Report No. 497a-UNI A Appraisal of m V 3 EPT Nucleus Estate/Smaliholder Oil Palm Project Mid-Western State N igeria v iRETURN TO NigaFILE CuP il REPORTS D7S March 28, 1975 WITHIN Agriculture Projects Department ONE WED j Western Africa Regional Offi(e Not for Public Use .-. Doc ument of the International Bank for Reconstruc-tion and Development International Development Association This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. CURRENCY EQUIVALENTS Currency Unit : Naira (N) US$ 1 N o.66 N 1 US$ 1.52 Ni = Kobo 100 WEIGHTS AND MEASURES Unless otherwise stated, all weights and measures used in this report are metric: 1 metric (m) ton = 0.98 long ton 1 long ton = 1.016 m ton long ton = 2,24o lb 1 hectare (ha) = 2.47 acres (ac) 1 acre (ac) = 0.405 ha 1 kilometer (km) = 0.62 mile ABBREVIATIONS AA : Agricultural Assistant AO Agricultural Officer CFS : Mid-Western Nigeria Central Financing Society Ltd. FDA Federal Department of Agriculture ffb : fresh fruit bunches FMANR Federal Ministry of Agriculture and Natural Resources FMG Federal Military Government MAINR : Ministry of Agriculture and Natural Resources MEU Monitoring and Evaluation Unit MWNCF Mid-Western Nigeria Cooperative Federation Ltd. MWSMB Mid-West State Marketing Board MWT Ministry of Works and Transport NAB : Nigerian Agricultural Bank NEWS s Nigerian Economic Welfare Services Ltd. NIFOR Nigerian Institute for Oil Palm Research NISER Nigerian Institute for Social and Economic Research NPMC Nigerian Produce Marketing Organization OPC Oil Palm Company Ltd. PAC Planting Authorization Committee PAMOL Unilever subsidiary in Nigeria; former owner Ajagbodudu estate SAO Senior Agricultural Officer SMU : Smallholder Management Unit (Western and East Central State) TCU Tree Crop Unit (in Mid-Western State) FISCAL YEAR April 1 - March 31 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE TABLE OF CONTENTS Page No. SUTMARY AND CONCLUSIONS . ............... *............. i - iii I. INTRODUCTION ..............................................so...... 1 II. BACKGROUJND .............................................1 General ........* ***** ***** ....................... ....... I Agricultural Sector ........... . ....... .......... 1 Oil Palm Production .................... , ....... . 2 Institutions ........... ................................... 3 III. THE PROJECT AREAS . ................ #. ... . .......... 3 IV. THE PROJECT .................. . ..................... . 5 A. General Description ...*.... ... .................. 5 B. Detailed Features .... .... ....... . ....... ...... ... .. 7 V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS .......... .. 11 Project Costs ... ............... 11 Financing Arrangements .............S...*.......... 13 Procurements ........................... ......... 15 Disbursements ........ o**...... ... 00.......... .................. 15 Accounts and Audits ..... .............. ....o... 16 VI. ORGANIZATION AND MANAGEMENT ..o ........... 17 The Tree Crop Unit ... .... . .. . .o. . .......... . . . . 17 The Oil Palm Company . .................... 18 Federal Department of Agriculture's Monitoring and Evaluation Unit ... ...... ...... .0 ........ 19 VII. PRODUCTION, MARKETING, FARMER BENEFITS, FINANCIAL ItMPLICATIONS TO GOVERNMENT .... ................... 21 Yields and Production .......o ............... 21 Markets and Prices .............................. 21 This report is based on the findings of an appraisal mission composed of Messrs. J. Bevan, M. Crowe, R. van der Lugt (Bank) and A. Bergan, J. Bogaerts, Osman Farruk, C. Hartley and C. Redfern (consultants). Table of Contents (Cont'd) Farmer Benefits .............. 22 Financial Returns to OPC .. 23 Financial Implications for the State Government . 24 VIII. BENEFITS AND JUSTIFICATION ........................... 24 IX. RECOMMENDATIONS .25 ANNEXES 1. State Institutions 2. Planting Program under the Project 3. Organization and Management A. Tree Crop Unit (TCU) B. The Oil Palm Company (OPC) C. Price Policy Committee and Fresh Fruit Price Calculation Chart WB 8364(2R) Tree Crop Unit Chart WB 8362 Regional Unit Chart WB 8701 Oil Palm Company Table 1 - OPC Financial Results and Estimates 4. Establishing Processing Facilities, Fruit Collection System and a Road Network A. Processing Facilities, Phasing and Costs B. Fruit Collection System C. Road Improvement Program Table 1 - Production in Eastern and Western Area and Percent Distribution Table 2 - Ajagbodudu Estate Production 1958-1972 Table 3 - Palm Oil Mills - Capital Expenditure Table 4 - Sapele Area Mill - Operating Cost of Mills Table 5 - Agbor Area Mill - Operating Cost of Mills Table 6 - Percent of Projects in Fruit Collection Estates Table 7 - Smallholder Fruit Collection Table 8 - Estate Fruit Collection 5. Project Costs Table 1 - Summary of Project Costs Table 2 - Smallholder Field Establishment Cost (per ha) Table 3 - Smallholder Field Establishment Cost Table 4 - TCU Headquarters Investment Costs and Recurrent Expenditure Table of Contents (Cont'd) Table 5 - TCU Headquarters, Staff and Salaries Table 6 - TCU Oil Palm Division, Regional Units Table 7 - Road Improvement Program Table 8 - Schedule and Cost of Training Table 9 - Nsukwa and Mosogar Field Establishment Costs (per ha) Table 10 - Ajagbodudu Estate Field Establishment Costs (per ha) Table 11 - Nsukwa and Mosogar Estate Field Establishment Costs Table 12 - Ajagbodudu Estate Replanting Field Establishment Costs Table 13 - OPC Management and Overheads, Nsukwa and Mosogar Table 14 - OPC Management and Overheads, Ajagbodudu Estate Table 15 - Palm Oil Mills, Investment Costs Table 16 - Fruit Collection Investment Costs Table 17 - Federal Department of Agriculture - Monitoring and Evaluation Unit/Tree.Crop Section; Benin Table 18 - Field Studies of Small-scale Processing in Wild Palm Groves and Equipment Needed at NIFOR Training Center Appendix 1 Smallholder Maintenance and Harvesting Cost (per ha) Appendix 2 Smallholder Maintenance and Harvesting Costs Appendix 3 Estate Harvesting and Maintenance Costs (per ha) Appendix 4 Estates and Ajagbodudu Estate Project Replanting; Maintenance and Harvesting Costs 6. Disbursements Table 1 - Financing Plan Table 2 - Detailed Financing of Project Costs Table 3 - Quarterly Disbursement Schedule Table 4 - Sources of Finance and Existing NAB Loan 7. Production Estimates for the Projects Appendix 1 Yields on Already Established Ajagbodudu Estate Table 1 - Project Production of ffb Table 2 - Project Production of Palm Oil Table 3 - Project Production of Kernels Table 4 - Ajagbodudu Estate, Production of ffb, Palm Oil and Kernels of Existing Estate, Ajagbodudu's Own Replantings and Smallholders around Ajagbodudu, Fruit of which is Collected by and Processed at Ajagbodudu Estate 8. Estimated Economic and Financial Millgate Values of Palm Oil and Kernels Table 1 - Estimated Economic and Financial Millgate Values of Palm Oil Table 2 - Estimated Economic and Financial Millgate Values of Kernels Table of Contents (Cont'd) 9. Smallholder Farm Budget for 1-ha Planting 10. Oil Palm Company Table 1 - OPC Cash Flow Table 2 - Inflation Indices 11. Mid-Western State Government Cash Flow 12. Calculation of the Economic Rate of Return and Sensitivity Analysis Table 1 - Economic Rate of Return for Smallholders Table 2 - Economic Rate of Return for Estates Table 3 - Sensitivity Analysis i4S IBRD 10967 - Oil Palm Projects IBRD 10964R - Project Area Supplementary Annexes are included in Report 474a-UNI and comprise: 1. Technical Aspects of Establishment and Production 2. Farming Systems in the Project Area 3. Federal Institutions 4. Federal Department of Agriculture, Monitoring and Evaluation Unit 5. Cost Comparison between Small and Large-scale Palm Oil Mills 6. Field Studies of Small-scale Processing System in Wild Palm Groves 7. Road Improvement 8. Fruit Collection 9. Smallholder Operational Procedures 10. Grant/Credit Arrangements with Smallholders 11. Training 12. Markets and Prices 13. Production Estimates for the Project NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE SUMMARY AND CONCLUSIONS i. The Federal Military Government (FMG) has requested Bank assistance to finance an oil palm project in Mid-Western State. This report appraises a nucleus estate/smallholder oil palm project for which a US$29.5 million loan is proposed. Nigeria's agriculture is primarily domestic market oriented. Output of staple foods, animal products, palm oil, cotton fibre and a subs- tantial part of groundnut production - together accounting for about 90% of agricultural production - is entirely consumed in the country. In 1973-74 agriculture contributed about 41% of value-added and provided employment for around 70% of the labor force. However, agriculture is growing more slowly than overall GDP, and its contribution to GDP is falling and is now 41% compared with 65% in 1960. ii. The long-term strategy of FMG is to transform agriculture from its present low technology semi-subsistence character to a modern, market oriented sector with greater regional specialization. This will necessitate providing incentives to encourage farmers to expand output and raise productivity and ensuring that the necessary technology, inputs and infrastructure are avail- able. The domestic market currently absorbs all of Nigeria's palm oil produc- tion now estimated to be static at around 550,000 tons per annum. Demand projections indicate that domestic consumption could reach 825,000 tons of paim oil by 1985, and additional production of nearly 275,000 tons per annum would be required by then if Nigeria is to avoid becoming a major importer. About 125,000 ha of new plantings of high yielding oil palm would be needed to meet the projected shortfall. The project described in this report aims at contributing to the above objectives by (a) applying improved technology through the use of high yielding material, husbandry practice and modern processing facilities, (b) increasing rural employment and thus redistributing income, and (c) expanding production to meet the increased demand for palm oil. iii. The project would be carried out over 9 years (1975-1983) and would involve planting about 8,000 ha of nucleus estates and 8,000 ha of smallholdings in the Sapele and Agbor area. The smallholder program would be implemented by an oil palm division of the Tree Crop Unit (TCU), which was established under the Second Cocoa Project (Loan 1045-UNI); grant/credit in cash and kind to meet establishment and maintenance costs would be channelled to smallholders through the TCU working in conjunction with the registered cooperatives; 299 km of earth roads in the smallholder areas would be improved to all-weather truck- able standards; Nigerian staff and the smallholders would receive technical and management training at selected institutions. The existing Oil Palm Company (OPC) would replant/new plant about 8,000 ha of nucleus estates, con- struct two central mills, and establish a fruit collection system capable of handling the total production from estates and smallholders. - ii - iv. Under the Federal Department of Agriculture (FDA) which is a depart- ment of the Federal Ministry of Agriculture and Natural Resources (FMANR), a Monitoring and Evaluation Unit (NEU) would be established, because of the urgent need to strengthen the Ministry's capability of monitoring and evaluat- ing the extensive agricultural development programs that are being planned. The MEU would be primarily concerned with: (a) the financial and technical monitoring of on-going projects; (b) evaluating their financial, economic, and socioeconomic impact; and (c) providing assistance in the planning and preparation of future development programs. The main tree crops involved are cocoa, oil palm, and rubber and Benin in the Mid-Western State would be a suitable base for staff concerned with monitoring these projects. FDA would be the executing agency and within one year of the commencement of the projects a team of specialists would be recruited to form the Tree Crop Section of the YEU. As wild palm groves will continue to be a major source of Nigeria's palm oil for many years, there is a need to examine ways of improving the extraction of oil and kernels from this source and funds have been provided for the field studies of small-scale processing systems by the Nigerian Institute for Oil Palm Research (NIFOR). v. Project costs over the nine-year development period (1975-1983) are estimated at N 38.7 million (US$58.8 million). The Bank loan of US$29.5 million would finance 50% of total project costs; it would be equivalent to all foreign exchange costs (US$21.7 million) and 21% (US$7.8 million) of local costs. The remainder of the project costs would be financed by the Federal Military Government (US$4.6 million or 8%), by the State Government (US$15.9 million or 27%), by NAB (US$7.7 million or 13%), and by the small- holders (US$1.1 million or 2%). vi. Vehicles, fertilizers, insecticides, polybags, tools, and wire netting valued at about US$4.3 million would be procured through international competitive bidding (ICB) in accordance with Bank guidelines except for indi- vidual contracts valued at under US$25,000. The oil mills--civil works and equipment--valued at about US$8.4 million would be procured through a single responsibility contract through ICB in accordance with Bank guidelines. Contracts for buildings, office equipment, and some road improvements such as bridges valued at about US$1.7 million are not suitable for international competitive bidding because of their size and location. Contracts for buildings and bridges would be procured through competitive bidding adver- tised locally and in accordance with local procedures which are satisfactory to the Bank. Contracts under US$25,000 and for office equipment would be procured after inviting quotations from at least three suppliers. A major part of project costs would be for smallholder labor, salaries, training and the operating expenses of TCU, valued at about US$5.5 million, and for estate labor, land acquisition, salaries and operating expenses of OPC's project estates valued at about US$7.8 million, none of which would be suitable for any form of competitive bidding. Road construction valued at US$0.2 million would be done by force account. For the Tree Crop Section of MEU only con- tracts for building and equipment valued at US$0.3 million are suitable for competitive bidding advertised locally and in accordance with local procedures which are acceptable to the Bank since the remaining costs valued at US$5.3 million are for salaries, operating expenses and consultancy services, none - iii - of which is suitable for competitive bidding. Similarly, equipment for the small-scale processing trials is not suitable for competitive bidding since different types of processing machinery must be tested and this equipment valued at US$0.5 million and equipment for NIFOR's training center valued at US$0.1 million would be procured through negotiated contracts. The services of expatriate staff and consultants would be obtained on terms and conditions acceptable to the Bank. Domestically manufactured goods would be allowed a 15% preference or the applicable import duties, whichever is lower, when com- paring bids with those of foreign manufacturers and a 7.5% preference for domestic civil works contractors would apply. vii. At full maturity in 1990 the combined estate and smallholder project would produce annually about 38,400 metric tons of palm oil for domestic consumption and 8,700 metric tons of kernels for export. Valued at the Bank's price forecast for palm oil in 1985 current terms (US$757 for palm oil and US$504 for kernels), the annual net foreign exchange savings/earnings are estimated at US$27 million. viii. Based on a fresh fruit bunch price of N 20 per ton, smallholder net income from 2 ha of oil palm would start at N 70 (US$106) in the first year of production, rising to N 298 (US$453) during the loan repayment period and thereafter would average about N 370 (US$562) at maturity. The returns per manday employed would rise rapidly from N 1.3 (US$2.0) in the first year of production to an average of N 4.5 (US$6.8) during the years of loan repay- ment and N 6.2 (US$9.4) thereafter. This compares favorably with a current rural wage rate of N 0.7 per manday. In addition, smallholders income would be augmented by bonuses from mill revenue surpluses. ix. During the establishment period the project would create 12,900 man-years of employment. At full maturity the estates would provide employ- ment for about 900 workers. Based on an average farm size of 2 ha about 4,000 farmers would benefit. Thus with an average family size of 6-7 persons about 32,000 people would benefit. x. The estimated economic rate of return is 18.2% for the smallholder component and 17.3% for the estate component. xi. On the basis of the assurances that were obtained during negotiations, the project is suitable for a US$29.5 million Bank loan, for a period of 20 years including a five-year grace period on principal. I. INTRODUCTION 1.01 The Federal Military Government of Nigeria (FMG) has requested a Bank Loan to help finance the planting of high yielding oil palms in its Mid-Western State. This report appraises a project that would establish 8,000 ha of nucleus estate and 8,000 ha of smallholder plantings as Phase 1 of a program establishing 24,000 ha of high yielding palms. 1.02 The first Bank Group loan for agricultural development in Nigeria was the Western State Cocoa Project (Loan 764-UNI) in 1971 which was followed by a loan for the Second Cocoa Project (Loan 1045-UNI) in 1974. The Bank is Executing Agency for the Nigerian Agricultural Bank Project financed by UNDP, which became effective in March 1973. A rice project, three agricultural de- velopment projects, and a livestock project have been approved by the Board in December 1974, and an irrigation project and a rubber project have been appraised and are being processed. The first cocoa project is proceeding satisfactorily. 1.03 The project was identified in November 1972 and prepared by a Bank mission in March 1973. This report is based on the findings of a Bank appraisal mission, composed of Messrs. J. Bevan, M. Crowe, R. van der Lugt (Bank), and A. Bergan, J. Bogaerts, Osman Farruk, C. Hartley and C. Redfern (Consultants), which visited Nigeria in November/December 1973 to appraise three palm oil projects in the Western, Mid-Western and East Central States. Details of features common to all three projects are in a supplementary report, entitled Supplementary Annexes to the Nigerian Oil Palm Projects Appraisal Reports (474a-UNI). II. BACKGROUND 2.01 General. The 12-State Federal Republic of Nigeria covers about 930,000 kmZ and provisional results of a recent census indicate a population of 80 million, growing at about 2.6% annually. About 41% of Gross Domestic Product (GDP), estimated at N 6.5 billion (US$9.9 billion) in 1973/74, is generated in the agricultural sector which employs some 70% of the labor force. In 1972, total domestic exports amounted to US$2.1 billion of which petroleum represented about 82% (US$1.8 billion). The main agricultural exports are cocoa and groundnut products. In 1972 all agricultural exports were valued at US$290 million or 13% of all exports. Currently, the value of food and beverage imports is estimated at the relatively low figure of about US$2.6 per capita annually. Dairy products, wheat, and sugar are the principal food imports. 2.02 Agricultural Sector. Agriculture, including livestock, forestry and fishing, is the most important sector in terms of output and employment; provides all but a small proportion of the nation's supply of food; and is a significant earner of foreign exchange. Nigeria's agriculture is primarily domestic market oriented. Output of staple foods, animal products, palm oil, cotton fiber, and a substantial part of groundnut production--together account- ing for over 90% of agricultural production--is entirely consumed in the country. However, agriculture is growing more slowly than overall GDP, and its contribution to GDP is falling and now is 41% compared with about 46% in 1971 and about 65% in 1960. While agricultural production has been hampered by short-term factors, such as drought in parts of the north in 1972/73 and 1973/74, the poor performance of the sector reflects agricultural and rural development programs that generally are inadequate in terms of physical extent and quality. 2.03 Because of Nigeria's wide range of ecological conditions agricul- tural activity, while varied, is highly specialized by region and function. Thus the rain forest zone, covering Western, Mid-Western, East Central, South Eastern and River States, is characterized by relatively high rainfall and cultivation of most of the tropical tree crops. Of the most important, cocoa is dominant in Western State; oil palm, mostly wild, grows throughout but with marked concentration in East Central and South Eastern States; and rubber is most important in the Mid-Western State. Cassava, yams, and cocoyams are the main food crops of the rain forest zone followed by maize and rice. The middle belt of the country, which includes the Kwara and Benue Plateau States, and the southern portions of the North Western, North Central, and North Eastern States, constitutes an intermediate savannah zone (the Guinea Zone) well-suited for arable agriculture. Sorghum and pulses are the principal crops, but there are also sizeable acreages under root crops, groundnuts, and cotton. The dry savannah zone (the Sudan Zone) of the far north, encompassing Kano State and the northern parts of North Western, North Central and North Eastern States, produces most of Nigeria's sorghum, millet, cowpeas, cotton, and groundnuts. This northern area, unlike most of the rest of the country, is tsetse fly and trypanosomiasis free and the main cattle raising area of Nigeria. 2.04 The long-term strategy of FMG is to transform agriculture from its present low technology semi-subsistence character to a modern, market oriented sector with greater regional specialization. This will necessitate providing incentives to encourage farmers to expand output and raise productivity and ensuring that the necessary technology, inputs, and infrastructure are avail- able to permit farmers to respond to such incentives. There are several constraints to implementing this strategy and these include: transport and distribution bottlenecks; inadequate machinery for planning, coordinating and implementing a national policy for rural and agricultural development; insuf- ficient experienced manpower particularly at senior management level; and shortages of improved seeds, fertilizers, chemicals, credit and other farm inputs. The project described in this report would remove these constraints insofar as the oil palm subsector in the Mid-Western State is concerned. 2.05 Oil Palm Production. Oil palm grows throughout Southern Nigeria but the center of palm oil production is the three eastern States. Approxi- mately 90% of production is from semi-wild oil palm groves operated by small- holders. These groves cover about 2.5 million ha and produce around 2.5 - 3 - tons of fresh fruit bunches (ffb) per ha which yield about 200 to 225 kg of palm oil and around 135 kg of kernels. Total Nigerian production is estimated at about 550,000 tons of oil and 300,000 tons of kernels. Exports of palm oil, which were valued at N 22 million in 1966, are now being displaced by domestic demand. Demand projections indicate that domestic consumption could reach 825,000 tons by 1985 and thus require production of an additional 275,000 tons per annum by that time if Nigeria is to avoid importing palm oil. About 125,000 ha of new plantings of high yielding oil palms would be needed to meet the projected shortfall. The three oil palm projects in Western, Mid-Western, and East Central States that have been appraised by the Bank (see para. 1.03) would produce about 100,000 tons of palm oil when at full maturity in 1990. 2.06 Institutions. The main institutions involved in the project would be the Ministry of Agriculture and Natural Resources (MANR), the Oil Palm Company (OPC), and the cooperatives (see Annex 1). III. THE PROJECT AREAS 3.01 There are two project areas proposed (see map 10964 (R)): (i) The Sapele area which consists of: (a) a nucleus estate of 2,800 ha at Mosogar bounded to the northwest by the Jamiesan River and to the northeast by the Sapoba Forest Reserve; (b) a smallholders' zone lying north of the Ethiope and Benin Rivers and bounded by the Ologbo, Sapoba and Usonigbe Forest Reserves; and (c) an existing estate, at Ajagbodudu, bounded to the north and west by Ologbo Forest Reserve and to the south partly by the Benin River. (ii) The Agbor area which consists of: (a) a nucleus estate of 2,800 ha northwest of Nsukwa; and (b) a smallholders' zone lying west and southwest of the nucleus estate and reaching as far as the Usonigbe Forest Reserve. 3.02 Climate. Mean annual rainfall at Sapele is 2,397 mm (94.1 in). There is a marked dry season from mid-November to early March and mean annual water deficits are estimated between 280 and 300 mm. Rainfall at Nsukwa is estimated at 2,000 mm (80 in) the water deficit at 350 mm. In the Agbor area water deficits are estimated between 290 and 350 mm. Annual sunshine in both areas is estimated at 1,800 hours, and mean annual temperature lies between 26° and 27°C. 3.03 Vegetation. Both project areas have considerably varied vegetation. The Mosogar estate consists predominantly of old untapped rubber and bush fallows at various stages of regrowth with scattered cultivation, and some high secondary forest. The adjoining smallholder areas have the same type of vegetation but in addition also appreciable areas of palm groves. The Nsukwa estate contains some old rubber but is largely old fallows with some -4- scattered food crop cultivation. The adjoining smallholder areas contain a considerable amount of old rubber and lie in a zone well known for its food crop production. Eupatorium odoratum 1/ is present everywhere. 3.04 Topography. The Sapele area is largely flat with occasional swamps but most of it is not subject to flooding. The Agbor area is also largely flat or gently undulating and drained by tributaries of the Ethiope River. 3.05 Soils. Typically soils are of great depth free draining with clay content increasing with profile depth. They are classed into soil series according to their clay content and the best series for oil palm cultivation are well represented in both areas. Furthermore there are some excessively sandy soils and through the selection process (see para 6.04) these areas would be excluded. 3.06 Population. The project areas are located in the most densely populated regions of the State and would contain populations of approximately 160,000 (Sapele area) and 260,000 (Agbor area) respectively. 2/ The average family size is between 6 to 7, and some 80% of households are engaged in agriculture. 3/ There is considerable employment on existing estates, in towns, and in factories processing timber and rubber, but labor availability in these densely populated rural areas is no serious problem. 3.07 Land Tenure. Generally land is vested in the various communities with any transactions being under the direct control of the head of the community in consultation with the chiefs and elders. Land may be given (though unrecorded) by the community to an individual as his personal and disposable property. Alternatively, land may be given by the community to a family, 4/ under the provision that the head of the family may transfer it outside the family only with the consent and sanction of the community elders. Although title to land is generally unrecorded, family and individual rights are usually well known and accepted within the community. In general the traditional system provides adequate security of tenure for the planting of permanent crops by natives of a community, though not necessarily for outsiders. There is increasing tendency towards individual ownership in some 1/ A noxious weed of comparatively recent introduction to Nigeria which adversely affects oil palm establishment. 2/ The Sapele area is about 800 km2 with a density of ibout 200/km2 (Urhobo West Division) and the Agbor area is about 1,050 km with an even higher density (250/km2 in Ika division). 3/ Sample survey of Agricultural Holdings, 1969, Mid-Western State Ministries of Agriculture and Economic Development and Reconstruction, Benin City (preliminary results published in Mid-Western Statistical Notebook, Ministry of Economic Development and Reconstruction, 1972). 4/ "Family" usually means the extended family and may include several genera- tions. - 5 - areas and in these tenancy of land belonging to absentees is common. Under the project, however, the aim would be, through the selection process (para 6.04), to restrict participation to smallholders who are directly engaged in farming, and assurances to this effect were obtained. 3.08 The Public Lands Requisition law provides for the acquisition by Government of any land for public use. Such acquisition may be by voluntary transfer or by compulsory acquisition with payment of reasonable compensation. In general compulsory acquisition takes place through gazetting and requires little time. The State usually gives land to other government entities under lease agreements. It would be a condition of effectiveness that the Oil Palm Company (OPC) had taken possession under a 99-year lease of all lands acquired by the State for conveyance to OPC to enable it to develop the project estates. Smallholders would plant their oil palms on land now owned by them or for which they have rights of usufruct. 3.09 Farming Systems in the Project Area. The size of smallholder farms in the area varies considerably, but according to a recent Government survey the average area cultivated per farming household is between 3 and 4 ha. Most families plant about 1 ha of food crops, mainly maize, yam and cassava. The remainder consists largely of rubber, much of which, however, is no longer productive. Arable farming is based on bush-fallow rotation of typically 6 to 8 years, including a fallow period of 4 years. Oil palm has been planted by a number of farmers in the Sapele area, and some have quite substantial acreages, the fruit from which is processed by the Ajagbodudu Estate mill. In the Agbor area there is more emphasis on food crop production with an active trade to the urban markets of Agbor and Warri. 3.10 Communications. A good network of hard-top and earth roads serves the project areas, although most roads need upgrading (para 4.07 and Annex 4). IV. THE PROJECT A. General Description 4.01 The project area is well suited to oil palm, labor is not a constraint and an oil palm project comprising nucleus estates and smallholder outgrowers is feasible. Linking a nucleus estate with smallholder development offers advantages in the spheres of employment, extension, and processing. The employ- ment opportunities on the nucleus estates would provide a regular source of income for members of the surrounding smallholder community. The technical experience gained by members of the smallholder community working in the estates--under well supervised conditions--should, through the process of diffusion, serve as a valuable extension factor in the smallholder planting sector of the project. To attain the high level of efficiency possible in a large central mill, a continuous and adequate supply of ffb is needed. - 6 - With regular supplies from a nucleus estate, the risk of large variations in mill throughput due to fluctuations in output from smallholdings is consider- ably reduced. 4.02 The project, involving planting some 16,000 ha of oil palm, would be carried out over nine years (1975 through 1983) and be Phase I of a program scheduled to plant about 24,000 ha of oil palm during the period 1975 through 1986. 4.03 The project would comprise: Smallholders: (a) creating an oil palm division and two regional units within the Tree Crop Unit (TCU) established under the Second Cocoa Project; (b) planting about 8,000 ha of oil palm on smallholdings; (c) improving about 299 km of earth roads to facilitate all- weather collection of ffb from smallholders; (d) operating a grant/credit scheme for smallholders; (e) training staff and smallholders at selected institutions and through in-service courses; Estates: (f) new planting/replanting about 8,000 ha of nucleus estates to be operated by the Oil Palm Company (OPC); (g) the construction and operation of two palm oil mills by OPC to process estate and smallholder production; (h) establishing a fruit collection system to be operated by OPC for estate and smallholder production; Evaluation and Research (i) establishing under the Federal Department of Agriculture a Monitoring and Evaluation Unit (MEU) with a Tree Crop Section at Benin; and (j) initiating field studies of small-scale processing for wild palm grove production. B. Detailed Features 4.04 Details of the phasing of the project planting program are at Annex 2. Smallholders 4.05 Tree Crop Unit (TCU). TCU is being headquartered in Benin under the Second Cocoa Project. 1/ Details of TCU's structure are given in paras 6.02-6.06 and in Annex 3. Under the project an Oil Palm Division would be established under TCU, which would have regional units at Sapele and Agbor and which would be responsible for appraising smallholder applications for credits and grants and for supervising technical and financial services involved in the field establishment and post maturity stages. 4.06 Smallholder Planting. Some 4,000 ha would be planted in the Sapele area, and 4,000 ha would be planted in the Agbor area. Smallholdings would be within about a 25 km range of the central mills. To facilitate ffb collec- tion, plantings would be restricted to areas within 600 meters of a road usable by 7-ton trucks all year round. Details of planting and maintenance procedures are in the Supplementary Annexes (Supplement 1). 4.07 Road Improvement. No major realignment of roads is anticipated but paved and earth roads need upgrading. The fruit collection road network (shown on map 10964 R) is 451 km (106 km paved roads and 345 km earth roads). 2/ The 76 km of paved roads would be upgraded (filling potholes, clearing ditches, reshaping shoulders, and some resurfacing) by the Ministry of Works and Trans- port (MWT). This work is estimated to cost N 114,000 (US$175,000); this amount is not included in the project costs, as it would form part of MWT's routine expenditure in 1976, 1977 and 1978. The cost of improving 299 km of earthroads is included under the project and would be carried out by a road unit within TCU. MWT would become responsible for the maintenance of all fruit collection roads once they have been upgraded. Annual maintenance costs are estimated at N 100,000 (US$152,000). Details are in Annex 4. Assurances were obtained that in the project area MWT would improve the paved roads, and would take over and properly maintain all fruit collection roads once they have been upgraded. 4.08 Grant and Credit Scheme. Producer prices for palm oil destined for the export market have been maintained well below world prices since the Second World War, and Marketing Board surpluses generated in this way have been used in other sectors of the economy (para 7.04). Consequently, until the very recent disappearance of palm oil surplus to domestic needs there has been very little incentive for farmers to plant even high yielding improved 1/ Loan 1045-UNI. 2/ 30 km paved roads and 46 km earth roads need no improvement. oil palms, and the industry has stagnated. In the early 1960s an oil palm rehabilitation scheme was introduced in the Eastern Region (now East-Central, Rivers, and South-Eastern States) under which the problem of incentives was overcome by providing smallholders with grants consisting of cash payments, planting material and other farm inputs for new planting/replanting oil palm. Under the project somewhat different arrangements would be used to reflect currently much higher palm oil prices and grants in kind and credits in cash would be provided to farmers. Combined with fair producer prices (see paras 4.16, 7.07 and 7.09) this should provide adequate incentives for farmers to plant oil palms that take nearly four years to come into bearing and produce revenue. 4.09 The project would provide grants and credits to smallholders planting, or replanting, a minimum of 1 ha and a maximum of 10 ha. One hectare is the smallest unit that is considered practical to administer under the project; while at maturity more than 10 ha would require the average extended farm family to hire labor for its oil palm and food crop cultivation. Partici- pating smallholders would be required to be members of a registered coopera- tive society. The FMG with the assistance of FAO is instituting a major program for the development of farmers cooperatives. In view of this there should be no problem in finding sufficient numbers of farmers who are members of registered cooperatives. Project farmers would be required to sign agree- ments with TCU and their cooperative relating to the amount and use of grant/ credit. Assurances were obtained that these arrangements would be employed and that the terms of the agreements would be acceptable to the Bank. 4.10 The total costs of clearing, planting and maintaining oil palms until they enter into production four years later are estimated in constant 1974 terms at about N 330/ha. TCU would distribute: (a) as a grant, and in kind, palm seedlings, cover crop seed, wire netting, fertilizer and chemicals to a value of about N 170/ha; and (b) as credit, in cash, N 100/ha for payment of labor (see Supplementary Annexes, Supplement 10). The credit would bear interest at 9.5% and have a term of 13 years from planting including 7 years grace during which interest would be capitalized. The smallholder would contribute the balance of about N 60/ha in the form of labor and hand tools. Monthly repayments would be calculated on a per-ha basis and deducted from the proceeds of each smallholder's ffb sales. In constant 1974 terms monthly repayments by the smallholder would amount to N 3.00 per ha (interest at 9.5%) and the cooperative would repay to TCU N 2.50 monthly (interest at 7.5%). The loan agreement between TCU, the cooperative, and the smallholder would include an undertaking by the smallholder to sell his ffb to the central processing mill. See paras 4.17, 5.07 and 6.06. 4.11 Training. Technical training would be provided for Senior Officers, Nursery Staff, Field Staff and Smallholders. A training schedule and cost estimates are given in Annex 5, Table 8. Where training facilities are not available staff would be trained elsewhere in West Africa and for some more senior officers possibly in the Far East. Funding for the latter possibility is included in project costs. - 9 - 4.12 Senior Officers (Agriculture Officer (AO) or above) would be given 6 months training in planting techniques and management on large-scale oil palm development schemes or commercial estates using appropriate husbandry standards. Agricultural Assistants (AA) designated to supervise nurseries would receive special training for twelve months in nursery techniques so as to cover a complete schedule of nursery operations from the germinated seed stage to field planting. Field staff (AgriculturaLl Assistants) would be given a 2-3 months intensive course in modern planting techniques at the Nigerian Institute for Oil Palm Research (NIFOR) followed by 2-3 months practical training in the supervision of field operations on existing estates. In addi- tion, all field staff would be trained in smallholder appraisal and grant/ credit supervision procedures. Smallholder training would be developed on a group activity basis and would include (a) outlining application/appraisal procedures and conditions of loan agreements, (b) demonstration of specific planting practices, and (c) short courses of 1 to 2 day duration. Estates 4.13 The estates component of the project would be carried out by the Oil Palm Company (OPC). The organization and management of OPC is described briefly in paras 6.07 through 6.09 and in more detail in Annex 3. 4.14 Planting Program. OPC would first establish two new estates of 2,800 ha each at Nsukwa and Mosogar and then replant 2,240 ha on Ajagbodudu Estate (see map 10964R). Arrangements for the acquisition of land for the estates are described in para 3.08. Details of the planting program are set out in Annex 2. The project provides for infrastructure and housing needed at the new estates. Labor is not a constraint and new land would be cleared by hand, using chain saws. Eupatorium weed would be eradicated after clearing and before establishing the cover cop. NIFOR would provide oil palm seeds which would be of wilt-tolerant varieties, if required. O4C would establish a nursery on each estate, and fertilizers would be applied at rates recom- mended by NIFOR following foliar analysis. Details of planting and mainte- nance procedures are in the Supplementary Annexes (Supplement 1). 4.15 Palm Oil Processing Mills. Until 1981, production from Ajagbodudu estate and the project would be processed at the existing mill at Ajagbodudu. Since the capacity of this mill cannot be expanded, and its life is limited, two new mills would be constructed to process production from 1982 onwards. At full maturity in 1990 smallholder and estate production is estimated at 115,000 tons of ffb a year in the Sapele area and 72,000 tons in the Agbor area. The build-up in required mill capacity would be as follows: 1982 1983 1984 1985 onwards …---- (tons of ffb per hour)-------- Sapele area 10 20 20 30 Agbor area 10 10 20 20 - 10 - Although sites have not been finally selected, the mill in the Sapele area would be constructed between Ajagbodudu and Mosogar estates, probably along the Jamiesan river; in the Agbor area the mill would be near the Nsukwa estate, probably along the river Omu. The costs of the two new mills are included under the project except for the expansion of the mill in the Sapele Area to 30 tons/hour by 1985 which would be financed from retained earnings. OPC would undertake to engage consultants acceptable to the State and the Bank to prepare the design and tender specifications for the new palm oil mill. Assurances to this effect were obtained. The undertaking would also be incorporated in the subsidiary loan agreement between the State and OPC. 4.16 Confirmation by TCU and the Tree Crop Section of the Monitoring and Evaluation Unit (see para 4.19) that OPC mill development proposals were in line with the project's overall production program would be a condi- tion of disbursement for investments in the mill and fruit collection systems (para 4.18). In addition, assurances were obtained that OPC would adopt a pricing formula for the purchase of ffb from smallholders determined, in accordance with principles acceptable to the Bank, by a Price Policy Committee, which would be established not later than 1980, and which would comprise representatives of the Ministries of Finance and Agriculture, the Registrar of cooperatives, OPC, TCU, Marketing Board, Farms Management Board, NPMC, and the Smallholders. See Annex 3. 4.17 TCU would be responsible for ensuring that an acceptable percentage (to be agreed with OPC) of the estimated production of smallholders' ffb would be delivered to the mills. Any financial losses incurred by OPC mills as a result of deliveries falling below this figure would be made good to OPC by the State Government. Assurances to this effect were obtained. 4.18 Fruit Collection System. At full maturity in 1990 annual small- holders' production would be about 80,000 tons, half from the Agbor area and half from the Sapele area. During the peak month about 400 tons of ffb would have to be collected each day. In both areas the participating smallholders would be within about 25 km of the central mills. The maximum distance that smallholders would have to carry bunches to a roadside pick-up point would be about 600 meters. The bunches would be heaped in nets on the road side to await collection, and the smallholders would be informed well in advance of the timetable for the delivery of nets and the subsequent fruit collection. The bunches would be loaded on to trucks by rear mounted cranes fitted with scales that would register the weight of the smallholder's fruit at the pick-up point. The smallholder would be given a receipt showing the weight of the bunches collected, the grade and the price. At full maturity about 107,000 metric tons of ffb would be produced at the project nucleus estates. During the peak month about 535 tons would have to be collected each day from these estates. The fruit collection system on the estates would essentially be the same as that used for smallholders, using nets and cranes with built- in scales to weigh the fruit bunches of individual harvesting teams. For details see Annex 4. - 1 1 - Evaluation and Research 4.19 Federal Department of Agriculture (FDA) - Monitoring and Evaluation Unit. In view of the extensive federally financed agricultural develop- ment programs there is an urgent need to strengthen the Federal Ministry of Agriculture and Natural Resources (FMANR) capability for monitoring and evaluating such programs. A Monitoring and Evaluation Unit (MEU) would be established in FDA, which is a department of FMANR. The Tree Crop Section, which would deal mainly with cocoa, oil palm and rubber, would be located in Benin and its establishment forms part of this project (see paras 6.10-6.17). 4.20 Field Studies of Small-Scale Processing in Wild Palm Groves. As wild palm groves will continue to be a major source of Nigeria's palm oil for many years, there is an urgent need to examine ways of improving the extraction of oil and kernels from this source. Field studies of small-scale processing systems geared to meet the requirements of wild grove production would be initiated. These studies would be implemented by the existing NIFOR/UNDP team. Some equipment would also be provided to NIFOR under the project to enable it to perform its training duties under the project (see Annex 5, Table 18 and Supplementary Annexes, Supplement 6). V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS Project Costs 5.01 Project costs over the development period 1975-1983 are detailed at Annex 5 and summarized in the following table: - 12 - NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Summary of Project Costs NairatO0O US$'OOO Foreign Local Foreign Total Local Foreign Total Exchange A. NUCLEUS ESTATE SMALLHOLDER PROJECT Srnllholder Program Field Establishment 1,834.4 816.3 2,650.7 2,788.3 1,240.8 4,029.1 31 TCU - Headouarter Capital Costs 10.3 18.2 28.5 15.6 27.7 43.3 64 TCU - Headquarter Starf Costs 445.8 117.1 562.9 677.6 178.o 855.6 21 TCU - Headquarter Recurrent Costs 32.2 19.9 52.1 48.9 30.3 79.2 38 TCUJ - Regional Units Capital Costs 133.8 112.8 246.6 203.4 171..4 374.8 46 TCU - Regional Units Staff Costs 1,082.3 83.8 1,166.1 1,645.1 127.4 1,772.5 7 TCU - Regional Units Recurrent Costs 73.2 70.6 143.8 111.3 107.3 218.6 49 Road Program 198.0 106.5 304.5 300.9 161.9 462.8 35 Training 54.4 43.5 97.9 82.7 66.1 148.8 44 Sub-Total 3,864.4 1,388.7 5,253.1 5,873.8 2,110.9 7,984.7 OPC PROGRAM Field Establishment 2,663.0 749.3 3,412.3 4,047.8 1,138.9 5,156.7 22 Estate Management and Overheads 2,586.3 1,103.2 3,689.5 3,931.2 1,676.8 5,608.0 30 Mill Investment 2,366.7 3,426.9 5,793.6 3,597.4 5,208.9 8,806.3 59 Fruit Collection Investment 76.2 169.5 245.7 115.9 257.6 373.5 69 Sub-Total 7,692.2 5,4418.9 13,141.1 11,692.3 8,282.2 19,974.5 - Total Nucleus Estate/Smallholder Project 11,556.6 6,837.6 18,394.2 17,566.1 10,393.1 27,959.2 37 Physical Contingencies (5.7%)l/ 659.7 387.5 1,0147.2 1,002.7 589.o 1,591.7 Price Contingencies (68%) 2/ 8,327.7 4,890.8 13,218.5 12,658.1 7,434.0 20,092.1 Total 20,51,4.0 12,115.9 32,659.9 31,226.9 18,416.1 49,643.0 B. MONITO`RI ,G AND EVALUATION DIVISION Costs 2,L77.7 1,196.1 3,673.8 3,766.1 1,818.1 5,584.2 33 Physical Contingencies (5%) 1/ 123.1 60.6 183.7 187.1 92.1 279.2 33 Price Contingencies (43%) 7/ 1,114.7 548.9 1,663.6 1,694.4 834.3 2,528.7 Total 3,715.5 1,805.6 5,521.1 5,647.6 2,744.5 8,392.1 C. FIELD STUDIES AND NIFOR EQUIPMENT Field Studies 72.8 229.9 302.7 110.7 349.4 460.1 76 NIFOR Equioment 28.8 42.2 71.0 43.8 64.1 107.9 59 Total 101.6 272.1 373.7 154.5 413.5 568.0 73 Phvsical Contingencies (5%9) 1/ 5.1 13.7 18.8 7.8 20.8 28.6 73 Price Contingencies (27%) 2/ 27.8 77.4 105.2 42.3 117.7 160.0 73 Total 134.5 363.2 497.7 204.6 552.0 756.6 73 D. OVERALL TOTAL (A, B, and C) Before Contingencies 14,135.9 8,305.8 22,441.7 21,486.7 12,624.7 34,111.4 37 Physical Contingencies (5.6%) 1/ 787.9 461.8 1,249.7 1,197.6 701.9 1,899.5 37 Price Contingencies (63%) 2 / 9,470.2 5,517.1 14,987.3 14,394.8 8,386.0 22,780.8 37 GRAND TOTAL 24394O.0 14,284.7 38,678.7 37,079.1 21,712.6 58z791-7 37 1/ As percentage of base costs 2/ As Dercentagc of base costs and physical contingencies. - 13 - 5.02 The estimates are based on prices ruling at January 1, 1974. They include indirect taxes and duties amounting to about N600,000 (US$910,000). Physical contingencies comprise 12% of the cost of civil works for the oil mills and 5% of other costs. Price contingencies calculated over base costs and physical contingencies allow for: compounded increase in the costs of: (a) civil works, buildings, and houses, of 18% in 1974, 15% in 1975, and 12% annually thereafter; (b) vehicles, office and mill equipment, non-labor farm inputs of 14% in 1974, 11% in 1975 and 7-1/2% annually thereafter; and (c) labor, salaries, operating cost and consultancy services and training, of 7% annually. Financing Arrangements 5.03 The financing plan has been discussed and agreed with the Federal and State Governments and takes account of FMG's decision that each State will be responsible for the balance of project costs. However, FMG will finance the balance of the evaluation and research component since this is of national interest. The financing plan (see also Annex 6) is summarized in the follow- ing table. IBRD FMG NAB State Farmer Total ------------- N million ------------------- Smallholder Program Field Establishment 1.6 - - 0.6 0.5 2.7 TCU 1.0 - - 1.6 - 2.6 OPC Program 6.6 - 4.6 2.0 - 13.2 Monitoring and Evaluation 1.8 1.8 - - - 3.6 NIFOR Field Studies 0.2 0.2 - - - 0.4 Unallocated 8.2 1.0 0.5 6.2 0.3 16.2 Total 19.4 3.0 5.1 10.4 0.8 38.7 ------------------- $ million ---------------- Smallholder Program Field Establishment 2.4 - - 0.9 0.7 4.0 TCU 1.6 - - 2.4 - 4.0 OPC Program 10.0 - 7.0 3.0 - 20.0 Mlonitoring and Evaluation 2.8 2.8 - - - 5.6 NIFOR Field Studies 0.3 0.3 - - - 0.6 Unallocated 12.4 1.5 0.7 9.6 0.4 24.6 Total 29.5 4.6 7.7 15.9 1.1 58.8 50% 8% 13% 27% 2% 100% 5.04 After appraisal by the Bank of the proposed project, OPC made an appli- cation to NAB for a loan to help develop the nucleus estate component of the pro- ject. In March 1974 NAB's board approved a N 5.34 million loan to OPC which to- - 14 - gether with an equal amount from the Mid-Western State Government would allow OPC to develop its estate component. The significant differences between the purpose of the NAB loan and the Bank's appraisal are: (a) smallholder com- ponent was not taken into account; (b) mill investment and fruit collection based on estate requirements only; (c) Ajagbodudu Estate replanting not in- cluded; and (d) different contingency calculations. NAB does not wish to finance 50% of OPC project costs, although it is willing to consider financing of the replanting of Ajagbodudu at a later stage. Consequently, NAB's pre- sent loan agreement with OPC has been taken into account for N 5.06 million US$7.7 million) 1/ (see para 5.06 and Annex 6), the remaining OPC requirements being provided by the Bank and the Mid-Western State Governments. 5.05 The Bank loan of US$29.5 million would finance 50% of total project costs; it would be equivalent to all foreign exchange costs (US$21.7 million) and 21% (US$7.8 million) of local costs. The loan would be for a period of 20 years, including a five-year grace period on repayment of principal. From the Bank loan, US$24.9 million would be onlent to the State Government on terms and conditions acceptable to the Bank, and the balance (US$4.6 million) would be used by FMG to fund the Tree Crop Section of MEU, the field studies, and NIFOR equipment. The remaining project costs would be financed by FMG (US$4.6 million), NAB (US$7.7 million), the State Government (US$15.9 million), and smallholders (US$1.1 million). 5.06 The NAB loan of US$7.7 million to OPC is at 5%. The State Government would onlend part of the Bank loan (US$18.5 million) and its own contribution 2/ (US$11.0 million) to OPC at a rate not less than the Bank's lending rate 3/ for a period of 20 years including nine-year grace for payment of principal. The State Government would use the remainder of the Bank loan (US$6.4 million) and its own contribution (US$4.9 million) to finance TCU (US$5.9 million) and grants (US$3.4 million) and credits (US$2.0 million). Credits made to smallholders would be channeled through the cooperatives which in consideration for their guaranteeing smallholders' loans would receive a 2% interest spread (see para 4.10). 5.07 Assurances were obtained that the terms and conditions of the sub- sidiary loan agreement between FMG and the State Government would be accept- able to the Bank; and also that the terms and conditions of the loan agreement between the State Government and OPC would be acceptable to the Bank. Sign- ing of these subsidiary loan agreements would be a condition of effectiveness. Assurances were also obtained that the terms and conditions of the loan agree- ment between TCU, the cooperatives, and smallholders would be acceptable to the Bank. It was agreed that from the date of the ending of loan negotiations retroactive financing of up to US$100,000 would be made mainly for employment of key personnel and for nurseries. 1/ NAB's loan includes N 285,000 for maintenance of plantings after maturity which are not included in project costs. 2/ N 5.06 million (US$7.7 million) already committed by the State in conjunction with NAB's loan to OPC. 3/ For calculating purposes an onlending rate to OPC of 9% was assumed. - 15 - Procurement 5.08 Vehicles, fertilizers, insecticides, polybags, tools, and wire net- ting valued at about US$4.3 million would be procured through international competitive bidding (ICB) in accordance with Bank guidelines except for indi- vidual contracts valued at under US$25,000. The oil mills-civil works and equipment--valued at about US$8.4 million would be procured through a single responsibility contract through ICB in accordance with Bank guidelines. Con- tracts for buildings, office equipment, and some road improvements such as bridges valued at about US$1.7 million are not suitable for international competitive bidding because of their size and location. Contracts for build- ings and bridges would be procured through competitive bidding advertised locally and in accordance with local procedures which are satisfactory to the Bank. Contracts under US$25,000 and for office equipment would be procured after inviting quotations from at least three suppliers. A major part of project costs would be for smallholder labor, salaries, training and the operating expenses of TCU, valued at about US$5.5 million, and for estate labor, land acquisition, salaries and operating expenses of OPC's project estates valued at about US$7.8 million, none of which would be suitable for any form of competitive bidding. Road construction valued at US$0.2 million would be done by force account. For the Tree Crop Section of MEU only contracts for building and equipment valued at US$0.3 million are suitable for competitive bidding advertised locally and in accordance with local procedures which are acceptable to the Bank since the remaining costs valued at US$5.3 million are for salaries, operating expenses and consultancy services, none of which is suitable for competitive bidding. Similarly, equipment for the small-scale processing trials is not suitable for competitive bidding since different types of processing machinery must be tested and this equipment valued at US$0.5 million and equipment for NIFOR's training center valued at US$0.1 million would be procured through negotiated contracts. The services of expatriate staff and consultants would be obtained on terms and conditions acceptable to the Bank. Domestically manufactured goods would be allowed a 15% preference or the applicable import duties, whichever is lower, when comparing bids with those of foreign manufacturers and a 7.5% preference for domestic civil works contractors would apply. Disbursement 5.09 The Bank loan would be disbursed over nine years from 1975 through 1983 (see also Annex 6) to cover: (i) 75% of grants and credits to smallholders, totalling N 1.6 million (US$2.4 million); (ii) 40% of TCU's costs, totalling N 1.0 million (US$1.6 million); (iii) 50% of the costs OPC's estate development, totalling N 3.6 million (US$5.4 million); (iv) 50% of OPC's investment in the palm oil mills and fruit collection, totalling N 3.0 million (US$4.6 million); - 16 - (v) 50% of the cost of the Tree Crop Section of MEU, totalling N 1.8 million (US$2.8 million); and (vi) 50% of the costs of the field studies for small-scale processing, and equipment needed at NIFOR training center, totalling N 0.2 million (US$0.3 million). An unallocated amount of N 8.2 million (US$12.4 million) would cover contin- gencies on the above items. Any surplus loan funds after completion of the project would be cancelled. 5.10 Disbursements of the Bank loan would be against import documentation, contracts, and certified records of expenditure. For disbursements made against certified records of expenditure, documentation would not be submitted for review but would be retained by TCU, OPC and the Tree Crop Section of NEU for scrutiny by Bank supervision missions. 5.11 In order to achieve a prompt and efficient flow of funds the follow- ing procedures would be used: TCU would prepare reimbursement claims under the signature of its General Manager and Controller of Finance. These docu- ments would be countersigned by the State Ministry of Finance who would submit them to the Federal Ministry of Finance for onward transhission to the Bank. OPC would prepare reimbursement claims under the signatures of its manager and chief accountant. An addendum would be added to the application for reimbursement specifically stating how much NAB had disbursed to OPC. Accounts and Audits 5.12 TCU would prepare annual budgets using cost estimates in this report as a base, amended where necessary to reflect changes in costs and project development policies. Such budgets would be submitted to the Steering Com- mittee for approval. TCU would thereafter establish, on a monthly basis cash flow statements indicating costs, revenues and additional capital requirements. Such monthly statements would be submitted to the Steering Committee for monitoring but project management would be authorized to operate on such monthly budgets unless officially informed to the contrary by the Chairman of the Steering Committee. 5.13 On the basis of the approved TCU budget, the State Government would make annual budget allocations to cover its own contribution to project costs as well as any additional funds required to bridge the gap between expenditure and disbursement of the Bank loan. Assurances were obtained from the State Government that a project bank account would be opened with a bank of their choice, and that TCU would have full access to funds within the limitations of the approved annual budget. It would be a condition of loan effectiveness that such account had been established and funded. 5.14 OPC, the Tree Crop Section of MEU, and TCU would: (i) keep records adequate to reflect, in accordance with consistently maintained sound account- ing practices, their operations and financial position; (ii) have their accounts audited by a firm of auditors acceptable to the Bank; (iii) submit copies of - 17 - their audited accounts and the auditors' reports thereon to the Bank within four months of the end of each financial year; (iv) cause the reports of the auditors to be of such scope and detail as the Bank may reasonably have requested; and (v) furnish such other information concerning their accounts as the Bank may reasonably have required. VI. ORGANIZATION AND MANAGEMENT 6.01 Project implemerntation would directly involve three organizations: (a) the Tree Crop Unit (TCU), (b) the Oil Palm Company Ltd. (OPC) and (c) the proposed Federal Department of Agriculture's Monitoring and Evaluation Unit (MEU). The Tree Crop Unit 6.02 General. TCU would be responsible for the smallholder program. The unit would have a high degree of financial and administrative autonomy and would be a component of the Ministry of Agriculture and Natural Resources (MANR). A Steering Committee, chaired by the Permanent Secretary of MANR, and comprised of representatives of relevant Government agencies would be responsible for determining TCU policy and approving development/operational programs and budgets. Details of the TCU's structure and operational proce- dures are given in Annex 3. A consulting firm acceptable to Government and the Bank would be engaged to set up a system of mechanized accounts that would meet the needs of the smallholder project and assurances to this effect were obtained. 6.03 Management Structure and Staffing. The structure of TCU is outlined in the Chart attached to Annex 3. For these projects TCU would have an oil palm division headquartered in Benin, with two regional units in Sapele and Agbor. TCU would be staffed primarily with personnel now employed by MANR or recruited especially for the purpose in Nigeria. However, the technical and financial complexity of the project will demand well qualified and experi- enced staff (see Annex 3, para 7), and if suitably qualified Nigerians were not available to fill the TCU senior management posts, staff for these posts would be recruited internationally. Assurances were obtained that TCU and its Steering Committee (established under the Second Cocoa Project) would be maintained in a form satisfactory to the Bank; that TCU would be adequately staffed at all times; and that TCU's senior management positions would be filled by qualified persons acceptable to the Bank and upon terms and condi- tions satisfactory to the Bank. 6.04 Operational Procedures. Notices calling for applications from smallholders and giving details of the scheme would be publicized through such media as local newspapers, radio and public administration offices. To facilitate the efficient employment of the field staff, particularly in the year of planting when the heaviest intensity of farm visits is required, a system of zonal development would be used. Thus in any given year appli- cations for participation would be restricted to specific zones within the - 18 - project area. Any shortfall in applications from a primary zone could be catered for by having an adjacent reserve zone from which applications could be requested but only accepted in the event of there being a shortfall in the primary zone. Applications would be called at the beginning of January of the year preceding the year of planting and the closing date would be the end of March in the same year. On receipt of the application, the smallhold- ings would be inspected by TCU staff to obtain details of vegetation, topo- graphy, soil type, size of holding, the composition of the family labor force available, and, in consultation with the cooperatives, the credit status of the farmer. Applications would be approved by a Planting Authorization Committee (PAC) composed of the TCU General Manager as chairman, the Control- ler of Field Operation, the Controller of Finance and a representative of the cooperative societies. 6.05 TCU staff would provide technical supervision and advice and ensure in particular that: (i) if Eupatorium infestation covered more than 30% of the area, the weeds were cleared before an application was approved; (ii) all old palm trees were felled before new planting/replanting; and (iii) in order to prevent encroachment into the root systems area of the young palms, no intercropping would be permitted in the new plantings/replantings of palms. Assurances were obtained that maintenance of suitable husbandry standards including those specified above would be a condition of smallholder partici- pation in the project. 6.06 Purchase of Smallholder ffb. Every two weeks the mill would provide TCU with a schedule of ffb purchased, and amounts due to smallholders, and credit the TCU account with the appropriate funds. TCU, after deducting loan repayments due to the State Government, would pay the balance due to each cooperative in respect of its members. The cooperatives after deducting the interest spread would distribute the balance to its members (see para 4.10). The cooperatives would guarantee the repayment of the loan by their members. The Oil Palm Company (OPC) 6.07 General. The Oil Palm Company Ltd. (OPC) is a private limited liability company, formed under the Companies Decree 1968, and registered on April 14, 1972. All its shares are owned by Government or Government nominees. The organization and management of OPC is summarized below and set out in further detail in Annex 3. 6.08 The OPC was formed to manage Ajagbodudu Estate, 1/ purchased from PAMOL (Unilever) in November 1971, and the estates, formerly operated by the Mid-West Development Corporation, which were taken over in April 1972. The assets include a processing mill on Ajagbodudu Estate and two small mills serving the other estates. The estates total some 5,360 ha. The head office is on Ajagbodudu Estate. In addition, Ajagbodudu and the other estates have 1/ Ajagbodudu estate was named Cowan estate during the period it was owned by PAMOL. - 19 - their own offices which maintain accounting and statistical records. OPC has a sound accounting and budgeting system. The accounts are audited by a Lagos firm of chartered accountants. The Board of Directors consists of two re- presentatives of the State Ministry of Agriculture (one of whom is chairman), one representative from each of the Ministries of Planning, Finance, and Forestry, and one representative from the Marketing Board. 6.09 Management and Staffing. The senior management comprises: (a) General Manager; (b) Estate Manager, who is also responsible for the processing mill; (c) Chief Accountant; and (d) Company Secretary. The great majority of OPC's management and staff were trained by PAMOL, whose operating methods continue to be used. Although the present management structure and staffing are basically sound, the expansion of activities under the project would call for some strengthening and some changes. The proposed organization is summarized in a Chart attached to Annex 3. The main changes would be: (a) the appointment of two additional Estate Managers for the new estates; (b) the appointment of two Oil Mill Engineers, who would manage the new mills and the fruit collection system, and would be directly responsible to the General Manager. The new positions would be filled by international recruit- ment, if necessary. Assurances were obtained that OPC's Estate Managers and Oil Mill Engineers would have qualifications and experience and be appointed on terms and conditions acceptable to the Bank, and that no change in appoint- ment to the position of its General Manager and Chief Accountant would be made without prior consultation with the Bank. Federal Department of Agriculture's Monitoring and Evaluation Unit 6.10 Under the Federal Department of Agriculture (FDA), which is a depart- ment of the Federal Ministry of Agriculture and Natural Resources, a Monitoring and Evaluation Unit (MEU) would be established. The MEU would be primarily concerned with: (a) the financial and technical monitoring of ongoing projects; (b) evaluating their financial, economic and socioeconomic impact; and (c) providing assistance in the planning and preparation of future development programs. 6.11 The main tree crop projects involve cocoa, oil palm, and rubber, and Benin in the Mid-Western State would be a suitable base for staff concerned with monitoring these projects. FDA would be the executing agency and assur- ances were obtained that within one year of the date of effectiveness a team of specialists would be recruited to form the Tree Crop Section of the Monitor- ing and Evaluation Unit (MEU). 1/ Assurances were also obtained that the senior specialist staff of the Tree Crop Section of MEU would have qualifi- cations acceptable to FMG and the Bank and would be employed upon terms and conditions satisfactory to the Bank. 6.12 The specialist staff of the Tree Crop Section of MEU would work in close conjunction with the appropriate Federal research institutions and 1/ More details on MEU are in the supplementary Annexes (Supplement 4). - 20 - university faculties. Consultants acceptable to FMG and the Bank would periodically be used to cover specific fields of activity such as research, business management, processing engineering and project preparation and assurances to this effect were obtained. The Tree Crop Section of MEU would prepare progress reports for submission to Federal and State Governments, and, where appropriate, external financing agencies. 6.13 The financial control system being used in projects would be examined by the Tree Crop Section of MEU at least every six-months with particular attention to the timing and procedures used in procurement; disbursement control; grant/credit accounting; produce price formulation; and the control of credit repayments. Technical evaluation would concentrate on assessing the standards being attained in nurseries, field planting, maintenance, harvesting/tapping, produce collection, and processing. To facilitate objec- tive monitoring it will be necessary to establish an agreed system for quanti- tative assessment of work done in relation to the main field practices. Inspection and field supervisory staff must apply the same criteria if the analysis of inspection data and the recommendations arising therefrom are to serve as effective instruments of management. 6.14 Continuous evaluation of the economic and socioeconomic impact of the projects would be carried out in conjunction with institutions such as the Nigerian Institute for Social and Economic Research (NISER). In addition to measuring the financial/economic benefits accruing to the participating farmers and companies, assessments would be made of changes in employment levels, business activity, consumption patterns, participation in education and other economic and socio-economic indicators of community well being. 6.15 The Tree Crop Section of MEU would assist in the planning and prepa- ration of future development programs by providing project management units and oil palm companies with the basic support services required such as (a) providing detailed guidelines for project preparation, (b) ensuring that services required from other institutions are made available for project preparation, and (c) attending Steering Committee and Board meetings. 6.16 The Nigerian specialist staff required to monitor the tree crop projects would need to be given opportunities to receive advanced training in selected fields of study. This would include their being attached to specific institutions in neighboring West African countries and the Far East for periods ranging from 3 to 4 months. 6.17 The costs of the Tree Crop Section of MEU (Annex 5, Table 17) are estimated at N 5.5 million (US$8.4 million) over the nine-year development period (1975-1983). Annual costs would amount to about N 0.61 million (US$0.93 million), but since the Tree Crop Section is responsible for all tree crops (oil palm, cocoa, and rubber) it is estimated that only 50% of costs should be charged to oil palm development. Taking this into account, and the fact that at this juncture three oil palm projects have been appraised (para 1.03), the average annual costs for each project would be about N 100,000 (US$152,000). However, the main advantage of the Tree Crop Section of MEU would be its institution building impact. - 21 - VII. PRODUCTION, MARKETING, FARMER BENEFITS, FINANCIAL IMPLICATIONS TO GOVERNMENT Yields and Production 7.01 Nucleus estate and smallholder oil palms would begin yielding in the fourth year after planting. At full maturity the nucleus estates are expected to yield 12.5 tons per ha except for Nsukwa estate which is estimated to yield only 11.3 tons per ha. Smallholder yields are estimated lower at 10 tons per ha reflecting anticipated lower field maintenance standards. Oil to ffb extraction rates are assumed to rise from 16% in the first year of harvesting reaching 22% at full maturity; the weight of kernels is estimated at 5% of ffb. These yield estimates and extraction levels are generally in line with those experienced with equivalent planting material under similar ecological conditions in West Africa. 7.02 At full maturity in 1990 the project would produce annually about 38,400 tons of palm oil and 8,700 tons of palm kernels. The nucleus estates would produce about 54% of total output and project smallholders the balance. See Annex 7. Markets and Prices 7.03 In 1970, production of palm oil in Nigeria was estimated to be about 490,000 tons of which all but 9,000 tons was consumed in the domestic market. This is in marked contrast to earlier years when exports were consi- derable; for example, in 1960 production was 545,000 tons and exports 189,000 tons. Based on an expected population growth rate sf almost 3% per annum, a projected per capita income growth of 3% per annum and an income elasticity coefficient for palm oil of 0.5. household consumption of raw oil should increase at roughly 4.5% per annum until 1980, reaching a total of 690,000 tons in 1980, or about 8.8 kg per capita. During the early 1980s per capita consumpticn can be expected to level off, and domestic consumption should increase at about 3.25%0 per annum. This would result in a projected domestic consumpticn about 810,000 tons by 1985. When the total estimated demand for palm oil -rom socal processors, such as manufacturers of margarine and soap, is added, the aggregate domestic demand in Nigeria is expected to be around 700,000 tons in 1980, and 825,000 tons in 1985. The projections indicate that by 1985, and without a major oil palm development program, there will be a shortfall of around 275,000 tons of palm oil that will have to be supplied through imports. 7.04 The Mid-Western State Marketing Board (MWSMB) is authorized, under current legislation, to purchase all palm oil and kernels offered for sale. This is a legacy frcm times when Nigeria was a major exporter of palm oil and of kernelsc Under the old arrangement MWSMB bought whatever oil was surplus to domestic requirements and exported this through the Nigerian Produce Marketing Company (NPMC). The amounts of oil available for export in the Mid-Western State have d,eclined rapidly in recent years and are now nonexistent. As there is almrnst no domestic market for palm kernels or for - 22 - palm kernel products--palm kernel oil and cake--the great bulk of these con- tinue to be exported through the medium of MWSMB and NPMC. As the Marketing Board functioned in the past as much as a taxation mechanism as a price stabilization agency, it has jealously guarded its rights to purchase palm oil surplus to domestic needs. In particular it has tended to treat the production from oil palm estates as being in the latter category. In recent years, however, it has permitted estates to sell oil on the domestic market although it would appear to retain the power to purchase their oil. Given this situation assurances were obtained that OPC would be permitted to sell its palm oil produced under the project freely on the domestic market. This assurance is required to ensure that OPC and its associated smallholders would receive full market value for their production. 7.05 Domestic prices of palm oil have risen considerably during the last few vears. Thus the average wholesale price of special grade oil in Ibadan rose from about N 160 per ton in 1971 to about N 200 per ton in 1972 and about N 240 in 1973. Significant seasonal price variations result in average December-January prices of palm oil being nearly 50% higher than the average April-May prices. Because of the increase in prices for palm oil, smallholders have also obtained higher prices for their ffb, although it should be remembered that presently smallholdings have very low yields. 7.06 The Marketing Board purchases virtually all palm kernels offered for sale and until recently farmers received about N 47 per ton; however, FMG announced that the price for the 1974/75 period would be N 135/ton. Kernels were normally exported unprocessed but in recent years investments in kernel crushing operations in Nigeria have considerably increased. The project would sell kernels ex-millgate either for export or for sale to local crushers. 7.07 In calculating the project's benefits, a value for palm oil equiv- alent to an import substitution price for oil has been used. This is based on the Bank's projected world price of US$495 per metric ton cif Europe in 1980. Palm kernels have been valued at an export parity price of N 120 per ton based on the Bank's world price forecast of US$330 per metric ton cif Europe in 1980 (see Annex 8). Farmer Benefits 7.08 It is expected that most farm families in the project area would be able to plant and maintain 2 ha of oil palm without a significant reduction in their current farming activities. On such a typical planting of 2 ha all developed at one time, production would begin in the fourth year from planting and full bearing would be reached in the eighth year. Over the four-year establishment period the farmer would receive a gross return 1/ from the cash element of the grant/credit equal to about N 0.60 per manday worked; the current unofficial farm wage rate is about N 0.70. A farm budget is given in Annex 9. 1/ Gross return is return to management, labor, land and capital. - 23 - 7.09 Assuming a farmgate price of N 20.0 per ton of ffb, the gross return (in constant 1974 terms) from 2 ha would start at N 70.0 in the first year of production (Year 4), rising to N 298.0 during the farmer's loan repayment period (Years 7-12) and thereafter would average about N 370,0 in maturity. These returns compare favorably with those obtainable from alter- native tree or food crops, even where improved management and planting mate- rial are used. After establishment a 2-ha planting would require between 50 and 70 mandays a year for maintenance and harvesting, and gross returns per manday would rise rapidly from N 1.3 in the year of first production (Year 4) to an average of N 4.5 during Years 7-12 of loan repayment and N 6.2 thereafter. 7.10 Official data on smallholder farm incomes is sketchy. However, gross returns on existing smallholdings are estimated to be in the region of N 200 to N 300 per year including N 100 - N 200 value of foodcrops consumed by the household. Thus, under the project a minimum planting of 1 ha of oil palm capable of generating a gross margin of N 185 per year, when mature (see Annex 9), would represent a very substantial increment to farm incomes in the area. 7.11 Participating smallholders would receive a bonus when the mill's receipts for palm products exceeded the full cost of fruit collection, pro- cessing and financial charges for the smallholder component of mill through- put. The bonus would be distributed half-yearly through the cooperative societies according to smallholders' fruit sales to the mill over the period. With the likely increase of palm oil prices in Nigeria over the project period these smallholder bonuses are expected to be substantial. Financial Returns to OPC 7.12 The projected OPC cash flow is at Annex 10, and is expressed in constant (1974) terms. The effects of inflation on both inflow and outflow have been calculated using the price contingencies described in para 5.02 for project costs, a 7% compounded rate for other costs, and the Bank's interna- tional inflation index for the value of benefits. 7.13 The annual cash balance during the project period 1975-1983 fluctuates but averages about N 140,000 in constant terms and about N 360,000 in current terms. Accordingly, no liquidity problems are expected and any deficits and temporary seasonal shortfalls should be readily covered by normal overdraft facilities or retained earnings. After 1984, when loan repayment begins, there is a rapidly increasing positive net cash flow in each year. This rises in constant terms from N 2.0 million in 1985 to N 5.0 million in 1990 and in current terms from N 5.8 million to N 17.6 million. These figures take no account, however, of company tax, dividends or bonus payments to smallholders, none of which can be meaningfully estimated at this range because of difficulties in forecasting future levels of taxation, price trends, and OPC policy with respect to new capital development projects. The repayment period of the loan, however, makes allowance for these factors and the cover for debt service is considered adequate in the early years of amortization, and ample afterwards. - 24 - Financial Implications for the State Government 7.14 The State Government's involvement in the project is threefold (a) it holds 100% equity in OPC which should be highly profitable (see para 7.13) with a cumulative surplus in current terms of about N 150 million 1/ generated by 1994 the final year of loan repayment, (b) it subsidizes the smallholder scheme by providing grants during the oil palm establishment phase, ferti- lizer subsidies, and the normal extension services that apply to small farmer agricultural activities throughout Nigeria, and (c) it lends and onlends funds to OPC, which should give it some interest income. Through this scheme (See also Annex 11) it is estimated that during the development period, the State Government would have to meet annual cash deficits in current terms ranging from N 400,000 (US$600,000) to N 2.6 million (US$3.9 million). During the repayment period the State Government would first have annual surpluses up to N 100,000 (US$150,000), but later would have to meet annual cash deficits increasing to N 500,000 (US$760,000). This is due to the fact that repayments of the Bank loan and in current terms increasing overhead costs will outweight the repayments of OPC overtime. By 1994 (last year of loan repayments) deficits would have accumulated to N 11.9 million (US$18.1 million). The State would receive no direct revenue contribution from smallholder oil palm production as there would be no Marketing Board price differential or produce sales tax, consequently the costs of this scheme would be defrayed against general State revenues. Federal policy with respect to the distribution of mineral oil revenues basically aims at meeting overall financial deficiencies in State revenues that are considered justifiable and would include any incurred as a ;result of the smallholder oil palm project. On the other hand, the State would be in receipt of substantial dividends from OPC (see para 7.13). VIII. BENEFITS AND JUSTIFICATION 8.01 The direct benefits from the project would be the increase generated in palm oil and kernel production which is estimated at 38,400 tons of palm oil and 8,700 tons of kernels annually at maturity in 1990 and thereafter. The economic rate of return is estimated at 18.2% for the smallholder compo- nent and 17.3% for the estate component of the project. Assumptions used in computing the rate of return are given in Annex 12. Project life is taken as 30 years. Costs are detailed in Annex 5, yields in Annex 7, and prices in Annex 8. Labor costs are shadow priced at 65% to reflect its average opportunity cost in the project area and foreign exchange is shadow priced at N 1.00 = US$1.27 compared with the official exchange rate of N 1.00 = US$1.52 (a premium of 20%). If labor and foreign exchange are now shadow priced, the rate of return is estimated at 15.5% for the smallholder compo- nent and 14.5% for the estate component. 8.02 As is usual when project benefits occur after a long development period, the rate of return is relatively insensitive to changes in costs and 1/ Prior to allowance for depreciation and reserves, and payment of taxes, dividends and bonuses to smallholders. - 25 - benefits (Annex 12, Table 3). A 10% increase in cost accompanied by a 10% decrease in benefits gives rates of return of 15.3% and 14.4% for smallholders and estates respectively. A 20% increase in costs and a simultaneous 20% decrease in benefits reduces the rates to 12.5% and 11.5%. 8.03 Project palm oil production would substitute for imports that other- wise would be required and kernels or kernel oil would be exported. Treating palm oil production as foreign exchange savings and kernel production as foreign exchange earnings, and using the Bank's price forecast in current 1985 terms (for palm oil US$757 per metric ton and for kernels US$504 per metric ton) annual net foreign exchange earnings/savings at full maturity (1990 onwards) would be about US$27 million. 8.04 The project would sustain and develop an industry that at full maturity (1990 onwards) would generate annually incremental net economic benefits of N 8.0 million (US$12.2 million) in constant 1974 prices. During the establishment period the project would create 12,900 man-years of employ- ment (6,200 man-years for smallholder field establishment and 6,700 man-years for estate field establishment). At full maturity the estates would employ about 900 laborers and about 4,000 smallholders would participate in the project. Assuming average family size of 6-7, some 32,000 people in total would benefit from the project. 8.05 The project has a number of largely unquantifiable benefits. In particular, it would demonstrate the feasibility of a well-supervised agri- cultural scheme. It would form and strengthen an agricultural extension service which would be able to handle further phases of the oil palm program or use its experience for diversification into other crops. The cooperatives would be strengthened through their participation in the project both organi- zationally and financially. The institutional framework established under the project should ultimately facilitate the provision of credit not only for oil palm planting but also for other crops grown by the farmers. The improvement of roads under the project would benefit not just project farmers but the whole farm community of project areas through such effects as more public transportation, easier access for farm products to markets, greater availability of goods and services to project area and lower transport costs. IX. RECOMMENDATIONS 9.01 Among the assurances obtained were the following principal points: (a) the project would confine the grant/credit scheme to small- holders planting, or replanting, a minimum of 1 ha and a maximum of 10 ha; smallholders would also be required to be members of a registered cooperative society (para 4.09); (b) OPC would adopt a pricing formula for purchases of ffb from smallholders determined, in accordance with principles acceptable to the Bank, by the State Price Policy Committee, which would be established not later than 1980 (para 4.16); - 26 - (c) any financial losses incurred by the mills as a result of smallholder failing to deliver their produce to any of the palm oil mills under the project up to annual targets agreed between TCU and OPC, would be made good to OPC by the State Government (para 4.17); (d) smallholders would sign a loan agreement with TCU and their cooperative, and the terms and conditions of this loan agreement would be satisfactory to the Bank (paras 4.09, 4.10, and 5.07); (e) the terms and conditions of the subsidiary loan agreement between FMG and the State Government would be acceptable to the Bank; and the terms and conditions of the subsidiary loan agreement between the State Government and OPC would also be acceptable to the Bank (para 5.07); (f) the State shall maintain TCU and its Steering Committee in a form satisfactory to the Bank and shall keep TCU adequately staffed at all times (para 6.03); (g) senior management positions of TCU would be filled by qualified persons acceptable to the Government and the Banxk and they would be employed upon terms and conditions satisfactory to the Bank (para 6.03); (h) OPC's Estate Managers and Oil Mill Engineers would have qualifications and experience and be appointed on terms and conditions acceptable to the Bank; OPC shall not make a change in appointment to the position of its General Manager and Chief Accountant without prior consultation with the Bank (para 6.09); (i) within one year of the date of effectiveness a team of specialists would be recruited to form the Tree Crop Section of the Monitoring and Evaluation Unit (MEU) (para 6.11); (j) MEU's specialists and consultants should be acceptable to the Bank and would be employed upon terms and conditions satisfactory to the Bank (paras 6.11 and 6.12); and (k) OPC would be permitted to sell its palm oil produced under the project freely on the domestic market (para 7.04). 9.02 Conditions of effectiveness of the loan would be that: (a) OPC had taken possession under a 99-year lease of all lands acquired by the State for conveyance to OPC to enable it to develop the project estates (para 3.08); - 27 - (b) subsidiary loan agreements acceptable to the Bank had been signed between FMG and the State Government, and the State Government and OPC (para 5.07); and (c) the State Government had established and funded a project account (para 5.13). 9.03 A condition of loan disbursement for investment in the mills and fruit collection system would be that confirmation had been received from TCU and the Tree Crop Section of MEU that OPC's mill development proposals were in line with the project's overall production program (para 4.16). 9.04 It was agreed that from the date of ending of loan negotiations retroactive financing of up to US$100,000 would be made mainly for employ- ment of key personnel and for nurseries (para 5.07). ANNEX 1 Page 1 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE State Institutions 1/ 1. Ministry of Agriculture and Natural Resources (MANR). The Ministry is responsible for planning and executing agricultural programs within the State. In the past, in the absence of effective planning and coordinating at the Federal level, each State planned its own development, seldom looking beyond its borders. Little or no consideration was then given to comparative economic advantage as seen from a country-wide basis and hence no regional specialization could develop. But ecological zones, water catchment areas, drainage basins and natural forest stands were part of the natural environment before state boundaries were formed. State plans therefore do not necessarily reflect the best allocation of resources for the nation as a whole. There was and still is unnecessary duplication of efforts and the effectiveness of scarce resources (mainly trained manpower since at present funds from mineral oil are available in ample surplus) is therefore reduced. However, FMG and the States recognize this problem and are taking steps to improve machinery for planning and coordinating agricultural development on a country-wide basis. The proposed Tree Crop Section of the Monitoring and Evaluation Unit (details are in the Supplementary Annexes - Supplement 4) is especially designed to further-this as far as tree crops are concerned. 2. There are adequate numbers of experienced staff in the Ministry of Agriculture and Natural Resources, but as a whole the Ministry does not appear very strong. Especially with a cocoa project (Loan 1045-UNI), this project, and a rubber project appraised in September/October 1974, the Ministry needs to look very carefully at its manpower and future manpower requirements if it is not to promote development in a certain agricultural field at the expense of development in other agricultural fields. 3. The Cooperative Movement will play an important role in the project. Only members of cooperatives would be allowed to participate in the project, and credit facilities would be provided through TCU in conjunction with the cooperatives. A loan agreement would be signed between the farmer, TCU and the cooperative. Experience gained by the cooperatives in channeling credit to the farmers for oil palm development would establish a sound basis for providing seasonal credit to farmers both for oil palm and other crops. 1/ Federal Institutions are described in the Supplementary Annexes to the Nigerian Oil Palm Projects Appraisal Reports (Supplement 3). ANNEX 1 Page 2 4. The Mid-Western State Cooperative Movement was part of the Western Region Cooperative Movement before the foundation of the Mid-Western State. It suffered from the separation and especially from the civil disturbances. However the cooperative movement is progressively recovering and, although still rather young, appears to be capable of continuing its healthy growth. 5. The cooperative movement consists of primary societies (more than 900 with around 35,000 members), secondary unions (more than 20) and two apex organizations - the Mid-Western Nigeria Cooperative Federation Ltd. (MWNCF) for marketing and the Mid-Western Nigeria Cooperative Central Finan- cing Society Ltd. (CFS) for credit. The movement is regulated by the Cooperative Societies Division of the Ministry of Trade and Industry. 6. The primary societies, functioning through Produce Marketing Unions, act as agents of the Marketing Board. They are engaged in the marketing of cocoa, palm kernels and cotton, and also rubber although rubber does not come under the jurisdiction of the Marketing Board. There was no single multi- purpose cooperative society until 1966 when the Cooperative Societies Division launched a campaign to promote them, and at present there are 305 multipurpose primary societies and nine unions with about 10,000 members. This type of cooperative became very popular in rural areas and is best suited to further the purposes of the project. The cooperative situation in Mid-Western State is summarized below: Cooperative Societies in Mid-Western State (as of 6/30/73) Type Number Membership Capital /1 ('000) (N '000) Produce marketing 128 4.0 62.4 Multipurpose 314 10.1 445.6 Credit societies 442 16.3 496.7 Other cooperatives /2 61 5.0 103.0 Total 945 35.4 1,187.7 /1 Paid up shares, savings and deposits. /2 Such as transport, consumer, industrial, fishermen and other cooperatives. 7. The Mid-Western Nigeria Cooperative Central Financing Society Ltd. (CFS), was established in 1966 with the aim to service the credit needs of the cooperative movement. Subscribed capital stands at N 40,000 and annual turnover at about N 100,000. Until recently arrears amounted to 30% of the ANNEX 1 Page 3 loan portfolio, but this has now been reduced to 15%. 1/ Government wants CFS to play a more important role, and a capital mobilization scheme has been launched. The ultimate goal is to convert CFS into a Cooperative Bank of M4id-Western Nigeria. 8. Another apex organization of the cooperative movement is the Mid- Western Nigeria Cooperative Federation Ltd. (IMWNCF), which was established in 1964. It is engaged in the marketing, transporting and exporting of the products of its members (primary societies, operating through their unions), and in the buying in bulk of farm inputs and consumption goods, MWNCF can guarantee loans advanced against expected production, but experience with this form of credit has been unsatisfactory and very few guarantees are given. 9. The Cooperative Societies Division of the Ministry of Trade and Industry regulates the Cooperative Movement. It is headed by the Registrar of Cooperatives and it has headquarters in Benin. There are four assistant registrars who are in charge of: marketing, credit, training and development, and planning. There are five circle offices, which provide services to and control over the unions and societies. 2/ 10. Legal steps required to form a cooperative are minimal. After an application has been approved, the cooperative society becomes an unregistered society; it can be fully registered after supervision proved that the society is healthy. Of the 945 cooperatives (para 6), 608 are formally registered and 337 are unregistered. 11. Members in a primary society are at present required to pay an entrance fee of N 6, but payment can be spread over three years. 12. The cooperative movement is satisfactorily established in Mid-Western State. With the aid of the TCU, cooperatives will be able to participate in the chanelling of credit and the distribution of payments for fruit collec- ted. The cooperatives would also guarantee the repayment of loans, and an interest spread would be provided to cover the risk. 13. State Marketing Board. Details on the Marketing Boards and the Mlid-Western State Marketing Board are given in the Supplementary Annexes (Supplement 12). 14. The State Ministry of Works and Transport (MWT), is responsible for the building and maintenance of roads. Under the project, earth roads would be built and upgraded by a road unit under TCU, but subsequent maintenance would be the responsibility of MWT (for Road Program see Annex 4). 1/ For more details see Report 282a-UNI, Appraisal of Second Cocoa Project, Nigeria, Annex 4. 2/ For organization chart, see Report 282a-UNI, Appraisal of Second Cocoa Project, Nigeria, Annex 3. ANNEX 1 Page 4 15. The Oil Palm Company Ltd. (OPC) was established in 1971 and re- gistered on April 14, 1972, when the State Government took over Cowan estate 1/ from PAMOL (Unilever). In April 1972, OPC also took over all oil palm planta- tions formally operated by the Mid-Western Development Corporation. Under the project, OPC would establish and manage the estates, the central palm oil mills, and the fruit collection system. For more details see Annex 3. 1/ It was subsequently referred to as Ajagbodudu estate. ANNEX 2 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Planting Program under the Project 1. The phasing of the planting of a total of 15,840 ha under the project - 5,600 ha on new estates, 2,240 ha replanting of Ajagbodudu estate and 8,000 ha smallholder plantings - is as follows: Ila Planted 1976 1977 1978 1979 1980 1981 1982 Total ESTATES Western Area HIosogar estate 400 600 800 1,000 - - - 2,800 Aj agbodudu Replant- ing - - - - 640 800 800 2,240 400 600 800 1,000 640 800 800 5,040 Eastern Area Nsukwa estate 400 600 800 1,000 - - - 2,800 Total Estates 800 1,200 1,600 2,000 640 800 800 7,840 SMALLHOLDERS Western Area 400 600 800 1,000 1,200 - 4,000 Eastern Area 400 600 800 1,000 1,200 - - 4,000 Total Small- holders 800 1,200 1,600 2,000 2,400 - - 8,000 Grand Total 1_600 2,400 3,200 4,000 3,040 800 800 15,840 2. Although Ajagbodudu Estate encompasses a total planted area of 2,660 ha, only 2,240 ha are replanted under the project, because Ajagbodudu has already established some nurseries and will replant a small area of its estate, 162 ha in 1974 and 259 ha in 1975. 3. The project is phase 1 of a program ultimately scheduled to plant over 24,000 ha of oil palm. The project encompasses 15,840 ha and Ajagbodudu's own replantings involve about 420 ha. In phase 2 of the program another 8,000 ha of smallholder plantings will be established. ANNEX 3 Page 1 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Organization and Management 1. Project implementation would directly involve three organizations, namely: The proposed Tree Crop Unit (TCU) - which would be responsible for implementing the new planting/replanting program for smallholders; The Oil Palm Company Ltd (OPC) - which would be responsible for new planting/replanting the nucleus estates, constructing and operating centrai processing mills, and establishing a smallholder fruit collection system; and The proposed Federal Department of Agriculture's - Monitoring and Evaluation Unit (MEU) 1/ - a section of which would be responsible for monitoring and evaluating progress in tree crop projects and assisting in planning future development programs for the sector. A. Tree Crop Unit (TCU) General Objectives 2. A Tree Crop Unit (TCU) established under the second Cocoa Project 2/ would be responsible for implementing programs involving the new planting/ replanting of cocoa, oil palm, and rubber. The TCU would have a high degree of financial and administrative autonomy and would report to the Ministry of Agriculture and Natural Resources (MANR). A Steering Committee comprised of representatives of relevant Government agencies would be responsible for determining TCU policy and approving development/operations programs and budgets. A consulting firm acceptable to Government and the Bank would be engaged to set up a system of mechanized accounts that meets the needs of the smallholder project. The same firm would be asked to advise on the type and venues for training the staff required to operate the system. 1/ For details on MEU, see Supplementary Annexes (Supplement 4). 2/ Loan 1045-UNI, and appraisal report 282a-UNI. ANNEX 3 Page 2 3. TCU headquarters would be in Benin. An oil palm division would be established under TCU, which would have Regional Units at Sapele and Agbor. TCU would be staffed primarily with personnel either seconded from MANR or recruited elsewhere in Nigeria. It must, however, be emphasized that the technical and financial direction of the tree crop projects will require well qualified and experienced staff. TCU would be responsible for appraising new planting/replanting applications and providing the technical and financial services involved in the field establishment and post maturity stages. The planting techniques and standards to be followed by TCU would be those agreed with the proposed Tree Crop Section of the Federal Department of Agriculture's Monitoring and Evaluation Unit (MEU) and the relevant Federal Research Institutions. The Steering Committee - Its Composition and Functions 4. The Steering Committee would be comprised of the following: i) Chairman - Permanent Secretary of Ministry of Agriculture and Natural Resources; ii) Permanent Secretary of the Ministry of Finance or his representative; iii) A senior representative of the Cooperative Division or the Cooperative Financing Society; iv) A senior representative of the Ministry of Economic Develop- ment and Reconstruction; v) A senior representative of the Oil Palm Company Limited; vi) A representative of the Federal Ministry of Agriculture; vii) The General Manager of TCU; viii) The Controller of Agricultural Services; ix) The Head of TCU's Oil Palm Division - who would be secretary for oil palm meetings. The Chairman would be authorized to co-opt up to three additional nonvoting members to the Committee and during the road improvement period, a repre- sentative of the Ministry of Works and Transport would be so co-opted. A quorum would require 6 voting members and in the event of a tie, the Chair- man would have a casting vote. 5. The Committee would meet quarterly, and its principal functions would be to: ANNEX 3 Page 3 i) determine policy; ii) appoint the General Manager, Controller of Field Operations and the Controller of Finance, for which Bank agreement would be required; iii) review the organizational structure (see Charts attached to this Annex) of the TCU, including terms of staff employment; iv) approve the annual development/operational programs and budgets; v) review quarterly progress reports and approve any program amendments; and vi) approve the annual report and accounts. Management Structure and Staffing 6. Management Structure. The basic management structure is outlined in the Charts attached to this Annex, the main divisions of function being: i) headquarters staff directing and supervising the technical and financial services being operated by the Regional Units; liaising closely with the Tree Crop Section of the Monitoring and Evaluation Unit of the Federal Department of Agriculture in evaluating ongoing and planning future programs, establishing training programs for staff and farmers; ii) financial control, including budget preparation, control of smallholder grant/credit and fruit payment accounts, internal audit and general administration; iii) the Regional Unit staff responsible for the distribution and subsequent appraisal of applications, supervision of grant/ credit services, providing extension and other services to the farmers. When OPC's central processing m'll establishes a fruit collection system, the Regional Unit staff will need to Liaise closely with the mill to ensure that the smallholders both understand and utilize the system. Deductions for loan repayments would be made from the value of fruit purchases. TCU's Controller of Finance would be responsible for calculating: (a) the loan repayments due to the State Government; (b) the balance to be passed on to the Cooperatives; and (c) the part of that balance to be distributed to the individual producers in payment for fruit sold to the central mill. 7. Staffing. The project's technical and financial direction would require suitably qualified and experienced staff, recruited internationally if necessary. Middle level technical and administrative positions would be filled by professional or senior technical grade officers recruited from ANNEX 3 Page 4 within the State or from other States in Nigeria. Lower level field and administrative staff would be recruited from existing Government agencies or the private sector. Details of the numbers and phasing of professional and technical staff requirements are given in Annex 5, Tables 5 and 6. 8. The General Manager - the chief executive of TCU would be delegated full responsibility for implementing the new planting/replanting program. He would be directly responsible through the Controller of Agricultural Services to the Permanent Secretary of the Ministry of Agriculture. The person appointed should have a professional qualification in agriculture and at least 10 years experience, 5 of which should have been in a senior administrative position. 9. The Controller of Field Operations - would be responsible for organ- izing and directing the technical aspects of the program, including nursery work, appraisal of applications, supervision of planting and maintenance in the immature and mature stages. He would also be responsible for organizing in-service training for all levels of field staff. The person appointed should have had at least 8 years experience of tree crop planting (oil palm, cocoa or rubber), preferably at a senior management level with a commercial organization. 10. The Controller of Finance - would be responsible for the general administration of the TCU and all project financial controls and procedures. This man would need to be a well qualified accountant with at least 8 years experience at senior management level preferably in agro-industry. 11. Head of Oil Palm Division - would be responsible for implementing the technical appraisal and supervision of all field operations. He would need to be very experienced in modern oil palm planting techniques with at least five years at a senior field management level. 12. Regional Unit Managers of the Oil Palm Division - would be in charge of the field operations at regional level and should be Senior Agricultural Officers (SAO) with about 3 years experience at that level. Preference would be given to SAO's who had experience of modern oil palm planting techniques, but in any event, these officers would be given in- service training courses at NIFOR. Other professional, technical and admin- istrative staff of the Regional Units would mainly be recruited from Govern- ment services or directly from tertiary/secondary level educational institu- tions. In order to equip such staff with the specialized techniques required for implementing this project, appropriate in-service training would be given at selected institutions. Operational Procedures 13. Operational procedures are described in the Supplementary Annexes (Supplement 9) and the grant/credit procedures are detailed in Supplement 10. ANNEX 3 Page 5 Training 14. Technical training at all levels will comprise a very important sector of project activity. To ensure an effective start-up in 1975, inten- sive training in selected spheres such- as nursery and field planting tech- niques will need to be started as soon as possible. The type of training involved can be divided into four basic categories: Senior Officers, Nur- sery Staff, Field Staff, and Farmer Training. A schedule and estimate of the cost of training are given in Annex 5, Table 8. More details in the Supplementary Annexes (Supplement 11). B. The Oil Palm Company (OPC) General 15. The Oil Palm Company Ltd. (OPC) is a private limited liability company, formed under the Companies Decree 1968, and registered on April 14, 1972. All its shares are owned by Government or Government nominees; its designation as a private company means that transfers of shares are restricted and that any invitation to the public to subscribe for any shares or deben- tures of the company is prohibited. OPC's shares are presently held direct by the State Government. It is proposed, however, to transfer them to the Nigerian Economic Welfare Services Ltd. (NEWS), which was formed in 1971 to act as a holding company for all Government-owned companies. Details of the arrangements are still being worked out, but, as both companies are wholly owned by Government, there are unlikely to be any policy changes of signifi- cance for the proposed project. 16. The OPC was formed to manage Cowan Estate, 1/ which was purchased from PAMOL (Unilever) in November 1971, and the estates formerly operated by the Mid-Western Development Corporation, which were taken over in April, 1972. The assets include a large processing mill on Ajagbodudu Estate and two small mills serving the other estates. The total area under OPC management is now as follows: ha Ajagbodudu Estate 2,660 Ewohimi Estate 790 Igueben Estate 820 Ubuluku Estate 690 Adwukwai Estate 400 Total 5,360 1/ Cowan Estate was subsequently referred to as Ajagbodudu Estate. ANNEX 3 Page 6 17. The condition of the estates varies. Ajagbodudu Estate was planted from 1936 to 1940 with old selected seedlings. Wilt disease reduced the plant- ing density from 60 to 40 trees per acre, and the yield is now about 7.5 tons of ffb per ha. Field maintenance and harvesting standards are satisfactory and it is expected that production could be maintained at its present level for a further six to eight years. The other estates were planted from 1953 to 1967 in the region east of Benin, where climatic conditions are marginal for oil palm. Maintenance has been neglected for years, and severe damage has been caused by rodents and disease. It is doubtful whether these estates could be profitably rehabilitated; further expansion in these areas is not recommended. Management - Present Position 18. The Board of Directors consists of two representatives of the State Ministry of Agriculture and Natural Resources, one of whom is chairman, one representative from each of the Ministries of Planning, Finance, and Forestry, and one representative from the Marketing Board. The senior management comprises: (a) General Manager; (b) Estate Manager, who is also responsible for the processing mill; (c) Chief Accountant,; ar,d (d) Company Secretary. The head office is located on Ajagbodudu Estate. In addition, Ajagbodudu and the other estates each have their own administrative office which maintains accounting and statistical records. 19. At Ajagbodudu Estate, the Estate Manager supervises field and oil mill operations. He has under him: a Field Manager who is responsible for harvesting, maintenance, and the preparation of new projects including nursery supervision; a Processing Manager for the oil mill, who also organizes the collection of fruit from the estate and surrounding smallholders; and an Estate Engineer who is responsible for the maintenance of equipment in all the mills and on all the estates. A contract with PAMOL provides for periodic visits to the Ajagbodudu mill by experienced expatriate engineers and for assistance in the procurement of spare parts. Ajagbodudu Estate has an adequate workshop and carpentry shop. The two other groups of estates at Igueben and Ubuluku are run by a Field Manager based at Igueben. The great majority of OPC's management and staff were trained by PAMOL, whose operating methods continue to be used. ANNEX 3 Page 7 Management - Proposed Arrangements 20. Although the present management structure and staffing are basically sound, the expansion of activities under the project would call for some strengthening and some changes. The proposed organization is summarized in the Chart attached to this Annex. The main changes would be; (a) the appointment of two additional Estate Managers, for the new estates at Nsukwa and Mosogar; (b) the appointment of w-w O1l Mill Engineers, who would manage the new mills and -he fruit collection system; they would be responsible to the General Manager, not to the Estate Managers. The positions referred to above wou` bdc filled by international recruitment. Whilst it is hoped that at least cr of the Estate Managers could be recruited from amongst present Nigerian management, provision has been made in the costs for expatriate salaries for all the posts for up to five years to ensure that adequate finance is available. New Oil Mills and Fruit Collection System 21. It is proposed that twc new oil mills would be established by 1982 to process production from estates and smallholdlirgs. The existing oil mill at Ajagbodudu would be worn out at this time and would not be rebuilt. OPC would engage consultants to prepare the design and tender specifications for these central mills. The fruit collection scheme would be organized in close coordination with TCU cn the lines. outlined in Annex 4. 2. Transport Manager, under the Oil Mill Engineer, would be responsible for organizing fruit col- lection and recording deliveries by individual smallholders as weighed and graded at the farm gate. This information would be transmitted to TCU for payment to farmers after deducting loan repayment. Ajagtodudu Estate already collects fruit from surrounding smallholders but the system would need to be improved considerably before incorporation into the project's collection scheme. 22. Under the subsidiary loan agreement with the Mid-Western State Government OPC would undertake to construct and operate a central mill and fruit collection system capable of handling the production of the areas re- planted under the smallholder component of the proiect. Prior to any funds being channelled to OPC for mill and fruit collection development, TCU and the Tree Crop Section of MEU would confirm that OPC's proposals were in line with the crop production schedules of TCU's planting program. 23. When purchasing fruit from smallholders, the central mill would adopt an agreed pricing formula as determined by the State Price Formulation Committee (see below). OPC would also channel the cash due on fruit pur- ANNEX 3 Page 8 chases to TCU where deductions for loan repayments would be made prior to handing over the balance to the cooperatives for distribution to the farmers. 24. On the other hand, TCU would be responsible for seeing that an acceptable percentage (to be agreed) of the projected crop production levels are attained and that the smallholders participating in the program sell their fruits to the central mill. This latter factor should be covered by the loan agreement between the smallholder and TCU. However, in the event of it proving difficult for TCU to take over the management of defaulting smallholder plantings, any financial losses by the central mill that could be clearly demonstrated as having resulted from smallholder crop shortfalls would have to be made good from State Government funds. It must, however, be emphasized that the underwriting of such losses by Government would not be permitted to be used as a means for OPC to cover up inefficiency on the part of its central mill management. Accounts and Audit 25. OPC has a sound accounting system which is adequately maintained. In addition, detailed budgets are prepared each year. The accounts are audited by a Lagos firm of chartered accountants. A summary of the latest available audited accounts is set out in Table 1. C. Price Policy Committee and Fresh Fruit Price Calculation Price Policy Committee 26. A Price Policy Committee would be appointed and would comprise: (a) Permanent Secretary of Ministry of Finance - Chairman; (b) Permanent Secretary of Ministry of Agriculture and Natural Resources; (c) Registrar of the Cooperative Societies or his representative; (d) General Manager of OPC or a senior representative; (e) General Manager of TCU - Secretary; (f) Representative of the Mid-Western State Marketing Board; (g) Two representatives of smallholders; (h) Representative of NPMC; and (i) Representative of Mid-Western Farms Management Board. ANNEX 3 Page 9 The Committee would determine a purchasing price formula which the OPC would be obliged to apply in calculating the price it would pay for ffb. Using this formula OPC from month to month, or other suitable time span, would announce a price to be paid for ffb. Any departure from this formula would be referred back to the Committee prior to implementation. Price Calculation 27. The price paid per ton of ffb would be determined from the revenue received for the palm oil and kernels produced from a ton of ffb after allow- ing for the costs of fruit collection and processing, including depreciation taxes and financial charges. The financial charges would be adequate to provide a reasonable return on the required capital investment, which return would be sufficient to cover interest charges, and margins for building up reserves and paying dividends to the OPC's shareholders. The return on capital would be measured on the basis of a percentage of net revalued fixed assets plus a reasonable allowance for working capital; this percentage would be agreed by the price policy committee within a suggested 10% - 15% range. Depreciation on fixed assets would be taken on a straight line basis for shortlived assets, such as those used for fruit collection; for longer lived assets, such as the mill, it is suggested that a more appropriate basis would be an allocation over output processed compared to the estimated processing capacity of the mills over their estimated remaining useful life. Having deducted these costs, calculated on a cost/ton basis, from the revenue received from the sale of one ton of produce, the price per ton of products net of all costs is known. This would be the base price. 28. Applying the appropriate extraction rate of products to bunches to this base price, the price per ton of ffb can be calculated. Extraction rates applied would be related to the mill's previous three months processing results. Having determined an ffb purchase price discount rates would need to be determined in order to take account of different grades of fruit. Further details are in the Supplementary Annexes (Supplement 12). 29. Any profits in excess of the agreed return on capital would be distributed to the smallholders in the form of a cash bonus at the end of, say, each half-year. The amount paid to the individual smallholders being proportional to the quantity of fruit sold to the company over the period concerned. NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WEST STATE TREE CROP UNIT Chairman Permanent Secretary MANR [MINISTRY OF AGRICULTUREI Permanent Secretary Ministry of Fmnance tAND NATURAL RESOURCES or his representative Senior representative Ministry ol Economic X . ~~~~~~~~~~~~~~~Developrnent and Reconstruction |STEERING COMTED__ _ _ _ _ eniortmeent, Ministr of Trade and Industry I . ~~~~~~~~~~~~~~~~~General Manage, OPC [ EXTERNAL AUDIT}_________________________ = menior representative Federal MiniSr ea Fol [ OPC ]-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ - ~~~ _ Agritulture and Natural ReourcesNatral esorce [OPC General Managernmnmnnm inm inn C GNEA MNAE | | t~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~For Meetings On Oil Palm) | CONTROLLER OF I *~~~~~~~~~~~~~~CONT;ROLLRO ----- __________________ ~~~~~FIELD OPERAIN|FINANCE gm - m - *ii mmn m mn m INTEtNAL TRAININ LANNING AND COCOA OIL PALM RUBBER SENIOR CREDIT SEN | I AUDIT l l OFFICER VALUATION UNIT | DIVISION DIVISION DIVISION OFFICER ACCOUNTANT ______mm _- _______________________mininmin mAD IRI DIVISION I _. I CREDIT REGIONAL REGIONAL MECHANIZED] OFFICER UNIT UNIT ACCOUNTING World Bank-8364(R) NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WEST STATE REGIONAL UNIT UNIT I O MANAG R (SAO) O r7~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I | CREDIT | / AGRICULTURAL AGRICULTURAL | 5| AGRICULTURAL1 | OFFICER I IOFFICER (AO) I IOFFICER (AO) | |OFFICER (AO) ADMINISTRATION .STOR ESI | LOAN 1 5/10 AGRICULTURAL 515,, AGRICULTURAL| 5/10 AGRICULTURAL AS:TS7] TSASSISTANTS (AA) ASSISTANTS (AA) ASSISTANTS (AA) SPECIAL LABORERS SPECIAL LABORERS | ISPECIAL LABORERS| 1 1 FOR EACH AA 1 FOR EACH AA | |1 FOR EACH AA I World Bank-8362 NIGERIA NUCLEUS ESTATE /SMALLHOLDER OIL PALM PROJECT MID-WEST STATE Oil Palm Company Ltd. - Chairman: Permanent Secretary, Ministry of Agricultural and Natural Resources - Representative Ministry of Agriculture BOARD OF DIRECTORS and Natural Resources - Representative Ministry of Finance - Representative Ministry of Economic Reconstruction and Planning - Representative of Marketing Board Representative Department of Forestry r GENERAL MANAGER l |ESTATE MANGR MIL MAAGR CHIEF ACCOUN'TANT | COMPANY SEC7RETA7RY| ESTATE OFFICES IEL M EN INE MANAGERS I TAFF FlIELD SUPERNTENDENTS ASSISTANTS | ; I OVERSEERS OPERATING World Bank-8701 ANNEX 3 Table 1 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE OPC Financial Results and Estimates Balance Sheet as at December 31 1972 1971 1972 1971 .... N *000 .. .... N '000 Share Capital 200 200 Net Fixed Assets 940 925 Capital Reserves 425 425 Capital Work in Progress 10 Profit and Loss Account 17 - Inventories 146 118 Total Equity 642 625 Receivables 15 - Long-term Loan 519 438 Cash 107 20 Current Liabilities 57 _ 1,218 1,063 1.218 1,063 Trading and Profit & Loss Accounts Estimated Actual Budget Actual 8 months 1973 1973 1972 .............. N 000 .... . .... Revenue 639 893 680 Production Costs - purchased fruit 58 101 53 - wages 175 214 173 - materials 23 45 36 - transport 56 41 54 - management 25 39 34 - repairs and maintenance 61 88 54 - depreciation 80 478 10 538 116 530 General Administration 157 214 144 Total Costs 635 752 664 Profit before Tax 4 141 16 Ajagbodudu Estate Replanting 14 40 10 ANNEX 4 Page 1 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Establishing Processing Facilities, Fruit Collection System and a Road Network A. Processing Facilities, Phasing and Costs 1. At full maturity in 1990 project output is estimated at 103,000 tons of ffb in the Sapele area and 71 ,640 tons of ffb in the Agbor area. However, in the Sapele area OPC has already replanted a small part of its existing Ajagbodudu Estate. Ajagbodudu Estate also collects fruit from existing small- holders around its estate and it is assumed that this policy will continue. At full maturity annual production of Ajagbodudu's own replantings will be around 5,260 tons and output of existing smallholders around Ajagbodudu is assumed to remain constant at 6,650 tons of ffb. Table 1 gives details of production and also shows project production as a percentage of overall pro- duction that will be processed in the mills. 2. Total production of ffb is therefore estimated at 114,910 tons of ffb in the Sapele area and 71,640 tons in the Agbor area. Maximum monthly peak production is estimated at 12.5% of annual production. This is based on a study of Ajagbodudu's production history (see Table 2). Peak production at full development is therefore estimated at 14,370 tons of ffb in the Sapele area and 8,995 tons in the Agbor area. Assuming 500 working hours in a month, mill capacity required would be about 29.0 tons/hour in the Sapele area and 18.0 tons/hour in the Agbor area. An ultimate capacity of 30 tons/hour in the Sapele area and 20 tons/hour in the Agbor area is proposed. The main figures are summarized below: Sapele Area Agbor Area Tons of ffb 114,910 71,640 Peak production (tons/month) 14,370 8,955 Capacity required (tons/hour) 29 18 Capacity proposed (tons/hour) 30 20 Capacity utilization (percent) 96 90 Since this project is the first phase of a larger program, it could be necessary to increase the capacity of the mills in the next phase of the program and therefore mills should be designed so as to allow for expansion. 3. As the capacity of the existing mill at Ajagbodudu cannot be expanded and the usefulness of this mill will be almost finished by the time the project ANNEX 4 Page 2 plantings start to yield, two new mills would be constructed to process project production from 1982 onwards. Phasing of mill capacity (details are in Table 3) is as follows: 1982 1983 1984 1985 -------(tons of ffb/hr)--------- Sapele area 10 20 20 30 Agbor area 10 10 20 20 4. Until 1981 production from the Sapele area will be processed in the existing mill at Ajagbodudu. This means that the rehabilitation program for that mill will have to be continued (replacement of the sterilizers and of the steam boilers). Furthermore, the replacement of two of the four hy- draulic presses by a continuous screw press must be considered as well as the installation of a new centrifugal sludge separator. It is assumed that project production in the Agbor area in 1980 (2,520 ton) and 1981 (8,300 ton) will be either processed in OPC's pioneer mills or sold to other local processors. 5. No final sites for mills have been selected, but in the Sapele area the new mill will be constructed between Ajagbodudu Estate and Mosogar Estate, probably along the Jamieson river. In the Agbor area the mill will be near the Nsukwa Estate, probably along the river Omu. When selecting mill sites, it is essential to ensure a reliable and adequate supply of water as well as a good access road for fruit- delivery and the evacuation of products. 6. Estimates of mill investment costs are given in Table 3 and are based on an analysis of (a) the Okitipupa mill contract between Speichim and the Western State Ministry of Agriculture and Natural Resources and (b) the Iliinvi Oil Mill contract between Usine de Wecker and the Sonadar, in Dahomey. These cost figures reflect investment costs in mills to be commissioned in mid 1973. In order to reflect end 1973/beginning 1974 prices in project costs, the cost of equipment has been increased by 10% and the cost of civil works by 12% (Annex 5, Table 15). 1/ Estimates of the operating costs of the mills are given in Tables 4 and 5. 7. Project costs include all costs, civil works, equipment and housing, for the oil mill in the Agbor area and costs, civil works, equipment and housing, necessary for the processing of 20 tons/hour in the oil mill in the Sapele area. Expansion of this mill to 30 tons per hour by 1985 would be financed from OPC's own funds. 1/ Half of 1973 Inflation rates, which were estimated at 20% for equipment and 24% for .,vil works. ANNEX 4 Page 3 B. Fruit Collection System 8. General. At full maturity in 1990 1/ there would be about 186,550 tons of fruit bunches to be delivered to the central mills for processing. During the peak period, production from smallholders would be about 400 tons/day 2/ and from estates (including the existing smallholders around Ajagbodudu Estate) about 533 tons/day. Table 6 gives details. 9. The fruit collection will be organized and managed by OPC. One unit will be responsible for all fruit collection. Smallholder and estate fruit collection are essentially the same although there are differences in procedures. 10. Details on planning and organizing fruit collection systems are in the Supplementary Annexes (Supplement 8). Smallholder Fruit Collection 11. At full maturity in 1988, 1/ the total production of ffb from the Mid-Western State smallholder project areas would be about 80,000 metric tons annually. Half of this quantity comes from the Agbor area and the other half from the Sapele area. During the peak month (assuming 12.5% of total annual production) about 400 tons of ffb would have to be collected each day (assuming 25 working days a month) from the smallholder areas. Fruit bunches collected from the smallholders in the Sapele area would be delivered to the existing mill at Ajagbodudu until 1981, thereafter all fruit would be delivered to the new mill. In 1980 and 1981 production from the Agbor area could either be sold in the local market or processed at the pioneer oil mills operated by the OPC; by 1982 the new mill near the Nsukwa Estate would be in operation. In both the Sapele and Agbor areas the participating smallholders would be within a radius of about 25 km from the central mills. Given this situation, a single stage system of fruit collection, using 7-ton tipper trucks with rear-mounted hydraulic cranes with built-in weighing scales, is considered suitable for the collection of fruit bunches from the smallholders. 12. It is estimated that each tipper truck could make about 4 trips in a 10-hour working day (night loading being considered impractical) and haul about 28 metric tons of ffb. At this rate the total peak month requirements are estimated at 17 trucks, 17 net delivery units and 680 nets. These esti- mates include the necessary reserves. The equipment would be apportioned equally between the Agbor and Sapele areas. The total cost of smallholder fruit collection is given in Table 7. 1/ Smallholder plantings will be at full maturity in 1988; Mosogar and Nsukwa estate will be at full maturity in 1987, but Ajagbodudu (replanted) will be at full maturity in 1990. 2/ Based on monthly peak production (12.5% of annual production) and 25 working days/month. ANNEX 4 Page 4 Estate Fruit Collection 13. At full maturity in 1990 1/ about 106,550 metric tons of ffb will be produced at the Ajagbodudu, Mosogar and Nsukwa Estates. Out of this, about 94,640 metric tons will be the output from project plantings, and the rest will be the output from Ajagbodudu's own replanting program and existing small- holders around Ajagbodudu Estate. Assuming that 12.5% of the total annual out- put will be harvested during the peak month, and assuming 25 days a month, about 375 metric tons of ffb from the Ajagbodudu and Mosogar Estates, includ- ing own replantings and existing smallholders, and 160 metric tons from the Nsukwa Estate would need to be collected each day during the peak months. 14. The new mill in the Sapele area would be at a distance of about 19 km from Ajagbodudu Estate and 13 km from Mosogar Estate. The mill in the Agbor area will be within a radius of about 12 km from Nsukwa Estate. It is estimated that in a ten-hour working day, each truck would, on an average, be able to make 5 trips from the estates to the mill and transport 35 ton. At this rate, in order to transport the peak harvest at maturity, estate fruit collection would require 18 tipper trucks with hydraulic cranes and built-in scales, 16 net delivery units and 640 nets. These estimates include the necessary reserves. Fruit bunches collected from the Ajagbodudu and Mosogar estates would be delivered to the existing mill at Ajabodudu until 1981. The new mill in the Sapele area starts production in 1982; the production from the Nsukwa estate could be sold to the local processors, or could be processed at OPC's pioneer oil mills until the new mill in the Agbor area starts its operations in 1982. The total cost of estate fruit collection is given in Table 8. C. Road Improvement Program 2/ Introduction 15. The Mid-Western State has a well developed communication system, consisting of about 9,000 km of roads, 160 km of navigable rivers, and domestic air services provided by Nigerian Airways. The State has no railways. The rivers, including the Benin river, play an important role in transport, especially in the coastal area, where road construction is inhibited by river deltas and swamps. 16. The roadnet work consists of about 550 km of Federal "A" roads; 2,400 km of "B" roads; and 6,000 km of earth roads. 1/ See footnote 1, page 3. 2/ More details are in the Supplementary Annexes (Supplement 7). ANNEX 4 Page 5 Cost of Reconstruction 17. The upgrading of earth roads to the standards discussed in the Sup- plementary Annexes (Supplement 7) would be done by a construction team working under the supervision of a road engineer and his staff. Costs, including grading and labor, but excluding supervision and depreciation, are estimated as follows: (a) N 560/km for an existing earth road to truck standard. (b) N 610/km for a new earth road to truck standard. If depreciation is included, the above costs are respectively N 675 and N 725. Administration of the Construction Program 18. The earth roads program would require experience and skills which are in short supply in Nigeria. Neither the Ministry of Works and Transport (MWT) nor the consultants in the State (whether local or foreign) appear to have wide experience in building and maintaining all-weather earth roads. However, the timber companies, which construct such roads for extraction purposes, have personnel with adequate qualifications. 19. A road engineer should be engaged to organize and supervise the road construction program, assisted by two supervisors and two clerks. The road engineer should have wide experience in the construction of low-cost, all-weather earth roads and preferably be recruited from the timber exploiting companies. 20. The improvement of the 299 km of roads would be executed by a construction team working under the supervision of the road engineer. Construction time would be about 2-1/2 years. The equipment could, after completion of the work, be handed over to the MWT on the understanding that it would be used exclusively for the maintenance of the roads within the project area. The repair of the bridges would be undertaken by the local contractors. The Road Network 21. The road network needed for the 8,000 ha smallholder project is shown on Map 10964R. It has been assumed planting will be confined to areas that lie within 600 meters on each side of the collection road. It is further assumed that only 12.5 ha per km of paved road and 20 ha per km of earth road will be used for planting palm trees under the project. 22. The total length of roads that need to be developed is shown below: ANNEX 4 Page 6 East West Total -- (km)----- Paved roads, no improvement needed 14.4 16.0 30.4 Earth roads, no improvement needed - 45.6 45.6 New earth roads to be constructed 21.6 32.0 53.6 Existing earth roads to be improved 165.6 80.0 245.6 Paved roads to be improved 76.0 - 76.0 277.6 173.6 451.2 23. Based on the above assumption, the total hectarage of smallholder plantings that could be developed along this road network is: East Paved roads 90.4 km x 12.5 ha = 1,130 ha Earth roads 187.2 km x 20.0 ha = 3,744 ha Total 4,874 ha West Paved roads 16.0 km x 12.5 ha = 200 ha Earth roads 157.6 km x 20.0 ha = 3,152 ha Total 3,352 ha Grand Total 8,226 ha Thus, this is sufficient for the planting of 8,000 ha. 24. The costs 1/ of reconstructing earth roads are detailed in Annex 5, Table 7 and summarized below: Existing earth roads 245.6 km at N 560 = N 137,536 New earth roads 53.6 km at N 610 = N 32,696 N 170,232 (or rounded) N 170,200 Repair four bridges = N 24,000 Capital costs equipment = N 71,000 N 265,200 1/ Cost of supervision by road supervision team of TCU not included. Supervision costs amount to N 39,000 over the three-year supervision period. NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MIfD-WFESTERN STATE Production in East and Western Area and Percent Distribution (notric tons and percent) 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Omoads Western Area Ajagbodudu Estate 2/ 17,416 18,999 15,563 10,421 4,952 5,263 5,263 5,263 5,263 5,263 5,263 5,263 5,263 Existing Smallholders 2/ 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 Project - - 2,520 8,780 19,060 34,120 52,032 68,720 83,600 94,792 100,040 102,040 103,000 Total Production FF3 Processed 2,4066 25,649 24,733 25,851 30,662 46,033 63,945 80,633 95,513 106,705 111,953 113,953 114,913 Project Production as percent of Total - - 10.2 34.0 62.2 74.1 81.4 85.2 87.5 88.8 89.4 89.5 89.6 Project Production Smallholdern - - 1,000 3,500 7,520 13,800 22,320 29,340 34,360 38,560 40,000 40,000 40,000 Project Production Esrar - _ 1,520 5,280 11,540 20,320 29,712 39,380 49,240 56,232 60,040 62,040 63,0DO Production of smallmolders as percent of total - _ 4.0 13.5 24.5 30.0 34.9 36.4 36.0 36.1 40.0 39.2 38.8 P'roduction Estates as percent ol wtal - _ 6.1 20,4 37.6 44.1 46.5 48.8 51.6 52.7 60.0 60.8 61.2 Eastern Area Prodw,tioe (projects only) - - 2,520 8,300 17,860 31,920 46,180 57,440 64,700 70,200 71,640 71,640 71,640 Project Production SEallholders - - 1,000 3,500 7,520 13,800 22,320 29,340 34,360 38,560 40,000 40,000 4u,000 Project Production Estates - - 1,520 4,800 10,340 18,120 23,860 29,200 30,340 31,640 31,640 31,640 31,640 Production tt &Asllholders as pecent of total - _ 39.7 42.2 42.1 43.2 48.3 51.1 53.1 54.9 55.8 55.8 55.8 Productits oaf Estates as percent Oa Total - - 60.3 57.8 57.9 56.8 51.7 48.9 46.9 45.1 44.2 44.2 44.2 Total Total Production 24,066 25,649 27,253 34,151 48,522 77,953 110,125 138,073 160,213 176,905 183,593 185,593 186,553 Smallholders (Project only) - - 2,000 7,000 15,040 27,600 49,640 58,680 68,720 77,120 80,000 80,000 80,000 Estates (Project only) - - 3,040 10,080 21,880 38,440 53,572 67,480 79,580 87,872 91,680 93,680 94,640 rrocucnon or mauLno±aers us percent t or total 7 21 31 35 41 43 43 44 44 43 43 Producticn of Estates as Percent of total a _ 11 30 45 49 49 49. 50 50 50 50 51 1 Production of Ajagbodudus old palms ontil felled and production of its own replsntings. 2/ Existing smallhklddws around Ajagboodud Estate, the fruit of which is processed at Ajagbo4adu's mill. NUCLFOIS ES5TATE/Sr4ALLHOLDER OIL PALM PROJECT 1UDlWEST8Nl STATE AJagbodusu hatate Produotion 1958-1972 (long tmne pFB) Yer -19518 1959 1960 1961 19o2 1963 1903 1965 1966 1961' 1966 1969 1973 1971 1972 boith I Ton- T... % Ton. T loo Tonus Ions % Tons % Tons % To.- 1 T-n % Toons Tons In Tons % Tons 9b Thou t Jan-ay i1,26L 6.15 1,462 7.12 2,303 11.71 1,529 7.35 2,356 1.1.37 1,738 8.36 2,291 11.15 2,610 12.60 2,635 12.63 2,321 11.30 1,639 8.03 1,998 9.73 849 4.13 2,132 10.38 2,475 12-0t: 9'ebrosy j1,53o 7.38 1,25 3 o.1l 2,382 11.60 1,3,66 7.13, 1, 912 9.26 2,121 10.33 2,183 10.15 3,022 15.72 2,307 11.72 2,1D70C 10.16 1,886 9.18 2,203 10.73 2,006 9.78 2,247 10.94 1,909 9.30 bM-b 1,751 8.53 1,285 8.69 2,457 12.05 1,817 8.85 2,378 11.58 2,237 10.89 1,936 9.33 3 ,11 6 15.13 2,921 13 .23 2,320 11..20 2,082 10.13 2, 024 9.86 2,311 11.75, 2,122 10.33 2,367 f.458 A4pril1 1,923 9.36 2,125 10.33 1,938 9.48 1,936 9.43 1,955 9.52 2,672 13.01 1, 370 6.67 2,684 13.07 2,314 11.27 2,172 10.57 2,03,6 9.96 1,522 7.31 2,3315 9.91 2,158 10.36 2.156 1o.49y May 1,763 8.52 1, 950 9.50 1,852 9.02 2,305 11.23 2,068 10.07 2, 106 13.26 1,328 6.36 1,930 9,.55 1,7511 8.52 2,201 10.22 1,82 8.88 1,295 5.33 1,361 6.63 1,269 6.18 1,723 8.39 fuse 1,397 7.29 1,506 6.851 1,395 7.28 1,535 7.60 1,1 .80 1,687 7.73 1 ,311, 6.39. 1,827 8.90 1, 095! 5.33 1,860 9.16 1,382 6.73 575 2.80 975 5.75 1,256 6.12 1,033 6.03 July 1;1,885 7.72 1,453 6.99 1,231 5.99 1,132 5.5"1 1,253 6.10 1,559 7.59 1, 225 5.96 1,266 6.17 1,107 5.39 1,355, 6.69 713 3.58 583 2.35 725 3,52 803 3.91 956 la.66 AugoUS 1 ,159 7.11 1,385 6.75 1,523 7.32 1,160) 5-o5 1,318 6.32 1,180 5.75 613 2.99 1,201 5.85 820 3.39 596 2.90 695 3.38 361 1.75 550 2.68 655 3.18 883 8..30 September 1,558 7.60 1,827 8.90 1,517 7.39 1,278 6.21It 1,288 6.27 1,137 5.39 1,777 5.15,, 1,378 1.71 93,8 3,.6 1 56r 2.25 692 3.37 269 1.31 588 2.86 709 3.58 1.038 5.06 Octobar 1,661' 7.56 2,179 10.61 1,337 7.00 1,371 7.11 1,772 5.-3 1,598 7.78 1,516 7.38 1,352 6.58 1,075 5.25 559 27.20 778 3.79 343 1-o7 689 3.3o 860 3.19 1,229 6.98 Noveaber 1,303 6.35 2,357 11.92 1,532 6.97 1,863 9.07 1,593 7.76 1,388 6.76 0, 125 F13 0 - ,875 9.13 1,135 5.58 1,075 5.28 1,276 6.21 357 1 .75; 871 5.2 903 5.39 1..334 6.60 Deceeber j1,378 6.71 2,301 11.21 1,563, 7.13 2,11 1 70.31 1,213, 5.91 2,955 9.5, 2,38) 11. 13 2,55 Ai?.2o3 1,521 7.31~ 1,011 5.89 1,551 7.-07 38.1 1.86 1,315 6.51 681 3.31 1,79s B.1J4 TMA91 18,551 90.03hi21,555 l03.9712l,i61 11~.05119,b17 95.3d9120,497 99,02:~21,243 103.55119,251 93.771125,593 51.3-19',L 735 9s.12118,178 08.53',1i6,474 8G.22~ 11,611 SS6S514,376 71.01 11 5, 785 76.871118,886 91.97 (1958) (1959) (1960) (i9611 (1,962) (1963) (103,) ( 1o'A( ( lo) (,133 (]253 -----)-11970 (1971) (1972) NOTES: fverate prod-tio- 1958-1972, e.nlod L, yns,o 01 disturb-nce aod onerttoiob (i1967-71 ) 20,535 lorg t-n or 20,862 metric tos. Th. perc-tages rflect ..onthly productions per-et sof this averge. AME4 vcIudS 1170I1/ C.6LiiOLDIR OIL PALN 8ROJllCT Pa1. Oil Mill. - CGpitni lxnanditear Dnit COats (NA-ot) 1978 1979 1980 1981 1982 1983 1984 1995 1986 1987 1988 1989 1990 CoPeeity e qoited Western Area Prodsetion 7Y8 (estrie toes) - Peojeet 1/3/ - - 2,520 8,780 19,060 34,120 54,032 68,720 83,600 94,792 100,040 102,040 IU3,000 Aj.gbtdod,h = 17,416 18,999 15,563 10,421 4,952 5,263 5,263 5,263 5,263 5,263 5,263 5,263 5,263 - Other S-sllholdee- 3/ 6,650 6,650 6,650 6.650 6,650 65650 65650 6,50 ,650 6,50 6J50 6.650 6,650 Total 24,566 25,649 24,733 25,851 30,662 46,033 63,945 80,633 95,513 107,705 111,953 113,953 114,913 Po-k prod Acioe 4/ (netti toes) 3,008 3,206 3,092 3,231 3,833 5,754 7,993 10,079 11,939 13,338 13,994 14,244 14,364 Capoity -reqotrd 5/ (tees/host) 6.02 6.41 6.18 6.46 7.67 11.51 15.99 20.16 23.89 26.68 27.99 28.49 28.73 Copseity peoposod (toss/hoot) 9 6/ 9 6/ 9 6/ 9 6/ 10 20 20 30 30 30 36 30 3C Catpoity stilt ation (7%3 66.8 71.2 68.7 71.8 76.7 57.5 79.9 67.2 79.6 88.9 93.9 94.9 95.0 Eastern Ane- Ptodoctioe of FFB 7/ (tetric tons) - - 2,520 8,300 17,866 31,920 46,180 57,440 64,700 70,200 71,640 71,640 71,640 Peak prod-eion 4/ (net tl tens) - - 315 1,038 2,233 3,990 5,733 7,180 8,088 8,775 8,955 8,955 8,955 Copoeity -eqtittd 5/ (tons/e/h-) - - 0.63 2.08 4.47 7.98 11.56 14.36 16.18 17.55 17.91 17.91 17.91 oPatltyprptossd - " _ _ -r - A/ 10 lo 20 20 20 20 20 20 20 Capslty otilitntio - - - 8/ - 8/ 44.7 79.8 57.8 71.8 80.9 87.7 89.5 09.5 89.5 ---------------------- ------------------------------------- cKat - 000) -------------------------------- ----------------------------------- invese ent Costs 9/ Wostert Area Hill Civil Wotks Ph.so I 10/ - - 350 350 05 Pb-an 2 11/ - - - 15 Phlae 3 12/ _ _ _ _ _ - 23 Total - - 350 350 100 - 23 Kqui p rees Photo 1 - - 550 550 120 Pha.e. 321/ - - _ - 460 ?hase 3 1/ _ - _ _ _ - 677 Total - - 550 550 580 677 Vohilo II  I tZ - '4 4 4. 02 4 - - 4242.4 .4.4'4.442'4 4 -  0. 4 42000040042 0424-00 420004200000 0 4242004-04-NON ON4-NN 00000000042 0 4 -I 4 4 - - *0 4 4 44 440 4 0 442 - 4 4 44 4 4 0.' 4 44 4 4 '4 o 44 " 4 .-.42 '44 4 '44 0 4 4 -'4 4' 4 4 44 04 44 '4 4 40 4 4 '4 44 4' - 42 444444242 44 .4 4 44 4 4 -04' 4 H 42 4020.4.4 4 4 44. 00442fl g 4    4.0.44444 - 4 0  42444.44'4 4 4 444442 4444.4444-04 - 4 42 fl t 4444044424 04 4 4444.4 H 4  4-44444 44 H 4 40  414244 4044'40242 4442 '4.444444444 02 4444-4 4 444424440024  '0 4 42..404'0'0'0444 '4444442 44444444444 424244444444 4 442444 44.444424424... 4 42 42 424242442424ooo.4 42 4.4-4200 0 4-4204 4000 4'4-42 C 00 'I NI ANNUZ 4 Table 5 rn _^ #_ 4 ~ 4 4 44 CS 4NN. 4 N N _ _N 4 _ 4 _ _ ONONNN N 0000 ONOSJNN_4c> _4 H_N -P N N C 0 CO nos 0.-ObOiC NNYOO N -.04400 0 O NDO0 OqO NO..4N N _4 r = R o NO m1 o=- -- gg- gl'D NN.544 NNINo>NNoNN NHIdb t eCNIX ONOONNNN400 N. ,NOO ON4-NN - N 0 N -s ONV <~ ~ ~ ~ ~ ~ o ~ - N N N N N N N o°=Oo c rvl 5.0 0N0=0tCNDN -N = SNc c Nv N M _n_e___4N _Ze__ N4NNed=Xfi= S e o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~f N~~~ _____ __- ---N.---.~'-"' N, N O NOON_RONNNN N 0000 RNNR _N_NN - N N C _ D NO D _ __ R gO V[ _ - NONOON 000NNCON NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Percent of Project in Fruit Collection Estates .1/ ~~~~2.!3 Ajagbodudu Existing Project % Project Estates Year Estate Smallholders Estates Total of Total 1978 17,416 6,650 24,066 1979 18,999 6,650 - 25,649 - 1980 15,563 6,650 3,040 25,253 12.0 1981 10,421 6,650 10,080 27,151 37.1 1982 14,952 6,650 21,880 43,482 50.3 1983 5,263 6,650 38,440 50,353 76.3 1984 5,263 6,650 53,572 65,485 81.8 1985 3,263 6,650 67,480 79,393 85.0 1986 5,263 6,650 79,580 91,493 87.0 1987 5,263 6,650 87,872 99,785 88.0 1988 9,263 6,650 91,680 103,593 88.5 1989 5,263 6,650 93,680 105,593 88.7 1990 5,263 6,650 94,640 106,553 88.8 l/ Ajagbodudu's old palm and own replantings. 2/ Existing smallholders around Ajagbodudu Estate. 3/ Nsukwa Mosogar and project replanting Xjagbodudu Estate. NIGERIA NUCLEUS ESTATE/SHA1LLHOLIER OIL PALM PROJECT TI -WE9OTERRi SlATE S2allhoider Fruit Collection Unit Costs 1980 19BI 1982 1983 1914 1985 19986 987 1988 1989 Onwards mlnestsent Costs Treosport manager car 3,200 (1) 3.2 - (1) 3.2 _ (1) 3.2 - - Tipper trucks ith crass 13,500 (1) 13.5 (1) 13.5 (2) 27.0 (2) Z7.0 (4) 54.0 (4) 54.0 (4) 54.0 (3) 40.5 (6) 81.0 Net Delivery units 800 (1) 0.8 (1) 0.8 (2) 1.6 (2) 1.6 (4) 3.2 (4) 3.2 (4) 3.2 (3) 2.4 (6) 4.8 Nets 24 (80) 1.9 (40) 1.O (80) 1.9 (80) 1.9 (200) 6.7 (200) 8.8 (360) 8.6 (240) 5.8 (440) 10.6 - Total Investment Costs 19.4 0i.3 30.3 33.7 63.9 62.0 69.0 48.7 96.4 70.1 1) Of shioh: Local casts 6.6 4.5 8.9 10.2 20.5 18.8 23.5 16.1 31.2 23.2 Foreign Enchange Costs 12.8 10.8 21.6 23.5 h3.4 43.2 45.5 32.6 65.2 46.9 Recurrsst Costs Staff and Salaries Troc.p-rt manager 5,200 (1) 5.2 (1) 3.2 (1) 5.2 (1) 5.2 (15 5.7 (1) 5.2 (13 5.7 (1) 5.2 (1) 5.2 (1) 5.2 Clerk 750 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.0 (1) 0.8 (1) 0.8 Drivers 640 (2) 1.3 (4) 2.6 (8) 3.1 (12) 7.7 (IC) 11.3 (24) 15.4 (28) 17.9 (30) 19.2 (34) 21.8 (34) 21.8 Loaders 430 (25 0.9 (4) 1.7 (8) 3.4 (12) 5.2 (18) 7.7 (24) 10,3 (28) 12.0 (30) 12.9 (34) 14.6 (34) 14.6 Total Selari.s 8.2 10.3 14.5 18.9 25.2 31.7 35.9 38.1 42.4 42.4 Oneretine and Mointenance Transport -n..ner ear 800 (1( 0.8 (1) 0,8 (1) 0.8 (1) (0. (1) 5 0 (15 0.8 (1) 0.8 (15 0.8 (1) 0.8 (1) 0.8 Tipper truck 4,500 (1) 4.3 (7) 9,0 (4) 10.0 (6) 27,0 (9) 40. (52) 54.0 (14) 63.0 (15) 67.5 (17) 76.5 (17) 76.5 Net deliv-ry .SIt 260 (11 0.3 (2) 0,5 (4) 1.0 (6) 1.6 (9) 2,3 (12) 3.1 (14) 3,6 (15) 3.9 (17) 4.4 (17) 4.4 Totol Operating c-d M.Notea-nce 5.6 10.3 19.0 39.4 43 6 57.9 67.4 71.2 81.7 81.7 Total Recurrent Coats 13.8 20.6 34.3 58,3 68.8 89.6 103.3 109.3 124.1 124.1 01 which: Local costs 11.1 16.0 25.9 42.0 53 S 65.9 75.8 80.5 90.9 90.9 Foreign Exchange Coets 2.7 4.6 5.4 16.3 li.9 21.7 27.5 29.0 33.2 33.2 Depreciation Transport manager c=r 1,067 (1) 1.1 (1) 1.5 (1) 1.1 (1) 1.1 (1) 1.] (1) 1.1 (1) 5.l (1) 1.1 (1) 1.1 (1) 1.1 Tipper truck 3,375 (1) 3,4 (2) 6,8 (4) 13.5 (6) 20.3 (9) 3054 (12) 40. 5 (14) 47.3 (15) 50.6 (17) 57.4 (17) 57.4 Net Deliv-ry Unit 200 (1) 0.2 (2) 0.4 (4) 0,0 (6) 1.2 (9) 1,8 (12) 2.4 (14) 2.1 (15) 3.0 (1/) 3.4 (17) 3.4 Nets 12 (80) 1.7 (120) 0.2 (200) _2.4 (240) 2.9 (360) 4.3 (480) 5.8 (560) 7.7 (402) 2.2 (680) 8.2 (680) 0.2 Total Depreciatioo 6.4 8.5 17.8 25,5 37.6 49.8 57.9 61.9 70.1 70.0 1/ Average yearly investment basod upe nannal depreciotien at full dcvelopeunt. NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PRO.IECT IID-WESTERN STATE Estate Fruit Collection lIsit Costa 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Owards Is-estment Costs Transport chief car 3,200 (1) 3.2 - (1) 3.2 - (1) 3.2 - - - - (1) Tippor tracks with crase 13,500 (5) 67.5 - (1) 13.5 (3) 40.5 (7) 94.5 (3) 27.0 (3) 40.5 (51 67.5 (7) 94.5 (3) 40.5 (3) 40.5 Net DSliv-ry Units 800 (4) 3.2 - (1) 0.8 (3) 2.4 (6) 4.8 (2) 1.6 (3) 2.4 (6) 3.2 (6) 4.8 (3) 2.4 (3) 2.4 Nets 24 (200) 4.8 _ (240) 5.8 (80) 1.9 (320) 7.7 (160) _ 3.8 (400) 9.6 (200) 4.8 (400) 9.6 (240) 5.8 (400) 9.6 - Total Ivestsmsts 78.7 _ 20.1 48.0 107.0 32.4 55.7 75.5 108.9 51.9 52.5 72.8 Of which: Local c.s. s 23.4 8.8 13.8 32.0 10.6 20.8 22.1 33.7 17.3 19.5 23.5 Fareign Eackh.og Costs 55.3 - 11.3 34.2 75.0 21.8 34.9 53.4 75.2 34.6 33.0 49.3 'ecortsnt Costs Staff and Saisris Transport chief 2,000 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 (1) 2.0 Clerks 750 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (I1 0.8 (1) 0.8 Servers 640 (9) 5.8 (9) 5.8 (111 7.0 (17) 10.9 (21) 13.4 (253 16.0 (29) 18.6 (32) 20.5 (32) 20.5 (34) 21.8 (34) 21.8 (34) 21.8 Loaders 430 (10) 4.3 (10) 4.3 (12) 5.2 (18) 7.7 (22) 9.5 (26) 11.2 (30) 12.9 (34) 14.6 (34) 14.6 (36) 15.5 (36) 15.5 (36) 15.5 Total Solartis 12.9 12.9 15.0 21.4 25.7 30.0 34.3 37.9 37.9 40.1 40.1 40.1 Operatisg and Maistenance Transport chief cot 800 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 (1) 0.8 Tipper trucks 5,400 (5) 27.0 (5) 27.0 (6) 32.4 (9) 48.6 (11) 59.4 (13) 70.2 (15) 81.0 (17) 91.8 (17) 91.8 (18) 97.2 (18) 97.2 (18) 97.2 Net Delivery osits 260 (4) 1.0 (4) 1.0 (5) 1.3 (8) 2.1 (10) 2.6 (12) 3.1 (14) 3.6 (15) 3.9 (15) 3.9 (16) 4.2 (16) 4.2 (16) 4.2 Total Oporating ond Matitenoace 28.8 28.8 34.5 51.5 62.8 74.1 85.4 96.5 96.5 102.2 102.2 102.2 Tota1 Rpcurrent Costs 41.7 41.7 49.5 72.9 88.5 104.1 119.7 134.4 134.4 142.3 142.3 142.3 Of which: Local Costs 30.0 30.0 35.5 52.1 63.2 74.3 85.3 95.6 95.6 101.2 101.2 101.2 Foceig E-echasge Costs 11.7 11.7 14.0 20.8 25.3 29.8 34.4 38.8 38.8 41.1 41.1 41.1 Depreetatien Transport o.aoag- cat 1,067 (1) 1.1 (1) 1.1 (1) 1.1 (1) 1.1 (1) 1.1 (1) 1.1 (1( 1.1 (1) 1., (5) 4.1 (1) 1,1 (1) 1.1 (1) 1.1 Tipper trocks 3,375 (5) 16.9 (5) 16.9 (6) 20.3 (9) 30.4 (11) 37.] (13) 43.9 (15 50.6 (171 57.4 (17) 57.4 (18) 60.8 (18) 60.8 (18) 60.8 Net delivery ssit 200 (4) 0.8 (4) 0.8 (5) 1.0 (8) 1.6 (101 2.0 (12) 2.4 (14) 2.8 (15) 3.0 (15) 3.0 (16) 3.2 (16) 3.2 (16) 3.2 Nets 12 (2001 2.4 (200) 2.4 (240) 2.9 (320) 3.0 (400) 4.8 (400) 5.8 (560) 6.7 (600) 7.2 (600) 7.2 (660) 7.7 (640) 7.7 Total Depreciation 21.2 21.2 25.3 36.9 45.0 53.2 112.9 68.7 68.7 72.8 72.8 72.8 L/ For prajeot estate prsdsstiis, bet ales fee jagbsdasc 's sen r-planitngs and e_0ting ensslljnlders arcund Ajagbodada Estate. g Aresrge yearlj inyststrt based tu annual depreoitioas at oull developmsat. NIGERiA SILFUN ESTATEA LLHOLDER 0ILY PROJECT MID-WESTERN STATE Soosnero of Project Costs (Nira' 000) Toto1 Foreioo Exchange ConosNot 1975 1976 1977 1978 1979 1980 1991 1982 1983 Project Coot N ( 0oSS) A. NULEUS ESTATE OIL PALS PROJECT (i) Smallholders Smallholdet Field EstablishmntL Colst 38.6 171.2 293.1 414.5 568.0 566.2 283.4 215.1 110.6 2,650.7 31 816.3 TCU - Capital Costs 13.2 - 2.7 5.1 -- '.7 2.1 - 2.7 28.5 64 18.2 - Person.el Costs 116.1 73.6 73.6 73.6 45.2 45.2 45.2 45.2 45.2 562.9 21 117.1 - Recocrent Costs 8.9 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 52.1 38 19.9 Regional Units - Capital Costs 99.9 76.3 . 13.7 21.3 25.2 12.0 8.2 - - 246.6 46 112.8 - Persoonnl Costs 74.0 112.9 135.3 154.1 181.6 177.1 115.1 111.6 104.4 1,166.1 7 83.8 --Roo.rrxnt Costs 9.4 14.8 16.4 19.6 21.2 22.9 13.2 13.2 13.2 143.9 49 70.6 Roed Improvement - 163.5 94.6 46,4 - - - - - 304.5 35 106.5 Training 30.3 23.0 13.6 17.0 13.2 - - - - 97.9 44 43.5 (ii) Oil Polm Cosesope OPC Field EstablEshosh- NooWks sed Mosog-r 409.9 224.0 364.5 531.9 419.8 322.9 241.7 135.1 - 2,649.8 21 567.7 Ajgbhododo Replanting - - - - 76.9 152.0 209.0 168.7 155.9 762.5 24 181.6 Myanagenot and Ooerhoads (oPC Estates) Noukws snd Mosogor 587.8 501.8 368.9 299.6 311.3 229.5 248.2 235.3 251.1 3,033.5 30 909.8 Ajegbodods Roplontiog - - - - 150.2 129.2 130.8 134.6 112.2 656.0 29 193.4 OPC Mill ICveormeot - - - - - 2,057.2 2,1'S.6 1,014.3 603.5 5,793.6 59 3,426.9 Froit Collection Invesrtoot - - - - - 98.1 15.3 50.8 81l7 245.7 69z. 169.5 Total Costs befocs Cootingo-cios 1,379.1 1,366.5 1,371.8 1,589.3 1,010.0 3,819.3 3,436.2 2,129.1 1,485.9 18,394.2 37 6,837.6 Physical Co.tinag.sxsj1/ 68.8 68.6 68.8 79.6 91.4 246.1 227.1 121.2 75.6 1,047.2 37 387.5 Price Costigegocieo 245.0 382.5 469.8 676.6 919.8 3.239.4 3.637.2 1,911.4 1.736.0 13.218.5 37 4.890.8 TOTAL MIDWEST STATE OIL PALD PROJECT 1,692.7 1,817.6 1,910.4 2,345.5 2,829.2 7,304.8 7,300.5 4,161.7 3,297.5 32,659.9 37 12,115.9 B. MONITORING AND EVALUATING DIVISION TRSR CROP SECTIRh Totls Costs before Cootingencies 481.1 500.0 500.5 457.7 418.9 380.5 404.5 265.3 265.3 3,673.8 33 1,196.1 Physicol Contin.gencies (5%) 24.1 25.0 25.0 22.9 20.9 19.0 20.2 13.3 13.3 183.7 33 60.6 rice Costitge.o is=o V/ 72.2 101.0 141.9 177.0 197.9 219.7 205.9 217.3 250.7 1.663.6 33_ 548.9 TOTAL TREE CROP SECTION 577.4 626.0 667.4 657.6 637.7 619.2 710.6 495.9 529.3 5,521.1 33 1,805.6 C. FIELD STUDIES AND NTEFOR EOUIPNENT Field Stdides 115.3 121.2 66.2 - - - - - - 302.7 76 229.9 Riles Equipment 71.0 - - - - - - - - 71.0 59 ,.42.2 Tstel Costs before Cootingencies 186.3 121.2 66.2 - - - - - - 373.7 73 272.1 Physical Contingesncis (5%) 9.4 6.1 3.3 - - _ - - _ 18.8 73 13.7 Price Cootitgeocios2/& 5 38,1 38.0 29.1 - - _ - - - 105.2 73 77.4 TOTAL RESEARCH 233.8 169.3 98.6 - - - - - - 497.7 73 363.2 GEANS TOTAL (A, B end C) 2,503.9 2,608.9 2,676.4 3,003.1 3,466.9 7,924,0 8,011.1 4,657.6 3,826.8 38,678.7_ 37 14.284.7 1/ Five %. except for civil works under mill investment for which a 12% physical co.tingency has bees applied. 2j 18/15/127. co-epoordod range for hooese, buildings, and capital works; 14/11/7.5% coopoundod range for all v-hicles, equipmeot sod 000 lbohr fiar iopots; 7% .ospoxeded for other costs (st larios, vehicle oporotitg ond othor operating expenses, troixisg sod labor). / 18/15/12% compounded range for buildings; 14/1117.5% compounded range fEr vehicles and furnitars sod 7% compoonded for soEaries, operating oxoses sad other services. 1/ 14/11/7.5% ompounded range. 51 Com.pounding has beg.. in 1974, and in the yeor coneorned only half the sstaod inflation perceotago has bho. tsken into accont. NIGERIA ANNEX 5 Table 2 NUCIEUS ESTATHE/ 0UIfHLDKR OIL PAIM PROJECT MID-WESTERN STATE Smallholder Field Establishment Costs 'per ha) Foreign Year - 1 Year Year 1 Year 2 Year 3 Total Exchange % Naira NURSERY COSTS /2 Labor costs /3 15.00 1.68 16.68 Seeds 7.5o 7.50 Poly bags 11.81 11.81 40 Fertilizer 2.73 0.30 3,93 80 Other non labor costs /A 11.31 1.25 12.56 65 TotCl Nursery Costs 48.35 3.23 51.58 SKALLHOLDER FIEID COSTS /5 Labor Mandays .... .... .. . Mandays .............. IJnderbrushing and clearing /6 50.0 50.0 Stacking, burning, clearing rows 25.0 25.0 Lining 5.0 5.0 Weeding avenues, precover planting 5.0 5.0 Planting cover 2.5 2.5 Holing, refelling 7.5 7.5 Planting 5.0 5.0 Fixing wire collar 2.5 2.5 Maintenance /7 27.5 35.0 30.0 22.5 115.0 Total Mandays 130.0 35.0 30.0 22.5 217.5 Naira Labor Costs /8 91.00 24.50 21.00 15.75 152.25 Cover Crop a 3.63 3.63 Wire Netting 31.25 31.25 50 Fertilizer 7.37 15.33 21.00 30.40 74.10 80 Chemicals 2.50 2.50 2.50 2.50 10.00 80 Tools 2.50 2.50 2.50 2.50 10.00 50 Total Field Costs 138.25 44.83 47.00 51.15 281.23 TOTAL FIELD ESTABLISHMENT OOSTS 48.35 141448 44.83 47.00 51.15 332.81 of which labor costs 15.00 92.68 24.50 21.00 15.75 168.93 local costs 19.10 22.98 4.82 5.95 7.83 60.68 foreign exchange costs 14.25 25.82 15.51 20.05 27.57 103.20 /I Year 0 is year of planting. 75 Cost of planting material is B1 51.58 per planted ha. Costs are broken down in their main components. 73 Nursery labor at N 1.00 per manday. 71 Includes irrigation equipment, fungicides, pesticides, herbicides, tools, transport costs and miscellaneous. 7§ Transport of materials costed under S4U. Occurs November/Decenber Year -1, but smallholder not refunded before Year 0. 7 Includes slashing rows and avenues, fertilizerapplication and weeding; and in Year 1 also supplying. 7F Shallholder labor at N 0.70 per manday. a Pueraria 11 kg/ha to allow for an early planting followed by a second planting in March/April. March 4, 1974 6 S r gt r * N < = & n d % =^ 0 N 0' 0 0 0 0 In O ~ ~ ~ ~ ~ 0 Io N W* N N N N 9OOO " ~ ~ ~ ~ ~~' a0 In o I rN o~ o' W " X XS osS W SS, - SS r- Xe , - ,, oS,S s ON Nss -- ssL 4,, 01 IN g10S N@X 0O9 0.X_ -@ _ g 0s N 0@_ NW_ O ._ 0@_ 1 0 0 N 0 NNN0 0 'r r r r-~sDOWDX|X| r ~ ~ ~ ~ ~ ~ 00 00.0 000 <0000.|Sr r ows < |i t| X | 0 0 0,S0 w00 r0.0 0.0r ,0*a o ~ ,¢ O4.0 0S o o 0- . g 9 r 'r ° 000.S-J _O , 000 0 00 0 NOON 0. 00 , u.C0. 00 04 ,,ON 00.,, 0. 0 0 ,000 s ,9f | , , > _w 'o_ ''l 00 g0 f w0 .0 04 0 0 0 0 c , 0 0 0 - r o oo , . . 0 ., , ,rr- w . . . , - s.|..e.|| r0rr 0F rr = r=,O w@Sg - 0 0 0 0 4 _> N w _ 0 0wb r 0SW 0 NwF 0 0> - S w Now | 0o _ 0 0o ooo r _0. 0 w0 0 0uw m 0wx 0 00 0u r_ 0_ _rr ! oo o_ - 0000~~~~~~~~~~ ~w 0 00 0 0 0 0 0 0 N 00 0 g~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.0 0 o s. NIGERIA NUCLEUS ESTATE/SMALLIOLDER OIL PALM PROJECT jID-WWElN STATE 1/ TCU 1-etdouconoo lovesiceet Costs nd Recurrent ERnedituro (Nai-s 000) unit Total Foreign 1984 Lnit 1975 1976 1977 1978 197 17 .1975-;983 Enchan O wrds (Nai re) CAPITAL COSTS BLuilding - Offices 2 54.0 54.0 30 Ofrice fur.Ltoes end equipment 72 18.0 18.0 40 Accounting meebines 3 3.000 (1) 3.0 (1) 3.0 6.5 60 Total 21.0 3.0 24.0 Cn..l.eotn- / j 6.0 6.0 100 Vehicle. 15 Red, 4,000]6 (1) 4.0 (1) 4.0 (1) 4.0 12.0 60 1.3 j7 Pour-vehel dnion 4,100 D 6 (1) 4.1 (1) 4.1 (1) 4.1 12.3 60 1.4 2 Safari wage 3,200 (2) 6.4 _ (2) 6.4 _ (2) 0.4 19.2 60 2.1 L Tute1 vehicle. 6.4 8.1 6.4 8.1 6.4 8.1 43.5 4.8 Total Capital Costs /11 87.4 8.1 9,4 8.1 6.4 0.1 127.5 4.8 of vhich c.stnd und-r COcOn 11 ProJ. 74,1 2.7 2.1 2.7 2,1 2.7 86.4 1.6 coated under Robber Project - 2.7 2.1 2.7 2.1 2,7 12.3 1.6 13.2 2.7 5,1 2.7 2.1 2.7 28.5 1.6 RECURRENT COSTS Office Meoftenne nd Runnin,g boses. S,OOO 5.0 81.0 8.0 B.0 8.0 8.0 8.0 8.0 8.0 69.0 60 8.0 E8t-ne-1 Andit /9 3,000 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 27.0 3.0 Vehicle Onermti /5 Sedan 1,000 (1) t.0 (1) 1.0 (1) 1.0 (1) 1,0 (1) 1.0 (1) 1.0 (1) 1.0 (1) 1.0 (1) 1.0 9.0 (1) 1,n Psor-vebel dries 1,200 (1) 1.2 (1) 1.2 (1) 1.2 (1) 1,2 (1) 1.2 (1) 1.2 (1) 1.2 (1) .12 (1) 1.2 10.8 (1) 1.2 Safari station u-gon 800 (2) 1.6 (2) 1.6 (2) 1.6 (2) 1_6 (2) 1.6 (2) 1.6 (2) 1,6 (2) 1.6 (2) 1.6 14.4 (2) 1.6 Tote1 3.8 3.8 3.8 3,8 3.8 3.8 3.8 3.8 3.8 34.2 40 3.8 Total Recurrent Costs /11 11.8 14.0 04.8 14,0 14.8 14.8 14.8 14,3 14.6 130.2 14.8 of which coined der Cocoa II Proj. 2.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 34.1 3.9 rontd under Ruhbbr project - 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 43.2 5.4 coatod under Oil Paln Proj. /12 0.9 5.4 0.4 3.4 5.4 3.4 0.4 5,4 5.4 33.1 Project cost costed nd-r Cocoa Il ProJ. 77.0 3 9 6.6 6.0 3.9 6.6 6.0 3.9 6.6 120.5 noat d under Rubber Project - 5.4 8.1 7.5 5.4 8.1 7.5 5.4 8.1 55.5 costnd und r Oil Pale Proj. 22.1 0.4 I.1 1005 1.4 0.1 7f5 3.4 0.1 8006 (of whi h local costs) (10.0) (3.3) (4.4) (5.3) (3.3) (4.4) (4.1) (3.3) (4.4) (42.5) (of which fornas mnchonge rcta) (12.1) (2.1) (3.7) (5.2) (2.1) (3.7) (3.4) (2.1) (3.7) (38.1) TOTAL PROJECT COlT /11 99.2 14.8 22.9 24.2 14.8 22.9 21.2 14.8 22.9 257.7 19.6 of thich ch-rged to 0ii Palo Prcj. L10 39.1 4.9 7.6 00.0 4.9 7.6 7.0 4.9 7.6 93.6 6.5 (of ohlch local costs) (20.9) (2.8) (3.9) (4.8) (2.8) (3.9) (3.6) (2.8) (3.9) (49.4) (3.4) (o£ which for-igc -ocheog costs) (18.2) (2.1) (3.7) (5.2) (2.1) (3.7) (3.4) (2.1) (3.7) (49.2) (3.1) ;t Tr Crop Unit Headqu-rters is to chargn of a11 proJects in co- , cil paIn sod ruhbbr. 12 Rutldin end offic qolpoect over yern 1974 aud 1975 (toteL rOotS IS this t.ble presented under 1975) futly coutod under Cocoa 3I Project. 3 Pully coated order Ol PaI Pro-jct. /4 Coosuletots to advis or onchaofeed ccoeciog nyston. ToLe1 cou- N 21,000 dividod bo-asen statir or bhel h-ectors, plactod. /5 Dsiided bot-ieec Cocoa, Rubber and Oil pls Profjcto. Elch 1/3. lowerer ince robber is not operitionel In 1975, Ofi polo to chorgod for 2/3. /6 Oc fPor-whel drive and one sodn purcha sd in 1974 are fIcly costed der Coc.e II. /7 Averag yearly it.r.to,st ba sd upon ont yehicl dprec-ited over 3 yeats. 8 Avrsg- yse-ly i--nsert based open -wo vuhiclee depr-ci.tsd over 3 yearn. L Divided bet-esn Rubbur end Oil P?sI Pjro ct (Elch 1/2), siecd no provieler for Sneernal audit has beun mado esder Coco II. /10 Fr economic .r.lysia 1/3 of boildings, office quipment, vehlnirn and reoucceut cunte, hut cocoultents ned oc-ouoticg -achie. for 100 porcent. /it Subdivinion of total ever thins profjcts osy cot add because of -oundlng. /12 Project eost nuder thic pro.jct. VL61 '5 ql0~ - 0:r202--:2--::-2 -- -- 055 ;o - 000 .ooo~ ~~~~~~~~... .. .. ~~0fr8~~~rg0g--'-------------- --- 00 00 90 ~ ~ ~ ~ ~ ~ ~ -- -00 --.0 -- or' 0 0 000 0 o0p-000 - ~~~~~~toos----- --- 00 St-0~~~~~8 0. 00 0 0 .--1-0- - - - - - - - - - --0-- 0000 NV ANNEX 5 Table 6 101-4 -00--0 -- -- - - F00.0- '00 0600 . *.~~~- - - - - - 0l- saY ~ ~ ~ ~~~ oJ ~~~J 0 nob .0j 00~~~~-l 00 001'1 20 -~~~~~~~~~ I. . . . . . . . . . 00 00100004001 - - - - - 0 - 00-1-1-- - -o - -3- 00 00100 0001- 0 - ' - - 0-- -- . - 0--0-- - 1 0 01 2 i0 JI~~~~~~~~I 0. oo 0 ~~~~~~~~~~~~~~~. *I21 4 i.-- I 0j1 I 100 .0 0~~~~~~~~124 M.-h 8, 0109074 ANNEx 5 Table7 NIGERIA NUCLEUS ESTATE /SMALLHOLDER OIL PALM PROJECT MID-WESTERN _STATE Road lmsroves,eot Progtrams Unit Costs 1976 1977 1978 1/Total FE ------------------ a--------------- K. of road to ho constructed Improvement of existing earth roads (truck standards) ....................80,1 112.5 53.0 245.6 Construction of new earth roads (truck standards). 38.1 15.5- 53.6 Total...................118.2 128.0 53.0 299.2 ----------------Naira---------------- Capital costs 2/ Supervision Unit Car for road engineer................3,200 (1) 3,200 3,200 60 Motorcycle for supervision ............. 550 (2) 10 1.100 70 Total...................4,300 4,300 Construction team 120 hp bulldozer..................30,000 (1)30,000 30,000 85 70 hp grader....................10,000 (1)10000 10,000 85 Tractor.......................4,000 (1) 4,000 4,000 85 4 cubic yard tipper.................8,000 (2)16,000 16,000 75 Robber tired roller.................6,500 (1) 6,500 6,500 90 Tanker on wheels .................. 500 (1) 500 500 85 Rotavator... .................. 500 (1) 500 300 40 Pick-up truck....................3,500 (1) 3.500 3.500 75 Total...................71,000 71,000 Personnel costs Supervision Unit Road engineer 3/ ..................6,000 (1) 6,000 (1) 6,000 (1) 6,000 18,000 10 Supervisors..................... 800 (2) 1,600 (1) 1,600 (1) 1,600 4,800 Clerks........................ 750 (2) 1,500 (2) 1,500 (2) 1,500 4,500 Helpers....................... 500 (2) 1,000 (2) 1,000 (2) 1,000 3,000 Drivers....................... 640 (1) 640 (1) 640 (1) 640 1.920 Total...................10.740 10,740 10,740 32,220 Gen.stuction team Operators.......................3,770 4,100 1,700 9,570 Mechanics.......................3,530 3,840 1,590 8,960 Foremen........................1,360 1,360 530 3,250 Laborers........................22.200 23.030 9.280 54.510 Total .. -.................30,860 32.330, 13,100 76,290 Operating coats Supervision Unit Operating car and motorcycles.4/ ..........700 700 700 2,100 Maintamanca sod rapair ...............215 215 215 645 Total...................915 915 915 2,745 40 Construction team Operating equipment.................24,340 26,380 10,930 61,650 Spare parts, repair.................11,900 12,940 5,330 30,190 Tools........................900 850 320 2.070 Total...................37,140 40,170 16,600 93,910 40 Laeal Contractor Repair of bridges5 ~.................8,300 10,500 5,000 24,000 20 GRAND TOTAL 163,455 94 655 46 35 304 465 Local coats ..... ...............84,743 75,321 37,749 198,013 FE costs......................78,712 19,134 8,606 106,432 .1usRd program executed in 21 years, but supervisiom umit needs half year more to wind up all businses. 2/ Residual value -:K 35.500(construction equipment 2k years depreciated out of 5, car and motorcycle depreoiated over 3 years. 31 Salary of road eugtneer not only determined by Governsment salar;y scales but also by duration of job and the meet to attract a suitable engineer. '4/ Labor for maintenanca sod repair provided by mechanics of construction teems. 5/ 4 bridges~ N 6,000 each. Costa based on estimates by local contractors and Wr. NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Schedule and Cost of Training (N '000) Foreign Total Exchange Training 1975 1976 1977 1978 1979 1980 1981 1982 1983 1975-1983 Component Senior Staff 1/ (3) 13.5 (2) 9.0 - (2) 9.0 - 31.5 100 Field Assistants 2/ (10) 4.o (15) 6.0 (14) 5.6 (2) 0.8 (13) 5.2 21.6 Nursery Staff 3/ (4) 4.8 4-8 22.3 15.0 5.6 9.8 5.2 57.9 Grant to NIFOR 4/ 8.0 8.0 8.0 8.0 8.0 40.0 30 Grand Total 30.3 23.0 13.6 17.8 13.2 97.9 44 Local Costs 14.4 11.6 11.2 6.4 10.8 5414 Foreign Exchange 15.9 11.4 2.4 11.4 2.4 43. 5 1/ Training of all AO's for six months outside Nigeria Cg u4,500. 2/ Training of AA's engaged in field development during three months at NIFOR @ u400. 3/ Training of nursery staff at Ajagbodudu estate and/or at NIJAI estates for 12 months @ N1,200. Nurseries for first year planting program (1976) will be operated by Ajagbodudu estate) -47. vi Used by NIFOR to organize field demonstrations and to buy teaching materials. However specific equipment needed by NIFOR in order to allow it to meet the training needs of the project (such as hostel water supply installation, minibuses, photographic equipment, beds for hostels, chairs, desks, cupboards and kitchen equipment) is costed separately under the "field studies of small-scale processing systems in wild palm groves." ANNEX 5 Table 9 IlIGRLA NUCLEUS ESUATE/SMALLHOLDIl OIL PArl P}OJZCM ID4MESTERN STATE Nsukwa and MosogarL Field Establishment Costs (per ha) Foreign Year -1 Year O/2 Year 1 Year 2 Year 3 Total Exchange % ° * - - - -Naira ..... ........ NURSERY COSTS aa Labor Costs 4 15.00 1.68 16.68 Seeds 7-50 7.50 Poly bags 11.81 11.81 40 Fertilizer 2.73 0.30 3.03 80 Other non labor costs /5 11.31 1.25 12.56 65 Total Nursery Costs 48.35 3.23 51.58 FTELD COSTS Establishment Mandays .......... Seedl 2.5 2.5 Underbrushing 12.5 12.5 Felling 31.3 31.3 Clearing 6.2 6.2 Burning 1.3 1.3 Lining 6.2 6.2 Fire breaks 0.9 0.9 Holing and planting 12.5 12.5 Sawing cover 2.5 2.5 Fixing wire collars 3.0 3.0 Eradicating Eupatorium 0.6 0.6 Maintenance Mandays Ring weeding 5.0 12.5 10.0 10.0 37-5 Slashing 7.5 20.0 15.0 10.0 52.5 Fertilizer application 1.0 1.2 1.2 1.2 4.6 Pest and deseases 1.0 5.0 3.7 2.5 12.2 Census and mapping 1.0 1.0 Plantation roads /6 20.0 1.2 1.2 1.2 23.6 Eupatorium control 5.0 5.0 3.0 13.0 Supplying 1.2 1.2 Castration 5.0 5.0 10.0 Prunning 1 .2 Fire control 2.5 2.5 2.5 7.5 Total Mandays 73.1 41.9 49.8 43.6 35.4 243.8 .. - ; , , 4 .. . . . . . ONaira . . . . . Labor Costs ¢ 73.10 41.90 49.80 43.60 35.40 243.80 Cover crop /8 2.15 2.15 Fertilizer 7.37 15.33 21.00 30.4o 74.10 80 Chemicals /9 3.69 2.00 2.00 1.50 11t.46 80 Wire netting 31.25 31.25 50 Tools 2.00 1.00 0.25 0.25 0.25 3.75 50 Total Field Costs 79.06 85.67 67.38 66.85 67.55 366.51 TOTAL ESTABLISHMENT COSTS 127 141 88.90 67.38 66.85 67.55 418.09 of which labor costs 88.10 43.58 49.80 43.60 35.40 260.48 local costs 20.89 20.65 3.60 4.73 6.51 56.38 foreign exchange costs 18.42 24.67 13.98 18.52 25.64 101.23 L Half of areas on which Nsukwa and Mosogar Estates are to be planted are assumed to consist of secondary forest, including rubber and heavy regrowth, and the other half consist of farms, fallows and/or old palms. 2 Year 0 is year of planting. Costs of planting material is N 51.58 per planted ha; costs are broken down in their main components. A Nursery labor at N 1.00 per mandays. Includes irrigation equipment, fungicide, pesticides, herbicides, transport costs and miscellaneous. Establishment and maintenance of 55 meter of plantation roads per ha. h Estate labor at N 1.00 per manday. For one planting 6.5 kg of pueraria. / Fungicides, pesticides and and for Eapatorium control trioxone in Year - 1. March 4, 1974 AHiIRC S Table 1 0 NOCIEUS ESTAT/SMAUHOLTME OIL PAIN PROJECT MID-WESTERN STATE Aiagbodudu Estate.LField Establishment Costs (Per Ha) 2/ Foreign Year -1 Year 0 Year 1 Year 2 Year 3 Total Exchange --- ----- ----- --------Nar-------_---_---__________--- 3/ NURSER! COSTS Labor costs _4/ 15.oo 1.68 _ _ - 16.68 Seeds 7.50 - - - - 7.50 Polybags 11.81 - -- - 11.81 40 Fertilizer 2.73 0.3D - - - 3.03 80 Other iion-labor costs 5/ 11.31 1.25 - - - 12.56 65 Total Nursery Costs 48.35 3.23 - - 51.58 --------------- Nandays-------------- FIELD COSTS Establishnent Mandays Surveying 2.5 - - - - 2.5 Under-brushing 10.0 - - - - 10.0 Felling 25.0 - - - - 25.0 Cleanr.ig 5.0 - - - - 5.0 Burning - 1.3 - - - 1.3 lining - 5.0 - - - 5.0 Firebreaks - 0.5 - - - 0.5 Hiolir.g and planting - 12.5 - - - 12.5 Sowing cover - 2.5 - - - 2.5 Fixing wire collars - 3.0 - - - 3.0 Eradicating eupatorium 1.0 - - - - 1.0 Nairterance Mandavs Ring weeding - 5.o 12.5 10.0 10.0 37.5 Slashing - 7.5 20.0 15.0 10.0 52.5 Fertilizer application - 1.0 1.2 1.2 1.2 4.6 Pest and diseases - 1.0 5.0 3.7 2.5 12.2 Census and mapping - 1.0 - - - 1.0 Plantation roads 6/ 20.0 - 1.2 1.2 1.2 23.6 Eupatoriuim control - - 5.0 5.o 3.0 13.0 Supplying - - 1.2 - - 1.2 Castration - - - 5.0 5.0 10.0 Pruning - - 1.2 - - 1.2 Fire -contr-l - - 2.5 2.5 2.5 7.5 _ot_; Xar.da7 63.5 4G.3 49.8 43.6 35.4 232.6 ----~---------------------NXaira ------ -------------------- labor Costs 7/ 63.50 40.30 49.80 43.60 35.40 232.60 Cover crop T/ 2.15 - - - 2.15 Fe-tilizer - 7 37 15-33 24.57 33.97 81.24 80 Cheni ala 9. 6.33 2.00 2.00 2.00 1.50 13.83 80 Wircnetting - 31.25 - - - 31 .25 50 To6l' C.0O 1.00 0.25 0.25 0.25 3.75 50 Tot- Fte-ld CCjts 71.83 84.07 67.38 70.42 71.12 364.82 TOTA_ FKELLC =kBLISSOPT COSTS t20A8 87.30 67.38 70.42 71,12 416.40 Of which: Labor uccts 73.50 41.98 49.80 43.60 35.40 249.28 _ocal costs 21.37 2c.65 3.60 5.44 7.22 58.28 FZ costs 20.31 24.67 13.98 21.38 28.50 108.84 1/ The area on which Ajagbodudu estate will be replanted consists of old oil palm trees. 2/ Year 0 is year of planting. 3/ Costs of planting material is 51.58 per planted ha; Costs are broken down in their main components. 4/ Nursery labor at N 1.00 per manday. 5/ Includes irrigation equipment, fungicides, pesticides, herbicides, transport costs and miscellaneous. 6/ Establishment and maintenmnce of 55 meter of plantation roads per ha. Z/ Estate labor at N. 1.00 per manday. §/ For one planting 6.5 kilogram of pueraria 9/ Fangicides and pesticides, and for eupatorium control. Trioxone in Year -1. H H H I10 ' "'1 - .4 o H H 0 100 I Ill 0 0 0 0''-'- I' j 0 01 01 (1 0 01 HO 10 01 00 0 0 0 0 0- I10 'I 0 0 0 0' 0 fl 01 0 I 0 01 0 (0 -. 01 0 01 0 (4 0 I '1 0' 0 0. 01 0100 11 0' H 01 0 0 0 0 10 0 0 0- 01 0 0 I1 0' 0 0 0 0 0 01 01 0 '1 10' 010 01 00 111H 01 0 0- 0101010- 010-0.0. 0-01010. 0.' 0.0' 010- "010101 0101010- 0.010101 01010100 01010101 00 0 01010101 0101010 01010101 01 '001 0101 01010101 01010101 01010101 01010101 01010101 0101 01 01 - 0101 01 0. H 0. H 0.* 0. H 0.01 0101 '001010. 0101010. 01010.0. 0 H 01000101 01010.0' 01010.01 0101'0' 01010.01 01010.0' 01010.01 10010101 0100010. 01010101 01000.01 0 100101 10010. 0 0- 001 10010 010101 010.01 100101 00 - - - - - - - - 01 0011001 010'1001 0010.00 010 00* 000.01 0.0, 001100' 0010101 0011001 01011001 01011001 40 00100 0000 00100 010001 010(10 0(100 0000 00100 01000 0000 0101010 0' 00001 001010 00100 001141. 10000 040010 0000 00100 01000 001010 010100 0 01 01 0 010101 01 01 0' 0-0-01 01 01 - 01 01 01 0' 01 '0 01 0 10 0 0' 010101 01 01 01 01 0. 0. 01 01 010 0 0-0' o 0.0-0. 01 01 01 0. 0 00. 01 0. 0. ' 01 0. o 0-0.00-01 0 0110 0' 01 01 ('01 01 0' 01 ' 41.' 0. 0' 0'01 01 010 0- 0- 01 01 01 010 01 010101 01 0. 10 0-01 01 0 0. 0,01 01 10 -- '4 0' 0.01 0' 04 00 01 010 0. l1 01 0 0 00 '001010101 01 1001 0.11001 00. 01 010.0.0.0110 I 0 00100-01010101010 0 011001 01 0110 10 10 "1 0.001 0.01*l.',01'10-0-0.0-1 0. 0 01 0' 010101011001141010 01 01 010-0' 0. 00. 0' 0' 01 0-00' 0 01 101 0. 010- 01 01 0 01 0 0001 10. 0 O'0' ,' 0 01 Y 0. ' 0l04'1 (' I,' 10 10 01 01 01 01 0100 01 0 0' 0.0100 0 0 01 0.01100.0101,00.1401 4 '0.010- ' 10 410 01 .00 01 01 0' 01. 01 010 0 01 0- 01 0 .01 01 0' 0. 0 00 0100' 01 0 10 001001 01 0 01 010100' 0 010-0' 4. 1 01 ''0-0101 01 01 00 0 011' 01 01 0- 0. 01 0. 00. ' o 01 01 01 0. 01 0- 01 0 01010-01 01 0- 4'. I 0' 0. l' 04 4 0 0- 0. 01 10 01 010.0. 01 01 0. 1000 . 100.0100' 01 hl0'01 4 4.01001 .... o o 01 0 00101 0100100-0110 0' I 0.HI.1l10''..l...(. 0. . '"'-'110 01 0''" 0 0 0 1. I 01 0 '0 0101011010 0 0.'.' 4' '041.1 0-0101 01 010.0.. 0'0 O00. 0- 01-'0- 0. 4. 01 0.0 0 400 01 01 01 01 - 10 1 4 0,0. 0. 0 10 0 01 0. 01 00101 0. '. '1. .1.1' 1' 00 0 00. 01 100' 01 01 0 01 .0 1" ' 0'.' 0 1. 14 0001 01 ' I. 00 1001 0. 0' 01010- 01 0 01 0 0." 01 001100. 10 0101 010101 01 ' 10 0. 0-011'1100,100.0. 1' 0-l'l01 . 0- 01014001 0 '4 100 ..0. 0- 01 100101 01 01 01010110.- 01 0 0.000 01  0. 401010 4.10001 '44 1.1 01(.1,0 01 0400-01 1.4 l'011' I' 010.l00 0. 0. 0.0l,0 0. 010.014 0101010.01 100101010, 01 001001 0 01 010-0. 01 '0 0 410010 0 010400- I" (0140' 10 01 10."010 14 001010. 0 101'0. 01 01 .1 0-00.0 01010010-0.0101100- 0 001010 01 0.0.001 I 0101 33 00 33 33 33 33 333 3 133 33 0 0-0.o - k 0' 00 4.. 00 0000000  W h-  - on -0- '0-0' 400000 00'1 o 00 , - 00 i. oooo.-, oo o o a - 3 '1 40 400- 00 -o 3 0 0 0 0 - 0 3 3 2 . 0 0 0 -. 040 0 0 00 00 00 0000 000 000 00-'0- '00 0000 0400 000 000 * '0'000 000000 000000 000000 000000 000000 4000 000000 000000 000000 000000 000000 000000 000000 000000 000000 000000 000000 * 3 000 000 0000 00000 000 00.00 000 0000 0.0 0000 040 000000 00000. 000000 00000 000000 000000 000000 000000 000000 000000 000000 000 00000 800 0000 0000 000 000 0000 0000 000 00000 00000 4040 00000 0000 000 00000 0000 0000 000000 0000 000 0000 00000 '0 00000 00 00 - 0 0 0 00 0 00 0 0 - 0 0 0 0 0 00 00 00 00 00 0 00 0000 00 0 0.0 0 - - 00 00 00 0 0 0 0 00 00 00 00 00 00 00 000 00 00 0 0 0 0 00 0 0 00000000000 0 0 00 000 0 0 00 0 0 000 0 0 000 0 00 00 00 00 0 00 00 8 00 0-00 0 0 0000 0 0 0 00 0 0 0 0 0 0000 0 00 000 0 00 0- . 0 0 0 00 000 00 00 0 0 0 0 00000 0 0 lo 00 00000 000000000 0004.00.0 0. 0 00 000 0 0 000 0 00 00 00 00 00 00 00 IC 0 0000 00 00 00 00000 0 0 0 00000 0 0000 00 0 00 00000 00 0 00 0000 0 0 0 0 00 000 0 040 00000 00 0' 00 0000 00 00000 0- 00 0- 0 H 00000000000 00 0 0 00000 00 000000 00 00000 0 0 00 0 0 0 00 00 0040 0 000 33 400 000- 00 00 400 00000 0 0 0 000 00 0000 o 00 3 0000000 .0 00000 000000000- 0 '000 00 3o3 * 00400 00004000044 0000 00 '-'0 H 0 0000 00 '0 00 000 0 00000000 0 00000 Ito 000 '-0 00 00 0 * 0 00 0 0 00 0- o-.-. 0 40 0 00 00000 00 0 00000 0 0000 0 000 0 0 000 0 00 00 0-000- 0000 00000 0000 0 0000 0 000000 00 0000- 000-0 00 0000 0 0 00000 0 000 00 0000 00 00000 0 0000 0 0 00000.0 '0 0000 0 000 0 0000- 00 00040 00 000 0 00000 0 0 00000 0 0000 440000 00 0000000 00 40 0 SO3 3 3  o - 0 0 0 0 000 00'-' 000000000- 00 0000 0 00000 00 0 000 0 00 00 0000- 0040 0000000000000 OOoOOoCOoooOOoo 0 000000 00 00000 00000000000 00 00000 0 000 00 00000000000000 00 000000000-0-0000 00 ooo 00 0000 0 00 0000000000-000 00 000000000 40 0 0 00 00 - 00 0 - 014000 0 00 00 0 0 0 00 100 NIGERIA ANNEx 7.bl0 13 NUCLEUS EUTATU/E892LOOLDER OIL PALM PREUCT MID-WESTERN STATE OPC- Estate_Maeaaaccet and Overhead -NesTs,. andUsoa 8 '000 Un,it farsigs 1984 Cast 1975 1976 1977 1978 1979 1980 1981 1982 1983 Tatal Esalhsge fl~rds~ tEru- Mosa.gora 130D() 3. - - 30.0 30 Ocelo Staff 1/ 10,003 (8) 60.3 (4) 40.0 (2) 20.0 ------ 140.0 30 J-elarOtsff 2/ 2,000 (14) 28.0 (4) 0.0 (4) 8.0 -- --44.0 30 Ovrser ard Detters 1,000 (12) 12.0 (8) 8.0 (4) 4.0 2 4.0 20 Later 3/ 700 (266) 186.2 (230)161.0 (100) 70.0 --- --417.0 20 Sub-Total 336.2 217.0 102.0 ------ 631.2 (b) ttffi-, Uto-e OffOre 10 N/sq. ft. 16.0 16.0 --.- - - 32.0 S-ore 3 5/sq. ft. 2.8 2.8 -------5.6 Workshop 0,000~4:11 40 4.0 - .0 Other lefrstrattare 02000 02.0 12.0 ---- ---2. Sub-To-l 34.8 34.8 -------69.6 20 (O E-ui--or -d Furniture OffIceeuyeo 4,000 4.0 4.0 - .0 40 Sar. wo rkshop 3,800 3.-5 3.3 ----- --O. 60 Sub-T.tti 7.3 2.15 10.0 (0 rtor Vehirl-s Frar-asheol drive 4 4,100 (4) 16.4 (2) 8.2 - (4) 16.4 (2) 8.2 - (4) 16.4 (2) 8.2 - 73.8 60 12.3 Lerrlet 0,3000 (0) 12.0 (2) 12.0 - (2) 12.0 (4) 24.0 -- - (4) 24.0 84.0 65 6.0 Graders ~~~~~~10.00 (2) 21.0 - - --.- - - 20.0 83 - Motorcycle 5/ 311~~55 (4) 2.2 (2) 1.1 (2) 1.1 (4) 2.2 (2) 1.1 (2) 1.1 (42 2.0 (2) 1.1 (2) 1.1 13.2 20 1.0 ttty,l_ 0) 52 (4) 0.2 (4) 0.2 (4) 0.2 (4) 0.2 (4) 0.2 (4) 0.2 (4) 0.0 (4) 0.2 () 0.2 1.8 70 0.2 Sat-Ta-s 30.8 21.3 1.3 30.8 33.5 1.3 18.0 9.5 25.3 192.0 28.5 eTota investmco- Ir-r 429.3 280.8 103.3 30.8 33.0 1.3 18.8 9.5 23.3 932.6 28.5 Orrarret Costs Es-ts ioae 25,000/10,000 (2) 50.0 (2) 50.0 (2) 00.0 (2) 30.0 (2) 00.0 (2) 20.0 (2) 00.0 (2) 20.0 (2) 20.0 330.0 50/10 10/ Filod Osaa Z/ 8,000 02) 10 .0 (2) 32.0 (4) 72.0 (43 32.0 )4) 32.0 (4) 32.0 (4) 02.0 (4) 32.0 (4) 30.0 0272.0 10 Field Sop-it-tro .ee 2' 2,000 (2) 14.0 (2) 14.0 (2) (4.0 (2) 14.0 (2 14.0 (2) 14.0 (2) 14.0 (2) 14.0 (2) 14.0 126.0 10 Field A-sl-a- 7/ 3.000 (23 6.0 (6 2.0 (6) 18.0 (6) 18.0 (6) 08.0 (6) 00.0 (6) 18.0 (8) 18.0 (6) 18.0 144.0 10 Orer-er 7/ 0,000 (4) 4. 88.0 (12) 12.0 (2) 2.0 (12) 12.0 (2)12.0 (2) 12.0 (12) 12.0 (12) 13.0 96.0 tat-To-1 00.0 111.0 126.0 126.0 126.0 96.0 96.0 90.0 9ItO 908.0 9608 (0) Estate offto- Atto.s.a-t 3,000 (2) 6.0 (2) 6.0 (2) 6.0 (2) 0.0 (2) 6.0 (2) 6.0 (2) 6.0 (2) 6.0 (2) 6.0 54.0 10 Score t- 10,000 (2) 2.0 (2) 2.0 (2) 2.0 (2) 2.0 (2) 2.0 (2) 2,0 (2) 2.0 (2) 2.0 (2) 20.0 10.0 Sealer Carks 7/ 1,303 02) 3.0 (4) 6.0 (6) 9.0 (6) 9.0 (6) 0.0 (6) 9.0 (6) 9.0 (6) 9.0 (6) 9.0 72.3 10 JucO- Clerks 7) 800 (4) 3.2 (6) 4.8 (8) 6.4 (8) 6.4 (8) 6.4 (0) 6.4 (8) 6.4 (8) 6.4 (8) 6.4 52.8 lte-hcp-r 8000 (2) 1.6 (2) 1.6 (2) 1.6 (2) 1.6 (2) 1.6 (2) 1.6 (2) 1.6 (2) 1.6 (0) 1.6 14.4 Oiieeaoe cht-t 9300 () . (4) 06 (4) 3.6 (4) 3.6 (4) 3.6 () 3.6 (4) 3.6 - - 0. Urlvees ~~~~ ~~~690 (8) 4.6 (122 7.2 (12) 7.2 (12) 7.2 (12) 7.2 (12) 6.6 (10) 6.6 (1I) 6.6 (11) 6.6 60.0 Orleere' eases 0/ 400 (2) 0.8 (4) 1.6 (4) 1.6 (4) 1.6 :6) 2.4 (6) 2.4 (6) 2.4 (6) 2.4 (6) 2.4 17.6 Mes-tser/Oeads 7/ 400 (10) 4.0 (13) 6.0 (20) 8.0 (20) 8.0 (10) 8.0 (20) 6.0 (20) 6.0 (20) 8.0 (20) 8.0 66.0 OSh-Tota1 29.0 38.8 40.4 43.4 46.2 45.6 45.6 42.0 42.0 580.0 42.0 Total Salartis 119.0 154.8 171.4 171.4 172.2 141.6 141.6 136.0 136.0 1,348.0 O,P-rtfas Gecse / Offic e-o-eee 2,500 1.0 3.0 5.0 5.0 5.0 3.0 3.0 5.0 5.0 30.3 Mafetoas-e 2.00 1.2 2.4 4.0 4.0 4.9 4.0 4.0 4.0 4.0 31.6 M.di t., D-11_1 10 :'02,~~ 6:0 12:0 20:0 20:0 20.0 20.0 200.0 20.0 20.0 108.0 Mis-ellaee-s Oeheed 20,000 12.0 24.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 316.0 Sat-Totl 20.7 41.4 69.0 69.0 69.0 66.0 69.0 69.0 69.0 545.1 60 69.0 Vehicle Opartleis Osr- Isa drte- 1.200 (4) 6.0 (6) 7.2 (6) 7.2 (6) 7.2 i6) 7.2 (8) 9.6 (92 10.8 (9) 10.8 (9) 10.8 75.6 Larrts 1.000 (2) 3.2 (4) 6.4 (4) 6.4 (6) 9.6 (8) 12.8 (4) 6.4 (4) 6.4 (42 6.4 (4) 6.4 64.0 r-de:, 3.000 (2) 10.0 (2) 00.0 (2) 10.0 (2) 10.0 (3) 13.0 - - - - 55.0 M.torytlo 200 (4) 0.9 (6) 1.2 (8) 1.6 (8) 1.6 (8) 1.6 (8) 1.6 (8) 1.6 (8) 1.6 (U) 1.6 03.2 Oah-Tot-l 18.8 24.8 25.2 28.4 30.6 17.6 18)8 18.0 18.8 207.8 60 18.8 Total R.eaeret Costs 150.5 221.0 260.6 268.8 277.8 228.2 209.4 220.0 220.8 2,100.9 025.6 GODAN TOTAL 387.8 001.8 368.9 299.6 311.3 229.3 248.2 233.3 201.1 3,033.5 246.3 Petetg,, Osehange Coe,peccct 0~~~~~~~77.4 139.2 108.5 1030 10.3 09.2 70.3 64.6 70.3 909.8 21.6 Los .. eetC. 410.4 362.6 260.4 104.6 201.0 120.3 177.9 170.7 170.8 2,123.7 174.7 If I-ccldee fIeld caaee-eecss,sceaOssd enter cl1-ke. 2/ Occludes field aperieteadeota, field aecle.tacte, jnic- e1eeks, starkespe,, asd ca-seeeshaclc.. I/ Bassd on epetted bhe sf lahe-e- at fudll mturity and Lna21idse dri-ee'e -etee sd ne-segr/gsssrds. A/ Pteceded foe retat -ssge sad fi.ld -asge- (e-plseed evey 3 yasre). 3/ P-irded let field eape atiesfedt and field ...sietacte (repla...d evry 3yer) 6/ Fr-edad fee - ....e. (rePlaced evey 3 y-eee0 7/ Phae..d te ppeo60cataly 30% of pe-enee an fall dealpcet fee she fleet year 607. for eh ceased yea ad 100% foe thereafter. 5/ Ocly far I.L..c 9/ Phaced at apyrassctcly 307. s sale oat fee the flees year, 60% foe she ......d yea and 100% therefte.t 18/ Allceere h-a hb- ade fee -eeptes.ett n -c9 darin fiald eaoehloeha,tt. ON N N n n a n a. 10 H ee < ° < n 2 > e w n b 1 c~L 6 w J~6 > Fno6 . . . . v. w. -6 . . . . . . o~~~~~~~~~~~~~~1 c6~ .f . . . rc nog n .- coo 6nw =. o. 6 coo - 6 o a H a 6 wHO H _HN 00 H HOO n H a n - c o nn N H H H H H~jj HV IION Z~ II OH H2V-.1 IF NN H J a t brr O°NN rrW r@_WO OCOT ng~~~J P!-r F fIt 6n Na N a O H OHO °O H 01 N H ONNOOO H°OONO OH O oa H OOI °H a H °i H H H OH. HH 0-0 Oar,. .a .H HHHO 0 H .0.NNN H . H N NH . _ _ _ _ _ _ __ _ _ _ _ _r _ _ _ __ ____.. . . . ._ H HHH - 11 1OH a 10 HHH _HIH H 1 H0 O0 H - OH N. -N [O W _ N H a OH HI ON H 0 H - COCH H 0 Y HO 000 N 1 N O H5 NN H l HIY _ H N - N X WHW W> 0 OI _ I OO WNOO I OHHN OHHH O H a N O - H O 1-- g~~~~ N H OH H H> Ha OHw Hl oooHO _p wwsjo 00 0 N N QQ Z~~k 'I H >_ W W _=^~r_^r ^>^HH - H NOHO |~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ y a fH __1o 2 IH H 12~~~~~~~~~~~~~~~~~~~~~~~~~ IF 2 N~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~6Z HOW ° 1°m oo Or r , 40 0110 OO N O O O a0 * 0 y - H- 0 1101 y- ot o >@or >9o*>1~-_ 0Ef O NNI WNHWOWON Hw oON H N H @-_ oM oH oH N oO N o-NH N H- o- N N I 2 1 It IN O 00 HN W NN Nt j/. Iooo0__l . oooooII . . 0 0 N 0000' 0 0000. xN xN ONOONOON 0 00000o 0X 0 0>of 0o c HI C HI 0> IN t00 0. 0000. 0 N NIONNNN~ON N 100000 0 0 ON 0 I 0N 0 r INW N HI 1° .H 0 00w N° N 000IN0 0 000 -loooCOXs> OlSo°°° °9 s . Y Ns ||- ° W 0u a° r0 NI ,0 Hso. ] os-Mw9b -YX|>_Wo _ N W 04 0h IOHH 0 NOO IN NA loIHHI0 0 000 N H 000 0 I N4 oNc oo 1 sooY o I O 0 jjN N 0 INN HO H ON0 S¢ IN 0W1110 N HINO t00 O 1000N01 _ Io,oooo 6 IWIbo & F Cffl ; g H > H CO N > e n} OOO cA ,' 'H 'H 'H 2 , ' o' g 'Hq gCc2e - s 9 H~~~~O 'A'a if 00 H' H H ro H - H ? o'ro Q - H H' OH H C 10 HOO O O HO 10 BHH H O OH Or f ;~ ~ ~ ~C HO HO W O OfS0S0lII > |eN 1 ! H 'A H O H H OW i | | | I I | I| ~ e woo N < ~ r. ~o - s i;9r XHOC HH HHH HHOO °e~ ~ ~~ C= *' r. ' .s o0 o NO OO Ol '4 'A- HO ° ° ; 01 0 0OO N > s N OC O A' 0 O CC O OH O~ - g OC O' C CW s O NIGERIA NUCLEUS ESTATEt5M4LL3OLDER OIL PALM PROJECT MID-MMsTERN STATE Fr-lt Collection Inve-tment Costs 1980- F.-eia. Unit -Coi 1980 1961 1982 1983 1983 1984 1985 1986 1987, 1988 1987 1990 899 Erhe- og FYrit Collectitn Illholders Transport 8eneger Car 3,200 (1) 3.2 - - (1) 3.2 6.4 - (1) 3.2 - - 1.1 1.1 1.1 60 Tipper trucks with cr-ne 13,500 (1) 13.5 (1) 13.5 (2) 27.0 (2) 27.0 81.0 (4) 54.0 (4) 54.0 (4) 54.0 (3) 40.5 :6) 81.0 57.4 57.4 57*4 75 Net Delivery Unit 800 (1) .8 (1) .8 (2) 1.6 (2) 1.6 4.8 (4) 3.2 (4) 3.2 (4) 3.2 (3) 2.4 (6) 4.8 3.4 3.4 3.4 70 Nets 24 (80) 1.9 (40) 1.0 (80) 1.9 (80) 1.9 6.7 (280) 6.7 (200) 4.8 (360) 8.6 (240) 5.8 (440) 10.6 8.2 8.2 8.2 1O Total Sm.11holder Fruit Collection 19.4 15.3 30.5 33.7 98.9 63.9 62.0 69.0 48.7 96.4 70.1 I/ 70.1 1/ 70.1 Fruit CEliection Estutee Transp-rt Chief Cur 3,200 (1) 3.2 (1) 3.2 6.4 (1) 3.2 (1) 3.2 1.1 60 Tipper trucks with crane 13,500 (5) 67.5 (1) 13.5 (3) 40.5 121.5 (7) 94.5 (2) 27.0 (3) 40.5 (5) 67.5 (7) 94.5 (3) 40.5 (3) 40.5 60.8 75 Net Detive-y Unit 800 (4) 3.2 (1) 0.8 (3) 2.4 6.4 (6) 4.8 (2) 1.6 (3) 2.4 (4) 3.2 (6) 4.8 (3) 2.4 (3) 2.4 3.2 70 Nets 24 (200) 4,8 _ (240) 5.8 (80) 1.9 12.5 (320) 7.7 (160) 3.8 (400) 9.6 (200) 4.8 (400) 9.6 (240) 5.8 (400) 9.6 7.7 10 Tntal Estate Fruit Collection 78.7 _ 20.1 48.0 146.8 107.0 32.4 55.7 75.5 108.9 51.9 52.5 72.8 Grend Total Fruit Culiectiun 98.1 11.3 50.6 81.7 245.7 170.9 94.4 129.7 124.2 205.3 122.0 122.6 142.9 Of uhich: Local Coets 30.0 4.5 17.7 24.0 76.2 52.5 29.4 44.3 38.2 64.9 40.5 42.7 *6.7 o-rivn Ueckhege Custs 68.1 10.8 32.9 57.7 169.5 118.4 65.0 80.4 86.0 1401.4 61.9 79.9 96.2 1/ Average uveusi investRet costs bsed on Nearly deprecietiuc at foil development. NuCLEUS ETAT&'3lUL'dO)LDE OIL PALi POJEZOT MTDi-EOTM6N SM0T4 F ~~~~~~~~~~~~~~~~~~~Federal Denartisent or AgrStulttre - Monitorire and Realoation OnIt/Traelegr Seotlon. Benln (Naira '1oo) Unit Total Foreign 1984 Costs 1975 1976 1977 1S 197 9 1980 1981 1932 1983 1975-1983 fouhanac % onwards (Bairn) CAPITAL EXPENDITURE Building ( 10 N/sq ft) 75.0 75.0 30 Office Eqoipseor 18.0 9.5 27.5 40 Veh8l0l0 (rCatio wagona) 4,000 (6) 24.0 (6) 24.0 24.0 72.0 60 8.0 /1 Total 117.0 9.5 24.0 24.0 174.5 8.0 Peeseoonl. Costa Nfigerian OtaEf Opeofaliala /2 10,000 (6) 60.0 (47) 120.0 (12) 120.0 (12) 120.0 (12) 120.0 (12) 120.0 (12) 120.0 (12) 120.0 (12) 120.0 1,020.0 10 (12) 120.0 Ad.nioi50at-vt Offirer 3,000 (1) 3.0 (1) 3.0 (1) 3.0 (1) 3.0 (1) 3.0 (1) 3.0 (1) 3.0 (1) 3.0 (1) 3.0 27.0 10 (1) 3.0 Saea-taclei 2,100 (6) 12.6 (6) 12.9 (6) 12.0 (6) 12.6 (6) 12.6 (6) 12.6 (6) 12.6 (6) 12.6 (6) 12.6 123.4 10 (6) 12.6 Cleoks 750 (6) 4.5 (6) 4.5 (6) 4.5 (6) 4.5 (6) 4.5 (0) 4.5 (6) 4.5 (6) 4.5 (6) 4.5 40.5 (6) 4.5 Typists 750 (4) 3.0 (4) 930 (4) 3.0 (4) 3.0 (4) 3.0 (4) 3.0 (4) 3.0 (4) 3.0 (4) 3.0 27.5 (4) 3.0 e..se-gers 490 (1) .5 (1) ,5 (1) .3 (1) .5 (11 .5 (1) .5 (1) .S (1) .5 (1) 5 1.5 (1) .5 Wa.ohoon 460 (3) 1.4 (3) 1.4 (3) 1.4 (3) 1.4 (3) 1.4 (3) 1.4 (3) 1,4 (3) 1.4 (3) 1.4 12.6 (3) 1.4 Drieors /3 640 (7) 4.5 (7) 4.5 (7) 4.5 (7) 4.5 (7) 4.5 (7) 4 (7) 4.5 (7) 4.5 (7) 4.5 4j,.5 (7) 4.5 Tote1 89.5 149.5 149.5 149.5 149.5 149.5 149.5 149.5 149.5 1,285.5 149.5 yepatrlaaote tff/Coesultsses Servtcen Opeelsliota 35,000 (6) 210.0 (6) 210.0 (6) 210.0 (4) 140.0 (4) 140.0 (3) 105.0 (3) 105.0 - - 1,120.0 50 - Coes-ltata S-ervira- /4 5,000 - (4) 25.0 (6) 30.n (8) 4_0o. (8) 40.0 (8) 40.0 (5) 40.0 (0) 40.0 (8) 40.0 29D.0 100 (8) 40.0 Total 210.0 230.0 240.0 180.0 180.0 145,0 145.0 40.0 40.0 1,410.0 40.0 OperttrNO Coot Offi0 - -esri..s 3.0 6.0 6.0 6 0 6.0 6.0 6.0 6.0 6.0 51.0 60 6.0 Offi-0 repir -0d eajt--nooe - 3.0 3.0 3.9 3.0 3.0 3.0 3.0 3.0 24.0 60 3.0 VWh ira r-uoing roata 1.000 (6) 6.0 0.0 6.D 6.0 6.0 6.0 6.0 6.0 6.0 54.0 40 6.0 Travel nobsistenro /5 3,400 (9) 30.6 (15) 51.0 (15) 51.0 (13) 44.2 (16) 54.4 (15) 51.0 (15) 51.0 (12) 40,8 (12) 40.8 414.0 (12) 40.8 T-sifiOg /6 25.0 25.Q 25.0 252. - - - - - 105.0 100 - S-nur-y /7 - 20.0 20.0 20.0 20.0 20.0 20. 20.0 20.0 160.0 Total 64.6 111.0 111.0 104.2 8904 86.0 86.0 75.8 75.8 803.8 55.8 TOTAL 481.71 5000 500.5 457.7 410.0 300.3 404.5 265.3 2.3 ,673. 33 253.3 of which loral roats (295.2) (326.6) (320.9) (288.7) (209.3) (268.4) (278.0) (205.3) (205.3) (2,477.7) (187,1) foreign e-ch-ogsroats (185.9) (173.4) (179.6) (169.0) (129.6) (112.1) (126.5) (60.0) (60.0) (1,196.1) (66.2) Physical Contingonoy Y(5%) 24.1 25.0 25.0 22.9 20.9 19.0 20.2 13.3 13.3 193.7 33 12.7 Psi-e contingencie /8 72,2 101.0 141.9 177.0 197.9 219.7 285.9 17.3 250.7 633- GRAND TOTAL 577_4 626.0 667_4 657.76 677 2 10.6 9.3 5,521.1 33 6 1/ Sia dap-esisted over 3 yeare, is average of 2 oarh year. 2/ I-olodas head of offic-. ./ One far earl oar and reserve driver. 4/ N 9,000 per ro-soltant eao-eoeth. 5/ N 3.400 per 00000 for eath sen.i-r eoff relber (Nigerisn and expatriate apecial.sts) at the oftice (not in tr-inixg) 6o/ Three NOg-riae taff nembere earh io the fiort four yearn; a-s-mod 2 for a 0h41 year; 1 for a hlof yeor. 71 Assuend 3 field surveys earh year aed for -ch ens-rvy ore required about 30 re- for 4 weeke and rooptrer t0(e. Er/ 18/15/12b entpeonded ran-9 for buildings: 14/11/7.95 -omp-unded range fee offire aquipment -nd vuhirle-; 77. -omp-uded for per-ne-el sod operating roots. Price rootingeenca. t loulated from 1974 oowords aver - oac rorts and physical rortiogenote. NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Field Studies of Small-Scale Processing in Wild Palm Groves and Equipment needed at NIFOR Training Cantre (Naira '000) Foreign Exchange 1975 1976 1977 Total % Amount A Research Program Capital Expenditure Vanderkerkhove oil pale kit (2) 100.0 (1) 50.0 150.0 80 120.0 Weckee hydraulic Press (1) 60.0 (1) 60.0 120.0 80 96.0 Four.wheel drive (1) 4.1 4.1 60 2.5 104.1 110.0 60.0 274.1 Recurrent Expenditure Unit operating costs /1 (2) 10.0 (2) 10.0 (1) 5.0 25.0 Vehicle Operating costs (1) 1.2 (1) 1.2 (1) 1.2 3.6 11.2 11.2 6.2 28.6 40 11.4 Total research program 115.3 121.2 66.2 302.7 76 229.9 Physical contingencies (57) 5.8 6.1 3.3 15.2 76 11.6 Price contingencies /2 23.2 38.0 29.1 90.3 76 68.6 Total research program 144.3 165 3 98.6 408.2 76 310_1 B Equipment needed at NIFCiR training centre Hostel water supply installation 20.0 20.0 80 16.0 Minibuses (3 @ N 7.000) 21.0 21.0 60 12.6 Teaching equipment L3 20.0 20.0 40 8.0 Beds for hostel (50 @ 1; 20) 1.0 1.0 Chairs/desks/cupboards (50 @ N 40) 2.0 2.0 Kitchen Equipment /4 7.0 7.0 80 5 71.0 71.0 59 42.2 Physical contingency (5%) 3.6 3.6 59 2.1 Price contingency /5 14.9 14.9 59 8.8 Total NIF04 equipment 89.5 89.5 59 53.1 C Grand Total (without contingencies) 186.3 121.2 66.2 373.7 73 272.1 Physical contingencies 9.4 6.1 3.3 18.8 73 13.7 Price contingencies 38.1 38.0 29.1 105.2 73 77.4 Grand total 233_8 165.3 98_6 497.7 73 363,2 /1 N 5,000 per unit for first six months. 72 14/11/7.5% compounded range for capital expenditure; 7% compounded for recurrent costs; price contingencies calculated from 1974 onwards over bace costs and physical contingencies. /3 Includes photographic material. /4 Cookers and refrf gerators. 75L 14/11/7.57 compounded range; price contingencies calculated from 1974 onwards over base costs and physical contingencies. July 31, 1971, NIGERIA NUCLESS ESTATE/SMALLHOLDER OIL PALM PROJECT N:rn-WR9qTRN STATE Smallholder Maintenance and Harvesting Cost (per Ha) Year 12 LABOR Year 4 1/ Year 5 Year 6 Year 7 Year 8 ear 9 Year 10 Year 11 Onwards ____ _ ------------------------------------- - - --------------Mandays~ ------------------ ------------- Z ------- Ring Weeding 5.0 5.0 5.0 5.0 5.0 5.0 5.0 3.75 3.125 Slashing and Avenue Weeding 7 5 7 5 7 5 7 5 7.5 7.5 7.5 5.0 3-75 Fertilizer application 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 Pruning 2.5 2.5 3.75 3.75 3.75 5.0 5.0 6.25 6.875 Harvesting 10.0 12.5 12.5 13.75 13.75 15.0 15.0 15.0 15.0 Total days 26.25 28.75 30.0 31.0 32.50 33-75 33-75 31.25 3O.O - ----------------------------------------------------------_----Naira------- -- ----- --- - --- -- LABOR COSTS 2/ 18.38 20.13 21.00 21.70 22.75 23.63 23.63 21.88 21.00 Fertilizer 3/ 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 80 Chemidals 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 80 Tools 2 2 .50 2.50 2.50 2.50 L 2.50 .50 2.50 50 Total 43.38 45.13 46.00 46.70 47.75 48.63 48.63 46.88 46.00 Labor costs 18.38 20.13 21.00 21.70 22.75 23.63 23.63 21.88 21.00 Local costs 5.75 5.75 5.75 5.75 5.75 5.75 5.75 5.75 5.75 FE costs 19.25 19.25 19.25 19.25 19.25 19.25 19.25 19.25 19.25 1/ Year 0 is year of planting. 2/ Labor @ 70 kobo per manday. 3/ Yiuriate of potash 200kg/ha. N LGERIA NUCLkJS ESTATE/SMALLHOLDER OIL PALM PROJECT MTf-T1.'STFTRN CTATP Smallholder Maintenance and Harvesting Costs (Naira' 000) 1992 1980 1981 1982 198: L281 1985 1986 1987 1988 1989 1990 1991 Onwards E Planting Planted Year ha Labor Costs 1976 800 14./ 16 1 16.8 17.14 18.2 18,9 18.9 17.5 16.8 16.8 16.8 16.8 16.8 1977 1,200 ,,.1 24.2 25.2 26.o 27.3 28.4 28.4 26.3 25.2 25.2 25.2 25.2 1978 I,600 - . 29.14 32.2 .33.6 34.7 36.4 37.8 37.8 35.0 33.6 33.6 33.6 1979 2,000o _ 36.8 4o403 42.0 43.4 45.5 47.3 47.3 43.8 42,0 - 12.0 1980 2,1400 ..- . 11.1 48.3 5 52.1 54.6 56.7 56.j 52-5 50.4 Total 114.7 38.2 70(.4 111.6 162.2 171.2 177.5 181.3 182.8 181.0 176.1 170.1 168.0 Fertilizer 1976 800 16.0 6, o 16.0 16.0 16.0 16.o 16.o i6.0 16.0 16.0 16.0 16.0 16.0 1977 1,200 - 214.0 24.0 24.0 214.0 24.o 24.0 24.0 24.0 24.0 214.0 24.0 214.0 1978 1,600 - 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 1979 2,000 - - 1_0.0 40.0 40.0 40.0 40.0 40.0 40.o 40.o 40.0 40.0 1980 a,40o _ _ _ 480 48.0 4B 0. 148.0- 48.0 4.80 48.0 48.o Total 16.0 40.0 72.0 112.0 160.0 160.0 160.0 160.0 160.0 160.0 16o.o 160.0 160.0 80 Cheraicals 1976 800 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 1977 1,200 - 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 1978 1,600 - - 4.0 14.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.o 1979 2,000 - - 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 1980 2,400 - - 6.o 6.o 6.o 6.0 6.0 6.o 6.o 6.o 6.o Total 2.0 5.0 9.0 14.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 80 Tools 1976 800 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 1977 1,200 - 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 1978 1,600 - 14.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 14.0 4.0 4.0 1979 2,000 - - - 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 1980 2,400 _ __ _ _ 6.o 6.o 6.o 6.o 6.o 6.o 6.o 6.o 6.o Total 2.0 5.0 9.0 14.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 50 Grand Total 34.7 92.2 160.4 251.6 362.2 371.2 377.5 381.3 382.8 381.0 376.1 370.1 368.0 w_s= =_ ===== === === s== =_= ======._ ==_== .====- =--. *== Of which Labor costs 14.7 38.? 70.4 111.6 162.2 171.2 177.5 181.3 182.8 18t.0 176.1 170.1 168.0 H. > Local cost 4.6 12.3 20.7 32.2 46.o 146. o 46.o 46.o 46.o 46.o 46.o 46.o 46.0 $t FE costs 15.4 ),1.7 69.3 10)!.- 114.a0 1914.0 1514 . 154.0 154.0 1594.0 194.0 154.0 154.0 1 o,zx 5 NIGERIA Appendix 3 NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Estate Harvesting and Maintenance Costs (Per Ha)- Foreign Year 4 Year 5 Year 6 Year 7 Year 8 Exchange Onwards ---------------------------(Mandays)------------------------- Labor Rng weeding 7.5 5.0 5.0 5.0 5.0 Slashing 5.0 5.0 3.7 3.7 2.5 Paths 2.5 2.5 2.5 2.5 2.5 Eupatorium Control 3.0 3.0 3.0 3.0 3.0 Fertilizer application 1.2 1.2 1.0 0.5 0.5 Pruning 2.5 2.5 2.5 2.5 2.5 Pest and diseases 1.2 1.2 1.2 1.2 1.2 Fire Control 2.5 2.5 - - - Road maintenance 1.2 1.2 1.2 1.2 1.2 Maintenance Total 26.6 24.1 20.1 19.6 18.4 Harvesting Ajagbodudu and Mosogar 3.8 7.5 10.0 11.3 12.5 Harvesting Nsukwa 1/ 3.8 6.3 8.8 10.0 11.3 Total Maadays Ajagbodudu and Mosogar 30.4 31.6 30.1 30.9 30.9 Total Mandays Nsukwa 30.4 30.4 28.9 29.6 29.7 ---------------------------(Naira)------------------------- Labor Costs Ajagbodudu and Mosogar 2/ 30.40 31.60 30.10 30.90 30.90 Labor Costs Nsukwa 2/ 30.40 30.40 28.90 29.60 29.70 Fertilizer Mosogar and Nsukwa 3/ 20.00 20.00 20.00 20.00 20.00 80 Fertilizer Ajagbodudu 4/ 23.57 25.50 25.50 25.50 25.50 80 Chemicals 1.00 1.00 1.00 1.00 1.00 80 Tools 0.25 0.25 0.25 0.25 0.25 50 Grand Total Ajagbodudu 55.22 58.35 56.85 57.65 57.65 Of which: Labor 30.40 31.60 30.10 30.90 30.90 Local Costs i.04 5.43 5.43 5.43 5.43 Foreign Exchange Costs 19.78 21.32 21.32 21.32 21.32 Grand Total Mosogar 51.65 52.85 51.35 52.15 52.15 Of which: Labor 30.40 31.60 30.10 30.90 30.90 Local Costs 4.33 4.33 4.33 4.33 4.33 Foreign Exchange Costs 16.92 16.92 16.92 16.92 16.92 Grand Total Nsukwa 51.65 51.65 50.15 50.85 50.95 Of which: Labor 30.40 30.40 28.90 29.60 29.70 Local Costs 4.33 4.33 4.33 4.33 4.33 Foreign Exchange Costs 16.92 16.92 16.92 16.92 16.92 1/ Yields in Nsukwa are lower than in Ajagbodudu and Mosogar and consequently less mandays are required for harvesting. 2/ Mandays @ N 1.00 per manday. 3/ 200 kg of Muriate ofPotash 4/ 200 kg of Muriate of Potash and 65 kg of Magnesium Sulphate in Year 4, and 100 kg in following years on half Ajagbodudu estate's area (Calabar _asc soil). A1NNEX5 Appendix 4 a. e c°0 o , 0 0 9 . . - 4 0 0 0 0 0 . 0 0 0 ( . 0 0 0 ' 00 000 0000000 0 e f SS ° 0.000000 1_ 0000000 N 0t 000d -* 00 0 0 0 0 0 0 .0 n000|o eooom oX >0> <,,, c o|os 8 0 - 1eona 0 -a>g¢ +mg ggg .4 0 I .0: v 0 t r o xxo o o o o cl D 0 000rl0. No - 00 0 00 00 000n 0. 0 0 .^> * a g-g.O sg. _ .1^ <: ~ ~- 00 0 00 00, O^00 31~~ ~ 00 0, 0 z0 0~ 0 000 ,, 0 00 0, 0D co 000 o oNoof e O O z z> a>< o| faN , ,- 000O.0 0. .. _ 0000 a = -t C00 0 00 0 s00 0 00< n00000 eol~~~~~~~~~~ 0,,,, a|fg ,,g 0. al.40 .01 0000 o00o 0000 0000 01 0.0 0000 000 ,Ss 0 0000o So 2ggg ... . S8 . . . . . C ......°8. , °° o001 o ) | 0i> 0 00 000 000 t> Fos KX o GaGZ OH~ ~ ~ ~ ~ V V X 0 0 0 0.~ ~ 0 l' ' l NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Financial Plan _- -(N'MILIoN)----------------------------------------------- FMG NAB STATE GOVERNMENT IBRD TOTAL LOAN OWN FUNDS B131D LOAN OWN FUNDS OWN FUNDS IBRD LOAN SYALFHOLDERS PROJECT COST Smallholder Program Field Establishment 1.6 - - - 0.6 1.6 0.5 2.7 TCU 1.0 - - - 1.6 1.0 - 2.6 OPC Program Field Establishment and Mills 6.6 - - 4.6 2.0 6.6 - 13.2 Monitoring and Evalustion 1.8 1.8 1.8 - - - - 3.6 Field Studies and NIFOR Equipment 0.2 0.2 0.2 - - - - 0.14 SUB TOTAL 11.2 2.0 2.0 4.6 4.2 9.2 0.5 22.5 Unallocated 8.2 1.0 1.0 0.5 6.2 7.2 0.3 16.2 TOTAL 19.d 3.0 3.0 5.1 10.14 16.14 0.8 38.7 -_ -- -- ---------(US$'MILLION) --------------------------- Smallbolder Program Field Establishment 2.4 - _ _ 0.9 2.4 0.7 4.0 TCU 1.6 - _ . 2.4 1.6 - 4.- OPC Program Field Establishment and Mills 10.0 - - 7.0 3.0 l0.0 - 20.0 Monitoring and Evaluation 2.8 2.8 2.8 - - - - 5.6 Field Studies and NIFOR Equipment 0.3 0.3 0.3 - - - - O.6 SUB TOTAL 17.1 3.1 3.1 7.0 6.3 14.0 0.7 34.2 Unallocated 12.14 1.5 1.5 40.7 9.6 10.9 0.4 24.6 TCA2L 29.5 4.6 4.6 7.7 15.9 24.9 1.1 58.8 PRRCENTAGE 50% 8% 8% 13% 27% 42% 2% 100% August 1, 1974 i- O, NIGERtIA NUCLEUS eSTATE/SMALLHOLl3il OIL PAIA 81OJECT MID-WESTERN STATE DUailed Ploanctn of Prolodt Cost Catego-ies of Proposed Pe, Disbor-een Ba-k L... Schedole 1975 1976 1977 1978 1979 1980 1981 1982 1983 Total ( B1n000 (USLoan 0. (US$0001 Field Estalslialoaaot IBRD (75% of gr-ats/credit.) 28.9 102.3 165.9 242.8 339.8 319.7 180.2 148,6 86.0 1.64.2 1.614,2 2,453.6 2.400.0 MWSG (25X of gr-ots/credito) 9.7 34.1 55.4 88.9 113.2 106.5 60.1 49.5 28.7 538.1 Smallholders - 31,8 _61.8 90.8 115.0 140.0 43.1 17.0 _ 4.1J 498.4 Sob Total 38.6 171.Z 283.1 414.5 568,0 566.2 283.4 215,1 110.6 2,650.7 Tree Cr-P Develooment Unit IBRD (40%) 136,7 187.8 142.1 137.3 116.7 tO6.1 75.7 70,2 68.4 1,041.0 1,041.0 1,582,3 1,600,0 M1SG 205.1 281,7 213.2 _206.0 175,1 15_9-1 113.5 105.2 102.5 1 561.4 Slb Total 341.8 469.5 355.3 343,3 291.8 265.2 189,2 175.4 170.9 2,602.4 !OPC PrOareanm IBRD (50%) 498.8 362.9 366.7 415.8 479.1 1,493.9 1,481.8 869.3 602.2 6,570.5 6,570.5 9,987.2 10,000.0 1/ NAB + M1SG 498.9 362.9 366.7 415.7 479,1 1 494.0 _ 1481.8 __ 869,3 602.2 6 570.6 slb Total 997.7 725.8 733.4 831.5 958.2 2,987.9 2,963.6 1,738.6 1,204.4 13,141.1 Monitorioe and Ev-loation I0RD (50%) 240.6 250.0 250.2 228.9 209.4 190.3 202.2 132.7 132.6 1,836.9 1,836.9 2,792.1 2,800.0 FM88 240.5 25. 250.3 228.8 209.5 190.2 202,5 132.6 133,7 5369 Sob Total 481.1 500,0 500.5 457.7 418.9 380.5 404.5 265.3 265.3 3,673,8 Field Stodies and NIFOR EOooemeot IBRD (50%) 93.1 60.6 33.1 - - - - - - 186.8 186.8 283.9 300,0 FMG 93.2 60.6 33.1 186-9- - _ _ 1 Sob Total 186,.3 121.2 66.2 - - - - - - 373.7 Unallocated IBRD 224.6 302.0 366.6 ),81 .5 62y.5 1,869.) 2,105.5 1,158.5 1,0057.6 8,195.2 8,195.2 12,456.7 12,400.0 8M81 + NAB 162.0 2235 24778 328 1 430°.5 1,633.9 7,676.9 971.7 891.3 6,761.3 FMGl 71.8 85.1 99.7 99.9 109.4 119.4 153.0 115.3 132,0 905.6 Smallholder - 1-,6 23.8 46,0 60.6 101 4 370 17.7 15.3) 291-9 Sub Tetal 458.4 621,2 737.9 956.1 1,230.0 3,724.2 4,170.4 2,263.2 2,075.6 16,237.0 Grand Total 2,503.9 2,608.9 2,676.4 3,003.1 3,466.9 7,924.0 8,011.1 4,657.6 3,826.8 38,678.7 19,144.6 29,555.8 29,500.0 1/ Of shich $5.4 millon for est.te develop-ent, and $4.6 million fo- intvstment iS the palo oil aille aod fr-,it collectioo. ANNEX 6 Table 3 NIGERIA NUCLEUS ESTATE/SMAILHOLDER OIL PALM PROJECT MID-WESTERN STATE Disbursement Schedule of Bank Loan Cumulative US$1000 US$I000 FY 75 Second Half 800 800 FY 76 First Half 1,000 1,800 Second Half 900 2,700 FY 77 First Half 1,100 3,800 Second Half 900 4,700 FY 78 First Half 1,100 5,800 Second Half 1,000 6,800 FY 79 First Half 1,300 8,100 Second Half 1,200 9,300 FY 80 First Half 1,500 10,800 Second Half 2,500 13,300 FY 81 First Half 3,600 16,900 Second Half 2,500 19,4OO FY 82 First Half 3,600 23,000 Second Half 1,500 24,500 FY 83 First Half 2,100 26,600 Second Half 1,200 27,800 FY 84 First Half 1,700 29,500 29,500 August 1, 1974 ANNEX 6 Table 4 NIGERIA NUCLEUS E3TATE/SMALIHOIDER OIL PALM PROJECT HID-WESTERN STATE 1/ 2/ Sources of Finance and Existing NAB Loan (Naira Million) NAB 3/ FNG State Total Total Oh7N,' IBRD OWN IBRB OWN Farmer Costs IBERD fmds funds funds funds funds I OPC PROGRAM A Items Part of' NAB Loan Mosogar Nsukta Field Establishment 1237 4/ - - 1.28 - - 2.65 1.28 Mosogar Nsukt:a Overheads 1.52 - _ 1.51 - - 3.03 1.51 Mill Investmuns 1.60 - - 2.93 1.29 - 5.79 2.90 Fruit Collec:i.n Investanent 0.09 0 _ O*13 0.03 - 0.25 0.13 Subtotal L457 _ _ 5,82 1.32 - 11.72 5.82 Contingencies 5/ 0.48 - _ 5.10 4.55 - 10.13 5.10 Total 5.06 _ _ 10.92 5.87 - 21.85 10.92 B Items Not Part of NAB Loan 6/ A3agbodudu Field Establishmer.t - - - 0.38 0.38 - 0.76 0.38 Ajagbodudu Overheads - - - 0.33 0.33 0.66 0.33 Subtotal - _ 0.71 0.71 - 1.42 0.71 Contingencies 5/ - 0.58 0.58 - 1.16 0.58 Total A1agbodudu - - - 1.29 1.29 - 2.58 1.29 TOTAL OPC 5.06 _ 12.21 7.16 - 24.43 12.21 II SMALLHOLDER PROGRAM Field Establishment - - - 1.61 0.54 0.50 2.65 1.61 TCU (Including Road Program and Training) 1.04 1.56 - 2.60 1.04 Subtotal - 2.65 2.10 0.50 5.25 2.65 Contingencies 5/ - - - 1.56 1.12 0.29 2.97 1.56 Total - - - 4.21 3.23 0.79 8.22 4.21 III MONITORING AND RESEARCH Tree Crop Section of MEU - 1.84 1.84 - - - 3.68 1.84 Research - 0.19 0.19 - - - 0.38 0.19 Subtotal - 2.03 2.03 - _ _ 4.06 2.03 Contingencies 5/ - 0.98 0.98 - - - 1.96 0.98 Total - 3.01 3.01 - _ _ 6.02 3.01 IV GRAND TOTAL (I + II + III) 5.06 3.01 3.01 16.42 10.39 7/ 0.79 38.67 19.43 V PERCENTAGE 13% 8% 8% 42% 27% 2% 100% 50% 1/ Based on a discussion in Benin on June 7 about the financing of this project. Participants in the discussion were the Bank, the State Government, OPC and NAB. Work document of that meeting adapted to other figures in this report. Differences however are minimal. 2/ In March 1974 NAB's Board approved a loan to OPC of N 5,342,629. 3/ No Bank funds onlent through NAB. 7/ NAB costing included in its financing maintenance of a part of the estates at maturity X N 285,000. Since this is not included in project costs this ameunt has been deducted of NAB's loan in the project financing plan. Physical and price contingencies. NAB undertook to consider further lending to MWSG for the replanting of Cowan estate. 7/ Under the NAB loan agreement already N 5.06 million committed for oil palm development by the State. August 1, 1974 ANNEX 7 Page 1 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Production Estimates for the Projects 1. Mean annual yield expectations, based on experience and data which are detailed in the Supplementary Annexes (Supplement 13), are as follows: Metric tons/ha/year Areas N4 N5 N6 N7 N8 N9 ESTATES Mosogar 3.8 7.5 10.0 11.3 12.5 12.5 Ajagbodudu 3.8 7.5 10.0 11.3 12.5 12.5 Nsukwa 3.8 6.3 8.8 10.0 11.3 11.3 SMALLHOLDERS Mosogar 2.5 5.0 6.3 8.8 10.0 10.0 Nsukwa /1 2.5 5.0 6.3 8.8 10.0 10.0 /1 Assuming smallholders areas are to the west or south of Nsukwa. 2. Mill extraction rates are expected to be as follows: Percent N4 N5 N6 N7 N8 N9 Oil to bunch 16 17 18 19 20 22 Kernels to bunch 4 4.5 5 5 5 5 3. Details of production are shown in Tables 1 to 4. ANNEX 7 Appendix 1 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Yields on already established Ajagbodudu estate 1. Average production (see Annex 4, Table 2) at Ajagbodudu estate over the period 1958-1972, excluding years of uncertainty and disturbance (1967 to 1971 inclusive) was 20,534 long tons or 20,862 metric tons annually. However, since years of neglect during the period of disturbances will have a lasting effect on the plantation, future yields from Ajagbodudu's old plantings are estimated at 7.5 metric tons/ha. Based on observations over the 12-month period October 1972 - October 1973 the extraction rates of Ajagbodudu's old plantings are as follows: Oil extraction rate 13% Kernel extraction rate 6.5% Ajagbodudu's own replantings in 1974 and 1975 are estimated to give the same yields and extraction rates as replantings under the project. 2. Ajagbodudu Estate also collects and processes fruit from surrounding existing smallholders. Over the years their production averaged 6,650 metric tons annually. Extraction rates are the same as those observed for Ajagbodudu's old plantings. It NICERIA a c NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Li V Project Production of FFB (metric tons) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Planting Planting Year ha Ajagbodudu Heplanting /2 1980 640 - - - - 2,432 4,800 6,400 7,232 8,000 8,000 8,000 1981 800 - - - - - 3,040 6,000 8,000 9,040 10,000 10,000 1982 800 - 3,040 6900 0 9,040 0,000 _ - - - - 2,432 7,840 1),440 21,232 25,040 27,040 28,000 28,000 Mosogar Estate 1976 400 1,520 3,000 4,000 4,520 5,000 5,000 5,000 5,000 1977 600 - 2,280 4,500 6,000 6,780 7,500 7,500 7,500 1978 800 - - 3,040 6,000 8,000 9,040 10,000 10,000 1979 1,000 - -- 3,800 7 500 10 000 11,300 12 500 __ _ _ 1,520 i 15,240 I,~4o PC,3 27> t TiFO 33,tVOO 35,000 35,000 35,000 35,000 35,000 Ns9kwa Estate 1976 400 1,52( 2,520 3,520 4,000 4,520 4,520 4,520 4,520 1977 600 - 2,280 3,780 5,280 6,000 6,780 6,780 6,780 1978 800 - - 3,o040 5,040 'y,o040 8,000 9,o040 9, 040 1979 1,00O - _ _ 3 800 6 300 8 800 loo000 11 300 1,5j20 ,800 i10,3V6 1]8,120 23 ,8 60 28,10 0, 1,0 31, 640 31,6140 Tl', 4o3 Total Estates 30148 0 080 280 38,440 53 v2 7,4 78 87,872 91,680 93,680 94,6440 Smdllholders, Sapele 1976 400 ).,000 2,000 2,520 3,520 4,000 4,000 4,000 4,000 4,000 1977 600 - 1,500 3,000 3,780 5,280 6,000 6,000 6,000 6,000 1978 800 - - 2,000 4,000 5,040 7,040 8,000 8,000 8,000 1979 1,000 - - - 2,500 5",000 6,300 8,800 10,000 10,000 1980 1,200 - - 6000 1 2,560 10A60 12. OO _ 1,0041 3,500 7,520 13,800 22,320 29,340 34,360 38,560 40,000 40,000 40,000 40,o00 Smr.liholders, A4,bor 1976 400 1,000 2,000 2,520 3,520 4,000 4,000 4,000 4,000 4,000 1977 600 - 1,5(0 3,000 3,780 5,280 6,000 6,000 6,000 6,000 1978 800 - - 2,000 4,000 5,040 7,040 8,000 8,000 8,000 1979 1,000 - - - 2,500 5,000 6,300 8,800 30,000 10,000 1980 1,000 - - 3,000 6,000 7,560 10,560 12,000 __- _ -- 1,00)0 3,500 7,520 13,000 22,320 29,34(0 34,360 38,560 40,000 40,000 40,000 40,000 Total Smallholders :2s00 ( 7,roO 15,04() 27 600 44 640 680 68,720 773120 80,000 80,000 8 _000 80,000 TOTAL MID-WER5EN STATE 5040 17 3 6,920 66,040 98P22 126,160 148.300 992 171,680 173 680 174640 174,640 ... ...=. ......... ...... Sapele Area (West) 2,520 8,780 19,060 34,120 52,032 68,720 83,600 94,392 100,040 102,040 103,000 103,000 Agbor Area (East) 2,520 8,300 17,860 31,920 46,180 57,440 64,700 70,200 71,640 71,640 71,640 71,640 /1 Based on' estimuated yields as explained in this Annex. /2 Production of that part of Ajagbodudi estate that udll be replanted under the project. aq NIGERIA NUCLEUS ESTATE/ SMALLHOLDER OIL PALM PROJECT HID-WESTERN STATE Project Production/iL of Palm Oil (metric tons) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Planting Planted Year ha Ajiagboduda Replanting /2 1980 640 - - - - 389 816 1,152 1,374 1,600 1,760 1,760 1,760 1981 800 - - - - - 486 1,020 1,440 1,718 2,000 2,200 2,200 1982 800 - - - - - - 486 L.Q?Q 1,470 1,718 2g000 2,200 389 1,302 2,658 3,834 4,758 5,478 5,960 6,160 Mosogar Estate 1976 400 243 510 720 859 1,000 1,100 1,100 1,100 1,100 1977 600 - 365 765 1,080 1,288 1,500 1,650 1,650 1,650 1978 800 - - 486 1,020 1,440 1,718 2,000 2,200 2,200 1979 1,000 _ _ - 608 1,275 1 2,147 _ 2500 2,750 243 875 1,971 3,567 5,003 6,118 6,897 7,450 7,700 7,700 7,700 7,700 Nsukwa Estate 1976 400 243 428 634 760 904 994 994 994 994 1977 600 - 365 643 950 1,140 1,356 1,492 1,492 1,492 1978 800 - - 486 857 1,267 1,520 1,808 1,989 1,989 1979 1,(00 - _ 608 ~1071 1,584 1900 2,260 2486 243 793 1,763 3,175 4,382 5,454 6,194 6,735 6,090'3 6,o90/3 6,090 /3 6,090 /3 Total Estat, 486 1668 3s,_4 6E742 _9_77 12,874 13 749 18,019 19 418 20 138 20 620 20 820 Smallholder, Si,pele 1976 400 160 340 454 669 800 880 880 880 880 880 1977 600 - 240 510 680 1,003 1,200 1,320 1,320 1,320 1,320 1978 800 - - 320 680 907 1,338 1,600 1,760 1,760 1,760 1979 1,(00 - - - 400 850 1,134 1,672 2,000 2,200 2,200 1980 1,200 - - 480 1,020 1 36 L 2_06 2,400 2 640 160 580 1,284 2,429 4, 040 5,572 6,833 7,966 8,560 8,800 8,800 8,800 Small4hol~der, I,or 1976 400 160 340 454 669 800 880 880 880 880 880 1977 600 - 240 510 680 1 003 i,200 J,320 1,320 1,320 1,320 1978 800 - - 320 680 907 1,338 1,600 1,760 1,760 1,760 1979 1,000 - - - 400 850 1,134 1,]62 2,000 2,200 2,200 1980 1,200 - _-I80 1 020 2 006 2,400 2f640 160 580 1,284 2,429 4,040 5,572 6,833 7,966 8,560 8,800 8,800 8,800 Total Smallolders 320 1 - 5 4 8l44 131666 17 120 17§600 I 0 17E010 Total Mid-W: st 806 2_828 6 2 11 _154 24 018 29415 3336955 337 38 ~ 3 Sapele Area 403 1,455 3,255 5,966 9,432 12,992 16,388 19,250 21.018 21,978 22,460 22,660 t Agbor Area 403 1,373 3,047 5,604 8,422 11,026 13,027 14,701 15,520 15,760 15,760 15,760 .3 a /1 Extraction rate: Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 onwards _ 167o 17% 18%7 19% 20/o 227/ /2 Production that part of Ajagbodudu that idll be replanted under the pro ject. /3 Rounded (0.8 to 0.0). NIGERIA .1 c NUCLEUS ESTATE/SMALLU4OLDER OIL PALM PROJECT - mlID-WESI9 STATE Project Production of Rernels (metric tons) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1970 1971 Planting Planting Year ha Ajagbodadu Repl.mting /2 1980 640 - - - 97 216 320 362 400 400 400 1981 800 - - - - - 122 270 400 452 500 500 1982 800 - - - - - - 122 270 400 452 500 97 338 712 1,032 1,252 1,352 1,400 1,400 Mosogar Estate 1976 400 61 135 200 226 250 250 250 250 1977 600 - 91 203 300 339 375 375 375 1978 800 - - 122 270 400 452 500 500 1979 1,000 _ _ - 152 338 500 565 625 61 226 525 948 1,327 1,577 1,690 1,750 1,750 1,750 1,750 1,750 Nsuhwa Estate 1976 400 61 101 141 200 226 226 226 226 1977 600 - 114 189 264 300 339 339 339 1978 800 - - 122 224 352 400 452 452 1979 1,000 - - - 152 284 440 500 565 61 215 452 843 1,162 1,405 1,517 1,582 1,582 1,582 1,582 1,582 Total Estates 122 41 -77 1,791 26 - 4584 4 4 4,732 4732 Smcallholders, Sapele 1976 400 40 90 126 176 200 200 200 200 200 1977 600 - 60 135 189 264 500 300 300 300 1978 800 - - 80 180 252 352 400 400 400 1979 1,000 - - - 100 225 315 440 500 500 1980 1,200 - - - - 120 270 37 528 600 40 150 341 645 1,061 1,437 1,7'8 1,928 2,000 2,000 2,000 2,000 Smallholder, Agbor 1976 400 40 90 126 176 200 200 200 200 200 1977 600 - 60 135 189 264 300 300 300 300 1978 800 - - 80 180 252 352 400 400 400 1979 1,000 - - - 100 225 315 440 500 500 1980 1,200 - _ - - 120 270 378 528 600 40 150 341 645 1,061 1,437 1,718 1,928 2,000 2,000 2,000 2,000 Total Smallholders 80 300 682 1,290 21j2 2,874 3,436 34856 4,000 4,000 4 4,000 Total Mid-West 202 741 1,659 3,081 4,708 6,194 7,355 8 220 8,584 8, 84 8,732 Sapele Area 101 376 866 1,593 2,485 3,352 4,120 4,710 5,002 5,102 5,150 5,150 Agbor Area 101 365 793 1,488 2,223 2,842 3,235 3,510 3,582 3,582 3,582 3,582 /I Extraction rate: Year 4 Year S Year 6 Year 7 Year 8 Year 9 onwards 4/ 4.5% 5Pf 5% 5% 5 ~L2 Production of that part of Aingbodndu thast will be replanted under the project. NIGERIA NUCLEUS ESTATE/ShAL,LHOLDER OIL P4114 PROJECT N18-WFiflN STATE AJagbododu Estate. Pfduction of FfB. Palm oil and Kernels of Exietig Estate. A.isgbodudu's OneaplantirEB. and Sasllholders around Ajagbodadu, fM Iit of tinh in coflected by and processed at Ajoagbodudo Estate (metric tons) FF8 PRODUCTION 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 Old PaLms L (Area tliled ha) (259) (640) (800) (800) 2,240 ha 16,800 16,800 16,800 16,800 16,800 16,800 12,000 6,000 - - - 259 ha 1.943 18,743 Own Replanting /2 1974 162 ha - _ _ - 616 1,215 1,620 1,831 2,025 2,025 1975 259 ha . - - 984 1.943 2,590 2,927 3,238 616 2,199 3,563 4,421 4,952 5,263 5,263 Existingl mallhelders 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 6,650 Total 25,393 23450 23,450 23,450 224,066 25649 28,213 17.071 11.602 11.913 11,913 OIL PALI PRODUCTION 314 Palmo /3 2,437 2,104 2,104 2,184 2,184 2,104 1,560 780 - - Own ReplantinS /4 1974 162 - - 99 207 292 348 405 446 446 1975 259 - - - - - 157 330 466 556 648 712 99 364 622 814 961 1,094 1,158 Oxistine Smallholders /3 865 865 865 865 865 865 865 865 865 865 865 Total 3,302 3,049 3.049 3.049 3,148 3,413 3,047 2,459 1.826 1.959 2,023 KERNEL PRODUCTION Old Palms /5 1,218 1,092 1,092 1,092 1,092 1,092 780 390 - - - Owm Roelantlne /6 1974 162 ha - - - - 25 55 81 92 101 101 1975 259 - - - - - 39 87 130 146 162 25 94 160 222 247 76 E.istint S-allhold-rs /5 432 432 432 432 432 432 432 432 432 432 432 1otal 1,524 1,524 1549 1.56 18 ,38 9_ 679 695 695 LI 7.5 tom/ha.. /2 Yield aame as project replantinEs 4 5 6 7 8 9 onwards 3.8 7.5 10.5 11.3 12.5 12.5 LI Obseraed prsent extraction rate 13'!. /4 Extration rate ame an project replantinEg: 4 5 6 7 8 9 onwards 16 17 18 19 20 22 /5 Ob6erwe-d pr ... t ext-ation rate 6.5T%. /6 Extraction rote sane an project replantingo: h 5 6 7 8 9 onwards 4 4.5 5 5 5 - February 6, 1974 ANNEX 8 Page 1 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Estimated Economic and Financial Mill Gate Values of Palm Oil and Kernels 1. For the purpose of this project the economic and financial prices for palm oil and kernels have been calculated using the Bank's world market price projections for 1980. The projections are as follows: Projected Prices for Palm Oil ($/MT) Year Current Prices Constant 1974 Prices 1974 710 710 1975 595 534 1976 438 358 1977 458 345 1978 469 327 1979 490 318 1980 495 300 1985 757 327 2. The actual prices for palm oil and kernels have been as follows: Actual Prices for Palm Oil and Kernels (Annual Average) 1972 1973 1974 /3 1974 (July-Sep.) Palm Oil /1 217 378 710 681 Palm Kernels /2 116 259 480 417 /1 In United Kingdom ($/metric ton). /2 In Europe ($/metric ton). /3 Partly estimated. ANNEX 8 Page 2 Palm Oil 3. It has been assumed that without the proposed projects Nigeria would be a net importer of palm oil by 1980. The projections indicate that by 1985 the net deficit would be around 275,000 tons of palm oil and most of this deficit would have to be supplied from Malaysia. The Ivory Coast would be able to supply part of this deficit but it is unlikely that the cif price would be much below the Malaysian price. It has further been assumed that palm oil imported or produced by the project would be sold in or around the large urban markets of Western Nigeria, such as Ibadan. Implicit in this assumption is that the rural markets of Mid-Western State and urban markets such as Benin would be fully supplied from alternative sources. It is probable, however, that these areas would also be the markets for the project and this would result in higher economic and financial millgate prices since (a) the transport from port to the market would be higher, and (b) the transport from the mill to the market would be less than projected with Ibadan as the market. Hence the price estimates tend to be on the conservative side. Furthermore projects would be in full production after 1985 and the forecasted price for 1985 in constant 1974 terms is substantially higher than the 1980 price. Kernels 4. For the purposes of the economic and financial millgate prices it has been assumed that kernels will be exported at a projected, 1980, price of US$330 per metric ton. The charges included are based on what is currently expected to be the role of the Marketing Boards and NPMC, where the Mill can bypass the Marketing Board and sell directly to NPMC and hence avoid any Mlarketing Board commission. 5. With the rapid expansion of kernel crushing industries from 2 mills at present, with a combined crushing capacity of 110,000 tons per annum, to about 7 - 9 mills with a capacity of 350 - 400,000 tons, provided all present- ly projected investment programs materialize (nearly all jcint enterprises with State participation), it is probable that a large proportion of kernels would be processed locally and exported as kernel oil. In that case the export price for kernel oil would be obtained and given efficiency in the crushing operations the added value for Nigeria would be higher. Therefore taking the export prices for kernels is again a conservative estimate. ANNEX 8 Table 1 NIGERIA NUCLEUS ESTATE/S4ALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Estimated Economic and Financial Millgate Values of Palm Oil It is assumed that palm oil will be imported from Malaysia in 1980 at US$ 495 /1 per metric ton and that CIF Nigeria Price is the same as the CIF Europe Price. Economic Financial CIF Apapa (metric tons) in 1980 prices US$ 495.0 in 1974 prices US$ 300.0 /2 N 236.2 /3 N 197.4 A Add Import duty N 39.5 /5 Add Handling, storage, etc. at port N 2.4 N 2.4 Add Transport Apapa - Ibadan N 6.0 ofi N 8.0 n Less Transport Mill - Ibadan N 12.6 /8 N 16.8 /9 Economic Millgate Price N 232.0 N 230.5 /10 /1 Price forecast for 1985 is US$ 757 or US$ 327 in constant 1974 prices. 7T Deflated with the International Price Index (1974 = 100; 1980 = 165.0). 74 Applying a shadow exchange rate of N 1 $ 1.27. 7E Exchange rate: N 1 = $ 1.52. /5 Based on a differential between the existing official exchange rate and the estimated shadow exchange rate (1.52/1.27 = 20 percent). /6 100 miles at 6 kobo per ton mile (8 kobo excluding taxes at 25 percent). 7t 100 miles at 8 kobo per ton mile. 240 miles at 5.25 kobo per ton mile (7 kobo excluding taxes at 25 percent). 7§ 240 miles at 7 kobo per ton mile. /10 It was announced in April 7b, that the sales tax of 10% would be abolished. ANNEX 8 Table 2 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Estimated Economic and Financial Millgate Values of Kernels It is assumed that palm kernels will be exported and that the value will be based on a world market price of US$ 330 1/ per metric ton in 1980. Economic Financial CIF Europe (metric tons) in 1980 prices US$ 330.0 in 1974 prices US$ 200.0 2/ Less Freight and insurance US$ 30.0 FOB Nigeria (Port Harcour, Warri) US$ 170.0 N 133.9 3/ N 111.8 4/ Less Handling at port N 1.8 N 1.8 Less Transport to port N 3.1 5/ N 4.2 6/ Less Marketing and inspection charges 7/ 14 2.4 N 2.4 Less Bags N 6.2 N 6.2 Millgate Price N 120.4 N 97.2 8/ 1/ Price forecast for 1985 is US$ 504 or US$ 218 in constant 1974 prices. 2/ Deflated with the International Price Index (1974 = 100; 1980 = 165.0). 3/ Applying a shadow exchange rate of N 1.00 = US$ 1.27. IT! Exchange rate N 1.00 = US$ 1.52. 5/ 60 miles at 5.25 kobo per ton mile (7 kobo excluding taxes at 25 percent). &/ 60 miles at 7 kobo per ton mile. 7/ To be carried out by NPMC. ~/ It was announced in April 74 that the sales tax of 10% would be abolished. NIGERIA NUCLEUS ESTATE/SHALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Smallholder Farm Budget for 1 ha Planting (N/ha) Year: -1 0 9/ 1 2 3 4 5 6 7 8 9 10 11 12 13-28 Production (tons ffb) 2.5 5.0 6.3 8.8 10.0 10.0 10.0 10.0 10.0 10.0 Sales at N 20.0/ton I/ 50.0 100.0 126.0 176.0 200.0 200.0 200.0 200.0 200.0 200.0 On Farm Costs: 2/ Labour 35.0 56.0 24.5 21.0 15.8 18.4 20.1 21.0 21.7 22.8 23.6 23.6 21.9 21.0 21.0 Non-Labour - 98.8 20.3 26.0 35.4 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 Total 35.0 154.8 44.8 47.0 51.2 43.4 45.1 46.0 46.7 47.8 48.6 48.6 46.9 46.0 46.0 Net Receipts before Grant/Credit (35.0) (154.8) (44.8) (47.0) (51.2) 6.6 54.9 80.0 129.3 152.2 151.4 151.4 153.1 154.0 154.0 Grant Receipts 3/ - 96.3 17.8 23.5 32.9 10.0-' 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 Credit Receipts 4/ - 50.0 15.0 15.0 20.0 Cumulative Credit 5/ - 51.4 71.3 93.1 122.0 133-5 146.2 160.0 Credit Repayments 6/ 36.0 36.0 36.0 36.0 36.0 36.0 - Net Benefits (35.0) (8.5) (12.0) (8.5) 1.7 16.6 64.9 90.0 103.3 126.2 125.4 125.4 127.1 128.0 164.0 On Farm Labour Costs 35.0 56.0 24.5 21.0 15.8 18.4 20.1 21.0 21.7 22.8 23.6 23.6 21.9 21.0 21.0 Gross Return 7/ - 47.5 12.5 12.5 17.5 35.0 85.0 111.0 125.0 149.0 149.0 149.0 149.0 149.0 185.0 On Farm Man-Days 50.0 80.0 35.0 30.0 22.5 26.25 28.75 30.0 31.0 32.5 33.75 33.75 31.25 30.0 30.0 Gross Return per M-D - 0.6 0.4 0.4 0.8 1.3 3.0 3.7 4.0 4.6 4.4 4.4 4.8 5.0 6.2 1/ Benefits calculated at constant 1974 price for ffb. 2/ On farm costs at constant prices; include labour costed at full market price of 70 kobo/manday; fertilizers at full oost; no contingencies. 3/ Assuming all materials for planting and establishment provided as grant (except hand tools), 4/ Cash payment of N 100.0 per hectare regarded as medium term loan. 5/ Interest capitalized at 9.5. 6/ Based on repayment of N 3.0 per month per ha for 6 years. 7/ To management, labor, land and capital. 8/ Assumes maintenance of 50% subsidy on fertilizer, which will affect farmer from Year 4 onwards. 9/ Year 0 is year of planting. Mean return per Manday over 30 yeara: N 4.3 Mean Net Benefits per ha over 30 years: N 115.6 Pk[ 9000i9N ScATH OPC Pr-fertec Cash Flaw 1975 - 1991 1991 1975 1976 1917 1978 1919 1980 1981 11982 1983 1984 18 196 1987 18 99 19 9sad Project Sales -paI int0l - - - - 185.8 6911.9 1,451.6 2,973.9 4,116.2 5,538.1 6,799,2 7,925.7 9,411.1 9,699.6 9,999.7 8,955.8 K.eInl - - - - 19.7 72.1 191.3 299.5 457,7 922.1 714.9 799.0 834.4 944.1 M4.$ 848.9 7ei8an Isles - Paloil 41 I/ 792.8 702.8 702.8 7223,8 786.7 702.4 5b1.9 420.9 491.6 466.3 466.3 499.3 469.3 466.3 496.3 466.3 466.3 Total Sale. 651.7 911.0 831.0 879.2 904. 0 1,042.0 1,392.3 1,100.9 3,472.5 9,177.9 6,672.1 8,09190 9.159,6 9,777.4 17,676.6 10,192.4 19,739.5 l-anOrc 09B/Z3R7/State j 997.7 725.8 733.4 83115 938.2 2,887.9 2,993.9 1,739.6 1,224.4 - - -- - - - Cee.05 9801 207.0 - - - - . -- Tctal Icflsi 1 649.7 1.576.9_ 1394.4 1.70777 1,902.2 4.029,9 4.353.9 3.839.4 4669 1179 6,622. 9.029.0 9.158.9 9,790.4 10.776.6 10,192.4 20.238.5 Onnfles (Creasa- Price> Field Establtsheat 499.9 124.7 364.5 331.9 496.7 474.9 450.7 303,9 1559. 113.3 99.9 - - - - - - Other Estate To-rt,oaoe 429.3 287.8 103.3 30.8 69.3 12,3 29.9 24.3 03.3 79.3 41.3 29.4 29.4 29.4 28,4 28.4 78.4 Estate Oteorgetart 159.5 721.7 269.6 768.8 392.1 349.4 349.3 343.6 398.7 9368.7 339.9 339,0 338.2 339.0 338.0 338.0 338.0 911 ML11. Buildings -r4 Plant - - - - - 2,237.2 2,118.6 1,014.3 603.9 791.3 - - - - - - Pe_letolorr Ve hicles. ..d lqa.iput - - -- 9. 133 56 817 170.9 94.4 124.7 924.0 209.3 122.8 122.6 942.9 Project B..e Cost 999.7 733.9 733.4 832.5 959.2 2,99.9: 2,99. 1,238, 1,004.4 Opera.tIng Crete Project loCater PsInCteeacr end Hlncvrtleg - .- - 41.4 103. 185.9 299.0 324.2 399.9 415.9 427.9 407.9 417.8 417.8 417.8 P-ojoct Frit Collection - - . 9, 62.3 83.8 114.0 197.3 193.7 223.0 243.7 238.5 266.6 266.4 266.4 Projec t091 Ile - - - - 177.3 307.3 244.2 259.2 261.0 271.7 274.7 276.0 276.4 276.4 Prult ,-th..ee 3/ Ferjrot .mnlhaldner - - 47.0 247.7 300.8 002.0 992.8 1,173.6 1.374,4 1,942.4 1.609,0 0.6D9,0 1,6D0.8 1,608.0 ftistisig S-cslll,ld-r A/ 133.0 133.0 133.0 133.0 133.0 133.0 133.0 153.7 133.0 133.0 033.0 193,7 133.0 133.0 133.9 133.6 133.9 Cowe lertet - forcing Forte Pield lRtlih-lhet nod tMalote....e 3/284 39.6 29. 23.2 24.6 2,3.9 24.2 24.2 24.2 24,2 24.2 24.2 04.2 24.2 24.2 24.2 24.7 liloeorn f 0ld Prin- 129.1 129.1 128.1 129.1 129.1 92.2 46.1 --- ----- Slaergrnt, PetIt CollectIo.n 8d Pronse..ing 2 60.3 280.0 260.7 260,0 202.7 103.0 102.0 --- .---- Seed 9WMc 4/ 90.0 90.0 90.0 99.9 90.0 90.0 80.9 90.0 90.0 90,0 90.0 90.70 90.0 99.0 996 98K0 9900 Ba Tetsl 1,638.3I 1,367.0 0,7.11114 1,466. 1,02, 3,568,9 3,697.9 2,733.6 2,624.8 3,305.2 1,773.9 3,011,6 3,2101.7 3,369.9 3,19.9~: 3,3916.8 3.,317.0 etServic oo BA/I501/Stete Lago I/48 123 18. 3. 3. 3 16.7 784.3 996.0 1.118,5 0,906.7 1,906.7 1.07 9 1.999,7: 0.0,7 199. 1.98. 1,99.1 ~6 Told1 Oatflu 1,683.1 1.490.0 1,163.1 1.725,5 1.679.0 4.05806 4,412.4 3.729,6 3.753.3 5.212.4 4.679.0 4,919.3 5.319.4 9,0376.6 520. 5.203,51,3. 5.22338 AnnualSnrple/(Dsintt)Cosant- Prices 369.6 86.9 11.9 (17.69 23.2 403.7) (99.5) 179.9 943.6 (104.69 1,992.7 3,109,3 4,739.1 4,,513.8 4,8374.1 4,988.9 0,014.'7UA CnltneS-rploe/(DoEliit) C-ntent Pc~i- - 352.4 373.3 333.7 376.9 313,1 1Z6.7 339.3 0,290.1 1,173,5 3,196.2 6,277,9 17,317.1 14,830.9 19,703.0 24.693,9 29.709,.6 gXLtcped Effect, of lnfletiou E Inflow- 9. Osle 9 97.9 190.6 179.1 3B3.3 051.9 670.3 1,066.5 1,967.6 3,79959 7,940.3 9,700.3 07,96,1. 14,b53,9 17,091.9 19,797.1 31,057.3 Loans ftc. NA5)B60/)Statc 10/ 239.9 261.7 300.3 393.1 390.7 2.979,9 3.414,0 1,438.0 1.5093 - -- . intel Ifllcw 333.5 432,3 579,6 773.4 1,082.3 3,397.2 4,260.7 3,334 .6 3,073.1 5,940.3 8,797.3 21,662.0 24,633.9 17,290,9 19,~307.1 2B _057.9 oulfIn- - Cobsta Solute IshI Serion 11/ 306.4 383,6 474.0 621,8 912,7 3,229.3 3,938.8 2,434.1 2,0797.27 3,437.9 3,271.9 4,206.9 4,786.9 9,627.7 9,130.2 6,791.4 D.he Serice 12 / [3 10.:6 33.0 - 99.3 99.3 792.0 297.7 579.0 909,9 949. ,3. ,3. ,3. ,3. .3, ,3. ,3. Totol OntOlau 317.0 416.6 332.3 711.3 940 3572 ,13.9 3,247.0 _3,736. ,0. ,1. 4. ,2. .6, .4, .0 Nec 1018c o f loflstiot 16.6 39.7 47.9 62.1 117.9 70.0 26.0 294.6 1,338.9 963.9 9,956.9 9,220.9 9,229.4 9,921.7 11,588.6 12,629.6 Snout1 Srls(eutSCrnt Poic-e 282.4 123.5 69.4 44,5 141.0 14.3 (698.9 404.4 0,2901.7 739.3 5,949.6 9,130.0 12,060.6 14,479.3 16,462.3 17,616.9 CunBlalte Srplue/OefOiiY Corect Pice 292.4 404.9 473.3 517,5 B58.8 673.1 903.3 1,007,7 3,24.2 4,049.3 9,999.1 09,729.6 31,297.7 49,724.7 67,199.2 79,815.7 1/ ongcingselse cE tOistit8 -orllhuld-t -o-d AJagbodudL. Ajagbodou't 09 repl-rtitg atud Ito old pol-, (gtsdualjy pi-nd -too. 2/ C cost-o pri-s (nicho-utcont)ngenclno At 4 8 2B per ton of fteb fruit. 4/ istleg euallhold.-e-noru Ajeghodudo, 5/ Cot ain coonte atshai ass neroc oF roec pIocot 4]Cos esla uth at fOC' latest....unt so..d Lodgotn plus 81 4D,007 a pe- f-r oil .til -ehshlirtfuu 1971 tc 1979. i cod la 1994 .20 yosr at 97 inoludtng 9 Yeor gr-ce Po,7c fodfos era Table 2, 9/ lflatOd with intornttin-i poit ioden ohIch is a.....ed tc cartlo- et 67 . ayear a fre 1993, 10I Aottol cuesig-se tee luldrda Or PC p-c -c cost. 11l/ ActosL -ctlugnoctee fo-rjc otad 71 -tupo...dud for all other. costs. 12/ ootffr-nn btottono dehi eer_ceco-1o.a.od In con.Ctim tr-, (nihuc- aut-dttto r It -icrun tor, (ioth .. colg-cot-). 313 Aeano,d at 95. . -eao the snintlng 4 icon uf 8 7,06 nillion h9a unl7 or ltre.te rots of 371. Tht-oi-e deht b-cdrn -u3d bn sliohoTh Ott- (cc 070. L-au Scam 0000l, State andI NAB tota N 34.4 n11i.o -10o1s ut)ngenlre -c B 13.1 rllO- rlnh-ot c-tinge...cies). 14/ 1994 is lest ptor u dht secis -anua -uplls oftaoad, ciil bo 9 6.9 r,1lo inontat tacs a-etrts 13, 1974 ANNEX 10 Table 2 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WESTERN STATE Inflation Indices Index of l/ Cost 3/ Project costs 4/ International Prices Inflation Contingencies A i/ B 6/ 1974 100.0 - _ 1975 111.5 111 123.6 117.8 1976 122.4 119 136.1 129.5 1977 132.8 127 141.0 134.3 1978 143.4 136 147.3 140.3 1979 154.2 145 157.5 149.9 1980 165.0 155 197.4 184.7 1981 176.6 166 217.2 203.3 1982 188.9 178 195.3 184.6 1983 202.1 190 225.3 214.4 1984 216.3 204 - - 1985 231.4 218 - - 1986 245.3 2/ 233 - - 1987 260.0 249 - - 1988 275.6 267 - 1989 292.1 286 - 1990 309.6 306 1/ International Economy Division Economic Analysis and Projections Divisions (used to inflate benefits). 2/ Assumed to continue at 6% compounded. 3/ 7% compounded (in year concerned only half inflation percentage) Used to inflate costs other than project costs. 4/ Overall effect of inflation on OPC project costs using different rates of inflation Contingencies (physical and price) as percentage of base costs I Price contingencies as percentage of base costs and physical contingencies NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PAL PROJECT MID-WESTERN STATE Mid-Western Stte Government Cachfl.e 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 $95 RNFLOW EIRD Lean 1/ 817.0 870.0 941.7 1,177.4 1,455.7 3,669.8 3,690.1 2,131.3 1,682.2 Repayment FPrmere 2/ - - - - - - - - Z4.0 60.0 108.0 i6R.0 240.0 240.0 216.0 180.0 132.0 72.0 - - Repayment ORC 3/ 30.8 87.5 141.1 203.0 286.4 557.4 1,027.1 1,404.1 1,638.3 2,811.0 2,811.0 2&1.O 2,811.0 2,811.0 2.811,0 2.811.0 2,811.0 2,811.0 2,811.0 2.811,0 Tetal Inflow - 847.8 957.5 1,082.8 1,380.4 1,742.1 4,227.2 4,717.2 3,535.4 3,344.5 2,871.0 2,919.0 2,979.0 3,051.0 3,051.0 3,027.0 2,991.0 2,943.0 2,883.0 2,811.0 2,811.0 OUTFLOW Field Establishment 1/ 47.5 178.6 310.8 486.9 695.3 730.8 450.3 402.4 251.4 - - - - _ _ _ _ _ Tree Crnp UGit 4/ 411.6 606.1 479.9 497.2 449,4 434.7 332,5 329.0 341.8 343.5 367.1 392.4 419.3 449.6 481.6 515.3 550.7 569.4 631.5 675.3 722.4 8obsidi.es - - - - _ 12.4 33.2 64.1 106.4 163.2 174.4 186.4 199.2 213.6 228.8 244.8 261.6 280.0 300.0 320.8 343;2 Lending te POP 6/ 684.8 574.6 617.3 758.9 1,093.4 4,927.4 5,512.7 2,683.7 2,341.6 - - - . - - - - - - - Dbt Sen-ies 18RD Leer: Ce-itmemt Charge 7/ 120.2 113.9 107.1 99.1 89.3 70.0 42.4 20.6 6.3 Inter-et 8/ 34.7 106.4 183.4 273.5 385.4 603.2 916.0 1,163.4 1,325.5 !rineipel 9/ - - - - - - - - 2.329.3 2.329.3 2,329.3 2,329.3 2,329.3 2,329.3 2,329.3 2,329.3 2,329.3 2,329.3 2L329-3 _ Total ore.flem 1,298.8 1,579.6 1,698.5 2,115.6 2,712.8 6,778.5 7,287.1 4,663.2 4,373.0 2,836.0 2,870.8 2,908.1 2,947.8 2,992.5 3,039.7 3,089.4 3,141.6 3,198.7 3,260.8 3,325.4 1,06S.6 Sceplee (Oefieit) (451.0) (622,1). (615.7) (735.2) (970.73 (2,551.3) (2,569.9) (1,127.8) (1,028.5) 55.0 - 48.2 70,9 103.2 58.5 (12.7) (98.4) (198.6) (315.7) (449.8) (514.4) (1,065.6) Co,ul-ti-v Scrplls/DEfitit (451.0)(1,073.1)(1,688.8) (2,424.0) (3,394.7) (5,946.0) (8,515.9) (9,643.7) (10,672.2)(10,637,2) (10,589.0) (10,518.1) (10,414.9) (10,356.4) (10,369.1) (10,467.5) (10,666.1) (18,981.8) (11,431.6) (11,966.0) (13,011.6) / Including Centimgen-iee. 2/ Repayment 9 N 2.50/hb mnnth; N 30.00/he *nnu-lly repay-d ov-r sin y-ars sft-r e seven year grane peeiod. 3/ Istaract eeuend at 9%. After nine yere rarie fer principal repayment in eqoel bi-anneal Onarallnonts, 4/ IReledee enetlige.cise ever proeect peeled inflated at 7% afteetarde. 5/ Sabsidies on f-rtili-ar at 50% of test d-ring -Etere phase. FPr finldo eablishment peeiod fertIlizer fIlly vented ced-r field estobliehmenvt vets,. lflated ot 7%. 6/ Total OPC eases less N45 Ieee i. Stnte Gene tI OPC (StIte Inen ietlades onlendig of Bdnh loan). 7/ At 3/4% ever endib-hrsed loam. 8/ At 0.57 oner diebhrsed loon, ft/ Priasipal end interest far bi-aeroel eq.al repayments over 11 year peeild. De.e ber 13, 1974 ANNEX 12 Page 1 NIGERIA NUCLEUS ESTATE/SMALLHOLDER OIL PALM PROJECT MID-WEST STATE Calculation of the Economic Rate of Return and Sensitivity Analysis 1. The annual costs and benefits used in calculating the economic rate of return to the project are given in Tables 1 and 2 and a summary of the sensitivity analysis in Table 3. (a) Project Life The life of the project is assumed to be 30 years and no residual value is attributed after that period. Planting would be completed by the end of 1980 except for Ajagbodudu's replantings which would be completed by 1982. Production would commence in 1980, and all areas would be at full maturity by 1990; (b) Project Costs The costs are those shown in Annex 5 but with the following adjustments: (i) price contingencies are omitted; (ii) identifiable taxes and duties are excluded, namely, import duties on vehicles and equipment and certain farm inputs and indirect taxes included in operating costs; (iii) labor is shadow priced at 65% of the estimated financial cost (smallholder labor 70 kobo and nursery and estate labor N 1). The shadow wage rate reflects a weighted average of economic wages in both peak and slack seasons; (iv) the official foreign exchange rate does not reflect exactly the domestic value of a unit of foreign exchange because of taxes and subsidies. Therefore a shadow exchange rate N 1 = $1.27 has been applied instead of the official rate of N 1 = $1.52. This implies an estimated overvaluation of the Naira of about 20%; (v) for the purpose of division of mill expenditure between nucleus estate and smallholder projects, the respective fruit production at full development has been taken as a percentage of total fruit processed. This percentage has been applied for division of mill investments. (Annex 4, Table 1); ANNEX 12 Page 2 (vi) similarly for the division of mill recurrent expenditure the same percentage as above--only calculated on annual basis--has been used (Annex 4, Table 1); (vii) since the estate fruit collection also caters for existing smallholders around Ajagbodudu Estate, project fruit production has been taken as a percentage of total production collected by the estate (Annex 4, Table 6) and this annual percentage has been used to determine the division of estate fruit collection costs (capital and recurrent expenditure); (viii) the cost of the Tree Crop Section of the Federal Monitoring and Evaluation Unit has been distributed between oil palm, rubber and cocoa projects on the basis of 50%, 25% and 25% respectively. Since there are three palm oil projects, the 50% share has been apportioned between projects and also between the smallholder and estate components on the basis of ha planted; (ix) physical contingencies (at 5% over all costs) have been included during the project period (1975-1983). (c) Benefits (i) Yields and production estimates are given in Annex 7; (ii) economic prices have been based on the Bank's price projections for palm oil kernels. The price projec- tions are $495 per metric ton of palm oil in 1980 ($300 in constant 1974 terms) and $330 per metric ton of kernels in 1980 ($200 in constant 1974 terms). The economic millgate prices for palm oil (N 232.0) and kernels (N 120.4) are given in Annex 8; (iii) the value of project palm oil is treated as foreign exchange savings (import substitution) and the value of kernels as foreign exchange earnings; (iv) only project production has been taken into account and thus output from Ajagbodudu's old palms, pre-project replantings (420 ha) and existing smallholders around Ajagbodudu have not been included; (v) no additional benefits due to road development are taken into consideration; (vi) mills are commissioned in 1982, but fruit collected before that year (1980, 1981), is either processed in Ajagbodudu's existing mill, OPC's pioneer mills or sold on the market. It is assumed that under these circumstances only 25% of benefits will be realized. ANNEX 12 Page 3 2. Based on these assumptions the economic rate of return is 18.2% for the smallholder component and 17.3% for the estate component. A 10% increase in costs with benefits unchanged reduces the rate of return to 16.9% and 16.0% respectively. As usual, where project benefits occur after a long development period, the rate of return is relatively insensitive to changes in costs and benefits (Table 3). Even in the case of costs increasing by 20% and benefits decreasing by 20%, the economic rate of return is 12.5% for the smallholder component and 11 .5% for the estate component. 3. Without shadow pricing of labor and foreign exchange, the economic rate of return is 15.5% for the smallholder component and 14.5% for the estate component. 4. The rate of return for the whole project combining the estate and smallholder component is 17.7%. NIGERIA NUCLEUS ESTATE/S16ALLHOLDER OIL PALM PROJECT M18-WESTERN StATE Economic Rate of Return for Smollholdxra 1975 1976 1977 1978 1979 191 19 199 198 18 195 96 197 98 189 1990 1991 1992 1993/2004 Snaliholder Field Establishment 38. 6 171.2 293.1 414.5 568.0 566.2 283.4 212.1 110.6 - - -- - -- of which: labor costa 12.0 92.1 154.8 224.1 299.4 323.9 12. 619 36 - - - - ----- local nests ~~~~~ ~~~~15.1 41.3 62.0 85.5 112.8 84.10 36.0 29.9 16.4 - - - - - ---- ForeioEcag oc 11.1 37.9 66.3 184.1 156.8 158.3 121.4 183.3 56.4 - - - ------ Sxallholdec Field Maintcemtsmn 34.7 92j 160 4 251.6 32 21 371.2 377.5 221. 3 &382 381.0 376.1 376.1 368.0 368.0 of which: labor cos ts a 14.7 38.2 70.4 111.6 162.2 171.2 177.3 181.3 182.8 181.1 176.1 170.1 168.0 168.0 loa-oss- - 4.6 12.3 28.7 32.2 46.0 46.0 46.0 46.8 46.8 46.0 46.0 46.0 46.0 46.0 Foreig Excag costs a 15.4 41.7 69.3 107.8 154.0 154.0 154.0 154.8 154,0 154.0 154.0 154.0 154.0 134.0 TCU management and ovenleada TEU Headquarters capital caste 35.2 - 2.7 5.1 - 2.7 2.1 - 2.7 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 TOO liesdqnecttca staff costa 72.9 73.6 73.6 73.6 45.2 43.2 45.2 45.2 43.2 45.5 43.5 45.2 45.2 45.2 45.2 45.2 45.2 45.2 45.2 TEU Headquarters recurren.t costs 3.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 TEE regional -nics capital cotat 89.9 76,3 13.7 21.3 25.2 12.0 8.2 - 6.7 6.7 6.7 6.7 6.7 6.7 6.7 6.7 6.7 6.7 TEU reinluits pe-onnel. coats 74.0 112.9 135.3 154.1 181.6 177.1 115.1 111.6 184.4 96.3 96.3 96.3 96.3 96.3 96.3 96.3 96.3 96.3 96.3 TEE regional unit recurrent cots 9.4 14.8 16.4 19.6 21.3 22.5 53.2 13.2 13.2 13.2 13.2 13.2 13.2 13.2 13.2 13.2 13.2 13.2 13.2 Road inprove..ent program - 163.5 94,6 46.4 - - - - - - - - - - .- --- TraJinig 30.3 230 1 .6... 17 8 13 2 - - - - - - ------ subtotal 315.5 469.0 354.8 342.8 291.3 264.7 188.7 174.9 170.4 167.9 167 9 167 9 167.9 167.9 167.9 167 9 167.9 167.9 167.9 of cabins, local nests 2T4.9 312.8 279.9 261.2 343.1~~~~~- 226.1 162.0 15. i49.5 143.6 134 4.6 143.6 143.6 143.6 143.6 143.6 143.6 143.6 Forelgs asobengs costs 100.4 116.2 74.9 81.6 47.8 38.6 26.7 20.2 21.2 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 Mill Investment I/. - - - - 884.6 911.0 436.1 259.5 340.3 - - - - - - - - Mill Recurr ent enpandituce I/ . - - - - 55.0 76.1 100.1 111.3 112.2 119.2 128.9 118.7 118.9 116.9 118.9 118.9 Fruit Collection OSallho1ders Invast-et - - - - 19.4 15.3 30.5 33.7 63.9 63.0 69.0 48.7 96.4 70.5 70.1 70.1 70.1 70.1 Froit Collection Snalhboldern Reconnet . - . - - 13.8 20.6 34.3 58.3 68.8 89.6 103.3 109.3 12-4.1 124.1 124.1 124.1 124.1 124-.1 subtotal.-1 917. 9 946.9 353.9 427.6 57 3.1 263. 1 284.3 277.2 341.4 312.9 313.1 313.1 313.1 313.1 of cabins, local noecs- 397.6 421.2 229.4 181.8 217.7 118.4 122 7.3 985 8.9 1791. 6 191.6 19.116 Foreign Earbange Costs . 528.2 125.7 326.5 246.6 353.4 104.7 112.2 104.9 142.9 124.0 121.5 121.5 121.5 121.5 Moxitoftng and Rvalu-tion nivislan 3/ 91.4 95.0 95.1 86.9 79.6 72.3 76.9 50.4 50.4 - - - . - - - . - - Total costs 4t/ 467.8 772.0 769.7 886.4 985.8 1,4. 1.667 .5 1J214.5 1J.0611.1 1I103222 802.2 820.9 826.4 892.1 861.8 837.1 831.1 849.0 849.0 of which: labor costa 4/ 12.6 96.7 162.6 235.7 313.3 355.5 172.4 159.9 156.9 162.2 171.2 177.5 181.3 182.8 181.0 176.1 170.1 168.0 168.0 local costs 4/ 305.8 438.6 425.9 425.2 430.1 798.8 717.2 491.9 433.2 407.3 348.0 361.8 361.9 388. 378.5 581.2 381,2 381.2 383.2 Foreign Enbanga cots 4 149.4 236.7 181.2 225.3 242.4 794.2 777.9 562.7 471.0 533.7 283.0 290.6 283.2 321.2 302.3 299.8 299.8 299.8 299.8 labor nests 5/ 6.2 62.9 105,7 153.2 203.6 231.1 112.0 103.9 102.0 103.4 111.3 115.4 117.8 118.8 137.7 114.3 110.6 109.2 109.2 loca cots 305.8 438.6 425.9 425.2 430.1 798.8 71.7.2 491.9 433.2 407.3 348.0 361.8 361.9 388.1 378.3 381.2 381.2 381.2 381.2 Foreign Exchsnge cota 6/ 179.3 284.0 217.4 270.6 290.9 953.0 933.5 675.2 563.2 640.4 339.6 348.7 339.6 385.4 362.8 339.8 359.8 339.6 359.8 subtotal 493.3 781.3 549.0 849.0 ~924.6 l.982.9 1,762.7 1,271.0 1~,10%.4 1,5. 798.9 825.9 819.3 892.3 839.0 855.3 851.6 850.2 850.2 las txs(18.4) (27.9) (2.) (2.) (19.8) (53.2) (40.1) (26.1) Q25.4) (27.6) (38.8) 13.6) 29.4) (38.0) (3.) (44 34.4 3.3 (44 granaxuin Costa 474.9 757.6 728.1 827.7 904.8 1 _27.7 7_14.Q 1,244.5 2120250 1 125 5 770.1 794 3 790.1 854.3 Ui22.6 821.1 8172. tusk8 filh. pale oil - - - 18.6 0/ 47.3 B/ 595.8 1,127.1 1,874.6 2,385.4 3,170.5 3,696.2 3,971.8 4,083.2 4,003.2 4,083,2 4,083.2 4,083.2 kernels 2 .4. %/ 9.0 8/ 2.) 155.3 25$.5 346.0 his.? [464.3 481.6 4.81.6 4.81.6 481.6 581.6 481.6 residual value 35....z. 5 - 12.0 - - - -- .- - - - - Total Benefits . 35.5 21.0 08.3 677.9 1,262.4 7,130.1 2a931.4. 3,581.2 4,160.5 4.,453.L4>1,564a.8 4,64a,564a.8 4,5641.8 4aS&aS g561a8 1/ 437. charged to snellholder, base.d on share of smallholder -fruit proce.ssd in Oil Mill at full deve.lopment. (Anman 4., table 1) 2/ Base.d on annual smallhold-r fruit as ,i of total fruit prone....d. (lAmer 4., labia i) tOf 587, a costs at Tree Crop Section of HEl charged to oil palm project. Divided between states end snsllhcldgc and cuc-n ..esnatesn cc pee ha hassa. 337, in f-reign exchange casts rex..foder Io.al costs. 4/ Inniudas physical noncingennies (5%) until 1983. 3j/ Shadow prices at 65%. 6/ Shadow priced at I - N 1.17 copared with I - Ni 1.32 with means a prenium of 20%. 7./ Residual value of road equipment in 1978 (N 35,500) and of surplus OMUT vehicles in 1981 (N 12,000). 8/Mill's cnanuiesioned in 1082. Before thfs year fruit processe.d in mill of AJagboudu4 satle, ar in OPE; pioneer mills or sel an local merkoet. Iti is essausd that only 25% of benafits is realizad ina thsse yeakrs. NIGERIA NUCLEUS ESTATE/8tMALlOLDER OIL PALM PRO7ECT MID-WE0¶I0E3 STATE Econo-ic Rate of Return for Estates 122 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1983 1989 1998 1991 9' Onwards Estate Field Establishment 409.9 224.0 364.5 531.9 496.7 474.9 450.7 303.8 115.9 113.3 56.9 _- - - - Of ehich: Labor Costs 70.5 140.5 233.1 340.6 297.7 301.6 272.0 173.0 97.4 63.2 28.3 - - - - - - Local Casts 324.5 41.6 61.1 83.0 71.4 52.8 55.6 34.8 11.8 10.0 5.7 - - _ _ - Foreign Echbange Costs 14.9 41.9 70.3 108.3 127.6 120.5 123.1 96.0 46.7 40.1 22.9 - - _ _ _ Estate Field Maint-nance _ - _ 41.4 103.7 285.9 289.0 324.2 368.5 415.9 417.8 417.2 417.8- Of which: Labor Costs - - - - - 24.4 61.2 109.4 170.0 189.3 212.5 238.5 238.9 238.3 238.9 Loral Costs 3.5 6.4 11.1 24.2 27.4 31.7 36.1 36.4 36.4 36.4 - - Foroigp Exchange Costs - - - - - 13.5 36.1 65.0 94.8 107.5 124.3 141.3 142.5 142.5 142.5 Maoasgnvg t and Overheads 587.8 501,8 369.9 299.6 461.5 357.7 379.0 369.9 363.3 364.5 579.3 366.4 366.4 366.4 366.4 366.4 366.4 Mill Inoestnnt 1/1- - l049.2 1,080.5 517.3 307.8 403.6 .---- - - Mill Recurrent z/- - 79,8 106.5 119.6 127.0 130.5 135.5 137.4 138.2 138.2 138.2 ,rnit Collection lovest=est 3/ - - _ 78.7 - 20.1 48.0 107.0 32.4 55.7 75.5 108.9 51.9 52.5 72.9 Fnit Collsctioo iecorrant 1/ - - - - - 41.7 41.7 49.5 72.9 88.5 104.1 119.7 134.4 134.4 ,142.3 142.3 142.3 5ub-Totol: S7.7 SrH 5$rV , VT T3 9 1,37 1 ,5TI 1,03% 3975 18727 87W 71;T:T 7 739 7;l 37 Of which: Locsl Costs7 781l 8 82E 71 7777E 3 7 511 51.75 3 ; Z7 4%.3 7 777T 85 77 75 Foreign Enchange Costs 177.4 139.2 108.5 105.0 162.5 760,5 723.6 487.4 409.7 553.7 208.1 220.4 246.8 270.0 232.1 227.6 243.9 Mloitoring and Ev-luatie Division 4/ 45.7 47.5 47.5 43.5 39.8 36.1 38.5 25,2 25.2 - - . - - - - Total Costs 5/ 1,095.6 812.0 819.9 918.8 E,24t.9 2 083.7 2,198.8 1J629.1 1,437.0 1.320.7 1.068.2 1 09882 1 J2h, jiA.3 1,116.4 1 117.2 L of which: Labor Costs 5/ 74 . 0 17 7 1577 3 1T273 2 8777 -tz35 t 71 2 38.9 , Local Costs S/ 803.8 457.9 371.0 322.1 416.9 889.7 908.7 643.0 568.7 566.9 472.1 468.0 501.4 513.5 502.9 508.2 512.2 Foreign E-change Costa 3/ 217.8 206.6 204.1 239.1 318.4 951.7 940.2 689.6 587.5 701.3 355.3 361.7 389.3 412.5 374.6 370.1 386.4 Lobar Casts 6/ 48.1 95.9 159.1 232.4 203.2 272.5 227.4 592.7 162.3 164.1 136.5 155.0 155.3 154.9 195.3 155.3 155.3 Loc a I tests 803.8 457.9 371.0 322.1 416.9 889.7 908.7 643.0 569.7 566.9 472.1 468.0 501.4 513.5 502.9 508.2 5125.2 Forsigs EsobsegA Costs 7/ 261.4 247.9 244.9 286.9 382.5 15,42,0 1 12872 827.5 705.0 841.6 426.4 434.0 462.7 495.0 449.5 444.1 463 7 Sab.Total 1.T 172 75 1 11231.79 .7 .157 I 117 113.7 Less Taxs, (51.1) (40.6) (23.1) (22.1) (29.3) (55.2) (63.6) (36,4) (32.8) (39.7) (34.8) (37.1) (42.2) (46.5) (40.5) (39.8) (42.8) Econo=ic Costs 1,062.2 761.1 751.9 819.3 972.9 2,199.0 2,200.7 1,626.8 1,423.4 1,532.9 1,828.2 1,039.9 1,081.7 1,116.9 1,067.2 1,067.8 1.088.4 BENEFITS ralm Oil - - . - 28.2 7/ 96.8 51/ 866.3 1,564.1 2,267.6 2,986.8 3,653.8 4,180.4 4,505.0 4,672.0 4,783.8 4,830.2: Camnels - . . - 3'75/ 13.31// 117.6 215.6 311.4 399.7 471.8 525.4 551.9 564.0 569.7 569.7 TOTAL 8ENEFIT8 _ - _ _ 31.9 550.5 983.9 1,779.7 2,579.0 3,386.5 4,125.6 4,705.8 5,056.9 5,236.0 5.353.5 5,399.9 1/ 5% % chargd to estates based on shore of astate fruit proc--esd in the sill at fa11 dev-lsp=ent. (Aonea 4, table 1) 2/ BDsed on ae.uAl estote fruit as % of tottl fEit proceso.d. (AnnDe 4, table 1) 3/ Based on an-onl froit .ollsotad from proJect as 7. of total fruit collected. (Ainer 4, table 6) 4/ SCF. of coste of Tre- Crop SeCtios of IIEC hbarged to oil palt projects. Divided beteeen raten and satllholder and nole-s estates an per ha basin 337. in foreign ..ohonge o-ts romaiasd. 5/ rnctodas physic-l -ontisgesoies (5% sv-r all ...t) nntil 1983. / hdo priced at 65% 7/ Shbdee priced at N 1 - 1.27 *s compared with R I - $1.52 ill -as a pr-ian of 207. 3/ Mills osniesionid in 982. BEfore this ye-r fritl p o.eosed in till of A/ooboadcd 0t0t10, or in OF one-e, .111e or 1-0 1n local -ankbt. It is oavo-d that only 25% of beaefiti is ces1iced in thoce years. Nl ANNE 12 Table 3 NIGEII NUCIEUS ESTATE/S(ALLHOLDER OIL PAIM PROJECT MID-WESTERN STATE Economic Rate of Return. Sensitivity Analysis ------------ -Rate of Returxn- % of Original Estimates With Shadow Pricing Without Shadow Pricing Costs Benefits Smallholdem Estates Smallholders Estates 100 100 18.15 17.25 15.45 14.45 100 90 16.65 15.75 14.05 12.95 100 110 19.55 18.65 16.85 15.75 110 100 16.85 15.95 14.15 13.05 110 90 15.25 14.35 12.65 11.55 110 110 18.15 17.25 15.45 14.45 120 100 15.55 14.65 12.95 11.85 120 90 14.05 13.15 11.45 10.35 120 80 12.45 11.45 9.75 8.65 120 110 16.95 16.05 14.25 13.15 I I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ C genue 4' 6- 8 W E 7 S T E R N CHAD BEN U E- f| vIGtRIA ) ; X . MID- /PLATEAU -o < 0 , ) M I D- i C AM E I o o N /\A/ I D 1-WESTERN ' _____ ____ ___ OkitDupaO Be)ig, City Agbor Enugu | _ AtSC)S ' > % <+> ~~~~~~~~~~~~~(,Benin City X , -6 N I G E R I A - t NIGERIA /'~~~~~~~~~~~~~? EA OIL PALM PROJECTS / ' sapele0 ESk [ L_ OIL PALM PROJECT AREAS CE N AT ) CRA L NATIONAL CAPITAL Umuahia t ®i) STATE CAPITALS /Owerri I< STATE BOUNDARIES 5$j so-'RIVERS -. - INTERNATIONAL BOUNDARIES A ) Cbolaba . F XR / g_ V 1 ) t>~~~~~~~~~~~~~~~~~~~~~~~~~~~Calabar . , o 20 40 60 110 00loo;fsX a> >ooccr 20 MILES 8 IR I E S 0 20 40 60 80 100 120 140 160 KILOMETERS The h,o ndaics showiw mt thms mvp do no t t iinply e-do-sement or watpft0en by tk.. 440 filr,fla B* nd oa, ffilil 4° 8A t I. i_. ..... APIt IBRD 10964R 530' 6°00 N I G E R I A PROJECT AREA BOUNDARY K oo MoloHo MID-WEST STATE E2 EXISTING ESTATE o,. CHAo AD 6~~~~~~~~3D U~~~~~~~~~~~~~~ PROPOSED MILL SITES N I G E RI A 6'30' OIL PALM PROJECT EXISTING MILL SITES X lr 6.! PROPOSED REGIONAL UNITS boCon PROJECT ROADS, PAVED atot C'i Eno9i /0 ? PROJECT ROADS, EARTH EXISTING MAIN ROADS Ho, rO 4'i,o~sa ~EXISTING SECONDARY ROADS t qj3 ~~~~~~~~~~STATE CAPITAL T. rb-h'ma,l diou e1ll / 1 ) g __ 2 ~~~~~~~~~FOREST RESERVES -I -1yMS ...... anl^at IOf AKUMAZI -1 ~o- ~f- BENIN C on tD- RIVERS ; F>ORfESFRTV >9FSER'VE /- I> ; Y Ugono ssele-Uku Ugo-b.\ X Adodo 5'30' 69000 6°30' DECEMBER 1974