.0 7 9.0 120.0 Subtotal Trainina Rent - House 3.0 3.0 3.0 - .0 Office space 10.0 10.0 - - - - 10.0 10.0 Other expenditures V/ 10.0 5.0 10.0 10.0 10.0 10.0 45.0 10 4.5 40.5 Training costs V/ 20.0 10.0 20.0 20.0 20.0 20.0 90.0 - - 90.0 Subtotal 28.0 30.0 30.0 30.0 30.0 148.0 3 4.5 143.5 Cooperative - Credit Services Rent - House 3.0 3.0 - - - - 3.0 - - 3.0 Office space 10.0 10.0 - - - - 10.0 - - 10.0 Other expenditures 10.0 5.0 10.0 10.0 10.0 10.0 45.0. 10 4.5 40.5 Subtotal 18.0 10.0 10.0 10.0 10.0 58.0 8 4.5 53.5 Planning and Evaluation House - Office space 10.0 10.0 - - - 10.0 _ _ 10.0 Other expenditures 10.0 5.0 10.0 10.0 10.0 10.0 45.0 10 4.5 40.5 Subtotal 15.0 10.0 10.0 10.0 10.0 55.0 8 4.5 50.5 Schistosmisasis Unit Rent - Office space 10.0 10.0 - - - - 10.0 - - 10.0 Other expenditures 10.0 5.0 10.0 10.0 10.0 10.0 45.0 10 4.5 40.5 Subtotal 15.0 10.0 10.0 10.0 10.0 55.0 8 4.5 50.5 TOTAL 161.0 loO.0 100.0 100.0 100.0 561.0 6 36.0 525.0 o 1/ Includes utilities. statiomary, office supplies. etc. 2/ Food, subsistence, etc. July 22, 1976 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Farm In uts (US 000) Foreign Exchange Year 1 Year 2 Year 3 year 4 Year 5 Total % Cost Local Cost Farm Inputs Incremental Fertilizer 3.9 50.1 109.0 210.3 332.2 705.5 80 564.6 140.9 Rice Seeds and Plantain shades *30.0 57.3 75.2 70.2 14.6 247.3 10 24.7 222.6 Land Development and tools 40.4 86.9 122.9 121.4 1.4 373.0 80 298.4 74.6 Chemical spraying, processing .equipment - 16.1 42.6 73.8 119.3 251.8 52 147.1 104.7 Subtotal 74.3 210.4 349.7 475.7 467.5 1,577.6 66 1,034.8 542.8 Seedlings (Cocoa and Coffee) - 79.2 192.8 282.5 290.4 844.9 10 84.4 760.5 Pedal threshers and Power tillers - 16.5 57.7 126.0 153.0 353.2 80 282.6 70.6 Subtotal 74.3 306.1 600.2 884.2 910.9 2,775.7 51 1,401.8 1,373.9 Hired labor - 38.2 156 3 251 9 213 7 660.1 - 660.1 Total 74 3 344.3 756.5 1,136.1 1,124.6 3,435.8 41 1,401.8 2,034.0 I >4 Aueust 2, 1976 LIBERIA BONG COUNTY AGRICULTURAL DEVEWPMENT PROJECT Road Construction, Upgrading and Maintenance Costs (US$'000) Foreign Exchange Local Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL Z Cost Cost Equipment 719.0 100.0 - - - 819.0 100 B19.0 - Labor Construction - 20.3 40.6 40.6 40.6 142.1 - - 142.1 Upgrading - 24.4 24.4 - - 48.8 - - 48.8 Maintenance - - 12.9 29.7 37.4 80.0 - - 80.0 Subtotal - 44.7 77.9 70.3 78.0 270.9 - - 270.9 Materials - Culverts Construction - 27.0 54.0 54.0 54.0 189.0 90 170.1 -18.9 Upgrading - 42.0 42.0 - - 84.0 90 75.6 8.4 Subtotal - 69.0 96.0 54.0 54.0 273.0 90 245.7 27.3 Operating Costs Construction 88.5 177.0 177.0 177.0 619.5 70 433.7 185.8 Upgrading - 46.6 46.6 - - 93.2 70 65.2 28.0 Maintenance - - 21.2 48.5 61.2 130.9 70 91.6 39.3 Subtotal 135.1 244.8 225.5 238.2 843.6 70 590.5 253.1 Materials and Supplies (local) Construction - 9.0 18.0 18.0 18.0 63.0 10 6.3 56.7 Upgrading - 12.5 12.5 - - 25.0 10 2.5 22.5 Maintenance - - 3.0 6.7 8.3 18.0 10 1.8 16.2 Subtotal - 21.5 33.5 24.7 26.3 106.0 tO 10.6 95.4 TOTAL 719.0 370.3 452.2 374.5 396.5 2,312.5 72 1,665.8 646.7 July 23, 1976 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Consultant Technical Assistance Costs and Research Station Improvement $ '000 Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL Foreign Exchange Local % Cost Cost Rural Dev. Feasibility Study 1/ -- 200.0 -- -- 200.0 100 200.0 Research organization study 2/ 15.0 -- -- _ 15.0 100 15.0 Reorganization of Min. of Agric.3/ 15.0 -- -- -- -- 15.0 100 15.0 __ Rice Research 4/ -- 30.0 30.0 30.0 30.0 120.0 100 120.0 -- Research improvements 5/ -- 150.0 200.0 150.0 150.0 650.0 80 520.0 130.0 TOTAL 30.0 180.0 430.0 180.0 180.0 1000.0 87 870.0 130.0 1/ Third Rural Development Project in Grand Gedah County. 40 man months at $5000/man month (all costs included). 2/ CAES Study: 3 man months at $5000/man month. 3/ Completion of reorganization of Ministry of Agriculture. m M 4/ Continuation of IITA support for Suakoko research. 5/ Improvement to Suakoko after Year 1 study. 0 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPn PROJECT Proposed Financing Plan (Us$'o00) 1 D A U SA ID Foreign Local Foreign Local Foreign Local Total Exchange Cost Exchange Cost Cost Total Exchange Cost Cost Total GOL Buildings 542.0 379.5 162.5 379.5 54.1 433.6 - - _ 108.4 Vehicles 488.1 390.4 97.7 390.4 48.9 439.3 - - - 48.8 Furniture and equipment 371.0 305.8 65.2 305.8 28.1 333.9 - - - 37.1 Salaries and wages 1/ 5,424.0 1,575.o 3,849.0 1,575.0 669.1 2,244.1 - 377.6 377.6 2,802.3 Vehicles - operating cost 676.9 473.9 203.0 473.9 - 473.9 - - - 203.0 General services 561.0 36.0 525.0 36.0 356.7 392.7 - - - 168.3 Farm inputs 2,775.7 1,401.8 1,373.9 - - - 1,401.8 680.0 2,081.8 693.9 Hired labor 660.1 - 660.1 - - - - 660.1 Road construction,upgrading and maintenance 2,312.5 1,665.8 646.7 - - - 1,665.8 68.6 1,734.4 578.1 Research 650.0 520.0 130.0 520.0 65.0 585.0 - - - 65.0 Consultants 150.0 150.0 - 150.0 - 150.0 - - - _ Feasibility study 200.0 200.0 - 200.0 - 200.0 - - - - Village wells 100.0 50.0 50.0 50.0 20.0 70.0 - - - 30.0 Development of banking institutions 150.0 90.0 60.0 90.0 15.0 105.0 - - - 45.0 Subtotal 15,061.3 7,238.2 7,823.1 4,170.6 1,256.9 5,427.5 3,067.6 1,126.2 4,193.8 5,440.0 Contingencies - physical 752.9 361.4 391.5 200.9 68.8 269.7 160.4 48.9 209.3 273.9 - price 4.441.6 2.132.o 2.309.6 972.7 335.7 1.308.4 1.161.5 383.5 1,545.0 1.588.2 Subtotal 5,194.5 2,493.4 2,701.1 1,173.6 404.5 1,578.1 1,321.9 432.4 1,754.3 1,862.1 TOTAL 20,255.8 9,731.6 10,524.2 5,344.2 1,661.4 7,005.6 4,389.5 1,558.6 5,948.1 7,302.1 1/ 757 of local cost (503.4) of Credit and Cooperative Services Unit for H i USAID and 20% of remaining local cost to IDA. August 17, 1976 L18ERIA lONG COUNTY AGRICULTURAL DEVELOPHUNT P'ROJECT IlsreseCash Flot for Cooemo f L.ber- Ye.r 1 Year 2 Year 3 Ser4 Yer S Year 6 Year 7 Year 0 Ye- 9 Year 10 Year 11 Year 12 Year 13-20 Ye-r 21-40 Yea- 41-50 IDA C-ed, 1/ -1,539.0 1,236.6 1,417.0 1,279.0 1,334.0 - ------- 1/SAID Lo... II 805.4 785.2 1,212.3 1,483.6 1,661.6 -- ---- Reveror Pros loAsro I T-r 2/ - - 100.3 161.2 258.7 343.4 434.3 518.6 572.0 608.8 636.0 650.7 658.1 658.1 658.1 17/C -d-,dei 3/ - 5.6 44.2 87.4 131.2 159.1 _178.4 129 200.4 204.2 204.2 204.2 TOTAL INFLOW 2,144.4 2,021.0 2,729.5 2,923.8 3,469.9 387.6 521.7 649.8 731.1 787.2 828.9 851.1 862.3 862.3 862.3 O.ofles of Fords ProJerI Costs 3,360.1 3,113.8 4,130.9 4,116.2 5,094.8 - . - - - . - - Rerorr-o Costs - P-.1 P-o/ort - - - 1,235.0 1,216.0 1,198.0 1,121.0 1,199.0 1,192.0 1,157.0 1,157.0 1,1157.0 1,157.0 Lees D"velop-er Food Srr-,"r 4' - / 4.6/ 27.35 77 5/ 153.05 229.77 278.5' 1 1 7 30.7.).( 357.41 1 35?.45 1 57.4/ TOTAL OO'TFLOW 3,360.1 3,113 0 4,130 9 4,551,6 5,062.5 1,157.5 1,063.0 960.3 842.5 886.8 854.8 806.3 799.6 799.6 799 6 N.1 bIbsl 'SbrOfboe 1.015 7' (1,092.0/ (1,401.4, (1,627.8) (1,197.6/ 769.97 541.37 318.51 111.4) 1 99.67 ( 5.97 44.8 62.7 62.1 62.7 Is/Il Se-ol' 0 IDA Cr-Ar, Pror, p.1 . - - . 70.0 70.0 70.0 210,0 210.0 Ir--res j' 5.6 -16.1 -26.1 -36.2 '46.7 52.5 52.5 -52.3 22.5 52.5 50.0 50.0 00.0 23,5 23.5 USA9/0 L.es.. Pr,,-1p.1 - - - - - -.200.0 200.0 200.0 200.0- -tero 6/0 40 4 70.9 102.3 10. 520.0 120.0 _ _2 U0120.0 120.0 106.2 106.2 106.2 106.2- S.brorsl 13.6 40 1 70.0 107.1 149.0 172.5 172.5 172.5 177.5 172.5 426.2 426.2 426.2 539.7 233.5 I,' A-, alo fiv (0ulflos ftrer D. b, Ser_soi- (1,029.2) (1,132.1/ /11471.4/ (1,734.9) (1,746.6/ 942.45 713.8) 4 91.0) ( 283.9) 1 272.1) 452.15 381.4) 365.5)1 477.0/ 170.85 C-mlatioe (1,029.3) (2,161.4) (3,632.0) (5,367.7) (7.114.3) (8,056.7) (8,770.3) (9,262.5) (9.545.41 (9,817.5) (10,269.6) (10,651.0) (13,559.0) (23,099.0) (24,807.0) 2/1 12/ of .11 -et ,sree'sIf-r , roe --,rr.1 f.,g.re v.les of p-olet ortprt) lagged by 2 y-r.. 3/ 47 of FOB Mo.... - -1- of Proet coffer sod co...o. orprr 'sdo507. eha- of COL eqo-ty h/sr or tho 07., L7MG prof- -sgir) lgged by 00. yea.- 4/ 77. of FOB Moorvis vs Ie of proje- ...o. .. d r-ff.e -rpr.t TDA11 h.tesr .5 b... Cal-1ated at 3/4 of 1%/ or -t.t-ad-g bal.-r year 1-10 -od averged ove ye- 11-50. USA01I1 i,ter-o ha. boo -elcolatd or 27. or -ntst-d-g b.lmor Year 1.10 sod ev-rged ove year 11-40 tr 3%. ANNEX 8 Table 13 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPNENT PROJECT Disbursement Schedule for IDA Credit Cumulative US$ '000 US$ '000 F.Y. - 1977 First Quarter - Second Quarter - - Third Quarter 100.0 100.0 Fourth Quarter 300.0 400.0 F.Y. - 1978 First Quarter 400.0 800.0 Second Quarter 400.0 1200.0 Third Quarter 350.0 1550.0 Fourth Quarter 350.0 1900.0 F.Y. - 1979 First Quarter 350.0 2250.0 Second Quarter 350.0 2600.0 Third Quarter 400.0 3000.0 Fourth Quarter 400.0 3400.0 F.Y. - 1980 First Quarter 350.0 3750.0 Second Quarter 350.0 4100.0 Third Quarter 300.0 4400.0 Fourth Quarter 300.0 4700.0 F.Y. - 1981 First Quarter 350.0 5050.0 Second Quarter 350.0 5400.0 Third Quarter 400.0 5800.0 Fourth Quarter 400.0 6200.0 F.Y. - 1982 First Quarter 400.0 6600.0 Second Quarter 400.0 7000.0 LIBERIA BONG COIINTY AGRICULTURAL DE7ELOP1ENT PROJECTS Coffee Establishment Cost (us$ '000) Foreign Exchange Local Year I Year 2 Year 3 Year 4 Year 5 TOTAL % Cost Cost Rice Seeds and Plantain Shades 1/ Year 1 150 ha 6.8 - - - - 6.8 10 0.7 6.1 Year 2 350 ha - 15.8 - - 15.8 10 1.6 14.2 Year 3 500 ha - - 22.5 - - 22.5 10 2.2 20.3 Year 4 500 ha - - - 22.5 _ 22.5 10 2.2 20.3 Subtotal 6.8 15.8 22.5 22.5 - 67.6 10 6.7 60.9 Land Development and Tools 1/ Year 1 150 ha 12.0 - - - - 12.0 80 9.6 2.4 Year 2 350 ha - 28.0 - - - 28.0 80 22.4 5.6 Year 3 500 ha - - 40.0 - - 40.0 80 32.0 8.0 Year 4 500 ha - - - 40.0 - 40.0 80 32.0 8.0 Subtotal 12.0 28.0 40.0 40.0 - 120.0 80 96.0 24.0 Coffee Seedlings 1/ Year 2 150 ha - 31.7 3.2 - - 34.9 10 3.5 31.4 Year 3 350 ha - - 73.9 7.4 - 81.3 10 8.1 73.2 Year 4 500 ha - 105.6 10.6 116.2 10 11.6 104.6 Year 5 500 ha - - - - 105.6 105.6 10 _ 0 6 95.0 Subtotal - 31.7 77.1 113.0 116.2 338.0 10 33.8 304.2 Fertilizers 1/ Year 2 150 ha - 15.5 7.6 9.7 13.4 46.2 80 37.0 9.2 Year 3 350 ha - - 36.1 17.6 22.7 76.4 80 61.1 15.3 Year 4 500 ha - - - 51.5 25.2 76.7 80 61.4 15.3 Year 5 500 ha - - - - 51.5 51.5 80 41.2 10.3 Subtotal - 15.5 43.7 78.8 112.8 250.8 80 200.7 50.1 Chemicals 1/ Year 2 150 ha - 0.2 0.2 0.3 0.3 1.0 80 0.8 0.2 Year 3 350 ha - - 0.4 0.7 0.7 1.8 80 114 0.4 Year 4 500 ha - - - 0.5 0.5 1.0 80 0.8 0.2 Year 5 500 ha - - - - 0.5 0.5 80 0.4 0.1 Subtotal - 0.2 0.6 1.5 2.0 4.3 80 3.4 0.9 Sprayers 1/ Year 2 150 ha - 2.6 - - 2.6 5.2 80 4.2 1.0 Year 3 350 ha - - 6.0 - 6.0 80 4.8 1.2 Year 4 500 ha - - - 8.5 - 8.5 80 6.8 1.7 Year 5 500 ha - - - - 8.5 8.5 80 6.8 1.7 Subtotal - 2.6 6.0 8.5 11.1 28.2 80 22.f 5.6 Processina Equivpent 1/ Year 2 150 ha - - 2.2 5.2 - 7.4 10 0.7 6.7 Year 3 350 ha - - - 5.2 12.2 17.4 10 1.7 15.7 Year 4 500 ha - - - - 7.5 7.5 10 0.8 6.7 Year 5 500 ha - - - - - - 10 - - Subtotal - - 2.2 10.4 19.7 32.3 10 3.2 29.1 Total Farm Inputs 1/ 18.8 93.8 192.1 274.7 261.8 841.2 44 366.4 474.8 1/ Sea Annex 2, Table 11 for Costs. July 16, 1976 LIBERIA BONG CODWY AGRICUlTURAL DWEWP3UNT PROJECT Cooa Eetablisbient Cost (L'S '000) loreigo IsebCng Local Year I Year 2 Year 3 Year 4 Year 5 TOTAL % Coat Cost Rice Seeds and Plantains Shades 1/ Year 1 300 he 13.5 - - _ 13.5 10 1.4 12.1 Year 2 700 - 31.5 - _ _ 31.5 10 3.2 28.3 Year 3 1,000 - - 45.0 - - 45.0 10 4.5 40.5 Year 4 1,000 - - - 45.0 - 45.0 10 4.5 40.5 Subtotal 13.5 31.5 45.0 45.0 - 135.0 10 13.6 121.4 Land Develoomnt and Tools 1/ Year 1 300 24.0 - - - _ 24.0 80 19.2 4.8 Year 2 700 - 56.0 - _ _ 56.0 80 44.8 11.2 Year 3 1,000 - - 80.0 - - 80.0 80 64.0 16.0 Year 4 1,000 - - - 80.0 - 80.0, 80 64.0 16.0 Subtotal 24.0 56.0 80.0 80.0 - 240.0 g0 192.0 48.0 Cocoa Seedlinas 1/ Year 2 300 - 47.5 4.8 - _ 52.3 10 5.2 47.1 Year 3 700 - - 110.9 11.1 - 122.0 10 12.2 109.8 Year 4 1,000 _ _ - 158.4 15.8 174.2 10 17.4 156.8 Year 5 1,000 - - - 158.454 15.8 142.6 Subtotal - 47.5 115.7 169.5 174.2 506.9 10 50.6 456.3 Fertilizers 1/ 'Isar 2 300 20.8 5.0 19.4 26.7 71.9 80 57.5 14.4 Year 3 700 - - 48.6 11.8 45.4 105.8 80 84.6 21.2 Year 6 1,000 _ - - 69.5 16.8 86.3 8O 69.0 17.3 Year 5 1.000 _- _ - 69.5 69.5 la 55.6 13.9 Subtotal - 20.8 53.6 100.7 158.4 333.5 80 266.7 66.8 Chemicals V/ Year 2 300 - 0.3 0.3 0.3 0.3 1.2 80 1.0 0.2 Year 3 700 - - 0.7 0.7 0.7 2.1 80 1.7 0.4 Year 4 1,000 - - - 1.0 1.0 2.0 80 1.6 0.4 Year 5 1,000 - - - - 1.0 1.0 60 0.8 0.2 Subtotal - 0.3 1.0 2.0 3.0 6.3 80 5.1 1.2 Spravers 1/ Year 2 300 - 10.5 - - 10.5 21.0 t0 16.8 4.2 Year 3 700 - - 24.5 - - 24.5 80 19.6 4.9 Year 4 1,000 - - -- 35.0 - 35.0 80 28.0 7.0 Year 5 1,000 - - - - 35.0 35.0 SO 28.0 7.0 Subtotal - 10.5 24.5 35.0 45.5 115.5 80 92.4 23.1 Processing EKauipent 1/ Year 2 300 - - - - 21.0 21.0 10 2.1 18.9 Year 3 700 - - - - - Year 4 1,000 - - - - Year 5 1,000 - - - - - - Subtotal - - - - 21.0 21.0 10 2.1 18.9 TOTAL 37.5 166.6 319.8 432.2 402.1 1,358.2 46 622.5 735.7 1/ See An.ex 2, Table 13 for Costs. July 16, 1976 Z- I~~~~~~ I . A . S I A 3. 63, ,CX.- - 5X 61 5X 592 I 59 6. 52251 1.11562 - - - 1.1 9.2~~~~~~~~~~~~~~~4 X~ 6. 41 Im ll:'~ . - . 2. 13 IX 37 . I..2 65 ,121 455 52622,21 . 65 121 5~~ ~ ~~~~ ~ ~~~~1 2 11.7 61.1 II 25 59.2 3225 4 63 .- - 56 395I5. 32255. . . 5 1. . .1 14. 6. 1,61,121 1 I 1.7 6.S 5.5 7~~ ~ ~~~~~ ~~~~~ 7 - 51.5 5 55 1. 5222157252 . 7~~ ~ ~~~~~.5 . 25 1. 4. 9 3. . 6,35,521 . 5.2 15.2 55.5 55.2 25.5~~~~~~~~~~4 91 5.1 1. 596,2. II~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~Z4 1 52225 59962 - - - 1616~ ~~- .261.2 -4 4152 5214 561 . - - 222 12. 5. 26,31- - 5. 62. 12. 15I - 621 5216 15ll110 52 2. 57 - - 6. 2,652201 - 35 2 21.7 60 7~~3 55.5 2. 2. z/2.62.4 4 61 . ANNEX 9 Page 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Market Prospects and Prices A. World Demand, Supply and Price Outlook 1/ Price 1. Rice is the staple food of approximately half the world's population. In Asia, rice is the major source of calories for 2 billion people; while in many parts of Africa, the Near East and Latin America rice is the "preferred" grain. Despite this predominance annual production, rice, roughly 220 million tons (milled), is only 55% of annual wheat production, or 20% of annual wheat and coarse grains production. 2. The market for rice is characterized by extreme uncertainty and instability. This instability stems from two factors: first, with 90% of the world's rice being grown in Asia, where monsoon conditions affect export- ing and importing countries simultaneously and periods of strong import demand necessarily coincide with periods of reduced export availability, instability is to some extent inevitable. Second, with 96-97% of production being con- sumed domestically, the residual which remains to enter world trade is small and highly susceptible to fluctuations in production. Thus, with the slight variation is tradable supplies of the past five years, export prices increased sixfold between April 1971 and April 1974 and have since fallen to nearly one third of the 1974 peak. This instability calls not only for measures to strengthen the production base in the main rice consuming countries and simultaneously to reduce annual fluctuations, but for the establishment of rice stocks which can provide adequate protection against production short- falls. 3. World demand and supply of rice are both projected to increase by 2.4% per annum between 1974 and 1985. The growth rates of demand imply an increase in world per capita consumption of rice from 55 kilograms to 58 kilograms between 1974 and 1985. The forecast 1980 and 1985 price for rice (Thai 5% br., f.o.b. Bangkok) in constant 1976 dollars is $359; this cor- responds in current dollars to a price of $484 and $679 in 1980 and 1985 respectively. 1/ This annex has been largely summarized from Annex 1 of Report No. 814/76. ANNEX 9 Page 2 Coffee 4. Total world supply of coffee is expected to increase from an average of 73 million bags in 1972-74 to 91 million bags in 1980 i.e., at an annual rate of 3.21%. The rate of growth will be about the same in 1980-85, but no further growth is estimated for 1985-90. The high levels of growth during 1980-85 are the lagged effects of anticipatory price increases, resulting from the heavy frost in Brazil's coffee producing areas in 1975. 5. World demand is expected to grow by 1.6% over the period 1973-80 and by 3.4% over the period 1980-85. The low rate of growth in the first period is due to the unfavorable income development in 1974 and 1975 and to the strong increases in coffee prices that followed the Brazilian frost, (coffee has high income and price elasticities of demand). The period 1980-85 can be expected to see a strong recovery of demand. Incomes are expected to in- crease at 5.2% p.a. during this period, as opposed to 3.2% p.a. in 1973-80, and real coffee prices will come down steadily. In consequence, coffee con- sumption is expected to grow at 3.4% p.a. over this period, after which the rate of growth will slow down to about 1.7% in 1985-90. 6. Consumption in the producing countries is expected to grow by 2.8% p.a. over the period 1973-80, by 5.2% p.a. in 1980-85, and 3.1% p.a. in the five-year period thereafter. In the USA, consumption is assumed to decline slightly. Consumption in the other importing regions will increase by 1.9% p.a. from 1973 to 1980, by 3.8% p.a. from 1980 to 1985 and by 1.6% p.a. from 1985 to 1990. By implication, the annual rates of growth of world import demand for coffee over these three periods will be around 1.1%, 2.8% and 1.1% respectively. 7. The price of coffee (Guatemalan prime washed, spot New York) was 62g per pound in 1973. After rising to 724 in the first half of 1974, it dropped sharply in the second half of that year, stabilizing at 50-554 per pound. It remained at this level until a heavy frost in July 1975 destroyed most of Brazil's prospective 1976/77 crop. The price started rising rapidly, reaching 1304 in May 1976. This price is higher than is warranted by the actual supply-demand balance, and once the size of Brazil's 1976 crop is known, it is expected to decline. The average price for 1976 is expected to be 1144, and the 1977 price is expected to average 1114. After that, the price will rise again in current terms, but real prices will decline further to reach a low of 624 (in 1974 dollars) in 1985. 8. In December 1975, a new International Coffee Agreement was nego- tiated providing for the introduction of export quotas whenever: (a) The average of the indicator prices of Other Mild Arabicas and Robustas falls for 20 consecutive market days below its 1975 level of USt63.23 a pound. ANNEX 9 Page 3 (b) The composite indicator price (on whose nature the International Coffee Council still has to decide) falls for 20 consecutive market days more than 15% below its average during the preceding year, and at the same time the average of the indicator prices of Other Mild Arabicas and Robustas does not exceed its 1975 level by more than 22.5% (i.e., does not exceed USJ77.46 a pound). Of the total available quota, 70% will be distributed over the exporting countries according to their recent export performance. The other 30% will be distributed in proportion to the exporting countries' carry-over stocks at the end of the previous crop year. 9. The new Agreement has been concluded for a period of six years. It will enter into operation on October 1, 1976. QuoLas will pvbLably not be introduced during 'the first two years of the Agreement, since a drop in the average indicator price of Other Mild Arabicas and Robustas below USJ77 in current terms is highly unlikely. However, the Agreement provides for a revision of the trigger price levels for its second and third two-year period. During this time, real prices are expected to start falling, and export quotas will probably have to be introduced. Cocoa 10. Since all cocoa is produced in the developing world and most of it is consumed in developed countries, the bulk of the annual cocoa crop enters international trade. Developing countries' export of cocoa are mostly in the form of beans; however there is an increasing tendency for cocoa to be manu- factured into intermediate products in the producing countries before being exported. Over one-fifth is now processed into intermediate products, com- pared with about one-eight in the early 1960s. 11. Five countries (Ghana, Nigeria, Brazil, Ivory Coast and Cameroon) produce about 80% of world cocoa output, and about 70% of world production originates in West Africa. World production grew at annual average rates of 3.3% from 1954/56 to 1972/74 and 2.3% from 1967/69 to 1972/74. Produc- tion is expected to grow at a rate of 2.8% between 1972/74 and 1980, reach- ing around 1.8 million tons in 1980; and at 3.4% in the period 1980-85 reaching around 2.1 million tons by 1985. Demand during 1980 and 1985 are expected to be about 1.8 million and 2.0 million tons respectively. 12. Real prices of cocoa decreased on average by 0.8% annually from 1954/56 to 1972/74, but increased by 2.3% per annum from 1967/69 to 1972/74. The high prices in recent years reached a peak of 98.2Ulb. (spot Accra, New York) in 1974. Projected real prices are expected to decline annually at a rate of 5.6% from 1972/74 to 1980 and by 3.4% on the average from ANNEX 9 Page 4 1980 to 1985. Major price fluctuations in the past reflected erratic changes in production in the face of fairly steadily rising demand. The prices projected to 1980 and 1985 follow a smooth pattern representing the expected trend, but prices in any one year may vary considerably from the level indi- cated, due to short-term variations in supply. 13. The three-year International Cocoa Agreement which came into force in 1973 is due to expire on September 30, 1976. It is expected to be suc- ceeded by a modified agreement, negotiated in 1975, from 1976/77 to 1978/79. The basic objectives of the agreements are to prevent excessive cocoa price fluctuations, and to help stabilize and increase producing countries' export earnings from cocoa while also taking account of the interests of consumers in importing countries. The main features are: (i) annual export quotas; (ii) a buffer stock of up to 250,000 tons of cocoa; and (iii) an indicator price range to be defended by export quota adjustments and buffer stock operations. The price range for the first Agreement, originally 23-32 #/lb., is currently 29-1/2 - 38-1/24/lb. The second agreement is similar to the first, and its price range will be 39 - 554/lb. 14. The participants in the current agreement include exporting members (representing over 90% of world production and exports) and importing coun- tries (representing over 70% of world imports). However, the largest import- ing country, the United States, is not a signatory to the first agreement. 15. The new agreement will enter into force on October 1, 1976, if by then at least five major exporting countries with at least 80% of the basic quotas and importing countries with at least 70% of total imports have rati- fied or at least given notice of their provisional participation in the agreement. It is possible that the new agreement might not enter into force, as both the United States and the Ivory Coast are non-signatory countries. In that event, the existing agreement may be extended. B. Market Prospects for Project Output 16. Rice: Rice is the main staple in the diets of the Liberians. Total present consumption is estimated between 140,000 - 150,000 metric tons. Between 1967-75 annual imports averaged about 40,000 tons (with considerable year-to-year variations); however, since 1973 annual imports have tended to decrease and total imports during 1975/76 season are about 30,000 metric tons. Future growth in rice production in Liberia is likely to be higher than it has been in the past due to the current GOL priorities on attaining national self-sufficiency. However, consumption would increase at a faster pace due to a population growth rate of about 3% and substantial income growth from development activities result in a consumption demand on the order of about 250,000 tons during the early 1980s. Therefore, domes- tic market would have no difficulty in absorbing the project-induced rice production. ANNEX 9 Page 5 17. However, appropriate policy measures need to be initiated to facilitate large scale commercialization of this crop. First, rural areas of Liberia are largely self-sufficient in rice and therefore almost all of the marketable surplus would have to find markets in the urban centers of population. Public action may be required for fostering the development of the necessary marketing institutions, e.g. processing, transportation, storage, etc. Secondly, all imported rice is presently consumed in the urban centers and it is believed that urban population have preferences for such rice. 18. Coffee: Liberia is not yet considered to be a major producer of coffee and its total exports of about 83,000 bags (1968-75 average) is less than 0.2% of world production. However, its export tonnages are higher than domestic production because of smuggling from neighboring Sierra Leone and Guinea (estimated to be about 20-25% of total exports) 1/ Liberia's present production and exports are well below the minimum quota of 100,000 bags (approximately 6,000 tons) established under the 1976 In- ternational Coffee Agreement. The incremental output from the project, although subtantial in terms of existing Liberian production, would be insignificant in terms of total world production, supply and demand, and therefore would have no impact on the world price situation. Besides, the total Liberian production including the full development output from the project would still be within the quota restrictions and no marketing dif- ficulties are anticipated. However, any further expansion might run into quota difficulties 2/ and in view of this, assurances will be sought from GOL to the effect that before proceeding with further coffee development they would (a) carefully analyze the market constraints and (b) have con- sultation with the Bank. 19. Cocoa: Liberia is not a member of the International Cocoa Organ- ization and therefore not limited by quota restrictions like coffee; its present exports do not exceed 0.2% of world production. Given Liberia's insignificant share of the world cocoa market, no market difficulties will be faced in respect to the project incremental output. With proper quality improvement, Liberia may even find an enlarged export market. 20. Since the proposed expansion for coffee and cocoa is covered by existing consultative agreements, both ICA and ICO have been informed of the scope of the project. 1/ See para 34 Report 426a-LBR 2/ Presently a project prepared by an Ivorian company SATMACI for 3,000 ha of coffee is under consideration. ANNEX 9 Table 1 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT International Market Prices, Actual 1955-75, Forecast 1976-85 Under Alternative Assumptions, In Current and 1976 Prices Rice Calendar Years Thai, 5% br, f.o.b. Bangkok (US$ per metric ton) A. Current Prices Actual 1955 142 1960-62 138 1963-65 139 1967-69 198 1970-72 140 1973 350 1/ 1974 542 1975 363 Jan. - Mar. 1976 260 Forecast 1976 300 1977 340 1978 393 1979 437 1980 484 1985 679 B. In 1976 Prices 2/ 1976 300 1977 314 1978 336 1979 347 1980 359 1985 359 1960-69 Average 368 1967-69 Average 443 1970-72 Average 267 1/ Partly estimated 2/ Deflated by the Economic Analysis and Projections Department, Index of International Prices(1974=100). ANNEX 9 Table 2 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Economic and Financial Fa rmnate Price (Import Substitution Values) Rice 1980 1985 Economic Financial Economic Finanical …------- US Dollars per metric ton FOB Bangkok 1/ 326 326 326 326 Freight and Insurance 2/ 60 60 60 60 Overseas Commission 31 13 13 13 13 CIF Monrovia 399 399 399 399 Importer's Margin 4/ 17 50 17 50 Import Tax 5/ - 12 - 12 Port Expenses 6/ 13 13 13 13 Value at Monrovia 429 474 429 474 Transport to Monrovia 7/ 21 30 21 30 Value at Gbarnga 408 444 408 444 Paddy Equivalent (65%) 265 289 265 289 Milling Cost 8/ 9 22 7 17 Bags and Transport 9/ 15 15 15 15 Value of Bran 10/ 4 4 4 4 Farmgate price 237 248 239 253 1/ Based on IBRD price projections for Thai 5% broken in constant 1976 dollars at 10% quality discount. 2/ LPMC data. 3/ 4% of FOB Bangkok. 4/ 12.5% of CIF Monrovia, 2/3 importers profit, 1/3 economic cost 5/ 50i per 100 kg. 6/ Harbor dues, inspection fees, etc. 7/ Transport from Gbarnga to Monrovia at $30/ton, 70% economic cost and 30% in profits and taxes, etc. 8/ Milling cost at 2.24/kg respectively, at 75% and 100% efficiency, 2/5 economic cost. 9/ $0.60 per 100 lb. bag whereby bag is used several times, transportation 0.504/bag. 10/ 8% of paddy weight in bran C 4.4J/kg. ANNEX 9 Table 3 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Coffee Prices In Current and Constant Terms Price 1/ …--------------…USt/lb.------------------ Current '74 Constant '76 Constant 1954/56 72.2 149.9 183.7 1967/69 39.6 72.6 88.5 1970/72 49.1 76.9 93.7 1973 62.0 75.9 92.5 1974 66.2 66.2 80.7 1975 65.3 57.0 69.9 1976 114.0 94.0 114.0 1977 111.0 84.0 102.4 1978 116.0 81.0 99.0 1979 118.0 77.0 93.8 1980 123.0 75.0 91.3 1985 143.0 62.0 75.7 1/ Guatemalan Prime Washed, Spot, New York Calendar Year Average. Source: IBRD Commodities Division ANNEX 9 Table 4 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Economic and Financial Farmgate Price Clean Coffee 1980 1985 Economic Financial Economic Finanical ------ US Dollars per metric ton----------- Spot New York 1/ 1935 1935 1604 1604 Insurance and Freight 2/ 96 96 96 96 Overseas Selling Commission 3/ 39 39 32 32 FOB Monrovia 1800 1800 1476 1476 Port Expenses 4/ 13 13 13 13 LPMC cost 5/ 198 198 162 162 Transport to Monrovia 6/ 21 30 21 30 Agric. Development Fund 7/ - 126 - 103 Price Stabilization Fund 8/ - 90 - 74 LPMC Profit 9/ - 144 - 118 Value at Gbarnga 1568 1199 1280 976 Bags and transport 10/ 20 20 20 20 Farmgate price clean coffee 1548 1179 1260 956 Farmgate price cherry coffee 882 672 718 545 1/ Based on IBRD price projection for dry coffee beans in 1976 constant dollars minus 4% for quality discount. 2/ Freight and Bunker surcharge, etc., $83, plus insurance. 3/ 2% of spot New York price 4/ Harbor dues, inspection fees, etc. 5/ 11% of FOB Monrovia value. 61 Transport from Gbarnga to port at $30/ton, 70% economic cost & 30% profits, taxes, etc. 7/ 7% of FOB Monrovia value. 8/ 5% of FOB Monrovia value. 9/ 8% of FOB Monrovia value. 10/ 20 bags (50 kg) $15 and local transport $5. ANNEX 9 Table 5 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPNENT PROJECT Cocoa Prices - In Current and Constant Terms Current Constant 1974 Constant 1976 ---------------------E4/lb. ---- - ---- 1954 57.8 123.0 149.7 1955 37.5 78.6 95.9 1956 27.3 55.5 67.7 1957 30.6 60.2 73.4 1958 44.3 88.6 108.0 1959 36.6 74.2 90.6 1960 28.4 56.1 68.4 1961 22.6 44.3 53.9 1962 21.0 41.3 50.2 1963 25.3 49.3 60.1 1964 23.4 45.4 55.3 1965 17.3 33.0 40.2 1966 24.4 45.5 55.5 1967 29.1 53.9 65.7 1968 34.4 64.1 78.0 1969 45.7 81.9 100.0 1970 34.2 57.4 69.9 1971 26.8 42.3 51.6 1972 32.3 46.9 57.2 1973 64.4 78.8 96.0 1974 98.2 98.2 119.8 1975 74.6 2/ 65.2 79.6 1954-57 40.8 85.7 103.7 1967-69 36.4 66.6 81.3 1972-74 65.0 74.6 94.9 Protected 1976 80.0 66.0 80.0 1977 80.0 61.0 73.8 1978 80.0 56.0 68.3 1979 81.0 53.0 64.4 1980 82.0 50.0 60.9 1985 97.0 42.0 51.3 1/ Spot Accra, New York. 2/ Preliminary. ANNEX 9 Table 6 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Economic and Financial Farmgate Price Cocoa Bean 1980 1985 Economic Financial Economic Financial -------US Dollars per metric ton-------- Spot New York 1/ 1278 1278 1076 1076 Insurance & Freight 2/ 91 91 91 91 Overseas Selling Commission 3/ 26 26 21 21 FOB Monrovia 1161 1161 964 964 Port Expenses 4/ 13 13 13 13 LPMC Cost 5/ 116 122 96 96 Transport to Monrovia 6/ 21 30 21 30 Agric. Development Fund 7/ - 81 - 67 Price Stabilization Fund 8/ 58 - 48 LPMC Profit 9/ - 93 - 77 Value at Gbarnga 1011 764 834 633 Bags and Transport 10/ 20 20 20 20 Farmgate price 991 744 814 613 1/ Based on IBRD price projection for dry cocoa beans in 1976 constant dollars minus 5% for quality discount. 2/ Freight and Bunker surcharge, etc., $83, plus insurance. 3/ 2% of spot New York price. 4/ Harbor dues, inspection fees, etc. 5/ 10% of FOB Monrovia value. 6/ Transport from Gbarnga to port at $30/ton, 70% economic cost and 30% in profits, taxes, etc. 7/ 7% of FOB value. 8/ 5% of FOB value. 9/ 8% of FOB value. 10/ 20 bags (50 kg) $15 and local transport $5. ANNEX 10 Page I LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Economic Analysis 1. The annual incremental costs and benefits used in calculating the economic rate of return to the project are given in Table 1. The basic rate of return is 21.35%. Table 2 shows the results of the sensitivity analysis. 2. The following assumptions and methods were used in calculating the benefit and cost stream: (a) Project Life: Project life is assumed to be 30 years from Project Year 1 and no residual value is attributed after that period. All development activities will be initiated and substantially completed by the end of the proj- ect development period. (b) Project Costs: (i) all identifiable taxes and duties on goods and services are excluded; (ii) price contingencies are excluded but physical contingencies (at 5% of base costs) have been included during the economic life of the project; (iii) all material farm in- puts (seeds, seedlings, fertilizers, agricul- tural chemicals, tools, equipment) have been costed at full landed price in the project area; (iv) all hired labor has been costed at full market wage rate but family labor at 50% of the market wage rate to reflect average opportunity cost and productivity in the area; (v) 60% of the investments in feeder road development has been included in the economic costs because the improved road network will also be used for non-project activities and benefits derived from such uses would be sufficient to offset 40% of the costs that have been ommitted; (vi) all costs associated with the implementation of research facilities, development of banking services, feasibility studies for future projects, village wells and consultants and an amount of US$0.6 million out of the investment on staff training have been excluded from economic costs as these are investments and technical assistance for de- velopment of socio-economic infrastructure; (vii) the extension coverage of agriculture and cooperative ANNEX 10 Page 2 credit officers would gradually revert to a normal staffing level during the post- project period (from 1982 onwards) because by then improved technology would be ade- quately diffused and local service insti- tutions would be able to take over a number of farm support services. (c) Benefits: (i) yield and production assump- tions are given in Annex 2, Tables 9 & 10. It has been assumed that full development yields would be maintained through the eco- nomic life of the project; (ii) the value of project milled rice output is treated as for- eign exchange savings (import substitution) and the value of coffee and cocoa as foreign exchange earnings; (iii) economic farmgate prices are based on IBRD projections for 1985 in 1976 dollars and have been adjusted for quality differentials (see Annex 8, Tables 2, 4 and 6); (iv) no additional bene- fits due to road improvement/development are taken into consideration. 3. The economic rate of return is not sensitive to a reduction of the project economic life by five years. However, it is sensitive to delays in the realization of project benefits and increased costs and lowered benefits. Details are at Table 2. LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Incremental Economic Costs and Benefits Year I Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12-30 Incremental Costs 1/ Civil Works 372 169 - - - Vehicles 212 47 5 23 201 25 25 25 25 25 25 25 Equipments 274 69 22 6 - - - - - - Salaries & Wages 923 1,040 1,140 1,177 1,144 350 350 350 350 350 350 350 Vehicle Operating 111 141 141 141 142 60 60 60 60 60 60 60 General Services 161 100 100 100 100 20 20 20 20 20 20 20 Feeder Roads 431 222 271 225 238 - - - - - - Farm Inputs 74 306 600 884 911 684 761 743 666 734 727 692 Hired Labor - 38 156 252 214 96 - - - - - Families Labor 61 231 629 858 522 798 823 854 889 913 935 946 Subtotal 2,619 2,363 3,064 3,666 3,472 2,033 2,039 2,052 2,010 2,112 2,127 2,103 LeSb Investment on Training 200 100 100 100 100 - - - - - Present Extension Ser- vices 2/ 42 46 51 56 61 68 74 82 90 99 108 120 TOTAL 2,377 2.217 2,913 3.510 3,311 1.965 1.965 1.970 1.920 2.013 2.013 1.983 With 57. Contingencies 2,496 2,328 3,060 3,686 3,477 2,063 2,063 2,069 2.016 2,114 2,120 2,082 Incremental Benefits 3/ Value of Rice 88 314 736 1,228 1,798 2,029 2,089 2,089 2,089 2,089 2,089 2,089 Value of Coroa - - - - 49 212 537 1,026 1,246 1,897 2,198 2,442 Value of Coffee - - - 57 284 731 1,326 1,764 1,890 1,890 1,890 1,890 Value of Plantain - - 135 450 765 900 450 - - - - - TOTAL 88 314 871 1.735 2.896 3.872 4.402 4.879 5.225 5.876 6,177 6.421 Net Benefits (2,408) (2,014) (2,189) (1,951) ( 581) 1,809 2,339 2,810 3,209 3,762 4,057 4,339 1/ T-rom Table 1 Annex 8; excludes all cost of resasrch, studies, consultants, village wells, banking services and 40% of road investments. 21 1975-76 budget for Song County extension services US$42,000 compounded at 10% per annum. 3/ Farmgate econom2ic value of rice, cocoa & coffee based or IBRD price projection for 1985 in 1976 constant dollars (see Tables 2,4,6, Annex 8). Plaiutain based on domestic market prices. ANNEX 10 Table 2 LIBERIA BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT Economic Rate of Return and Sensitivity Analysis % of Original Estimates Costs Benefits Rate of Return* A B 100 100 21% 16% 100 90 19% 13% 100 80 16% 10% 110 100 19% 13% 120 100 16% 11% 120 80 11% 4% 100 100 1/ 21% 16% 100 100 2/ 14% 10% * -QA - Family labor shadow wages at 50%. B - Family labor costed at full market rate. 1/ Project life reduced by 5 years. 2/ 2-year delay in benefit stream. IBRD 12367 lIBERIA SIERRA G LEONE C GUINEA BONG COUNTY AGRICULTURAL LO ! %. \IVORY DEVELOPMENT PROJECT COAST PROJECT AREA MONR IA - DISTRIBUTION OF CLANS 50 * Project Headquarters ___ _ Proposed Wood Pulp Concession G U I N E A Primary Roads ..Clan Boundaries - h Chiefdom Boundaries * W R>IA ---County Boundaries / .._ International Boundaries i. KPAQUELLIE // , / * )) Belefuanai i... sl *- / -PANTA C°0 A MENQUELLEH 0 _ JORPOOL . e..t 2- P KPATAWEE: !ba, . o .*------- -.* < *-G---k-- ePala/ t Y*.y*.WALLAHUN;- *-- k Gban . L. . SA0K JORQUELL E - i BORYEMAH 9 - , : GFB,0 4 Ml' 'otots SHEANSUE , . - - -/ : *~~~~~~. :. :.YAINDAWOUN' c. .$C, **SENWEINJ o 5 ip O KILOMETERS IKOKOYAH , 1p The boundaries shown on this map do not MILES imply endorsement or acceptance by the World Bank and its affiliates. AUGUST 1976 S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ D13 -W g~~~~~~~~~~f -Ano , Hnd s Gon4glll =. ... ...9X 1T4 XA '00\ r 4t v sa |C iE ,s J r L i e ; 0)S: dE0ti - , \ Xy *e D 0 f X ;?~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~n E r. x,:,.'> qXUNtYi;%\; ' ''\'0e . A.U0 i \2'&;LS_'\0 \q0 9/ qsx v 't4- 1k 9 i:~~~~ ~~ ~~~ ~~~~~ EAU N. T: -jy 0. < 0L( : < 5INO COUNTY XQ ~~~~~~MN ; T-WesrvlL8 S, t, 0' 0 1 _n ;X. ' | LIBERIA BONG COUNTY AGRICUILTURAL DEVELOPMENT PROJECT PROJECT ORGANIZATION Ministry of [A griculture Piroject Steering Project Committee . Adviso-.y Committee Ministry of Public Works Road Unit e _____ Project Evaluation Management Monitoring Ministry of Health Schistosomiasis Unit Experimentation ~oopratve CAES I | | Development | CAES Survey and Commercial | Registration r Service LIPA NSA LM County Land L LBDI LPMC | Commissioner LP B World Bank-16393