Document of The World Bank Report No. 15625-LE STAFF APPRAISAL REPORT LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT August 14, 1996 Natural Resources, Water and Environment Operations Division Country Department II Middle East and North Africa Region CURRENCY EQUIVALENTS Currency Unit = Lebanese Pound US$1 = LL 1,590 LL I million = US$628.9 (as of February 1996) PRINCIPAL ABBREVIATIONS AND ACRONYMS USED AIDP Agriculture Infrastructure Development Project CDR Council for Development and Reconstruction DG Director General DSC Directorate of Studies and Coordination EIMC Environmental Information and Monitoring Committee ERR Economic Rate of Return GDP Gross Domestic Product GIS Geographic Information System GOL Government of Lebanon GP Green Plan GPEC The Green Plan's Executive Committee ICB International Competitive Bidding IBRD International Bank for Reconstruction and Development IFAD International Fund for Agricultural Development IMS Information Management System IRR Internal Rate of Return MOA Ministry of Agriculture NAC National Agriculture Census NCB National Competitive Bidding NGO Non-Governmental Organization O&M Operation and Maintenance TA Technical Assistance TORs Terms of Reference GOVERNMENT OF LEBANESE REPUBLIC FISCAL YEAR January I - December 31 LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT STAFF APPRAISAL REPORT Table of Contents Chapter Page No. Loan and Project Summary ............................................. i-iii 1. BACKGROUND . A. The Economy. I B. The Agricultural Sector. I C. Agricultural Institutions. 2 II. THE PROJECT CONTEXT. 2 A. General Characteristics. 3 B. Major Constraints to Hilly Agriculture Land Development. 3 C. Evaluation of the GP's Past Achievements. 4 D. Cost Sharing Arrangements. 5 E. Design Considerations. 6 III. THE PROJECT. 7 A. Project Objectives. 7 B. Project Description. 7 C. Project Cost and Financing ..................... 9 D. Procurement ................................................ 10 E. Disbursements ............................................... 10 F. Environmental Impact .......................................... 11 G. Women's Role in the Project ..................................... 12 Wv. ORGANIZATION AND MANAGEMENT .............................. 12 A. Institutional Arrangements .................... 12 B. Monitoring and Evaluation (M&E) ................................. 13 V. AGRICULTURAL PRODUCTION .................................... 13 VI. MARKETING, PRICES AND INCOMES ............................... 13 A. Marketing and Prices .......................................... 13 B. Incomes . .................................................. 14 VII. BENEFITS, ECONOMIC JUSTIFICATION AND RISKS ................... 14 A. Benefits and Beneficiaries ....................................... 14 B. Economic Analysis and Justification ................................ 15 C. Project Risks and Sensitivity Analysis ............................... 16 VIII. AGREEMENTS REACHED ........................................ 17 TABLES IN TEXT 3.1 Project Cost Summary ............................................ 9 3.2 Financing Plan ................................................. 10 3.3 Disbursement Plan ............................................... 11 3.4 Estimated Disbursement Schedule .................................... 11 ANNEXES I. Implementation Arrangements and Schedule II. Appraised Sample of Land Development Works III. (a) First Two-Year Program of Rural Roads (b) Economic Analysis IV. Key Monitoring Indicators V. Environmental Analysis, Monitoring and Plan of Action VI. Cropping Patterns and Yields VII. List of Working Papers Available in Project Files CHARTS I Ministry of Agriculture - Organizational Chart 2 Green Plan - Organizational Chart MAPS Map No. IBRD 27927: Administrative Map of Lebanon and Location of First Two-Year Program of Agricultural Roads Map No. IBRD 27928: Mean Annual Rainfall Map Vice President Kemal Dervis Director Inder Sud Division Chief Salah Darghouth Task Team Mohamed N. Ben Ali (Task Manager), Nejdet Al-Salihi, Jean-Francois Barres LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT STAFF APPRAISAL REPORT Loan and Proiect Summary Borrower : Lebanese Republic ImDlementine Agencies The Green Plan (GP) of the Ministry of Agriculture (MOA) and the Council for Development and Reconstruction (CDR) Beneficiaries Ministry of Agriculture The Green Plan Farmers Loan Amount : US$31 million equivalent Terms Standard variable interest rate for currency pool loans, with 17 years maturity, including 5 years of grace Commitment Fee 0.75 percent on undisbursed loan balance, beginning sixty days after signing, less any waivers Project Obiectives The main objectives of the project are to: (a) develop land and water resources to increase farmers' incomes and conserve the environment through land terracing and development of about 5,600 ha and storage of runoff water in about 250 small hill- ponds; (b) increase access to rural areas through the construction of about 300 km agricultural roads; and (c) upgrade the institutional capabilities of the Green Plan (GP) and Ministry of Agriculture (MOA), carry out a National Agricultural Census and establish an Information Management System at MOA. Project Description : The Project would finance three major components: (a) a land and water development component which would include, inter alia, mechanical works for the terracing of 3,100 ha of steep- sloped land (IFAD financing), construction of terrace-retaining walls, construction of 250 hill-ponds of about 10,000 m3 capacity (20 of which to combat forest fires) and the provision of about I million fruit tree seedlings to plant about 2500 new and existing terraces; (b) an agricultural roads component which would finance the construction of about 85 km of asphalted roads and 215 km of earthen roads and provide specialized design and works supervision equipment, studies, vehicles, as well as incremental staff and recurrent costs; and (c) an institutional support component which would include improving the implementation capacity of the GP, providing it with a new Environmental Information and Monitoring Committee (EIMC) and conducting a National Agricultural Census, as well as establishing within MOA an Information Management System. ii Agriculture Infrastructure Development Project Environment The Project has been classified as a Category B project for the purpose of O.D. 4.01. Guidelines and environmental assessment checklists have already been prepared. Environmental assessments, to be conducted by the EIMC, would become part of all feasibility studies and would be implemented under the Project to mitigate potential negative effects on the environment of land and water development as well as of agricultural roads. Povert: The project is classified under poverty Category "Program of Targeted Interventions" (PTI), because of a specific mechanism, and the use by the GP of existing local committees to help it to focus on needy rural populations, particularly those with small land holdings of less than 0.5 ha.. Benefits The primary benefits of the project would be incremental agricultural production (58,000 tons of vegetables and 1 10,00 tons of fruit), the improved management and conservation of land and water resources, savings on the cost of rural transportation and an updated agricultural sector database. In total, about 9,600 farm families or about 75,500 people would benefit directly from the project. Risks The uncertainty of achieving the anticipated agricultural benefits on schedule is the first risk that the project may face. This risk would be caused by potential delays in the implementation of agricultural investments by farmers. It would be mitigated during the selection of project beneficiaries by assisting farmers who plan to complete the entire investment within two years or who commit themselves to refund the GP assistance if they do not complete the investments. The past 30 years' experience of the GP shows that this risk is in reality minimal, as most farmers do indeed complete their investment on time. The second risk is related to the maintenance of rural roads. This risk would be overcome by providing funds under the project for the GP to maintain the roads it builds. In the long term, the increasing allocations of road maintenance funds made to the Governorate offices and Deputies of the various regions in Lebanon would ensure the adequate maintenance of agricultural roads. Agriculture Infrastructure Development Project iii Proiect Cost Summary % */eTui Foreign Base Local Foreikn Total Local Foreien Total Exchange Costs -------- (LL Million) - US$ '000) A. Land and Water Development 68,441 23,442 91,883 43,045 14,743 57,788 26 73 B. Agricultural Roads 6,720 15,888 22,609 4,227 9,993 14,219 70 18 C. Capacity Building 1. Green Plan Headquarters 1,259 1,027 2,286 792 646 1,438 45 2 2. Environmental Monitoring 569 638 1,207 358 401 759 53 1 2. Ministry of Agriculture Support to Agricultural Census 3,484 2,358 5,843 2,191 1,483 3,675 40 5 Support to MOA's Management Infornation System 811 639 1.450 510 402 912 44 1 Subtotal Ministry of Agr. 4,295 2.998 7,293 2,701 1,885 4,587 41 6 Subtotal Capacity Building 6,123 4,663 10.786 3.851 2,932 6.783 43 9 Total Baseline Costs 81,285 43,993 125,278 51,123 27,668 78,791 35 100 Physical Contingencies 7,124 3,767 10,891 4,480 2,369 6,849 35 9 Price Contingencies 24,9 5.524 30,421 11,M 3.474 19.132 18 24 Total Project Costs 113,306 53,284 166,590 71,261 33,511 104,772 32 133 Financine Plan Financier Local Foreign Total ---------------- (US$ Million) --------------- World Bank 5.8 25.2 31.0 IFAD 7.2 4.8 12.0 Beneficiary farmers 46.4 2.3 48.7 Government 11.9 1.2 13.1 Total 71.3 33.5 104.8 Estimated Disbursements IBRD Fiscal Year FY97 FY98 FY99 FY00 FY01 FY02 FY03 ----------- ---------------------- (US$Million}------------------------------------- Annual 2.0 3.0 4.9 5.6 6.1 6.6 2.8 Cumulative 2.0 5.0 9.9 15.5 21.6 28.2 31.0 Economic Rate of Return: 24 percent Estimated Completion Date: December 31, 2002 Project Identification No.: LE-PA-34037 LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT STAFF APPRAISAL REPORT I. BACKGROUND A. The Economy 1.01 Lebanon is a small mountainous country with an area of 10,450 km2. Its population was estimated in 1994 at about 3.4 million. Administratively, Lebanon comprises six administrative Governorates (Muhafazats): Mount Lebanon, North Lebanon, South Lebanon, Nabatiye, the Bekaa Valley and Beirut (see Map IBRD 27927). The six Muhafazats are sub-divided into 24 Districts (Cazas). Until the mid-seventies, Lebanon was a prosperous middle-income country driven mainly by the service sectors, namely trade, tourism and finance, which contributed more than 70 percent of the Gross Domestic Product (GDP). In 1975, the country plunged into a violent civil war which lasted for nearly 17 years and had a profoundly destructive effect on the Lebanese economy and the foundations of Lebanese society. B. The Arricultural Sector 1.02 Agriculture in the Economy. Agriculture GDP has remained significantly below its pre-war level (20 percent) and is currently accounting for only 10 per cent of total GDP. Nevertheless, the agriculture sector continues to be an important source of income for 20 to 30 percent of the population, particularly in hilly and mountainous areas. Moreover, although its share of GDP has fallen since the mid- 1970s as the trade and service sectors have grown, agriculture accounts for a substantial proportion of exports. Approximately 360,000 ha, or slightly more than one-third of Lebanon's total land area of about one million ha, is arable. The most fertile areas are located in the Bekaa valley and along the narrow coastal strip. Of the 215,000 ha of arable land that are presently cropped, 87,000 ha are under irrigation and the rest is rainfed. The remaining 145,000 ha of arable lands are hilly and mountainous and are either in fallow or are too steep to be cultivated without rehabilitation and development. Tree crops, vegetables and livestock make up a significant proportion of agricultural production. In their quest for higher and more stable incomes, farmers have shifted away from annual crops to fruit trees and protected high value crops. The proportion of cropped land under fruit trees has risen from 41 percent of the total cultivated area in 1974 to more than 51 percent in 1990. About 40 percent of tree crops are receiving supplemental irrigation. Major tree crops include olives, grapes, apples, cherries, citrus and bananas. The area devoted to cereals decreased from 30.4 percent in 1974 to 18 percent of the total cultivated area in 1990. Annual crops include cereals, pulses, potatoes, tomatoes, cucurbits and other vegetables. 1.03 Government Policy and Strategy. Given the limited arable land resources, the deterioration of the natural resource base and the steadily growing population, the Govemment has since the early sixties given a high priority to land and water conservation and development as well as to improving access to isolated rural areas. This was manifested through the creation of the Green Plan (para. 1.07) and the provision to land-owners, through cost-sharing arrangements, of incentives to sustainably develop their steep-sloped lands. Public financing of land and water development for private farmers is justified on several accounts: (i) land and water developments dramatically increase farm income and improve living standards so as to reduce poverty in rural areas; (ii) improved rural incomes and standards of living reduce the migration of the rural poor to urban areas and facilitate the return of populations displaced during the war, thus lowering the cost to the Govemment of urban infrastructure and reducing urban congestion; (iii) land and water development activities significantly reduce soil and water erosion and protect the environment; and (iv) because initial investment costs are very high and the time it takes for 2 Agriculture Infrastructure Development Project these investments to provide returns is long, poor and small land owners cannot afford to make these investments on their own since needed credit is virtually unobtainable. C. Agricultural Institutions 1.04 The Council for Development and Recor-struction (CDR). CDR is a financially autonomous public institution created in 1977 for the coordination of reconstruction and development planning in Lebanon. It is attached to the office of the President of the Council of Ministers to whom it is responsible for recommending economic, financial and social policies. It is also entrusted with the channeling of loans and grants from external sources to finance the country's reconstruction and development. 1.05 The Ministry of Agriculture (MOA). The MOA has the statutory responsibility to formulate agricultural policy and to support agricultural development through its central and regional services and satellite agencies. After the end of the civil disturbances, the MOA was restructured and re-engineered under the provisions of a new organizational decree (Chart 1). The decree entrusts MOA with the responsibility for planning, administering and developing the agricultural sector and its related activities. The war-induced absence of permanent systems to collect agricultural statistics and the lack of an updated sectoral information data base are now the major factors constraining MOA's efforts to forrnulate effective agricultural policies and strategies. 1.06 The Green Plan (GP). The GP is a public authority with considerable management autonomy. Established in 1963 under Decree No. 13785, the GP became active in 1964 as an autonomous authority under the tutelage of the Minister of Agriculture. Its mandate is "to study and execute land rehabilitation and development projects" and its range of activities includes land rehabilitation and development, development of hill ponds and small water reservoirs, water distribution systems and small-scale irrigation schemes and the construction of agricultural roads. All civil works planned and financed through the GP are often designed and always executed by private sector contractors. As shown in Chart 2, the GP is headed by an Executive Committee (GPEC) composed of a President and two members. At its Beirut headquarters, it is organized into three central services: Cabinet/Administrative, Accounting and Technical. In addition to the above three services, the GPEC is supported by a small administrative and advisory unit. From an original staff of about 300 in the late sixties, the GP now employs 40 engineers/agronomists and some 170 technicians and support staff. The GP's effectiveness is presently constrained not only by staff shortages but also by budget resource limitations and a lack of mobility. These have reduced its programs and implementation capacity. However, despite its reduced capacity, the GP is still substantially active. More details on the GP are in Chapter 11 , Section C. II. THE PROJECT CONTEXT 2.01 Relevance to Country Assistance StrateLuv. The Country Assistance Strategy (CAS) for Lebanon was last discussed by the Executive Directors on June 30, 1994. The proposed project would be central to achieving the goals of the CAS, which focus on: (i) addressing social needs and environmental concerns; (ii) rehabilitating physical infrastructure; and (iii) helping to rebuild and strengthen public administration. The demand-driven land and water development activities to be financed under the project would respond to farmers' needs and significantly increase rural income, thereby reducing poverty. These same activities would also help reduce soil and water erosion and protect the environment. The rehabilitation and construction of agricultural roads would contribute to the upgrading of physical infrastructure and to improving the access of rural populations to markets and social services. The conduct of a National Agricultural Census and the establishment of a Permanent Statistical System and an Information Management System would strengthen MOA's capacity to formulate sectoral policies Agriculture Infrastructure Development Project 3 and development strategies, including the promotion of private-sector-led agricultural growth. The project is also consistent with the MENA Rapid Country Water Strategy and the draft "Lebanon Environmental Strategy Framework Paper." A. General Characteristics 2.02 Location and Climate. Due to the participatory and demand-driven nature of the activities to be financed by the proposed project, their location would be distributed throughout Lebanon. They would be focused mainly on hilly, remote and less developed areas. Lebanon is blessed with a mediterranean climate and has relatively adequate water resources. Temperatures are moderate with no significant incidence of frost below 100 m elevation. Annual precipitation ranges from about 1250 mm in central Mount Lebanon to just over 800 mm in the South (Map IBRD 27928), which is roughly the average for Lebanon as a whole. 2.03 Farm Size and Credit. According to the last, unpublished 1970 agricultural census, about 46 percent of farm holdings in Lebanon are small (between 0.5-2 ha); they account for about 9 percent of the privately owned lands (POL). Another 28 per cent of holdings are considered to be of average size and have an area of between 2 - 5 ha; they account for about 16 percent of the POL. The remaining 26 percent of holdings have a size of more than 5 ha and account for about 75 per cent of the POL (Annex VI, Table 1). There is no source of institutionalized formal credit for agriculture in the country. Small and medium-sized farmers can generally obtain loans from family members, local money lenders and commercial firms (input suppliers and/or wholesalers) in the form of short-term credit but at very high indirect interest rates. Parliament has recently approved a law authorizing the creation of an Agricultural Bank with a large share of private-sector participation. B. Major Constraints to Hilly Aariculture Land Development 2.04 Undeveloped hilly agricultural lands often have shallow and eroded soils. After centuries of unsustainable cultivation, they have been practically depleted and are presently utilized to either cultivate annual subsistence cereals or have been converted to marginal pastures. Under both utilizations their soils continue to be eroded. The income these lands generate is no longer sufficient to sustain livelihood. As a result, farmers have either taken other jobs to supplement their farm income or have migrated to urban areas. Several decades ago, a few well-to-do farmers or those with access to remittances from abroad succeeded in changing the production capability of their lands by terracing them and planting them to high-value fruit trees. Land terracing, terrace consolidation, planting and water mobilization in hill-ponds are the techniques most favored by Lebanese farmers for soil and water conservation and for sustainable income-generation. They are, however, expensive and out of reach of most land owners. Through the GP, the Government has devised a way to channel assistance to landowners to conserve, improve the aptitude and develop lands in the mountainous areas of Lebanon (para. 3.02). The results of GP experience during the past three decades is discussed in Section C below. 2.05 The isolation and lack of access to mountainous agricultural areas has had detrimental effects on both the intensity with which lands are cropped and the yields the crops achieve. Because of their relatively high elevation, most of these areas are covered with snow in the winter and are wet and muddy during the spring. Without agricultural roads, farmers have to wait until tracks become passable and are unable to get to their land until late during the cropping season. As a result, they are only able to hastily plough and late-seed a few crops on only part of their land; hence, the low cropping intensity. Late- seeding of most crops on hastily prepared seed-beds affects the performance of crops and significantly reduces their yields. The lack of access roads also makes it difficult for farmers to transport to their farms and use adequate arnounts of organic and chemical fertilizers and other crop husbandry products. Inadequate fertilization and crop husbandry practices have been observed to reduce crop yields by more 4 Agriculture Infrastructure Development Project than 50 percent. Transporting farm products, particularly perishable farm produce, on animal-drawn carts or small trucks over several kilometers takes a long time and causes the produce to bruise and diminish in quality and price. Because their vehicles suffer frequent breakdowns and high O&M costs, transporters charge very high fees. Linking these isolated areas to the local "classified" road network and to villages would enable fanners to improve cropping intensity and practices and achieve higher incomes (para. 3.03). These agricultural roads would also make it easy for them and their families to access social services from their farms. 2.06 In addition to the specific constraints described in paras. 2.03 and 2.05 above, the Lebanese agricultural sector as a whole suffers from the lack of an updated and complete sector information database. Because of the civil war and turmoil that followed the conduct of the field surveys and completion of the data, the full results of the 1970 agricultural census were never released. Much of the information that was collected and analyzed was either destroyed or lost during the war. Presently, the MOA is finding it difficult to formulate policies and a coherent strategy for agricultural development without essential infornation, an updated sectoral database and adequate staffing. To alleviate this constraint, the conduct of a new National Agricultural Census (the last completed census dates to 1960) and the establishment of a permanent system for agricultural statistics as well as a documentation center would be necessary (para. 3.06). Until public salaries become attractive, MOA staffing needs would continue to be met through the recruitment of consultants from the local budget. C. Evaluation of the GP's Past Achievements 2.07 Lessons From Past GP Experience. Since its inception, the GP has adopted a demand-driven approach to the execution of land rehabilitation and agricultural roads activities. During the past thirty years, the GP has helped terrace about 26,000 ha of sloped privately-owned land (about 0.7 ha per fanner), construct more than 7 million m2 of terrace retaining-walls, 500 hill ponds (average capacity = 8,000 m3) and more than 3,000 small concrete basins. The GP has also built more than 1,000 km of agricultural roads. Its activities have benefitted more than 38,000 farmers and about 1,000 villages scattered all over Lebanon. After reaching a peak in 1968, the GP's activities declined and became erratic during the 17 years of war. Since 1991, the GP's ability to respond to fanner and community demands for agricultural roads and land development increased appreciably but remained curtailed by the lack of adequate financial resources. In 1994, 800 ha of land were developed and 40 km of agricultural roads were constructed. The GP estimates that unsatisfied requests for assistance to land terracing and development exceed 40,000 ha, and those for rural roads exceed 2,000 km. 2.08 The review of past activities indicates that, overall, the development implemented by the GP during the last thirty years has been generally successful and in line with its mandate to develop hilly lands and improve access to isolated agricultural areas. The administrative procedures used to implement the GP's work plans are known to the farming population in Lebanon and have evolved with time and are becoming more efficient and more competitive than in the past. It is, therefore, logical for the design of the proposed project to build on the current system and institutions and take into account the lessons learned from the GP's past experience. These lessons include the need to: (i) increase the efficiency of land and water and agricultural roads investments; (ii) introduce greater transparency and competitiveness in the award of land-terracing mechanical-works contracts; (iii) put greater focus on environmental aspects; and (iv) to the extent feasible, focus project resources on poor areas. Agriculture Infrastructure Development Project 5 D. Cost-Sharinf Arrangements 2.09 Present cost-sharing arrangements set the lifetime assistance allocation at an aggregate ceiling of LL 10 million per person and take into consideration only part of the investment required to rehabilitate and develop lands. The costs eligible for GP assistance include land terracing, terrace retaining-walls, soil ripping, rock removal, hill-pond construction and localized irrigation systems. They amount to about LL 13 million per ha (US$8,175). Costs eligible for GP assistance do not include those for soil preparation, basic fertilization, seedlings, planting costs, replacement of failed trees and crop establishment expenses during a period of four years. These are financed by beneficiary farmers. When all costs are added, the total investment per hectare reaches about LL 26 million (US$16,350) in North Bekaa or double the amount deemed eligible for assistance by the GP. Farmers' share in the costs of land rehabilitation and development amounts to 13 percent of eligible costs when the area developed amounts to 0.5 ha; it is 35 percent for a I ha area; 67 percent for a 2 ha area and reaches 78 percent for a 3 ha area. However, when the total costs are taken into account, farmers share of the cost increases to 57 percent for 0.5 ha, 68 percent for I ha, 84 percent for 2 ha and 89 percent for 3 ha. During negotiations, GOL gave assurances that the GP would maintain cost-sharing arrangements at their present level. If a change becomes necessary, new arrangements would have to be satisfactory to the Bank [para. 8.01 (a)]. 2.10 Land terracing, water conservation and use and orchard establishment are, in the long term, capable of generating substantial incomes even in the poorest areas. The analysis of the financial returns of these activities in each of the five Lebanese regions indicates that their IRRs vary between a low of 18 percent for North Lebanon to a high of 50 percent in South Bekaa. With these lucrative returns, it would seem that Government cost-sharing would not be necessary. However, when all the costs of investing in land and water developments are added up and analyzed, it becomes clear that farmers would not be able to make this type of investment on their own. The estimated initial investment to establish and operate (first four years) a one-hectare mixed-crop farm varies between a low of about LP 26 million (US$15,700) in North Bekaa to a high of LP 51 million (US$32,000) in South Lebanon. Present average farm incomes in Lebanon are not known; however, estimates made during the preparation of the proposed project indicate that a one-hectare wheat-farm has an average income of about LL 67,000 (US$42.0), which is insignificant. 2.11 The minimum initial investment in a one hectare fruit-farm in North Lebanon is about LL 26 million (where some of the poorest areas of Lebanon exist). It is equivalent to 373 times the average annual income of a one-hectare wheat-farm in this area. With the existing low incomes of farmers, the high initial investment costs and the six years it takes for orchards to break even with operating expenses, farmers are unable to muster the necessary financial resources to invest in land terracing and development. Without Government assistance, only the rich would be able to undertake this type of activity. Without Government assistance, rural farmers would not only be incapable of developing their lands, but would also have their land resource base and their present meager incomes deteriorate as a result of erosion. To insure their livelihood, they would most likely abandon their farm land and migrate to urban areas, causing great expenses to the Government in social infrastructure. In an attempt to deal with this potential out-migration, conserve the environment and improve life in the rural mountainous areas, the Government has committed itself to share the costs of sustainable development of land and water resources. Past experience has indicated that farmers benefitting from the GP's assistance have been able to mobilize their share of development cost through personal savings and informal financing channels. 2.12 Environmental Aspects. The GP's past activities (terraces, rural roads and fruit tree distribution) have generally achieved positive environmental impact. However, in some cases, the lack of sufficiently detailed environmental surveys, particularly for agricultural roads, may have resulted in effects that are not fully consistent with the objectives of natural resources conservation. These possible effects remain undocumented mainly because of the lack of adequate monitoring of the GP's activities and 6 Agriculture Infrastructure Development Project their effect on the environment. In order to avoid potential harm to the environment as a result of future activities to be financed by the proposed project, durine negotiation GOL gave assurances that an Environmental Information and Monitoring Committee (EIMC) would be created Ipara. 8.01 (b)M within the GP. Its role would be to assess, during the study and design stages of project activities, potential detrimental effects on the natural resource base and various eco-systems and to propose mitigating measures to be undertaken before or during the implementation of these activities (Annex 5). E. Design Considerations 2.13 The objective of improving farmers' income from agriculture in the mountainous areas of Lebanon can best be achieved through the development of their land and water resources. To achieve this goal several alternatives are available. Agriculture intensification through better cultural practices and a higher level of inputs (fertilizers, pesticides and better crop varieties) was the alternative most used in the past. The results have often been significant in the short term; however, their long-term benefit was not sustainable, mainly because the annual crops grown do not make the best use of resources and often were the causes of erosion and pollution. A second alternative, which has been adopted almost exclusively by wealthy landholders and was proven sustainable, has been to change the aptitude of the land and improve its capacity to support higher value and/or permanent crops. By terracing steep hilly lands, conserving their soils, planting them with fruit trees in lieu of erosion-conducive annual crops and storing potentially erosive runoff water for summer supplemental irrigation, well-to-do farmers have been able to create employment for their families and neighbors, developed and protected natural resources from erosion, and substantially increased their income. One of the objectives of the GP was to make the adoption of this second natural resources development alternative affordable to smallholders. 2.14 The Project has been designed under a program approach. Under this approach, regular activities of the GP that respond to a set of agreed criteria [para.8.01 (c) and (d)] would be financed by the Project. With regard to land and water development activities, a sample of farmers' requests for assistance was appraised (Annex II) and was found to be responsive to the agreed criteria except for the environmental assessment which remains to be completed. The GP has issued instructions and forms to be included in all the feasibility study packages to ensure that the agreed criteria are taken into account in the selection of activities that would benefit from GP assistance. Disbursements for land and water development would be contingent on the full responsiveness of the planned activities to the agreed selection criteria, as ascertained during the review of the GP's annual work program. With regard to agricultural roads, the program (70 km) to be implemented during the first two years of the project was evaluated and was found to be responsive to the agreed selection criteria (Annex III). The required environmental assessment of agricultural roads has been completed. This involved consultations with farmers, the GP, NGOs, local community leaders and Government authorities. Detailed designs for the two-year road program have been completed and agreement on the expropriation of the land on which these roads would pass has either been obtained or is underway. The project components relating to institutional capacity building have been well defined and evaluated in detail (paras. 3.05 and 3.06). 2.15 Stakeholders Participation. Rapid Rural Appraisals and a workshop were conducted during project preparation and pre-appraisal. Their results indicate that in order to have an impact on poverty, project activities should, to the extent feasible and within the existing social equilibrium, give greater priority to the poorest farmers and the most depressed rural areas. According to current GP policy, project financial resources would, in principle, be divided equally among the four regions of Lebanon (North Lebanon, Mount Lebanon, South Lebanon and the Bekaa). However, it was agreed that the GP may allocate up to 20 percent more resources to regions where farmers' demand for assistance are high. During negotiations it was further agreed that within regions, the GP's regional offices would target needv villazes and communities and that within targeted villages and communities, the Green Plan would work with local committees to Rrioritize the poor and target proiect assistance to those most in need. The Agriculture Infrastructure Development Project 7 participation and involvement of populations through elected representatives (municipalities, cooperatives, village associations, etc.) would be used by the GP's regional offices to increase their capacity to identify and target needful families. Representatives of populations would, for example, help to: (i) differentiate between farmers who rely on farming to make a living from those who have additional sources of income; and (ii) determine which potential beneficiaries of the project are the poorest [para. 8.01 (e)]. However, project activities would benefit the Lebanese farming population at large and would not be focused exclusively on the poor. III. THE PROJECT A. Proiect Obeectives 3.01 The main objectives of the project are to: (i) develop land and water resources on about 5,600 ha for the purposes of increasing farmners' incomes and protecting the environment through land terracing and harvesting of runoff water in small hill-ponds; (ii) increase access to and from isolated rural areas through the construction of about 300 km of agricultural roads; and (iii) strengthen the institutional and implementation capabilities of the GP and the Directorate of Studies and Coordination (DSC) within the Ministry of Agriculture (MOA) by upgrading their human and material capabilities, financing the conduct of a National Agricultural Census (NAC) and establishing an Information Management System to provide the data necessary for strategy and policy formulation. B. Project DescriDtion Land and Water Development (base cost US$57.8 million: 73 percent of base cost) 3.02 The aim of this component is to help farmers achieve the sustainable development of their land holdings that are presently under extensive agricultural production or that are not cultivated because past practices have caused them to erode and degrade (para. 2.04). Under this component, the project would finance: (i) mechanized works for land terracing on about 3,100 ha; (ii) the construction of terrace retaining walls to stabilize existing terraces and/or consolidate newly terraced lands; (iii) the construction of 250 hill-ponds (10,000 m3 average capacity) and 50 small concrete reservoirs (100 to 300 m3 average capacity) to harvest runoff water for supplemental irrigation of crops in the summer. At least 20 ponds would be constructed in collaboration with the MOA's Directorate of Rural Development and Natural Resources (in charge of Forestry) to provide water for fighting forest fires. Once lands are terraced and stabilized, they would be planted to high-return crops such as vegetables, protected vegetables and banana trees or to other high-value fruit trees. Therefore, in addition to financing the land terracing and water conservation infrastructure described above, the Project would also finance an orchard establishment activity through the procurement of about one million fruit tree seedlings to plant 2,500 ha; these would be purchased by farners under the same cost-sharing arrangements described in para. 2.09 above. The Project would also finance costs associated with the execution of the land and water development component, which would include: (i) topographic and office equipment, computers and software to allow GP staff to supervise the land terracing and hill-pond construction works; (ii) 4WD vehicles; (iii) local staff training; (iv) incremental staff salaries and allowances, as well as (v) office supplies; and (vi) vehicle operation and maintenance costs (Working paper No. 4, Table 1). Aericultural Roads (base cost US$14.2 million: 18 Dercent of base cost) 3.03 In order to improve access to agricultural areas and make it easy for rural populations to move to and from isolated mountainous areas (see para. 2.05), the project would finance the construction of 85 8 Agriculture Infrastructure Development Project km of asphalted roads and 215 km of earth roads. Agricultural roads are generally constructed on existing tracks made by animal-drawn vehicles or by farm tractors and small trucks. The GP has so far been able to carry out design studies on 180 km of roads of which 110 km are at the detailed design stage. The execution of the agricultural roads component would follow a program approach, characterized by a well- defined two-year work program (Annex II1) evaluated at appraisal and a flexible program (230 km) to be studied and evaluated according to agreed criteria (Annex I, para. 3) during project implementation. To allow for the conduct of activities associated with the construction of agricultural roads, the project would finance: (i) laboratory analysis, feasibility studies and detailed designs for 300 km of roads; (ii) one set each of topographical, geo-technical and office equipment in addition to computer software for road design and construction supervision by GP staff; (iii) one replacement and 8 new 4WD vehicles; (iv) 4 person- months of technical assistance in road design; (v) local and intemational staff training and; (vi) recurrent costs for incremental staff salaries and incentives, road maintenance, vehicle operating costs and office supplies (Working Paper No. 4, Table 2). Institutional Support (base cost US$6.8 million; 9 percent base cost) 3.04 The institutional support to be provided by the project would target the GP, which would be in charge of implementing the land and water development and agricultural roads components, and the Directorate of Studies and Coordination (DSC) of the Ministry of Agriculture, which would be in charge of the field execution of the agricultural census and the establishment of an information management system. 3.05 The Green Plan. Project support to the GP would encompass the following two sub- components: (a) Environmental Information and Monitoring (base cost US$0.8 million; 1 percent of base cost) The major objective of this component would be to create within GP, through EIMC, the institutional capability to undertake simple environmental reviews, assess the potential implications of the GP's core activities on critical ecosystems and design measures to mitigate their potential negative effect on the environment (Working Paper No. 6). The EIMC would also monitor project progress and maintain records on project monitoring indicators [paras. 2.12 and 8.01(b)]. To establish the proposed EIMC, the Project would finance specialized equipment, including computers, vehicles, etc. (Working Paper No. 4, Table 3) as well as vehicle operation and maintenance costs. (b) Implementation Capacity Building (base cost USS1.4; 2 percent of base cost). Under this subcomponent, project support targets the GP's central offices'. This would allow for a faster turnover in the verification of farmers' requests for assistance in land and water development, in the review of designs of agricultural roads and in the preparation of tender documents. The Project would finance office equipment, 4WD vehicles, consultant services, the organization of farrners information campaigns, etc. (Working Paper No. 4, Table 4). 3.06 Ministry of Agriculture. Project support to the Ministry of Agriculture would encompass the following two sub-components: (a) National Agricultural Census (base cost US$3.7 million; 5 percent of base cost). In order to enable the Directorate of Studies and Coordination (DSC) of the Ministry of 1/ Support to the GP's regional offices has been included in the cost of the land and water and agricultural roads development components. Agriculture Infrastructure Development Project 9 Agriculture to update the agricultural sector information database (para. 2. 06) and create a permanent system for agricultural statistics, the project would finance the implementation of a national agricultural census (NAC) and the rehabilitation and upgrading of the existing statistical services of MOA as well as policy/strategy formulation, marketing and comparative advantage studies. More specifically, the project would finance, inter ai specialized equipment, such as stereoscopes, aerial photographs, computers as well as survey and GIS equipment, 4WD vehicles, 43 person-months of international technical assistance and 45 person-months of local consultants and recurrent costs to cover incremental staff salaries and staff travel allowances (Working paper No. 4, Table 5). (b) Information Management System (base cost US$0.9 million; 1 percent of base cost). The objective of the Information Management System (IMS) sub-component is to physically gather all the available information in one accessible location, classify this information to make it easily retrievable and preserve some documentation onto more compact forms of documents. For this purpose the project would finance, inter alia, the procurement of 5 units of audio-visual equipment, computers and printers, one vehicle, the construction of a documentation center at Ghazir or the rehabilitation/completion of an existing center in Beirut, technical assistance, and training and staff incentives (Working Paper No. 4, Table 6). C. Proiect Cost and Financing Proiect Cost 3.07 Total project costs, including physical and price contingencies, are estimated at US$104.8 million, of which 32 per cent or about US$33.5 million are in foreign currency. 3.08 Details of cost estimates are presented in Working Paper No. 4 and are summarized in Table 3.1 below. Table 3.1 - Project Cost Summary % %Total Foreign Base Local Foreien Total Local Foreign Total Exchanpe Costs -------- (LL Million) --------- USS '000) ------- A. Land and Water Development 68,441 23,442 91,883 43,045 14,743 57,788 26 73 B. Agricultural Roads 6,720 15,888 22,609 4,227 9,993 14,219 70 18 C. Capacity Building 1. Green Plan Headquarters 1,259 1,027 2,286 792 646 1,438 45 2 2. Environmental Monitoring 569 638 1,207 358 401 759 53 1 2. Ministry of Agriculture Support to Agricultural Census 3,484 2,358 5,843 2,191 1,483 3,675 40 5 Support to MOA's Management Information System 811 639 1.450 510 402 912 44 1 Subtotal Ministry of Agr. 4.295 2.998 7.293 2.701 1.885 4.587 41 6 Subtotal Capacity Building 6.123 4.663 10.786 3.851 2 932 6.783 43 9 Total Baseline Costs 81,285 43,993 125,278 51,123 27,668 78,791 35 100 Physical Contingencies 7,124 3,767 10,891 4,480 2,369 6,849 35 9 Price Contingencies 24.897 5,524 32 15.65 3.474 12.13 18 24 Total Project Costs 113,306 53,284 166,590 71,261 33,511 104,772 32 133 10 Agriculture Infrastructure Development Project Financing Plan 3.09 The proposed Bank loan of US$31 million would meet about 93 percent of the foreign costs. The International Fund for Agricultural Development (IFAD) has been approached by the Government and has agreed to provide US$12 million, or 11 percent of project costs for the parallel financing of terrace-retaining wall construction. Total financing by project beneficiaries would amount to about US$48.7 million or 46.5 percent of total project cost. The remaining US$13.1 million or 12.5 percent of project cost would be financed by the Government. Table 3.2: Financing Plan (US$ million) Financier Local Foreign Total World Bank 5.8 25.2 31.0 IFAD 7.2 4.8 12.0 Beneficiary farmers 46.4 2.3 48.7 Government 11.9 1.2 13.1 Total 71.3 33.5 104.8 D. Procurement 3.10 Procurement responsibilities would be vested in the GP and the CDR. The GP would be responsible for all procurement, including ICB, relevant to the land and water development and agricultural roads components, as well as its own institutional strengthening sub-component. The CDR would be in charge of all procurements relevant to the sub-component of MOA's DSC. The GP has had extensive experience with implementing small works packages for agricultural roads as well as land and water development activities that would be financed by the proposed project. The DSC, however, has not had such extensive experience with procurement and would need the support of the CDR and the institutional strengthening planned under the project. All goods and works to be financed from the proceeds of the Bank's loan would be procured in accordance with the Bank's Guidelines for Procurement under Bank Loans and IDA Credits. The procedures to be adopted are detailed in Annex 1, Appendix 3. E. Disbursements 3.11 The proposed Bank loan of US$31 million would be disbursed against the categories and at the rates indicated in Table 3.3 below. Disbursement would be made against full documentation, except for payment against contracts of less than US$150,000 equivalent for goods, US$100,000 for works, US$50,000 for mechanized works for land and water development, US$100,000 equivalent for services with consulting firms and US$50,000 equivalent for services with individual consultants (including training and studies), which would be reimbursed against statement of expenditures (SOEs). Documentation related to SOEs would be retained by the GP and the CDR, each for the activities for which it has implementation responsibility. Given the long interruption in lending to Lebanon, there is no disbursement profile for the country. The implementation period for the project is estimated at six years. The proposed disbursement profile closely follows the disbursement for the on-going Irrigation Rehabilitation and Modemization Project. Because project funds will be disbursed through two Special Accounts (one for the GP and one for the CDR), a disbursement plan for GP and another for the CDR have been formulated; they are shown in Annex I, Appendix 4. An estimated disbursements plan for the Bank loan is summarized in Table 3.4 below. Agriculture Infrastructure Development Project 11 Table 3.3: Disbursement Plan US$ million Percentage of Expenditures Catep,ory eguivalent to be Financed 1. Civil Works 19.8 80% 2. Goods 5.7 80% 3. Consultants, Training, Studies 4.8 100% 4. Unallocated 0.7 Total 31.0 3.12 Special Account. To facilitate disbursements against eligible expenditures, the Borrower would establish two Special Accounts in the Central Bank. The first is to be operated by the GP and the second by the CDR; both accounts would be operated under terms and conditions satisfactory to the Bank. The Bank would, upon request, make authorized allocations of US$2.5 million into the Special Account of the GP and US$0.3 million into the Special Account of the CDR. Initially, the allocations would be limited to US$1.5 million and US$0.2 million for the GP and the CDR respectively. The full authorized allocation could be claimed when disbursements reach US$4 million and US$.05 million for the GP and the CDR respectively. The GP and the CDR would submit replenishment applications for the Special Account on a monthly basis, or when about 20 percent of the initial deposit has been utilized, whichever comes first. The replenishment applications would be supported by the necessary documentation, bank statement of the Special Account and a reconciliation bank statement of the Special Account against Bank records. Table 3.4: Estimated Disbursement Schedule (US$ million) IBRD Fiscal Year FY97 FY98 FY99 FY00 FY01 FY02 FY03 Annual 2.0 3.0 4.9 5.6 6.1 6.6 2.8 Cumulative 2.0 5.0 9.9 15.5 21.6 28.2 31.0 3.13 The GP and the CDR would keep separate accounts for project expenditures in accordance with accounting principles and practices acceptable to the Bank. The GP would have ultimate responsibility for budgeting and accounting for the land and water development component (para. 3.02), the agricultural roads component (para. 3.03) and institutional strengthening sub-components [para. 3.05 (a) and (b)]. The CDR would have responsibility for budgeting and accounting and would coordinate project activities executed by the MOA's DSC [para. 3.06 (a) and (b)]. Both the GP and CDR would prepare reimbursement requests for their respective components and forward them to the Bank, as well as ensure that up-to-date information on expenditure and disbursements would be available to the Bank supervision missions. Assurances have been obtained at negotiations from the GP and the CDR that they would (i) have their proiect records. proiect accounts and proiect financial statements for each fiscal year audited in accordance with appropriate auditing principles by independent auditors acceptable to the Bank: (ii) fumish to the Bank no later than nine month after the end of each year certified copies of its financial statements for such year and the reports of such audits [para. 8.01(fl and (e)il. F. Environmental Impact 3.14 In consonance with O.D. 4.01, the project has been classified under Environmental Category "B". The safeguards designed into the project, particularly the creation of the Environmental 12 Agriculture Infrastructure Development Project Information and Monitoring Committee and the inclusion of environmental considerations as a criteria for selecting activities to be supported by the project, would insure that the integrity of natural ecosystems and the environment are preserved. Environmental impact assessments would become an integral part of all the feasibility studies the GP conducts for land and water developments as well as for agricultural roads. The impact of the project on the environment is expected to be positive. Guidelines and environmental assessment checklists have already been prepared. More specifically, it is anticipated that the project would help ensure that environmental assessmentsto be conducted by the EIMC would become part of all feasibility studies and would be implemented as part of the project to mitigate potential negative effects on the environment of land and water development as well as agricultural roads (Working paper No. 5). G. Women's Role in the Proiect 3.15 Women would have an active role in project implementation and would benefit from its assistance. The Government of Lebanon and the agencies involved in the project do not have regulations that would preclude women from fully participating or benefiting from the proposed project. In all the three institutions involved in the project, women occupy posts of responsibility and have participated in the design of the project. As civil service employees, women would be able to actively participate in the management and implementation of the project. As potential beneficiaries, women have under Lebanese laws the same rights of land ownership as men. As in the past, the GP would continue to provide its cost- sharing assistance to beneficiaries regardless of their gender. Under Lebanese law, women are able to own and operate businesses and would, therefore, be eligible to bid and receive award of contracts financed by the project. IV. ORGANIZATION AND MANAGEMENT A. Institutional Arrangements 4.01 The project would be implemented by two agencies, the Green Plan and the Council for Development and Reconstruction (Annex 1). The GP would play the role of the project management unit and be responsible for implementing the land and water development component (para. 3.02), the agricultural roads component (para. 3.03) and the subcomponents related to the creation of the Environmental Infornation and Monitoring Committee [para. 3.05 (a)] and its own institutional strengthening subcomponent [para. 3.05 (b)]. The CDR would play the role of a second project management unit and be responsible for the implementation of the institutional support subcomponents of the Ministry of Agriculture. These subcomponents include the conduct of the national agricultural census [para. 3.06 (a)] and the establishment of an information management system and documentation center [para. 3.06 (b)]. To allow for proper staffing and the smooth implementation of the added activities brought on by the project, the GP and the DSC of MOA would recruit additional contractual staff and where feasible, give additional allowances to performiing staff (as indicated in the detailed cost tables for each activity). Implementation arrangements, responsibilities and schedule are detailed in Annex 1. Bank Supervision Missions 4.02 Review missions would normally be held twice a year, except for the first year when an additional project-launch mission would be undertaken immediately after project effectiveness. Supervision missions would normally take place when semi-annual reports have been produced by the Borrower's agencies (after March and September of each year). Staffing of project-launch and supervision missions during the first year of the project would include the Task Manager (Agriculturist), a Civil/ Agriculture Infrastructure Development Project 13 Irrigation Engineer, a Soil and Water Conservation Specialist, a Statistician, an Economist and a Monitoring and Evaluation Specialist and would require a total input of about 20 staff-weeks. Further details are available in Annex 1. B. Monitorin! and Evaluation (M&E) 4.03 The M&E of project achievements would be the responsibility of the GP and the CDR (see Annex 1, Section C). The CDR M&E report would be based on information gathered and reports submitted by the DSC. Project M&E activities would have the two-fold objective of generating information on progress of implementation and on the achievement of project developmental objectives. Key monitoring indicators are detailed in Annex IV. V. AGRICULTURAL PRODUCTION 5.01 The activities to be financed under the proposed project would influence agricultural production in several ways. Land terracing and water harvesting in hill-ponds would be expected to bring about increases in: (i) cropping intensity from an average of 30 percent to about 100 percent (Annex VI, Table 3), arising from land capability upgrading and improved suitability to high value crops and/or multiple cropping; (ii) crop yields from an average of 30 to 45 t/ha for tomato, 13 to 18 t/ha for cherries and 23 to 30 t/ha for apples (Annex VI, Table 4), resulting from better plant growth environments (deeper soils, less rocks) and supplemental irrigation with water conserved in hill-ponds. Agricultural roads would also bring about increases in: (i) cropping intensity, because early access to farm land and timely crop establishment would allow farmers to plant most of their landholdings; (ii) crop yields, due to timely crop husbandry practices and adequate use of production inputs, particularly fertilizers (Annex VI); and (iii) savings in transportation costs as a result of diminished vehicle operation and maintenance costs. The Agricultural census would allow the Ministry of Agriculture to formulate sector policies based on reliable information and more attuned to prevailing sector conditions. Changes in cropping patterns and yields between the without-project and with-project situations have been captured in crop and one-hectare farm models and are summarized in Annex VI and detailed in Working Paper No. 3. VI. MARKETING. PRICES AND INCOME A. Marketing and Prices 6.01 No major marketing problems are foreseen for the expected incremental production of the project. The expected agricultural production would reach its peak during year 13 of the project and would amount annually to about 14,000 t of green-podded almonds, 47,000 t of apples, 29,000 t of cherries, 11,000 t of olives, 10,000 t of apricots and about 65,000 t of vegetables. Wheat production would decline by about 2,600 t annually. Import statistics indicate that many types of agricultural produce including tomatoes are being imported for processing within Lebanon. Much of the anticipated incremental production would be easily absorbed within the domestic market, which is expected to require more high-value agricultural produce as a result of the gradual increase in per capita income and the growth of the population. A substantial share of the almond, apple and cherry incremental production is expected to be exported to the Asian, East European and Gulf market. With few exceptions (wheat, tobacco and sugar beets), prices are market responsive and it could be argued that production is, to a large extent, determined by market forces and reflects Lebanon's competitive edge. This is particularly the case for most fruit and vegetable crops grown in the project area. At present, prices of agricultural output do 14 Agriculture Infrastructure Development Project not differ considerably from their respective world market levels. On the input side, there are no subsidies on fertilizers, pesticides or farm machinery. The local prices of fertilizers are slightly above world market prices. The list of farmgate prices for agricultural outputs and inputs is given in the financial and economic Working Paper No. 5. B. Incomes 6.02 Levels of farn income vary considerably with farm size, agro-ecological region and production technologies used by farmers. On the basis of crop models designed to approximate the real costs of production and crop returns, one-hectare farm models were prepared for each of the five regions of Lebanon in order to estimate the farm-level benefits that would accrue as a result of the project. An analysis of these farm models indicates that incomes, in all farm sizes, can be expected to increase significantly. In areas where land and water development would take place, present incomes for all types of farms are quite depressed. This is due to the fact that most of the land is currently either in fallow and out of production (70 percent) or is cropped to subsistence wheat (30 percent), whose income after labor costs is insignificant. With the project, the production capability of lands would be significantly upgraded and the income they would generate at full development would become similar to that of rich lands of the Bekaa plain or the costal areas of Lebanon. During the first five years after investing in land and water developments and even with the GP's assistance, farm income would be negative. Farm income would start to cover annual production costs beginning in year six of the project. However, at full development (year 13), income after labor cost would become relatively high. In North Lebanon, income of a one- hectare wheat farm is expected to increase from LP 67,000 (US$42.0) to LP 6.3 million (US$3,980.0) when it is planted with fruit trees. In Mount Lebanon the expected increase would reach LP 14.7 million (US$9,245.0), and in South Lebanon the increase would reach LP 9.0 million (US$5,660.0). Financial Internal Rates of Return (IRR) have been calculated for one-hectare fruit farns in the five regions of Lebanon; they are 20.3 percent for North Lebanon, 30.4 percent for Mount Lebanon, 59.3 percent for South Lebanon, 21.2 percent for Bekaa North and 36.2 percent for Bekaa South. Incomes of farms to which access would be improved by the roads built under the project would increase significantly as a result of increased yields and improved cropping intensification (details are in Working Paper No.3). Vll. BENEFITS, ECONOMIC JUSTIFICATION AND RISKS A. Benefits and Beneficiaries 7.01 The primary benefits of the project would be the incremental agricultural production, the improved management and conservation of land and water resources, savings on transportation costs and an updated agricultural sector database. The incremental agricultural production would result from the sustainable development of land and water resources in mountainous areas and increased agricultural productivity of lands to which access was improved by the construction of agricultural roads. The improved management and conservation of land and water resources would be brought about by the terracing and consolidation of eroded steep-lands, the storage of runoff water in small hill-ponds and a better interaction between development objectives and environmental concerns. The savings in transportation costs would materialize as a result of reduced vehicle and maintenance costs. The updated agricultural sector database would result from the conduct of a national agricultural census and the establishment of a permanent sector data updating system. 7.02 Overall project incremental production at full development would be substantial and would include about 65,000 metric tons of vegetables and 111,000 metric tons of fruit. Because the area devoted to rainfed wheat would be planted to higher-value fruit tree crops, the production of wheat grain would Agriculture Infrastructure Development Project 15 be reduced by about 2,600 metric tons per year. About 1,300 families would benefit from the agricultural roads and 8,300 farm families would benefit from the land and water development activities. In total, about 9,600 farm families or about 75,500 people would profit directly from the project (Annex VI, Table 2). Poor farmers with small land holdings of less than 0.5 ha would be targeted by the GP through local committees. The project would reduce the isolation of rural villages through rural road development, and thereby reduce one of the motives for rural-urban migration. Other benefits, highlighted by the communities consulted during the participatory process, are better access to work sites, improved health conditions (by improving travelling conditions for emergency cases), improved comfort of transportation, and easier access to schools. The need for link roads is most strongly expressed by villages where farmers still rely on small paths, which only allow animal transit to market their produce or to purchase products from the towns. Construction or rehabilitation of rural roads would also lead to a reduction of transport costs, and to savings in transportation and travelling time. 7.03 Environmental benefits and impact. The project would contribute to environmental protection through reduced soil erosion and improved water conservation as a result of land terracing and hill-ponds construction. The farming systems proposed are less destructive than the present systems and should result in reduced erosion and general land and water degradation. Some increase in the use of artificial fertilizers and pesticides is envisaged. However, overall usage rates would be low and would be applied more efficiently following improved extension advice. To assure protection of the environment, surveys to be conducted by the EIMC and check lists covering environmental aspects would become an integral part of feasibility studies of all GP activities (para. 3.05). B. Economic Analysis and Justification 7.04 The project is consistent with the Country Assistance Strategy for Lebanon and is explicitly mentioned among the objectives and instruments of the CAS. The project would support the Government policy for development of rural infrastructure currently implemented by the GP. Through the project, public sector investment would assist private farmers in developing land that is potentially suitable for agriculture but is currently left idle, or cultivated with very low intensity, due to slope, rockiness and/or lack of rural roads. Public sector involvement in cost sharing of land terracing and water storage on private land is justified by the targeting of poor and remote rural areas with few economic development alternatives and by the long-term impact of those infrastructures on the preservation of the natural environment. 7.05 Design Alternatives. The financial profitability of the proposed crops and investments has been assessed for five agro-ecological zones. Detailed crop and farm budgets (Working Paper No. 3) have been calculated utilizing FARMOD on the basis of the full land reclamation and development costs, including Green Plan share of the financing. Although land terracing costs are highly variable depending on local conditions such as land rockiness and slope, financial rates of return are only moderately sensitive to variations in the cost of land development. This is due to the fact that land reclamation costs are relatively modest in comparison with on-farm negative cash flows that farmers must face in the early years of establishment and maintenance of perennial crops. Stone wall terraces have been selected as the most appropriate solution for mountainous and rocky areas (slope above 20 percent), while cheaper earth embankments would be acceptable for areas with slopes under 20 percent. Regarding water storage, earth hill-ponds costing on average US$1 per m3 of storage, have been selected as the most economical alternative in mountainous areas. 7.06 Economic Analysis. An economic analysis has been carried for individual roads [results are in Annex III (b)] to be constructed during the first two years of the project and for the whole project (Annex III (b)], taking into account incremental agricultural production benefits to be derived from land reclamation and rural roads construction and savings in vehicle operating cost resulting from the rural 16 Agriculture Infrastructure Development Project roads. On-farm cost and benefit streams are based on aggregated crop budgets and activity models used in the financial analysis and on the phasing of land reclamation and rural roads. The project's net benefits are calculated by deducting the without project net benefits, which have been assumed to remain constant over time. 7.07 The project cost streams are based on economic project costs, excluding taxes and price contingencies. Civil works have been costed at likely contract prices, and imported equipment has been costed at CIF prices. Considering that there are no restrictions on the trade of goods and services, that the Lebanese Pound is freely convertible, and that domestic markets are generally free from price distortions, no conversion factor has been applied to the project investment cost streams, and the economic analysis has been carried out taking into account the prevailing exchange rate of US$ I = LLI,590 as of February 1996. Further details on the methodology and assumptions of the economic analyses are available in Working paper No. 3. The main fiscal impact of the project will result from incremental maintenance costs of agricultural roads. These costs would amount to about US$460 thousand per year at full development. All other operation and maintenance costs of land terracing and irrigation infrastructure will be supported entirely by the farmers. 7.08 The overall rate of return of the project, calculated over a 30-year period, is about 24 percent. The project is expected to generate a net present value of about US$119 million discounted at the opportunity cost of capital of 12 percent. Considering that only agricultural production benefits and savings on transport costs from the roads have been taken into account in the analysis, this suggests that the project is economically viable. The project would also bring other social, environmental and institutional benefits which cannot be readily quantified. C. Proiect Risks and Sensitivity Analysis 7.09 Project Risks and Sensitivity Analysis. The project could face two major risks. The first is at the individual farmer level and is related to the uncertainty of achieving anticipated agricultural benefits in a timely manner. This would be caused by potential delays in the completion of agricultural investments by farmers, poor maintenance of orchards and possible fluctuations in product prices. As in the past, this risk would be mitigated during the selection of project beneficiaries by giving first priority to farmers who plan to complete the entire investment within two years of completion of works for which GP assistance was obtained. Before receiving the GP's assistance, farmers would commit themselves in writing to complete the investment within two years. Failing that, they would reimburse to the treasury the financial assistance they received from the GP. In addition, the past 30 years' experience on which the present project is built show that, in reality, this risk is minimal and that most farmers complete their investments on time and maintain their orchards properly. The risk of fluctuation in product prices cannot be mitigated entirely. The second potential risk is related to the maintenance of agricultural rural roads, which used to be a problem during the period of civil strife. During negotiations. it was agreed that local budgetarv resources would be made available by the Borrower to maintain the roads built by the GP [para. 8.01 (h)]. In the long-term, the significant allocation of funds made to the Muhafazats offices (Governors offices) and Deputies of the various regions of Lebanon for the specific purpose of roads maintenance would ensure the adequate maintenance of agricultural roads. The sensitivity analysis indicates that the economic analysis is relatively sensitive to assumptions made on on-farm benefits. The ERR would be reduced to 12 percent by a decrease of 26 percent in farm benefits. However, because the assumptions made on crop yields are quite conservative, the probability that the accrued benefits would be lower than those assumed is considered low. On the other hand, the economic results of the project are quite resistant to variations in project cost; investment cost would have to increase by 36 percent to reduce the ERR to 12 percent. Agriculture Infrastructure Development Project 17 VIII. AGREEMENTS REACHED 8.01 The following agreements have been reached at negotiations: (a) the GP would maintain cost-sharing arrangements at a level satisfactory to the Bank (para. 2.09); (b) the GP has created an Environmental Information and Monitoring Committee (EIMC) to carry out environmental assessments and monitor project activities (para. 2.12); (c) the GP would select land and water development activities according to agreed criteria (Annex I, para. 3); (d) the GP would select agricultural roads on the basis of agreed criteria (Annex 1, para. 3); (e) within regions, the GP's regional offices would target needy villages and communities, and within targeted villages and communities, the GP would work with local community leaders to target their neediest residents (para. 2.15); (f) for all expenses made on the basis of SOEs, GOL would (i) maintain records and accounts reflecting such expenditures; (ii) ensure that all records evidencing such expenditures are retained until at least one year after the Bank has received the last audit report; (iii) have each fiscal-year's records and accounts audited by independent auditors acceptable to Bank; and (iv) furnish to the Bank the audit reports (para. 3.13); (g) the GP and the CDR would: (i) have their project records, accounts and financial statements for each fiscal year audited and (ii) furnish to the Bank certified copies of its financial statements for such year and the reports of such audits (para. 3.13); (h) funds from the local budget would be utilized by the Borrower to maintain the roads built by the GP (para. 7.09); (i) the GP would submit semi-annual reports in March and September of each year as well as an action program for land and water development and agricultural roads each year (Annex I, para. 2); (j) in September of each project year and starting in 1997, the DSC would prepare an annual action program for the agriculture census and IMS activities planned for the following calendar year (Annex 1, para. 6); (k) the CDR would establish a committee to coordinate the implementation of the institutional support to the DSC (Annex I, para. 7); (I) the MOA would maintain the recently created Agricultural Census Steering Committee (Annex 1, para. 7); (m) the GP would consult and coordinate its project activities with MOA's Directorate of Rural Development and Natural Resources, the Ministry of Environment (MOE) and NGOs (Annex 1, para. 7); and 18 Agriculture Infrastructure Development Project (n) the GP and the CDR would each submit: (i) a detailed progress report for the mid-term review by December 31, 1999; and (ii) an Implementation Completion Report not later than six months after the project completion date (Annex 1, para. 10). 8.02 With the above assurances from the Government, the proposed project would be suitable for a Bank loan of US$31 million equivalent. ANNEX I Page I of S THE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT Implementation Arrangements and Schedule A. Institutional Arrangements 1. The project would be implemented by two agencies, the Green Plan and the Council for Development and Reconstruction. The GP would be responsible for implementing the land and water development component (SAR para. 3.02), the agricultural roads component (SAR para. 3.03) and the subcomponents related to the creation of the Environmental Infornation and Monitoring Committee [SAR para. 3.05 (a)] and its own institutional strengthening subcomponent [SAR para. 3.05 (b)]. The CDR would be responsible for the implementation of the institutional support subcomponents of the Ministry of Agriculture. These subcomponents include the conduct of the national agricultural census [SAR para. 3.06 (a)] and the establishment of an information management system and documentation center [SAR para. 3.06 (b)]. The GP and CDR would be in charge, each with regard to the components under its responsibility, of developing annual work plans. clearing annual work plans with the Bank, procurement. disbursement of project funds. keeping proiect accounts and reporting on the progress of their components. To allow for proper staffing and the smooth implementation of the added load of activities brought on by the project, it was agreed that the GP and the DSC of MOA would recruit additional contractual staff and give salary incentives to deserving staff (as indicated in the detailed cost tables for each activity). The Green Plan 2. The GP would have full responsibility for the implementation of the land and water development and agricultural roads components. For both of these demand-driven activities, the GP would continue to deal with potential beneficiaries' requests for assistance on the basis of existing procedures (appendix 1). It would be responsible for overall planning, evaluation and monitoring of all the project activities for which it is responsible. It would also be in charge of conducting technical, socio-economic and environmental feasibility studies and designs either by its own staff or through the use of consultants. When requests for assistance are received from farmers or from rural communities, the GP's regional offices would conduct the necessary preliminary studies and include the request in the waiting list. Each project year starting in 1997, the GP's regional offices would formulate action programs detailing the required budget and the activities they plan to implement during the following year. These action programs would be consolidated, verified and approved by the GP's Executive Committee. The GP would submit semi-annual reports in March and September of each year to report on project progress and inform on its annual Programs for land and water development and agricultural roads. The GP would submit in the semi-annual report (due in September) of each proiect year. starting in 1997, the consolidated action program for land and water development of the following calendar year to the Bank for review and clearance [para. 8.01 (i)]. Disbursement for the 1997 land and water development activities would be approved with the clearance, at project effectiveness, of the 1997 action program. Disbursement for subsequent years would be approved when annual action programs for land and water development are cleared by the Bank in september of each year, starting in September, 1997. For agricultural roads, and since the first two-year program has already been appraised, disbursement for this program can proceed as soon as the project becomes effective. Disbursement for subsequent years would be approved when annual action programs for agricultural roads are cleared by the Bank in March of each year, starting in 1998. The GP would submit. in its semi-annual report of March of each proiect year. starting in 1998, ANNEX I Page 2 of 5 the consolidated action program agricultural roads for the following calendar year to the Bank for review and clearance [para. 8.01 (i)]. 3. The selection of activities to be financed by the project and the identification of farmers and communities that would receive the GP's cost-sharing assistance would be done according to current GP procedures and a set of agreed criteria. A new pilot procedure would be tested at various locations to improve the targeting of project benefits towards the poor; this pilot procedure is described in para. 4 below. Assurances have been obtained at negotiations that the GP would select land and water development activities and agricultural roads on the basis of criteria acceptable to the Bank. For land and water development, the criteria are: (i) land terracing and development not to take place in areas where the slope is above 40 percent and rockiness exceeds 60 per cent of soil cover; (ii) beneficiaries of GP assistance to commit themselves to finance and complete remaining development investments within two years of works implemented through GP assistance; (iii) GP not to assist in land and water development in areas intended for urbanization or industrial development; (iv) GP not to assist in land development on national forests and protected bio-diversity areas or in areas within 500 meters of these forests and protected areas; (v) a minimum Internal Rate of Return (IRR) of 12 per cent [para. 8.01 (c)]. For agricultural roads, these criteria would include: (i) the beneficiary population would participate in sharing the cost of the roads by voluntarily giving, without compensation, the land on which the road would be constructed; (ii) road design and alignment to take into account, inter alia, the mitigation indicated in the environmental assessment summary checklist of the road feasibility study; (iii) a minimum Economic Rate of Return (ERR) of 12 per cent; and (iv) responsibility for road maintenance would be assumed by the Borrower and local budget allocations secured before roads are constructed [para. 8.01 (d)]. In undertaking the required environmental reviews, and in addition to conducting its own flora and wildlife studies for specific agricultural roads, the EIMC would make use of available information (from UNDP and UNEP Projects) that describes the distribution, status and significance of natural and agricultural biodiversity in Lebanon. 4. According to current GP policy, project financial resources would, in principle, be divided equally among the four regions of Lebanon (North Lebanon, Mount Lebanon, South Lebanon and the Bekaa). However, it was agreed that the GP executive committee may allocate up to 20 percent more resources to regions where farmers' demand for assistance are high. It was further agreed that within regions, the GP's regional offices would target needful villages and communities, and that within targeted villages and communities, the Green Plan would work with local committees to prioritize the poor and target project assistance to those most in need. The participation and involvement of populations through elected representatives (municipalities, cooperatives, village associations, etc.) would be used by the GP's regional offices to increase their capacity to identify and target needful families. Representatives of populations would, for example help to: (i) differentiate between farmers who rely on farming to make a living from those who have additional sources of income; and (ii) determine which potential beneficiaries of the project are the poorest. However, project activities would benefit the Lebanese farming population at large and would not be focused exclusively on the poor. The Council for Development and Reconstruction (CDR) 5. As indicated above, the CDR would have full responsibility for the implementation of the components aimed at strengthening the Directorate of studies and Coordination of the MOA [SAR para. 3.06 (a) and (b)]. The CDR would have responsibility for contracting the technical assistance necessary for the execution of the national agricultural census by the DSC. The CDR is in the process of negotiating a contract with the Food and Agriculture Organization (FAO) of the United Nations to provide assistance to the DSC in the execution of the planning and preparatory phase of the agricultural census. MOA has ANNEX I Page 3 of S expressed a preference for the FAO, which may be awarded a new contract under the AIDP financing, to provide TA to DSC for the implementation of phases 2 and 3 of the census. In addition, the CDR would provide advice and support to the GP (as requested by the GP) in the preparation, evaluation and execution of procurement through ICB procedures. The CDR has the capacity to undertake these functions through its existing Program Management Unit (PMU) established under the Bank-financed Emergency Reconstruction and Rehabilitation Project. In case the PMU ceases to exist, the CDR would put in place alternative implementation arrangements that are satisfactory to the Bank. Tender process and contracting for the construction and equipment of the Ghazir center would be undertaken by the CDR. For ease of operation, procurement of items with a value of less than US$10,000 equivalent would be implemented directly by the DSC under delegation from the CDR. The Directorate of Studies and Coordination (DSC) 6. The DSC of the Ministry of Agriculture would be responsible for the field execution of the National Agricultural Census and the establishment of a permanent system for agricultural statistics including the creation of the Information Management System (IMS) and documentation center at Ghazir. The DSC would require a significant amount of Technical Assistance (TA) for the implementation of the Census. This TA would be procured by the CDR for the DSC under one package. The permanent system for agricultural statistics would evolve from upgrading the capacity of the existing statistical service within the DSC. Information gathering for the census would be undertaken by enumerators hired by the DSC; they would be supervised by existing MOA staff and by incremental contractual staff to be recruited under the project. The processing of the census data and cross-tabulations would be executed on computer systems purchased under the project. The analysis of the data and publication of the census results would be the responsibility of the Ministry of Agriculture. The DSC would also be responsible for the execution of the IMS and the operation of the documentation center at Ghazir. Detailed designs for the Ghazir center are already under preparation by architects working for MOA. In September of each proiect year starting in 1997. the DSC would prepare an annual action program for the agriculture census and IMS activities planned for the following calendar year. This annual action program would then be submitted for review and clearance by the Bank. through the CDR [para. 8.01 (1)]. Coordination Arrangements 7. A Proiect Coordination Committee (PCC) would be established. The CDR would establish a committee to coordinate the implementation of the subcomponents related to the provision of institutional support to the DSC [para. 8.01 (m)]. It would meet twice a year in March and September to review project progress and to sanction the annual action plans and progress reports prepared by the DSC and the consultant providing the technical assistance to the execution of the agricultural census. The PCC would be headed by a representative of the CDR and would include a member of the DSC of MOA. In addition, there is an imperative need to ensure that a consensus exists among the concerned agencies and users of agricultural statistics, including the private sector and academia, on the methodology and goals to be achieved by the proposed national agricultural census. For this purpose, the MOA would maintain the recently created Agricultural Census Steering Committee, which would be responsible for reviewing and approving the statement of obiectives and methodologv of the proposed census as well as for the supervision of the data analysis and publication of the census results [para. 8.01 (n)]. The committee is headed by the Director General of Statistics (in the Office of the president of the Council Of Ministers) and its executive secretariat is assured by the Director General of MOA. In order to coordinate land and water development activities and agricultural roads and optimize environmental benefits, the GP would coordinate its proiect activities with MOA's Directorate of Rural Development and Natural Resources, the Ministry Of Environment (MOE) and NGOs [para. 8.01 (m)]. This committee ANNEX I Page 4 of 5 would be headed by the Chief of the GP's Environmental Information and Monitoring Committee (EIMC) and include representatives from MOA, the MOE and NGOs such as the Muawadh Foundation. B. Implementation and Supervision Plan 8. The project would be implemented over a six-year period. An implementation schedule is given in Appendix 2. The 70 km-program of agricultural roads already defined would be implemented during the first two years of the project (SAR - Annex III). For land and water development and rehabilitation activities, farmer and community requests for which studies have been completed by the end of March of each year would be implemented during the spring and summer of that year. For agricultural roads and during the first year of the project, studies, designs and tender documents would be completed for the agricultural roads to be implemented in year 3 of the project and their bidding procedure would be completed in year 2 of the project. In years 2 and 3 of the project, designs and bidding process would be completed for the year-4-program of roads. The IMS of the DSC and the agricultural census would be completed in years 3 and 5 respectively. Phase one of the census ( development of methodology, planning and staff training), under financing from the on-going Bank-financed Irrigation Rehabilitation and Modernization Project, would start during the second half of 1996. Phase two (methodology, recruitment of staff, conduct of census) and phase three (data inputting, analysis and publication of results) of the census would be financed under the AIDP and would take a total of 4 years to complete. Borrower Contribution 9. The GP and the CDR would be responsible for coordinating the arrangements for review missions by the Bank and other co-financiers and for providing the information required by missions. At least one member of the GP's executive committee and the Director of the DSC would accompany review mission to the field and participate in project reviews. Semi-annual Rrogress reports would be submitted at the end of March and September of each proiect-year by the GP for its activities and by the MOA's DSC (through the CDR). These reports would focus on: (i) the status of physical progress in agricultural roads, land and water development and institutional support activities, including the conduct of the agricultural census etc.; (ii) the status of award of contracts for civil works and procurement of goods; (iii) progress in the conduct of studies, designs and tendering of works and activities to be implemented during the coming semester; (iv) the status of technical assistance, studies and training; (v) brief summary of information on various key project monitoring indicators; (vi) the annual work program and budgetary requirement for local funds; (vii) the status of the Bank disbursement, including pending withdrawal applications and project expected disbursement for the following semester; (viii) a summary of actions taken in response to issues raised during the previous supervision mission; and (ix) the status of other issues, such as legal covenants, accounts and audit and project staffing. Bank Supervision Missions 10. Review missions would normally be held twice a year, except for the first year when an additioiial project-launch mission would be undertaken immediately after project effectiveness. Supervision missions would normally take place when semi-annual reports have been produced by the Borrower's agencies (after March and September of each year). Staffing of project-launch and supervision missions during the first year of the project would include the Task Manager (Agriculturist), a Civil Engineer, a Soil and Water Conservation Specialist, a Statistician, an Economist and a Monitoring and Evaluation Specialist and would require a total input of about 20 staff-weeks (sws) for the first year. For subsequent supervisions, the inputs of a Civil/Roads Engineer, an Agriculturist and a Statistician would be required. Supervision missions would also make use of local and international expertise made available ANNEX 1 Page 5 of 5 to the project by the technical assistance component. A mid-term review of all project activities would be conducted jointly by the GP, the CDR, the DSC, the Bank and IFAD. In preparation for the mid-term review, the GP and the CDR, assisted by the DSC, would prepare a detailed report for submission to the World Bank by December 31, 1999; the mid-term review would take place in March, 2000. In addition to the above, an Implementation Completion Report (ICR) would be prepared by the GP and the CDR and submitted to the Bank no later than six months after the project completion date. Assurances have been obtained at negotiations that the GP and the CDR would each submit: (i) a detailed progress report for the mid-term review by December 31, 1999; and (ii) an Implementation Completion Report not later than six months after the proiect completion date [para. 8.1 (n)]. C. Monitoring and Evaluation (M&E) 11. The M&E of project achievements would be the responsibility of the GP and the CDR (the CDR M&E report would be based on information gathered and reports submitted by the DSC). Project M&E activities would have the two-fold objective of generating information on progress of implementation and on the achievement of project developmental objectives. For the GP-executed activities, implementation progress would be assessed on the basis of achievement per region of the annual work program targets in terms of number of km of roads constructed, number of hectares terraced, number of m2 of retaining stone wall constructed, etc. Periodic surveys would be carried out to monitor the use of terraced and developed lands, production performance and farm incomes. For the DSC-executed activities, implementation progress would be assessed on the basis of the completion of various phases of the NAC and the establishment of the IMS and documentation center at Ghazir. A set of monitoring indicators are listed in Annex 3. The GP and the CDR would include in their respective semi-annual and annual progress reports information on key target indicators and analyze project constraints giving proposals for their resolution. I ANNEX I ADpendix I Page I of 2 THE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJET Green Plan Current Procedures 1. Since its inception, the Green Plan has adopted a demand-driven approach to the conduct of its activities. The GP focussed specifically on the development of privately-owned lands and on improving access to isolated rural areas. To implement its mandate, it enters into a partnership with farmers, to share with them the cost of land development and natural resources conservation activities. 2. The procedure used by the GP to serve the rural communities is relatively simple. For land terracing and water resources conservation, requests for assistance are made by individual farmers by completing a standard form provided by the GP. When the budgetary resources are likely to become available, the development proposal is reviewed by the GP's regional staff (between January and March of each year) and if approved goes to GP headquarters, where it is verified and signed by the GP's executive committee members. The approved and signed request is then reviewed, as are all requests for assistance submitted to the GP, by a resident auditor (controleur financier) from the Ministry of Finance (MOF). Before the works start (usually in May of each year), farmers are informed of their share of the financing and are requested to deposit the calculated amount at the treasury. After receiving the treasury deposit slip, the GP proceeds with hiring contractors (for mechanical works such as earth moving and ripping) or allowing farmers themselves to initiate the manual works (such as terrace retaining wall construction, concrete reservoir construction and tree planting). Mechanical works for land terracing are awarded to private contractors through advertised tenders indicating the price the GP would pay for the earth moving works under various conditions. Interested contractors come to GP headquarters and are given through mutual agreement a contract for works in a given region. After completion of the works contractors are paid directly by the GP. 3. With respect to agricultural roads, farner groups (20 to 30 farmers per km of road, i.e. about 30 ha of agricultural land) or communitie organize themselves and make a written request to the GP for an agricultural road. In their request, farmers inform the GP that they donate the land on which the road would be constructed. With the request in hand, the GP's regional office conducts a preliminary study and alignment of the road and verifies with local authorities, communities and with the farmer group itself the needs, commitment and feasibility of the road. Once this is confirmed, the proposed road is included in the waiting list. When funds become available, proposed roads are entered in the work program on a first- come, first-served basis. Their feasibility and design study is given to private consulting firms and the GP starts the process of voluntary expropriation of the lands on which the road would pass. When all farmers agree to give up their share of the land for the road, a presidential decree is issued for the expropriation. The road designs are verified by the GP staff, who prepare bid documents and advertize and tender the works on a competitive system. Past experience indicates that after the road is constructed, beneficiary communities who have supposedly committed themselves to its maintenance, are usually unable to honor their commitments. Until recently, the GP was not mandated or funded to maintain the agricultural roads it builds. As a result, many of the roads built in the past are in urgent need of repair. The Ministry of Public Works (MPW) has the responsibility and would maintain all the agricultural roads that would either connect two existing secondary roads or lead to a village. For the remaining "non- classified" agricultural roads, the GP needs to receive before negotiations, a clear mandate from the ANNEX I ApDendix I Page 2 of 2 concerned Ministries for their maintenance. The financial costs of road maintenance have been included in the project. 4. Present Cost-Sharing Arrangements. Under present cost-sharing arrangements, farners participate by sharing with the GP the costs of land development and conservation (land terracing, retaining walls construction) and water resources mobilization and conservation (hill ponds, concrete reservoirs, localized irrigation systems). For agricultural roads, farmners participate by donating free of charge the land required for the road. Under these arrangements, all farmers who can produce the required proof of ownership (or a seven-year lease of titled land) of the land they wish to develop, are eligible to receive a grant from the Government through the GP. The main features of present cost-sharing arrangements between Government (Green Plan) and beneficiary farners are as follows: (a) A one-time aggregate ceiling amount per farmer of LL10 million (US$6,289). This total amount can be drawn upon in one or several installments and applies throughout the farmer's entire lifetime; and (b) Farmer's contribution is related to the total cost estimate of the development work he wants to undertake. Cost-Sharing Levels at Various Development Costs Size of Area Developed Farner Contribution (% of Cost) "Eligible Coste' Real Costs' 0.5 ha 13.0% 57% 1.5 ha 35.0% 68% 2.0 ha 67.5% 84% 3.0 ha 78.0% 89% a/ Cover only the cost of land terracing, retaining walls, soil ripping, rock removal, hill-pond construction and localized irrigation system; total cost about LL 13 million per ha (US$8,175.0). _/ Covers in addition to a/ the cost of soil preparation, basic fertilization, planting, seedlings, replacement of trees, crop establishment cost, etc.; approximate total of LL 26 million per ha (US$16,350.0). ANNEX I Appendix 2 Page I of 6 REPUBLIC OF LEBANON AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT Project Implementation Responsibilities and Tentative Schedule Implementation Agencies Target Dates Project Actions __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ CDR GP MOA WB IFAD Start/Completion 1. Project Processing World Bank loan approval X Sept. 1996 IFAD loan approval X April 1997 Follow Up on Loans/Project documents X X X Oct. 1996 (WB) signature by Government May 1996 (IFAD) Submission of Loans documents for Council of X 5 Nov. 1996 (WB) Ministers and Parliamentary approvals June 1997 (IFAD) Securing project investment counterpart funds X X Jan. 1997 for DSC (by CDR) and GP (by GP) activities _ Securing project recurrent counterpart funds for X January of each land and water development and Ag. roads and project year other GP activities (GP annual budget) Securing project recurrent counterpart funds for X January of each agricultural census and other DSC activities project year (MOA annual budget) Parliamentary approval x S S Feb. 97 (WB Loan) Oct. 97 (IFAD) Declaration of project effectiveness X X Immediately after ratification by Parliament. Project launch x x x x x March 1997 II. Project Implementation A. Land and Water Development and Agricultural Roads Comrnnents: Screening farmers and community requests for X January to June each assistance year Fornation of land and water and agriculture X September of each roads annual work programs year Formulation of annual work program for agrl. X September of each census and Inf. Mgmt. System activities year ANNEX I Appendix 2 Page 2 of 6 Implementation Agencies Target Dates Project Actions CDR GP MOA WB IFAD Start/Completion Review and clearance of annual work programs C C Sept. of each year Preparation of component-specific semi-annual x x March and September project reports each year Procurement: Responsibility for contracts for x C C For all prior review land and water development activities (includine contracts procurement of seedlings) and agricultural roads Preparation of terms of reference, technical X C C February to June each specifications and tender documents for project year technical and feasibility studies to be executed by consultants for agricultural roads Conduct of investment feasibility study, X C C February to June each environmental impact assessment and approval project year land and water development assistance and agricultural roads construction Preparation of pre-qualification documents (if X C As necessary applicable Review and clearance of GP's annual C February of each year invitations to small contractors to submit bids for ranking them towards award of contracts for mechanical services to construct land terraces and hill-ponds Review and clearance of ranking of contractors C As required for terracing and hill-ponds Review recommendation for contract award for C As required any single contract for terracing and hill-ponds mechanical works with a value of more than LL 80 million (US$50,000 equivalent) Conduct semi-annual post-review of award of C April and October of small contracts with a value of more than each project year US$12,500 equivalent for terracing and hill- ponds works and US$75,000 for agrl. roads Review and clearance of bidding documents for C one month before all road tenders with a value of more scheduled bid thanUS$100,000 equivalent advertizing Advertise and issue bidding documents x 60 days before bid opening Open and evaluate submitted bids and X Within 30 days of recommend award of contracts bid opening ANNEXI AMpendix 2 Page 3 of 6 Implementation Agencies Target Dates Project Actions CDR GP MOA WB IFAD Start/Completion Review and clearance of bidding evaluation and C Two weeks before no-objection to award of all road contracts with contract award a value of more than US$100,000 equivalent ___ Award contracts X After receipt of WB no-objection Follow up with contractor, supervise and X As required monitor execution of contracts and act on legal issues with contractors Accept delivery of works and authorize X At completion of payment works Execution of payment to contractors x As required Send SOEs and withdrawal applications to x As required World Bank to replenish Special Account Monitor and evaluate project's land and water X Continuous process, activities and their development impact, annual evaluation including farmers' compliance with timely every following year completion of development investments in March Monitor and evaluate agricultural roads X Continuous process activities and their impact on agricultural production and farners' income Ensure maintenance of roads built X April to August each year Prepare, advertize, evaluate tenders and award S X C contracts for all ICB procurement for the land and water and agrl. roads components B. Institutional Support to: MOA's Directorate of Studies and coordination xi January 1997 for formulating the methodology and terms of reference for the conduct of the National Agricultural Census Review of terms of reference for TA to Xi March 1977 undertake National Agricultural Census I/ Drafted by technical assistance and reviewed and cleared by the National Agricultural Census Technical Committee (NACTC) which is headed by the Director of Statistics Department of the Council of Ministers Office and includes members from the MOA, CDR, MOF-Land Cadastral Office, private sector and a representative from one Lebanese university. ANNEX I Appendix 2 Page 4 of 6 Implementation Agencies Target Dates CDR GP MOA WB IFAD Start/Completion Prepare technical specification for goods and X March 1977 TORs for services Advertise and evaluate tenders X S August 1977 Review and give no-objection to all final tender C June 1977 and later documents, bid evaluations and recommenda- on as required tions for awarding contracts for all ICB contracts and for contracts with a value of US$150,000 for works and goods and US$50,000 for individual consultants and US$100,000 for consulting firms Award all contracts for this component after X C September 1977 WB clearance and follow up with contractors Accept delivery of works, goods and services X As required and authorize payment Execute payment X As required Send SOEs and withdrawal applications to X S As required World Bank to replenish Special Account _ _ _ __l Recruitment of technical assistants (FAO) to X S January 1977 continue with the conduct of the National Agricultural Census (NAC) Award new contract to FAO or extend existing x s C March 1977 contract with FAO2 to continue provision of technical assistance for the conduct of the agricultural census Monitor and evaluate progress of NAC X Through 1997, 1998, 1999 Allocating incentives to national staff at the x 1977, 1988, 1999 DSC and to technical committee members from the local budget Procurement of eligible small items (less than x As required US$10,000 equivalent) through local shopping _ _ Analyze and edit results of National X4 1988 and 1999 Agricultural Census 2/ Existing contract with FAO is financed under the World Bank/lFAD-financed Irrigation Rehabilitation Project. 3/ By the National Agricultural Census Technical Committee. 4/ By the Directorate of Studies and Coordination through FAO as a contractor for technical assistance to undertake the agricultural census. ANNEXI Avpendix 2 Page 5 of 6 Implementation Agencies Target Dates IProject Actions- - .I_ _ _ _ _ _ _ _ _ _ _ _ _ _ CDR GP MOA WB IFAD Start/Completion Ensure publication of results of agricultural X 1999 census and maintain and upgrade agricultural sector database C. Institutional SupPort to the Green Plan to bIDlement Project Activities Formulation of terms of reference for all X June 1977 technical assistance required by the GP Review and no-objection to TORs C July 1977 Pre-qualification, recruitment and award of X As necessary contracts for technical assistance with contracts of less than US$30,000 equivalent per contract Pre-qualification, recruitment and award of X C As necessary contracts for technical assistance with contracts of more than USS30,000 equivalent per contract _ Formulation of technical specification for all X C January 1977 specialized equipment _______ Procurement of equipment and vehicles under S X C September 1977 ICB Award of ICB contracts, follow up with s x C Sept. 1977 and as contractors and take legal action as required _ necessary thereafter Accept delivery of equipment and authorize S X As necessary payment Allocating incentives to national GP staff from X Throughout project the local budget life D. Proiect Coordination. Disbursement, Accounts and Reporting Chairing and secretariat of PCC for MOA X s March and Sept. of component each year Reviewing annual work programs and progress X S C March and Sept. of for agricultural census and IMS component each year Management of project special accounts x x Throughout project life Withdrawal of project proceeds X X As required Maintaining project accounts X X Throughout project life ANNEXI Appendix 2 Page 6 of 6 Implementation Agencies Target Dates Project Actions CDR GP MOA WB IFAD Start/Completion Audit reports X X September of each project year starting in Sept. 1998 Preparation of Project ICR x x x December 2002 X Preparation/Responsibility S Support C Clearance CDR Council for Development and Reconstruction GP Green Plan MOA Ministry of Agriculture, Directorate of Studies and Coordination (DSC) WB World Bank ICR Project Implementation Completion Report ANNEXI Apjendix 3 Page 1 of 3 THE LEBANESE REPUBLIC AGRICULTURE INERASTRUCTURE DEVELOPMENT PROJET Procurement 1. Procurement responsibilities would be vested in the GP and the CDR. The GP would be responsible for all procurement, including ICB, relevent to the land and water development, agricultural roads and its own institutional strengthening sub-component. The CDR would be in charge of all procurements relevant to the sub-component of MOA's DSC. The GP has had extensive experience with implementing small works packages for agricultural roads as well as land and water development activities that would be financed by the proposed project. The DSC, however, has not had such extensive experience with procuremea1t and would need the support of the CDR and the institutional strengthening planned under the project. All goods and works to be financed from the proceeds of the Bank's loan would be procured in accordance with the Bank's Guidelines for Procurement under IBRD Loans and IDA Credits. The procedures to be adopted are given below and procurement arrangements are summarized in the attached table. 2. Civil Works. Several procurement arrangements are envisaged: (i) Civil works contracts for agricultural roads would generally be of a small size, and even when packaging was possible,would have a maximum contract size of about US$0.5 million. These contracts would be scattered throughout the five regions of Lebanon and would not attract the interest of international contractors. The rural roads component and the documentation center building, estimated to cost US$0.35 million, would be implemented according to National Competitive Bidding (NCB) procedures, acceptable to the Bank, using standard bidding documents modelled after the Bank's Standard Bidding Documents for smaller works. (ii) Implementation of the land and water conservation and development component, which consists of small and scattered parcels of land terracing and hill reservoir construction, would not be susceptible to normal contracting procedures. The current contracting procedures for these works (referred to as mechanical works) is to parcel out annual work loads to small individual contractors in each area. The cost of each parcel is based on unit rates set up by the GP and finally negotiated with a short list of contractors. The GP would introduce the necessary modifications to its current direct contracting practices for mechanical works in land terracing and hill-ponds by small local contractors, to make the process acceptable to the Bank. To make the process more competitive and transparent, GP would, for works implemented under the project, advertize annually and invite contractors to submit bids. The annual advertisements would include scope of work in each region and area, volume of works and base unit rates proposed by GP. Contractors would return their bids specifying percentage increase or decrease to the base rates they would be prepared to accept, equipment available to them, volume of works they would be prepared to undertake and areas they would be prepared to work in. Based on the submitted bids, the GP would select the lowest evaluated bidders for each region and area and draw up a priority list of contractors to award works to. (iii) Construction of stone terrace-retaining walls and concrete basins would be implemented by local communities with GP supervision. (iv) Where no suitable arrangements for NCB procedures for civil works(land terracing and hill ponds) are possible, construction may be undertaken by beneficiaries under Green Plan's supervision and cost sharing arrangements in accordance with procedures acceptable to the Bank up to an aggregate amount not exceeding US$1.2 million equivalent. 3. Equipment and Vehicles. All equipment and materials estimated to cost more than US$0.15 million equivalent per contract, mainly equipment for surveying, office equipment, computers, audio visual ANNEXI Apvendix 3 Page 2 of 3 equipment, GIS equipment, and vehicles (with the exception of the first four vehicles needed to expedite project start-up) would all be procured under ICB procedures. For purposes of economy and efficiency in procurement, the requirements of the project would, where feasible, be packaged into contracts greater than US$0.15 million in value. Lebanese manufacturers competing under ICB would receive a preference in bid evaluation in accordance with Appendix 2 of the IBRD Procurement Guidelines. International shopping (IS) with at least three quotations from at least two eligible source countries would be used for contracts estimated to cost less than US$0.15 million equivalent each, up to an aggregate amount of US$0.6 million equivalent. National shopping (NS) would be used for the procurement of off-the-shelf items costing less than US$50,000 per contract and for the four vehicles required for project start-up, up to an aggregate amount of US$0.30 million equivalent. Direct contracting (DC) would be allowed for items of a proprietary nature or items required to ensure compatibility with existing equipment up to an aggregate amount of US$0.10 million equivalent. Seedlings and irrigation equipment would be purchased directly by farmers under GP technical supervision and cost sharing arrangements. 4. Technical Assistance and Training. Engaging consultants to support project implementation agencies and to conduct studies, engineering and supervision work would be in accordance with World Bank Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as an executing agency (August 1981), using the Bank's Standardized Letter of Invitation (LOI) and sample forms of Contract for Consultants' Services. The project would provide for a total of about 120 person- months of consulting services of which about 65 person-months would be of local consultants. Training services would be obtained mainly through local universities and training institutions or through specialized UN agencies. 5. Procurement Review. All contracts for goods awarded through ICB and all consultant appointments above US$ 50,000 for individual consultants and US$100,000 for firms would be subject to prior Bank review. Civil works for rural roads components would be subject to prior review for single contracts with a value above US$100,000. Single contracts for mechanized works for land and water development with a value of more than US$50,000 are subject to prior review. All other contracts would be subject to selective ex-post review by the Bank. It is estimated that these limits would result in prior review of about 50 percent of total contract value. This relatively low coverage by prior review is justified by the high number of repetitive contracts for land and water conservation and for rural roads, as well as a high intensity of post review covering about 40 percent of contract value. 6. Procurement Arrangements for CDR Implemented Components on Behalf of Ministry of Agriculture. Procurement by the CDR would be undertaken according to Bank guidelines and be consistent with the procedure to be followed by the GP where applicable. ANNEX I Appendix 3 Page 3 of 3 Summary of Proposed Procurement arrangements Procurement Method Procurement Category ICB NCB OTHER N.B.FY TOTAL Civil Works 25.0 3.3 5' 12.01' 40.3 (20.0) (0.4) (20.4) Orchard Establishment 4.96' 4.9 (3.9) (3.9) Additional Investment by 44.8 44.8 Farmers Equipment and Vehicles 1.6 1.0"i 2.6 (1.3)1' (0.8) (2.1) Technical Assistance 1.12' 1.1 (Consultant Services) (I. 1) (1.1) Training 0.72' 0.7 (0.7) (0.7) Studies, Engineering 2.83' 2.8 and Supervision (2.8) (2.8) Incremental Operating 7.68' 7.6 TOTAL 1.6 25.0 13.8 64.4 104.8 (1.3) (20.0) (9.7) (31.0) Note: Totals may not add up due to rounding. ' Figures in parentheses represent amounts financed by the Bank. 2' Non-Bank financed (Government, Farmers and IFAD). 2' Consultants and TA Services recruited in accordance to Bank's Consultant Guidelines. 4/ Financed by IFAD for the construction of terrace-retaining walls. 5/ For construction of small concrete basins by the local communities under G.P. supervision and according to procedures acceptable to the Bank. 6/ Seedlings and irrigation equipment purchased by farmers under GP technical supervision and cost sharing arrangements. ' International shopping, national shopping and direct contracting (I.S. = US$0.60 million. N.S. = US$0.30 million, D.C. = US$0.10 million). ' Project Recurrent Costs ANNEXI Appendix 4 Page 1 of 3 THE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT Disbursements 1. The proposed Bank loan of US$31.0 million would be disbursed against the categories and at the rates indicated in table below. Disbursement would be made against full documentation, except for payment against contracts of less than US$150,000 equivalent for goods, US$100,000 equivalent for works, US$50,000 for mechanized works for land and water development, US$100,000 equivalent for services with consulting firms and US$50,000 for services with individual consultants (including training and studies), which would be reimbursed against statement of expenditures (SOEs). Documentation related to SOEs would be retained by the GP and the CDR, each for the activities for whichit has implementation responsibility. Assurances would be obtained that, for all expenses made on the basis of SOEs, the Government of Lebanon (GOL) would: (i) maintain or cause to be maintained records and accounts reflecting such expenditures; (ii) ensure that all records evidencing such expenditures are retained until at least one year after IBRD has received the last audit report; (iii) have the records and accounts of the SOEs, including those for the Special Account for each fiscal year, audited by independent auditors acceptable to IBRD; and (iv) furnish to IBRD the audit reports, including a separate opinion on the SOEs, no later than six months after the end of each fiscal year. 2. Given the long interruption in lending to Lebanon, there is no disbursement profile for the country. The implementation period for the project is estimated at six years. The estimate is based on the implementation capacity of the CDR and the execution capabilities of the project-supported Green Plan and Directorate of Studies and Coordination of MOA. Project implementation would use institutions and procedures (with minor modifications) already in place. It is anticipated that disbursements would be completed by June 30, 2003, about six months after scheduled project completion. The disbursement profile closely follows the disbursement for the on-going Irrigation Rehabilitation and Modernization Project. Because project funds will be disbursed through two Special Accounts (one for the GP and one for the CDR), a disbursement plan for GP and another for the CDR have been formulated and are shown below along with a global disbursement plan. Proposed Disbursement Plan for the GP US$ million Percentage of Expenditures Category equivalent to be Financed 1. Civil Works/Buildings (a) Land and Water Development 9.5 80% (except terrace retaining wall construction) (b) Agricultural Roads 10.0 80% (c) Buildings 2. Goods (including seedlings) 5.0 80% 3. Consultants' Services, Training, Studies 3.0 100% 4. Unallocated 0.7 Total 28.2 ANNEX I AvDendix 4 Page 2 of 3 Proposed Disbursement for the CDR US$ million Percentage of Expenditures Categorv equivalent to be Financed 1. Civil Works (a) Building 0.35 80% 2. Goods 0.70 80% 3. Consultants' Services, Training, Studies 1.75 100% 4. Unallocated Total 2.80 Proposed Disbursement Plan for the Whole Project US$ million Percentage of Expenditures Category equivalent to be Financed 1. Civil Works/Buildings (a) Land and Water Development 9.50 80% (except terrace retaining wall construction) (b) Agricultural Roads 10.00 80% (c) Buildings 0.35 80% 2. Goods (including seedlings) 5.70 80% 3. Consultants' Services, Training, Studies 4.75 100% 4. Unallocated 0.70 Total 31.00 3. Special Account. To facilitate disbursement against eligible expenditures, the Government would establish two Special Accounts in the Central Bank. The first to be operated by the Green Plan and the second by the CDR; both accounts would be operated under terms and conditions satisfactory to the Bank. The Bank would make authorized allocations of US$2.5 million in the special account of the GP and US$0.3 million in the Special Account of the CDR. Initially, the allocations would be limited to US$1.5 million for the GP and US$0.2 million for the CDR. The full authorized allocation could be claimed when disbursements reach US$4 million and US$0.5 million for the GP and the CDR respectively. The GP and the CDR would submit replenishment applications for the special account on a monthly basis, or when about 20 percent of the initial deposit has been utilized, whichever comes first. The replenishment applications would be supported by the necessary documentation, bank statement of the special account and a reconciliation bank statement of the special account against Bank records. ANNEXI Avpendix 4 Page 3 of 3 Estimated Disbursement Schedule for the Bank Loan (US$ million) IBRD Fiscal Year IBRD Fiscal Year FY97 FY98 FY99 FY00 FYOI FY02 FY03 Annual 2.0 3.0 4.9 5.6 6.1 6.6 2.8 Cumulative 2.0 5.0 9.9 15.5 21.6 28.2 31.0 LEBANESE REPUBLIC AGItICULTUItAL INFRASTRUCTURE DEVELOPMIENT PROJECT Appraised Sample Land Developiient WVorks l1[lf l Amourn |csacicisr) .Toult Dc% clp. ricosllo Typc of lad Coscc, uf GP' Cosair- Rtgws Rtcqutl Arcs Arcs lrJ a abuse Crops Dewcip. Siusc Siursac Supporl buiiu, Eapecled 1 kre.1 No. Dalc Nowc Nil hi, H.sinfd st I"e t sslabt hi,' W.Il Task (.1. ) (II.) lIHH Coaasils buaih Lbasus kilcib 1o (5) 492 Mnn. ELidutn 10,199 5.000 Iiwgatcd Vcgcab. S,000 200 LkwrocLuss. Ali E4zudsn S00 lcnaulg, 2,300,000 2.500.000 350,000 | cv5lu1g. ripping t2) 44t I;ludiJ 5Lunil) 20,619 ,000 D Rmnfc. 400 Almonds S,000 200111| 2012 Sod uipun NajJi S00 SA000 |u| 2,500.000 1,000.000 4.000.000 650.000 ichabii(0mion I w~~~~~~~salls (200 m ) ll - t3I 545 9/1-4s94 SJudw Fa.dbil 30,061 6,000 lSsgAccd IS0 VcgcLabl. 1,000 200 200 LAnd Uka-1h "5j.a 500 5.000 ichabitiwion SOW . 1,000.000 1.000,000 4,000,000 6S0.000 | | 3dll. k5.stsca SM,at (4) 4/19/94 Abbas 10,199 5,000 liigAicd Vcgculb. 1,000 200 | Lvckup, Mutumad S00 t|na.slg, ELidin 2,S00,000 2,500,000 350,000 |c|cjlujg' |________ |____ _ __cipping. ucaled 151 9,2S6 6,000 OlSVCI. 6,000 141 T enracng t (6) 9,256 2,400 2,400 400 Sx7x2 sWill Lcaacing. (II 9 256 2,314 2.314 160 | ails (I) 92S6 2,312 2,312 XIW JA... Joel 101S lIOW ln Ali I5,000 0,oo000 Kauc.(c 5,200 Ailmonds I0.000 202 AllFnm 300 3,000,000 3,000,000 450.000 XlNjJ4).Jn 3041 I0/1S/9S ManLull MahdJ l0.000 I0,000 KainfcJ I.200 Almonds I0,000 20 2 Alow 300 3,00,000 3,000,000 450,000 hlap).son 3t,44 50/51/S TarL hMiald 50,000 I,O0O Kainfcd 1,200 Olivcs I0.000 14 1 Alow 300 3,000,000 3,000,000 450,000 Al )Ala& 3t4S 50/26/95 Ahlum Ali 9,256 2,314 tjufdcd 100 Alsisonds 2,314 60 20u2 Woniti Nouj ShibiO 750 5.000 beneficjary 1,700,000 300,000 2,000,000 250,000 Al QldO 5043 15042619 A,li hAila 9,256 2,324 Kaufc.l 500 OSso0 2.314 460 14 1 Is Shiblh 7S0 5000 __l_ ___ 1,700,000 2.300,000 4,000,000 6S0,000 .l Qwds 3440 10/26M9 Raots Al Abw 9,256 2,304 RasJnld 7S Ollves. 2.314 60 20 0 Woalicn S.,,,, Asissd Fudlhl 7S0 5.000 bcncliciary Allah 1,700,000 300000 2,000,000 2S0000 I= ~ - ~. = Total AmouAnt U lorfi(iry Tolal De%elp. ELeytlio 1 pe of La-d Concc. of CGP Coaoti- 11tsoa Rtquest ArFa Aeca Irri a above Crop, Deveip. Slons Sturarc Support butioa Espteltd JAIto) NO. Date Name hi, h1 Raiold sea Ie,el suilsabk hi Wall Tank (IL) (Li.) IRR ComIments Al QJ.A 3144 I0/2 6.195 IusI Ali Shibli 9,256 2.314 isincId 75 Vcgtcbl. 2.314 60 200 Wa,1stcic (~uttt.4J _II III I__ 1.700,000 300.000 2,000,000 250,000 lount Lebaso0 Ain Al (I) 120 4J12 I5 Ali hid. Duon 3.000 2.S00 lKsfcd 950 Chsents 2.500 140 5.2s5| 151 a CA1W"b 400 5.000 52 ml Jubua .30.000 1I000.000 7.000,000 1.550.00 4,000.000 650.000 0 Al G6.J (3) 399 8/1"s95 1 am AudAl 10,000 10.000 Kazfcd 1.400 Appis 10.000 21 0 Jubad iRi 400 1.000.000 4.000.000 650,000 AA&) - (J) 407 6/27/94 Tanos Rfuccl 6 4,200 aosfcd 900 Cheeacs 6 huldinp 464 6>S 4X2 I | 6 houljngs jobal Al llaj hosldig 650.100 |30 mlt990 mI s low.a 4.200 5.341 400,000 3.000 30,000 1.680.000 2,320.000 1.920,00 4,000,000 6S0.000 i ibfanQ (4) S74 10/10/9 laflin Pcuos 3 i,500 lnlguscJ 1450 Appk 1,500 302 6U5 4x2 2i0 3 hlsuldgs bqiahst Al liaj holding 300 5,000 64 as' 720 * 722 s ~~~~~~~~~~~~~~~~~~30,000 s213 in' 1I60 5,25,000 1.510.000 1,920.00 4,000,000 65,000 Remed 0 lkYuaww D 51 4103 12/i 1/9S Fayie "nul I55 ltiguied Chcnics 334 16.7 Rainfcd 30.000 10'° ° 'I000.000 1 10.000,0 00 _ ( I, -&.ial Asavoal bemtficiary Ilo9l Develp. Iievstio Type of Load Coacc. ol Cl' Cueri- < Hctseio Kequesi Arcs AFcs IrrJ * absoe Crops Develp. Sloec Siurage Suaport bulisa Ezpeceed 1 tis) No Dilt Nagnc hi, hi, Ns Hisd was kvtl sultbie hi, WVal 'I sGik( 1.) (I. 1 l)Ih Communotls W hN1h i ebasus llabbClcl (1I 4102 11/11 5 I/hllrad 4000 KasLfcJ 500 Olives 480 14 1 AIIM )Jauhil 5000 5,000 _ lohubad _ 2,400,000 2.400,000 460,DOO _ _ Al Naesa 12) 4105 1131 19i l,a" T s 7,b.4 2.000 t Ka&nLcJ 200 A moedS 2.400 202 2 holdings ALIm Awad 1.389 4,000 75,000 .992 1,60.000 1,800.000 220,000 holdmng Al NAi,a (31 791 4/ i94 Jorjes WhJi 1,400 1,000 KItIfcd 200 Almood& 1.000 202 AUlI Al-Aisma 500 SO,000 300,0O S0,000 | Al N.JA- II) 921 611.94 iarimn Saltn 4,326 1,500 K,audc,l 200 Alhomds 1.500 202 40 Jls..lyugs .%LL.u Al Airru 500 7,500.000 7,SOO,000 75,000 Al Naes.- ts5 920 6/L94 SW Saliao Al 4,326 1,500 kainfad 200 Vegcubl. 1,500 200 40 IlduiJLng Akia Amum SOO5 7SO.000 750.000 75,000 AusaAa. 3640 IVI1/95 Fuiss l 4.141 4.141 lr,g.acl 1.400 Appks 11.600 310 ALLot YszbiL 3SO 1 1 s 4,0000000 4,000,000 650.000 I U.,h Al J97 | 1026895 fulis lialan 4,141 4.141 l|igacd 9|00 | Veygub. 4,141 200 K,a fik YssbiL ISO ______ _____ _____ _ _ _ _ _ _ _ _ _ _ _ _____ _____ 600,000 600,000 60,000 AI.l,A 1443 7124-9S |lauan AluaJ| 20,000 13,500 |RniCelJ 600 MMAlerw 135Y0 20|.2 IUalel.. laffu 4IIII300 lNlMibj _ _ _ _______ 4,000,000 4,000000 650,000 ALqA&- 1442 7f24/9S Ksi id aih.i 15,000 13,500 Kain1w 60 Chcn,es 13,50| ISO lIi4jbCh )| gmI 300 ________ _____________ _______ _______ _ _ _ _ 4,000.000 4,000.000 650,000 Al Nab| lulesunbe Ali 27.690 6,900 IeeilAcwd 1.100 Cbenaics 9,600 ISO !shccl l l |SlviF | 2700 250 ILiab L 9,600 2,400.000 2.400.000 2.400,000 ANNEX III Page 1 of 3 THE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT (a) First Two-Year Program of Rural Roads District | | Length | | Total Cost 1 I I (Gaza) | Name | (km) j Type J (US$) j Costkm j Decree I ERR J Feasibility NORTH LEBANON Akkar Kafar Halda Kfour Al 3.5 Earth 84,000 24,000 2 months 38 Yes Arab Batroum Tanourine Wadi El Jred 2.245 Earth 8,756 3,900 2 months 25 Yes El Koura Amioum Dar Bechtar 1.43 Earth 68,262 47,736 2 months 43 Yes Bacharre Bacharre Bekfraya 4.093 Earth 15,963 3,900 2 months 37 Yes Total Earth 11.268 176,981 15,707 El Koura Afesdik Batrame 3.194 Asphalt 161,285 50,496 34 Yes Zghorta Karamsadeh Namatoura 3 Asphalt 176,265 58,875 Yes 37 Yes Bacharre Bacharre Marlicha 1.236 Asphalt 82,122 66,442 1 month 37 No (environ.) Total Asphalt 7.43 419,672 56,483 1 Total North Lebanon 18.698 596,653 31,909 MOUNT LEBANON Kesrwan Mazraat Kafarzebianne 2.897 Earth 268,074 92,535 3 months 27 Yes El Chouf Majdel El Maouch 2.815 Earth 133,479 47,417 3 months 29 Yes El Chouf El Werhanie Ei 3.932 Earth 162,373 41,295 3 months 19 Yes Zehalta Jbail Bechtelas 1.289 Earth 35,000 27,153 Yes 51 Yes Jbail Gharzous Deir Arbaain 1.967 Earfh 127,611 64,876 2 months 31 Yes Jbail El Moncef Deir Mar 1.229 Earth 59,976 48,801 2 months 30 Yes Mama Total Earth 14.129 786,513 55,667 Jbail Ehmeyel Wardyat 2.67 Asphalt 214,552 80,357 2 months 19 Yes Baabda Qsaiba Ras El Mata 3.715 Asphalt 315,511 84,929 Yes 29 Yes Total Asphalt 6.385 530,063 83,017 Total Mount Lebanon 20.514 1,316,576 64,179 ANN£FXIII Page 2 of 3 District Length Total Cost 1 (Gaza) | Name | L J(km) Type (t1S$) | Cost/km_ Decree | ERR I Feasibility SOUTH LEBANON Saida El Zraiah El Wata 3.953 Earth 82,583 20,891 3 months 40 Yes Saida Kfarmilki-Kfarhatta 1.167 Earth 14,221 12,186 1 month 47 Yes Sour Aybit Reklieh Ain Beall 2.391 Earth 33,833 14,150 1 month 40 Yes Nabatieh Sir El Gharbeih 2.743 Earth 84,312 30,737 Ready 54 Yes Nabatieh Ansar El Mereysseh 7.378 Earth 241,414 32,721 1 month 20 Yes Jezzine Roum Karem El 2.326 Earth 32,000 13,758 2 months 34 Yes Zeitoun Zezzine El Midan El Houranieh 1.868 Earth 87,644 46,919 Ready 26 Yes Marjayoun El Maissat El Wazzani 2.42 Earth 68,765 28,415 1 month 24 Yes Marjayoun El Sawanee Touline 7.672 Earth 233,780 30,472 2 months 25 Yes Kalawi Hasnbaya Hasbaya El Katch 6.123 Earth 130,400 21,297 3 months 36 Yes Total Earth 38.041 1,008,952 23,067 Total South Lebanon 38.041 1,008,952 23,067 _ BEKAA Hermel Wadi El Nayra Jebabe 6.664 Earth 72,689 10,908 2 months 34 No (environ.) El Houmour Hermel Marijheen Aamiri 13.00 Earth 200,000 15,385 3 months 34 Yes Baalbek Boudey El Tell 1.496 Earth 40,000 26,738 25 Yes Baalbek Shmestar El Mazraa 1.965 Earth 60,000 30,534 Ready 37 Yes Zahle Wadi Arrayach Behina 5.736 Earth 98,435 17,161 2 months 20 Yes Bir Hachim West Lebbaya 6.00 Earth 126,500 21,083 1 month 35 Yes Bekaa I West Job Janin Lala 4.5 Earth 109,166 24,259 6 months 27 Yes Bekaa Rachaya El Mouheydasse 2.912 Earth 14,403 4,946 3 months 29 Yes Total Earth 42.273 721,193 15,875 Rachaya Yanta Kfarouk 4.6 Asphalt 149,960 32,600 1 month 25 Total Asphalt 4.6 149,960 32,600 = | Total Bekaa 50.564 879,642 17,397 Total Lebanon Earth Roads 105.711 2,693,639 25,481 _ Total Lebanon Asphalt Roads 18.415 1,099,695 59,717 TOTAL LEBANON 124.126 3,793,334 30,560 = ANNEX m Page 3 of 3 (b) Economic Analysis - Economic Rate of Return (LL '000) 1-30 1 2 3 4 5 6 7 1O 30 Totsi Bwwolsj Chn.. ..stChaofd 2l371,500 2.371.500 Z371,500 24C0.736 2,4t.054 52.6 2.706t.5 3874450 A24.244 1315 TotJ wana Chem" nmwdrarad a 0 0 0 156.25 460.274 969,594 1,736,65 5.419,186 92,2200 TeJ eaSdi Chnema. i km 3,3033M 3,333.720 3X33720 3,3'.721 3x474,190 l619.581 3.820.874 4,055,72 4.64.577 4,815,20 Tol B.naft chnes ,,,rT. 0 0 0 0 108.390 364.912 C14.730 1.33.0 7543,931 2336.6D0 Tot Bw t Aprncchat fr%W*d 1.70498O 1.73,6 1.748,718 1,799,121 1869.746 1.96330 2075.433 2.16205 2 7 2,369.250 T1at Bww8 Apned rwAraad 0 0 0 0 18496 179.410 706.t02 1,580,946 51113.121 8.066.250 Total BEnM Almond inWrnfald 4.67S,200 4.678200 4,745,244 4,9091 5.159.801 5.521,46B 5.946.0B2 6.403.946 7,07.30 7.017.300 Teti BOrntAJrod nlnraWded 0 0 0 0 114.756 539.355 2.27.514 5.301,748 16.364.8 24,0 Tdr OI C astmUkrwed , at6,7s0 2681.750 a661e,750 2.763473 2.952494 3.1685,23 3.531.481 3U3t6,677 4,791.150 4.,791150 Tobl Baert O0-_ nrranrdd 0 0 0 0 0 2e3,761 647,461 13Q2739 4.506.613 20.420.400 ToW l Ba,a Appeessz,soovagd 9.6.e.90 S.M9.9 e 9, o 9.770,403 10.001.179 110390,271 1oa07911 11.446.540 12639.OW I2m,e c Tl Badi Ao8p" n.0afad 0 0 0 0 640.644 2,796s82 4.974,518 1i443.053 433.3 4 40ff,245,00D ToJ Bnaftf Toratoes kngatad 4.425,1 3.406L0 11,01.357 14.144,52t 21.074.773 20.57XCt 35.6750 3s.,e,750 36,e7X750 367750 'Tow Bat Tomatos greenhousesx 0 2.006S9 5,'146e2 9.7110325 15.496.60 21.709.2D4 21025,08 30.246.019 31A00.000 31=.500 Tomt BnEt P _oas dngated 2951.200 511,24 1,2Q.OC6 2321.068 3.65,400 s 1.m1111 6.766253 7,324.753 D32.5S00 &,=0 ToW S1ne3 W_het rwri.d 1.029,7 OD,325 142.76 250,348 373,009 505.724 31.400 631.400 631.400 631.400 T7 tw " Bnlt 334473, 304A.8t 38.1714 11 ,61`14,30 67.538624 373,63 112.466.866 V26I7362 1833116 E6.34.97 Feeder Road* Co n LL'0 3.W47.460 3..250 4ss7201D 50511.200 4.199,500 3246,100 651.000 .tM1100 1..W100 Green PLan Ingtuttoaal Supp@Et Cad in LL'COO 64 566,800 325950 2s56560 MM 24ZO 618I560 256,650 242.000 Envtomnntal Manitodng Coo en LL00 2n700 321,700 27esoo 121,350 111.600 124.40 12.SO60 67.800 S&O. Ar,icntural Production h CodeCtr Ch6rnssJrasv4ud 0 0 0 0 0 0 0 0 0 0 hvua Cost Chtrns nrawed 0 424,720 6.769 968t435 1227,481 1.38.,275 1.411.063 561.748 a a khCst Coo Cmwnest.Amad 0 0 0 0 0 0 0 0 0 0 kvqat Coas CInem neAtngatd 0 631.90 1.278401 t.v2,37e 2260.375 253.019 2.554,146 ess.795 0 0 k"aCost ApncatnsLk"uIml 0 0 0 0 0 0 0 0 0 a kNSaL Ccat Apnco neod ained 0 22.129 425.513 a09.= 766974 W67.410 6782M 325603B 0 0 Irrvl. C Aknond dJsaMed 0 0 0 0 0 0 0 0 0 0 kyL Coo ATnond notrairded 0 1. 2 1,UK9,43A 2.361.843 2363.0e2 3 732 3.353.863 1.145.47t 0 0 k.- CostOIrssintw$ed a 0 0 0 0 0 0 0 0 0 rvs. Cost Ow r na.4ranvd 0 1.16727 1,643.478 2.75.015 3411.916 3.866.G 3.,964 1.800.671 0 0 brre Cog Appla .aLmnnend 0 0 0 0 0 0 0 0 0 0 kyroa Cot Apples, ne rnGatad 0 1.n112 1.90n76S 2tes.9s7 3.346.2t7 3.754.901 3.773.= 1.257.411 0 0 Tote Coo Torma irnged 3.443.418 2.500.71 5.sa5,e2t 10,391,064 15.4112.21 20.s0s.7e5 26.207.163 26.07,163 26.37.183 26207.183 ToJ Cost Tomae G(eerhoufA . 0 0.1.379 11.15294t 162,.878 21.746.364 20.717,631 30-2596 19.83781 20.M1000 30.14ZO Totm CogA Paoo kr%Wd 2. 124 4A2.057 1.000.= 11.s10.01 3.073,765 4 ,27,325 s467.,44 5.73Z.917 6.333 6.113.507 ToA Cod Wheat Ra.nIed 11.676131 Qn774 148,564 26D.510 361,150 526.252 es7,030 667.=30 47,0 t2946 Total lnvesunent Cost Total PerenrAia 7646.M73 14,3737 26,I36.I36 40,J01.C06 64e6,6 6f.332.176 7.4,271 fI.171*6 g2M4.7 6334* 0 7.,41.673 14.947.967 26.09.0036 40,401,06O 54.666,663 66.33Z176 76,445.271 58,171.248 53040,750 53.346* Oparadg Cost Oper CosA Chemaes. inamwitaed 1,053.511 1.070438 1.076a.73 1.10.933 1,164,803 1.224.4861 124.077 1.364,467 11.462337 1.503.216 Open. CosA Chai.s nairufed 0 16a.S 323.064 5,4.327 6SM.102 1,.74.361 1,700.20 1,916.906 3X0S,143 4,13.481 Ope. Cod ChIne a.stlrigated 1,.s556 1.657126 11,664.38 11667,963 1.669,056 1,717,239 1.756.560 1,80736 1.S4,247 1,S45,514 Oper. CoSt COnmfr img5ted 0 341 eD 764.198 1.35s74s Z086.381 Z943.02D 3,5061 4,100.794 6.005.504 9,16427 Op.' Cost Apncot axwtira&Wd 706.C37 716.110 72D.570 739,807 755.356 765.268 15175 IM.86 6o901 use36 Oper. Cood Apnct nend4fud 0 121.079 2m3,673 475.010 ts4.043 1,064,156 1,410,477 1,703.047 Xne69 3.4K553 Opar. Cost Amond mtjnned 1,457,2 1,472.339 1,471,111 1,5o963 1,517,664 1.5,4409 1,510994 1.6S0912 1.7atts 1,725.273 Oper Cod Almond rnadinrndd 0 360.304 776,426 1,4311133 21146.993 30661.721 4.00448 4.471.514 6.574,324 7.47719 Oper Coat Olr.esa tnginunhed 1.145,313 1,161.1 1.171.559 1,214.112 1.250,967 1.320.662 1,3781141 1.431.079 Ies53 1,55622 Op.r. Coat O,.& nedrwrdnd 0 376.26 625,735 1.217.412 1.067.811 Z3114.563 2.811115 2.8117.422 519,170 5.9Xf464 Oper Cost Apples awainstated Z733.66 Z767.66 2^669,210 3,030.985 3.213,802 3.517.450 3e61aso 4.090.197 4,706.U4 4.879.655 Opew. CostApples nrwnAnigtad 0 6.356 1,377,236 Z.83.63 3a774.763 5.778,746 7.1st65.420 .366.1u1 14,639.76 16,373,006 Totra Operating Coat Parrenia Crops 8.74a.127 109.706 13R8. C 16,73263 23,92 26,111.073 32.437.36 3,6.62 4 444 6.64*6 Total rost 1632.a30 29.50,12 43,a33.952 62.54.42 30,11,474 111.31,213 11U,276.370,73 96,9436 103 J86,94 113J72.33 17,055,006 Hot Bandit 17.066.10 A 1 -6163.3 -21,517.1U -27,396,160 -30.1295O .23.479.737 -10,316,3 12 ,362*6 647fAi43 1v421.426 (rmnus ,let ba-nt od axng technology) IRR 34% DlaAyn baneits 0 Yew NPV(LL'I 189,96.174 locreaz u^ lna.^ nt Cost () 0 NPV 5 119.437.845 THE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT 2 KEY MONITORING INDICATORS The following indicators will be used to monitor project implementation progress and the achievement of its development objectives. Project Ycar Activity 1997 1998 1999 2000 2001 2002 Total Plan. _A. Plan. Act Plan. Acl Plan. AcL Plan. Act Plan. A lcL 1. INMPLEMENTATION PROGRESS INDICATORS A. Land & Water Development 1. Land Terracing (ha) 300 410 535 610 660 625 3140 2. Terrace-Wall Construction (ha) 210 265 345 380 445 440 2085 3. Hill Pond Construction (units) 29 43 . 48 55 43 32 250 4. Concrete Bassins (units) 0 8 8 10 13 If 50 5. Localized Wrig. Equip. (ha) 50 50 100 100 150 150 600 6. Seedlings ('000 units) 100 130 160 180 200 200 970 B. Agricultural Roads _ .EarthRoads(km) 20 26 140 I 40 44 44 214 2. Asphalted Roads (Ian) 10 |14 20 | 20 | 16 6 86 C. Institutlonal Support - GP I .CcMed Enviroamental Info. and I I Monitoring Committee becomes | Operiona j - - - I 2. Procurement of vehicics 10 2 2 0 0 0 14 ____________ ___________Projeci Yeau Activity 1997 1998 1999 2000 2001 2002 Plan. Act. Plan. AcL Plan. AcL Plan. Act Plan. Act. Plan. Act. Plan. ACL 3. Procuremcnt of cquipment (units) x x x x 4. Consultant services (rinmonth) 5 3 3 0 0 0 II 5. Training (mnmonth) 3 I _ I I 0 0 6 6. Studies (m/month) 2 2 2 2 2 2 12 D. lsitiutiosal SuppL MOA I. Construction of Documentation Ccntcr at Ghazir (m) 900 0 0 0 0 0 900 2. Procurement of census and Documcntation Equipment x x 0 0 0 0 3. Vchicles 7 0 0 0 0 0 7 4. Tcchnical Assistance (m/month) 31 29 15 0 0 0 75 5. Training (ri/month) 10 4 1 1 0 0 16 6. Studics (lump sum US$ million) 01.| 01 0. 1 0I0 0.1 0.5 I1 ACIIIEVEINIENT OF PROJECT OBJECTIVES (To be monitored through periodic surveys conducted by the EIMC) 1 Bascline survy to asesmscrop I I I I I I 6 yields and cropping intensity in areas to be served by roads 2. Pcrccntage of taeced land that was actually developed (within 2 years of tcrracing) - - 300 410 535 610 3. Survey of crop yield: - Annual and seasonal crop I I I | 4 - Fruit trees [a various ages of I | 2 trces (5 years-10 years) not planted by projcctl _ ________ Project Year Activity 1997 1998 1999 2000 2001 2002 Total Plan. ACL Plan. ACL I'lan. AcL Plan. Act. Plan. Act. Plan. AcL Plan. AcL 4. Results of survcy to determine I I I I I 5 numbcr of projcct beneficiaries in poor categories 5. Ex-Post assessment of roads I I I I 1 5 environmental imnpact (EIMC) 6. Survey to assss cffect of mad on I 4 agricultural development (yields -t cropping intensity) . _ 7. Formulation of policy and strategy I I I 2 by MOA _ S. Publication of agricultumal census I resuLtS 9. Documentation center being uilized ANNEX V Page 1 of 3 THE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT Environmental Analysis, Monitoring and Plan of Action 1. The two project components that would have an impact on the environment are the land/water development and conservation component, and the agricultural roads component. It is clear that land and water development and conservation activities such as land terracing, terrace consolidation, harvesting of runoff water in small hill-ponds for irrigation and forest-fire fighting purposes and the use of efficient localized irrigation systems would help conserve soil and water resources and have a positive effect on the environment. It is also clear that when access to rural areas is improved, populations and, to a certain extent the environment, are expected to benefit from these roads. However, the activities under both of these project components may also have temporary or permanent detrimental effects on the environment. While the positive effects are welcome and expected, the project should guard against causing direct or indirect harm to the environment. The objective of this annex is to briefly analyze the environmental aspects associated with the implementation of land and water development/conservation and agricultural roads components proposed under the project and indicate the actions that would be taken to avoid and/or to mitigate potential harmful effects to the environment. 2 The proposed project would not introduce radically new concepts to land, water and agricultural roads development activities in Lebanon, but would support a time-slice of the on-going government programs in these fields. Before doing so, however, it is necessary to evaluate the results and learn the lessons of past experiences. Land and water development and conservation as well as agricultural roads construction activities have been implemented by the Green Plan Authority (GP) since its creation in 1964. Since its inception, the Green Plan has adopted a demand-driven approach to the execution of its activities. During the past thirty years, the GP has helped terrace about 26,000 ha of steep privately-owned land, construct more than 7 million m2 of terrace retaining-walls, 500 hill ponds (average capacity 8,000 m3) and more than 3,000 small concrete basins. The GP has also built more than 1,000 km of agricultural roads. Its global activities benefitted more than 38,000 farmers and about 1,000 villages scattered all over Lebanon. 3. In its project preparation report, the FAO/CP indicates that The GP's past activities have so far achieved global positive environmental impact. However, because of the lack of sufficiently detailed environmental surveys and monitoring, it is not known whether some GP executed activities may have had detrimental effects on the environment. In the FAO/CP report, particular mention is made of some potential risks to the environment. These include inter alia the lack of awareness and analysis of environmental issues in the studies and designs of agricultural roads and land development activities commissioned or executed by the GP; lack of terrace retaining walls in some areas, risk of encroachment on protected forest areas, loss of biodiversity, disturbance of archeological sites, encroachment of urbanization on land terraced by the GP, potential mis-use of chemicals and fertilizers. 4. Under the proposed project a number of actions and safeguards would be put in place to avoid or mitigate potentially detrimental environmental impacts. The first, is the creation within the Green Plan of an Environmental Information and Monitoring Committee (EIMC) whose role ( working paper No.5) would be to, inter alia, systematically include environmental assessments in all studies and designs for ANNEX V Page 2 of 3 land and water development and agricultural roads construction. The EIMC would also formulate mitigating measures which would be implemented by the GP or its contractors during the course of project implementation. The table below lists the major potential impacts and the mitigating measures that would be undertaken by the Project. Potential Impact and Environmental Mitigation Potential Impact Mitigation Measures Lack of environmental awareness Creation of the Environmental Information and Monitoring Committee (EIMC) to carry out environmental assessments on all agricultural roads as well as land and water developments. Financing of environmental awareness campaigns through the media. Lack of terrace retaining walls Future land and water development studies by GP staff to clearly indicate when retaining walls are needed, subsequent GP assistance would be conditional on the agreement of beneficiaries to complete retaining walls. Encroachment on protected forest areas No GP assistance for land and water development within 500 meters of protected or national forest areas would be made available to investors. Agricultural road alignments would be changed to avoid passing through protected areas. Loss of biodiversity EIMU to ascertain through specific studies that areas rich in biodiversity would not be disturbed; assistance would be withheld for land and water developments, and road alignments would be modified. Disturbance of archeological sites Project assisted works not to be undertaken where studies show presence of significant archeological sites. Contracts for land and water development and road construction would require project contractors to stop work, inform the GP and archeological authorities if works reveal any archeological sites. Encroachment of urbanization on lands developed Project beneficiaries to sign written commitment to by the project keep developed land under agricultural production until initial investments are recovered or after GP assistance is re-reimburse. Potential mis-use of chemicals. Ministry of Agriculture is being supported by Bank- financed Irrigation Modernization Project to formulate guidelines for the use of pesticides. Recommendations on the use of fertilizers can be obtained by farmers from private sector suppliers or from regional offices of the MOA or the GP. ANNEX V Page 3 of 3 5. Other potential detrimental impacts on the environment would be identified by the environmental information and monitoring committee which would also develop appropriate mitigation. The EIMC would have responsibility for clearing all studies for land and water development and agricultural roads and would be under the direct authority of the GP's Executive committee. Conditionalities would be included in the project legal documents in order to limit project interventions to those that are environmental friendly. Assurances would be obtained at negotiations that the Government of Lebanon would select land and water develovment activities and agricultural roads on the basis of criteria acceptable to IBRD. 6. Overall, the impact of the project is expected to be positive. The safeguards designed into the project, particularly the creation of the environmental monitoring committee and the inclusion of environmental consideration as a criteria for selecting activities to be supported by the project, would insure that the integrity of natural ecosystems and the environment are preserved. Terms of reference, guidelines and environmental assessment checklists have been produced and are detailed in working paper No.5. More specifically, the project would: (i) reduce soil erosion through the construction of new land terraces and the rehabilitation of existing ones; (ii) harvest and store potentially-erosive runoff water in small hill-ponds and promoting the use of efficient irrigation methods; (iii) help in controlling forest fires by constructing inside forested areas and in collaboration with MOA's Directorate of Forestry 20 water-storage ponds; (iv) improve the socio-economic environment in rural areas by contributing to job creation, improved incomes and better access to rural areas; and (v) contribute to the formulation of informed sector policies, including those related to the management of natural resources, by conducting an agricultural census and establishing a permanent statistical system for the agricultural sector in Lebanon. ANNFX VI Page I of 7 LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT Cropping Patterns and Yields Table 1. Farm Size Distribution and Fragmentation Table la. Farm Size Distribution Farm Holding Size Number of % of No. of in Hectares Holding Holdings Area - ha % of Area 0.5 - 2 44,053 46.2 57,400 8.8 2 - 5 26,809 28.1 106,124 16.3 5 - 10 13,213 13.8 104,949 16.2 10 - 20 5,691 6.0 79,509 12.2 20 - 50 101,893 15.7 50 - 100 5,605 5.9 81,754 12.6 100 + 117,864 18.2 Total Distribution 95,371 100.0 649,491 100.0 Source: Ministry of Agriculture, 1070 Agricultural Census, Unpublished Results Table lb. Land Fragmentation Per Farm Size Number of Parcels Per Holding Farm Size 1 - 4 5 -9 10 - 24 25 + Hectares Percent of Holdings 0.5-2 64 31 5 2 - 5 40 42 18 5-10 27 43 26 3 10-20 28 38 30 4 20-50 20 42 30 8 50- 100 22 33 32 13 100 - 200 42 15 39 4 200 + 32 23 32 13 Total 49 36 14 1 Source: Ministry of Agriculture, 1070 Agricultural Census, Unpublished Results LEBANESE REPUBLIC AGRICULTURE INFRtASTRUCTURE DEVELOPMENT PROJECT Table 2. Areas to be Developed and Estimated Beneficiaries per Region Areas to be Served by Agricullural lloads Km of Areas servcd Total Area Average farm No. of Average Size of Total No. of Roads per kimi of served by size (lia) Beneficiary Farm Ilousehold Bcneficiaries Roads (ha) Roads (ha) llolders North Lebanon 75.0 25.0 1,875.0 5.5 341.0 10.0 3,410.0 Mouth Lebanon 57.0 15.0 855.0 2.0 428.0 6.0 2,568.0 South Lebanon 90.0 20.0 1,800.0 8.5 212.0 6.0 1,272.0 Bekaa Nornh 39.0 30.0 1,170.0 4.5 260.0 10.0 2,600.0 Bekaa South 39.0 - 780.0 9.0 87.0 6.0 528.0 Total 300.0 6,480.0 - 1,328.0 - 10,378.0 Areas to be Terraced and lPlanted with Fruit Trees Terraced Area Planted Total Arca Average Size No. of Benefiting Average Size of Total Nol of Area (ha) to Fruit T rees Developed Developed Farming lIousehold Beneficiaries ____________ (ha) (ha) (hla) lIouseholds North Lebanon 785.0 500.0 1,285.0 0.68 1,890.0 10.0 18,900.0 Mount Lebanon 455.0 500.0 955.0 0.68 1,404.0 6.0 8,424.0 South Lebanon 890.0 500.0 1,390.0 0.68 2,044 6.0 12,264.0 Bekaa North 500.0 500.0 1,000.0 0.68 1,471.0 10.0 14,710.0 Bekaa South 510.0 500.0 1,010.0 0.68 1,485.0 6.0 8,810.0 "a Total 3,140.0 2,500.0 5,640.0 - 8,294.0 - 63,208.0 r GENERAL TOTAL 9,622.0 75,586.0 %!k m :\lebanon\aidp\report\annex6.2 LEBANESE REPUBLIC AGRICULTURtE INFRASTRUCTURE DEVELOPMENT PROJECT Table 3. Current and Future witli Project Cropping Patterns, Yields and Projectionsin Areas to be Terraced and/or replanted as Fruit Trees Cu renit Wilh Project (Ycar 12 - Full Developinent) Resgion/M\ajor Crops . Iicrementlal Area %/u of 'icldl Total Area % of Yield Total ton (Iha1) Total ton/ha Production (Ila) Total ton/ha Production Area ton Area (on Northiern Lebanon Wheat (RF) 385.5 30.0 1.2 163.0 1 .7 -163.0 FalHow 899.5 70.0 - - - - - - Apple (new-irrig.) - - - - 257.0 20.0 30.0 7,710.0 7,710.0 Cherry (new-Irrig.) - - - - 128.5 10.0 20.0 2,570.0 2,570.0 Olive (new-RF) - - - - 642.5 50.0 5.5 3,434.0 3,534.0 Alinond (new-RF) - - 257.0 20.0 12.0 3,084.0 3,084.0 Sub-Total/Cropping 1,285.0 0.3 - - 1,285.0 100.0 - - Intensity . M1ount Lebanon |Wheat (RF) 287.0 30.0 1.2 344.0 - - - - -344.4 Vegetables (irrig.)' - - - - 191.0 20.0 45.0 8,595.0 8,595.0 Fallow 668.0 70.0 -- - - - Apple (new-irrig.) - 477.5 50 0 30.0 14,325.0 14,325.0 Cherry (new-irrig.) - - 286.5 30.0 20.0 5,720.0 5,720.0 Sub-Total/Cropping 955.0 30.0 - - 955.0 100.0 - - Intensity South Lebanon Wheat (RE) 695.0 50.0 1.2 834.0 | | | -834.0 I/ Average between field tomato and green house tomato. Table 3 (continued) Current With Project (Year 12 - Full Development) Rcgion/lMajor Crops Area % of Yield Total Arca % of Yield Total Incremental (ha) Total ton/ha Production (ha) Total ton/ha Production Area ton Area ton Vegetable (irrig.) - - 556.0 40.0 45.0 25,020.0 25,020.0 Fallow 695.0 50.0 . - Olive (new-RF) - - 556.0 40.0 5.5 3,058.0 3,058.0 Almond (new-RF) - - 278.0 20.0 12.0 3,336.0 3,336.0 Sub-Total/Cropping 1,390.0 50.0 - - 1,390.0 100.0 - - Intensity Bekaa North Wheat (RF) 300.0 30.0 1.2 360.0 - - | | -360.0 Fallow 700.0 70.0 - - - - - - Apricot (new-RF) - - - - 300.0 30.0 25.0 7,500.0 7,500.0 Cherry (iiew-RF) - - 500.0 50.0 13.0 6,500.0 6,500.0 Alnond (new-RF) - - - - 200.0 20.0 12.0 2,400.0 2,400.0 Sub-Total/Cropping 1,000.0 30.0 - - 1,000.0 100.0 - - Intensity . Bekaa South Wheat (R.F) 505.0 50.0 1.2 606.0 - - | | -606.0 Fallow 505.0 50.0 - - - - - - Vegetable (irrig.) - - - - 303.0 30.0 45.0 13,635.0 13,635.0 Apple (new-irrig.) - - 303.0 30.0 30.0 9,090.0 9,090.0 Olive (new-RF) - - 202.0 20.0 5.5 1,111.0 1,111.0 Cheny (new-Irrig.) - 202.0 20.0 20.0 4,040.0 4,040.0 Sub-Total/Cropping 1,010.0 50.0 | | - 100.0 - - - Intensity _ _ _ _ _ _ ______ _S LEBANESE REPUBLIC Agriculture Infrastructure Development Project Currenit and Fuitre with Pioiect Croping Patterns. Yields and Productions Areas to be Served by Agriculhtmal Roads Cur- iit WVith l'roject (Year 12 - i'ull D)evelopment) Regiun/Niajor Crops Area (lia) % of Yield Total Area (ha) % of Yield Total Interrnental Total Ton/ha Production Total ton/ha Production Production Area Ton Area TFon North Lcbanon Wlicat (RF) 562.5 30.0 1.2 675.0 375.0 20.0 1.7 . 638.0 -37.0 Alinond (exisc-RF) 75.0 4.0 10.0 750.0 75.0 4.0 12.0 900.0 150.0 Apple (exist-irrig.) 75.0 4.0 23.0 1,725.0 75.0 4.0 30.0 2,350.0 525.0 ('ierry (exist-RF) 37.5 2.0 9 3 349.0 37.5 2.0 13.0 488.0 139.0 Olive (exist-RF) 187.5 10.0 2.5 469.0 187.0 10.0 4.5 842.0 373.0 Fallow 937.5 50.0 - - 375.0 20.0 - - - Atinsond (new-RF) - . 187.0 10.0 12.0 2,244.0 2,244.0 Apple inew-irrig.) - 187.0 10.0 30.0 5,610.0 5,610.0 Cherry (new-irrig.) - 187.5 10.0 20.0 3,750.0 3,750.0 Olive (new-RF) - - 187.5 10.0 5.5 I,031.0 1,031.0 Sub-Total/Cropping 1,875 50.0 1,875.0 80.0 - - - intensity _ _ _____________ Table 4 (Continued) Current jVitli Project (Year 12 - Full Development) Regionahlajor Crops Area (ha) % ol Yield Total Area (h a) % of Yield Total Intermental Total TonAia Production Total tonlha Production Pfoduction Area | Ton Area _ Ton Nlount Lebanon Vegetables (irrig.)' 42.8 5.0 30.0 1,284.0 85.5 10.0 45.0 3,848.0 2,564.0 I'oiato (irrig.) 42.8 5.0 20.0 856.0 85.5 10.0 30.0 2,565.0 1,709.0 Apple (exist-irrig.) 213.7 25.0 23.0 4,915.0 213.7 25.0 30.0 6,411.0 1,496.0 Cherry (exist-irrig.) 128.2 15.0 13.0 1,667.0 128.2 15.0 18.0 2,308.0 641.0 Fallow 427.5 50.0 - - 170.0 20.0 - - Apple (ncw-irrig.) - - 78.0 9.0 30.0 2,340.0 2,340.0 Cherry (new-irrig.) - 94.1 11.0 20.0 1,882.0 1,882.0 Sub-Total Cropping 855.0 50.0 855.0 80.0 - - - Intensity Soutli Lebanon Wheat (RF) 720.0 40.0 1.2 864.0 360.0 20.0 1.7 612.0 -252 Vegetabks (irrig.) 90.0 5.0 30.0 2,700.0 180.0 10.0 45.0 8,100.0 5,400.0 Potato (irrig.) 90.0 5.0 20.0 1,800.0 180.0 10.0 30.0 5,400.0 3,600.0 Almiond (exist-RF) 126.0 7.0 10.0 1,260.0 126.0 7.0 12.0 1,512.0 252.0 Olive (exist-RF) 234.0 13.0 2.5 585.0 234.0 13.0 4.5 1,053.0 468.0 Fallow 540.0 30.0 - 360.0 20.0 - - - Almiond (new-RF) - - 180.0 10.0 12.0 2,160.0 2,160.0 Olive (new-RF) - 180.0 10.0 5.5 990.0 990.0 Sub-Total/Cropping 1,800.0 70.0 1,800.0 80.0 - - - Intensitty I _ I s)iqon,l3 pP'J pflr sJqlJfu., pitn SOWIIIOi ,,,aq I.'soi. SO,iio fU!pnlaul iT Table 4 (Continued) Current Witb P roject (Year 12 - Full Development) -- 2 ] RegionlNlajor Crops Area (ha) °/ of Yield Total Area (ha) % of Yield Total Intermental Na Total Ton/ha Production Total ton/ha Production Production o Area Ton _ Area Ton N_ lBekka South Wheat (RF) 351.0 30.0 1.2 421.0 351.0 30.0 1.7 596.7 175.0 Ailmond (Exist-RF) 70.2 6.0 10.0 702.0 70.2 6.0 12.0 842.0 140.0 Apricot (exist-RF) 105.0 9.0 18.0 1,895.0 105.3 9.0 25.0 2,633.0 738.0 Cherry (exist-RF) 175.5 15.0 9.3 1,632.0 175.0 15.0 13.0 2,275.0 643.0 Fallow 468.0 40.0 - - 234.0 20.0 - - - Almond (new-RF) - - - - 58.5 5.0 12.0 702.0 702.0 Apricot (new-RF) - - 58.5 5.0 25.0 1,463.0 1,463.0 Cherry (new-RF) - - - - 117.0 10.0 13.0 1 521.0 1,521.0 Sub-Total/Cropping 1,170 60.0 - - 1,170.0 80.0-- Intensity lBekaa South Whealt (RF) 163.0 21.0 1.2 197.0 - - - -197.0 Vegeiables (irrig.) 78.0 10.0 30.0 2,340.0 117.0 15.0 45.0 5,265.0 2,975.0 P'otato (irrig.) 78.0 10.0 20.0 1,560.0 117.0 15.0 30.0 3,510.0 1,950.0 Apple (exist-irrig.) 132.6 17.0 23.0 3,050.0 132.6 17.0 I 30.0 3,978.0 928.0 Cherry (exist-irrig.) 85.8 11.0 13.0 1,115.0 85.8 11.0 18.0 1,544.0 429.0 Olive (exist-RF) 85.8 11.0 2.5 215.0 85.8 11.0 4.5 386.0 171.0 Fallow 156.0 20.0 - - 156.0 20.0 - - - Apple (new-irrig.) - - 39.0 5.0 | 30.0 1,170.0 1,170.0 Cherry (new-irrig.) - - 46.8 6.0 20.0 936.0 936.0 Sub-TotaUCropping 780.0 67.0 - 780.0 80.0 - - - Intensity | Total 6,480.0 | ANNEX VII THE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJET List of Working Papers Available in Project File Working Paper No. I : Land and Water Development Working paper No. 2 . Agricultural Roads Working Paper No. 3 : Economic Analysis, Agricultural Production - Crop and Farm Models Working Paper No. 4 Project COSTABs Working Paper No. S : Environmental Analysis, Guidelines and Environmental Assessment Summary Checklists Working Paper No. 6 : Participatory Approach to Project Design and Selection of Beneficiaries Working Paper No. 7 : Rapport de Mission - Renforcement des Capacite Institutionnelles - Recensement Agricole et Systeme Permanent de Statistiques Courantes TIE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMENT PROJECT Chart 1. Ministry of Agriculture Organization MINISTER OF AGRICULTURE Insillule oa The High Commission for The Green Plan Agricullural Agricullural Coordinallon ot Sclence Research Council Planning General Direclor Cabinet Service Secretary Sludies and Crop Animal Rural Development Coordinallon Producilon Production and Natural Resources Deparlmenl Deparlment Deparlment Department Educallon and Exiension MOA Service Rgoa fle Developmenl Projecis and Programs 1 Service Mount Lobo North Lebo Planning and Archives Caiza Sub-Regional Service Oftices Slalistical and Economic Studies I , I I Service | Shoul Alya Babda Mein Kesrouan Juball Caza Caza Caza Caza Caza Caza MOA =Mlnlsiry oa Agriculture TIE LEBANESE REPUBLIC AGRICULTURE INFRASTRUCTURE DEVELOPMIENT PROJECT Chart 2. Green Plan Organization EXECUTIVE COMMITTEE PRESIDENT 2 Members CABINET ACCOUN1ING TECHNiCAL E. C. SERVICE SERVICE SERVICE ADMINISTRATION RELATION WITH RECETTES & ROADS & WATER REIARY MOA SECTION DEPENSES SECTION SECTION VEHICLES ACONTING : ] SECTION ON DOCUMENTATION | BEAA L qMT. LEBANON| PUBLIC RELATIONS I DONORS IFFW) E. C SECTION J SECTION J L. R. CONTROL & . t~~~~~~~~~~~~~~~~INSPECIION SECTION ADMINISTRAIIVE & FARMERS AS9STANCE PERSONNEL SECTION SECnTlON STUCRIES & L. R.RGOA | L. R. = Land ReclarTKition IBRD 27927 3530' 36WOO 3630' LEBANON AGRICULTURAL INFRASTRUCTURE t DEVELOPMENT PROJECT o 'o _34130 , ADMINISTRATION 34'30 - TripWoIi¶'' ' rg '- ' ,. Zhport Herm.ol chekko 0 £s3 © SD~~~~~~~~~~~~~ OAfqr. ; + (z) 4 + > >' O3.A >,t ¢00001bs 3 r00 - Joun-i eh . t ' I .. ..A . BEIRUT ODohr- El- 6h , -~~~~one -l *, * ,\0 BEIRUT4) b Nobot O R Mos0EIun Me ( @ NATIONACZhlAPI 0RoykL 4~~~ 0Ae U' 'o o L ; '(/~~ITRAINL3UDRE -S J_- J 0 35t3' 36 0' 3630' MA 199 0Boit ed Dine.2 Soido0./ ~ tN Jeooine0 S5/ 'Deir El Akm- 0 r~ NUMBE R OF AGRICULTURAL ROADS PER CAZA akron, ~~~~~~~~~ A ~~Racltoiyo ¼I)To BE CONSTRUCTED BY THE PROJECT DURING )I -nAr -Sorbo0 THE FIRST TWO YEARS 33'30- (sss, . 0~~~~~~~~~~~~~ SELECTED CITIES %AO.t:i ~ ~ ~ ~ ~~~~~~ - 6 ~~~~GOVERNORATE (MOHAFAZAT) CAPITALS © ~~~~r-t (Thi I ~~~~~~~~~~~NATIONAL CAPITAL N~ ' Nobotiyek0 ) m.''y' -n CAZABOUNDARIES N Lb TUH I >t '( . 4 GOVERNORATE BOUNDARIES t NTERNATIONAL BOUNDARIES Sour a I0h'r ~ . WATERCOURSES '"Tilbni,,0V */ 5 5 10 15 20 23 KILOMETERS Th, boud- o -s o-r, de -t,ooscd o-y other-noino,o 0 5 10~~l I'S MILES orceteo uhboudor,es 3530' 36'00' 36'30' MAY 1996 IBRD 27928 35':30' 360 3AO,' LEBANON AGRICULTURAL INFRASTRUCTURE DEVELOPMENT PROJECT kk/ _34j30, MEAN ANNUAL RAINFALL ><°, 34'30'- O'h9q,tw ; lS M e d i t e r r a n e M n EL AO I -34-00' L BANO #, WATER 34C00RS aEIRUe o oo an- any ote nfraoto BEIRIL so on h m d o y oa | Bcob RrsEi-Motn /9 < 'RY°k i -. ~ ~ ~ ~ ~ ~ / - 5 10 15+HRB MILES350+5 350 36 05/- - > <' 36 30'0-10 .0 ".1~~ ~~~~~~~~~~~~~~~~~~~~~~4019 QAIDA - 7~~, Je7titjru-t g - iteir El Alfmor c ~ = 1300-1500 -33,303' zgrn } f . / OR.chaiy. 200-300 33'30 - F/ \ So tXOzfntr < a7>i /' _ <~~~~~~~~~~~200 / ~ ~~~ r , - v0 X ~~~~~~~~~~S~~~ . / O~~~~ SELECTED CITIES ,J . NABATIYE\I tJ - /7~H.s + 0 GOVERNORATE (MOHAFAZATI CAPITALS / ~~~N6tiy.hc V O or ASt N ji NATIONAL CAPITAL \ S 5 0 H L z WA N p ~~~~~~~~~~~~ , / ~~CAZA BOUNDARIES ~~~' ' ) ' J - ~~~~~~~~~~~~~~~~GOVERNORATE BOUNDARIES /SouJ lMRAOUN . *WATERCOURSES _/ \ - O~~~~~~~~~~ 5 1.0 1S 20O 25r.1LOMETERS Th.b ... d--e, -bl- deom rln=d-y th-rf-nmt-o 2 \ ~~~~BINT JBEIL : ' hown on lhs mop do ..t-Iply, on 1e p-r of The W-rld 8-k Goup, / \ ! 0 5 10 ~ ~~~~~~ ~ ~ ~~~~~~ 1'5MILES cn .ub -nnhe b-ld-ifoyrrtr oayedrsmn L 0 0 \@ _ ' ~~~~~ 35 30' 36'00' 36 30'